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3 Ways Life Insurance Can Help Maximize Your Retirement | Maryland Benefit Advisors

If you’re one of the millions of Americans who owns a permanent life insurance policy (or are thinking about getting one!) you’ve probably done it primarily to protect your loved ones. But over time, many of your financial obligations may have ended. That’s when your policy can take on a new life—as a powerful tool to make your retirement more secure and enjoyable.

Permanent life insurance can open up options for you in retirement in three unique ways:

1. It can help protect you against the risk of outliving your assets. Structured correctly, your policy can provide supplemental retirement income via policy loans and withdrawals. Having a policy to draw from can take the pressure off investment accounts if the market is sluggish, giving them time to rebound. Some policies may also provide options for long-term care benefits. At any time, you may also decide to annuitize the policy, converting it into a guaranteed lifelong income stream.

2. It can maximize a pension. While a traditional pension is fading fast in America, those who can still count on this benefit are often faced with a choice between taking a higher single life distribution, or a lower amount that covers a surviving spouse as well. Life insurance can supplement a surviving spouse’s income, enabling couples to enjoy the higher, single-life pension—together.

3. It can make leaving a legacy easy. According to The Wall Street Journal, permanent life insurance is “a fantastically useful and flexible estate-planning tool,” commonly used to pass on assets to loved ones. Policy proceeds are generally income-tax free and paid directly to your beneficiaries in a cash lump sum—avoiding probate and Uncle Sam in one pass. Your policy can also be used to pay estate taxes, ensure the continuity of a family business, or perhaps leave a legacy for a favorite charity or institution.

Having a policy to draw from can take the pressure off investment accounts if the market is sluggish, giving them time to rebound.

If you do expect your estate to be taxed, you can even establish a life insurance trust, which allows wealth to pass to your heirs outside of your estate, generally free of both estate and income taxes.

Where to start? A policy review
If you’ve had a life insurance policy for awhile, schedule a policy review with your life insurance agent or financial advisor. By the time you reach mid-life, you may have a mix of coverage—term, permanent, group or even an executive compensation package.

Your licensed insurance agent or financial advisor can help you assess your situation and adjust a current policy or structure a new policy to help you achieve your retirement planning goals.

If you have no coverage at all, there’s no better time than today to get started. Life insurance is a long-term financial tool. It can take decades to build permanent policy values to a place where you can use them toward your retirement goals. And, health profiles can change at any time. If you’re healthy, you can lock in that insurability now and look forward to years of tax-deferred (yes!) policy growth.

Retired already? The best thing you can do is meet annually with your personal advisors to ensure your plans stay on track. Market conditions and family circumstances change, so that even the best-laid plans require course adjustments over time.

By Erica Oh Nataren

Originally posted by www.LifeHappens.com

 

President Directs Federal Agencies to Consider ACA Changes | Maryland Benefit Advisors

On October 12, 2017, President Trump issued an Executive Order directing the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury to develop new rules to allow some exemptions from the Affordable Care Act (ACA).

The Order indicates the Administration’s priorities although it has no immediate effect since any rule changes must first go through a long proposal, review, and public comment process.

The Order’s key directives are:

1. Consider expanding the time period allowed for short-term limited duration insurance (STLDI).
By excluding pre-existing conditions and restricting the scope of covered services, STLDI policies typically offer lower premiums. STLDI policies are already exempt from many of the ACA’s requirements, but are generally limited to three-month coverage periods. Changing the federal rules may allow greater availability for longer coverage periods, although state insurance laws will also need to be considered.

2. Consider allowing employer-funded Health Reimbursement Arrangements (HRAs) to reimburse their employees’ premiums for individual medical insurance.
HRAs allow employers to make tax-free contributions to account plans that reimburse employees for eligible healthcare expenses, such as group medical deductibles and co-pays. The ACA currently prohibits employers (other than certain small employers) from paying or reimbursing an employee’s individual policy premiums either directly or through an HRA. This prohibition could be revised or eliminated by changing the current federal rule.

3. Consider loosening restrictions on association health plans and expand availability across state lines.
Association health plans are designed to cover members of professional and trade groups. Generally they are exempt from some of the ACA requirements and state insurance laws that apply to typical “small employer” group health plans. Expanding the availability of association health plans, which generally offer less coverage at lower costs, would likely require changing how group plans are defined under the Employee Retirement Income Security Act (ERISA). Also, state insurance laws, particularly in states that are wary of association health plans, may limit the impact of any federal rule changes.

ThinkHR will continue to monitor developments as the federal regulatory agencies consider rule changes. In the meantime, all current ACA requirements and state insurance laws continue to apply.

Originally posted by www.ThinkHR.com

PCORI Fee Increase for Health Plans | Maryland Benefit Advisors

On October 6, 2017, the Internal Revenue Service (IRS) released Notice 2017-61 to announce that the health plan Patient-Centered Outcomes Research Institute (PCORI) fee for plan years ending between October 1, 2017 and September 30, 2018 will be $2.39 per plan participant. This is an increase from the prior year’s fee of $2.26 due to an inflation adjustment.

Background

The Affordable Care Act created the PCORI to study clinical effectiveness and health outcomes. To finance the nonprofit institute’s work, a small annual fee — commonly called the PCORI fee — is charged on group health plans.

The fee is an annual amount multiplied by the number of plan participants. The dollar amount of the fee is based on the ending date of the plan year. For instance:

  • For plan year ending between October 1, 2016 and September 30, 2017: $2.26.
  • For plan year ending between October 1, 2017 and September 30, 2018: $2.39.

The fee amount is adjusted each year for inflation. The program sunsets in 2019, so no fee will apply for plan years ending after September 30, 2019.

Insurers are responsible for calculating and paying the fee for insured plans. For self-funded health plans, however, the employer sponsor is responsible for calculating and paying the fee. Payment is due by filing Form 720 by July 31 following the end of the calendar year in which the health plan year ends. For example, if the group health plan year ends December 31, 2017, Form 720 must be filed along with payment no later than July 31, 2018.

Certain types of health plans are exempt from the fee, such as:

  • Stand-alone dental and/or vision plans;
  • Employee assistance, disease management, and wellness programs that do not provide significant medical care benefits;
  • Stop-loss insurance policies; and
  • Health savings accounts (HSAs).

A health reimbursement arrangement (HRA) also is exempt from the fee provided that it is integrated with another self-funded health plan sponsored by the same employer. In that case, the employer pays the PCORI fee with respect to its self-funded plan, but does not pay again just for the HRA component. If, however, the HRA is integrated with a group insurance health plan, the insurer will pay the PCORI fee with respect to the insured coverage and the employer pays the fee for the HRA component.

Resources

The IRS provides the following guidance to help plan sponsors calculate, report, and pay the PCORI fee:

Originally posted by www.ThinkHR.com

IRS Releases Final 2017 ACA Reporting Forms and Instructions | Maryland Benefit Advisors

The IRS has finalized the forms and instructions that employers will use for 2017 reporting under the Affordable Care Act (ACA).

Applicable large employers (ALEs) will use the following:

Employers that self-fund a minimum essential coverage plan will use the following:

Background

Applicable large employers (ALEs), who generally are entities that employed 50 or more full-time and full-time-equivalent employees in the prior year, are required to report information about the health coverage they offer or do not offer to certain employees. To meet this reporting requirement, the ALE furnishes Form 1095-C to the employee or former employee and files copies, along with transmittal Form 1094-C, with the IRS.

Employers, regardless of size, that sponsor a self-funded (self-insured) health plan providing minimum essential coverage are required to report coverage information about enrollees. To meet this reporting requirement, the employer furnishes Form 1095-B to the primary enrollee and files copies, along with transmittal Form 1094-B, with the IRS. Self-funded employers who also are ALEs may use Forms 1095-C and 1094-C in lieu of Forms 1095-B and 1094-B.

Information is reported on a calendar-year basis regardless of the employer’s health plan year or fiscal year.

Changes for 2017

The 2017 forms and instructions are similar to the 2016 materials, although there are some changes for items that no longer apply or to simplify or clarify the information. Some of the changes include:

  • Removing references to transition relief options that are no longer available to ALEs.
  • Confirming the multiemployer interim relief rule remains in place for ALEs that contribute to a multiemployer plan (e.g., union trust).
  • Updating references for items that have been adjusted for inflation, such as the affordability percentage (9.69 percent for 2017).
  • Adding a note in the instructions for Form 1095-C, line 16, stating that “There is no specific code to enter on line 16 to indicate that a full-time employee offered coverage either did not enroll in the coverage or waived the coverage.”

In general, the forms and instructions are very similar to the versions used last year. Since the reporting requirements have been in place for several years now, employers and their advisors should have little trouble in working with the new materials for 2017.

Due Dates

The due date to furnish 2017 forms to individuals is January 31, 2018, while the due date to file copies with the IRS, including the appropriate transmittal form, will depend on whether the employer files electronically or by paper. Entities that provide 250 or more forms to individuals are required to file electronically with the IRS.

The due dates for 2017 reporting are:

  • January 31, 2018: Deadline to furnish 2017 Form 1095-C (or 1095-B, if applicable) to employees and individuals.
  • February 28, 2018: Deadline for paper filing of all 2017 Forms 1095-C and 1095-B, along with transmittal form 1094-C or 1094-B, with the IRS.
  • April 2, 2018: Deadline for electronic filing of all 2017 Forms 1095-C and 1095-B, along with transmittal form 1094-C or 1094-B, with the IRS. (April 2 is the first business day following the usual due date of March 31.)

Summary

Employers are encouraged to work with experienced vendors, tax advisors, and payroll administrators to review how the ACA reporting requirements apply to their situation. The required forms are important IRS documents and preparers should use the same level of care that would apply to employee W-2s.

Originally posted by www.ThinkHR.com

Life Insurance for a Family of One | Maryland Benefit Advisors

We spend a lot of time talking about how couples, families and businesses can protect their financial futures with life insurance. But what about if you are single—do you need life insurance, too?

There are those people who have no children, no one depending on their income, no ongoing financial obligations and sufficient cash to cover their final expenses. But how many of those people do you really know? And, more importantly, are you one of them?

I think it’s important, then, to illustrate how a life insurance purchase can be a smart financial move for someone who is single with no children. Asking yourself these three questions can help you get at the heart of the matter:

  • Do you provide financial support for aging parents or siblings?
  • Do you have substantial debt you wouldn’t want to pass on to surviving family members if you were to die prematurely?
  • Did family members pay for your education?

Don’t Take My Word for It

Life insurance is an excellent way to address these obligations, and in the case of tuition, reimburse family members for their support. But don’t just take my word for it. Instead, “do your own math.” This Life Insurance Needs Calculator can help you quickly understand if there is a need—a need you might not be aware of—that could be easily addressed with life insurance.

“The most important reason for

you to consider life insurance may

be the peace of mind you’ll have.”

In addition to addressing any financial obligations you might have, the current economic climate has made permanent life insurance an attractive means to help you build a secure long-term rate of return for safe money assets. The cash value in traditional life insurance can provide you with money for opportunities, emergencies and even retirement.

For young singles, keep in mind that you have youth on your side. I don’t mean to sound trite. Instead, I’d like you to think about the fact that purchasing life insurance is very affordable when you’re young and allows you to protect your insurability for when there is a future need—perhaps, in time, a spouse and children.

While all of these reasons are valid, the most important reason for you to consider life insurance may be the peace of mind you’ll have knowing that your financial obligations will be taken care of should anything happen.

By Marvin H. Feldman

Originally posted by www.LifeHappens.org

Emergency vs. Urgent – What’s the Difference in Walk-In Care? | Maryland Benefit Advisors

We’ve all been there – once or twice (or more)—when a child, spouse or family member has had to gain access to healthcare quickly. Whether a fall that requires stitches; a sprained or broken bone; or something more serious, it can be difficult to identify which avenue to take when it comes to walk-in care. With the recent boom in stand-alone ERs (Emergency Care Clinics or ECCs), as well as, Urgent Care Clinics (UCCs) it’s easy to see why almost 50% of diagnoses could have been treated for less money and time with the latter.

It’s key to educate yourself and your employees on the difference between the two so as not to get pummeled by high medical costs.

• Most Emergency Care facilities are open 24 hours a day; whereas Urgent Care may be open a maximum of 12 hours, extending into late evening. Both are staffed with a physician, nurse practitioners, and physician assistants, however, stand alone ECCs specialize in life-threatening conditions and injuries that require more advanced technology and highly trained medical personnel to diagnose and treat than a traditional Urgent Care clinic.

• Most individual ERs charge a higher price for the visit – generally 3-5 times higher than a normal Urgent Care visit would cost. The American Board of Emergency Medicine (ABEM) physicians’ bill at a higher rate than typical Family-Medicine trained Urgent Care physicians do (American Board of Family Medicine (ABFM). These bill rates are based on insurance CPT codes. For example, a trip to the neighborhood ER for strep throat may cost you more than a visit to a UC facility. Your co-insurance fee for a sprain or strain at the same location may cost you $150 in lieu of $40 at a traditional Urgent Care facility.

• Stand alone ER facilities may often be covered under your plan, but some of the “ancillary” services (just like visit rates) may be billed higher than Urgent Care facilities. At times, this has caused many “financial sticker shock” when they first see those medical bills. The New England Journal of Medicine indicates 1 of every 5 patients experience this sticker shock. In fact, 22% of the patients who went to an ECC covered by their insurance plan later found certain ancillary services were not covered, or covered for less. These services were out-of-network, therefore charged a higher fee for the same services offered in both facilities.

So, what can you and your employees do to make sure you don’t get duped into additional costs?

Identify the difference between when you need urgent or emergency care.

• Know your insurance policy. Review the definition of terms and what portion your policy covers with regard to deductibles and co-pays for each of these facilities.

• Pay attention to detail. Understand key terms that define the difference between these two walk-in clinics. Most Emergency Care facilities operate as stand-alone ERs, which can further confuse patients when they need immediate care. If these centers, or their paperwork, has the word “emergency”, “emergency” or anything related to it, they’ll operate and bill like an ER with their services. Watch for clinics that offer both services in one place. Often, it’s very easy to disguise their practices as an Urgent Care facility, but again due to CPT codes and the medical boards they have the right to charge more. Read the fine print.

It’s beneficial as an employer to educate your employees on this difference, as the more they know – the lower the cost will be for the employer and employee come renewal time.

3 Ways Life Insurance Can Benefit a Charity You Love | Maryland Benefit Advisors

Would you like to make a charitable gift to help organizations or people in need; to support a specific cause; for recognition such as a naming opportunity at a school or university? Perhaps you would do it just for the tax incentives. There are any number of reasons, and life insurance can be one of the most efficient tools to achieve these purposes. So the question becomes, how does this work?

Let me list the ways.

1. Make a charity the beneficiary of an existing policy. Perhaps you have a policy you no longer need. Make the charity the beneficiary, and the policy will not be included in your estate at your death. This also allows you to retain control of both the cash value and the named beneficiary. If you want or need to change the charity named as beneficiary, you can.

2. Make a charity both the owner and beneficiary of an existing policy. This gives you both a current tax deduction along with removing the policy from your estate. Once you gift the policy, you no longer have any control over the values.

3. Purchase a new policy on your life. Life insurance is an extremely efficient way to provide a large future legacy to a charity in your name without needing to write the large checks now. The premiums are given directly to the charity which then pays the premiums on the policy. The charity also owns the cash value as an asset. I am using this concept in my own planning.

Many charities would prefer to have their money upfront, but if you cannot write that large check or don’t want to part with your cash today, a gift of life insurance is a most efficient method to leave a large legacy in your name.

By Marvin H. Feldman

Originally posted by www.LifeHappens.org

Federal Employment Law Update-September 2017 | Maryland Benefit Advisors

Revised EEO-1 “Component 2” Stayed Effective Immediately

On August 29, 2017, the Office of Management and Budget (OMB) notified the Equal Emplo

yment Opportunity Commission (EEOC) that it is initiating a review and immediate stay of the new EEO-1 pay reporting requirements (Component 2) that were scheduled to take effect with the next filing c

ycle in March 2018.

The previously approved EEO-1 form, which collects data on race, ethnicity, and gender by occupational category, will remain in effect. Employers should plan to comply with the earlier approved EEO-1 reporting requirements (Component 1) by the previously set filing date of March 2018.

Read the EEOC press release

DACA Phase Out

On September 5, 2017, the Department of Homeland Security (DHS) announced and initiated the phase-out of the Deferred Action for Childhood Arrivals (DACA). The DHS will provide a limited, six-month window during which it will consider certain requests for DACA and applications for work authorization, under specific parameters. Read the memorandum from Acting DHS Secretary Elaine Duke for details.

All DACA benefits are provided on a two-year basis; therefore, individuals who currently have protection under DACA will be allowed to retain both DACA status and their employment authorization documents (EADs) until they expire. Next, the U.S. Citizenship and Immigration Services (USCIS) will adjudicate, on an individual, case-by-case basis:

  • Properly filed pending DACA initial requests and associated applications for EADs accepted as of September 5, 2017.
  • Properly filed pending DACA renewal requests and associated applications for EADs from current beneficiaries accepted as of September 5, 2017, and from current beneficiaries whose benefits will expire between September 5, 2017 and March 5, 2018, but whose documents were received by October 5, 2017.

The USCIS will reject all applications for initial requests under DACA received after September 5, 2017.

Read the USCIS press release

FLSA Overtime Rule Overturned

On August 31, 2017, a federal judge in Texas overturned an Obama-era federal overtime rule (final rule) that would have:

  • Increased the minimum salary required for the white collar exemption from $23,660 per year to $47,476 per year (from $455 per week to $913 per week).
  • Increased the required annual salary for highly compensated employees from $100,000 to $134,004.
  • Automatically updated the salary and compensation levels every three years beginning January 1, 2020 to account for inflation.

The court’s ruling that the final rule was invalid is effective immediately.

Originally posted by www.ThinkHR.com

The Risk of Being Uninsured (and the Hidden Bargain in Addressing It Now) | Maryland Benefit Advisors

With all the expenses of everyday living, it’s tempting to think of insurance as just another cost. What’s harder to see is the potential cost of not buying insurance—or what’s known as “self-insuring”—and the hidden bargain of coverage.

The Important vs. the Urgent
We’ve all experienced it: the tendency to stay focused on putting out fires, while never getting ahead on the things that really matter in the long run. For most people, there are two big things that matter in the long run: their families and their ability to retire. And being properly insured is important to both those concerns.

Life Insurance: a Hidden Bargain?
It’s exceedingly rare, but we all know it can happen: someone’s unexpected death. Life insurance can prevent financial catastrophe for the loved ones left behind, if they depend on you for income or primary care—or both.

The irony is that many people pass on coverage due to perceived cost, when in fact it’s far less expensive that most people think. The 2016 Insurance Barometer Study, by Life Happens and LIMRA showed that 8 in 10 people overestimate the cost of life insurance. For instance, a healthy, 30-year-old man can purchase a 20-year, $250,000 term life insurance policy for $160 a year—about $13 a month.

Enjoy the Benefits of Life Insurance—While You’re Alive
If budget pressures aren’t an issue, consider the living benefits of permanent life insurance—that’s right, benefits you can use during your own lifetime.

Permanent life insurance policies typically have a higher premium than term life insurance policies in the early years. But unlike term insurance, it provides lifelong protection and the ability to accumulate cash value on a tax-deferred basis.

Cash values can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home, to help pay for your children’s education or to provide income for your retirement.

When you borrow money from a permanent insurance policy, you’re using the policy’s cash value as collateral and the borrowing rates tend to be relatively low. And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit and cash-surrender value.

In this way, life insurance can serve as a powerful financial cushion for you and your family throughout your life, in addition to protecting your family from day one.

Disability Insurance: For the Biggest Risk of All
The most overlooked of the major types of insurance coverage is the one that actually covers a far more common risk—the risk of becoming ill or injured and being unable to work and earn your paycheck.

How common is it? While no one knows the exact numbers, it’s estimated that 30% of American workers will become disabled for 90 days or more during their working years. The sad reality is that most American workers also cannot afford such an event. In fact, illness and injury are the top reasons for foreclosures and bankruptcies in the U.S. today. Disability insurance ensures that if you are unable to work because of illness or injury, you will continue to receive an income and make ends meet until you’re able to return to work.

It’s tempting to cross your fingers and hope misfortune skips over you. But when you look at the facts, it’s easy to see: getting proper coverage against life’s risks is not just important, but a bargain in disguise.

By Erica Oh Nataren

Originally posted by www.LifeHappens.org

Why Are Statistics Important in the Health Care Field? | Maryland Benefit Advisors

Quantitative research guides health care decision makers with statistics–numerical data collected from measurements or observation that describe the characteristics of specific population samples. Descriptive statistics summarize the utility, efficacy and costs of medical goods and services. Increasingly, health care organizations employ statistical analysis to measure their performance outcomes. Hospitals and other large provider service organizations implement data-driven, continuous quality improvement programs to maximize efficiency. Government health and human service agencies gauge the overall health and well-being of populations with statistical information.

Health Care Uitilization

Researchers employ scientific methods to gather data on human population samples. The health care industry benefits from knowing consumer market characteristics such as age, sex, race, income and disabilities. These “demographic” statistics can predict the types of services that people are using and the level of care that is affordable to them. Health administrators reference statistics on service utilization to apply for grant funding and to justify budget expenditures to their governing boards.

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Resource Allocation

Heath care economists Rexford Santerre and Stephen Neun emphasize the importance of statistics in the allocation of scarce medical resources. Statistical information is invaluable in determining what combination of goods and services to produce, which resources to allocate in producing them and to which populations to offer them. Health care statistics are critical to allocative and production efficiency. Inevitably, allocation decisions involve trade-offs–the costs of lost or missed opportunities in choosing one economic decision over another. Reliable statistical information minimizes the risks of health care trade-offs.

Needs Assessment

According to Frederick J. Gravetter and Larry B. Wallnau, statistics “create order out of chaos” by summarizing and simplifying complex human populations. Public and private health care administrators, charged with providing continuums of care to diverse populations, compare existing services to community needs. Statistical analysis is a critical component in a needs assessment. Statistics are equally important to pharmaceutical and technology companies in developing product lines that meet the needs of the populations they serve.

Quality Improvement

Health care providers strive to produce effective goods and services efficiently. Statistics are important to health care companies in measuring performance success or failure. By establishing benchmarks, or standards of service excellence, quality improvement managers can measure future outcomes. Analysts map the overall growth and viability of a health care company using statistical data gathered over time.

Product Development

Innovative medicine begins and, sometimes, ends with statistical analysis. Data are collected and carefully reported in clinical trials of new technologies and treatments to weigh products’ benefits against their risks. Market research studies steer developers toward highly competitive product lines. Statistics indirectly influence product pricing by describing consumer demand in measurable units.

By Rae Casto

Originally posted by www.LiveStrong.com