comments filed today with the IRS on PPACA Safe Harbor/Affordability test

THE IMPORTANCE OF FLOOD INSURANCE – FROM DAVID ELLIS, VP ROBERT ELLIS & ASSOCIATES

After the devastation of Hurricanes Katrina and Gustav, the importance of a comprehensive property insurance package was made painfully clear to most of us here in the Gulf South.  While the property and casualty insurance marketplace remains cautious in our area for coverage related to wind and hail protection, the availability of insurance to protect property owners financially from losses due to flooding is secured by the National Flood Insurance Program (NFIP).

Given the fact that standard property insurance does not cover flooding, it’s important to safeguard both your personal and professional property (building and contents) against floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact our area.  According to the Standard Flood Insurance Policy (SFIP) on the FEMA website, a flood is defined, in part, as:

A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least of which one is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow.

While a more complete definition is available in the SFIP, Section II, Definitions A1 and A2, one simple rule of thumb to remember is if your property is damaged due to rising water, contact your flood insurance agent.  If property damage results from falling water, call contact your property insurance representative.  For example, with Hurricane Katrina a number of properties were damaged by the tidal surge and the inability of drainage systems to handle the volume of water that accumulated.  Damages incurred from this rising water were considered flood related. Claims for those properties, however, that suffered roof damage during the storm and sustained subsequent water damage from the rain falling into the structure were considered under the insureds property coverage.  In the case of a hurricane, of course, claims for both flood and property insurance may apply.

If your property is located in a flood zone, your mortgagee may require you to carry flood insurance.  And, even if you do not have a loan on your building or contents, if you are in a flood zone, most of us understand the need for flood insurance in these areas.  However, if you are not in a flood zone, do not become complacent about the necessity of this important insurance protection for your assets.  According to FEMA, property owners outside high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding.  Just a few inches of water from a flood can cause tens of thousands of dollars in damage —  over the past 10 years, the average flood claim has amounted to nearly $48,000.

For your consideration, we’ve listed some important highlights of flood insurance below:

• There is typically a 30-day waiting period from the date of purchase before a new flood policy goes into effect.  An exception to this 30-day waiting period results if your lender required flood insurance in connection with the making, increasing, extending or renewing a loan;

• While limitations of coverage under the regular NFIP are as follows,

Excess Flood policies are available to increase your limits;

• Deductibles apply separately to building and contents with different amounts to choose from.  Like other insurance plans, a higher deductible will lower the premium you pay, but will also reduce your claim payment.  Your mortgage lender can also set a maximum amount of your deductible;

• Flood insurance rates are set and do not differ from company to company or agent to agent.  You should purchase flood insurance from an agency and carrier with a good reputation for service and claims handling.

• What’s Covered: Generally, the coverage on your building will protect the actual structure and its foundation, as well as permanently installed air conditioning, furnaces, water heater, carpeting, wallboard, bookcases and cabinets.  The coverage on contents includes personal belongings such as furniture, electronic equipment and certain valuable items such as original artwork (up to $2500).  It is also important to note that preventive measures are also covered expenses up to a certain limit.  When a building is in imminent danger of flooding, the cost to purchase sandbags and fill them, plastic sheeting and lumber used in connection with them, pumps, fill for temporary levees and will be reimbursed up to $1000.  In addition, the removal of insured property to a safe location and return will be reimbursed up to $1000. The deductible is typically waived for these preventive measures.

• What’s Not Covered: Damage caused by moisture, mildew or mold that could have been avoided by the property owner, currency, precious metals and valuable papers such as stock certificates, property and belongs outside of an insured building (such as trees, plants, septic systems, etc.), living expenses such as temporary house, financial losses caused by business interruption or loss of use of the insured property and most vehicles are not covered under the standard policy.  An excess policy may provide some protection for business interruption.

In today’s property insurance market, flood remains one of the best values available for your premium dollar.  Robert Ellis & Associates would be happy to assist you in reviewing the limits you require and the annual premium cost should you wish to obtain coverage.   You may also contact the NFIP at 888-379-9531 to request an agent referral.

As always, it is our pleasure to serve you and we look forward to the opportunity to be of service,

David Ellis
Vice President
Robert Ellis & Associates

“BENEFITS BYLINE” from David Ellis, VP Robert Ellis & Associates

 If you have a health savings account (HSA) in conjunction with an IRS-qualified high deductible health insurance plan, you need to be aware of “what’s changing” and “what’s not changing,” effective January 1, 2011.

1. Over-the-counter medicines and supplies will no longer be considered an eligible expense unless they are specifically prescribed by a doctor.

2. The penalty for utilizing your HSA funds for non-qualified expenses will increase from 10% to 20%. This penalty is in addition to the taxation liability you will incur if you use your account for purposes other than qualified medical expenses.

What’s not changing:

1. Maximum contribution levels are not increasing.  These will remain the same as 2010.
     $3050 for individuals and $6150 for families.

 It’s important to remember that HSA guidelines do not restrict the source of contributions to the account holder alone. Both your family members and your employer may make contributions to your account. 

While the definitive source for additional information on your HSA account and changes for 2011 is the IRS website (www.irs.gov.), HSA Bank is another excellent reference site for account holders (www.hsabank.com).  

If you have any questions regarding your current coverage or would like additional information on the expanded selection of HSA qualified plans, please do not hesitate to contact us. As your independent insurance consultant for the Northshore with 100+ years of combined experience and many insurance companies for consideration, we welcome the opportunity to be of service.

What We Should all know about health care reform- Consumer’s Guide provided by NCPA (National Center for Policy Analysis)

What Are the Facts?

During the nine-month period leading up to the passage of the Patient Protection and Affordable Care Act, Americans were subjected to more than $200 million worth of TV, radio, newsprint and Internet ads. Almost all of these — pro and the con — were pure propaganda.
Even today, the White House and leaders of both political parties offer us little more than sound bites crafted for the evening news. A taxpayer-funded mailing to Medicare enrollees has been accused of selling more than informing. The government’s own Web site, while containing much valuable information, touts only the benefits of reform and ignores the costs. It focuses on what might go right and ignores what might go wrong.
As a result, many people are rightly confused about what to expect and why. We hope this publication will clear the air. Its goal is a balanced overview, with all important content sourced from government reports and other reputable documents.

Overview: A Better Health Care System?
Recently enacted legislation will radically transform the U.S. health care system. These changes will occur over time, however. The most significant changes (e.g., a requirement that most people obtain health insurance) will not become law until 2014. A tax on employee “Cadillac” health plans does not take effect until 2019. This means there will be many elections and many opportunities for voters to express their will before most provisions become law. In the meantime, here is a brief summary.
Structural Features of Reform
• Beginning in 2014, you will be required by law to have health insurance and to attach proof of insurance to your tax return.
• If you fail to insure, you will be fined — with the penalty rising to $695 ($2,085 per family) in 2016 or 2.5% of your adjusted gross income, whichever is greater.
• If your employer fails to offer you health insurance, your employer can be fined as much as $2,000 per employee per year.
• The type of insurance you must have — including copays, deductibles and the employee’s share of the premium — will all be determined by federal regulations, rather than by you and your employer.
• If you are not covered by an employer plan, Medicare, Medicaid or other government plan, you will be required to buy insurance in a government-regulated health insurance
Overview: A Better Health Care System? 4
exchange, where competing insurers will offer the government-mandated health insurance benefit package.
• How your doctor practices medicine and how you obtain care are likely to substantially change.
Some Major Benefits of the Reform. Some of the touted benefits of reform are not new. For example, since 1996 federal law has barred insurers from dropping your coverage just because you get sick. However, the following changes are new:
• You may be able to buy insurance you cannot now afford. Beginning in 2014, for example, a couple with an income of twice the poverty level (currently $29,000) will be able to buy insurance for an annual premium no higher than 6.3% of their income ($1,827).
• If you have a pre-existing condition, you will be able to buy insurance for the same premium as that paid by people in good health.
• Over the next four years, newly created risk pools will offer subsidized insurance to some of the people who have been turned down by health insurers because of a pre-existing condition.
• If you have a very expensive and continuing health problem, there will be no lifetime limits on your health insurance coverage.
• Overall, the Congressional Budget Office (CBO) expects 32 million otherwise uninsured people (about 60% of the total) to obtain health insurance. Medicare’s chief actuary puts the estimate at 34 million.
Some Major Costs of the Reform. In general, for every benefit there is an offsetting cost. More than half the costs of this reform, for example, will be borne by the elderly and disabled on Medicare:
• $523 billion of health reform’s first 10-year cost will be paid for by cuts in spending on Medicare enrollees, according to Congressional Budget Office.
• In addition, there are new taxes on drugs and on such medical devices as wheelchairs, crutches, pacemakers, artificial joints, etc. — items disproportionately used by Medicare enrollees.
Reduced spending and reduced subsidies will have an especially big impact on seniors:
• Of the 15 million people expected to enroll in Medicare Advantage programs, 7½ million will lose their plans entirely, according to Medicare’s chief actuary, and the remainder will face higher premiums and lower benefits.
Overview: A Better Health Care System? 5
• Nearly 6 million retired employees will lose their employer drug coverage, according to the most recent Medicare Trustees report.
There are other measures that will affect the more general population:
• A new tax on health insurance is likely to cost the families of employees of small businesses more than $500 a year in higher premiums.
• A 40% tax on the extra coverage provided by expensive “Cadillac” plans will apply to about one-third of all private health insurance in 2019; and because the tax threshold is not indexed to medical inflation, over time the tax will eventually reach every health plan.
• Scores of other items will be taxed, ranging from tanning salons to the sale of your home, in some cases.
There are also hidden costs of certain benefits:
• Health insurers will have to raise premiums for everyone in order to charge people with pre-existing conditions less than the expected cost of their care. Young people, for example, could see a doubling or tripling of their premiums, according to industry estimates.
• In order for employers to provide health insurance (or more generous insurance) to their employees, they will have to reduce what they pay in wages and in other benefits.
• The extra burden on employers could cost as many as 700,000 jobs by 2019.

Contact:  David Ellis for more information- dellis@ellis4u.com

Keeping the Health Plan You Have: The Affordable Care Act and “Grandfathered” Health Plans

The Affordable Care Act gives American families and businesses more control over their health care by providing greater benefits and protections for family members and employees.  It also provides the stability, and also the flexibility, that families and businesses need to make the choices that work best for them.   

During the health reform debate, President Obama made clear to Americans that “if you like your health plan, you can keep it.”  He emphasized that there is nothing in the new law that would force them to change plans or doctors. Today, the Departments of Health and Human Services, Labor, and Treasury issued a new regulation for health coverage in place on March 23, 2010 that makes good on that promise by: 

• Protecting the ability of individuals and businesses to keep their current plan;
• Providing important consumer protections that give Americans – rather than insurance companies – control over their own health care.  
• Providing stability and flexibility to insurers and businesses that offer insurance coverage as the nation transitions to a more competitive marketplace in 2014 where businesses and consumers will have more affordable choices through Exchanges. 

The rule announced today preserves the ability of the American people to keep their current plan if they like it, while providing new benefits, by minimizing market disruption and putting us on a glide path toward the competitive, patient-centered market of the future.  While it requires all health plans to provide important new benefits to consumers, it allows plans that existed on March 23, 2010 to innovate and contain costs by allowing insurers and employers to make routine changes without losing grandfather status.  Plans will lose their “grandfather” status if they choose to significantly cut benefits or increase out-of-pocket spending for consumers – and consumers in plans that make such changes will gain new consumer protections.

Most of the 133 million Americans with employer-sponsored health insurance through large employers will maintain the coverage they have today.  Large employer-based plans already offer most of the comprehensive benefits and consumer protections that the Affordable Care Act will provide to all Americans this year – such as preventing lifetime limits on coverage – and in the future.

People who work in smaller firms – which change insurers more often due to annual fluctuations in premiums – and people who purchase their own insurance in the individual market– a group that frequently changes coverage – will enjoy all of the benefits of the Affordable Care Act when they choose a new plan.  These Americans also will benefit from the new competitive Exchanges that will be established in 2014 to offer individuals and workers in small businesses with greater choice of plans at more affordable rates – the same choice of plans as members of Congress.

Continue article at- http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html

Health Care Reform Implementation- Summary updates from the National Association of Health Underwriters

Robert Ellis & Associates bulleted summary:  Health Reform Highlights lby REA 4 10

NAHU (Source- www.nahu.org )- Health Reform NAHU 3 25 10

Robert Ellis & Associates Insurance Agency (Mandeville, LA; Baton Rouge, LA and Jackson, MS) specializes in health insurance among other areas for clients all over Louisiana and Mississippi.  Specifically, we have a carrier that is unique in the industry and can work with large groups, small groups and even individual policyholders.  We have the latest updates on health care reform and have additional markets that other agencies do not have access (exclusive with an A+ Blue Cross Blue Shield company, professional associations and other markets).  Finally, we can show unique strategies to save money via health reimbursement arrangements (HRA), traditional co-pay plans with gap coverages, health savings accounts (personal favorite, virtually untouched with health care reform), or just a more competitive plan for your individual situation. 

If you would like to see if you are in the best available plan in your area or just discuss the condition of the market given the health care reform implementation schedule, send David Ellis an email at dellis@ellis4u.com or call at w#985-674-3888.

Regardless, I hope you enjoy www.NorthshoreLinks.com and the 2 sister sites- www.GNOLinks.com and www.BatonRougeLinks.com- all 3 community sites put together for your ease of navigation and pleasure.

The Louisiana Department of Insurance warns consumers to be on alert- SCAMMERS TAKE ADVANTAGE OF HEALTH REFORM

Consumers searching for health insurance coverage since the passage of the Patient Protection and Affordable Care Act of 2009 (PPACA) should be on the lookout for scammers hoping to take advantage of the confusion surrounding the details of the new law.  State insurance regulators are receiving complaints about scam artists going door-to-door selling fake insurance policies or claiming there is a limited open-enrollment period to buy health insurance.  Some of these scam artists have even set up bogus toll-free numbers to sell policies.  The Louisiana Department of Insurance warns consumers who have been offered a policy that is a “limited-time offer,” has limited benefits or is advertised as necessitated by health insurance reform, to STOP before signing anything or making a payment, CALL the Louisiana Department of Insurance and CONFIRM that the policy, agent, and company are legitimate. 

While there are many changes coming in the health insurance marketplace, there are no provisions in the PPACA that require consumers to make immediate modifications to their health coverage.  Many of the initial changes will go into effect six months from when the law was signed by President Obama – or September of this year.  Until then, agencies in Louisiana and the federal government are working on implementing the changes.  This means designing and putting into place at the state level many of the new consumer programs and regulations.

Don’t Be Misled!  Here are some important “red flags” to watch out for:

• The agent or salesperson says the premium offer is only good for a limited enrollment period.

               There is no open enrollment period currently associated with the new health care law, so if the salesperson is pressuring you to buy the policy because the price or option is only good for a short time, be wary.  Before you write a check or sign a contract for one of these policies, call the Department of Insurance to make sure the insurance company and agent are licensed in your state and carefully read the contract to make sure you understand the coverage and limitations of the policy.

• The agent or salesperson says the coverage is necessitated or required by the health care reform law.

               You may have heard that all Americans will be required to purchase health insurance under the new law, but this requirement does not go into effect until 2014 for most people.  If an agent or salesperson implies you have to purchase coverage now, stop and call the Department of Insurance at 1-800-259-5300.

• The agent or salesperson does not explain the coverage included in the policy or does not provide a full list of the coverage.

Limited benefit health insurance plans are legitimate health insurance plans offered by many insurance companies, but some agents or salespeople may not be fully explaining the limits to these policies. These bare bones policies typically have lower premiums, but they only cover specific expenses and have many more limitations than a comprehensive medical plan. These plans also have higher co-insurance percentages, co-payments and deductibles than comprehensive plans. These types of policies also have low maximum benefit limits called “caps,” so it may be possible for you to reach your cap quickly, leaving you responsible for the balance of the bill.  If you are considering a limited benefit health insurance plan or a high deductible health insurance plan in conjunction with a Health Savings Account (HSA), be sure to research the plan before signing a contract.

•  The agent or salesperson claims the coverage will be “grandfathered” or exempted from changes required by the health care reform law.

Only policies purchased before President Obama signed the PPACA on March 23, 2010, will be ”grandfathered” or exempted from changes required by the law.  Any policy purchased now must comply with all of the changes required by the bill to satisfy the individual mandate in 2014.  If an agent or salesperson claims otherwise, stop and call the Department of Insurance at 1-800-259-5300.

                For a list of the changes included in the PPACA and when they will go into effect, visit the NAIC Health and Managed Care Committee Web page ( http://www.naic.org/committees_b.htm) and look for the PPACA charts. Information can also be found on the White House Web site ( http://www.whitehouse.gov/healthreform) and the HHS Web site ( http://www.healthreform.gov/).   Commissioner Donelon urges consumers who feel uneasy about any insurance related transaction to call the Department of Insurance Fraud Section at 225-342-4956 or 1-800-259-5300. If callers do not want their names used, they can request that their involvement be kept confidential.

Successful Health Insurance Reform Example We Can All Follow

Here are two excerpts from WSJ article of 3-1-2010 by Mitch Daniels, Governor of Indiana:Subject: Mitch Daniels on HSAs – WSJ

This is by far the most radical and most successful experiment in the country using HSAs for state employees. Surely every governor will quickly follow the lead of Governor Daniels…

Hoosiers and Health Savings Accounts

An Indiana experiment that is reducing costs for the state and its employees.

As Washington prepares to revisit the subject of health-care reform, perhaps some fresh experience from Middle America would be of value.

When I was elected governor of Indiana five years ago, I asked that a consumer-directed health insurance option, or Health Savings Account (HSA), be added to the conventional plans then available to state employees. I thought this additional choice might work well for at least a few of my co-workers, and in the first year some 4% of us signed up for it.

In Indiana’s HSA, the state deposits $2,750 per year into an account controlled by the employee, out of which he pays all his health bills. Indiana covers the premium for the plan. The intent is that participants will become more cost-conscious and careful about overpayment or overutilization.

Unused funds in the account—to date some $30 million or about $2,000 per employee and growing fast—are the worker’s permanent property. For the very small number of employees (about 6% last year) who use their entire account balance, the state shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected.

The HSA option has proven highly popular. This year, over 70% of our 30,000 Indiana state workers chose it, by far the highest in public-sector America. Due to the rejection of these plans by government unions, the average use of HSAs in the public sector across the country is just 2%.

What we, and independent health-care experts at Mercer Consulting, have found is that individually owned and directed health-care coverage has a startlingly positive effect on costs for both employees and the state. What follows is a summary of our experience:

Click the link below for the remaining part of this article:

http://online.wsj.com/article/SB10001424052748704231304575091600470293066.html

New Year Means New Opportunities for Roth IRA Conversion

If you already have a Roth IRA, you’re aware of its biggest benefit: Your earnings grow tax free, provided you meet certain conditions. If you don’t have a Roth IRA, you may want to consider one — and it may be easier for you to do just that in 2010.

Before we get to the reasons why 2010 may be your year to open or convert to a Roth IRA, let’s look at some differences between Roth and traditional IRAs. If you own a traditional IRA, your contributions may be tax-deductible, depending on your income level. But whether you can make deductible contributions or not, your earnings grow on a tax-deferred basis, which means your money can grow faster than it would if it were placed in an investment on which you paid taxes every year. On the other hand, Roth IRA contributions are never tax-deductible, but your earnings grow tax free, as long as you’ve held your account at least five years and you don’t start taking withdrawals until you’re at least age 59½.

Furthermore, unlike a traditional IRA, a Roth IRA does not require you to start taking distributions when you reach 70½. Consequently, you’ll have more flexibility and freedom when it comes to making withdrawals.

If you have a traditional IRA, you might be thinking it’s a good idea to convert to a Roth IRA because tax free sounds better than tax deferred — and, all things being equal, tax free would indeed be better. However, it’s not quite that simple. If you convert your traditional IRA to a Roth IRA, you’ll have to pay taxes on those traditional IRA earnings and contributions that had previously gone untaxed. If you do convert, you’ll be better off if you use money held outside your IRA to pay the taxes. If you simply take money from your IRA, you’ll obviously lower the value of your IRA — and, if you’re under 59½, you may have to pay an additional 10% penalty on the amount you withdraw to pay the taxes.

In the past, many investors have been prohibited from converting their IRAs due to either their tax filing status or their income. Under previous rules, you could convert your traditional IRA to a Roth IRA only if you were married and filed a joint return or were a single filer, and your modified adjusted gross income (MAGI) was $100,000 or less. But starting in 2010, you can convert funds to a Roth IRA even if your MAGI is over $100,000. You will also be able to convert to a Roth if you are married and file separate tax returns.

And that’s not the only piece of good news regarding your conversion ability. As mentioned above, you will have to pay taxes when you convert to a Roth IRA. A conversion is usually reported as income for the tax year the conversion takes place. However, in 2010 only, your conversion amount will be split and reported as income for tax years 2011 and 2012 unless you elect to report the entire conversion amount on your 2010 taxes. You may find that spreading the taxes over two years can make the conversion more affordable.

In any case, consult with your tax advisor before converting from a traditional IRA to a Roth. If done correctly, such a conversion can potentially make a big difference in your ultimate retirement lifestyle.

For any questions or comments regarding this post, please call or email:

Evan Gremillion- 985-893-4742

evan.gremillion@edwardjones.com

Website tells all about Louisiana health care facilities

Website tells all about Louisiana health care facilities

 Louisiana residents now have easy access to detailed, accurate information on the cost, quality and performance of health care facilities such as hospitals and nursing homes, as well as health plans and prescription drugs. The state has launched a new website called HealthFinderLA.gov, through which consumers – including children – will be able to access educational materials on living healthier lives, find the usual and customary charges for the Top 100 most commonly prescribed medications, and access information comparing various quality and patient safety measures in Louisiana hospitals, nursing homes and health plans. The site will provide key performance data on health care facilities and health plans, including death rates, readmission rates, dozens of nationally accepted quality and performance measures for health plans, and complication rates for procedures. The website is a product of the Consumer’s Right to Know Act the legislature passed in 2008, which was part of the governor’s legislative package and was authored by Sen. Willie Mount of Lake Charles. The act authorizes DHH to collect a broad range of health care information and publish it on the Internet.