Solving the Uninsured Crisis - NAHU Suggests Solutions
(Arlington, VA) -- The National Association of Health Underwriters (NAHU) believes that all Americans should have access to high-quality and affordable health care and it salutes the participants of "Cover the Uninsured Week" for raising the awareness of the plight of the nation's uninsured.
"Millions of Americans currently lack health insurance coverage," stated Janet Trautwein, executive vice president and CEO. "And the more than 200 million Americans who do have the security and peace of mind that having health insurance provides are at risk of losing their coverage due to the rising costs of providing health care. "We believe there is no one magic answer to the problem of the uninsured and rising health care costs. A multi-faceted approach will be required, since the American population is very diverse, and no one solution will fit the needs of all of our citizens. "However, we do believe that any attempt to provide Americans with universal access to health coverage should preserve the private health insurance market. Other countries have experimented with government-run health care systems, and this has resulted in high-cost, low-quality rationed care. Americans need to be able to access a competitive health insurance marketplace with a wide range of health plan choices and continued access to the services of health insurance professionals. "We believe the time is right for a solution that controls medical spending and guarantees access to affordable coverage for all Americans.
We believe this can be accomplished without limiting the people’s ability to choose the health plan that best fits their needs. That’s why NAHU recently unveiled ‘Healthy Access’ -- a comprehensive health care reform plan that builds on the best aspects of the American health care system. ‘Healthy Access’ lays out detailed recommendations that will lower health care costs, improve quality, create greater efficiency and provide better access to care for more Americans.
“NAHU continues to work with the Administration and members of Congress on sensible solutions like those contained in NAHU’s ‘Healthy Access’ that reform our health care system and expand health insurance coverage in America.”
More information about NAHU’s “Healthy Access” plan can be found online at www.nahu.org. The National Association of Health Underwriters represents 20,000 professional health insurance agents and brokers who provide insurance for millions of Americans.
NAHU is headquartered in Arlington, VA. For more information, please call Kelly Loussedes at 703-276-3835 or email kloussedes@nahu.org
Over 300 Attend FAHU Symposium
See Pictures
(Daytona Beach, FL) If you weren’t among the 300 you missed FAHU’s premier event of the year. Symposium Chairman Dave Gentry and his committee outdid expectations by organizing and executing what was enjoyed as the highlight of the FAHU year. From the opening ceremony, complete with Naval Color Guard, through to relevant CE topics taught by our industry leaders and innovators, this was clearly an outstanding gathering. Also during the two days we were able to learn much about our sponsors as we made our way through the Exhibit Hall meeting the various representatives that attended from all over the country.
Due to the enormous response for sponsorship space we had to accommodate some with booths outside the Exhibit Hall. The Welcome Reception was the first event set aside for fun and networking. We were able to enjoy a delightful evening on the terrace with an ocean view complete with cocktails, music and food. The next evening found many of us in the Exhibit Hall partying with friends, singing Karaoke and dancing. Much of the credit for the success of this year’s symposium is to be credited to the outstanding facility provided by the Daytona Beach Hilton. The facility, location and accommodations were excellent. The service and food was top notch, and the staff most professional.
The best news yet is that we will return to the same location for next year’s Symposium. So be sure to mark the dates now; May 13-15, 2009 will be next year’s FAHU’s Educational Symposium and Expo. See you there! PCAHU Remembers Bill Radford The Palm Coast Chapter notes with sadness the passing of FAHU Past President (1989-90) William H. Radford III, on March 18th. Bill was a vital and active member of our Chapter until his health forced him to retire from the Board this past December.
We acknowledge with gratitude his dedication to PCAHU and we will miss his guidance and leadership. Earlier this year, to honor Bill, the PCAHU Board of Directors established the “William H. Radford III Ambassador of the Year Award” to be given as merited to a member who demonstrates the admired qualities of the honoree.
Nuts and Bolts of HSAs
Health care spending accounts (HSAs) provide a tax-favored way to save for and pay for medical expenses. HSAs can be established by individuals who participate in high deductible health plans (HDHPs), or by employers that offer an HDHP option for health care coverage, in which case HSA eligibility is limited to employees who choose the HDHP option. Either the employer or the individual, or both, can make contributions to the HSA. Amounts paid from an HSA for qualified medical expenses are distributed tax-free.
This article summarizes IRS guidance on HSA dollars—the requirements for contributions made to HSAs and for distributions made from HSA accounts.
Contributions
Either the employer or covered individual can make contributions to the HSA. Employee contributions are deductible (or paid pre-tax through salary reduction in a cafeteria plan) and employer contributions are excludable from the employee's gross income. HSA contributions are limited to $2,900 for individuals/$5,800 families (2008 limits, indexed annually, with larger amounts permitted for individuals age 55 or older). Employer contributions made on behalf of all "comparable participating employees" must themselves be comparable. Notice 2004-50 provides examples of application of the comparability requirement, which indicate that this requirement is interpreted very literally:
• Employer contributions that match employee contributions, either in their entirety or as a percentage, would not satisfy the comparability requirement, unless all eligible employees contributed the same amount.
• Employer contributions conditioned on an employee's participation in health assessments, disease management programs, or wellness programs would not satisfy the comparability requirement, unless all eligible employees participated in the programs.
• Employer contributions conditioned on age would not satisfy the comparability requirement, unless all eligible employees met the age requirement. The comparability rules do not apply to HSA contributions made through a cafeteria plan (but these contributions would be subject to the nondiscrimination rules for cafeteria plans).
Distributions
HSA distributions used to pay for qualified medical expenses are excluded from income. "Qualified medical expenses" generally include those expenses as defined in Sec. 213 of the Tax Code. A notable exception is health plan premiums, which generally cannot be paid from an HSA. However, certain types of premiums can be paid from an HSA: long-term care insurance premiums, up to applicable age-based limits (even if employee HSA contributions are made through a cafeteria plan); COBRA premiums; health care coverage premiums while an individual is receiving unemployment compensation; and premiums paid by individuals over age 65 for Medicare or for employer-sponsored health insurance or retiree health insurance (but not for Medigap policies).
HSAs can also pay for long-term care services, whether or not the HSA is funded through a cafeteria plan.
Distributions that pay for the medical expenses of the accountholder's spouse or dependents receive favorable tax treatment, even if these individuals are not covered by an HDHP.
There is no time limit by when a distribution must be taken to pay for or reimburse a qualified medical expense (i.e., no carryover rules, such as those commonly found in health plans or cafeteria plan flexible spending accounts). However, the HSA cannot pay for expenses that were incurred prior to the time that it was established.
Overall, the distribution rules for HSA take a generous approach. Together with the clarifications on HSA contributions, these accounts present an attractive option for employers looking to better define their health care dollars.
IRS Says Split-Dollar Changes That Don't Affect Underlying Life Insurance Contract Are "Not Material"
Split-dollar life insurance arrangements are used in a variety of business situations: to fund buy-sell agreements; to make the purchase of life insurance on an owner, key employee or other employee more affordable; to fund deferred compensation arrangements. In general, in a split-dollar life insurance arrangement, two or more parties allocate the policy benefits and costs. In the business settings described, this allocation is between the individual business owner or employee, and the business/employer.
Internal Revenue Service rules govern the taxation of split-dollar life insurance arrangements. Changes to laws in recent years have tightened some of the taxation issues involving these arrangements. For example, the Pension Protection Act of 2006 added Sec. 101(j) to the Tax Code, which provides that in the case of an employer-owned life insurance contract, the amount of death benefits excluded from the gross income of a policyholder cannot exceed the sum of the premiums and other amounts paid by that policyholder for the contract. This provision was effective for life insurance contracts issued after August 17, 2006. Also, the Taxpayer Relief Act of 1997 added Sec. 264(f) to the Tax Code, which denies a deduction for an interest expense that is allocable to the unborrowed cash value of a life insurance policy or annuity or endowment contract. This provision applies to contracts issued after June 8, 1997. In addition to these tax law changes, the IRS issued final split-dollar regulations in 2003, which apply to arrangements entered into after September 17, 2003.
For all these tax law and regulatory changes, life insurance contracts issued before the stated dates are grandfathered, and thus not subject to these requirements, unless there is a material increase in the death benefit or other material change after those dates. IRS Notice 2008-42 explains that a modification of a split-dollar arrangement that does not entail any change of the underlying life insurance contract will not be treated as a material change. This is because both sections 101(j) and 264(f) apply to “life insurance contracts.” Thus, modifications to split-dollar life insurance arrangements entered into before the effective date of the tax law changes, which do not affect the underlying life insurance contract, will not cause the arrangement to lose its grandfathered status. |
Dental Checkups Can Screen for Oral Cancer
Everyone knows the importance of regular visits to the dentist in promoting good dental health. Those visits to the dentist, however, can have far more long-term significance than just cavity prevention.
Good oral hygiene goes hand in hand with a person’s overall health. Dental care is on the front lines in the early detection of a variety of medical conditions, including diabetes. Some research has associated gum disease with health problems such as heart disease, stroke, and premature birth and low birth weight. But perhaps one of the most serious conditions that can be detected through regular dental care is oral cancer. Recent years have seen a nearly five-fold increase in the incidence of oral cancer in individuals under age 40, many of whom had no risk factors, according to information from the American Dental Association (ADA).
American Cancer Society statistics show that nearly 35,000 Americans are diagnosed with oral cancer each year, and only half of these will live for more than five years. Oral cancer is as common as leukemia and claims more victims than either melanoma or cervical cancer, yet hasn’t received the kind of attention in the media as these other types of cancer. Oral cancer can surface in the mouth, on the lips and gums, and along the throat or jaw line. Individuals certainly can and should be educated on the signs of oral cancer—a nagging mouth sore, changes in tissue color, a lump, thickening or rough spot, tenderness or numbness. Dentists, however, have the training, experience and expertise to recognize the difference between a run-of-the-mill mouth sore and one that calls for a closer examination. A dentist also would be better able to spot hidden or hard-to-see sores, lumps and patches.
During a routine checkup, the dentist should screen for oral cancer in several ways—closely examine the inside of the mouth, lips, tongue and gums for sores, patches, etc.; examine the tongue and neck for lumps; examine the jaw for any swelling; and ask the patient whether he or she has experienced any difficulty or pain in chewing, swallowing or moving the jaw. Any suspicious areas can be examined further using a “brush test,” through which cells are collected from a sore or lesion and sent to a lab for analysis.
Another recently available screening tool involves a form of light technology that detects tissue abnormalities; products developed using this technology may or may not be covered under a dental plan. Clearly, regular dental checkups can play a role in the detection of all types of oral cancer, making a dental plan that provides generous coverage for preventive services an important tool in oral cancer prevention. Whether provided as a regular benefit or on a voluntary, employee-pay-all basis, employees should know that their dental plan is about more than clean teeth and a nice smile. Communicating all that a dental plan has to offer can encourage employees to sign up for the coverage, and to motivate those who are covered to schedule regular checkups.
Stifle Retirement Saving Worries with a Dose of Confidence
The thought of funding a cozy retirement causes a lot of anxiety for many Americans. In the face of skyrocketing health-care costs and declining home values, U.S. workers and retirees are growing increasingly apprehensive about their ability to fund an enjoyable retirement.
According to the 18th annual Retirement Confidence Survey conducted by the Employee Benefit Research Institute, fewer than one in five U.S. workers (18% of those surveyed) say they are very confident about having enough money to support a comfy retirement. That leaves a whopping 80% of nervous folks who are not certain that they have enough retirement savings. If you’re among the masses of these unconfident workers, it’s time for a retirement savings morale boost. Before you decide your retirement days are doomed, here are some things you may want to consider:
Numbers don’t lie
It’s no secret that confidence is derived from preparation and education. Obviously, you won’t have much confidence in your ability to fund your retirement if you feel unprepared and don’t fully understand the ins and outs of retirement expenses.
According to the Retirement Confidence Survey, out of the workers who have calculated how much retirement money they need, 43% admitted that they simply guessed at the amount. It’s no wonder that many of these people are uncertain about whether or not they can afford a nice retirement. If you want a dose of retirement confidence, it’s important to spend time crunching numbers and calculating precisely how much retirement money you need. As you look at the numbers more closely, you may determine that you need to start investing or saving more—or you may even decide to change your retirement plan altogether.
There’s an array of methods for calculating how much money you’ll need to afford a comfortable retirement. One rule of thumb says that you’ll need 20 to 30 times your last working year’s salary in your retirement savings. However, some experts say this amount may be a little excessive. Consider meeting with a financial advisor to determine the appropriate amount of retirement savings for your unique situation. Post-retirement jobs About two in every three soon-to-be retirees say they plan to continue working either part-time or full-time after their “official” retirement to help fund expenses. However, you shouldn’t rely too heavily on this option. According to the Retirement Confidence Survey, more than half of retirees end up leaving their post-retirement jobs earlier than expected because of health problems or disability. If you are planning to work into your retirement years, it’s important that you adopt a healthy lifestyle.
This will increase the odds that you’ll be physically capable of working in your older years. Still, many financial experts say that upcoming retirees should focus more on saving for retirement instead of assuming that they’ll continue working. The key to smart retirement planning is preparing for a wide variety of scenarios. You can’t predict exactly what will happen in your future, so your best bet is to be prepared for the best and the worst. Boost your confidence Once again, only 18% of those surveyed in the Retirement Confidence Survey said they are confident in their ability to afford a comfortable retirement. Where do these workers get their confidence?
The study shows that these self-assured people share a few similarities. For example, the workers in this group are more likely to have a defined-benefit plan and retiree health-care insurance in addition to savings. Although not all employers offer these valuable benefits, it’s worth looking into if you want to boost your retirement savings confidence.
Hunting Down a Mortgage in Today's Marketplace
In the shadow of the subprime mortgage crisis, it seems that many lenders are still a little gun-shy. Most lenders have implemented extremely strict requirements and are turning down potential borrowers left and right. As a result, prospective homebuyers in the U.S. are finding it increasingly difficult to pin down a mortgage. Even consumers with impeccable credit are having a hard time getting approved for a new mortgage or refinancing an existing one. How can you possibly qualify for a home loan in today’s difficult marketplace?
If you want to prove to lenders that you are mortgage-worthy in the current environment, you’ll need to have the following three things:
1. A killer credit score
While a FICO score of 640 might have landed you a mortgage a few years ago, things have changed drastically. If you want to receive a great mortgage rate right now, you’ll probably need a score of 700 or higher. Borrowers with a score of 720 or higher are in the best position right now. These consumers can qualify for the lowest rates with no extra fees. But even those borrowers with FICO scores somewhere between 700 and 719 may have to pay an extra 0.5% in interest rates or fees. For a $200,000 mortgage, that’s an additional $1,000. This proves just how important it is to clean up your credit before applying for home loan. If your score goes up by a mere 20 points, it could cost you a pretty penny in rate increases or mortgage fees.
2. A fat down payment
A 5% to 10% down payment may not be nearly enough right now—especially if your credit score is lower than 620. And you might as well forget about 100% financing in today’s market. That’s because mortgage insurers are no longer covering 100% financing loans, and they’ve also cut way back on insuring 95% financing for borrowers with low credit scores. In today’s environment, you should be prepared to put down at least 20%, especially if you’re sporting a low credit score.
3. Watertight finances
These days, lenders expect borrowers to reveal every dirty detail about their finances—even those with awesome credit. You may be required to share information about your income as well as the exact amount of money you currently have in your bank account. Plus, you may have to prove that you are in a stable job or that you can cover up to six months of living expenses if you were to lose your job.
In the past, borrowers with excellent credit ratings had the option of what’s called a stated-income loan. With these loans, borrowers weren’t required to reveal their income, assets and other financial information. But these types of loans are long gone, even for consumers with super credit scores.
There’s no doubt that securing a home loan in the current environment is challenging. However, it is possible. If you can boost your credit score, save up for a sizeable down payment and prove that you have sound finances, you’re on the right track.
If you can’t make these things happen, you may want to consider an FHA loan. An increasing number of homebuyers are turning back to these loans, which are guaranteed by the government and allow extremely low or no down payments. However, before you make the decision to apply for one of these loans, you may want to discuss your options with a qualified advisor. |