As you may be aware, the Centers for Medicare & Medicaid Services (CMS) imposed intermediate sanctions against Cigna-HealthSpring. CMS did not create a Special Election Period (SEP) for members, but it is considering requests for an SEP on a case-by-case basis. If Cigna members want to choose another plan, they must call CMS. What happens if Cigna members move to another carrier through 1-800-MEDICARE?
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Late last week, Congress passed and President Obama signed into law the Consolidated Appropriations Act of 2016 and the Protecting Americans from Tax Hikes ("PATH") Act of 2015 - a massive, $1 trillion-plus tax and spending package that will fund the federal government for another year while providing for more than $600 billion in tax breaks. The new law does contain a few items of note for our clients and participants, so please take a moment to read through the information below summarizing the relevant provisions. Cadillac TaxTitle I of Division P of The Appropriations Act contains three provisions relating to the excise tax ("Cadillac Tax") for high cost plans. The most important of these is, of course, the postponement of the effective date of the tax by two years: instead of going into effect in 2018 as was anticipated, the Cadillac Tax will go into effect in 2020, provided it is not modified or repealed. The dollar amount of what is considered a "high cost" health plan for the purposes of calculating the tax will also be increased to reflect the delay in the tax's effective date. Mass Transit Benefits Under current law, Qualified Transportation Fringe Benefits provided by an employer are excluded from an employee's wages (including parking, transit passes, and vanpool benefits). Before February 17, 2009, the amount excluded as Qualified Transportation Fringe Benefit was higher for parking than it was for combined vanpool and transit passes. As you may recall, legislation in 2009 eliminated this discrepancy and provided "parity" between the exclusion amount for parking and mass transit benefits. This parity, however, only extended until December 31, 2014, and in 2015, the amount of the exclusion for transit passes dropped below the exclusion for parking benefit. With the passage of the PATH Act, this parity is now permanent - meaning the exclusion amount for parking and mass transit will be equal (increasing to $255 per month for both parking and transit beginning January 1, 2016). Did you know that Type II Diabetes is one of our nation's fastest growing serious health conditions, and according to the American Diabetes Association, is the cause of more deaths each year than breast cancer and AIDS combined?
With your CareOptions benefit, you and your entire family can now take an easy, brief risk assessment to find out your risk for developing Type II Diabetes. This important health application was developed after years of credible studies that proved there are certain risk factors for developing Type II diabetes. It's vital to know your risk and take precautions before it may be too late. Take this Type II Diabetes Risk Assessment today and be proactive about your health and the health of your loved ones. Don't forget to check out all of the other Important Health & Wellness Assessments your CareOptions benefit provides you. Remember, as always, your CareOptions family healthcare benefit is provided to you at no charge- ever! Click this link for more information about CareOptions. Contact me for more information. Thank you Now that everyone has Froze their families credit to adequately protect themselves from Anthems data breach lets move onto further protecting our money.
Set up Two Factor Authorization (2FA) with your bank or brokerage account. The process where your identity is fully verified before any money leave your account. You may not know it, but you probably already use two-factor authentication in the physical world "two-factor authentication is a simple feature that asks for more than just your password. It requires both "something you know" (like a password) and "something you have" (like your phone). Think of it as entering a PIN number, then getting a retina scan, like you see in every spy movie ever made. It's a lot more secure than a password (which is very hackable)" Clark Howard's one minute take on the matter: http://t.co/6lqiW9BXym List of websites and whether or not they support 2FA. https://twofactorauth.org/ Average Costs For Long Term Care Insurance Rise 8.6 PercentOverall costs for new long term care insurance coverage increased 8.6 percent compared to one year ago, according to the just published 2015 Long Term Care Insurance Price Index.
“A healthy 55-year old man can expect to pay $1,060-per-year for $164,000 of potential benefits, compared to $925 last year,” reports Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI). ”The average cost for a 55-year-old single woman is $1,390, an increase from $1,225-per-year (2014).” Each January, the trade group releases the findings based on top-selling policies offered by leading insurers. “Rate increases are the result of both higher claim costs and the historic period of low interest rates,” Slome explains. Last year, long term care insurers paid out a record $7.5 billion in claim benefits and the Association predicts the industry will pay some $34 billion in annual claim benefits by 2032. According to the 2015 Price Index, a married couple both age 60 would pay $2,170-per-year combined for a total of $328,000 of long term care insurancecoverage. In 2014, the Association reported a couple could expect to pay $1,980. Adding an inflation growth option that builds their benefit pool to a combined $730,000 at age 85 will added $1,760 to the couple’s yearly cost. A wider spread between the lowest and the highest available costs for each segment analyzed was found by the Association. “The largest spread now represents a 119 percent difference between the lowest available cost and the highest rate one pays for virtually identical coverage,” Slome points out. Much of the difference still impacts single women as insurers continue the trend of charging single women more for coverage due to their increased likelihood of needing long-term care. Costs Vary By 34-To-119 Percent; How Consumers Can Get Best Rates AALTCI reported a larger spread in costs than in prior years. “In some situations the difference between the lowest-cost policy and the highest-cost was 34 percent but it could be as much as 119 percent,” Slome points out. “Our average 55-year old woman could pay as little as $890-a-year or as much as $1,829 based on which insurer she buys from.” “Long-term care insurance policies today vary in terms of cost, available discounts and policy benefit options,” Slome explains. “It’s a complicated product and almost impossible to compare on your own.” Insurance companies do not sell long-term care insurance policies directly to consumers. “They will merely direct your inquiry to an agent that favors their particular company,” Slome acknowledged. “When you step into a Ford car dealership, you understand the salesman is trying to sell you a Ford,” Slome adds. “If you want an objective comparison, we believe working with a long-term care insurance professional able to offer multiple policies from multiple insurance carriers could be in your best interest.” The Association suggests ways to determine an insurance professional’s expertise. “In insurance industry jargon, the word ‘appointed’ actually means an agent can actually sell you that particular company’s policy,” Slome explains. “An insurance agent who focuses on long term care insurance will typically be appointed with between four and six leading LTC insurers, so it pays to ask who they are appointed with.” Link to article Anthem has announced that they were the target of a sophisticated cyber attack that compromised significant member data. To ensure you are able to answer any questions you may receive from your clients about the Anthem cyber attack, please see the following resources for more information:
Message from Anthem President and CEO, Joseph Swedish: http://www.anthemfacts.com/ FAQs with more information regarding next steps and what information was compromised: http://www.anthemfacts.com/faq Hotline: 1-877-263-7995 Each year, at this time, we remind our clients of the importance of keeping their estate plan up to date. Estate planning goals change over the years for many reasons, including the birth, marriage, death or disability of a family member. Financial reasons which warrant the review of your estate plan may include significant changes in net worth or changes in the nature of your assets such as the sale or purchase of real estate or a business. It is important that your estate planning documents reflect your current goals. This includes the beneficiary designation forms for your contractual property, such as life insurance, annuities, and retirement accounts, which will be inherited by your designated beneficiaries regardless of the provisions in your last will and testament or revocable living trust. In addition, federal and state transfer tax laws offer opportunities for significant tax savings through proper planning. Clients should consider the benefits of insightful tax planning both during life through lifetime gift planning and at death through testamentary estate planning.
Consider making a resolution to review your estate planning documents to make certain that they are still effective under current law and continue to meet your goals. Below is a brief reminder of significant laws relating to estate planning, including significant changes for 2015.
This is not an endorsement of this firm. http://www.jdsupra.com/legalnews/make-a-new-years-resolution-to-review-y-28424/?utm_source=JD-Supra-eMail-Digests Court Decision Has Implications For Estate Planning
By Cyril Tuohy InsuranceNewsNet A ruling by the U.S. Supreme Court holding that assets contained in an inherited individual retirement account (IRA) don’t qualify as retirement funds for the purposes of bankruptcy exemption, has turned the estate planning community on its head. The Supreme Court’s ruling is “sending seismic shock waves through the estate planning community,” said Gail Buckner, a retirement and financial planning specialist and instructor with Franklin Templeton Investment. In a story published on Fox Business, Buckner, citing sources with accounting, estate and wealth transfer expertise, said that the ruling will make it easier for creditors and bankruptcy attorneys to lay claim on inherited retirement assets. In Clark V. Rameker, the Supreme Court on June 12 ruled 9-0 to uphold a lower court ruling in favor of bankruptcy trustee William J. Rameker. “This decision points to a significant chunk of American wealth that is now, quite clearly, no longer as ‘bulletproof’ from creditors as most thought,” Eleanor Blayney, the Board of Certified Financial Planners’ consumer advocate, wrote in a recent blog posting. IRAs held assets worth $6.5 trillion at the end of last year, according to the Investment Company Institute. “Estimating non-spousal inherited IRAs at 1 percent of total IRA wealth, this could mean that $54 billion in IRA assets previously inaccessible to creditors are now no longer protected,” Blayney wrote. “It’s not a bad time to be a bankruptcy attorney!” “In light of this decision, many are asking themselves: If inherited IRAs aren’t protected, how long before traditional and Roth IRAs aren’t protected either?” Blayney wrote. The court didn’t address that question. The question facing the Supreme Court was: Does the U.S. Bankruptcy Code exempt an inherited IRA from a debtor’s estate in bankruptcy? “The crux of the decision came in the discussion of the purpose of bankruptcy and the court’s finding that, where Congress intended to protect retirement funds and the debtor could access the inherited funds prior to retirement, the inherited IRA smacked of windfall,” the National Consumer Bankruptcy Rights Center reported in a blog post. Writing for the unanimous court, Justice Sonia Sotomayor held that an inherited IRA account did not qualify as a retirement fund, and was therefore not exempt. “The text and purpose of the Bankruptcy Code make clear that funds held in inherited IRAs are not ‘retirement funds,’” within the meaning of the bankruptcy exemption, Justice Sotomayor wrote in her 11-page decision. Inherited IRAs do not fit the definition of a retirement fund because the heir to the fund — other than a spouse — cannot invest more money or make contributions to the account. The accountholder, or heir, is also required to draw money from the account in its entirely or via annual distributions, regardless of how many years the inherited IRA accountholder has until retirement. Taxes are paid on the distributions. Allowing an inherited IRA to be exempt from creditor claims would ultimately undermine the purpose of the Bankruptcy Code, the Supreme Court found. The case began in 2001, when Heidi Heffron-Clark inherited a $450,000 traditional IRA from the estate of her mother Ruth Heffron. Heffron, who died in 2001, had named her daughter the sole beneficiary of the account the year before. Upon Heffron’s death, Heffron-Clark chose to take monthly distributions from the inherited account as required by law. But when Heffron-Clark and her husband filed for Chapter 7 bankruptcy in 2010, the couple claimed the inherited IRA, now with a balance of only $300,000 due to the monthly distributions, was exempt from claims of the creditors. Bankruptcy trustee William J. Rameker and unsecured creditors of the estate objected to the claimed exemption on the grounds that the funds in the inherited IRA were not retirement funds in the context of bankruptcy laws. Heffron-Clark had been receiving monthly distributions from the account for almost a decade. The Bankruptcy Court agreed with Rameker and the bankruptcy trustees. It concluded that funds in an inherited IRA are not “segregated to meet the needs of, nor distributed on the occasion, of, any person’s retirement.” A U.S. District Court disagreed, however, and reversed the Bankruptcy Court’s ruling. The U.S. District Court found that the exemption covers any account containing funds “accumulated for retirement purposes.” The opinion of the U.S. District Court was overturned by the 7th U.S. Circuit Court of Appeals. The circuit court concluded that “inherited IRAs represent an opportunity for current consumption, not a fund of retirement savings.” The Supreme Court agreed with the circuit court. “We now affirm,” Justice Sotomayor wrote. Will it remain the law of the land? The National Consumer Bankruptcy Rights Center said since this case involved exemptions under federal law, it’s possible there may be some “wiggle room,” but only in states with “applicable exemptions that do not track the federal language.” http://insurancenewsnet.com/innarticle/2014/07/24/court-decision-has-implications-for-estate-planning-a-535087.html Couple Can Deduct up to $9,100 in 2013, Business Owners Can Cover Spouses Explains American Association for Long Term Care Insurance http://www.marketwired.com/press-release/Dont-Overlook-Long-Term-Care-Insurance-Tax-Deduction-Opportunity-1859922.htm LOS ANGELES, CA--(Marketwired - Dec 6, 2013) - There is still time to secure a significant 2013 tax deduction for having long term care insurance purchased prior to the end of the year with an increased deduction next year according to an industry expert. "The tax deductibility of long term care insurance remains one of the best kept secrets," explains Jesse Slome, director of the American Association for Long-Term Care Insurance(AALTCI). "The federal government and a number of states encourage long term care planning by offering tax deductions and tax credits. The federal deduction can be as much as $9,100 for a couple with this protection in place." Slome notes that there is still time for individuals to take advantage of the tax deduction by acting prior to the end of the year. "Plus, those who already own tax-qualified long term care insurance coverage may qualify for a tax deduction this year even if they were not eligible in prior years," Slome points out. To take advantage of the deduction, individuals must itemize their tax deductions and meet personal medical expense limits. "After retirement people typically have little or no income to report so it takes less to meet the medical expense threshold for itemized deductions," Slome explains. "At the same time, the tax deductible limits for long term care insurance increase as you age, so a 70-year-old can deduct up to $4,550. Two spouses each with coverage could deduct twice that amount. So, even if you didn't qualify last year, don't overlook the potential to take a deduction this year." Business owners and self-employed individuals may benefit from enhanced tax-deductible treatment. "It may be possible to deduct eligible long term care insurance premiums for spouses and even for eligible dependents," Slome notes. Small businesses established as C-Corporations can benefit from complete tax deductibility of tax qualified long term care insurance as a business expense similar to traditional health and accident insurance, the expert points out. "They can typically select who is covered and some insurers will offer discounts when multiple individuals are covered," Slome adds. 2013 and 2014 Tax Deductible Limits For Long Term Care Insurance Tax-deductible limits for individuals start at $360 for individuals who are age 40 or less prior to the close of the 2013 tax year and increase to $4,550 for those who are more than age 70. The complete Internal Revenue Service (IRS) 2013 and 2014 long term care insurance tax deductible limits can be accessed on the Association's website. "Individuals who have procrastinated all year about looking into long term care insurance have a valuable reason to start now before the year ends," Slome advises. "But don't wait until the last week because it takes time to get necessary information and complete and submit an application and payment." The Association advises individuals work with a knowledgeable long term care insurance professional. "Even when the cost is tax deductible, you don't want to overpay for coverage," Slome notes. According to the annual AALTCI Long Term Care Insurance Price Index, costs for virtually identical protection can range from 30 to 92 percent... Although not well thought out, the Roth 401(k) conversion provision in theAmerican Taxpayer Relief Act of 2012could be a great opportunity for some investors moving forward.
Since provision 902 of the bill was a last-minute decision, the U.S. Department of the Treasury and Internal Revenue Service must issue some guidance, said Bob Kaplan, vice president and national training consultant at ING Investment and a member of the government affairs committee for the American Society of Pension Professionals & Actuaries, in a webinar this week. The provision’s main purpose was to raise about $12.2 billion over the next 10 years, Kaplan said. The belief was that, if given the chance, many people would convert large portions of their 401(k) plans to Roth 401(k) plans to better manage their taxes in retirement. “We’re not so sure. There are a lot of details that have to be worked out,” Kaplan said. The Roth was first allowed as a deferral provision in certain types of 401(k) and 403(b) plans back in 2006. In 2010, investors were allowed to convert pretax money for portions of their accounts that were available for distribution, for instance if they had rollover money or had reached age 59½, Kaplan said. The change under this new law allows investors to convert any portion of their pretax account to a Roth. One confusing point that Kaplan hopes will be clarified by Treasury and the IRS is whether those funds have to be vested or not. “Why in my right mind, why would I want to convert my non-vested dollars? We are waiting for Treasury to do a clarification. Probably it will come out in an FAQ or regulation. They need to give us guidance. We expect it to say vested pre-tax accounts,” he said. It is important to note that the Roth conversion is only available to plan participants if their employer and plan sponsor add it to their plan. If they don’t add it, participants are out of luck and won’t be able to do it, he said. Conversion to a Roth is a taxable event. Another point that needs guidance is whether an investor can pay for those taxes out of its converted dollars or if it needs to find another pot of money to do it from, he said. Treasury and the IRS need to make a decision on this soon because any conversion made this year is taxable in 2013. The Roth conversion can only be added to retirement plans that already offer a Roth type deferral, which means 401(k), 403(b) and 457(b) plans. “We can’t add a Roth conversion to any other type of plan, like a defined benefit, cash balance or profit-sharing type of plan with no 401(k) feature,” he said. That said, if a plan doesn’t offer a Roth deferral, it can amend its plan to allow for Roth deferrals as well, making it a candidate for Roth conversions. Companies that decide to do this can begin offering the deferral plan immediately, but they need to make sure they amend their plan by the last day of the plan year, Kaplan said. These plan provisions must be communicated across the board to all plan participants on a non-discriminatory basis. It can’t just be offered to people who make six figures because those are the people who will take advantage of it, he said. It isn’t just wealthy people who are interested in Roth plans. Younger people are starting to defer with Roth because they feel their tax burden won’t be as high as later on in their life. If a plan does have a Roth deferral feature, advisors should have a conversation with clients about tax diversification, Kaplan said. With the possibility of taxes being raised, it doesn’t hurt to discuss the best options out there. One benefit of a Roth conversion is that investors can pay taxes now and pass that money on to their heirs tax-free. http://www.lifehealthpro.com/2013/03/14/guidance-is-needed-on-new-roth-401k-conversion?eNL=514245eb140ba01d5f000191&utm_source=LifeHealthProDaily&utm_medium=eNL&utm_campaign=LifeHealthPro_eNLs&_LID=107720536 Converting a 401(k) to a Roth in 2013 The American Taxpayer Relief Act of 2012 (the Act) allows 401(k) plan participants to convert funds held in their traditional 401(k)s into Roth 401(k)s. Like an IRA-to-Roth-IRA conversion, this move allows 401(k) account owners to pay the taxes on the funds when they are rolled over into the Roth — so that the funds can then grow tax-free within the Roth, where they can be withdrawn without tax liability in the future. The Act does not impose any limits on the amount that can be transferred from the 401(k) to the Roth. These types of rollovers were always permitted, but, under prior law, a 401(k) account owner was permitted to convert only the funds that he could otherwise withdraw without penalty. This limitation effectively confined conversions to those clients who had already reached age 59½, or who had died, become disabled, or separated from service. Other clients were required to pay a 10 percent penalty if they converted where distributions were not otherwise permitted. Why convert? Even though we no longer have fiscal cliff tax uncertainty hanging over our heads, the permanence of the income tax rates set by the Act does not mean that your clients will be taxed at the same rates when they eventually retire. Inflation adjustments and government budgetary needs will almost certainly mean that tax rates will be higher for many of your clients when they retire, whether that is in five years or twenty. The primary benefit of converting to the Roth 401(k) is that clients choosing this path can stop wondering what tax rates will be like when they retire. The taxes are paid up front so that the funds are allowed to grow tax-free. For younger clients, this can represent decades of tax-free growth that can be drawn upon during retirement. http://www.lifehealthpro.com/2013/01/14/cliff-deal-opens-the-gates-for-roth-conversions?eNL=50f8623d140ba00c330002f9&utm_source=WealthMgmtPro&utm_medium=eNL&utm_campaign=LifeHealthPro_eNLs&_LID=106056789
Some of the nation's leading insurers are filing new long term care insurance (LTCI) policies that use sex-distinct pricing. That could result in women paying 20 percent to 40 percent more than comparable men.
LTCI carriers suspected all along that women were likely to live longer than men and consume more formal long-term care (LTC) services than men. LTCI carriers now know that women account for two out of every three LTCI claim benefit dollars paid out, and that single women alone account for about 41 percent of all LTCI benefits paid out. The carriers have, in effect, been giving women -- especially single, divorced and widowed women -- what amounted to a significant price advantage. At the carriers shifting to sex-distinct pricing, that advantage will be ending soon. This change is of special interest to female clients ages 55 to 65, who are likely to be old enough to understand the need for LTCI coverage and healthy enough to qualify for coverage. At the American Association for Long Term Care Insurance (AALTCI), we've been trying to get this message out to insurance professionals. I've been writing about this issue in communications to AALTCI members, and putting it in press releases aimed at publications that could reach other agents, brokers, consultants and financial advisors. Given who the readers of this site are, you may already have gotten this message through AALTCI publications or through articles based on the press releases. If so: You no doubt already are doing your best to educate female clients and prospects about the coming pricing shift. If not, keep in mind that all insurers are watching the insurers that have reported filing new policies using sex-distinct rates. Insurers that resist the trend may find themselves underpricing the market. That practice might seem beneficial to women in the short run but could to problems in the long run. But, for now, while unisex prices prevail in the market, this may be a good opportunity for women to take advantage of the disappearing price advantage. When you are talking to women who are thinking about LTCI coverage, explain that women live longer, have a greater risk of needing long-term care, and, indeed, initiate two-thirds of all new claims started each year. LTCI will end up costing more for women because they're likely to need it more. When you are talking to married women, make sure they understand that women are much more likely than their husbands to live into their 80s and 90s, and much more likely to end up needing LTC services About the Author Jesse Slome is executive director of the American Association for Long-Term Care Insurance, Los Angeles. http://www.lifehealthpro.com/2012/12/18/warn-the-women?eNL=50d20861ca9f80051b000359&utm_source=LTCIInsider&utm_medium=eNL&utm_campaign=LifeHealthPro_eNLs&_LID=107764087 |
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