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April 2017

Apr 07
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Understanding Dependent Care Reimbursement Accounts

By Employment Resources

Dependent Care Reimbursement Accounts assist you in paying for qualified dependent care. With it, you can focus on your job instead of worrying about your kids or elderly dependent parents. Consider taking advantage of this employee benefit.

What are Dependent Care Reimbursement Accounts?

Dependent care reimbursement accounts pay for dependent care while you’re at work. Dependents are typically defined as children under the age of 12, a disabled spouse or dependent parents.

Depending on your tax filing status, you can contribute up to $6,000 annually to a dependent care reimbursement account. The money deposited into your dependent care reimbursement account is not refundable and does not carry over to the next year, so you’ll lose any funds you do not use.

What Do Dependent Care Reimbursement Accounts Cover?

You may only use funds in your dependent care reimbursement account for daycare expenses. The money cannot be used for any other expense even if it is related to your dependent’s care. Eligible expenses include:

  • Childcare before and after school for kids 13 and younger
  • In-home care as long as the provider is not your dependent
  • Home or daycare for disabled dependents who live with you at least eight hours a day
  • Licensed child and adult daycare providers
  • Registration fees associated with qualified dependent care
  • Summer day camp for kids 13 and younger

Dependent care reimbursement accounts do not pay for these expenses.
Care not related to work

  • Educational Fees/Tuition
  • Food, clothing
  • Overnight camps
  • Payments to a qualified individual’s parent or spouse
  • Transportation expenses you incur

Keep all receipts to prove that you used the funds for eligible expenses.

Why enroll in a Dependent Care Reimbursement Account?

    1. Perform better at work.

      Caring for your child or dependent is your first priority, and it’s difficult to concentrate at work when your child is sick or your elderly parent is home alone. A dependent care reimbursement account ensures your dependents are taken care of as you work. The account can actually improve your work performance since it decreases tardiness, absenteeism and distraction while increasing morale and productivity.

    1. Reduce your tax burden.

      You fund your dependent care reimbursement account with pre-tax paycheck deductions, which means you pay fewer taxes.

    1. Balance your budget.

      Paying for childcare or elder care can be expensive and could strain your budget. Make regular contributions to your dependent care reimbursement account and keep your budget balanced.

    1. Dependent care reimbursement accounts offer numerous benefits. They’re an important asset for your family, so consider opening an account. Your Human Resources manager or insurance agent will provide additional information.
Apr 07
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Volunary Benefits Advantages

By Employment Resources

The voluntary benefits market is growing, and with good reason. Voluntary benefits-offered through the workplace but paid for fully by employees-enable an employer to make a wide array of supplemental benefits available to employees, at little or no cost to the company. Voluntary benefits products are so attractive that, according to one study, more than six in ten employers now offer at least one type of voluntary benefit.

The advantages of voluntary benefits are well known. Because a voluntary benefit product is marketed and sold in a group setting, employees can purchase the benefits at a group rate, pay for them through payroll deduction, and save the time of shopping for them on their own.

For eight consecutive years, Metlife has conducted research on employees and employers regarding the U.S. benefits industry, and compiled the results in its annual Study of Employee Benefits Trends. The 2010 study reveals the apparent resilience of workplace benefits even during a tough economy.

It also shows that although employers and employees continue to deal with the effects of the economic downturn, they are focused on the long term, and value voluntary benefits. However, there is a slight disconnect on how much worth employers/employees place on voluntary benefits.

According to the 2010 study, 57% of employees agree that voluntary benefits provide access to options that better fit their needs. Furthermore, 60% of employees surveyed believe that voluntary benefits are valuable to provide them with extra coverage that supplements employer-sponsored benefits.

From the employer’s perspective, the study found that many employers underestimate the value employees place on voluntary benefits. Just as employees expressed greater interest in voluntary benefits, the importance of these benefits has declined among employers. As a result, there may be a missed opportunity for employers to improve satisfaction with benefits program.

The most in-demand voluntary benefits continue to be those that supplement core medical, life, or disability coverages. These include dental, critical illness, specific illness, hospital supplemental, medical supplemental, disability buy-up, and supplemental life coverages.

However, demographic trends are contributing to growing interest in long-term care and financial planning products. As more people become faced with their parents’ eldercare needs, they begin to appreciate the cost of extended care and anticipate what their own needs may be in a few short years. And, many workers, beginning in mid-career, face the double crunch of saving for retirement at the same time they are attempting to finance their children’s college education.

Other products in the voluntary benefits market include vision insurance, legal services plans, auto/homeowners’/renters’ insurance, and pet care insurance.

In deciding on a particular voluntary benefit product or vendor, an employer should keep several things in mind:

  • Is the type of product one for which employees have expressed an interest (as demonstrated by requests made or surveys done of the workforce) or one that you are comfortably sure employees will want?
  • If administrative processes by the company’s human resources/benefits staff will be required, are they easy to understand and economical in terms of the amount of time they will require?
  • After examining detailed information on the product, does it seem to provide what its name implies?
  • Is the carrier/vendor financially stable and reputable?

If chosen properly, voluntary benefits can be a welcome, win-win supplement to an employer’s benefits package.

Apr 07
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Health Care Reimbursement Accounts

By Employment Resources

Health Reimbursement Accounts (HRAs) supplement your health insurance policy. Employer funded, they reimburse you for a variety of qualified medical expenses. Understand HRAs as you maximize your health insurance coverage.

What are HRAs?

Also known as Section 105 Medical Reimbursement Plans or Health Reimbursement Arrangements, Health Reimbursement Accounts essentially work as business expense accounts. You pay for your medical care but can then receive reimbursement for qualified expenses.

An HRA is funded from your paycheck deductions. Because you pay taxes on your gross income before HRA deductions are taken, you won’t pay taxes on the HRA reimbursements you receive.

Your employer sets the HRA dollar amount. Unlike a Flexible Spending Accounts (FSA) or Health Savings Account (HSA), an HRA has no contribution limit so your employer can deposit as much or as little money into the account as they wish.

If you don’t use all the funds in your HRA, the money rolls into the next year unless your employer has designed the HRA to limit rollover. You may also be eligible for distributions after you retire if your employer’s plan allows it.

What Expenses Qualify?

A variety of health care expenses may be reimbursed with an HRA as long as the expense is not reimbursed from another source and is not itemized on your tax return. Typically, eligible expenses include:

  • Surgery
  • Diagnostic tests
  • Co-pays and deductibles
  • Out-of-pocket expenses
  • Prescriptions
  • First aid supplies
  • Medical equipment
  • Dental expenses
  • Vision expenses

Who’s Covered by an HRA?

Your personal medical expenses are covered by an HRA. Also, it may pay for the unreimbursed medical expenses incurred by your spouse, qualifying child who is under the age of 26 or dependent parent. Check your specific HRA for additional details on who is covered.

Why Use an HRA?

If your employer offers an HRA, consider taking advantage of it for several reasons.

  • Supplement a high-deductible health insurance policy. Increasingly, health insurance policies include high deductibles of up to $10,000 and may not cover dental or vision expenses. Use your HRA to cover the gaps.

 

  • Improve your health. Instead of putting off medical treatment like diagnostic testing or surgery or not taking expensive medication, use your HRA to cover those costs. The funds help you get and stay healthy.

 

  • Save money. Think of your HRA as a savings account. When you need the funds for authorized medical expenses, they’re available, and you won’t pay taxes on the distributions. Health reimbursement accounts are valuable assets that supplement your health insurance policy and stretch your budget. Ask your employer about opening an HRA today.
Apr 07
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Salary Continuation Plans

By Life and Health

Salary continuation plans offer your company an invaluable resource for attracting and retaining key employees. Whether you work in Human Resources or are a key executive, understand salary continuation plans and how they work.

What is a Salary Continuation Plan?

Companies may offer salary continuation plans to key employees or executives as a supplement to their employee benefits package. In the event that the executive retires, becomes disabled, dies or otherwise separates from the company, the plan provides a salary to the employee or designated beneficiary.

How Does a Salary Continuation Plan Work?

After a company decides to offer salary continuation plans, they negotiate with the key executive to determine a specified benefit amount. That set amount can be contributed to the plan while the executive remains employed or paid annually during retirement.

Employees who participate in a salary continuation plan pay no out-of-pocket expenses. The plan also grows tax-free. However, the employee will be taxed on any benefits they receive.

Typically, the executive receives access to the plan when he or she retires, is disabled or otherwise separates from the company. If the executive dies, a designated beneficiary may receive the plan benefits.

The salary continuation plans may feature vested scheduling based on the employee’s position, length of employment and other arrangements. For example, a director may receive 100 percent of the annual salary while junior executives receive a lower percentage or the executive may be required to remain with the company for a certain number of years to receive the full plan amount.

How are Salary Continuation Plans Funded?

Most salary continuation plans are funded with a whole life or universal life insurance policy. The company wholly funds and usually owns the policy, pays the premiums and controls the cash value of the policy, and the key executive is named as the policy’s beneficiary. A life insurance agent sets up salary continuation plans and can make adjustments as needed.

Advantages of Salary Continuation Plans

Companies and employees gain several advantages with salary continuation plans. Weigh the advantages as you decide if this coverage is a wise choice for you.

Company Advantages:

    1. Reward and retain key executives.
    1. Use vesting schedules to “tie up” key executives.
    1. Recover costs easily.
    1. Plans are flexible, easy to understand and relatively simple to implement.

Employee Advantages:

    1. Enjoy a supplemental source of retirement income in addition to your 401(k) plan benefits.
    1. Increase the value of your executive benefits package.
    1. Negotiate the benefit amount.

Salary continuation plans benefit companies and key executives. Discuss the details with your insurance agent as you take advantage of this important benefit.

Apr 07
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Elderly Need to Be Aware of Schemes and Fraud

By Life and Health

No one likes to believe that, in our society, there are predators who take advantage of individuals who are the least able to defend themselves. However, the sad truth is that across America every year, millions of seniors are hoodwinked by fraud, scams, and swindlers. These common scams can happen in the home or at the mall. They can be carried out in person, by mail, on the phone, or over the Internet.

In reviewing telemarketing fraud, the United States Congress has stated that telemarketing schemes have become a $40 billion per year “industry.” There are approximately 140,000 active telemarketing firms in the U.S., and Congress estimates that up to 10% of these might be fraudulent. Many of these fraudulent telemarketers prey on older Americans.

The American Prosecutors Research Institute indicates that senior citizens are more susceptible to telephone fraud than others because they possess more than half of all the financial assets in this country and their assets can be converted easily into large sums of cash. Secondly, older people are more likely to be at home to receive telemarketing calls. And finally, many older Americans are too polite to hang up. Amazingly, some senior citizens are subject to fraud because they are just too nice.

But there are steps you can take to protect yourself at home, on the phone, and online. On the Internet, beware of any “free” service or product. Don’t give out personal information unless you absolutely know who the provider is. Just because your friend knows them is not good enough. Furthermore, don’t use your credit card to make purchases on the Internet. No site, not even a bank site is 100% safe.

In your home, you control access and never, ever, let anyone inside whom you don’t know. If you make the decision to purchase something from a door-to-door salesperson, which is not recommended, pay by post-dated check or ask to pay upon delivery of your item. Never pay cash. And don’t use your credit card or give your credit card number. Even better, ask the salesperson to come back tomorrow after you’ve had a chance to think about it, and then investigate to confirm they are legitimate.

On the phone, get an answering machine or caller ID to screen your calls, and only pick up the receiver if it is someone you know and trust. If a salesperson gets through, don’t accept anything they claim is free; such as sweepstakes prizes, cruises, or high-yield investment returns. If it sounds too good to be true, most likely it is too good to be true. Never give your credit card, phone card, Social Security, or bank account number to anyone over the phone. In fact, it is illegal for telemarketers to ask for these numbers to verify a gift or prize.

If you feel suspicious of any person or company, trust your instincts and hang up, close the door, or turn off your computer. Call the police or the Better Business Bureau and report the questionable activity. Or contact the National Consumers League Fraud Information Center at www.fraud.org. With vigilance and good common sense, you can help yourself as well as other potential victims avoid this insidious crime.

Be safe. Be careful, and don’t become another victim.

Apr 07
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Understanding Roth IRA

By Life and Health

Saving for retirement is important for your financial future. Consider a Roth IRA because it offers five benefits.

What is a Roth IRA?

A Roth IRA allows you to contribute up to $5,500 ($6,500 for consumers over the age of 50) per year. You receive no tax benefits when you contribute, but the contributions and earnings grow tax-free.

You may withdraw funds from your Roth IRA when you turn 59-1/2 years old and the account has been opened for five years. There are no required minimum distributions. When you do withdraw money, it’s tax-free and penalty-free.

The 5 Benefits of the Roth IRA

Carefully consider five benefits of the Roth IRA as you plan your retirement strategy.

    1. Gain tax-free income during retirement.

      You will pay no taxes on your Roth IRA contributions and earnings. That’s a huge advantage, especially if you’ll be in a higher tax bracket when you begin taking distributions.

 

    1. Receive investment flexibility.

      Retirement funds such as certificates of deposit or traditional IRAs require you to wait for distributions. Your Roth IRA offers greater flexibility.

      Withdraw funds from your Roth IRA for any purpose when you turn 59-1/2. There are no required distributions or penalties. Also, you may withdraw funds sooner than 59-1/2 years of age for these purposes.

      • First-time home purchase
      • Postsecondary education expenses
      • Permanent disability
      • Unreimbursed medical expenses of over 10 percent of your adjusted gross income or 7.5 percent if you’re over 65 years old
      • Health insurance premiums during unemployment
      • Back taxes

 

    1. Contribute after age 70 1/2.

      Traditional IRAs do not allow you to make contributions after you turn 70-1/2 years old. Instead, you must take distributions and pay taxes on those distributions.

      A Roth IRA includes no age limits for contributions. As long as you continue to earn income, you can contribute to the account and watch the total and your future financial security grow.

 

  1. Assist your heirs.

    Every Roth IRA includes an account beneficiary. Select an heir or multiple heirs who then receive tax-free income. This benefit is particularly attractive if caring for heirs or leaving an inheritance is an important part of your financial plans.

  2. Gain a back-door entry as a high earner.

    There are income limits to Roth IRA contributions that inhibit high earners from opening this type of account. However, you can open a traditional IRA and then convert those funds into a Roth IRA. A tax professional helps you make this conversion.

A Roth IRA provides five key benefits. Consider them carefully as you choose the best retirement strategy for your needs.

Apr 07
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Insuring Your Prized Flatware

By Personal Perspective

When you sit down to dinner, your eating utensils probably include a fork, spoon and knife. The fork is only a few centuries old, but knives were used by Stone Age diners, and the first man-made spoons were fashioned from horns, bones and wood. Today’s silverware has come a long way from its early predecessors, and it’s a popular wedding gifts. Protect your priceless silverware with an insurance policy.

Why Purchase Silverware Insurance?

Your homeowners insurance policy covers most of your possessions. However, it may not cover silverware, including the pieces passed down from generation to generation. If your policy does cover silverware, it may limit the amount of money it pays for valuables and antiques, limit coverage to $500 or less or not cover your silverware if carry it out of your home and with you on vacation, to an appraisal or to a family gathering.

Purchase silverware insurance to protect your collection and give you peace of mind. The coverage is typically an endorsement or rider on your homeowners insurance policy and can cover your entire collection or your most valuable pieces.

What Does Silverware Insurance Cover?

Insurance cannot prevent theft, loss, fire, or weather or other physical damage, but it can give you peace of mind. Your insurance company may reimburse your for the value of your insured silverware, whether it’s new or antique.

How to Determine the Value of Your Silverware

You can easily determine the value of household items like furniture and electronics. Silverware can be trickier to valuate, though, especially if you’re not sure of its age, value or authenticity.

Contact an antique or silver dealer for an accurate appraisal of your collection. You may try to find the value online, but you’ll need a written appraisal for insurance purposes.

Once you have that appraisal, take pictures of your collection. Include the appraisal and pictures with your policy in a fireproof safe or lock box.

How to Purchase Silverware Insurance

While you may be lucky enough to own an entire collection of rare silverware, you can also insure a single item such as a valuable piece you purchased at an estate sale or a special spoon your grandmother owned. Many insurance companies suggest you insure each piece individually. That way, each piece is appraised and listed on your policy, allowing you to receive the item’s full value if you must file a claim.

Your insurance agent will assist you in understanding the coverage options and in finding the best coverage for your needs.

Silverware insurance is valuable coverage for your precious flatware. Purchase a policy today to give yourself peace of mind and protect your valuable silverware collection.

Apr 07
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Planning a Home Party? Get Covered!

By Personal Perspective

If your Super Bowl Sunday plans include throwing a party, you’d better be sure you have adequate insurance in the event of an injury claim by one of your guests. This advice stems from a new study sponsored by Trusted Choice, the independent agent’s branding campaign launched by the Alexandria, Virginia-based Independent Insurance Agents & Brokers of America.

The study was conducted by TRC, an independent research company in Fort Washington, Pennsylvania. The researchers polled 1,009 adults in a telephone survey about their plans for a social gathering. Their research revealed that of 28.5 million Americans who plan to have parties in their home, 21 million do not have a Personal Umbrella insurance policy, making them vulnerable to lawsuits, which could result in financial ruin. The remaining seven million didn’t know what coverage they currently carried.

The importance of proper coverage cannot be underestimated because in 30 states, hosts can be held legally responsible for guests who drink, drive and cause an accident. Interestingly enough, 53% of those surveyed said the host should be held responsible; however, most of those who responded in this manner have not taken any steps to protect themselves.

The researchers concluded that people don’t buy Umbrella policies because they think enough coverage is offered by their Homeowner and Auto policies. Nothing could be further from the truth. Large jury awards coupled with substantial health care costs make it commonplace for lawsuits to exceed the liability limits on the average Homeowner/Auto policy.

The researchers made the following recommendations:

  • Discuss your insurance coverage with one of our agents before hosting a party to familiarize yourself with your state’s host liability laws, and to make sure you are insured properly.
  • Limit invited guests to people you know.
  • Host the party at a restaurant or bar that has a liquor license, rather than in a home or office.
  • Be sure that you provide filling food for guests and alternative nonalcoholic beverages.
  • Schedule entertainment or activities that draw partygoers away from drinking.
  • Arrange transportation or overnight accommodations for those who should not drive.
  • Stop serving alcohol at least one hour before the party is scheduled to end.
  • Do not serve guests who are visibly intoxicated.
  • Consider hiring an off-duty police officer to monitor guests’ sobriety discreetly or handle any alcohol-related problems as guests leave.
Apr 07
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Dangers of Confined Spaces

By Risk Management Bulletin

If you revisit some of the lessons learned in basic high school science classes, you will probably remember that 78% of the air we breathe is nitrogen gas. If you think a little more, you may also recall that nitrogen is only safe to breathe when mixed with the right amount of oxygen. That simple lesson, learned so many years ago, may save your life if you frequently work in confined spaces.

Before entering any confined work space, there are several critical points you must consider. First, is the work area defined as a confined space according to OSHA? OSHA’s definition states that a confined space is any area where an employee must squeeze in or out through narrow openings and perform their tasks while cramped or contorted. Entry and exit are difficult, and employees are not to remain in the space for lengthy periods of time.

If your work space fits this description, you must also determine if it has a dangerous atmosphere or shows the potential for you to become trapped or even asphyxiated. If so, this space will be designated as a “permit space,” and will require a permit for entry. The employer who allows an employee entry must develop a written safety program for their permit-required spaces.

Your gas monitor plays a crucial part in securing your safety when you are working in a confined space. You need to be certain that you know how to properly operate the instrument and that you fully understand the procedures for confined space monitoring. Taking these steps will lessen the risks associated with this type of work significantly. Do not allow yourself to be lulled into a false sense of security because you are working in a familiar setting. If you take unnecessary risks, you may, unfortunately, only be working in the space for a short time.

Another element of safely working in a confined area is to have an attendant who will maintain contact with you while you are working. Be certain that this person is not involved with any other tasks or distractions and that they remain outside of the confined space at all times. If you will be confined in the space for an extended period of time, this person should record additional atmospheric readings to monitor the safety of the confined space. The attendant should also know exactly what the potential hazards are, and have a plan in place in case of an emergency.

If an emergency situation does arise, the attendant needs to immediately implement the rescue plan that was developed by the employer. No matter what type of rescue situation occurs, the attendant must try to maintain contact with you during the entire rescue process. They should also attempt to gather information about the incident that may be helpful to the rescuers. Their position as “point man” between you and the rescue team can make all the difference in the success of the rescue effort.

Apr 07
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Municipalities Employment Practices Liability

By Risk Management Bulletin

Municipalities, the governing body of a district or community, employ a variety of workers. Employment practices liability insurance protects those employees and the municipality, making it an essential product. If you operate or work for a municipality, learn more about municipalities employment practices liability insurance.

What is Employment Practices Liability Insurance?

Also known as EPLI, employment practices liability insurance covers numerous employees, including municipality directors, officers, management personnel and employees. It’s designed to cover legal rights violation claims employees may make against their employer, the municipality. An EPLI policy can cover claims related to:

  • Breach of employment contract
  • Defamation
  • Deprivation of career opportunity
  • Discrimination
  • Failure to employ or promote
  • Invasion of privacy
  • Mismanagement of employee benefits
  • Negligent evaluation
  • Retaliation
  • Sexual harassment in all forms
  • Wrongful discipline
  • Wrongful infliction of emotional or other distress
  • Wrongful termination

When you file an EPLI claim, the policy reimburses your municipality for the legal costs of defending the lawsuit in court. It also covers judgments and settlements whether you win or lose the case.

In most cases, an EPLI does not cover civil or criminal fines, punitive damages or liabilities covered by other insurance policies such as workers compensation. Other exclusions typically include bodily injury, property damage or intentional and dishonest acts.

Review your municipality’s EPLI policy for coverage and exclusion details. You may be able to customize your policy based on your municipality and employees’ unique needs.

How to Purchase EPLI

When purchasing municipalities EPLI, choose a reputable insurance company with an excellent customer service reputation and reviews. The company should understand your unique needs and be available when you have questions, want a consultation or need to file a claim. The right insurance and company gives you peace of mind and valuable protection.

In most cases, your municipality can purchase EPLI in several ways.

    1. Purchase it as part of your management liability package policy.
    2. Purchase it as stand-alone coverage.

Discuss your options with your insurance company to ensure all your municipality employees’ needs are met and reduce your municipality’s liability.

How Much Does EPLI Cost?

Several factors affect the cost of an EPLI policy. They include:

  • Your type of business
  • Number of employees
  • Various risk factors, including previous employment practices lawsuits

For specifics on the cost of your municipality EPLI, talk to your insurance company or agent. They can create a customize quote for your municipality, employees and needs.

Municipalities employment practices liability insurance offers valuable protection. Understand the coverage and ensure you purchase adequate coverage.

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