Health insurers begin to provide user-friendly plan guides

Under President Barack Obama's healthcare reform law, employers and insurers must provide a summary of benefits and coverage in a clearly worded, standardized format that allows the private insurance market's 163 million beneficiaries to make side-by-side comparisons of plan offerings.

Consumers are also required to have access to a standardized glossary of insurance and medical terms. The rule takes effect just as insurers and employers prepare for annual enrollment periods, when employees select their coverage for 2013.

The benefit guides will also factor into the creation of new state-based health insurance markets due to begin offering subsidized, private coverage to moderate-income consumers in January 2014.

The Department of Health and Human Services released an eight-page sample benefits form to demonstrate how the actual summaries will outline everything from deductibles and out-of-pocket expenses to referrals and network providers.

The guides are also supposed to show what a plan covers for two common medical situations -- new births and adult diabetes.

U.S. officials compared the summaries to the Nutrition Facts label required for packaged food sold in the United States.

The rule has been criticized by the insurance industry as a new administrative burden that will increase the cost of healthcare coverage. 

Source: http://www.reuters.com/article/2012/09/24/us-usa-healthcare-insurance-idUSBRE88N0Y620120924

Insurance gap needs to be filled

Many people who could use additional auto insurance protection may not find that out until it's too late. They would have a better chance of not facing that gap if the governor approves legislation encouraging, although not requiring, drivers to choose to buy greater liability insurance.

The bill, sponsored by the chairmen of the insurance committees, Sen. James L. Seward, R-Oneonta, and Assemblyman Joseph Morelle, D-Rochester, and passed overwhelmingly in both houses is expected to reach Gov. Andrew M. Cuomo's desk soon.

It goes to the heart of what consumers often think they're getting and the reality that can hit them.

New York motorists tend to increase their liability insurance to protect other motorists from their negligence beyond the legal limit of $25,000 per individual and $50,000 per accident. And that's good because according to the Insurance Research Council, about 5 percent of cars in New York were uninsured in 2009. That places New York at the very lowest end of states by percentage of uninsured motorists, but that's still a big number.

So what about those people who have already opted to increase their liability insurance?

What they don't know - and may find out painfully after a serious accident - is that their increase in liability insurance coverage was not matched by an increase in their supplementary uninsured/underinsured motorist (SUM) insurance. This is the insurance that provides coverage in the event that they are the victims of an accident with an uninsured or underinsured driver.

It isn't until the unpaid bills start to show up that many discover they did not, in fact, have the coverage they expected.

Consumer advocates point to the case of Staten Island residents Victor and Wilma Rao, who were hit by an uninsured ex-convict who was driving drunk. The local business owners had purchased additional liability insurance but did not have additional SUM coverage.

Both were seriously injured. Because the other driver had no insurance, the couple had to take care of hospital and rehabilitation bills that piled up above the $25,000 minimum uninsured/underinsured coverage they had.

New York's legislation would establish the default setting for SUM coverage at the amount chosen by the consumer for liability. It is aimed only at consumers choosing liability coverage above the statutory minimums, and should cost less than $100 per year for most policyholders.

Again, this is not a requirement. The supplemental insurance, for those who can afford it, is a prudent investment. This law will ensure that they know about it.

Source: http://www.buffalonews.com/apps/pbcs.dll/article?AID=/20120919/OPINION/120919009/1074

The importance of long-term insurance

Long-term disability insurance and long-term care insurance are difficult issues to talk about.

For starters, there are many situations where these types of insurance are never needed at all. If someone passes away very suddenly, the money spent on these insurances goes for naught.

In some situations, the premiums might simply be beyond what they can actually afford. These types of insurance are not free, after all.

In my view, the benefits of long-term disability and long-term care insurance are worth the cost, but only if you’re in a position to afford it without putting your finances into crisis mode.

So, what are these policies?

Long-term disability insurance is a type of insurance that provides you with some portion of your salary in the event that you’re no longer able to work because of your job. Some employers offer this coverage directly, but in many cases, you have to obtain it yourself.

Long-term care insurance is a type of insurance that pays for some or all of the costs of your long-term care if you find yourself in a situation where you need extensive care for your health. Often, this occurs near the end of one’s life, when medical issues begin to mount.

In both cases, you need to fully understand what is being insured when you get the policy. While some policies are very strong, others are full of loopholes which minimize what the insurance company would have to pay.

So, when do you need these policies?

If you’re a professional who earns an income that your family simply could not live without, you should strongly think about long-term disability insurance. There are many situations where your ability to do your job could be limited severely without taking your life (blindness, severe injury, brain trauma, countless diseases). If you’re making a strong income and your family relies on that, you should think about this type of insurance.

On the other hand, long-term care insurance appeals more to retirees and people approaching that age. The goal with long-term care insurance is to make sure that you’re covered as well as possible should you need long-term care during your final years. If you have a spouse, a large part of the reason for obtaining the insurance is to protect your partner.

In either case, get the insurance only if it doesn’t break the bank for you. Most of the time, the cost is on the order of a hundred dollars (or two) per month, depending on your specific situation. Get it if you can afford it, because the peace of mind it can give you is worth it.

http://www.csmonitor.com/Business/The-Simple-Dollar/2012/0910/The-importance-of-long-term-insurance

Why You Should Have Umbrella Liability Insurance

Umbrella liability insurance is an inexpensive way to protect you and your property from lawsuits. You don’t need it if you have relatively little at stake, but “if you’ve accumulated some assets and have a home, it makes sense to have the policy,” says Rob Seltzer, a CPA in Los Angeles. He recommends that you add an umbrella policy, which starts at $1 million of coverage, to protect against lawsuits even if your net worth is far less than that. The policies protect future income as well as assets and also cover legal fees. 

Insurers generally require that you have at least $300,000 in liability coverage on your home and automobile before you can buy umbrella coverage, which picks up after you’ve exhausted your homeowners and auto liability limits. The first $1 million of coverage generally costs $200 to $400 a year; the next $1 million runs an additional $75 to $100.

Raising your auto and homeowners deductibles from, say, $250 to $1,000 would offset the cost of $1 million in umbrella coverage, says Seltzer. “If you are in a car accident and have to come up with an extra $750 for the deductible, that’s not going to kill you. But if something really bad happens, that $1 million umbrella policy is a savior.”

To buy the coverage, start with your auto- or homeowners-insurance company, which may give you a discount for keeping your business in-house. If your company doesn’t offer affordable umbrella coverage, ask an independent insurance agent for quotes.

Source: http://www.kiplinger.com/columns/ask/archive/why-you-should-have-umbrella-liability-insurance.html 

More information at: http://www.mainlineinsurance.com/public/umbrella_liability.asp