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September 29, 2008
Why is Utilization Review Important?
Choosing health insurance? Make sure the carrier’s utilization review is accredited. Accreditation protects your employees when treatments must be approved by providing standards of management. The case managers should follow guidelines that are aimed at providing quality care as well as managing cost.
September 1, 2008
Can employees pick a plan design?
These days, even the smallest of businesses can often get a health care plan in which individual employees can select from a menu of benefit options, including deductibles and coinsurance percentages. In many cases each employee can even pick for him or herself whether to go with an HMO, EPO or PPO.
July 21, 2008
Do you Participate in Managed Care Discounts?
Your surgeon may have a “list price” of $2,000 to perform a minor surgery, for example, but he or she may have an agreement with your insurance carrier to charge only $1,500 for its members. Make sure your out-of-pocket expenses are based on the discounted price. Some carriers would pay benefits as if you paid list price. That is, they expect you to pay 10% of $2,000, even though the actual charge was only $1,500.
May 26, 2008
Doctors not on the “preferred” list
If you’re in an HMO, you probably have to pay on your own for any medical care from doctors or hospitals not on the list. While you lose freedom in an HMO, you gain a lot more benefits for the money. Many other types of managed care health plans, however, provide some coverage for care from doctors and hospitals not on the preferred list. PPO’s often require the member to pay a higher coinsurance percentage - - say 30% instead of 10% - - for out-of-plan care.
April 21, 2008
What is a coinsurance limit or an annual out-of-pocket cost?
Most managed care plans require their members to pay a small % of the charges beyond the deductible, up to a point. You might pay a $500 deductible, plus 10% of the next $2,000. Your deductible plus your coinsurance limit is the point where your health plan takes care of all covered charges - - in this case $2,500 - - up to any policy limit. And your out-of-pocket maximum for any year is the deductible plus 10% of $2,000 - - or a total of $2,700.
April 14, 2008
Monitoring your HealthCare Account
Many employers maintain dependent-care or health-care "flexible spending arrangements". Most are calendar year plans, which puts a year-end deadline for spending that qualifies for reimbursement. Finding ways to spend the money is critical because any funds left in these accounts at the end of the plan year are forfeited. There is no refund or carry over to next year.
March 17, 2008
What is Universal Life?
Universal Life insurance is an "interest driven" type of policy. There is a low guaranteed interest rate, but the policy is generally purchased with an expectation of higher returns. If returns are low on a continual basis, the policy may require supplements to the premiums. Universal life policies allow limited changes in the death benefit and the amount and frequency of premium payments.
February 11, 2008
Business Reasons for Life Insurance
Life insurance can serve very specific purposes in maintaining the long-term viability of a business. Among them:
· Collateral for business loans
· Funding for buy/sell agreements
· Funding lost profits while seeking a replacement for a key executive
· Providing benefits to key employees and general employees
December 31, 2007
Traveling with your Laptop Computer
If you travel with your computer, you need to carefully read the provisions in your policy. While some policies cover all your personal belongings away from home, other policies limit the amount of coverage provided to a certain dollar amount. Consider getting a "floater" on your homeowners policy to cover your laptop. A floater would cover your laptop for its full value wherever you are and would cover risks that aren't covered in your homeowners policy. Compare the cost of a floater to the cost of insuring your computer with a policy specifically designed for computer owners - separate and apart from your homeowners policy.
December 24, 2007
Computers in your Home Based Business
If your computer is always in your home - meaning that it is probably a Desktop PC rather than a Laptop PC - then it should be covered against all of the basic events listed in your policy: Fire, Theft, Earthquake, etc.
The rub is that your policy may have limits for electronic equipment, just as it does for jewelry or cash. It is important to know ahead of time about these limits, because additional coverage to raise the limits is relatively inexpensive.
December 17, 2007
Automobiles in your Business
Don't just assume that you're covered. READ YOUR POLICY.
If you're using your automobile for business activities, you need to understand your coverage and ascertain that your coverage is both adequate and not overlapping. If you are transporting supplies, products or customers you are using your automobile for business. Your insurance company needs to know that you are using your automobile for business. Be certain that every employee who might possibly use your vehicle is listed on the policy. Provide the drivers license information to your insurance agent.
December 10, 2007
Insuring your Home-Based Business
Do you operate a business out of your home? If yes, go to the next question.
Have you specifically covered your business assets? If no:
You have a potential problem!!!
Fact: a typical homeowners policy does not cover your business. Your coverage for business assets in your home is probably limited to $2,500. For coverage of liability due to a business activity in your home may be non-existent. You need specific coverage for your business, either through an endorsement to your Homeowners Policy or a separate Business Owners Policy.
December 3, 2007
Internet Coverage
In addition to coverage of EDP risks, today's business must consider insuring the risks of doing business on the Internet.
· Copyright issues
· Trademark violations related to a domain name
· Deceptive use of meta-tags
· Privacy issues related to information garnered from visitors
· Loss of functionality due to hacker attacks
· Loss of sensitive data to hacker attacks
· Loss of functionality due to viruses
A traditional commercial insurance policy does not address these risks. Newer policies written specifically to cover these risks are difficult to underwrite because of the lack of history.
November 26, 2007
Liquor Liability
Certain risks arise because a business handles substances that can cause harm. Liquor liability arises when there is bodily injury or property damage arising from alcohol consumption. It can arise from contributing to the intoxication of any person, furnishing alcoholic beverages to a person who is under the legal drinking age or who is intoxicated, or violating a law related to the distribution or use of alcoholic beverages.
Liquor liability insurance is written to protect businesses engaged in either:
manufacturing alcoholic beverages; selling or otherwise distributing alcoholic beverages;
serving alcoholic beverages for a charge, whether or not it requires a license; or serving alcoholic beverages without a charge, if a license is required.
November 19, 2007
Errors and Omissions Coverage
Professional liability insurance is referred to as Malpractice Insurance when doctors and lawyers purchase it. When other professionals, such as real estate brokers and insurance agents purchase it, it is called Errors and Omissions. It is a sort of firewall against claims that can range from misrepresentation to failure to negotiate effectively. Failure to maintain coverage can prove disastrous in this litigious society.
November 5, 2007
Filling the Malpractice Gap
To cover the gap left by a “claims made” policy, an insured must purchase an endorsement specifically providing for extension of the reporting period. This extension is commonly called "tail" coverage. Tail coverage has several drawbacks:
· It may not be available when needed
· It may provide coverage for a very limited period of time
· It is probably expensive
· The cost is unpredictable because circumstances change
October 29, 2007
Are there Different Types of Malpractice Coverage?
There are two approaches to professional malpractice insurance - the more traditional "occurrence" policy and the "claims made" policy, which emerged during the malpractice crisis of the mid-seventies. Occurrence policies are more straight-forward in that they cover events occurring doing the policy period. With a claims made policy, the coverage only applies to claims both occurring and reported during the policy period. It is possible to add “prior acts” coverage, but the coverage must be separately negotiated.
October 22, 2007
Who Needs Professional Malpractice Insurance
It's common knowledge that litigation has exploded over the past few years. This is particularly true with respect to malpractice suits against licensed professionals. This category of risk generally applies to:
· Doctors
· Nurses
· Other medical practitioners
· Attorneys
· Certified Public Accountants
· Architects
October 1, 2007
Why Purchase D&O or EPLI Coverage?
If there is one factor that should motivate a business to purchase D&O and EPLI coverage, it’s the cost of defense. Many seemingly frivolous suits have cost companies hundreds of thousands of dollars in legal costs. The ability to fund a defense and funds to negotiate a settlement go a long way to provide piece of mind to corporate officers and directors. Very liberal indemnities in the bylaws and employment contracts may prove of little value if the company is strapped for cash. That’s when the insurance coverage is even more essential.
September 17, 2007
What is the Difference between D&O and EPLI?
While smaller companies don’t have the same exposure to shareholder actions that large public companies have, they have a very real exposure to employee actions. These small and mid-size firms often combine D&O coverage with EPLI (Employee Practices Liability Insurance) coverage.
EPLI covers the following types of claims:
* Wrongful termination
* Harassment
* Retaliation
* Discrimination
* Wrongful discipline
September 10, 2007
What is D&O Insurance
Directors and officers (D&O) insurance is purchased to cover the CEO, COO, CFO, other corporate officers and outside directors. The coverage is specific to actions of the individuals, rather than to actions of the company. It applies whenever a claim is brought against one of the covered individuals for an action arising out of performance of their duties. The officers and directors will generally be covered so long as their actions are intended to be in furtherance of the interests of the company.
August 13, 2007
Product Liability – Not Just for Manufacturers
It’s easy to understand how manufacturers are liable, but manufacturers are not the only ones subject to product liability exposure. More and more retailers are finding themselves brought into a lawsuit for alleged negligence toward the consumer . . .
In most situations, manufacturers are held to the knowledge and skill of that of an expert. The manufacturer's status as experts means that, at a minimum, he must keep abreast of scientific knowledge, discoveries, and advances in his industry.
The retailer will often have a duty to warn. If a retailer is aware or has reason to know that, because of intelligence, the buyer is not aware of the danger of the product and the retailer has such knowledge, the retailer is required to warn the consumer of the danger.
August 6, 2007
Product Liability - Points to Watch
1. Be alert for defective design
2. Examine products for adequacy of warnings
3. Think through potential misuses of the product
4. Identify foreseeable events that could cause liability
Develop plans for communication of the risk and ways to avoid injury.
July 22, 2007
How Do I Get a Surety Bond?
A Surety Bond, or Performance Bond, is critical for small construction firms bidding on jobs in competition with larger firms. The purpose of a surety bond is to guarantee performance. If a contractor is financially unable to complete a project or leaves subcontractors unpaid, the insurer steps in and protects the property owner from loss. Getting a surety bond requires extensive review of a contractor's credit history and may require the pledging of substantial collateral, in addition to payment of a premium. It can be a huge asset, however, in leveling the playing field for large projects. Work with your Independent Agent or look for a firm that specializes in the field.
July 15, 2007
How Much Liability Coverage?
At one extreme, a business might conclude that it makes sense to purchase little or no insurance, because if there's no pot of gold, there is less likelihood of a lawsuit. At the other extreme, a business might purchase insurance based on the absolute worst-case scenario, and end up over-insured and wasting premium dollars. The extent of coverage really should be based on a thorough analysis of the risks. The business should consider the experience of the industry, the size of judgments against similarly situated companies, etc. The business should also consult with its trade association and push its independent insurance agent to do research and come up with a meaningful recommendation.
June 18, 2007
Is Your Liability Covered?
The starting point is a Comprehensive General Liability policy. That may not, however, be the only policy you need. While Comprehensive General Liability coverage is comprehensive, it is not all inclusive. Additional policies need to be considered for:
· Workers compensation
· Automobile liability
· Product liability
· Director's and officers liability
· Errors and omissions
· Non-performance of contracts
· Employment practices
June 11, 2007
What Exactly is a BOP?
BOP stands for Business Owners Policy. It is a type of policy developed over the past several years to accommodate the typical small business. It has the advantage of including reasonably broad property and liability coverages in a logical bundle. These BOP plans are convenient for the business owner because an insurance professional has already determined that the combination and extent of coverage makes sense for a typical business of this size. The plans are also attractively priced because the insurance company has a single plan to underwrite rather than a string of several plans. The caution flag with BOP's is that every business is different, and many small businesses have insurance requirements that just don't fit neatly into a standard package.
June 4, 2007
Replacement Cost Coverage
If the business owner wants replacement cost coverage, then the business owner must make sure that's what he is purchasing. It is more expensive than actual cash value coverage, but not substantially more expensive. When claims are eventually settled, the insurance company will typically have three options:
· Pay cash for the replacement value
· Repair the damaged property
· Replace the damaged property with property of similar quality
May 21, 2007
The Need for EDP Coverage
With computers so cheap, who needs special EDP coverage? The low cost of computer hardware and packaged software certainly changes the focus of EDP insurance. The real exposure is often with internally developed software systems and loss of income. These systems have become so integral to the operations that many businesses cannot function without them. Risk management assessments should point out weaknesses in backup procedures and should reduce the likelihood of loss, but loss could be devastating. Companies with custom applications should definitely consider coverage for lost profits during a recovery period.
May 14, 2007
Is a Standard Fidelity Bond Broad Enough?
Fidelity bonds include coverage for employee theft. Historically, the bonds have been issued to cover cashiers and other persons who handle money. Claims are only approved for substantiated losses, and losses can be difficult to substantiate. Many claims, particularly claims for merchandise theft, are ignored.
Businesses today experience far greater loss from theft of merchandise than from theft of cash. If your business is considering a fidelity bond, we suggest you consider broadening the coverage to include employees entrusted with merchandise as well as cash.
April 30, 2007
How to Review Business Interruption Insurance?
This coverage and handling of claims under this coverage can be very complex. Business owners must work closely with their insurance agents to build in the right protections. Policies must be carefully read to ensure that surprise exclusions aren't in the package. The insurance company might be looking to specifically exclude the events that the business owner is trying to cover.
Another sticky point is the period of indemnity. Does the coverage pay until the business can reopen, or does it pay until the business can reopen under normal business conditions? What if the business never reopens? Generally, the business owner would expect the indemnity period would be the period that it would take to bring the facility back to operating condition. Read the policy provisions to see how this point is addressed.
April 23, 2007
Why Purchase Business Interruption Insurance?
This special coverage is often attached to a firm's property and casualty insurance. It provides for reimbursement of lost profits while a business is closed as a result of a covered casualty. If the business has been operating at a loss, then the insurance would cover the fixed expenses of the company.
The most common cause of business interruption claims is weather damage. When businesses are shut as a result of a hurricane or tornado, they still must cover their rent or debt service. The coverage can be especially important to a retail operation such as a restaurant.
April 9, 2007
Workers Compensation for Your Home Based Business
Workers compensation laws mandate that employers cover their employees for injuries incurred while on the job, whether on company property or at another location on company business. Coverage is for medical costs plus lost wages. Many states have exemptions for companies with one or two employees, and many home-based business don’t carry workers compensation insurance on their employees. Is that a problem? It can be when someone is injured on the job and their homeowners policy doesn’t cover their business. Talk to your insurance agent and make sure you get the protection you need.
April 2, 2007
Employment Practices Liability
Did you know that most businesses are more likely to be sued by an employee than by an outsider? In addition to employment practices insurance, companies need to proactively address risk management. First and foremost, you must develop proactive employment policies and procedures. The exercise of preparing the written documentation of procedures will force you to contemplate and plan for the mitigation of all sorts of risks. Having procedures in place and strictly following those procedures will provide an affirmative defense to allegations of wrongdoing. Steps you should take include:
· Create an employee handbook
· Communicate the contents of the employee handbook
· Follow the provisions of the employee handbook
· Conduct training for your supervisors
· Develop checklists and instructions for the hiring process
· Complete employee evaluations on a timely basis
· Have specific procedures for implementing disciplinary actions or termination
· Conduct exit interview for all terminated employees
March 19, 2007
Your Home Based Business LLC
You have protected your assets by: having business assets covered by a rider to your homeowners policy and by forming an LLC as a shield from business debts and obligations. But what if the $5,000 computer system owned by your LLC is stolen from your basement office? Is it covered? Maybe not, unless you specifically had your LLC listed as an “Additional Named Insured”. Talk to your agent.
March 12, 2007
How Much Coverage Does Your Business Need?
At one extreme, a business might conclude that it makes sense to purchase little or no insurance, because if there’s no pot of gold, there is less likelihood of a lawsuit. At the other extreme, a business might purchase insurance based on the absolute worst-case scenario, and end up over-insured and wasting premium dollars.
The extent of coverage really should be based on a thorough analysis of the risks. The business should consider the experience of the industry, the size of judgments against similarly situated companies, etc. The business should also consult with its trade association and push its independent insurance agent to do research and come up with a meaningful recommendation.
March 5, 2007
Manage the Cost of Insurance in your Home-Based Business
When attempting to control the cost of insurance, you should generally save dollars through higher deductibles rather than leaving risks underinsured. That means self-insuring the lower levels of coverage, but protecting against the huge losses that could put you under. In a trade-off, you should opt for replacement cost coverage over a low deductible. The depreciated value of office furniture and equipment will rarely enable you to continue your operations without an out of pocket amounting to thousands of dollars. Replacement cost coverage will put you back in business.
February 26, 2007
Treat Your Home-Based Business Like a Business
Just because you run your business from home doesn’t mean you don’t need many of the same protections as a storefront business. Chances are that your homeowners coverage does not adequately insure your home-based business. Sit down with a qualified insurance agent who can help you identify risks and schedule the assets that you need to protect. Then have the agent make a recommendation about a separate policy for your business, and then provide a clear comparison with riders that might be attached to your homeowners policy.
February 12, 2007
What is a Co-Insurance Payment?
Let’s say you have your gall bladder removed and it costs $10,000. Let’s also say you have a deductible of $500 and a “coinsurance limit” of $2,500. You would pay the $500 deductible, plus a percentage of the next $2,000. Above that, the health plan would pay for all of the covered charges. Your percentage is your “coinsurance payment”, sometimes referred to as a “Co-pay”. (Note that coinsurance takes on additional consequences in property insurance).
February 5, 2007
How Managed Care Works
When you go through a managed care plan, there is some sort of connection between the payer (insurance company) and the doctor (or hospital). In an HMO, that connection is very strong – the doctors are often salaried employees of the HMO. In a PPO, doctors agree to provide their services at a fixed, discounted price in exchange for patient referrals.
January 29, 2007
Basic Types of Managed Care
There are 4 basic types of plan:
HMO – Health Maintenance Organization
PPO – Preferred Provider Organization
POS – Point-of-service Plan
EPO – Elect Provider Organization
January 22, 2007
Cost Effective Health Coverage
Cost-effective health coverage is achieved by limiting the freedom to choose and by controlling the circumstances under which benefits are used. By limiting the freedom to choose, carriers are able to negotiate fee structures with specific providers. Usage can be reduced through use of very high deductibles – or so-called “catastrophic” coverage plans. While such plans put more responsibility on the consumer, they stem the tide of
rising costs.
January 15, 2007
Health Coverage – Key to Cost
The most important thing to know about the cost of health insurance is that a few basic trade-offs drive the price tag. The two primary variables are Level of Benefits and Freedom to Choose. Level of Benefits includes extent of coverage, amount of deductible and amount of co-payment. Limiting freedom to choice contains cost through the effective use of PPO’s and HMO’s. As you vary the factors, price goes up and price comes down.
January 8, 2007
Does the Carrier Handle Other Benefits?
Carriers can help small businesses set up flexible spending accounts (Section 125 plans) that allow employees to pay for things like uncovered medical costs, vision care and daycare using pre-tax dollars. This can often be done at no cost to employers. Dental plans are often viewed as necessary and group term life policies are a popular employee benefit. Make sure your health carrier can provide all of these benefits - - if not today, as your business grows.
December 4, 2006
Does Your Carrier KNOW Small Business?
Small businesses have special needs because they generally don’t have a personnel department or benefits mangers. If you’re in a small business, you need to think of your carrier as your benefits manager. Make sure their experience shows they’re up to the task.
November 27, 2006
What is “Portability”?
Portability refers to the ability of an employee to change employers without having to start over for coverage of pre-existing conditions. It means that the period of coverage under one policy will count toward the requirements of the new policy, so long as there has not been a lapse in coverage.
November 20, 2006
What is the carrier’s A.M. Best rating?
An “A” (excellent) rating from the independent insurance rating firm A.M. Best Co. is a positive indication that the insurer will have the money to meet its obligations into the foreseeable future.
November 13, 2006
Will I have to fill out claim forms?
Some carriers require members to fill out claim forms, while others simply have their members show an ID card that allows the clinic or hospital to take care of all the paperwork. We recommend the latter.
October 30, 2006
Getting the Most for your Health Insurance $
Are customer service people available in the evenings or on weekends?
Make sure the carrier answers that 800 number when it’s convenient for you.
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