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April 21, 2010
For our current and future flood insurance clients, you can rest easy in knowing that coverage is again available for now.
Expired National Flood Insurance Program Temporarily Extended Again
Program expired on March 28.
WASHINGTON, D.C., April 16, 2010 —The Independent Insurance Agents & Brokers of America (the Big “I”) today commented on the latest short term extension, until May 31, 2010, of several programs including the National Flood Insurance Program (NFIP).
A few weeks ago, the Senate left town for the Easter recess without voting on extending the NFIP, thereby resulting in the program’s expiration. The House had previously approved, by unanimous consent, a $9 billion measure containing one-month extensions of several programs including unemployment insurance, COBRA subsidies for health benefits and flood insurance. Senate leaders of both parties hoped to have their chamber approve the same bill before the Easter break, but Sens. Tom Coburn (R-Okla.) and Jim Bunning (R-Ky.) objected to the House bill saying it was not funded. A similar scenario occurred in early March.
“It is alarming that the NFIP was allowed to expire, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for more than two weeks,” says Robert Rusbuldt, Big “I” president and CEO. “The Big ‘I’ is greatly concerned that these short expiration periods, coupled with the uncertainty of temporary extensions, will negatively impact the market.”
In theory, the NFIP will now return to normal operations and, since the extension is also retroactive, then any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application (or in the case of waiting periods, the waiting period will start from the date of application).
“This series of temporary extensions, last minute actions and service lapses during such a delicate period in our economy is of great concern to our agents, homeowners and small businesses,” says Charles Symington, Big “I” senior vice president of government affairs. “Though we are grateful that Congress extended this program, we are increasingly frustrated by these repeated one-month extensions and the periods of expiration that sometimes result from them. The National Flood Insurance Program is meant to provide some level of stability and protection for homeowners and businesses against dangerously unpredictable and costly flooding events, not to be an unpredictable ‘here one minute-gone the next’ program subject to monthly congressional action. The Big ‘I’ strongly urges Congress to pass a long term extension of this critical program.”
In the 110th Congress, the Flood Insurance Reform and Modernization (FIRM) Act of 2007 made progress in the House and Senate. The legislation would have extended the program for five years and made significant and needed reforms to help put the program on sound financial footing. This summer, similar legislation was introduced in the House of Representatives.
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.
April 14, 2010
Thought you would find this short article on how health reform could affect small business interesting. This is from Independent Agent Magazine, Insurance News and Views.
On the Hill
Health Care Reform Hits Small Businesses with New Rules
Regardless of size, agencies may face new requirements and some potential new grant and tax credit opportunities.Last week’s IN&V included “What Does the New Health Care Reform Law Mean for Agents?”, a piece examining the health care reform from a health insurance sales standpoint. This week, IN&V looks at the new law from a small business perspective. Whether you have a small, medium or large agency, you may be facing many new requirements and some potential new grant and tax credit opportunities. Much like the health insurance delivery aspect, many of the specifics affecting small businesses will be somewhat of a question mark as the law’s implementation occurs over the next four years.
For example, starting in 2011, small businesses will be eligible to receive federal grant money to set up “wellness initiatives” that some Big “I” members may be interested in pursuing. Aside from stating that such grants will be available, the law does not specify who would be eligible, how small businesses would apply, or what exact “wellness initiatives” they would need to undertake. All of these issues would be left to future rulemaking by the Department of Health and Human Services (HHS) and the states. However, despite the uncertainty over many of the specifics of the new law, the Big “I” can provide some generalities about what the bill may mean for small businesses.
Although the new law does not contain a true employer mandate, by 2014, employers with more than 50 employees will face a penalty if they do not offer health insurance coverage AND at least one of their employees gets coverage through an Exchange and gets a premium credit. The penalty will be a $2,000 per full-time employee penalty (the first 30 employees will be excluded from the calculation). In determining whether a business has 50 employees, part-time employees will have their aggregate hours combined, with 30 hours a week counting as a full-time employee. For example, if an agency has two part-time employees working an average of 15 hours per week, that will count as one full-time employee. Meanwhile, employers that do offer health insurance coverage but have at least one employee who receives a premium credit through an Exchange are required to pay the lesser of $3,000 for each employee who receives a premium credit or $750 for each full‐time employee.
Some small businesses may be eligible for temporary tax credits to help them adjust to the new law. In 2010, small businesses with less than 25 employees and average annual wages of less than $50,000 are eligible for tax credits of up to 35% of the employer’s contribution toward the employee health insurance premium. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. The amount of the credit will decrease as the business size and average wages increase, to a maximum of 25 employees and average wages of $50,000. Employers must subsidize at least 50% of their employees’ premiums in order to be eligible for the tax credit. In 2014, this tax credit will change, and the eligible small businesses will have tax credits up to 50% of the employer’s contribution; again the amount of the credit would phase down as the size and wages of the business increase. After 2014, these credits would only be available for two years to any particular small business.
All employers, regardless of size, will have to abide by a litany of new administrative requirements. In 2011, all employers must include the aggregate cost of employer-sponsored health benefits on each W2 tax form. If an employee receives health insurance coverage under multiple plans, the employer must disclose the aggregate value of all such health coverage but exclude all contributions to HSAs and Archer MSAs and salary reduction contributions to FSAs. Also in 2011, all employers will be required to enroll employees in a new national public long-term care/disability program called the “CLASS Act” unless the employee opts out. By 2013, employers will have to provide written notice to employees on the existence of state-based exchanges. Starting in 2014, employers that have a waiting period before health insurance coverage becomes effective cannot have that waiting period exceed 90 days.
These are just a few of the many changes on the horizon for small businesses as the health care reform law is implemented. Big “I” members will undoubtedly continue to have many questions about how the new law will impact them, as health insurance professionals and small businesses; and the Big “I” and each state association will continue to work to ensure that agents and brokers have the tools necessary to both survive and thrive in this new health care world.
Click here for a short chart summary of the health care reform law.
John Prible (john.prible@iiaba.net) is Big “I” vice president of federal government affairs.
April 8, 2010
There are over 240 million registered motor vehicles in the U.S., according to the Census Bureau. At a given time, as many as a third of those clutter American roadways, and it is estimated that one-fourth of those are being used in the course of work.
Running errands, making deliveries, visiting customers. Even for those whose employment is not based on driving, it’s fair to say that your vehicle is an essential part of your employment. This presents an important question: If you are involved in an accident in the course of employment, are you covered by your personal auto insurance policy (PAP)?
Like most insurance questions, the answer depends on circumstance. For example, what kind of car are you driving? Does the car belong to you or someone else? What type of business are you in?
Consider the language found in the typical PAP. At a glance, many policyholders are shocked to see that the PAP appears to exclude coverage for the use of any vehicle in the course of business other than farming or ranching. However, a very broad exception to this exclusion allows coverage for the business use of a vehicle provided it is one of three types: 1) a private passenger auto, 2) a pickup or van, or 3) trailer while used with the aforementioned. This exception suggests that as long as the vehicle is one of these three types, coverage remains intact after the accident.
But policyholders should proceed with caution, since some PAPs are not as generous. For example, some versions may be more restrictive towards pickups or vans, possibly including a gross vehicle weight (GVW) limitation or a clause that restricts coverage to owned pickups or vans only. Be sure to consult your policy before driving any pickup or van for work.
Further, policyholders should understand that any coverage permitted for business use of personal vehicles by the PAP is not intended for these three vehicle categories:
Commercial-type vehicles. The PAP restricts business use to private passenger autos, pickups and vans. While they can be purchased personally, box trucks, tractor trailers, shuttle busses and other commercial-type vehicles do not fit this description; such vehicles require a commercial auto policy.
Furnished or available for regular use. Often called the “company car” exclusion, this provision is dangerous and must be remedied if the exposure exists. The reason is that a typical PAP will exclude coverage for a vehicle that is regularly available to the policyholder but is not specifically insured under the PAP. For example, if you are furnished a company car as a benefit to your employment, make certain that you are covered by your employer’s auto insurance policy. If not, specific action is required to extend coverage under your PAP; it will not do so automatically. The good news is that this coverage change is usually inexpensive and can be done easily; just be sure to request the change now, before the accident happens. While the definition of furnished or available for regular use varies by case, err on the side of caution. Don’t assume that because you don’t take it home with you each night or that you only drive it occasionally you’re in the clear. Regardless, a vehicle owned by your employer could be considered available for your regular use. This exclusion presents a potential gap that is too risky to ignore; your Trusted Choice® agent can help you take the appropriate steps to close it.
Vehicles that are the business. A PAP will not cover your vehicle if you use it to carry people for a fee, such as a taxi, limo or shuttle. The only exception is a share-the-expense car pool. And if you’re planning to make a few extra bucks delivering pizzas, auto parts, newspapers or other goods, proceed with caution. Many PAPs also remove coverage for vehicles that are used to deliver food or other types of property for a fee.
While in most cases the PAP will cover you for business use of a personal vehicle, there are situations where it will not. Such situations are not uncommon and, if not remedied, could result in significant financial detriment for you and your family. Consult your Trusted Choice® agent for advice on how to close potentially devastating gaps in your PAP today.
Copyright © 2010; Trusted Choice, Inc. All rights reserved
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