New Flood Insurance Rules

http://www.youtube.com/watch?v=tpeqSQr3ngY&list=UUHMck7Qh7gAf7o4qnPu84IA&index=2

Good video on history of flood insurance and upcoming changes.

Rates are going up!

Home Insurance Exclusions

Home Insurance Exclusions:  

It’s important for every homeowner to know the ins and outs of his or her home insurance policy, but sometimes knowing what isn’t covered can be just as important as knowing what is.  

1. Mold Damage

Most home insurance companies exclude mold damage from their policies. Unlike a fire or tornado, insurers see mold damage as a problem that grows over time, and homeowners are expected to take preventive measures to prevent mold spores from spreading throughout the home. If left unchecked, mold can cause structural damage to the home as well as serious health issues for residents.

2. Floods, Earthquakes, Landslides

As many homeowners found out in the aftermath of Hurricane Katrina, flood insurance is not covered under a standard home insurance policy. For protection against flood damage, you’ll need to purchase a separate flood insurance policy.

Earthquake and landslide damage are also notable home insurance exclusions. You will need separate coverage for damage caused by these perils.

3. Aggressive Dog Breeds

If your pet is a poodle or a Chihuahua, your home insurance company probably won’t bat an eye. Owning a pit bull, Rottweiler or other dangerous breed, however, may make it difficult—in some cases, impossible—to find home insurance coverage. Depending on your location, insurer and other factors, home insurance exlusions may apply to the following dog breeds:

 •Pit bulls

•Staffordshire Terriers

•Doberman Pinschers

•Rottweilers

•Chows

•Akitas

•Presa Canarios

•Wolf-hybrids

If you own a "blacklisted" breed, you may be charged more for coverage or denied a policy altogether; you can ask your insurer to exclude your dog, in which case you’ll be financially responsible for any damage it causes.

4. Neglect

Insurers expect homeowners to care for their homes and repair minor problems. This includes sealing cracks, minimizing water damage, fixing damaged pipes, scheduling regular inspections and more.

For example, if a storm causes your tree to fall onto your home, you’re probably covered. However, if your tree collapses onto your home because of a termite infection that went unchecked, you may be responsible for the resulting damage.

5. Sewage Backup

Infamous home insurance exclusions include sewer damage. For instance, if a toilet overflows and you have to hire a professional crew to mop up the mess, you’ll probably be left footing the bill. Sewage backup usually isn’t covered by home insurance unless you’ve purchased a separate rider.

6. Luxury Items

If you keep especially valuable items in your home, you probably need to purchase additional theft liability coverage. According to the Insurance Information Institute, most standard home insurance policies only cover up to $1,500 for damage or theft. Items that may require additional coverage include:

•Jewelry

•Antiques

•High-end electronics

•Collectibles

Contact your home insurance agent if you have items that requires additional coverage.

7. Power Outages

The most common and expensive damage occurs when power is restored and a surge of electricity floods the home’s circuits. These blasts of electricity can cause computers to lose information, electronic devices to overheat and large appliances to malfunction. In addition to making use of surge protectors, home insurance companies expect homeowners to unplug all sensitive electronic appliances and leave them unplugged until power is restored.

8. Intentional Damage by a Resident

Intentional damage caused by a resident of the home is not covered by home insurance. For instance, if your teenage daughter purposely sets fire to your home after a heated argument, you’re on your own to cover the losses.

9. War, Terrorism, Nuclear Attacks

If your home is destroyed in a riot, you’re probably covered for the damages. But if a foreign army, terrorist attack or nuclear meltdown damages or destroys your home, your home insurance policy won’t cover you.

10. Trampolines

Insurance companies consider trampolines to be an extreme risk to personal safety—and a lawsuit waiting to happen if a neighbor is injured while jumping on your trampoline. That’s why many home insurance companies refuse to extend coverage to trampolines, and your current insurer may threaten to cancel your policy if you purchase one.

11. Maintenance and Inherent Vice Exclusions

Termite or rodent damage, rust and rot, mold, general wear and tear and other property damage caused by neglect or improper maintenance is not covered under your standard homeowners policy. Damage from power outages, such as spoiled food, is also excluded. Poorly made or defective products are not covered, based on the inherent vice exclusion, which means external factors did not cause the loss.

Proposed PPACA Reporting Rules Obama Care

IRS Releases Proposed PPACA Reporting Rules

 

On Sept. 5, 2013 the Internal Revenue Service (IRS) released the long awaited rules that describe the reporting that plans, employers and insurers will need to provide in support of the individual shared-responsibility and employer shared-responsibility requirements of the Patient Protection and Affordable Care Act (PPACA).  The rules are proposed, so some changes may occur when the rules are finalized.

Separate reporting will be needed with respect to providing minimum essential coverage (which affects both the individual shared-responsibility requirement/individual mandate and the "offer" part of the employer shared-responsibility/play or pay requirement) and offering affordable, minimum value coverage (which affects the "adequacy" part of the play or pay requirement and individuals' eligibility for a premium subsidy.)  The reporting will occur with the same timing as W-2/W-3 reporting - the individual's report will be first due Jan. 31, 2016 based on 2015 coverage and the employer "roll-up" report will be due by Feb. 28 (or March 31 if filed electronically).

The minimum essential coverage report (which is sometimes called the 6055 requirement) will be prepared by the insurer for insured plans and the plan sponsor for self-funded plans.  (A plan sponsor generally is the employer for employer-provided coverage and the board of trustees or committee for a multiemployer plan.)  6055 reporting is only required on individuals who actually elect coverage.  The insurer or plan sponsor will need to report:

• The insurer's or plan sponsor's name, address and employer identification number;
• The name, address and Social Security Number of the named insured;
• The name and Social Security Number (or date of birth if a Social Security Number is not available) of each covered spouse and dependent;
• The number of months each covered person was covered for at least one day;
• The name, address and EIN of an employer sponsoring the plan;
• Whether coverage is through a SHOP exchange, and if so the SHOP's unique identifier.

The minimum value/affordable coverage report (which is sometimes called the 6056 requirement) must be filed by all large employers. (An employer is considered "large" if it has 50 or more full-time or full-time equivalent employees.)  All employers in a controlled or affiliated service group are combined for purposes of deciding if the employer is "large," but each employer in the group will file the 6056 report separately.

Each large employer will need to report:

• The employer's name, address and EIN;
• The name and telephone number of a contact person;
• The calendar year for which the information is being reported (even non-calendar year plans must report on a calendar year basis);
• A certification, by calendar month, as to whether minimum essential coverage was offered to employees (and dependents);
• The number of full-time employees for each month;
• For each full-time employee:
• The months during the year that minimum value coverage was offered;
• The employee's share of the cost of self-only coverage for the least expensive minimum value plan offered to the employee, by calendar month;
• The employee's name, address and Social Security Number and the number of months, if any, that the employee was actually covered

In addition, it is likely that employers will be required to use a series of codes to indicate:

• Whether the offered coverage meets minimum value (60 percent);
• Whether the employee's spouse and/or children are eligible for coverage;
• If a full-time employee was not offered coverage, whether the employee was excluded due to a permissible waiting period, because the employee was not full-time for the month, because the person was not employed for the month, or for another reason;
• If coverage was offered to an employee who is not full-time;
• Whether the coverage met an affordability safe harbor;
• The total number of employees, by calendar month;
• If the employer was not conducting business in any month(s);
• If a member of a controlled or affiliated service group, the name and EIN of all other employers in the group;
• If a member of a controlled or affiliated service group, if the employer expects to remain in the group the next year;
• The name, address and EIN of anyone filing on behalf of the employer;
• If a contributing employer to a multiemployer plan, whether the employee is eligible for that plan because of the employer's contributions, and the name, address and EIN of the administrator of the multiemployer plan.

The IRS has proposed several safe harbors to reduce or eliminate the 6056 reporting, but as it seems unlikely that many employers will be able to meet the criteria, the proposed safe harbors will not be discussed in this Alert.

Interested parties may file comments on the proposed rules until Nov. 8, 2013. Public hearings are scheduled for Nov. 18.  Final rules likely will be published in late 2013 or early 2014.  The proposed rules are here:

Proposed Minimum Essential 6055 Rule.pdf
Proposed Large Employer 6056 Rule.pdf

Obama Care for Business

Highlights of the SHOP Exchange

PPACA requires that a Small Business Health Options Program (SHOP) exchange/marketplace be established in each state for small employers. For 2014, all states will use 50 employees as the cut-off for small employer status.* Beginning in 2016, all states must use 100 employees as the cut-off. The SHOP exchanges/marketplaces will operate similarly to the individual exchange/marketplace, as they will provide a place for small employers to compare and enroll in available health insurance options.

To participate in the SHOP, the employer must offer coverage to all full-time (30 or more hours per week) employees. The employer will determine the amount of its contribution towards coverage. (The regulations do not require that the employer make a contribution, but carriers may impose contribution requirements.) For 2014 in all federally facilitated SHOP exchanges (FF-SHOPS) and a few state-run exchanges, the employer will choose the health plan (QHP) it will offer its employees. Beginning in 2015 in all exchanges the "employee choice" option will be effective. With employee choice the employer will select a specific level or "tier" of coverage--bronze, silver, gold, or platinum--and each employee will select a QHP within that tier. Some state-run exchanges will offer employee choice for 2014. The SHOP will provide an aggregate bill to the employer.

The employer may either offer coverage to all eligible employees through the SHOP serving the area in which the employer has its principal business address or offer coverage through a SHOP in each place the employer has a location. Retirees and COBRA participants may be covered through the SHOP exchange if the employer makes its standard contribution. Sole proprietors are considered individuals and will purchase through the individual exchange, not through a SHOP.

Coverage through a SHOP is considered employer-sponsored coverage, so premiums may be paid on a pre-tax basis if the employer adopts a Section 125 plan.

Both the employer and employee will complete applications to purchase coverage in the SHOP exchange. The FF-SHOP employer application may be found at http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/shop-employer-application-6-12-2013.pdf. The FF-SHOP employee application may be found at http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/shop-employee-application-6-12-2013.pdf. State-run SHOPs may use these applications, or they may design their own.

Small employers may enroll in the SHOP at any time during the year, for a 12-month coverage year. If an employer cannot meet the carrier's participation requirements, which in many states will be 70 percent, it can be required to wait until the annual small employer open enrollment, which will be November 15 to December 15 in all states. Coverage will be effective January 1. Carriers may impose participation requirements at renewal. In many states, employees with coverage through another employer plan, Medicare, Medicaid, the military, or veterans' programs will not be included in the participation calculation, and employees who have purchased individual coverage will be included in that calculation.

Plans in the SHOP exchange will be required to provide the 10 essential health benefits. Deductible limits (generally $2,000 per individual and $4,000 per family) and out-of-pocket maximums ($6,350 per individual and $12,700 per family) will apply.

Small employers that have fewer than the equivalent of 25 full-time workers, an average annual employee wage below $50,000, and cover at least 50 percent of the cost of health insurance coverage for employees may be eligible for a small business premium tax credit when they offer health coverage. Starting in 2014, the maximum tax credit increases to 50 percent, but is available only to small employers who purchase coverage through the SHOP. Nonprofit employers meeting the eligibility criteria can receive credits for 25 percent of the employer's share of premium costs through 2013 and, beginning in 2014, 35 percent of these premium costs for coverage purchased through a SHOP. Additional information on the small business tax credit is available in our Highlights of the Small Employer Tax Credit.
* The FF-SHOPs will use the same method of counting full-time and full-time equivalent employees as is used to determine "large" employer status under the employer shared responsibility/play or pay rules. State-run exchanges may use the state's current definition of employee until 2016.

9/18/2013