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10 Reasons to Love a Health Savings Account

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Many consumers are eager to learn more about health savings accounts (HSAs), which continue to generate buzz as a growing trend in health care coverage. The general assumption is that a financial tool with this much potential must be complex and difficult to understand. However, HSAs are simple to outline, and can be broken down into a list of ten basic points for consumers to easily digest.

  1. HSAs fund health care needs

The HSA is first and foremost designed to fund health care expenses in conjunction with a high deductible health plan (HDHP). An HDHP is a requirement to set up an HSA. The HSA is a savings account that secures pre-tax dollars in a fund for future medical needs, and helps meet the deductible on one’s health insurance plan, should something happen that takes medical expenses beyond what is readily affordable.

  1. HSAs utilize pre-tax funds

HSAs may be set up through employers or through financial institutions like banks, insurance companies, or third-party administrators. Contributions to HSAs through employers are set up as pre-tax investments. HSA accounts created through financial institutions are designed so that consumers can take an “above-the-line” deduction on personal taxes. One asset for many is that taxable income is decreased, so fewer taxes need to be paid out.

  1. HSAs come with significant premium savings over traditional insurance plans

High deductible health plans also come with much lower premiums than a traditional plan. This is especially apparent to someone who pays the premiums all year long but doesn’t actually go to the doctor or utilize medical services very often. For this person, the premium can feel like money out the window. Based on premium savings alone, some HSA consumers see 20 to 40 percent savings each year.

  1. HSAs offer expanded coverage options for consumers

Unlike typical insurance plans that have a highly negotiated list of medical products or services that are covered, HSAs allow many additional health-related expenses. So doctors’ visits, hospital expenses and prescriptions are covered, but coverage also extends to some dental and vision services, and certain “non-traditional” treatments such as acupuncture and deep tissue massage.

  1. HSAs allow negotiating power to secure discounts on medical services

Because an HSA is a “cash” account, it empowers consumers with an option to negotiate pricing on many medical services, which can lead to substantial savings on medical expenses. For example, standard imaging services can vary widely in price depending on location and payment method. An MRI, for example, can cost anywhere from $400 to $1,800 for the exact same service.

  1. HSAs offer control and choices regarding health care needs

With these plans, consumers have unlimited choices regarding services, service providers and medical expenditures. With an HSA, one can go to the doctor of his or her choice.

  1. HSAs are portable

If a consumer switches jobs, the HSA account follows. And, unlike traditional insurance plans, consumers do not lose unused funds in these accounts at the end of the year. The consumer “owns” this account and all benefits that come from its good management.

 

  1. HSAs create financial incentives for managing health care expenses

There are always unfortunate cases where a catastrophic event occurs and emergency medical services are required that do not allow time to “shop around.” But the majority of medical transactions faced in the course of a lifetime are more predictable. Since the HSA is a consumer-controlled cash account, that consumer is encouraged to think about whether a particular expense is worth it or if a cheaper alternative, like a generic medication instead of name brand, might work just as well.

  1. HSAs are a powerful tool for retirement investing

Over time, a relatively healthy person or someone who is a decent financial manager can save a good deal of money and investment earnings in an HSA. Consumers who are between the ages of 55 and 65 also have the opportunity to make additional “catch-up” contributions to the fund. Increased access to this fund begins at age 65. The account can continue to be used for medical expenses with no penalties, but withdrawals for other purposes are also possible (after age 65) and often face fewer penalties than withdrawals from an IRA.

  1. HSAs create a health-conscious community and put market forces to work that drive down health costs for everyone

Because of the incentive to save and earn money, consumers are encouraged to become educated on health care and medical services to become active participants in the control of their health and wellness. Providers of medical products and services are forced into a healthier competition for consumers. Additionally, there is a personal incentive to make smarter decisions about the use of the health care system, then decreasing the likelihood of its abuse. Overall, it becomes a more efficient system, and the costs of medical services decrease to meet the new market realities.

The HSA is an easy-to-use tool that offers consumers a way to take control of their health investments. It puts all of the financial incentives in the right place to encourage the consumer to make healthier lifestyle choices, better health care-related financial decisions, and to invest and save money over time for future medical needs. Consumer driven health care has the power to change a family’s financial future while also catalyzing positive change in America’s health care system as a whole.

Understanding Voluntary Benefits

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Unlike traditional benefits such as health coverage, employees are responsible for paying most or all of the cost of voluntary benefits.


You know the importance of having health care coverage and a 401(k), but are you taking advantage of all the benefits offers? Voluntary benefits are additional benefit options offered through the company. Unlike traditional benefits like health coverage, employees are responsible for paying most or all of the cost of these voluntary options.

What’s the Advantage?

You may wonder–if you’re responsible to pay, then why elect any voluntary benefits? There are several advantages.

Lower Price

If the benefit in question is something you are planning to purchase for yourself regardless, then it is probably more cost-effective to purchase through . The group rate we can secure is generally lower than what you’d pay buying individually from an insurance company.

Convenience

When you elect a voluntary benefit option through our open enrollment, your premium is paid through convenient payroll deductions just like your other benefits (and you receive the same benefit of pre-tax payroll deductions). Plus, you can skip the hassle of shopping around to find and purchase a plan – simply elect what you need during enrollment time.

Protect Yourself and Your Family

Many of these types of insurance may seem unnecessary, but they are designed to protect you in the event of an unexpected illness, accident, death or other event. For instance, you may be skeptical about needing disability insurance, but consider if you could afford to be disabled and without a paycheck for weeks or months, plus having medical bills to pay? Paying a small premium now can help protect you financially.

Common Types

There are a variety of voluntary benefit options; some of the common ones include:

  • Life Insurance – employees can typically elect up to a certain amount without needing to go through medical underwriting
  • Vision Insurance – typically includes free annual eye exam and discounts on glasses and contacts
  • Dental Insurance – generally covers preventive services and offers a discount on other treatments
  • Long-term Care Insurance – covers the care people need when they have lost the ability to perform certain daily activities (care that may not be covered under Medicare or Medicaid)
  • Short-term Disability – covers a percentage of lost pay due to time away from work because of a disability, generally up to three or six months
  • Long-term Disability – covers care needed over a longer period of time, for injuries that could affect someone for years
  • Accidental Death & Dismemberment – coverage in case an employee dies in an accident or loses a limb, vision or hearing.

CREATE A FIRE ESCAPE PLAN

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Every year thousands of people die or are injured in house fires. Don’t let your family become a statistic—many of these injuries are avoidable if you have a sound escape plan in place to protect you and your family if a fire occurs in your home.

Preparation

First, always ensure that your smoke detectors are properly installed and operating. Test them every month—a working smoke detector is the earliest signal alerting you to a potential fire.

Second, you and your family should establish an escape plan that outlines at least two exits from each room in your home in the event of a fire. If the primary exit is blocked by fire or smoke, you will need a second way out.

Every member of your family should practice the escape plan each month both in the light and in the dark so that everyone knows how to feel their way out of the house.

The Plan

When creating an escape plan, incorporate the following elements:

  • When coming to a closed door, use the back of your hand to feel the top of the door, the doorknob and the crack between the door and the frame to make sure that the fire is not directly outside. If the door feels hot, use the secondary exit. If the door feels cool, brace yourself against it and open it slowly.

  • Do not waste any time trying to save your personal property. Instead, take the safest exit route.

  • If you must escape through smoke, crawl low under the smoke and cover your mouth.

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  • Establish a meeting place outside of the home where everyone knows to go once they are safely out. Designate one person to go to a neighbor’s house to call the fire department.

  • Never go back into a burning building for any reason.

10 Questions to Ask Yourself About Your Retirement Plan

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Understanding fiduciary responsibilities is important for the security of a retirement plan and compliance with the law. If you answer “no” to any of the following questions, you may not be complying with federal regulations.

  1. Have you identified your plan fiduciaries, and are they clear about the extent of their fiduciary responsibilities?
    • ERISA defines a retirement plan fiduciary as a person or entity that does any of the following with respect to a retirement plan:
      • Exercises discretionary control or authority over the management of the plan or its assets
      • Provides investment advice or manages the plan assets for a fee
      • Has discretionary responsibility in the administration of the plan
      • Is specifically identified in the written plan documents as a fiduciary
    • Fiduciary responsibilities include:
      • Acting solely in the interest of plan participants and their beneficiaries, and with the exclusive purpose of providing benefits to them and paying plan expenses
      • Carrying out their duties prudently
      • Following the plan documents (unless inconsistent with ERISA)
      • Diversifying plan investments
      • Paying only reasonable plan expenses
      • Monitoring investments
      • Avoiding transactions that are a conflict of interest
  1. If participants make their own investment decisions, have you provided sufficient information for them to understand their rights and responsibilities under the plan related to the direction of their investments?
    • Provide plan- and investment-related information, including details of fees and expenses.
      • You must provide this information before participants make their first investment decision in the plan, and annually from then on.
      • Present investment-related information in a format that allows for comparing the plan’s investment options, such as a chart.
    • If the information you provide comes from a service provider that you rely on reasonably and in good faith, you will not be liable for its completeness and accuracy.
  2. Have you considered ways to limit fiduciary liability under the plan?
    • Document the processes used to carry out fiduciary responsibilities, such as the hiring process for plan service providers and the selection and monitoring of plan investment alternatives.
    • Set plans up in a way that gives participants control over the investments in their accounts—this can help limit the fiduciary liability for participants’ own investment decisions. To do this, participants must be given the opportunity to choose from a broad range of investment alternatives that follow these guidelines set by the Department of Labor (DOL):
      • There must be at least three different investment options so that employees can diversify investments within an investment category, such as through a mutual fund, and among the investment alternatives offered.
      • Sufficient information must be provided to participants to allow them to make informed decisions about the investment options the plan offers.
      • Participants must be permitted to provide investment instructions at least once per quarter, and possibly more often in the case of volatile investment options.
    • Plans in which employees are automatically enrolled can be set up to limit fiduciary liability for plan losses that are a direct result of participant contributions being automatically invested in certain default investments.
      • There are four alternatives for default investments, as explained in DOL regulations, and in order to use them, an initial notice and an annual notice must be provided to participants.
      • Participants must be given the opportunity to direct their investments to a variety of other plan options, and given information on these other options.
  3. Are you aware of the schedule to deposit participants’ contributions in the plan, and have you made sure it complies with the law?
    • When employee contributions are made through payroll deductions, employers must deposit the employees’ contributions into the plan “as soon as it is reasonably possible,” according to the DOL.
    • As a general rule, employers must deposit employees’ contributions into the plan by the fifteenth business day of the month following the payday, but should do so sooner if it is possible. However, for plans with fewer than 100 participants, an employer will comply with the law if employees’ contributions are deposited with the plan no later than the seventh business day following withholding by the employer.
  4. If you are hiring third-party service providers, have you looked at a number of service providers and made meaningful comparisons?
    • Provide each potential provider with complete and identical information about the plan and what services you are looking for.
    • Compare providers based on the same information, such as services offered, experience, current client base and costs.
    • Gather and evaluate information about the firm as a whole, including financial condition, experience with similar group health plans and the qualifications of the professionals who would be handling the plan.
    • Verify that the firm’s licenses, ratings and/or accreditations are current.
    • Ensure that you understand how the company will manage investments and take direction from participants.
  5. Are you prepared to monitor your plan’s service providers?
    • You should create and follow a review process at predetermined intervals to evaluate whether the current service provider is meeting your plan’s needs.
    • This review should take into consideration the provider’s performance, reports, notices, fees, questions and follow-up.
    • The review should include asking the plan’s service providers about policies and practices, ensuring that plan records are properly maintained and following up on participant complaints.
    • The review process should be documented, and when using an internal administrative committee, you should educate committee members on their roles and responsibilities.
  6. Have you identified parties-in-interest to the plan and taken steps to monitor transactions with them?
    • Parties-in-interest to the plan may include:
      • Plan fiduciaries, legal counsel or employees
      • Individuals who are providing services to the plan
      • Employers with employees who are covered by the plan
      • Organizations with members who are covered by the plan (such as a union or employee organization)
      • Relatives of any of individuals who are considered parties-in-interest
      • Owners of 50 percent or more of:
        • Combined voting power of a corporation
        • Capital or profits interest of a partnership
        • Beneficial interest of a trust or unincorporated enterprise, which is an employer with employees who are covered by the plan or an organization with members who are covered by the plan.
      • Employees, officers, directors or 10 percent or more shareholders of individuals who are considered parties-of-interest
    • Some prohibited transactions include:
      • Sales, exchanges or leases between the plan and a party-in-interest
      • The lending of money or other credit between the plan and a party-in interest
      • The furnishing of goods, services or facilities between the plan and a party-in-interest
  7. Are you aware of the major exemptions under ERISA that permit transactions with parties-in-interest, especially those key for plan operations (such as hiring service providers and making plan loans to participants)?
    • One exemption allows the provision of investment advice to participants who direct the investments in their accounts. This applies to the buying, selling or holding of an investment related to the advice, as well as to the receipt of related fees and other compensation by a fiduciary adviser.
    • Many other exemptions may be applicable, depending on the situation—exemptions that apply to classes of plans and to individual plans can be viewed at www.dol.gov/ebsa in the “Compliance Assistance” section.
  8. Have you reviewed your plan document in light of current plan operations and made necessary updates? After amending the plan, have you provided participants with an updated SPD or SMM?
    • Review your plan document on a regular basis to ensure accuracy.
    • A Summary Plan Description (SPD) explains the plan simply while still providing all of the necessary information on plan features and what to expect—it is provided within 90 days of when coverage begins and is redistributed every five years or within 30 days of a request.
    • A Summary of Material Modification (SMM) informs participants of material changes to the plan or to what is included in the SPD—it is provided within 210 days after the end of the plan year, unless it represents a reduction in covered services or benefits, in which it is provided within 60 days of the change.
  9. Do those individuals handling plan funds or other plan property have a fidelity bond?
    • ERISA requires that individuals who handle plan funds have fidelity bonds.
    • The fidelity bonds can be narrow, moderate or broad.
    • The required limit of liability for an individual’s fidelity bond must equal 10 percent of the plan funds handled, with a minimum of $1,000 and a maximum of $500,000 in most cases.

National Western Life Announces 2Q Earnings

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AUSTIN, Texas, Aug. 6, 2015 /PRNewswire/ — Ross R. Moody, President and Interim Chief Executive Officer of National Western Life Insurance Company (Nasdaq: NWLI), announced today second quarter 2015 consolidated net earnings of $28.9 million, or $8.16 per diluted Class A common share, compared with consolidated net earnings of $29.2 million, or $8.25 per diluted Class A common share, for the second quarter of 2014. For the six months ended June 30, 2015, the Company reported consolidated net earnings of $50.2 million, or $14.19 per diluted Class A common stock, compared with $49.0 million, or $13.86 per diluted Class A common shares a year ago. The Company’s book value per share increased to $437.86 as of June 30, 2015 from $436.35 at March 31, 2015.

The Company reported earnings from operations, excluding net realized gains and losses on investments, of $26.1 million for the three months ended June 30, 2015, or $7.38 per diluted Class A common share, compared to $27.2 million, or $7.69 per diluted Class A common share, in the same period for 2014. Mr. Moody commented on the earnings results saying, “Operating results were very solid for the quarter. We continue to maintain expense control discipline in keeping costs down and our policy benefits returned to expected levels after running higher than normal in the first quarter.” Earnings from operations for the six months ended June 30, 2015 of $46.8 million, or $13.23 per diluted Class A common share, were slightly higher than the $46.0 million, or $13.02 per diluted Class A common share, recorded during the same period in 2014. Mr. Moody observed, “We are in a very competitive market and in the midst of exceptionally low interest rates. Given that the majority of our products are interest-sensitive, being able to maintain our profitability levels in this environment is very gratifying.”

Sumitomo Life To Acquire Symetra Financial

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BELLEVUE, Wash.–(BUSINESS WIRE)– Symetra Financial Corporation (NYSE: SYA) (“Symetra”) today announced that it has entered into a definitive merger agreement with Sumitomo Life Insurance Company (“Sumitomo Life”) pursuant to which Sumitomo Life will acquire all of the outstanding shares of Symetra. Symetra shareholders will receive $32.00 per share in cash at closing, plus a previously announced special dividend of $0.50 per share in cash, which is payable on August 28, 2015 to Symetra shareholders of record as of August 10, 2015. The amount of the special dividend was established in connection with the determination of the total combined transaction consideration. The total combined transaction consideration of $32.50 per share is approximately $3.8 billion in aggregate and represents a 32% premium over Symetra’s average stock price of $24.64 for the 30 days ending August 5, 2015.

Sumitomo Life, founded in 1907 and headquartered in Tokyo and Osaka, Japan, is a leading life insurer in Japan with multi-channel, multi-product life insurance businesses. Sumitomo Life provides traditional mortality life insurance, nursing care, medical care and retirement plans through sales representatives, insurance outlets, the Internet and bancassurance. As of March 31, 2015, Sumitomo Life had $229 billion in assets, approximately 6.8 million customers and 42,000 employees.

Feds Question Insurers’ ACA Aid Program Filings

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CCIIO asked the affected health insurers to feed data into the program by July 31, using a data filing system the agency set up for the PPACA minimum medical loss ratio (MLR) compliance program.

Virtually all of the affected insurers turned their risks corridors program data in on time, CCIIO officials say in a memo posted on the Web.

But, “while conducting quality assurance of the risk corridors data, we have identified a significant number of discrepancies in the data, which makes it necessary to conduct additional data validation,” CCIIO officials say in the memo.

CCIIO will validate the information in the risk corridors program reports by comparing it to the information available through sources, and the agency may ask some issuers to resubmit their data, officials say.

Originally, CCIIO was going to tell health insurers how much they might get from the risk corridors program, and how much they might have to pay into the program, by Aug. 14 — Friday.

While reviewing the risk corridors program filings, “we are postponing the publication of the preliminary risk corridors program results,” officials say.

CCIIO will “provide further information when the risk corridors data is accurate, complete and validated,” officials say.

CCIIO is part of the Centers for Medicare & Medicaid Services (CMS). CMS is part of the U.S. Department of Health and Human Services (HHS). CMS created CCIIO to run the new HHS commercial health insurance market programs created by PPACA.

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