By RISQ Consulting

If everyone had Liam Neeson’s special set of skills from the Taken series, there would be no need for kidnap and ransom (K&R) insurance. Unfortunately, K&R scenarios are a real-world possibility for many high-profile executives and individuals traveling abroad.

What is Covered

K&R policies cannot prevent an abduction or pay ransom directly, instead they are indemnity clauses which reimburse you for costs related to kidnapping. Common reimbursement claims include:

• Ransom monies paid or lost as a result of kidnapping.
• Money lost due to destruction, theft, or confiscation in delivery or transit.
• Accidental death and injury sustained during a kidnapping as well as medical and psychiatric care.
• Liability judgments brought against the victim.
• Severe disruption of business operations and damage to company brand.
• Salary replacement, relocation, and job retraining.

Many policies include provisions for crisis management consultants who advise on incident response or prevention and reaction training for insured individuals.

Who Needs K&R Insurance Coverage

The most commonly targeted individuals include high-net worth and high-profile executives, celebrities, strategic decision makers, and people with ties to them including family members and employees.

Missionaries, volunteers, and reporters working in volatile areas may also be targets as a result of political and public reactions surrounding their capture.

Susceptible Locations for Kidnapping Occurrences

Policies are generally written to cover specific trips. Fees and coverage are based on individual factors including the insured’s country of residence, region and length of travel, revenue, and industry.

Mexico, Venezuela, Haiti, Nigeria, certain countries in Latin America, parts of the Russian Federation, Eastern Europe, and Central Asia, particularly Afghanistan and Iraq, are commonly named K&R policies.

The U.S. Department of State maintains a list of travel advisories worldwide (https://travel.state.gov/content/travel/en/traveladvisories/traveladvisories.html/) which specifically highlights dangerous regions.

This article is from RISQ Consulting’s MyWave Connect portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.

Overview

On Dec. 17, 2019, the U.S. House of Representatives passed a short-term continuing spending resolution to prevent a government shutdown and continue funding through September 2020. If signed into law, the spending bill would repeal the following three largely unpopular taxes and fees under the Affordable Care Act (ACA):

• The Cadillac tax on high-cost group health coverage, beginning in 2020;
• The medical devices excise tax, beginning in 2020; and
• The health insurance providers fee, beginning in 2021.

The bill would also extend the PCORI fees to be effective for 2020-2029. This bill would need to be passed by the Senate and signed into law by President Trump before taking effect.

Action Steps

Employers should be aware of the evolving applicability of existing ACA taxes and fees so that they know how the ACA affects their bottom lines. RISQ Consulting will continue to keep you informed of changes.

Cadillac Tax

The ACA imposes a 40 percent excise tax on high-cost group health coverage, also known as the “Cadillac tax.” This provision taxes the amount, if any, by which the monthly cost of an employee’s applicable employer-sponsored health coverage exceeds the annual limitation (called the employee’s excess benefit). The tax amount for each employee’s coverage will be calculated by the employer and paid by the coverage provider.

Although originally intended to take effect in 2013, the Cadillac tax was immediately delayed until 2018 following the ACA’s enactment. A federal budget bill enacted for 2016 further delayed implementation of this tax until 2020, and also:

• Removed a provision prohibiting the Cadillac tax from being deducted as a business expense; and
• Required a study to be conducted on the age and gender adjustment to the annual limit.

Then, a 2018 continuing spending resolution delayed implementation of the Cadillac tax for an additional two years, until 2022.

There was some indication that these delays would eventually lead to an eventual repeal of the Cadillac tax provision altogether. The Cadillac tax has been a largely unpopular provision since its enactment, and a number of bills have been introduced into Congress to repeal this tax over the past several years.

If enacted, the 2019 continuing spending resolution would fully repeal the Cadillac tax, beginning with the 2020 taxable year.

Health Insurance Providers Fee

Beginning in 2014, the ACA imposed an annual, nondeductible fee on the health insurance sector, allocated across the industry according to market share. This health insurance providers fee, which is treated as an excise tax, is required to be paid by Sept. 30 of each calendar year. The first fees were due Sept. 30, 2014.

The 2016 federal budget suspended collection of the health insurance providers fee for the 2017 calendar year. Thus, health insurance issuers were not required to pay these fees for 2017. However, this moratorium expired at the end of 2017. A 2019 continuing resolution provided an additional one-year moratorium on the health insurance providers fee for the 2019 calendar year, although the fee continued to apply for the 2018 calendar year.

If enacted, the 2019 continuing spending resolution would fully repeal the health insurance providers fee, beginning with the 2021 calendar year. Employers are not directly subject to the health insurance providers fee. However, in many cases, providers of insured plans have been passing the cost of the fee on to the employers sponsoring the coverage. As a result, this repeal may result in significant savings for some employers on their health insurance rates.

Medical Devices Excise Tax

The ACA also imposes a 2.3 percent excise tax on the sales price of certain medical devices, effective beginning in 2013. Generally, the manufacturer or importer of a taxable medical device is responsible for reporting and paying this tax to the IRS. The 2016 federal budget suspended collection of the medical devices tax for two years, in 2016 and 2017. As a result, this tax did not apply to sales made between Jan. 1, 2016, and Dec. 31, 2017. A 2018 continuing resolution extended this moratorium for an additional two years, through the 2019 calendar year. The moratorium is set to expire beginning in 2020.

If enacted, the 2019 continuing spending resolution would fully repeal the medical devices tax, beginning in 2020. Therefore, as a result of both moratoriums and the repeal, the medical devices tax would not apply to any sales made after Jan. 1, 2016.

PCORI Fees

The ACA created the Patient-Centered Outcomes Research Institute (PCORI) to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. The Institute’s research is funded, in part, by fees paid by health insurance issuers and sponsors of self-insured health plans. Under the ACA, the PCORI fees were scheduled to apply to policy or plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019.

If enacted, the 2019 continuing spending resolution would reinstate the PCORI fees for the 2020-2029 fiscal years. As a result, specified health insurance policies and applicable self-insured health plans would continue to be responsible for paying these fees through 2029.

By RISQ Consulting

Natural disasters, vandalism, fire, and many other factors could impact your business unexpectedly. How long could you survive a full or partial shutdown? Days? Weeks? Months?

We understand that losing access to your business hurts the bottom line, so we provide a range of business interruption insurance options. By evaluating your specific risk factors and drawing upon the global Acrisure Agency Partner network, we can develop coverage to keep your business afloat if disaster strikes.

Business interruption insurance replaces the loss of income due to suspended operation as a result of prescribed events and factors. Unlike property insurance which covers physical damage and associated costs, this coverage is intended to recoup lost revenue.

Consider Your Risks

Business interruptions affect each business differently depending on the nature of the business, its location, current economic conditions, and several other factors. If your business could be affected by one or more of these tell-tale risks, we advise you to consider business interruption coverage.

• Volatile Location – The possibility of natural disasters, high rates of crime, aging municipal infrastructure, and political instability could all halt your business. Whether a result of nature or human interference, if the location of your business is unstable, so is your ability to stay open.
• Tight Interdependency – While being a part of an interconnected network of businesses or supply chains can increase your company’s productivity, the same dependency can create cascading problems when issues arise. If you rely on an outside source for parts, labor, or services you need to prepare for possible repercussions.
• Critical Equipment – When vital pieces of machinery are damaged, wait times for repair or replacement may freeze your productivity. Beyond insurance policies written to repair and replace such assets with physical insurance, business interruption coverage can be used to offset lost production earnings.
• Financial State – Bills don’t stop just because business is on hold. Depending on your business’ success and age, business interruption coverage can mean the difference between bouncing back and throwing in the towel.

Audit Your Policy

Depending on the length and severity of a shut down, business interruptions can eat away at a company’s bottom line. Would your business be able to weather the storm?

Thoroughly reviewing your current policies and unique risk factors is the best way to determine if you have adequate business interruption insurance, but you don’t have to go it alone.

Combining data and historical factors, our team can audit your current policy. By assessing your risk level, valuations and coverage needs, we get to know your company inside and out to develop holistic solutions.

This article is from RISQ Consulting’s MyWave Connect portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.

Overview

The Department of Labor (DOL) has released the following three model disclosure documents related to a November proposed rule on transparency in coverage for group health plans and health insurers in the individual and group markets.

• Proposed Transparency in Coverage Model Notice
• Proposed Negotiated Rate Data Elements
• Proposed Allowed Amount Data Elements

These documents were issued as appendices to the proposed rule, and are intended to be used to satisfy its disclosure requirements.

Action Steps

The transparency in health coverage proposals would apply to issuers of insured plans and sponsors of self-insured group health plans. However, they would not apply to grandfathered plans.

The Departments have requested comments on both the proposed rule and the required disclosure documents. Comments must be submitted by Jan. 14, 2020.

Health Care Transparency Proposed Rule

The November proposed rule would impose new transparency requirements on group health plans and health insurers in the individual and group markets—including self-insured plans. Specifically, the proposed rule includes the following two approaches intended to make health care price information accessible to consumers and other stakeholders, allowing for easy comparison-shopping.

• First, each non-grandfathered group health plan or health insurance issuer offering non-grandfathered health insurance coverage in the individual and group markets would be required to disclose personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form available to participants, beneficiaries and enrollees (or their authorized representative) upon request. This includes estimates of the individual’s cost-sharing liability for health care for different providers.
• Second, each non-grandfathered group health plan or health insurance issuer offering non-grandfathered health insurance coverage in the individual and group markets would be required to disclose to the public (including stakeholders such as consumers, researchers, employers and third-party developers) the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files.

The provisions included in the proposed rule are proposed to apply for plan years (or, in the individual market, policy years) beginning on or after one year after the finalization of the rule.

Model Disclosure Documents

In conjunction with the proposed rule, the DOL issued the following model disclosure documents:

• Proposed Transparency in Coverage Model Notice—As part of an estimate of an individual’s cost-sharing liability, the proposed rule requires plans and issuers to provide a notice of any required prerequisite for the item or service, and a notice explaining certain limitations that are applicable to the individual’s cost-sharing liability estimate. This model notice is intended to satisfy those notice requirements under the proposed rules.
• Proposed Negotiated Rate Data Elements—Under the proposed rule, plans and issuers must disclose in-network provider negotiated rates through a machine-readable file posted on an internet website. The “negotiated rate” is the amount a plan or issuer (or a third party on behalf of the plan or issuer) has contractually agreed to pay an in-network provider for covered items and services. This model disclosure includes a table that identifies proposed data elements that a plan or issuer would be required to include in each negotiated rate machine-readable file.
• Proposed Allowed Amount Data Elements—Under the proposed rule, plans and issuers must disclose certain data elements to the public, including allowed amounts for out-of-network providers, through a machine-readable file posted on an internet website. This model disclosure includes a table that identifies data elements that a plan or issuer would be required to include in each allowed amount machine-readable file.

This article is from RISQ Consulting’s MyWave Connect portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.

Your credit score is one of the most influential factors when it comes to financial outcomes in your life. Most people know that their credit scores affect their ability to obtain a mortgage or loan. What’s more, most people understand that the interest rates they pay on loans is tied to their credit scores. However, there are even more aspects of your life that are influenced by your credit score.

In fact, your insurance premiums can be directly affected by your credit score, which means that if your score isn’t great, you’ll be paying more for your coverage.

Insurance Scores

Many insurance companies use your credit score to generate a credit-based insurance score that is then used as a factor in determining your premiums. Credit-based insurance scores and your credit score are not the same thing. Insurance scores focus on only some factors of your credit history in order to gain an indication about how you manage risk. Factors that may be used include:

• Payment history
• Amount of debt
• Length of credit history
• Recent applications for new credit
• Types of credit you have

In some states, insurance companies are limited in whether they can use credit-based insurance scores and, if so, to what extent.

While influential, credit-based insurance scores are only one factor in a company’s process of determining your premiums. Auto insurance companies, for example, could consider factors such as your location, age, the model and age of your vehicle, and how much you drive.

Improving Your Score

The easiest way to improve your credit-based insurance score is to increase your actual credit score. A healthier credit score can lead to lower premiums and put money back into your pockets. In addition, the higher your credit score, the better terms you will receive on loans and credit cards. As such, having a good credit score is helpful not only for the present, but also for your financial future.

Some steps that you should consider taking to improve your credit score include:

• Be punctual—Paying your bills on time is a key factor in maintaining or improving your credit score.
• Pay it back—Reducing the amount of overall debt that you have is a good way of improving your score.
• Keep it open—Paying off a credit card feels great, but even if you don’t owe any money, you should still keep the account open.
• Limit new debt—Keep the amount of applications you make for new credit to a minimum.
• Maintain balance—Having a wide variety of types of credit, such as a mortgage, auto loan, credit card and personal loan can contribute positively to your credit score.

By Tonya Mott

Here is an update on our LEAN Journey; I wanted to summarize where we started and what is next for us at RISQ.  As you may recall in recent blog posts:

• We started with the “why”, why would we want to be LEAN and what’s in it for the company and each of us.   
• Then we moved on to an office wide clean up and organization project that involved our entire staff.   

Now we are jumping into writing workflows and procedures.  I cannot tell you how much fun this is (in my most sarcastic tone).  I had to find some humor in this part of the process to give me the courage to keep this project moving forward.  So I did! Here is a hilarious video of a Dad following his kids PB&J sandwich instructions very literally.  My energy is now renewed and we will forge forward:

https://youtu.be/j-6N3bLgYyQ

Wish us luck!