Sonia Marques

How to Get Ideal Long-Term Disability for Your Specialty Group

Specialty groups need special attention

By David Serena

Group Disability Specialist

The simple truth is specialty physician groups need special treatment in order be fully protected from the financial hardships a disability can cause.

From among the many reason why, three stand out:

  1. Specialty group physicians are more vulnerable because an injury – say to a shoulder or a hand – can limit or preclude their ability to perform invasive procedures (especially true for surgeons, anesthesiologists, invasive radiologists);
  2. Too many Long-Term Disability(LTD) contracts do not take into account all possible specialty group income streams such as K-1 distributions, and;
  3. Too many LTD contracts do not protect physicians based on a very specific and accurate definition of their specialty.

Finding the ideal LTD insurance for your specialty group usually begins with a conversation with an experienced insurance advisor who recognizes the unique vulnerability of your specialty.

If your group is purchasing LTD for the first time, your advisor will provide a strong proposal with an “apples-to-apples” comparison highlighting any significant differences between policies and insurance companies.

If your group is already covered, it’s often very advantageous to work with an insurance advisor to compare your existing insurance to the latest policies available. Ideally, your advisor is proactive when it comes to informing you of the potentially positive or negative impact changes in the insurance industry can have on your coverage. At a bare minimum, your advisor should review your changing circumstances and explore new opportunities with you an annual basis.

The WisMed Advantage

At WisMed Assure, our only business and our sole focus is serving healthcare professionals. Our team has decades of experience and a deep understanding of your concerns, aspirations and opportunities. By leveraging the shared wisdom and collective buying power of the many physicians and healthcare professionals we serve, WisMed Assure is able to deliver preferred service, terms and, in many cases, better pricing. 

Here are some of the important features we provide that are of particular importance to physicians:

  • We protect the physicians’ own specialty by using the CPT-10 codes they have billed for during the last 12 months to identify their “own occupation”.  This is unusual. Many contracts have weaker language.
  • Our program typically pays claims for 6 months longer to Doctors over age 60. This is of value to senior Physicians who are the most likely to go on claim.
  • Because our sole focus is physicians, there is an unusually deep understanding of “income”, such as K-1 distributions for specialty groups owned wholly or partially by the physicians in the Group… income that goes away if they cannot practice.
  • Our plans do not have the subjective provisions often seen in other contracts, such as working to maximum capacity, part-time work requirements, or prudent person language. When these provisions are in other LTD products, it can allow a carrier to pre-maturely terminate a claim or reduce expected benefits. 
  • We can bring you a host of riders to choose from based on your unique circumstances and needs including:
  • Infectious diseases, including the COVID-19 virus.
  • Progressive illnesses. Some contracts don’t pay until there is a 20% income loss in one year, whereas ours pays as soon as there is a 20% income loss from the time of diagnosis. This is unusual.
  • Extended earnings for physicians coming back after an extended illness. This rider is important for those who bill and have to wait for receivables.
  • Pension contribution payments can also be covered.
  • Additionally, we offer ancillary coverage for things like travel assistance and identity theft protection.

While price isn’t everything, in most cases, specialty groups can expect an extra 5% discount for working with us.

One more thing, WisMed Assure not only works for you directly, we serve the healthcare community at large as all of our profit goes to support the Wisconsin Medical Society.

If you wish to discuss any of the features I’ve written about here, or if you want your disability insurance to be an ideal fit for your group’s unique needs and situation and concerns, contact me or click on the link below.

WisMed Assure

608.442.3810

insurance@wismedassure.org

Facts You Need About Medicare Supplement Insurance

By Laura Kinart

WisMed Assure Account Executive

The best time to explore and understand Medicare Supplement Insurance is well before you turn age 65.

Medicare Supplement Insurance is health insurance that pays some of the health care costs that Medicare doesn’t cover. This includes costs like coinsurance, copayments, and deductibles among others.

The ins and outs of Medicare and supplement insurance can be confusing, and it is best for you to seek advice from an insurance expert who takes the time to fully understand your current situation and the future needs of you and your family.

Because WisMed Assure is the only insurance agency in Wisconsin working exclusively with physicians and the healthcare community (healthcare is our only business), we may be your best choice when it comes time to figure out what you need to do about Medicare and Medicare Supplement Insurance.

Our knowledgeable staff understands Medicare and supplement insurance. Even more importantly, we hold ourselves accountable for giving you everything you need to make the best decisions and feel confident while doing so.

A starting point in decision making is to pick the right company to work with. At WisMed Assure we partner with Wisconsin Physicians Service Insurance Corporation, commonly known as WPS, to provide what we feel are the very best supplement insurance options.

WisMed Assure and WPS have common roots, we were both started by the Wisconsin Medical Society; WPS in 1946 and WisMed Assure in 1981 (We were originally known as Wisconsin Medical Society Insurance and Financial Services, Inc., we took on our new name in 2019.)

Here are some important facts for you to consider:

  • Medicare alone is not enough, you need to make sure you have a supplement to fill in the gaps that Medicare leaves.
  • Medicare Supplement Insurance can be used anywhere in the US, so there is no worry of having “out of pocket” charges.
  • Coverage begins on the first of the month that you turn 65 and/or enroll in Medicare Part B, or on the effective date you request up to three months in the future.
  • If Medicare Covers it, so does the Supplement!
  • WPS has a local customer service center to help out if needed and they give you the help you need, quickly and accurately because they only work with supplements.
  • WPS offers a 7% discount to households with two members on a WPS Medicare Supplement.
  • In 2019, WPS Health Solutions was named one of the World’s Most Ethical Companies® for the 10th year in a row by the international Ethisphere® Institute.
  • Optional Dental Coverage is available
  • Silver & Fit program is available on base plans which provides discounts to local gyms as well as discounts on fitness products.
  • All WPS Medicare supplement insurance plan customers receive access to the EyeMed Vision Care discount program at no additional cost.  EyeMed offers substantial savings on eye care and eyewear at thousands of provider locations nationwide.
  • Hear in America program is also available to all WPS Medicare Supplement insurance plan customers – offering discounts on hearing aids (which are not covered by Medicare).
  • Profits earned by WisMed Assure directly support the mission and vision of the Wisconsin Medical Society.

If it is time for you to explore, understand and make the best possible decisions about Medicare and Medicare Supplement Insurance, it’s time to call WisMed Assure.

Laura Kinart

Account Executive

Wismed Assure

D: 414-238-6106

E: laura.kinart@wismedassure.org

Click here to visit the WPS website.

Is Your Money Unemployed? Replace budgeting with goal setting and give your money a job

By Christopher Rufus Sweeney

“If you are willing to live like no one else will early in life, then you can live like no one else can later in life.”

James Dahle, MD, “The White Coat Investor”

As we developed our financial literacy course for medical students, my colleague Emma Crawford and I initially called the first module “Budgeting”.  We quickly realized no one likes to create a budget much less stick to it. So, we changed our perspective and called the module “Budgeting: Goal Setting”.

Goal setting is all about giving your money a job… a very empowering activity. And, to add a little sugar to the medicine, we’ve replaced the “b” word altogether and use “earmarking” instead.

Emma and I created this course to give medical students a scaffolding on which to build their futures… financial and otherwise. Goal setting and earmarking challenges you to do three things:

  1. Determine and rank the values that drive you
  2. Decide the goals that are most important for you to achieve
  3. Make sure your spending habits reflect your values and goals

These steps are simple to understand, but they are perhaps some of the most challenging to live by. There are plenty of studies about the psychology of why we struggle with these but one published in the Journal of Consumer Psychology is particularly helpful. It’s titled, “If money doesn’t make you happy, then you probably aren’t spending it right” and it is available on sciencedirect.com. The title speaks for itself.

When determining your values and identifying your goals, one key takeaway from the study may be very helpful: Buy experiences instead of things. Because we quickly get used to new things, the happiness we experience is fleeting. With experiences, new and repeated, the happiness we experience is much more enduring.

Another key takeaway is easy to say but extremely difficult to do: Pursue your own goals, not anyone else’s. This is where your values come in; when you are very clear about what they are, and you review them often, they protect you from getting caught up in someone else’s definition of what’s important in life. (The quote by James Dahle, MD at the beginning of this article speaks to the reward you can expect when you stick to your values.)

Once you have your values and goals, you need to decide how to earmark your money. Here is a simple table with my spending categories to help you get started.

  NON-NEGOTIABLE NEGOTIABLE
FIXED Housing
Transportation
Insurance
Savings 		Subscription streaming services
Amazon Prime
VARIABLE Food
Gasoline 		Hobbies
Nights out
Vacation

There are a number of very good online resources to help you set up, manage and stick to your goals. In the course, we run through a detailed explanation of how to use an app called Mint. Without actually going online to do so, here are some of the soundest steps you can take to give all of your money the job of ensuring you achieve your goals:

  • Look at your personal history of spending. (With apps like Mint, you track your credit and debit card activity)
  • Track your spending back at least a month… preferably six months
  • Assign categories of spending for all transactions
  • Once you know how much you spend on average, you can refine or create new categories of spending as needed
  • Set a monthly budget and identify where you can cut back if needed
  • Keep track of how you’re doing on at least a weekly basis

What do you learn from tracking your expenses? First, you learn where all your money is going. Without a doubt, you will be surprised at how many different ways you spend money and, most importantly, how little much of your spending contributes to the achievement of your goals. In other words, you learn how to recognize when you are spending money towards the achievement of someone else’s goals (increasing Starbuck’s income comes to mind).

The best result of earmarking is it gives you a clear picture of what you can do to accelerate your progress to your bigger longer-term goals. The sense of power and satisfaction even the smallest step towards those bigger goals is invigorating and an acknowledgement of your ability to be in control of your money instead of suffering as your money controls you.

Next blog:

Live Like a Resident: If you live and work like a resident, you can become financially independent in 10-12 years. That feels good.

What’s Next for Physicians, Clinicians and Health Systems? The Coronavirus and Your Insurance.

As of today, here’s what we can safely tell you about Short-Term Disability, Long-Term Disability, Workers Comp, and business interruption insurance.

Please Note: The following information is general. Specific circumstances may impact how your insurance works. If in doubt about claims related to Coronavirus, contact your insurance agent.

Healthcare Insurance

Most if not all insurance companies are waving first-dollar (co-pay, deductibles, co-insurance) for diagnostic testing. Other costs will likely apply depending upon your plan and needs. We will update you if any significant changes occur.

Short-Term Disability

If you are sick and unable to work for more than the number of days specified in your policy (typical terms are 0,1,7,14 or 30 days), a Short-Term Disability claim will be approved and paid. But, if you are quarantined for more than the number of days stipulated in your policy – quarantine typically lasts two weeks – but do not contract the virus, your Short-Term Disability insurance would not pay.

Long-Term Disability

The important number here is, like Short-Term Disability, the number of days specified in your policy (the shortest is 30 days but it can be 60, 90 or more). If you contract the virus and are unable to work for longer than the number of days stipulated in your policy, you will most likely be eligible for compensation.

Workers Comp

Filing a workers compensation claim if you are unable to work because of Coronavirus quarantine or actual illness is tricky. You would have to be able to prove you actually contracted the virus at your place of work. Since it is similar to a flu, insurance companies are likely to treat it as such and your claim would most likely not be approved.

Business Interruption Insurance

Business interruption insurance is designed to replace income that is lost due to an event that causes business to be halted or interrupted due to damage to the business physical property, such as a fire or hurricane or other natural disaster.  Policies differ but most specify what kind of event would trigger coverage.  Additionally, most policies have coverage for when a civil order prevents access to the property.  Many policies “contingent business income coverage” if business cannot continue due to a loss experienced by a third party, such as a critical supplier.  None of these triggers or policy coverage language specifically address an event like we are experiencing now with COVID-19.  Ultimately, coverage will depend on how the facts are applied to the policy language.  

What’s Next?

What’s next indeed! We know physicians, clinicians and health systems are on the frontlines in this battle. That’s why we are doing everything we can to make sure we are here for you. We are actively monitoring our teams’ health and updating plans to provide best service possible if they can’t come into work.  All of our staff has the ability to work from home.

We are also actively monitoring coverage policies and watching for any changes from our insurance company partners.

Warm regards,

Shawna Bertalot, CIC, ACI,

President

To address any questions or concerns, please contact Christopher A. Noffke, GBDS

Director of Group Benefits.

608.442.3734 direct

Chris.Noffke@wismedassure.org

PS: The Johns Hopkins Coronavirus Resource Center hosts a website dynamically tracking cases around the world. Despite the increase in cases worldwide, a visit to the site shows how China was able to relatively quickly “flatten the curve” by enacting public health and safety measures. I think this is a very good indication of how quickly we will be able to eliminate this threat.

Group Health Insurance Slam Dunk

A three-point strategy for winning big

By Chris Noffke, GBDS, Director of Group Benefits

“A little March madness may complement and contribute to sanity and help keep society on an even keel.”

If Henry V. Porter, the high school coach who wrote this in 1939, could see how powerfully March Madness grips our nation today, he might have second thoughts about its effect on our sanity… not to mention the alignment of our collective keel.

When it comes to group health insurance, deciding when and how to pivot from one insurance company to another can be as maddening as filling out your bracket ahead of the big dance. Anyone who has wagered even the smallest of amounts, knows how difficult it is to choose the winners among the 68 teams in the tournament. Despite the countless strategies hyped by all sorts of experts, winning most often comes down to plain luck.

But, unlike choosing your March Madness bracket, developing and sustaining a successful employee benefit plan doesn’t have to be a toss-up. You can tilt the court in your favor by following this three-point strategy.

Point #1: Always be shopping

When it comes to staying ahead in the health insurance game, maintaining status quo is the fast lane to self-defeat. Instead, by carefully shopping around each year and being prepared to change, you can spot opportunities for significant savings.

That’s because insurance prices tend to follow a multi-year pattern. Generally speaking, insurance companies offer better rates to entice new groups to switch plans. They then gradually bring the premiums for those plans back up to a more profitable level… this takes between two and four years.

I’m not saying you should change insurance companies every year. But, by shopping around every year, you will be able to compare your plan costs to what is available on the market. At some point, you will see a significant difference between the renewal you’ve been given and what is available elsewhere in the market.

This strategy can benefit both small and larger employers and their employees. The difference maker here is a proactive, knowledgeable insurance advisor. Think of your advisor as a scout who is always on the lookout for the best talent.

Point #2: Know your benchmarks

Large or small, your organization is competing for employees against other employers. That’s why it is essential to constantly monitor the benefits types and benefit levels being offered in your area by similar companies. You need to know if your benefits are going to attract the best players to your team.

Here again, a proactive insurance advisor is your best ally. Speaking from experience, the ability to provide healthcare-only benchmarking across our entire customer base gives our clients a big competitive edge in attracting and retaining talent while controlling costs. Regardless of where you get your benchmarking data, it is important to drill down as deeply as possible to find the specific data most relevant to your business.

Point #3: Innovate your game plan

A company with the right medical plan is a lot like a basketball team with strong fundamentals; no team wins without excellent dribbling, shooting, passing, and rebounding. But, these skills alone are not enough to make it to the Final Four. To be the best takes something special; a secret sauce of team spirit, creative leadership and great individual talent.

Your success in attracting and retaining the best possible employees also depends on your ability to offer a fundamentally sound health plan. Exploring and understanding all options for how benefits are paid – from medical gap coverage, HSAs, HRAs, flex spending and many more – and then choosing what is best for your organization is essential. (E.g.: Recently, by altering how the employees paid their deductibles, we helped a client with 60 enrolled employees save over $100,000 on their annual insurance premiums.) 

But, just like in basketball where fundamentals are essential but not enough to win the tournament, to succeed as an employer, you need something special. Truth is, the vast majority of employees want access to voluntary benefits because they cover what may otherwise become a personal financial issue that distracts them from their work.

Renewal madness

Because it never actually ends (unlike March Madness), playing the employee benefits game isn’t about winning year-to-year, it’s about playing to the best of your ability. Bob Knight, one of the winningest coaches of all time said it best: “Discipline is doing what has to be done, when it has to be done, as well as it can be done, and doing it that way all the time.”

At WisMed Assure, we carry out these three points every year, for every client. They simply give us their employee census and we do the rest. (If you are not – yet – a client of WisMed Assure, we can do the same for you for free if you provide your census.)

I invite you to contact me to explore how these three points can help make your benefit program a winner.

chris.noffke@wismedassure.org

608.442.3734 – direct

800.975.3421

Physician Financial Wellness Matters

New course battles financial stress and physician burnout

By Christopher Rufus Sweeney

The survey says… wait, that’s wrong. Start again: 42 percent of all surveyed physicians say that they are burned out. And that number is steadily rising.

My research shows that financial anxiety is one of the primary drivers of physician depression, burnout, and suicide. When asked why, physicians say it’s because of their job. But, when asked what would reduce burnout, their first answer is increased compensation to avoid financial stress.

But, think about this: getting a higher salary is often not something you can directly control. On the other hand, you do have direct control of how you manage your salary. You can control what you have.

That’s the great news my colleague Emma Crawford and I are spreading through our new course being offered to students at the School of Medicine and Public Health at UW-Madison.

Funded by a grant from the Wisconsin Medial Society Foundation, our goal is to help med students make smart, well-thought-out, intentional financial decisions now so that you are able to enjoy your life with less financial stress later.

Medical students, residents and physicians are busy and have little financial training, which can result in suboptimal decision-making and being targeted by less than scrupulous “financial planners”. This can be scary, intimidating, and discouraging.

I am speaking from experience here. Before entering medical school, I was talked into a bad investment and quickly realized physicians represent a vulnerable combination of high income and poor investment skills. This makes us an ideal target for salesmen posing as financial planners. Since then, I’ve dedicated myself to helping others avoid the mistakes I made.

You can’t blindly luck into financial independence, even with a physician’s salary. No one is born good at managing finances! Financial decisions both large and small are more psychological than logical. The good news is that anyone can learn it. That’s why we’ve put together this course. From budgeting and living on a resident’s salary to figuring out whether you should rent or buy a house during residency, this course arms students with carefully distilled personal financial wisdom to better navigate their financial journey when they graduate from SMPH.

The Wisconsin Medical Society’s insurance agency, WisMed Assure, has asked me to share some of the course’s highlights over the coming months.

Here’s what you can expect:

  • Budgeting: The word budgeting sounds like a scolding… it’s a lot better to think of it as Goal Setting
  • Live Like a Resident: If you live and work like a resident, you can become financially independent in 10-12 years. That feels good.
  • Rent or Buy a House in Residency: In residency, most of the time, the answer is rent!
  • Different Kinds of Debt: Knowing helps you choose the best repayment method.
  • Types of Educational Loans: Don’t pay people to help you with student loan repayment. Don’t get bamboozled!
  • Compound Interest and Loan Basics: Compound interest is unfriendly when used against you… it’s quite nice if you use it to your advantage
  • Emergency Fund: Consider setting aside about $5k as a resident, and more as your resources and liabilities accumulate
  • Income Driven Repayment Plans: The many ins and outs of income-driven repayment options
  • Public Service Loan Forgiveness: A great deal for many physicians, but you have to do it right
  • Insurance: Insurance works best when it is low probability, but high consequence
  • Taxation: Navigating safely through the sea of taxes and deductions
  • Retirement: Never, ever raid your retirement account

While there are a few pitfalls in personal finance, there are many more ways as to be successful. Most often, what works comes down to what is most important to you and you alone. That’s why we created this course to teach students how to make a plan for their finances based on their personal goals and individual situation. It will give them a scaffolding on which to build their futures.

Looking ahead, think about what James Dahle, MD, “The White Coat Investor” says: “If you are willing to live like no one else will early in life, then you can live like no one else can later in life.”

Next Blog: Budgeting: Goal Setting is all about giving your money a job… and it really is an empowering activity.

IRS Releases 2019 Instructions for Form 8994: Employer Credit for Paid Family and Medical Leave

The IRS recently released the 2019 Instructions for Form 8994: Employer Credit for Paid Family and Medical Leave. Employers who provide family and medical leave to their employees may complete Form 8994 in order to claim a credit for tax years 2018 and 2019. In order to claim the leave, employers must have a written policy that provides at least two weeks of paid leave to full-time employees (prorated for part-time employees), and the paid leave must be at least 50% of the wages normally paid to the employee.

Family and medical leave, for purposes of this credit, is leave granted by the employer in accordance with written policy for one or more of the following reasons:

  • Birth of an employee’s child and to care for the child
  • Placement of a child with the employee for adoption or foster care
  • To care for the employee’s spouse, child, or parent who has a serious health condition
  • A serious health condition that makes the employee unable to do the functions of their position
  • Any qualifying exigency due to an employee’s spouse, child, or parent being on covered active duty (or having been notified of an impending call or order to covered active duty) in the Armed Forces
  • To care for a service member who’s the employee’s spouse, child, parent, or next of kin

The credit is a percentage of the amount of wages paid to a qualifying employee while on family and medical leave for up to 12 weeks per taxable year. The applicable percentage falls within a range from 12.5% to 25%. In certain cases, an additional limit may apply. An employer can claim credit only for leave taken after the written policy is in place, and the credit is scheduled to expire for tax years beginning after 2019.

Employers seeking to claim this credit should work with their accountants or tax professionals to do so.

Source: NFP Benefit Partners Compliance and Regulatory Federal Health Updates; December 10, 2019

Play Defense and Offense to Win the Medical Liability Game: A game plan for success in a hard insurance market

Part 3 of 3

By Shawna Bertalot, CIC, ACI, President WisMed Assure

“Physicians in Wisconsin will soon be paying more for medical professional liability (MPL) insurance thanks to a cyclical “hardening” of the market.”

(Excerpt from Part 1)

Three of every four primary care physicians will be sued by a patient during the course of their career. The numbers are even worse for specialties.

Which is why physicians as a whole are not willing to take the chance they will be among the lucky few who never get sued. To guard against the financial impact of a law suit, they purchase Medical Professional Liability (MPL) insurance. But, as Wisconsin physicians begin to experience rising MPL premiums along with greater underwriting scrutiny, the question becomes, “How can I get the coverage I need and avoid paying too much?”

The answer is to play defense and offense at the same time; defense by reducing the chances of being sued and offense by managing your insurance purchase.

It’s simple: don’t get sued

Well, if only it was that simple. In reality, a physician can do everything perfectly for a patient and still be sued because of a poor outcome.

Legally speaking, to be successful in court, a patient’s legal team has to prove three things:

  1. The physician committed a breach of duty by not providing medical care another healthcare professional would have provided
  2. The patient suffered emotional or physical injury
  3. The physician caused the damage to the patient

But, even when one or more of these three are not provable in court, no physician wants to end up in court in the first place… nor does their MPL insurer want to pay the legal bills.

How’s your Patient CRED?

Playing defense could be as conceptually simple as applying the “CRED” concept to your medical practice:

C – communication

R – relationship

E – education

D – documentation

Communication

A breakdown in patient-provider communication is a leading contributor to malpractice lawsuits. While it is absolutely essential to obtain adequate informed consent, doing so as part of an open, two-way conversation with the patient and their family when appropriate goes a long way to helping you avoid your day in court.

By taking the time answer questions, address concerns and openly discuss potential complications, you can avoid false assumptions and miscommunication while building patient confidence.

Relationship
Patients and families are much less likely to sue a physician when they feel they have a good relationship. Even if you deliver the best possible care, without a good relationship, its perceived value and effectiveness can be significantly diminished in the eyes of your patient.

That’s why approaching each patient with compassion and empathizing with their concerns and condition throughout the cycle of care, is one of your best defensive strategies. Most of the time all it takes is for you to stop for a few seconds and truly engage with patients. Making eye contact, actively listening, just being there for a moment instead of worrying about where you have to be next, can make all the difference.

Education
When a patient or a member of their family doesn’t understand the diagnosis, treatment or regulations, it is far too easy for them to feel you’ve done something wrong or inadequate.

If you don’t educate them, they instead rely on assumptions, what they read on the Internet, and what their cousin in Oconomowoc heard on the Doctor Oz Show.

To protect yourself, to play strong defense, take time to educate your patients and their family so they understand why you are recommending all tests and treatments ahead. Plus, they need to know what to expect including risks and possible side effects, recovery times, and results.

Clearly explaining why and what helps you avoid having to justify your actions and decisions by making the patient and their family part of the decision-making process.

Documentation.
Malpractice law suits occur when a patient thinks they’ve been harmed and are supported by others in making a case against a physician. Defense then is conceptually simple; you must accurately document the patient’s condition and why your diagnosis and treatment decisions were made.

But, in practice, it’s a lot more complicated. One complicating factor you cannot afford to overlook are the decision-making (or at least decision-influencing) conversations you have with patients and their families. When you use the other three elements of Patient CRED, these conversations gain importance and the need to document them is essential.

Going on the offensive

Inevitably, you will pay more for MPL insurance. But, to avoid an even worse-case scenario, where you can no longer find adequate coverage at all, there are several things you can do.

As the market hardens, underwriters will begin to clamp down on exceptions. This means that if your risk management practices and policies are irregular, you will pay a lot more and your options could be severally limited.

Unfortunately, to protect their profits, some insurers may reduce claims and risk management personnel and services. And some may sell directly and not through licensed insurance agents who can help you play offense. Which makes it even more important for physicians to make sure they have their act together when it comes to risk prevention.

Here is a risk management checklist you can use to improve your offense and be seen as a preferred risk to an insurance company.-

  • I understand and have taken advantage of the premium discounts and credits my insurance company offers.  Yes    No    Not Sure
  • I regularly participate in risk-reduction CME courses and seminars and receive discounts from my insurance company for doing so.  Yes    No    Not Sure
  • I utilize electronic medical records in my practice and receive discounts from my insurance company for doing so.  Yes   No   Not Sure
  • My organization pursues ongoing risk-management efforts such as claims management, quality initiatives, and risk assessments. Yes    No     Not Sure
  • My organization has an effective peer-review process.  Yes     No     Not Sure
  • My organization has practical guidelines for medical record documentation and consent forms.  Yes   No    Not Sure
  • I (we) have chosen the location for our organization by balancing market/patient accessibility and location-specific insurance costs.   Yes    No    Not Sure
  • When completing annual insurance renewal forms, I am careful to answer all questions as accurately as possible and include any and all substantive changes to my practice (e.g.: changes to hospital staff privileges, joining a managed-care network, gaining specialty board certification).   Yes   No   Not Sure
  • I understand the difference between claims-made and occurrence coverage and have chosen the coverage most appropriate for my situation:   Yes   No   Not Sure

It takes two to Tango

Playing offense goes beyond implementing risk management strategies. It also means playing tough with your insurance company. Given that the likelihood of a law suit occurring is so high, you need to be aware of your insurance company’s track record when it comes to managing claims.

Here are some important questions to ask:

  • How many law suits do they defend annually?
  • What is the percentage of cost they spend on defense vs. settlement?
  • How does their success rate in court compare to the national average?

Nationally, only about five percent of cases go to trial. And, of those, about 80 percent are decided in favor of the physician.

What should you do now?

For now, assuming your house is in order, you will want to look for stability and security by renewing your coverage with a financially strong insurer; a long-term player committed to the MPL insurance market place. This is where an experienced broker can play a key role in helping you understand the quality of the insurers willing to do business with you.

As the market continues to harden, it is essential to seek the help and advice of an experienced, committed advisor who can help you improve your underwriting profile if need be and navigate your options.

If you would like to discuss this article or your insurance needs and concerns, please feel free to contact me.

Shawna Bertalot, CIC, ACI, President WisMed Assure

shawna.bertalot@wismedassure.org

Term Life Insurance

“How much can I get for how little?”

This is the usual question from a potential buyer of “Term” Life insurance.

But for our Residents, Fellows, and young Physicians who want to protect their life and their family, it’s an incomplete question.

The better question is, “How can I inexpensively protect my family from bad consequences while we buy time for our assets to grow to a point where we won’t need Life Insurance anymore?”

Thinking through potential bad things that can happen is no fun, especially with the understanding that the probability of something catastrophic happening (other than death) is highly unlikely to happen to you.

And you’re right. It is not going to happen to you. That’s right … it is statistically NOT going to happen to you.

But it does happen to some … and when it does, the consequences are either tolerable or devastating, leaving one either emotionally comfortable or severely distressed.

Keeping in mind that insurance, by nature, is intended to cover “low probability/highly severe financial consequences”, there is a difference between “inexpensive” Life Insurance (the goal) and “cheap” Life Insurance (the mistake).

So, what makes term life insurance “cheap”?

After 24 years of working exclusively with Physicians, I’ve experienced a lot. The issues that follow are very real … (We’ll just leave it at that … but I can tell you that I am much more “mindful” of structuring Term Life Insurance now than I was 24 years ago …).

So, let’s look at an example of this low probability circumstance happening to someone like you…

A Physician, age 30, buys a $1,000,000, 20-year Level Term Life Insurance policy. She is delighted because, after a comprehensive search, she found the least expensive contract. She got the best rating class possible: only $25.73 a month. Such a deal!

Then, at age 42, with three young children, she is diagnosed with MS and is partially disabled and can practice only part time.

By age 45, she is totally disabled and not working at all.

So here’s the situation …

Typically, if one is disabled early in one’s career, one has not enough time to attain enough assets for retirement (and other objectives, such as a child’s college tuition).  This is because the monthly benefits being received from one’s disability insurance benefits leaves little to save. There simply is not enough money.

This was the reason for purchasing the Term Life Insurance 15 years ago.

Now the life insurance takes on greater value … It’s there to do what was intended … to make sure there are assets there for the family …

But does it?

Here is what her Life Insurance policy can and cannot do for her and her family …

This was the lowest premium … and it is, indeed, a cheap policy …

  1. She has 5 years left on her 20-year level term. Then you know what happens at the end of the level term? It becomes very expensive … onerously expensive … and increases in premium every year. So, with a tight budget, it quickly becomes unaffordable … at just the wrong time …
  2. She is now uninsurable and cannot get a new policy.
  3. Her policy could have been convertible to a longer term, but only during the first 10 years …

Talk about stress … At a time when one is emotionally vulnerable, now there is additional stress.

So, how could this have been avoided?

There could have been a longer “conversion” period put on the original policy. This would have allowed for the policy to be stretched to a longer term.

A conversion to a “permanent” policy is no bargain at this point; it has a much higher premium; it is around $1,000 per month; $12,000 per year … year after year. But, at least one would have had the option.

Please Note: longer conversion periods cost pennies more per month … but need to be applied for and put on the original policy at inception.

Could a better decision have been made back when the policy was originally purchased?

The answer is “yes”. There could have been a “Waiver Of Premium” Rider on the policy.

Waivers differ with each Insurer, but “strong” waivers waive premiums when one is totally disabled … and continue to waive them past the “level” term period … Many will waive it all the way until one passes … no matter how long one lives.

Disability waivers typically cost about $12 – $15 per million per month.

If this had been part of the policy, the contract would have stayed in force free of charge.

So, the result could have been less stress, knowing that one’s family would be getting that $1,000,000 no matter how long or how short one’s life would have been.

Could decisions have been made that would have been even better than this?

The answer is “Yes”. This could have been a contract with the ability to both “waive” the premium and then convert it to a permanent contract, which, if one is totally disabled, not only waives premiums, but it funds itself, that is, the Insurer pays the premium.

Now that same $1,000 per month is deposited into the contract by the Insurer and would have been building a cash reserve for the insured that could have been accessed later in life.  

At age 65, the cash would have probably been in excess of $500,000 … and, of course, there’s the Life Insurance …

Now, instead of stress, there is the emotional comfort of knowing that one’s family is financially sound no matter if one lives a long time or dies prematurely.

There’s a little bit more to this story …

A “20” year level term is, by far, the most common “term” chosen by young Physicians … and, with me having been around for 24 years, many of those 20-year terms are coming to an end.

As mentioned before, once the “level” term ends, these contracts get incredibly expensive … No one ever keeps them …

The thing is … Many, now at age fifty-something, still want some life Insurance. “The kids are still in college” … Not quite enough yet in the Retirement plan … Just want the extra million for another 10 – 15 years of so …” are commonly heard reasons.

Well, back at age 30, that 20-year term for $25 per month could have been a 30-year term for $44, but it was decided back then that was just a little too “pricey”.

Now, at age 50, if one is healthy, a new 10-year level term is $75 per month and a new 20 year term is $119 per month.

And again, that is assuming one is still in good health …

In closing, if you want the cheapest Life Insurance, anyone can shop for you.

But, as a young Physician, if you want “inexpensive” insurance with the appropriate protections for you and your loved ones, our promise is to watch out for you and provide the right kind of guidance.

Dave Serena

Dave Serena is in his 25th year as an Agent with the Wisconsin Medical Society’s Insurance Group: Wismed Assure. He has Physician clients in 36 states and continues to provide them with  life-long counsel and guidance. His position is that Physicians are free to practice high quality medicine and enjoy their families when they are confident about their personal financial security. Contact WisMed Assure at insurance@wismedassure.org  608.442.3810

FSA Contribution and Other Benefits Limits Rise for 2020

The IRS announced an increase to flexible spending account (FSA) contribution limits for the 2020 plan year. Individuals can contribute $2,750 in 2020, up $50 from the previous year.

Since this announcement came so late in the year, some employers may not use the updated figures in their benefits limits—as doing so would require an addendum.

In fact, some employers have been known to use limits from the previous year because they cannot wait until this far into the enrollment season to release benefits materials. With that in mind, it wouldn’t be surprising if employers use the 2019 limits for their FSA plans in 2020.

In addition to the FSA contribution limits, the IRS announced increases for transportation benefits and adoption services. Qualified transportation benefit limits (for parking or transit passes) increased to $270 for 2020. Maximum employer subsidies for qualified adoption expenses rose to $14,300, up $220. Other adoption-related limits increased as well.

The content herein is provided for general information purposes only, and does not constitute legal, tax, or other advice or opinions on any matters. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy.

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