News – WisMed Assure

Life, Death and Taxes

March 30, 2024April 1, 2024

By Lisa Koerner, Insurance Advisor

If you are looking for some creative ways to avoid paying taxes, don’t overlook the benefits of life insurance. There are several different types of life insurance policies that serve different objectives, the greatest is a tax-free death benefit for your beneficiaries. Also, the death benefit does not go through probate, so only your beneficiaries can receive the money. There are a few things to look for when searching for the right life insurance.

When choosing life insurance programs, term life policies are typically the most popular. Term policies offer a larger death benefit for a smaller premium, however, the rates are only locked in for a certain number of years and don’t provide any cash return if you outlive the term or cancel the policy.

The advantage of a permanent policy is that it can build cash value in the policy that you can access tax-free while you are living and still provide a tax-free death benefit for your beneficiaries.

Universal life plans offer more flexibility but are also driven by interest rates. When setting up this policy, it is very important to work with your agent to make sure it is properly funded in the beginning to avoid the need to put more money into it later on.

Whole life policies can also be a good option for cash value growth, but there are things to look for here as well. If you choose a policy that has dividend options, you can set up the policy to allow you to access the dividends tax-free in the future without worrying about having a loan on the policy that could affect how the policy pays out. The biggest thing to be aware of with cash value policies is that if you take out more money than what you put in, the gains would be considered taxable income.

To learn more, reach out to Lisa Koerner or the WisMed Assure team at insurance@wismedassure.org, complete this quick online form or call 608.442.3810 for help with your insurance needs.

Note: This article is for informational purposes only and should not be considered as insurance advice related to your specific policy or situation. Please consult with a qualified insurance advisor or professional before making any policy decisions. Full disclaimer and contact information.

Your Medicare Update

March 30, 2024April 1, 2024

By Mary Krueger, Medicare Specialist

It’s early 2024 and its already time to explore Medicare options for 2025. Many Medicare enrollees want to look at what is suitable for their needs in the Medicare market. If you have started looking for yourself or someone else, there are many different ways to procure coverage. Let’s explore some ideas for the 2025 Medicare Advantage programs that are being considered by medicare.gov.

Medicare Advantage

One of your options is the Medicare Advantage program. Insurance companies have slightly different copays and out-of-pocket maximums, so it’s very important to look at those. Additionally, some of your coverages are limited to in-network clinics and hospitals. Out-of-network procedures may require you to pay more or all of the bill. This is why it is critical to understand what your plan covers. Medicare pays the insurance companies for your care, so you do not need to show your Medicare card to the provider, you only need your insurance card.

Medicare Supplement (Medigap)

Your other options are the Medicare Supplement (also known as Medigap) policies which do not have networks. This seems to be the most popular option with our members with plans written through WisMed Assure. The freedom to choose where you get care (as long as the facility accepts Medicare) has been a very important benefit for those who are semi or fully retired.

Losing coverage

If you are age 65 or older, you have a right to guaranteed issue within 63 days of when you lose or end certain kinds of health coverage. When you have a guaranteed issue right, companies must sell you a Medigap policy at the best available rate, regardless of your health status, and cannot deny you coverage.

Choosing to enroll

Under federal law, you get a 6 month “Medigap Open Enrollment” period. It starts the first month you have Medicare Part B and you’re 65 or older.

Disability eligibility

Options are also available for those under age 65 who are eligible for Medicare because of a disability.

We are here to help you. Contact our Medicare Specialist Mary Krueger at 715.760.1350 or contact the WisMed Assure team at insurance@wismedassure.org, complete this quick online form or call 608.442.3810 for help with your insurance needs.

Tax Treatment of Long-term Care Insurance a Game Changer

March 30, 2024April 1, 2024

By Tom Strangstalien, Insurance Advisor

We put my dad into a nursing home on Monday. My mom had been his caretaker since he was diagnosed with a somewhat rare neurological disorder. My mom has been superwoman, a real- life example of a family member caring for a loved one. However, even superwoman has a kryptonite, hers being a diagnosis of breast cancer with an impending dual mastectomy this Friday. In need of her own care, our family had no choice but to concede to the fact that dad needed continuous care from qualified professionals. The cost? $8,000 per month, and that does not include costs for prescription medications and other needed skilled medical treatments. My parents are faced with a common long-term care phenomenon, which asset do we liquidate first?

As part of our financial planning, we should all anticipate being faced with this conundrum. Which asset should we set aside to be liquidated first in the event of the need for exorbitant long-term care expenses? In considering the tax treatment of “qualified” long-term care insurance products, we may be able to make this decision much easier.

Qualified long-term care insurance premium deduction

First, the IRS allows a tax deduction for qualified long-term care insurance premiums. These premiums could be in the form of a traditional long-term care policy or for the prevalent “hybrid” life insurance with long-term care benefits available today. In essence our premiums can be combined with our unreimbursed medical expenses to the extent that they do not exceed 7.5% of our adjusted gross income. The maximum we can deduct is subject to age limits, but this by itself can be significant, especially if we combine the sum-total over a respective number of years. If we do not claim the deduction on our Federal return, we can claim the expense of our premiums on the State of Wisconsin income tax return. All states vary with how these premiums are treated, so you need to check with your individual state.

The 2024 federal IRS deduction limits are:

Age 40 and below $470

Age 41-50 $880

Age 51-60 $1,760

Age 61-70 $4,710

Age 71 and over $5,880

How are long-term care insurance payments for care treated by the IRS for tax purposes?

When determining which asset to liquidate first, this can be the determining game changer! If the policy is “qualified” per IRS guidelines, typically the payments for any level of care including home health care, assisted living or skilled nursing home care are not taxed. For my parents that would mean an estimated $96,000 in annual benefits received that would not be taxed. If assets were set aside and allocated to a taxable investment for future long-term care, it likely would need to achieve a significant rate of return to compete and almost certainly involve volatility and risk. I would say most of the time it makes much more sense to purchase “tax qualified” long-term care protection. My grandmother was in a home with cognitive impairment for 12 years. In her case at an average nursing home cost of $100,000 per year, she would have received $1,200,000 in tax-free benefits. Can a savings account or investment compete with that? And how will inflation and supply and demand affect future costs?

Using a Health Savings Account for long-term care insurance premiums

Another tax consideration worth mentioning is that qualified long-term care insurance premiums can be funded with Health Savings Account (HSA) assets. As we know, our health savings accounts accumulate on a tax-free basis, are deductible for individual contributions and can be funded with employer contributions. This fact can further enhance the benefits of purchasing long-term care protection.

I work with insurance planning for our physicians every day. Yet, the value of proper planning still resonates with an abrupt wake-up call when faced in real life. How much expense will accrue with my dad’s nursing home stay? Only the future holds the answer. One fact is undisputable, knowing which asset we will liquidate first should be planned well in advance. That asset may very well be and should be a tax qualified long-term care insurance policy.

For help with your insurance planning, contact Tom Strangstalien at 608.442.3730 or the WisMed Assure team at insurance@wismedassure.org, complete this quick online form or call 608.442.3810.

Tornadoes Can Strike in Seconds. Are You Ready?

March 30, 2024April 1, 2024

By The Hartford, reposted with permission

Tornado season is upon us and could bring more storms in the months ahead. In fact, the U.S. experiences the most tornadoes of anywhere in the world.¹ Last year alone 1,197 tornadoes tore through the country, costing over $1 billion in property damage.²

While we can’t prevent tornadoes, we can help you craft a safety plan and prepare. And know that if a tornado has damaged your property and you need to file a claim, we’re here to help you online or by phone (800 243 5860).

Before a Tornado

Designate a Shelter

The best shelters are sturdy, windowless spaces with room for you, your family, and pets.

A basement is ideal, though any low level, windowless room works, including closets, hallways, interior stairwells, or a bathtub if you have a heavy blanket or mattress as cover.

Create an Emergency Kit

Be sure your kit includes:

Food and Water for 72 hours, such as canned soup, granola bars, or shelf stable goods, plus a can opener

Whistle or horn to attract attention should you become trapped

Battery or generator powered lights to conserve mobile phone power

First aid kit that includes bandages, antiseptic, and essential medicines

Battery or crank radio because cell towers may be down

Important documents, including copies of your ID, insurance information, Social Security cards, a small amount of cash, and other legal documents, such as wills

Extra pet food if needed

During a Tornado

Know the signs of a tornado:

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Dark green or sickly looking sky

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Large hail

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Low clouds, especially if they’re rotating

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A roar often compared to a train whistle

If you hear or see these signs, or there’s a local tornado warning, shelter with family and pets.

If you’re far from that shelter, try to find a sturdy community building, such as a church or office building nearby.

If you’re in a vehicle and can’t find shelter, stay inside, and cover your head.

After a Tornado

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Use your horn or whistle, or another implement to attract help if trapped.

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Check your structure’s integrity. If you see cracks, rubble, or fallen beams, exit until it’s deemed safe to return.

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You may need shelter. If so, text "Shelter" and your zip code to FEMA (43362).

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Avoid downed powerlines. Even if they look inactive, wires may still carry a live current.

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Avoid using lighters or flames. Even if you don’t smell gas, there may still be a leak.

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Use generators safely. Vent generators outside. Carbon monoxide poisoning comes fast and can be deadly.

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Monitor the radio. Stay informed and safe by tuning your radio to reliable local news or emergency services.

File your claim with The Hartford

We want to help you get your life back on track as fast as possible. We’ll be there after a disaster – and anytime you need us. You can reach us 24/7 online or at our toll free number 800 243 5860.

Thank you for your business.

Steve Deane
Chief Claims Officer

Please reach out to the WisMed Assure team at insurance@wismedassure.org, complete this online form or call 608.442.3810 to explore your insurance options.

Disability and Life Insurance Taxation

March 30, 2024April 2, 2024

By Chris Noffke, GBDS, CSFS, Vice President of Employee Benefits

Taxation of benefits is a unique and important topic. Many groups I work with want to make sure their employees are not taxed for an employer paid life insurance benefit and other clients want to ensure that if an employee becomes disabled, they do not have to pay taxes on their already reduced income. Making sure these benefits are set up correctly, both by the insurance carriers and in your payroll service, is vital to tax-free benefits for employees.

Life insurance

Life insurance is the easier of the benefits to establish correctly. If an employer provides up to a $50,000 benefit to each employee, then this benefit and premiums paid for it can be excluded from an insured employee’s taxable wages. If you offer coverage to employees for a benefit over $50,000 and it is employer paid, you are required to tax premiums for the amount above $50,000.

Disability insurance

A bigger discussion happens regarding disability insurances (both Long-term and Short-term). When an employee or owner/partner is out of work due to a disability, they will receive only a fraction of their pre-disability earnings, the average benefit being 60% of pre-disability earnings. If an employer is paying 100% of the disability premiums, the employer can decide to offer these benefits as a “gross-up” to employees. A gross-up is structuring the premiums paid by the employer to be a taxable benefit on the employee payroll. The benefits received by the disabled employee (disability income) will then be tax deferred. The rule is direct, if employees are paying payroll taxes on the premiums that the employer is paying, the benefit will be tax free – however – it is very important that the payroll taxes begin prior to the benefits being received.

When premiums are split between the employer and employee, we need to make sure there are a few rules followed. If a benefit has a premium contribution of 50% paid by the employer and 50% paid by the employee, the setup will determine if the benefit is partially or fully taxable. If in this situation the employee pays their premiums pre-tax and there is no gross-up for the amount the employer pays, this full benefit will be taxable income. Another example is if the employer pays 50% of the benefit (not grossed-up) and the employee is paying for 50% of the benefit with post-tax dollars, then when the employee receives this disability income benefit, 50% of the benefit will be taxable. So, to make the full benefit tax deferred, you need to have the employer premiums paid be grossed-up and the employee portion needs to be paid with post-tax deductions.

This can get a bit confusing, and I would love to talk if you have any questions. Please email me at chris.noffke@wismedassure.org or call 608.442.3734.

Change Healthcare ™ Attack Highlights Often Overlooked Cyber Insurance Coverage

March 30, 2024April 2, 2024

By Shawna Bertalot, CIC, ACI, WisMed Assure President

Many health care practices rely on a third party for access to their EMR and for billing. This creates a “contingent” or “dependent” risk. The February 21 cyberattack on Change Healthcare changed the world for many patients and health care providers. The March 14 and March 28 issues of Medigram included resource links and information on potential payment programs for Part A and Part B providers impacted. For practices and organizations that contracted with Change Healthcare™ to facilitate the electronic transfer of medical documentation and billing for all their insurance claims, revenue stopped, expenses continued and funding programs from Optum and CMS/Medicare have not been comprehensive solutions.

Cyber Insurance programs can provide additional coverage for a scenario like this, but only if the policy includes Business Income or Business Interruption coverage and includes Contingent Business Interruption or Dependent Business Interruption coverage. Without contingent or dependent coverage, your policy would only respond if the cyberattack were on your organization and would not respond if the attack were against a third party upon whom you are dependent. We discussed the importance of comprehensive cyber insurance in the November 2, 2023 issue of Medigram and the Fall 2023 issue of The Antidote.

Important Considerations for Cyber Insurance Coverage:

Cyber insurance policies do not always include contingent or dependent coverage.
Cyber coverage included as an add-on to other policies, like a business owners’ package or medical professional liability, typically do not include this coverage.
Business Interruption or Business Income options are not automatically covered.
Paying claims for cyber policies is complicated and typically requires forensic information technology and legal review to confirm the breach or attack. This can take weeks or months before any payment will be made.
Policyholders must provide proof of loss and that the incident in question directly resulted in the policyholder’s loss of income, without regard to whether an event has been widely reported in the news.
Deductibles and waiting periods will apply.
Reach out to the insurance carrier as soon as you become aware of an incident, before you hire your own consultants, and respond promptly and completely to their requests for supporting documentation. Your insurer will have specialized relationships at pre-negotiated rates.

If you are concerned about your Contingent or Dependent Risk and wondering if your current cyber insurance policy has coverage, how that coverage works or if you can obtain coverage, contact your WisMed Assure agent or shawna.bertalot@wismedasure.org.

Don’t Let Taxes Take a Bite Out of Your Finances: Common Errors to Avoid

March 30, 2024April 1, 2024

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

Investing is a smart way to grow your wealth, and keeping more of it from taxes is even smarter. Let’s explore some common tax mistakes investors make and how to avoid them:

Right Investment, Wrong Account: Investment growth, dividends and interest can be taxed as ordinary income, short or long-term capital gains or tax-free. Similarly, investment accounts are treated as tax deferred, taxable or tax-free. Holding tax efficient and inefficient investments in the right accounts can improve net returns.
Short-Term Gains Trap: Selling an investment held less than a year triggers short-term capital gains taxes, typically at your ordinary income tax rate. This can be much higher than the long-term capital gains tax for assets held over a year. Consider waiting to sell until you hit that long-term mark.
Neglecting Tax-Advantaged Accounts: Contributing to IRAs, 401(k)s and other tax-advantaged accounts, like a health savings account, allows your investments to grow tax-deferred or tax-free until withdrawal. This can significantly boost your returns in the long run.
Letting Losses Linger: Selling investments at a loss can offset capital gains and reduce your tax bill. This is called tax-loss harvesting. Don’t miss opportunities to claim these deductions! However, be mindful of the wash-sale rule, which limits claiming losses if you repurchase a similar investment within 30 days before or after selling.
Forgetting IRA Contributions: Investment companies typically don’t send the supporting tax document 5498 until May each year (because investors have until April 15 to make their IRA contribution for the prior year). This leads many investors to forget to record their IRA contribution on their tax return.

Wisconsin Specifics:

Missing Long-Term Care Premiums: Wisconsin allows a deduction for qualified long-term care insurance premiums on the state income tax return, even if you don’t claim an itemized deduction on the federal return. Plus, you won’t necessarily get a supporting tax document from your insurance company, so this is easy to miss.
Missing Edvest Contributions: Wisconsin residents contributing to an Edvest college savings plan may qualify for a state tax deduction on contributions. This is another one that’s easy to miss; there’s no supporting tax document sent out by Edvest.

Please note, this is not professional tax advice. For specific guidance on your situation, consult a tax professional. By being aware of these common pitfalls, you can keep more of your hard-earned investment returns come tax time, especially when considering Wisconsin’s unique tax landscape.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

Note: This article is for informational purposes only and should not be considered as financial or tax advice. Please consult with a qualified financial advisor or tax professional before making any financial decisions. Full disclosures.

Winter 2024 Issue

March 29, 2024April 3, 2024

Don’t Let Taxes Take a Bite Out of Your Finances: Common Errors to Avoid

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

Investing is a smart way to grow your wealth, and keeping more of it from taxes is even smarter. Let’s explore some common tax mistakes investors make and how to avoid them.

Change Healthcare™ Attack Highlights Often Overlooked Cyber Insurance Coverage

By Shawna Bertalot, CIC, ACI, WisMed Assure President

Disability and Life Insurance Taxation

Tax payment concept. State Government taxation, calculation of tax return. Blank tax form, calendar, magnifier, money, notebook, calculator, coins, glasses, watches, documents, computer.

By Chris Noffke, GBDS, CSFS, Vice President of Employee Benefits

Tornadoes Can Strike in Seconds. Are You Ready?

By The Hartford

Tornado season is upon us and could bring more storms in the months ahead. In fact, the U.S. experiences the most tornadoes of anywhere in the world.

Tax Treatment of Long-term Care Insurance a Game Changer

Nurses, doctor and caregivers in nursing home take care of old men and women. Volunteers help aged people at home and hospital.

By Tom Strangstalien, Insurance Advisor

Your Medicare Update

By Mary Krueger, Medicare Specialist

Life, Death and Taxes

By Lisa Koerner, Insurance Advisor

If you are looking for some creative ways to avoid paying taxes, don’t overlook the benefits of Life Insurance. There are several different types of life insurance policies to serve several different objectives, the greatest being a tax-free death benefit for your beneficiaries.

Making Part D of Medicare brighter

photo of an elderly man looking at medications with his physician

By Mary Krueger, Medicare Specialist

As many of you on Medicare know, October 15 to December 7 is the Annual Election Period for Medicare Part D and Medicare Part C (Medicare Advantage). This often coincides with a flurry of research needed and concerns expressed by client recipients and this year was no exception.

Peace of mind this holiday season

December 11, 2023December 11, 2023

By Martin Hurst, Insurance Service Representative

The agents here at WisMed Assure do not focus solely on revenue, our agents go that extra mile to address individual and specific concerns and provide coverage within each customer’s budgetary needs. By putting clients’ needs first, our agents demonstrate their commitment to providing excellent service and building trust with physicians. Their expertise and attention to detail enables them to guide physicians through the complex world of insurance, explaining terms, conditions and benefits clearly and transparently. Ultimately, our agents strive to empower physicians with the knowledge and coverage necessary to protect their health and peace of mind.

As I navigate my first year here at WisMed Assure, the agency has prioritized providing me with direct training with our agents. Tom Strangstalien is one of the agents I have had the opportunity to sit down with to discuss Life and Disability policies. Recently, Tom and I reviewed disability quotes for a physician. Tom carefully considered the physician’s lifestyle, occupational practice and potential risks to tailor the policy to their unique needs.

Additionally, he broke down the various policy options, highlighting the specific benefits and limitations of each. He focused on the importance of comprehensive coverage that would provide adequate support if the physician ever faced a disability, without worry of the financial burden. After reviewing the quotes for this physician, he noted that the physician was concerned the monthly premium was exceeding their budget. This was to be expected as their initial meeting was to create the “ideal policy” without worrying about the premium cost. With this concern in mind Tom navigated to the riders page with the cost for each listed next to the rider and asked what I would keep or remove from the policy to reduce the overall cost. We went back and forth on keeping or removing certain riders, we looked at 90- or 180-day elimination periods, possibly decreasing the time covered in relation to retirement age of 65 or 67, to see the impact this would have on premiums. At the end of our meeting, we were able to give this physician several options that had the potential of saving them $4,000 in monthly premiums. This is an example of what each agent does here daily and is the reason I am grateful to work alongside so many unique and caring individuals.

As you’ll see in this edition of the Antidote, the WisMed Assure and WisMed Financial team is focused on building and maintaining relationships with clients, and always keeping the best interest of the client at the center of all we do. These real client stories help illustrate the WisMed difference. Contact us at 608.442.3810 or insurance@wismedassure.org.

Finding insurance and financial advisors I trust

December 7, 2023December 11, 2023

By Tim Bartholow, MD

I have several connections to our Wisconsin Medical Society, and I’d like to share some good and bad experiences with on the street financial advising and insurance advising, and how WisMed Financial and WisMed Assure cut through market confusion.

Like many physicians, I’ve worked around insurance for many years and have served as Chief Medical Officer and quality advisor for several health insurance companies. You’d think that I would know a sturdy amount about insurance and personal finances. Don’t get me wrong, I live modestly, save aggressively and have been very fortunate, but for three decades, I didn’t have advice that allowed me to be assured that I had the right insurance and personal finance solutions.

When I was in residency, I was approached by an agent from a reputable insurance company who signed me up for long- and short-term disability coverage at a price that I could afford. As I saw colleagues have accidents, become unable to practice or displaced from their employment, I learned how important it is to have a policy not tied to an employer. I bought a significant life insurance policy from that same agent, which I continued for 30 years. At about 15 years in, the agent approached me about buying whole life, which she made to sound like great security for my family despite its high cost. I mentioned this to an investment advisor who didn’t try to sell me something else, but made it clear I was about to make a mistake.

So now what? Which investment advisor was giving me the best advice? Which insurance agent was working for me, not themselves or the company quota they were required to meet? I just wanted independent advisors who would authentically fulfill their full fiduciary duty to me and my family.

So, for the next decade and a half, I squirreled away savings with various investment advisors – some large houses, some smaller practices. Several of these advisors offered to take care of all of my savings, but I couldn’t put my full faith in any one of them. I wasn’t sure that their motives were to keep my costs of investing low. And on the insurance side, I didn’t know if I needed the expensive policies that that I had carried for 30 years, the small one I had purchased from a door-to-door salesman or my work’s plan, which if I left, I wouldn’t be able to continue. It was simply confusing.

Then, at our Wisconsin Medical Society, I met Tom Strangstalien of WisMed Assure and Mark Ziety of WisMed Financial. On the insurance side, Tom helped me understand my choices and needs for long-term care and life insurance. He steered me away from some products and towards others and we landed on a solution that is appropriate for me and my family. Mark walked me through how my investments in many accounts were costing me fees that eroded their savings potential. While I’ve had advisors assess my risk tolerance, I’ve not experienced financial advising nor insurance agents that studied my concerns and goals so comprehensively and helped me to understand which choices made best sense for me to do next. I’m not a wealthy person, but Mark saved me approximately $9,000 in annual fees. I wish I had known that a decade ago!

I asked to provide this testimonial, WisMed Assure did not approach me. Whether you’re a medical student or close to retiring, I want our physicians to make great financial choices so they can worry about their patients, not about their risks and retirement. My quick advice is this: find someone you authentically trust for your financial advising and find someone away from your employment (if you’re not a governing partner/practice owner) to advise you about insurance for you and your family. And if, like me, you’re having trouble placing your full faith in what you’re being advised to do, WisMed Assure and WisMed Financial are more than capable of providing you with a second opinion or reaction to what you’re being told. They are there to serve you, and because their efforts support our Medical Society, there is no confusion about whose interests come first. I am probably biased by my several connections to the Wisconsin Medical Society and my pride in MetaStar, WISHIN, WHIO and WPS, all of which the Wisconsin Medical Society helped start. So do what works for you, but personally, I’ve never been so reassured and confident that I am doing the right thing for me and my family.

Contact the WisMed Assure team at 608.442.3810 or insurance@wismedassure.org and contact WisMed Financial at 608.442.3750 or info@wismedfinancial.org.