News – Page 16 – WisMed Assure

This is the final instalment of a three-part series on changes in the Wisconsin MPL insurance market.

By Shawna Bertalot, CIC, ACI – WisMed Assure President

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

Term Life Insurance

By Dave Serena

“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?”

Dave Serena has been an Insurance Advisor with Wisconsin Medical Society Insurance Services since 1995. Working exclusively with Physicians – he has more than 800 active clients – Mr. Serena provides guidance for income and asset protection. He is dedicated to working with Residents, Fellows, and practicing Physicians and their families. Mr. Serena is a member of the National Association of Life Underwriters and the National Association of Insurance and Financial Advisors. He is the recipient of the National Association of Life Unerwriters’ prestigious National Quality Award.

Physician Wellness Matters

New course battles financial stress and physician burnout

by Christopher Rufus Sweeny

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.

Physician Financial Wellness Matters

January 21, 2020March 18, 2020

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: B~~udgeting~~: 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

January 17, 2020January 17, 2020

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

January 17, 2020January 17, 2020

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.

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:

The physician committed a breach of duty by not providing medical care another healthcare professional would have provided
The patient suffered emotional or physical injury
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

January 17, 2020February 27, 2023

“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 …

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 …
She is now uninsurable and cannot get a new policy.
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 25^th 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

December 5, 2019October 9, 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.

Ask for more – it never hurts to try.

November 27, 2019

When negotiating employment contracts – always ask for more. Ask for a signing bonus or higher salary or money for relocation or more money for CME. Better benefits are often easier to negotiate than salary so even negotiating for more paid vacation per year is an option. It never hurts to ask and in mot cases you’ll be surprised that the answer is ‘Yes.’ And then make sure it is in writing!

Wendy M.

Fall 2019 Issue

November 16, 2019June 30, 2025

Keeping Wisconsin Safe: Why it’s the Best Place to Practice Medicine

There’s a reason Wisconsin is one of the safest places to practice medicine; it’s long been a haven for affordable medical professional liability (MPL) insurance. Which, among many other reasons, also makes it a great state to be a patient in. But now, as the rest of the country feels the impact of increased MPL premiums, it may only be a matter of time before Wisconsin physicians see similar increases.

What are the Timing Rules for Employer and Employee HSA Contributions? What Should be Done if HSA Contributions are Submitted Late?

It’s Time to Jump Start Your 2020 Employee Benefit Process

Open enrollment season is upon us! We created a list of important items you should consider to ensure your employee benefit program for 2020 is implemented without a hitch.

Check it out here.

What are the timing rules for employer and employee HSA contributions? What should be done if HSA contributions are submitted late?

November 11, 2019January 17, 2020

There are some general rules pertaining to timeliness of HSA account contributions. While employer contributions to an HSA don’t have a particular “due date,” the employer should sufficiently follow the plan terms. So if an employer communicates to employees that employer contributions will be contributed at a specific interval (such as per pay period), the employer should contribute based on that timetable. As an outside compliance limit, the IRS generally allows employers to contribute to employees’ HSAs through the tax filing deadline for the year in which the HSA contributions were due.

On the other hand, participant contributions withheld from employee paychecks, including employee-deferred HSA contributions, are subject to the DOL’s plan asset regulations governing welfare and pension benefits. Specifically, participant contributions become plan assets “as of the earliest date on which such contributions can reasonably be segregated from the employer’s general assets, but in no event later than 90 days after the payroll deduction is made.” This generally means the outside limit for submitting contributions is 90 days, but this is not to be considered a safe harbor because contributions should nearly always be segregated in a matter of days rather than weeks.

This deadline applies to participant contributions coming into an employer’s possession under the welfare benefit plan, including personal checks used to pay COBRA contributions, premiums during FMLA leave, retiree premiums, salary reductions under a cafeteria plan, and HSA contributions. As such, employers should contribute employee-deferred HSA contributions to their accounts as soon as the funds can be separated from the employer’s general account. In this way, the deadline for forwarding HSA contributions is similar to the deadline for forwarding employee 401(k) deferrals.

Keep in mind, though, that there is a safe harbor for small employers for this purpose. Employers with fewer than 100 participants can utilize a DOL “safe harbor” that gives them up to seven business days to deposit plan assets (including HSA contributions) to an employee’s account.

When an employer has failed to forward participant contributions on a timely basis, there are procedures available to correct both the fiduciary breach and the prohibited transaction that has occurred. There is a DOL correction program available to employers that commit this failure. The Voluntary Fiduciary Correction Program (VFCP) allows employers to correct failures (such as failure to forward HSA contributions on a timely basis) by submitting an application for the program and filing a Form 5330, acknowledging the prohibited transaction. However, as with any compliance failure, an employer that fails to timely forward contributions should consult with legal counsel.

Source: NFP Benefit Partners Compliance and Regulatory Frequently Asked Questions; October 1, 2019