insurance

Workers Compensation rate changes & good news for health care professionals

By Brian Fowler, WisMed Assure Account Director

Starting October 1, 2022, Workers’ Compensation rates in Wisconsin will drop for the seventh year in a row. Unlike many other states, Work Comp rates in Wisconsin are set by the state and are the same for every insurance carrier. The decrease is 8.47% over all employee classifications. Physician rates are relatively low, though higher when hospital employees, but still much lower than hospital employees other than professional employees (see the chart below).  

The following chart shows the current and new rates for the listed class codes (rates are per $100 of payroll):

CodeDescriptionCurrent RatesNew Rates 10/1/2022Change
8832Physician & Clerical0.310.28– 9.7%
8833Hospital Professional Employees0.860.82– 4.7%
9040Hospital All Other Than Professional5.084.24– 16.5%

Slight changes were also made to minimum premiums for experience rating, increases in annual remuneration to calculate premiums for sole proprietors and partners and increases in the maximum remuneration for executive officers.

Another difference in how Workers’ Compensation is governed in Wisconsin is there is not a set fee schedule for medical services provided. The Wisconsin Medical Society has long advocated to keep Wisconsin from adopting a Work Comp fee schedule.

Mark Grapentine, Wisconsin Medical Society Chief Policy and Advocacy Officer and a medical liaison to the Worker’s Compensation Advisory Council, told Wisconsin Health News that the current system gets workers back on the job faster and more satisfied with their health care than in other states.

“The news of yet another significant decrease in rates is good news across the board,” he said.

He called the state’s current workers’ compensation system a “national model” that provides injured workers easy access to high quality care. Though he noted that Wisconsin can do better when it comes to its workplace injury rate, and getting that below the national average would be a win-win for everyone.

If you have questions about Workers’ Compensation coverage rates and dividend programs for your practice, please contact Brian Fowler, WisMed Assure Account Director, at brian.fowler@wismedassure.org 608.442.3718.

Do you have the old or the new life insurance?

Tom Strangstalien

By Tom Strangstalien, Insurance Advisor

September is Life Insurance Awareness Month and is the time when I urge all our members to take a moment to reflect on the life insurance protection they have in place. Not too long ago, life insurance (especially term life), was generally viewed as a commodity. All policies were generally the same, so you simply bought the desired amount of coverage for the least expensive cost. Today’s New Life Insurance contains several bells and whistles well worth consideration and begs the question whether you should keep your old life insurance or upgrade to the new and improved model.

So, what are these new improvements that may benefit you and your family or your overall estate and financial plan? The major upgrades include protection for a critical illness, long term care protection and a living benefits or accelerated death benefit rider to the policy. All provide security that goes well beyond a payment to beneficiaries upon death.

If you elect a critical illness rider on your policy, the policy will pay either a lump sum payment or periodic payments upon sustaining a serious illness among a list of health conditions. These can include things like heart attack, coronary bypass events, cancer, kidney disease, stroke and various other neurological disorders. In other words, the life insurance proceeds can potentially be paid out while you’re living.

Another critical consideration when purchasing a life policy today is inclusion of long-term care protection. A long-term care event can devastate a financial plan. The premise is that since the life insurance amount will be paid out in the future (if the policy remains in force), and the amount of the proceeds is known, so why not allow the proceeds to also be paid for long-term care? It’s never too early to purchase long-term care protection! Placing a long-term care policy while young dramatically lowers the cost. So why not incorporate it into your life insurance policies? If you’re unable to perform a respective number of “activities of daily living,” you’re qualified to receive the life insurance benefits for payment of long-term care expenses. The life insurance amount will be paid out in the form of a payment to your beneficiaries or for costs associated with long-term care. It’s a win-win!

Lastly, many policies today include an accelerated death benefit provision, where if you would be unfortunately diagnosed by a physician to have a designated timeframe to live or are unable to perform activities of daily living, you qualify to receive benefits while you are living. How fortunate to be able to direct the life insurance proceeds as you see fit while you are alive! Many times, the cost of this benefit rider is zero.

As you can see, there are substantial benefits to upgrading to a policy containing the new available options. Please reach out to me and my team at WisMed Assure at insurance@wismedassure.org, complete this online form or call 866.442.3810 to explore upgrading your life insurance to the New Life Insurance.

How to prevent floods from damaging your business

By Society Insurance Team, reposted with permission from Society Insurance

The continued impact of extreme weather events isn’t lost on businesses: according to one report, businesses can expect to see roughly $13 billion in flood damage in 2022. Tornados, derechos, and severe thunderstorms all threaten billions in damage, but with spring just ahead, let’s focus on how you can protect your business from the threat of flooding.

Businesses everywhere are susceptible to flood damage—so how can they prepare? Below, we’ll cover five flood-readiness essentials that your business should consider.

Use Natural Landscaping Techniques Around Your Business

Large paved areas such as surface parking lots collect water, and only have limited areas for drainage. Plus, if your community is flooding, these drains in your parking lot may be overwhelmed to a point where they aren’t helpful. Surrounding your building with a variety of shrubs, natural grass or bushes can help absorb excess water during floods.

Rain gardens, for example, are a type of landscaping that collects runoff rainwater. They can divide parking lots, flank walkways or be embedded into grassy areas. Additionally, incorporating an appropriate mulch into landscaping around your business can help protect your business’ foundation and exterior by slowing and absorbing water.

A rain garden divides a street and a walkway. Photo via EPA

 

Make Sure Your Gutters Are Clear

You should clean your gutters twice a year, and spring is one of the best times to do so. Cleaning your gutters ensures they’re clear of debris that could prevent proper drainage. If your gutters aren’t clear, water can collect on your roof or in the gutters themselves, weighing them down and potentially causing costly damage to your building. 

Don’t forget that directing your downspouts and drains away from your business’ foundation is just as important as clearing your gutters of debris. When high volumes of storm water is draining from your gutters, it should be diverted away from your building. If it pools at the base of your building, it can cause significant damage to your building’s foundation. 

Flood-Proof Your Building’s Most Susceptible Areas

The lowest point of elevation in your building should ideally be above the highest point expected in a flood. By learning your building’s base flood elevation (BFE), you can identify the areas of your business that are most vulnerable to floods. From there, you can determine what flood-proofing techniques will be most beneficial depending on your property’s level of risk.

If there are important areas below your BFE, dry floodproofing techniques can involve impenetrable barriers, plates or coatings that prevent flood water from entering your property. On the other hand, wet floodproofing is a technique where highly-durable areas are designed to allow water through, in effect creating a path of least resistance in order to protect your property. 

Dry floodproofing (top) and wet floodproofing (bottom) shown in a residential setting. Illustrations courtesy of FEMA. 

Shore Up Your Foundation

Floods or torrential rainfalls can cause significant damage to your foundation. Water is incredibly powerful; when it seeps into your building, it can expand existing cracks and displace walls. Overall, when a building is subjected to flowing or standing water, the structural integrity can be damaged, leading to burdensome repair or rebuild costs.

Use caulk and other sealants to ensure the locations where pipes enter your building are sealed. Consider hiring a contractor to assess and restore existing damage in your basement or foundation before spring thaws or floods. 

Use Water Detection Devices

Water detection devices can monitor moisture levels around your building. If there’s flooding, they can alert you to areas where water is seeping in so you can triage these places and protect anything that could be damaged before it’s too late.

Be Prepared to Weather the Storms

Spring is a time of new beginnings but it’s also a time of risk: melting snow unable to be absorbed by the still-frozen ground, heavy seasonal rains, and other environmental factors can lead to Spring floods. Being prepared for these risks can be the difference between a profitable spring and a summer spent recovering from it.

Contact Brian Fowler, WisMed Assure Account Director, at 608.442.3718 for a quote or with any questions.

Reposted with permission from Society Insurance

What is Inflation Guard?

By Society Insurance Team in 2021, reposted with permission from Society Insurance

In 2021, we’re seeing a unique economic environment. Supply chains have been affected by the pandemic and a few industries experienced weather-related setbacks. This, along with the new challenge of a labor shortage, is not allowing supply to keep up with demand, which leads to inflation.

Lumber is a relevant example and a commodity that has a significant impact on the cost of claims. The cost of claims in 2021 is significantly more than the cost of claims in recent years. This increase may subside quickly, however, economists believe inflation will persist.

What is Inflation Guard?

Inflation Guard is the automatic annual increase in property values on an insurance policy to keep up with rising costs of construction. It provides carriers with adequate premium to pay for losses and provides policyholders with protection against coinsurance penalties if a coinsurance requirement exists. Many insurance carriers apply an annual 4% Inflation Guard increase. If values don’t keep up with the pace of inflation, insurance premiums will eventually have to take a steeper spike upward.

What is Coinsurance?

Coinsurance language in a policy gives an insurance company the right to reduce the amount of a claim payment if the amount of insurance purchased was inadequate.

What Does This Mean for Policyholders & Insurance Agents? 

Policyholders could be underinsured at the time of total loss and find themselves with significant out-of-pocket costs in order to return to normal operations. If a partial loss occurs and the carrier imposes a coinsurance or underinsured penalty, the policyholder would also experience out-of-pocket costs. If the above occurs, there may be errors and omissions lawsuits against the insurance agent.

Does Society Insurance Include Inflation Guard in Policies?

Society Insurance does include Inflation Guard and does not include coinsurance or underinsured penalties in their policies. This provides protection for both policyholders and agents from some of the challenges in managing property values. Maintaining adequate values on insurance policies is critical. Inflation Guard – and annual conversations between insurance agents and policyholders – can fend off trouble.

Contact Brian Fowler, WisMed Assure Account Director, at 608.442.3718 for a quote or with any questions.

Reposted with permission from Society Insurance

Is your group disability insurance good enough?

Tom Strangstalien

By Tom Strangstalien, Insurance Advisor

May is Disability Insurance Awareness Month. This is the perfect time to evaluate your disability protection, determining if you’re adequately covered and address any potential holes or gaps in your coverage. A common theme I hear when talking with our members is, “I have disability insurance coverage as part of my employee benefits, so do I really need personal disability protection?” For physicians and medical professionals, the answer is almost always yes!

Typical limitations of group coverage

First, there is a cap on the amount of benefits that will be paid out for a claim. If the maximum benefit amount is $10,000 per month and as a physician you’re earning $300,000 per year, you’re not even covering half of your income. Are you willing to roll the dice for a potentially devasting and dramatic lifestyle change?

Second, group disability coverage contains “offset provisions.” This means that if you are drawing payments from other sources upon incurring a disability, the benefits paid by the group policy will be reduced pro-rata. These sources could include things like social security, liability settlements, workers compensation payments, employer provided retirement plan replacement benefits and other accident or short-term disability plans. A properly designed personal disability plan will not contain such provisions.

Next, group disability plans are not portable. In other words, if you change your place of employment or go into practice on your own or as an independent contractor, you will lose the disability protection. If you have incurred some health issues, coverage then can be very expensive or not available to you at all. This is why it’s so important to get a personal disability plan in place as early in life as possible.

Benefits of personal disability insurance

With a personal disability insurance plan, there are many optional benefits available to you. It’s not a one size fits all plan like a group plan tends to be. You can elect additional coverages such as:

  • student loan payment coverage
  • inflation protection
  • catastrophic coverage
  • partial and residual disability coverage levels
  • future increase benefits (you can increase the amount of benefits as your income increases with no additional medical underwriting)

What I want you to take away from this article during Disability Awareness Month is this: take a few minutes and review your current disability protection. If you do not yet have a personal disability plan, get one as soon as possible. Don’t roll the dice with your biggest asset – your ability to earn a substantial income! As the independent insurance agency of the Wisconsin Medical Society, we can shop all of the major insurers, review your current group plan and design a plan that will fully protect you and your family for your lifetime.

As your financial partner, your WisMed Assure team is here to take care of your personal financial security so that you can take the best possible care of yourself, your family and your patients.

For additional information regarding disability insurance, contact WisMed Assure at insurance@wismedassure.org, complete this online form or call 866.442.3810.

Hybrid Policies Shine in Addressing Long-term Care Concerns

Tom Strangstalien

By Tom Strangstalien, Insurance Advisor

It’s not a secret that the rapidly increasing cost of long-term care is driving dramatic increases in long-term care (LTC) insurance premiums. You may also have been victim or witness to a dramatic increase in long-term care insurance premiums on a policy purchased years ago.

In the 1990s and early 2000s, people realized the potentially huge benefit of buying long-term care insurance. Along with advances in medicine and the benefits of nutrition and exercise, life expectancy increased. Coming with that was the demand for long-term care services, assisted living facilities and home health care. Popularity in long-term care insurance grew exponentially and consumers bought policies with lifetime premiums, ten pay premiums or even single premiums at an affordable price.

Actuaries calculate statistics with acute precision to guide insurance companies to make their profits. However, this is one of very few instances where they missed the mark. Typically, with life and health insurance, a significant number of people will not hold the policy for their lifetime, and the policy will lapse. This lapse rate was miscalculated, as people who purchased these policies held on to them. Furthermore, inflation for this sector of health care was severely under calculated. Simple supply and demand economics manifested cost increases well beyond the costs of other consumer goods and services. Exacerbating the situation was the decrease in interest rates, as long-term bonds are purchased to provide the future benefits.

Now, consumers are experiencing the results of this perfect storm. We are seeing shockingly increased premiums, lowered benefits or even offers by insurance companies to buy-out or provide a dramatically lower paid-up benefit. Thankfully, actuaries have learned the impact of past transgressions and traditional long-term care policies are now priced properly. But what does this mean to you? A very expensive insurance protection, along with the risk that it may never be used, so what should you do?

What happens if you pay for LTC insurance but never actually need it?

Despite long-term care insurance being so costly, I remain steadfast that long-term care protection is paramount to your financial plan! The facts speak for themselves; longtermcare.gov and the AARP agree, 70 percent of people 65 and older will require long-term care and meeting that need will continue to become more expensive.

Genworth’s Cost of Care Survey shows national annual median costs increased across the board for assisted living facilities (6.1%), home care (4.3-4.4%) and skilled nursing facilities (3.2-3.5%). The median monthly cost of an assisted living facility is $4,051, a home health aide costs $4,385 and a private room in a skilled nursing facility $8,517 a month. Genworth estimates these costs will almost double over the next 20 years.

There’s a new option for long-term care planning: hybrid life insurance long-term care policies. Actuaries have been properly pricing life insurance policies for decades. They now know the amount that will be paid out in benefits and when that benefit will be paid. In these hybrid policies, the life insurance benefit can be paid out early if needed for long-term care. If benefits are not used for long-term care, the life insurance amount is paid upon death to the policyholder’s beneficiaries. This addresses the concern of never using the policy. Benefits will not be taxable if paid out for long-term care and the life insurance benefit is paid out income tax free. In the majority of cases, this type of plan outperforms self-funding.

Hybrid policies have a lot going for them:

  • They offer flexible premium payment options. You can make one lump-sum payment, pay over ten or twenty years, or pay premiums over time.
  • It is often easier to qualify for coverage as the insurer knows what will be paid out in benefits.
  • A hybrid policy can also pay for home health care, assisted living, adult day care and even respite care for a loved one.
  • Permanent life insurance policies build cash value that can be cashed out in the future if you feel there’s no longer a need for long-term care protection or independent wealth negates the benefit.

You have options…lots of options to choose from

Hybrid life and long-term care policies come in several shapes and sizes.

  • Linked benefit policies are true hybrids that link a life insurance policy to a long-term care policy. With these, the typical long-term care benefit amount is close to or equals the life insurance amount. The greater the life insurance amount, the greater the LTC benefits.
  • You can also get a long-term care rider on a life insurance policy which only allows you to add LTC coverage at the time you buy the life insurance policy – you can’t add it later.
  • There are chronic illness or critical illness riders that let you accelerate the death benefit to pay for care if you have a qualifying chronic lifetime illness.

If you currently own some form of LTC insurance and want to compare which coverage may fit best into your current financial plan, we are here to comprehensively explore all the options and make sure your plan is suitable and won’t blow up at a time when you may need it most.

If you do not yet have any form of LTC insurance, the longer you wait, the more expensive it will become. I highly recommend exploring a hybrid life insurance / long-term care policy and getting it early. The younger and healthier the better! Avoid crisis mode or future exorbitant premiums.

As your financial partner, your WisMed Assure team is here to take care of your personal financial security so that you can take the best possible care of yourself, your family and your patients.

Contact me today to protect your tomorrow.

tom.strangstalien@wismedassure.org

608.442.3730

Why Residents Need Disability Protection

Tom Strangstalien

By Tom Strangstalien, Insurance Advisor

As a resident or fellow, your biggest asset is quickly becoming your ability to earn an income. Until you become independently wealthy and can sustain a loss of earning power without consequence, it is imperative to have disability protection. But why do this as a resident or fellow, before the dramatic income increase of becoming an attending physician? Can you wait, get on my employer benefits group plan if applicable, and purchase supplemental personal disability insurance when I can better afford it? There are several reasons why this may not be the best choice as you build your overall financial plan.

While a medical resident or fellow, you are entitled to a base amount of coverage without being required to provide proof of financial qualification. Additionally, WisMed Assure works with several insurers that provide discounts to many of the residency programs. Furthermore, Wisconsin Medical Society Members are eligible for even more discounts. Throughout your career, these savings can add up to a monumental amount of money.

Disability insurance protection increases in cost as we age – it will be more expensive every year. By getting a policy early in your career, you’re locking in the price while it’s the most affordable. Another consideration is to purchase a future increase option at this time, where you can increase your protection as your future income increases, without the imposition of any more medical underwriting.

Group disability insurance coverage is a wonderful benefit, and I almost always advise to enroll for the maximum group benefits that you are eligible for, however it often has limitations. It may be capped at an amount that is insufficient to replace your total income if disabled. Portability is also a concern – if you change employers or career paths, the coverage will be lost. Almost always, group coverage contains offsets where any benefits attained from other sources will decrease the benefits paid out by group coverage. A solid personal disability policy, specially designed for physicians and those in the medical field, addresses these inherent risks.

So where should you obtain this vitally important coverage at the most affordable price? Only purchase personal disability insurance coverage through an independent agent who can offer plans from multiple companies. Never allow yourself to be sold a policy by a representative who offers only one plan, and thereby has an innate conflict of interest. The plan should be designed for you, not just a standard policy.

WisMed Assure exists for your benefit and offers plans from the Big 5 insurance companies, with plans specifically designed for physicians. Reach out to us and let us design a plan that fits your needs. James Dahle, MD, of The White Coat Investor states, “Early in residency, buy as large of a high-quality, specialty-specific, own occupation, individual disability insurance policy as an agent is willing to sell you.” Take care of this urgent financial chore today.

For additional information regarding disability insurance, contact WisMed Assure at insurance@wismedassure.org, complete this online form or call 866.442.3810.

BE AWARE AND CHANGE LIVES

By Tom Strangstalien

Insurance Advisor with WisMed Assure

September is Life Insurance Awareness Month. All month long, as I sat sipping my morning coffee, I reflected on how many times I’ve experienced the life changing impact of life insurance.

Even though I’ve been a life insurance agent for more than two decades, there are times when even I take for granted this life changing tool within our financial tool box. There are dozens of stories I can tell about how life insurance has truly been a difference maker in the lives of so many. Four of these stories stand out in particular because they had a direct personal impact on me.

Rene’s Home

Rene designed a plan, utilizing universal life insurance to potentially pay off the mortgage on her home early. The policy insured the lives of her and her husband jointly, and we funded the policy in such a way to grow the cash value quickly, yet be friendly to the family budget. 

One day, John mentioned to Rene that he had a lump on the back of his tongue which was bothering him. Being a nurse, Rene advised John, that he probably should get it checked out by their Doctor.  John battled cancer for the next four months. The family took care of him at home, until the day came when John passed away in his sleep.

 I received a call from Rene months later. Choking back tears, she told me because of the plan that was intended to pay the mortgage off early, the life insurance allowed her to remain in the home with her two daughters. She went on to tell me that she was going back to college to advance her status to a Registered Nurse. After much expression of gratitude and profuse thanks, she ended by telling me I helped the family change their life. Speechless at first, I finally said, “Yes, life insurance is a game changer.” 

Rene is debt free, cherishing her career as a registered nurse, while her two daughters attend college in Eau Claire.

Don’s Hockey Legacy

My son is a hockey player. Our small-town hockey rink was actually a make shift park shelter. I cherish the times that we set up the chiller to make the ice for the season, construct the walls, bring in the bleachers, and keep the rink maintained throughout the winter season. Our rink was viewed as a joke, and with a little bit of disdain by our fellow competitors throughout the state. 

However, we were really good. In fact, we took home many tournament trophies, state youth championship titles, and as a high school advanced to the state tournament on multiple occasions. How amazing would it be if we had a real rink? In discussing ideas with the parent committee on how to pursue such an aggressive endeavor, I suggested we approach community benefactors. 

I proposed an idea to Don, a very successful businessman in the community, that we fund a $5 million life insurance policy to someday create a community hockey arena and event center, bearing his family’s name. After deliberation with his tax accountant, he learned the charitable pursuit would provide a large benefit to him “tax wise”. His family stands proud of their patriarch, as they regularly witness the use of the family named facility. Don made a difference, and his legacy lives on.

Life Can Go On

Wayne would do anything for me, and pretty much for everyone. 

He helped me put up my tree stands for deer hunting every season. He taught me the ropes to hunt for ginseng in the fall and morel mushrooms in the spring. When the Brewers would play during the summer, I would frequently see Wayne and Carla’s truck pulling into our driveway, with their daughter Carlie in tow, to have a cold one, watch the Brewers, and do our best to discover the meaning of life. 

As with all of my friends, I encouraged Wayne to purchase a term life insurance policy. Their budget was tight, but we were able to formulate a significant amount of coverage with an affordable price. 

On a really soggy rainy day in the spring of 2016, Wayne, Carla, and Carlie ventured out to Carla’s mother’s land, located in Iowa. They would frequently take these trips, and while Carla visited with her mother, Wayne would maintain the family farm.

Shortly after crossing the bridge into Minnesota, and initiating the trip south to the Iowa border, Carla saw a tree give way on the bluff above. There was no time to react. The tree landed on the roof of the truck, killing Wayne instantly, breaking Carla’s neck, and leaving Carlie with head trauma and face lacerations. 

Carla was now a single parent, in a neck brace for months. Carlie recovered, cherishing the moments with her father and hero. I stood silent at the funeral, as the military salute and folding of the flag took place. Doing their best to emulate Wayne, the family stood tall, confident, and proud. Life would go on, and they would be “ok”. 

My Friend Randy

Randy was my best friend. We went to high school together, were college roommates for four years, and his brother married my sister. I recruited Randy to join our team in the “insurance business”. After some hesitation, Randy joined the team, and we spent many nights together learning the business. His on the job training involved writing a policy on himself (encouraged by me). 

I’ll never forget the call I received from my mother one beautiful April spring morning. She uttered, “Are you sitting down?” As I sipped my morning coffee at my kitchen table, I replied an affirmative yes. “I have some news. Your friend Randy woke up yesterday, and was going to read the morning paper, but he couldn’t. He was diagnosed with an inoperable brain tumor, and has about 6 months to live.” The words shook me to my core.

I took Randy shopping for his groceries one day. That was the last time I saw him. Six months from the date of the initial diagnosis, Randy was gone. He left behind two children, ages 5 and 7, and his wife Michelle who was a nurse. Michelle cried when she got the check for the life insurance. She was able to purchase a home for the family, continue her career in the medical field, and eventually put both boys through college.

Are You Aware?

Heaven forbid anything happens to you or your loved ones. But, wishing is not a plan. If you would like to explore and discover the very best possible options to fit your needs, I am always available. Please contact me with any questions or concerns you may have.

Tom Strangstalien

Insurance Advisor

WisMed Assure

Direct:  608-442-3730

Cell:  608-304-1579

tom.strangstalien@wismedassure.org