What Does The Economic Relief Package Do To Supplement Health Insurance?

One of the biggest deficiencies in the American system of health insurance is that there is very little standardization. Each plan is different. And the devil is in the details, as they say. Your plan might not cost much in weekly or monthly premiums, but it probably won’t provide much of a benefit either. A yearly checkup and a few prescription drugs? No problem. But an emergency room visit that leaves you responsible for paying off a high deductible before your health insurance kicks in a dime? Huge problem.

The harsh reality is that a person can be insured on any plan and still be financially ruined due to COVID-19. The economic relief package passed into law by Democrats addresses some of these concerns.

Director of the National Center for Coverage Innovation at Families USA Stan Dorn said, “If Congress can circle back and make these improvements permanent, it will go a long way toward making insurance affordable in this country.”

Civil rights attorney John Stackett said, “One of the biggest issues with previous relief packages was that they provided protections that disproportionately left minority groups out in the cold. The Biden package does better, but it probably still doesn’t go far enough. Right now, families living below the family line will receive a small payment monthly for the rest of the year. We needed that terribly, and we hope to see an extension in the future.”

What does all this mean? Essentially, it means that health insurance is still far too expensive for many working families in the United States. But by providing what is basically a universal basic income (UBI) for parents, Democrats have found a round-about wait to make insurance payments more manageable. The trick is getting the payments renewed after this year — but as we already know, it’s very difficult to take away this kind of benefit once people have it. And Republicans will have to struggle for how to respond to this when they’re running in the midterm elections next year.

Biden has also ensured that open enrollment for the Affordable Care Act will stay available for months, which is great for people who lose employer-provided coverage. Many citizens are still out of work, and they need healthcare coverage now more than ever. 

The American Rescue Plan Act also removes repayment requirements for premium tax credits, which should go a long way into helping families who don’t have any extra funds on hand to pay them. It’s worth noting that those who use the ACA to find coverage must update demographic information now in order to guarantee these changes have the desired effect. 

How Is “Insurance Law” Defined — And Who Needs It?

To say insurance law is a complicated subject is no exaggeration. The average American has a limited understanding of insurance to begin with. The basics are simple enough: insurance is a contract, usually between two parties. The first party wishes to purchase a policy to become insured against the financial damages of certain outcomes. For example, if you get sick, health insurance helps. If you get into a car accident, car insurance helps. Home burned down? Homeowners insurance helps. Simple, right? 

Not so fast.

Behind the scenes, everything is a bit more complicated. Insurance companies are rich. They’re rich because the insurers are often insured — sometimes with literal insurance, and sometimes through insurance defense attorneys. These are lawyers hired by the insurance company to protect both of the aforementioned parties in case of lawsuit. 

Attorneys will also help the insurer cross all the “T’s” and dot all the “I’s” to reduce the opportunity for a third party to sue. The insured can also hire insurance attorneys to protect them in case an insurer decides not to pay up when it should. Keep in mind that insurance companies are rich for two reasons: first, they push people to purchase insurance even when statistically unnecessary (i.e. make sure you have it before you need it) and second, they do everything in their power to find a reason not to pay out claims.

Even attorneys who don’t practice insurance law will know a little about the subject. Personal injury attorneys will routinely represent car accident victims — and getting compensation for those victims often includes in-depth discussions with car insurance providers who represent both the victim and the person at fault. Real estate or estate planning attorneys will nearly always recommend that clients take out homeowners insurance policies. They know the ins and outs.  

The short answer to the second part of our question — who needs insurance? — is simple: Everyone needs insurance. Whether we like it or not, that’s how the system works.

Stimulus Payments Delayed For Social Security Recipients — Because Of Trump?

We already knew that payments for the economic relief package most recently passed by Congress and signed into law by President Joe Biden were delayed for certain groups of people — but now we may have a better idea of why. House Democrats believe that delays for the $1400 individual payments may have been purposely delayed by former Trump employees in the Social Security Administration.

Those waiting on social security disability checks are accustomed to long wait periods — even being approved for SSDI can take two years — but experts warn that lives could be lost in the interim.

House Ways and Means Committee chairman Richard Neal (D-Massachusetts) said, “We understand that these beneficiaries are waiting because the Social Security Administration has not sent the necessary payment files to the Internal Revenue Service.”

An SSA spokesperson said, “Social Security staff is working day and night with Treasury and IRS representatives to ensure that the electronic file of Social Security and SSI recipients is complete, accurate, and ready to be used to issue payments.”

Once the SSA provides the requisite information, it could be a week or two before anyone currently on social security receives a check.

IRS Commissioner Chuck Rettig provided his testimony at a Ways and Means Committee hearing: “Many of these folks are also entitled to an [earned income tax credit]. They’re also entitled to a child tax credit. We did not get that information from the non-filer portal.”

The current head of the SSA wants to implement deep cuts to the organization, which is a non-started for Congressional Democrats. If it seems strange that a Trump appointee would want to make cuts to the programs he oversees, don’t forget that he also appointed a climate change denier to head the Environmental Protection Agency (EPA). When Trump wanted to gut funding for a particular organization, he attacked from within.

Those still waiting on relief payments can visit the “Get My Payment” portal to find out if the check has already been sent.

The House Ways and Means Committee released a written statement to explain the delays: “The American Rescue Plan was intended to provide much-needed economic stimulus and assistance to people across the country — immediately — and we are counting on your agencies to ensure that beneficiaries are not left behind in the seamless delivery of those payments.”

It continued, “However, we were alarmed to learn recently that most Social Security, SSI, RRB, and VA beneficiaries who are not required to file a tax return have not yet received their payments and the IRS is unable to provide an expected timeline for these payments. Some of our most vulnerable seniors and persons with disabilities, including veterans who served our country with honor, are unable to pay for basic necessities while they wait for their overdue payments.”

Are you an SSDI or SS recipient? There’s no need to worry if you normally file taxes with the IRS. Your information should be on file and your payment should be scheduled normally.

Insurance Terminology You Need To Know: Part VI

Have you ever needed to purchase an insurance policy but been at a loss when you try to read the plan they offer you? There are dozens of new terms you won’t know that are defined by other strange words you won’t know! And how about when you actually need to file a claim for damages based on that insurance policy? It can be a disaster waiting to happen and a certain win for the insurance company if you can’t even discuss the basics. That’s why we’re determined to help you learn some of the most common insurance-related jargon. Here are a few more!

Broker.

This word refers to the person — usually a third party — responsible for connecting an insurer to the soon-to-be new policy owner. Brokers always take a commission, because that’s what leeches do.

Builders’ Risk Policies.

These policies protect construction companies from any losses incurred during construction. Misplaced beam, building falls down? No problem. The “builders’ risk” policy will cover the damage.

Book Value.

The book value of a transaction is the original cost of the transaction. 

Calendar Year Deductible.

Usually, you’ll see the word “deductible” on an insurance policy — and hopefully you’ll realize that the usually very large amount next to the word is what you have to pay before the insurance company will give you a dime. A calendar year deductible means that you have to pay that usually very large amount every year. 

Carrying Value.

This phrase is the book value in addition to accrued interest of a particular policy. 

Cash Equivalent.

These are flexible investments that can easily be turned into “not investments” (i.e. cash). These investments are usually mature and not subject to random, risky bouts of fluctuation. They’re the opposite of, say, penny stocks. Never invest in penny stocks unless you’re into losing huge amounts of cash.

SSDI Wait Period Threatened By COVID

To put in perspective exactly how bad this is: people die waiting to see if they qualify for disability, usually from the very disability that forced them to apply in the first place. And it’s notoriously difficult to get approved for Social Security Disability Insurance (SSDI) in the first place.

SSDI hearings have experienced a whopping 591-day delay on average, or a 40 percent increase from 2010 to 2018. This is a harsh reality: SSDI is a government benefit provided with very little actual government support. There aren’t enough workers to investigate and properly file claims. There aren’t enough judges to promptly clear the docket of new cases. COVID-19 didn’t help at all.

For those who say, “Good. It should be hard to get on disability,” we have a rebuttal: “Why?” Why should it be this difficult for people who have physical or mental incapacities to get the payments they need to survive? How many people need to have their financial security ruined by the unforeseeable circumstances of life before we accept that it’s a worthwhile system to implement? 

And don’t forget, these people receive all the backpay that accrues from the moment they apply until the moment the application is accepted. The system would be more stable with smaller payments, and that means accepting applications as they arrive.

For a year now, COVID-19 has strained the system to it’s breaking point.

Thankfully, the recent passage of another round of economic relief will help SSDI applicants get their heads above water for another month or two.

The IRS said, “Because these payments are automatic for most eligible people, contacting either financial institutions or the IRS on payment timing will not speed up their arrival.”

A spokesperson added, “For those who received EIP1 or EIP2 but don’t receive a payment via direct deposit, they will generally receive a check or, in some instances, a prepaid debit card (referred to as an “EIP Card). A payment will not be added to an existing EIP card mailed for the first or second round of stimulus payments.”

In general, SSDI has experienced yet another slowdown. Disabled U.S. citizen Antonio Evans said, “I had a slip and fall where I damaged my spine. At 4,5 and 6 in my neck. I had to recover from being paralyzed from the neck down.”

His application for SSDI was filed in 2019 — but nearly two years later, it still hasn’t been accepted or denied.

Non-profit clinic manager Tom Yates helps low-income individuals navigate the SSDI application, hoping to make it a little faster for them. Yates said, “It’s a hard system to navigate. It’s like, I don’t try to do my income taxes myself. It’s a complicated system. And I would say that Social Security and SSI disability is similar. The rules are incredibly complex.”

He added, “[Applicants are] having trouble getting medical records or sending people out for medical exams when they can do that. So the whole process has really kind of slowed down because of the pandemic. It’s, I wouldn’t say collapsed, but for some people, it’s probably the same effect, just nothing is moving like it should be.”

Insurance Terminology You Need To Know: Part V

We believe that people should know and understand exactly what their insurance policies say and mean. But insurance companies purposely use a lot of jargon and complicated terminology that the average person could never (or would never want to) wrap their heads around. That’s why we’re going to do it for you. Here are a few insurance-related terms that you might find in any policy you’ve purchased, and what they mean.

Actual Cash Value

This term refers to the value of repayment requested after a financial loss (most usually due to property damage). You’ll also see it coupled with the word “indemnification,” which refers to the protection of one party when a third party is damaged. 

Actuary.

This term refers to the professional responsible for determining the level of risk that an insurance company might be willing to accept. The actuary determines the equations for calculating premiums, dividends, etc.

Adjuster. 

If you ever need to cash in on a policy, then the insurance adjuster is the one who will investigate your claim. Basically, the adjuster’s job is to never give you an inch and not give you the company’s money unless a certain standard is met. They determine the claim’s worth in relation to the policy’s cash value.

Admitted Assets

These are an insurer’s valuations for specific assets. You’ll find them on the balance sheet.

Advance Premiums.

Normal premiums are the price you pay — usually once a month — once you’ve agreed to purchase a policy. An advance premium means you’ve paid…in advance. 

Affiliate.

Insurers refer to anyone who is under the insurer’s control as an affiliate.

Agent.

These are the insurance lackeys who sell their services. They don’t always work for the insurance provider. Sometimes providers will ask a third-party for sales work.

Aggregate.
This word refers to the most money you can have returned from a single loss (total coverage).

Life Sentence Given To Man After Insurance Collection Plot

Most rational people on planet Earth would recognize the futility of planning a murder (or two or three) in order to collect a massive life insurance settlement. And yet, it keeps happening. Hawthorne resident Ali F. Elmezayen, 45, was sentenced to 212 years in federal prison after the buffoon took out accidental death life insurance policies on his two kids and wife — and then partially carried out the plot when he drove his vehicle off the Port of Los Angeles.

His wife survived, but his two disabled sons died. 

Judge John F. Walter imposed the maximum sentence available when he ruled for 212 years. Walter said, “He is the ultimate phony and a skillful liar…and is nothing more than a greedy and brutal killer. The only regret that the defendant has is that he got caught.”

Elmezayen was also slammed with $261,751 in restitution fees that were paid out as part of the accidental death policy.

An anonymous lawyer for a personal injury law firm (https://www.socalinjurylawyers.com/) commented that these types of cases were surprisingly plentiful: “People don’t realize that they can’t possibly get away with it. The first person they suspect is the closest person in the deceased’s life.”

Acting United States Attorney Tracy L. Wilkison said, “Mr. Elmezayen conceived a cold-blooded plan to murder his autistic sons and their mother, then cash in on insurance policies. He now has ample time to reflect — from the inside of a federal prison cell — on where his greed and self-interest took him. We continue to grieve for those two helpless boys who deserved better from their father, who will never again walk among us as a free man.”

The scheme was poorly planned from the beginning. Before the plot was executed, Elmezayen contacted the relevant insurance companies a number of times — sometimes posing as his wife — in order to ensure the eight insurance policies he had purchased for more than $3,000,000 would pay out without much scrutiny. Prosecutors say one of his motivations was a bankruptcy he filed the year he purchased the policies (which he couldn’t even afford). 

Assistant Director in Charge at the LA FBI Field Office Kristi Johnson said, “Fathers are supposed to protect their children but instead, Elmezayen drove his boys straight to their certain death in exchange for cash. The defendant maliciously planned the death of his autistic sons and gave them virtually no chance of survival. The investigation that led to today’s sentencing won’t give them their lives, but affords them justice in death.”

Insurance policies have a “contestability” period. Once it expires, there are no longer any investigations into the cause of death. Theoretically, Elmezayen could murder his family only days after the contestability window expired and no one would bat an eye. He waited only 12 days. Funny thing: the FBI tends to take notice of such aberrations in the system. Who knew?

What The Judges Are Saying About COVID In The Workplace

Everyone knew that a storm of sorts was coming. Many businesses — non-essential and otherwise — remained open during the coronavirus pandemic. This resulted in many people becoming sick because they were allowed to work. Not all employers took the necessary precautions to protect them. Could those businesses be held liable for employee damages? What does insurance have to say about it? What about Workers Comp?

You can see that the equations judges have to balance are complicated — and the law might not have all the answers. But we finally have some insight into how judges are ruling in cases like these. Suffice it to say, judges are ruling against businesses in COVID-19 lawsuits.

The University of Pennsylvania Law School tracked COVID legislation starting early. 

Many of the cases involved businesses that wanted insurance companies to cover COVID-19 losses because they had purchased “business interruption” policies. But the problem is simple: those policies rarely cover this kind of public health crisis. Business owners would have to voluntarily purchase a policy that does. Most don’t.

Judges ruled against business owners who built these lawsuits. The Penn data shows that there were thousands of such lawsuits over the past 12 months. In federal courts, insurers won lawsuits more than three-quarters of the time. Many more cases were “resolved” by the judge’s outright dismissal of the case.

Civil lawsuits are generally filed against the person or organization mostly responsible for financial damages. In this case, they should probably be filed against the United States government. The arguments would be obvious enough. The Trump administration failed to invoke many laws that would have increased production of PPE or attempted to standardize COVID restrictions from state to state. At the very least, he could have tried to limit travel. But in the name of business, that’s not what happened.

Unfortunately, those lawsuits would also fall flat — because the U.S. government would claim immunity.

What Are “Nuclear Verdicts” And How Do They Affect Insurance Rates?

We rarely think about how the transport industry works. But maybe we should. Every year, millions of trucks — gasoline-fueled missiles, rather — travel from one end of the United States to the other. We’re talking hundreds of millions of miles traveled on an annual basis. With those kinds of numbers, accidents are inevitable. And what happens when those accidents lead to massive lawsuits that wind up in court?

Mike Card is president and CEO of Combined Transport. He took over the business from his father, who started it in 1980. And suffice it to say, business is better than ever. This is in part because of the reliance on material goods during the coronavirus pandemic. The government relies on some trucking services to get vaccines and PPE from one region to the next. But Card says the bigger the business gets, the more he worries.

He commented, “If someone wins $20 million from the jury, my insurance companies only pay the first $5 [million]. I would have to pay the next $15 million. We couldn’t afford that. We’d have to shut our doors.”

It’s a legitimate concern. From 2010 to 2019, the number of trucking accidents with fatalities blew up 43 percent. Overall injuries rose 7 percent. Needless to say, most of the casualties were passengers or drivers in other vehicles.

Combine that with the epidemic of “nuclear verdicts” — or the ballooning costs and jury awards from those crashes in excess of $10 million, and you get a lot of worried business owners. The aforementioned 43 percent increase in fatalities doesn’t come close to the whopping 1000 percent increase in jury awards during the exact same time period.

Why are the awards getting so high so fast? Liberty Mutual Insurance says that the main reason is the idea that the system in general is broken (and hint: it is). 

But the trucking industry is more likely to receive a punitive judgement (i.e. a punishment from the judge) for gross negligence than many other industries. That’s because truck drivers are often fatigued behind the wheel. Coupled with the fact that some drivers are allowed to keep their drives even without a flawless driving record, and it’s easy for a personal injury lawyer to win a case for injured plaintiffs.

An anonymous lawyer from Koonz McKenney Johnson & Depaolis LLP (https://koonz.com/) said, “99 percent of the time, it’s the business owner’s fault. It’s the hiring practices, the overtime hours, the broken laws and regulations that lead to the majority of these accidents. Ordinary people are the ones who pay the price with their lives. Why shouldn’t we take the owners to town for their mistakes? Someone has to reimburse victims for the damage done, and it’s got to be the ones responsible. The drivers are just tools for those business owners. And so we target the business owners.”

But senior vice president of the American Transportation Research Institute Dan Murray says, “In most states there’s a disconnect between your level of negligence and your level of liability. There are states where you can be identified as 10 percent of 15 percent negligence and still be vulnerable for 100 percent of the financial liabilities.”

Insurance Terminology You Need To Know: Part IV

Welcome to part four of our series in insurance terminology you should definitely know — especially if you’re a new buyer of any kind of insurance. It never hurts to brush up when you’re rusty. Today we will look at a few terms like HMO, HRA, and HSA that are abbreviated to become more confusing than they have to be. 

What is an HMO?

HMO stands for “Health Maintenance Organization.” When you see HMO on your plan, it means you can only go through the specific HMO providers outlined by that plan. Usually, this means choosing one doctor in the network to be your primary care physician. Should you need to see a specialized doctor, your primary care physician will provide you with the right referral.

What is an HRA?

HRA stands for “Health Reimbursement Account.” An HRA is usually a benefit shared through an employer, and it allows you to deposit money from your paycheck to funnel toward healthcare expenses as needed — but this is purely a savings account with no tax benefits. It’s good for people who have trouble hanging onto their money for more than a day.

What is an HSA?

HSA stands for “Health Savings Account.” Another benefit normally shared through an employer, but an HSA normally allows the user to avoid federal taxes on anything deposited into the account. Funds deposited into an HSA do not need to be spent in a given timeframe, which makes them a great way to complement insurance. 

What is a PPO?

PPO stands for “preferred provider organization.” A PPO is similar to an HMO, except they usually cost more through higher premiums — and also provide limited coverage for when healthcare providers are used outside of the network. These plans are great for people who like to travel or move often for work, because they still offer some coverage in case you’re not where you normally are.