Most consumers normally don't think about life insurance until an important event takes place -- a marriage, the birth of a child, the purchase of a home, or the death of a friend or relative. Brokers say that's the way it should be, since those events highlight a new or previously unrecognized need.
"When do you need it? It's the minute someone else depends on you," said Byron Udell, CEO of AccuQuote, a Wheeling, Ill. quotation and brokerage firm.
The problem, brokers say, is people all too often neglect to act on that need even though most don't carry enough life insurance.
Half of U.S. households now have at least one person with an individual life insurance policy, down from 55 percent in 1992, according to LIMRA, an industry research association.
Many employers, especially large companies, provide workers with some, limited level of life insurance, usually two to three times an employee's annual income. But that coverage falls far below what most people's survivors would typically need.
Many employers allow people to buy additional coverage through the corporate group plan. But before doing so, consumers should check to see if that coverage is portable if they leave for another job, said Don Cullen of The Young Agency, a Syracuse, N.Y. independent insurance agent.
There are norms for figuring out how much additional insurance you need. They vary depending on who you talk to, and needs also differ by a consumers' personal circumstances. The usual rules of thumb suggest that people have total coverage of between 5 and 10 times their annual income. For someone who earns $40,000 each year, that means taking out a policy valued at between $200,000 and $400,000.
But some brokers say that is often not enough for many people, particularly those with younger families who expected to depend on their earnings for many years to come.
"The rule of thumb that I have is that all rules of thumb are wrong because what you really have to do is do a really careful needs analysis," said David Woods, president of the Life and Health Insurance Foundation for Education, an insurance education group funded by the industry.
Woods and others say consumers need to figure out how many years their survivors would need to replace their income and what percentage of it would need to replaced, allowing for inflation and interest income. They can then subtract current savings from that cumulative figure to figure out how much coverage is needed.
The goods news for consumers is that life insurance has gotten much cheaper in recent years. As recently as 10 years ago, a healthy 40-year-old man who has never smoked would've paid nearly $1,000 annually for a $500,000 term life insurance policy, a rate to be held steady for 20 years. But such a consumers would now pay less than $400 a year for the same coverage, Udell said.
A conversation with an insurance agent can help a consumer figure out how much coverage they need. An agent will ask a number of questions about family and personal health conditions, and once a policy is settled on, arrange for a physical examination, paid for by the insurer, to verify that you are in sound health.
Monday, May 16, 2005
California Auto Insurance Company Supports Community
SAN FRANCISCO, May 16 /PRNewswire/ -- Esurance, a direct-to-consumer
personal auto insurance company, will sponsor a benefit held by Urban Services
YMCA of San Francisco. The silent auction and wine tasting event will take
place on May 20, from 7 p.m. to 10 p.m. at the Simmons Gallery near Union
Square. All proceeds will benefit Urban Services YMCA's Mentoring, Tutoring,
and Truancy Intervention Programs. For more information or to purchase tickets
to the event, visit http://www.ymcasf.org/UrbanServices/
John Swigart, Esurance Managing Director and CMO, explained, "Esurance has
been really fortunate to have achieved success in so short a time. This would
have been impossible without the support of our Bay Area community. We're
delighted to be able to support an organization like Urban Services YMCA."
Regarding Esurance's support of Bay Area youth and families, Urban
Services YMCA's Founder, Executive Director, and Vice-President of the YMCA of
San Francisco Association stated, "As we celebrate our 10th year of operation,
Urban Services relies more than ever on partnerships with companies in our
community. These partnerships ensure that every young person in the City has
the tools he or she needs to be successful academically, socially, and
physically. Esurance's sponsorship of this event means that more Mission
District youth this year will develop meaningful relationships with adult
mentors, that more summer literacy programs in Bayview-Hunter's Point will
flourish, and that youth throughout the City will have safe and supportive
places to go during high risk after school hours. We are thankful for
Esurance's support."
Swigart concluded, "As a company headquartered in San Francisco, Esurance
has benefited from the Bay Area's world-class talent and positive, visionary
climate. What better way to give back then to encourage the talents and
potential of San Francisco's youth?"
personal auto insurance company, will sponsor a benefit held by Urban Services
YMCA of San Francisco. The silent auction and wine tasting event will take
place on May 20, from 7 p.m. to 10 p.m. at the Simmons Gallery near Union
Square. All proceeds will benefit Urban Services YMCA's Mentoring, Tutoring,
and Truancy Intervention Programs. For more information or to purchase tickets
to the event, visit http://www.ymcasf.org/UrbanServices/
John Swigart, Esurance Managing Director and CMO, explained, "Esurance has
been really fortunate to have achieved success in so short a time. This would
have been impossible without the support of our Bay Area community. We're
delighted to be able to support an organization like Urban Services YMCA."
Regarding Esurance's support of Bay Area youth and families, Urban
Services YMCA's Founder, Executive Director, and Vice-President of the YMCA of
San Francisco Association stated, "As we celebrate our 10th year of operation,
Urban Services relies more than ever on partnerships with companies in our
community. These partnerships ensure that every young person in the City has
the tools he or she needs to be successful academically, socially, and
physically. Esurance's sponsorship of this event means that more Mission
District youth this year will develop meaningful relationships with adult
mentors, that more summer literacy programs in Bayview-Hunter's Point will
flourish, and that youth throughout the City will have safe and supportive
places to go during high risk after school hours. We are thankful for
Esurance's support."
Swigart concluded, "As a company headquartered in San Francisco, Esurance
has benefited from the Bay Area's world-class talent and positive, visionary
climate. What better way to give back then to encourage the talents and
potential of San Francisco's youth?"
Friday, May 13, 2005
Health Insurance Industry and patient care
By Dr. Alexander Strasser
(May 13, 2005) — Physicians used to be in charge of patient care. Now insurance companies are practicing medicine and dictating to health care providers how medical practice should be conducted. Instead of being a patient-oriented clinical art and science, medicine has become an algorithm of care controlled by the insurance industry for the main purpose of lowering costs. Lip service is given to quality and preventive medicine, but the emphasis is on cost savings.
How did this happen? Does the public benefit from insurance company control of medicine? Who profits from this arrangement?
As health care costs began to rise, companies that pay health care benefits looked to the insurance industry to control costs. To do this, insurance companies hired physicians as full-time employees (medical directors). Initially the influence of insurance companies was small, but as more patients had their medical costs covered, insurers gained the upper hand.
Under the guise of promoting good health, they set up elaborate algorithms of care. In time, these became the accepted mode of practice. Extensive and costly infrastructure was established, and health maintenance organizations were spawned. The public message was that insurance companies strived for improved medical care, while the real intent was cost control.
Cost effectiveness was rewarded and the reverse was also true. Free-thinking and innovative diagnostic and medical therapy were discouraged. "Take the safe and cheaper way" is the message.
One very effective way for insurance companies to control physicians was through extensive documentation requirements. Keep the physician busy with paperwork so that he or she will not have time to fight back. This policy has worked. Using preventive medicine as their battle cry, insurance companies demand an ever-growing list of documentation.
In Massachusetts, under the guise of improving mental health care for Medicaid patients, elaborate algorithms of drug therapy for depression were established. Drug treatment of depression is an individual matter, and algorithms of medical care simply are inappropriate.
Medical schools used to teach the discipline of taking a detailed medical history. But in these algorithms, insufficient time is left to the physician for listening.
Initially the concept of quick turnover of patients from a high-cost hospital to a lower-cost (nursing home) level of care might save money. However, this is impossible unless quality is sacrificed. Patients should not be discharged from the hospital until all appropriate diagnostic and treatment steps have been completed.
And, despite all these efforts, health care costs continue to climb as our population ages and health expectations rise. Unless we are willing to ration medical care, costs cannot be controlled.
Eventually our society must decide how much medical care each individual will have paid for. Does the public have the right to unlimited medical care? Enough money for unlimited medical care will never exist. If the public wants unlimited health care, it will have to be paid for in some way. This would mean higher taxes in a government system or higher insurance premiums and out-of-pocket expenses in a private system. A free ride as promised by the insurance industry does not exist.
(May 13, 2005) — Physicians used to be in charge of patient care. Now insurance companies are practicing medicine and dictating to health care providers how medical practice should be conducted. Instead of being a patient-oriented clinical art and science, medicine has become an algorithm of care controlled by the insurance industry for the main purpose of lowering costs. Lip service is given to quality and preventive medicine, but the emphasis is on cost savings.
How did this happen? Does the public benefit from insurance company control of medicine? Who profits from this arrangement?
As health care costs began to rise, companies that pay health care benefits looked to the insurance industry to control costs. To do this, insurance companies hired physicians as full-time employees (medical directors). Initially the influence of insurance companies was small, but as more patients had their medical costs covered, insurers gained the upper hand.
Under the guise of promoting good health, they set up elaborate algorithms of care. In time, these became the accepted mode of practice. Extensive and costly infrastructure was established, and health maintenance organizations were spawned. The public message was that insurance companies strived for improved medical care, while the real intent was cost control.
Cost effectiveness was rewarded and the reverse was also true. Free-thinking and innovative diagnostic and medical therapy were discouraged. "Take the safe and cheaper way" is the message.
One very effective way for insurance companies to control physicians was through extensive documentation requirements. Keep the physician busy with paperwork so that he or she will not have time to fight back. This policy has worked. Using preventive medicine as their battle cry, insurance companies demand an ever-growing list of documentation.
In Massachusetts, under the guise of improving mental health care for Medicaid patients, elaborate algorithms of drug therapy for depression were established. Drug treatment of depression is an individual matter, and algorithms of medical care simply are inappropriate.
Medical schools used to teach the discipline of taking a detailed medical history. But in these algorithms, insufficient time is left to the physician for listening.
Initially the concept of quick turnover of patients from a high-cost hospital to a lower-cost (nursing home) level of care might save money. However, this is impossible unless quality is sacrificed. Patients should not be discharged from the hospital until all appropriate diagnostic and treatment steps have been completed.
And, despite all these efforts, health care costs continue to climb as our population ages and health expectations rise. Unless we are willing to ration medical care, costs cannot be controlled.
Eventually our society must decide how much medical care each individual will have paid for. Does the public have the right to unlimited medical care? Enough money for unlimited medical care will never exist. If the public wants unlimited health care, it will have to be paid for in some way. This would mean higher taxes in a government system or higher insurance premiums and out-of-pocket expenses in a private system. A free ride as promised by the insurance industry does not exist.
Thursday, May 12, 2005
Affirmative Insurance Holdings Announces First Quarter 2005 Results
ADDISON, Texas--(BUSINESS WIRE)--May 12, 2005--Affirmative Insurance Holdings, Inc. (Nasdaq:AFFM), a producer and provider of personal non-standard automobile insurance, today announced financial results for the quarter ended March 31, 2005.
Highlights for the Company's first quarter included:
-- Net income for the first quarter of 2005 was $8.0 million, an increase of 9.8% compared to net income of $7.3 million for the first quarter of 2004;
-- Earnings per share for the first quarter of 2005 were $0.47 per diluted share with an annualized return on equity of 15.3%; and
-- Total revenues for the first quarter of 2005 were $87.1 million, an increase of $14.9 million or 20.7% as compared to total revenue of $72.2 million for the same period of 2004.
"Affirmative produced another quarter of solid profitability as we worked to fully employ the capital raised during 2004," said Thomas E. Mangold, chief executive officer of Affirmative Insurance Holdings, Inc. "We continue to remain focused on developing and deploying our multiple distribution channel strategy, both through organic and acquisition expansion. We saw competitive pressures accelerate during this quarter, particularly in the independent agency distribution channel. From an underwriting and pricing perspective, we continue to exercise strong discipline and have been unwilling to sacrifice underwriting margins for the sake of top line growth. In the quarter we have continued to see favorable loss experience from prior periods."
First Quarter Financial Results
First quarter consolidated net income was $8.0 million or $0.47 per diluted share, up 9.8% from net income of $7.3 million or $0.62 per diluted share for the same period in 2004. Increases in consolidated net income were primarily due to increased retention of gross premium written in our insurance companies at favorable margins. Weighted average diluted shares for the first quarter increased to 17.1 million compared to 11.7 million for the same quarter of the prior year, as a result of the Company's initial public offering in July of 2004.
Consolidated revenues for the three months ended March 31, 2005 were $87.1 million, an increase of $14.9 million, or 20.7%, compared to revenues of $72.2 million for the three months ended March 31, 2004. The increase in consolidated revenues was primarily due to increased retention of gross premiums written and increased invested assets in our insurance companies.
Total controlled premium decreased $5.6 million, or 4.7%, to $113.2 million in the first quarter of 2005 compared to total controlled premium of $118.8 million in the first quarter of 2004. In the Company's Retail distribution channel, total controlled premium increased $3.4 million, or 9.1%, to $41.0 million in the first quarter of 2005, principally due to increases in Texas. Total controlled premium from the Company's Independent Agency distribution channel decreased $6.9 million, or 12.7%, to $47.1 million primarily due to decreases in Florida, partially offset by increases in South Carolina and New Mexico. Total controlled premium from unaffiliated underwriting agencies decreased by $2.2 million, or 8.0%, to $25.1 million in the first quarter of 2005, primarily due to the continued run-off of a cancelled program in California partially offset by increases in two other programs in California.
Revenues from agency operations increased 12.1% to $47.7 million with a pre-tax margin of 17.2%, compared to revenues of $42.6 million with a pre-tax margin of 19.0% for the first quarter of 2004. Net income from agency operations increased 3.0% to $5.3 million from $5.1 million in the same quarter of the prior year.
Revenues from insurance company operations for the first quarter of 2005 were $76.1 million, an increase of 39.6% as compared to first quarter 2004 revenues of $54.5 million. The combined ratio for the first quarter of 2005 was 94.7% as compared to 93.2% for the first quarter of 2004. Net income from insurance company operations increased 34.3% to $3.3 million from $2.5 million in the same quarter of the prior year.
Guidance and Supplemental Information
Based on its current expectations of market conditions, Affirmative is adjusting its guidance for 2005 and estimates full year earnings to be in the range of $1.75 to $1.85 per diluted share from its earlier guidance of $1.90 to $2.10 per diluted share. This guidance is based on 17.1 million diluted shares and does not include the impact from any acquisitions that may occur in the future.
To provide a more complete understanding of Affirmative's financial results, the Company has posted supplemental financial data on the investor relations portion of the Company's website, www.affirmativeholdings.com. The data pertains to first quarter financial results for 2004 and 2005.
Conference call
Affirmative will hold a conference today, Thursday, May 12th, at 11:00 a.m. Eastern Time, 10:00 a.m. Central Time. Following a brief presentation, participants will have the opportunity to ask questions. To participate in the call, dial 1-800-299-9086 (international dial 1-617-786-2903), ten minutes before the conference call begins and dial passcode 95900620.
There will also be a real-time audio webcast of the conference call by CCBN. To listen to the live call, select the webcast icon from the investor relations section of Affirmative's website http://www.affirmativeholdings.com at least 15 minutes before the start of the call to register, download, and install any necessary audio software. Individuals accessing the audio webcast will be "listen only" and will not have the ability to take part in the Q&A session.
A digital replay will be available one hour after the conclusion of the call. Interested individuals can access the webcast replay at http://www.affirmativeholdings.com, by clicking on the webcast link. The webcast replay will be available for 30 days after the call. Phone replay will be available through May 19th and may be accessed by dialing 1-888-286-8010 (international dial 1-617-801-6888), then enter passcode 27793299.
Highlights for the Company's first quarter included:
-- Net income for the first quarter of 2005 was $8.0 million, an increase of 9.8% compared to net income of $7.3 million for the first quarter of 2004;
-- Earnings per share for the first quarter of 2005 were $0.47 per diluted share with an annualized return on equity of 15.3%; and
-- Total revenues for the first quarter of 2005 were $87.1 million, an increase of $14.9 million or 20.7% as compared to total revenue of $72.2 million for the same period of 2004.
"Affirmative produced another quarter of solid profitability as we worked to fully employ the capital raised during 2004," said Thomas E. Mangold, chief executive officer of Affirmative Insurance Holdings, Inc. "We continue to remain focused on developing and deploying our multiple distribution channel strategy, both through organic and acquisition expansion. We saw competitive pressures accelerate during this quarter, particularly in the independent agency distribution channel. From an underwriting and pricing perspective, we continue to exercise strong discipline and have been unwilling to sacrifice underwriting margins for the sake of top line growth. In the quarter we have continued to see favorable loss experience from prior periods."
First Quarter Financial Results
First quarter consolidated net income was $8.0 million or $0.47 per diluted share, up 9.8% from net income of $7.3 million or $0.62 per diluted share for the same period in 2004. Increases in consolidated net income were primarily due to increased retention of gross premium written in our insurance companies at favorable margins. Weighted average diluted shares for the first quarter increased to 17.1 million compared to 11.7 million for the same quarter of the prior year, as a result of the Company's initial public offering in July of 2004.
Consolidated revenues for the three months ended March 31, 2005 were $87.1 million, an increase of $14.9 million, or 20.7%, compared to revenues of $72.2 million for the three months ended March 31, 2004. The increase in consolidated revenues was primarily due to increased retention of gross premiums written and increased invested assets in our insurance companies.
Total controlled premium decreased $5.6 million, or 4.7%, to $113.2 million in the first quarter of 2005 compared to total controlled premium of $118.8 million in the first quarter of 2004. In the Company's Retail distribution channel, total controlled premium increased $3.4 million, or 9.1%, to $41.0 million in the first quarter of 2005, principally due to increases in Texas. Total controlled premium from the Company's Independent Agency distribution channel decreased $6.9 million, or 12.7%, to $47.1 million primarily due to decreases in Florida, partially offset by increases in South Carolina and New Mexico. Total controlled premium from unaffiliated underwriting agencies decreased by $2.2 million, or 8.0%, to $25.1 million in the first quarter of 2005, primarily due to the continued run-off of a cancelled program in California partially offset by increases in two other programs in California.
Revenues from agency operations increased 12.1% to $47.7 million with a pre-tax margin of 17.2%, compared to revenues of $42.6 million with a pre-tax margin of 19.0% for the first quarter of 2004. Net income from agency operations increased 3.0% to $5.3 million from $5.1 million in the same quarter of the prior year.
Revenues from insurance company operations for the first quarter of 2005 were $76.1 million, an increase of 39.6% as compared to first quarter 2004 revenues of $54.5 million. The combined ratio for the first quarter of 2005 was 94.7% as compared to 93.2% for the first quarter of 2004. Net income from insurance company operations increased 34.3% to $3.3 million from $2.5 million in the same quarter of the prior year.
Guidance and Supplemental Information
Based on its current expectations of market conditions, Affirmative is adjusting its guidance for 2005 and estimates full year earnings to be in the range of $1.75 to $1.85 per diluted share from its earlier guidance of $1.90 to $2.10 per diluted share. This guidance is based on 17.1 million diluted shares and does not include the impact from any acquisitions that may occur in the future.
To provide a more complete understanding of Affirmative's financial results, the Company has posted supplemental financial data on the investor relations portion of the Company's website, www.affirmativeholdings.com. The data pertains to first quarter financial results for 2004 and 2005.
Conference call
Affirmative will hold a conference today, Thursday, May 12th, at 11:00 a.m. Eastern Time, 10:00 a.m. Central Time. Following a brief presentation, participants will have the opportunity to ask questions. To participate in the call, dial 1-800-299-9086 (international dial 1-617-786-2903), ten minutes before the conference call begins and dial passcode 95900620.
There will also be a real-time audio webcast of the conference call by CCBN. To listen to the live call, select the webcast icon from the investor relations section of Affirmative's website http://www.affirmativeholdings.com at least 15 minutes before the start of the call to register, download, and install any necessary audio software. Individuals accessing the audio webcast will be "listen only" and will not have the ability to take part in the Q&A session.
A digital replay will be available one hour after the conclusion of the call. Interested individuals can access the webcast replay at http://www.affirmativeholdings.com, by clicking on the webcast link. The webcast replay will be available for 30 days after the call. Phone replay will be available through May 19th and may be accessed by dialing 1-888-286-8010 (international dial 1-617-801-6888), then enter passcode 27793299.
Health Insurance Higher for smokers
The Associated Press - ATLANTA
State employees who smoke will soon have to start paying an extra $40 a month for health insurance.
The surcharge will affect state workers, public school teachers and their family members who admit to smoking or using tobacco in the past year. It will begin July 1.
Employees will be expected to use the honor system when they sign up for coverage and are asked whether they use tobacco, said Tim Burgess, commissioner of the Georgia Department of Community Health. Those caught lying will lose their health insurance for a year, he said.
Senate Majority Leader Tommie Williams, R-Lyons, said the surcharge will help limit the increase in premiums for state employees and was adopted to fill a projected $400 million shortfall in the insurance fund. Gov. Sonny Perdue proposed a 13 percent rise in premiums, but lawmakers dropped it to 9.5 percent.
"Smokers are very expensive. In the private sector, you pay more if you are a smoker and you pay more for your spouse," Williams said.
About 650,000 people are on the state health insurance plan.
But the surcharge comes as unwelcome news to some employees.
Laurie Reid, a smoker who works as a secretary for the state Board of Pardons and Paroles, said her insurance was going up from $74 to $117 a month.
"That's a lot of money for many state employees," Reid said. "Our hands are tied. We have to have health insurance. What are we to do?"
State Rep. Alan Powell, D-Hartwell, a smoker who says he is trying to quit, thinks the surcharge is unfair.
"It's a legal product," Powell said. "If you want a surcharge, don't just put it on smoking. Why not do it based on weight? If you are going to put the surcharge on smoking, put it on that six-pack drinker."
Williams said many state employees did not realize the insurance system was self-insured, meaning premiums must go up to meet rising health costs and claims.
"Anytime your costs go up for a plan, people are going to grumble," Burgess said. "But I think what I ask state employees to remember is, the costs of the plan are outstripping our ability to pay for it."
Three states _ West Virginia, Alabama and Kentucky _ are already imposing a surcharge on health insurance for employees who smoke, a trend that has also been seen in the private sector.
State employees who smoke will soon have to start paying an extra $40 a month for health insurance.
The surcharge will affect state workers, public school teachers and their family members who admit to smoking or using tobacco in the past year. It will begin July 1.
Employees will be expected to use the honor system when they sign up for coverage and are asked whether they use tobacco, said Tim Burgess, commissioner of the Georgia Department of Community Health. Those caught lying will lose their health insurance for a year, he said.
Senate Majority Leader Tommie Williams, R-Lyons, said the surcharge will help limit the increase in premiums for state employees and was adopted to fill a projected $400 million shortfall in the insurance fund. Gov. Sonny Perdue proposed a 13 percent rise in premiums, but lawmakers dropped it to 9.5 percent.
"Smokers are very expensive. In the private sector, you pay more if you are a smoker and you pay more for your spouse," Williams said.
About 650,000 people are on the state health insurance plan.
But the surcharge comes as unwelcome news to some employees.
Laurie Reid, a smoker who works as a secretary for the state Board of Pardons and Paroles, said her insurance was going up from $74 to $117 a month.
"That's a lot of money for many state employees," Reid said. "Our hands are tied. We have to have health insurance. What are we to do?"
State Rep. Alan Powell, D-Hartwell, a smoker who says he is trying to quit, thinks the surcharge is unfair.
"It's a legal product," Powell said. "If you want a surcharge, don't just put it on smoking. Why not do it based on weight? If you are going to put the surcharge on smoking, put it on that six-pack drinker."
Williams said many state employees did not realize the insurance system was self-insured, meaning premiums must go up to meet rising health costs and claims.
"Anytime your costs go up for a plan, people are going to grumble," Burgess said. "But I think what I ask state employees to remember is, the costs of the plan are outstripping our ability to pay for it."
Three states _ West Virginia, Alabama and Kentucky _ are already imposing a surcharge on health insurance for employees who smoke, a trend that has also been seen in the private sector.
Wednesday, May 11, 2005
Health Insurance premiums skyrocket
House Bill 20 would help small businesses in NC pay for employee health insurance.
Greensboro, NC -- The number of uninsured workers in North Carolina is on the rise.
Officials blame that on rising health care costs and skyrocketing premiums.
So, state lawmakers are introducing a new bill that would help small businesses pay for health insurance for employees.
House Bill 20 is a $42 million dollar proposal.
It would give businesses with 25 employees or less a $400 tax credit per employee per year, helping to offset costs.
Clyde Cummings owns Cummings Auto Service in Greensboro.
He has about 10 employees, and he pays 100% of employee premiums. He says the tax credit would be a tremendous help.
"We've maintained our health insurance coverage, but I don't know how many more years we can keep doing that without some help somewhere. In my opinion, that would be one of the best things legislators could do to help small business," says Cummings.
"I've been in business 32 years and had a medical plan all these years. And the past few years it's been real testy."
This bill would apply to businesses that pay more than 50% of employee premiums.
It is being heard in the House finance committee, and according to lawmakers we talked to, it has a lot of momentum and support.
Greensboro, NC -- The number of uninsured workers in North Carolina is on the rise.
Officials blame that on rising health care costs and skyrocketing premiums.
So, state lawmakers are introducing a new bill that would help small businesses pay for health insurance for employees.
House Bill 20 is a $42 million dollar proposal.
It would give businesses with 25 employees or less a $400 tax credit per employee per year, helping to offset costs.
Clyde Cummings owns Cummings Auto Service in Greensboro.
He has about 10 employees, and he pays 100% of employee premiums. He says the tax credit would be a tremendous help.
"We've maintained our health insurance coverage, but I don't know how many more years we can keep doing that without some help somewhere. In my opinion, that would be one of the best things legislators could do to help small business," says Cummings.
"I've been in business 32 years and had a medical plan all these years. And the past few years it's been real testy."
This bill would apply to businesses that pay more than 50% of employee premiums.
It is being heard in the House finance committee, and according to lawmakers we talked to, it has a lot of momentum and support.
PCI Says Insurers Survive Colorado Legislative Session
May 10, 2005
In what best could be called "Survivor: The Colorado Legislative Session," there were many twists, turns and surprises along the road to adjournment recently, however the insurance industry successfully worked to preserve the state's stable marketplace, according to the Property Casualty Insurers Association of America (PCI).
"With the first Democrat controlled Legislature in 40 years, the insurance industry played defense for most of the session," said Michael Harrold, assistant vice president and regional manager for PCI. "Even when a bill was killed, the issue would arise, like a phoenix, in another committee or chamber. Ultimately, the combination of a coordinated and united industry lobbying effort, key strategic alliances, a new Democratic majority that struggled within its own ranks not to legislatively overreach, and the ever present threat of a Republican governor's veto pen, the industry survived a session that saw most anti-insurance bills or issues either killed, softened through amendment, or put off to another day."
Colorado's insurance scoring law, which is based on the National Conference of Insurance Legislators (NCOIL) model act, remains intact after three attempts to ban insurers use of credit information. Two bills were killed in committee, and then a late bill banning the use of credit was introduced and assigned to the committee which the Senate president, a fierce foe of insurance scoring, was a member. That third bill made it out of committee but died on the Senate floor. The issue will remain alive through the summer and into next session, because a health insurance study resolution (SJR 36) awkwardly includes a call for the study of the use of credit scoring in insurance underwriting.
Another example of the topsy-turvy nature of the 2005 session includes identity theft legislation that would allow a consumer to put a freeze on his or her credit information. Senate Bill 137 morphed from being one of the nation's worst bills on this subject from an insurance perspective to being one that excluded insurance from its provisions. Senate Bill 137 provided an insurance exemption for rating and underwriting in relation to credit reports as it passed the Senate. However, as the House passed the bill, it imposed a freeze requirement on all consumer reports, which included credit reports, loss history reports and motor vehicle records. In the final days of the session a conference committee restored the exemption for insurance rating, underwriting and claims handling and the bill was sent to the governor with those insurance exemptions intact.
Lawmakers also rejected three separate bills that would have prohibited the workers' compensation guaranty fund from seeking reimbursement from large employers. As a result of the Reliance insolvency in 2001, Colorado like many other states is facing increased unfunded liabilities. To address this situation, the Colorado fund has imposed an assessment on several large employers, which led to their repeated efforts to remove the law's net worth provision.
Workers' compensation legislation, HB 1018 originally would have allowed injured employees their choice of provider, and then was amended to require that employers offer injured workers the choice of three health care providers. The bill had its own phoenix-like qualities as it was considered on the House floor, given late status and referred back to committee, and then narrowly defeated when it was considered a second time on the House floor. This bill would have upended a long-standing law that enables the employer to designate the physician who is to provide care to the injured worker. It ignored the efficiency and cost savings to the workers compensation system of having a designated medical provider treat workplace injuries.
After much legislative arm wrestling, a bill raising disability benefit levels (HB 1113) was returned to a form with which the industry could live. Another workers' compensation bill (SB 134) requires that all expert testimony in a workers' compensation case be presented through deposition. As a practical matter, that means that the employer must present its main defense to the claim before the claim has been presented in a hearing. "Requiring the defendant to go first in a legal proceeding violates the fundamental standards of fairness and due process, will give claimants an unfair advantage, and will cause workers compensation costs to go up," said Harrold, who noted that PCI and others have asked Gov. Owens to veto the bill.
Gov. Bill Owens (R) did veto legislation (SB 25) that would have put in place automatic inflation adjustments for the cap on non-economic damages. The bill would have increased the cap on non-economic damages from $366,000 to $440,000 next year and allowed for additional increases on an annual basis. The cap on non-economic damage has been very effective at keeping Colorado's tort reform system in balance.
Other bills that failed to pass included legislation that would have: converted the Colorado workers' compensation fund, Pinnacol Assurance, to a nonprofit insurance company (SB 54); made insurers a proper party defendant when insured is sued in a damages action for negligence (HB 1095); increased the costs awarded to a plaintiff whose final judgment is less than the amount previously offered in settlement by the plaintiff (HB 1111); changed the impairment rating used to determine permanent partial disability benefits for an employee who is injured on the job (HB 1112); rolled back past construction defects reforms (HB 1295); enacted the NCOIL market conduct model law (HB 1301); and diluted Colorado's requirement that a certificate of expert review be filed at the inception of a professional malpractice lawsuit (HB 1348).
Compared to the past few legislative sessions, there was little legislation directed at Colorado's auto insurance system. Legislation to return to a no-fault system (HB 1150) was killed without receiving serious consideration. Auto insurers successfully amended legislation (HB 1250) that would have required up front disclosures about medical payments coverage. The disclosure as originally written may have frightened consumers into purchasing unnecessary coverage. The bill was changed so that the notice was more balanced and would be included in the Summary Disclosure Form that all insureds receive.
"Expected assaults on Colorado's still fledgling tort auto insurance system turned out to be the issue that wasn't in the 2005 legislative session," said Harrold. That was due in large part to an understanding that was reached early in the session by Democratic leaders that the issue merited further study, which will be achieved by the passage of a resolution (HJR 1026) calling for an interim study of the automobile insurance system. "Preserving the current tort auto insurance system that replaced the broken and wasteful no fault system and which has enabled Colorado drivers to save money by purchasing only the coverage they need remains one of our highest priorities," said Harrold.
In what best could be called "Survivor: The Colorado Legislative Session," there were many twists, turns and surprises along the road to adjournment recently, however the insurance industry successfully worked to preserve the state's stable marketplace, according to the Property Casualty Insurers Association of America (PCI).
"With the first Democrat controlled Legislature in 40 years, the insurance industry played defense for most of the session," said Michael Harrold, assistant vice president and regional manager for PCI. "Even when a bill was killed, the issue would arise, like a phoenix, in another committee or chamber. Ultimately, the combination of a coordinated and united industry lobbying effort, key strategic alliances, a new Democratic majority that struggled within its own ranks not to legislatively overreach, and the ever present threat of a Republican governor's veto pen, the industry survived a session that saw most anti-insurance bills or issues either killed, softened through amendment, or put off to another day."
Colorado's insurance scoring law, which is based on the National Conference of Insurance Legislators (NCOIL) model act, remains intact after three attempts to ban insurers use of credit information. Two bills were killed in committee, and then a late bill banning the use of credit was introduced and assigned to the committee which the Senate president, a fierce foe of insurance scoring, was a member. That third bill made it out of committee but died on the Senate floor. The issue will remain alive through the summer and into next session, because a health insurance study resolution (SJR 36) awkwardly includes a call for the study of the use of credit scoring in insurance underwriting.
Another example of the topsy-turvy nature of the 2005 session includes identity theft legislation that would allow a consumer to put a freeze on his or her credit information. Senate Bill 137 morphed from being one of the nation's worst bills on this subject from an insurance perspective to being one that excluded insurance from its provisions. Senate Bill 137 provided an insurance exemption for rating and underwriting in relation to credit reports as it passed the Senate. However, as the House passed the bill, it imposed a freeze requirement on all consumer reports, which included credit reports, loss history reports and motor vehicle records. In the final days of the session a conference committee restored the exemption for insurance rating, underwriting and claims handling and the bill was sent to the governor with those insurance exemptions intact.
Lawmakers also rejected three separate bills that would have prohibited the workers' compensation guaranty fund from seeking reimbursement from large employers. As a result of the Reliance insolvency in 2001, Colorado like many other states is facing increased unfunded liabilities. To address this situation, the Colorado fund has imposed an assessment on several large employers, which led to their repeated efforts to remove the law's net worth provision.
Workers' compensation legislation, HB 1018 originally would have allowed injured employees their choice of provider, and then was amended to require that employers offer injured workers the choice of three health care providers. The bill had its own phoenix-like qualities as it was considered on the House floor, given late status and referred back to committee, and then narrowly defeated when it was considered a second time on the House floor. This bill would have upended a long-standing law that enables the employer to designate the physician who is to provide care to the injured worker. It ignored the efficiency and cost savings to the workers compensation system of having a designated medical provider treat workplace injuries.
After much legislative arm wrestling, a bill raising disability benefit levels (HB 1113) was returned to a form with which the industry could live. Another workers' compensation bill (SB 134) requires that all expert testimony in a workers' compensation case be presented through deposition. As a practical matter, that means that the employer must present its main defense to the claim before the claim has been presented in a hearing. "Requiring the defendant to go first in a legal proceeding violates the fundamental standards of fairness and due process, will give claimants an unfair advantage, and will cause workers compensation costs to go up," said Harrold, who noted that PCI and others have asked Gov. Owens to veto the bill.
Gov. Bill Owens (R) did veto legislation (SB 25) that would have put in place automatic inflation adjustments for the cap on non-economic damages. The bill would have increased the cap on non-economic damages from $366,000 to $440,000 next year and allowed for additional increases on an annual basis. The cap on non-economic damage has been very effective at keeping Colorado's tort reform system in balance.
Other bills that failed to pass included legislation that would have: converted the Colorado workers' compensation fund, Pinnacol Assurance, to a nonprofit insurance company (SB 54); made insurers a proper party defendant when insured is sued in a damages action for negligence (HB 1095); increased the costs awarded to a plaintiff whose final judgment is less than the amount previously offered in settlement by the plaintiff (HB 1111); changed the impairment rating used to determine permanent partial disability benefits for an employee who is injured on the job (HB 1112); rolled back past construction defects reforms (HB 1295); enacted the NCOIL market conduct model law (HB 1301); and diluted Colorado's requirement that a certificate of expert review be filed at the inception of a professional malpractice lawsuit (HB 1348).
Compared to the past few legislative sessions, there was little legislation directed at Colorado's auto insurance system. Legislation to return to a no-fault system (HB 1150) was killed without receiving serious consideration. Auto insurers successfully amended legislation (HB 1250) that would have required up front disclosures about medical payments coverage. The disclosure as originally written may have frightened consumers into purchasing unnecessary coverage. The bill was changed so that the notice was more balanced and would be included in the Summary Disclosure Form that all insureds receive.
"Expected assaults on Colorado's still fledgling tort auto insurance system turned out to be the issue that wasn't in the 2005 legislative session," said Harrold. That was due in large part to an understanding that was reached early in the session by Democratic leaders that the issue merited further study, which will be achieved by the passage of a resolution (HJR 1026) calling for an interim study of the automobile insurance system. "Preserving the current tort auto insurance system that replaced the broken and wasteful no fault system and which has enabled Colorado drivers to save money by purchasing only the coverage they need remains one of our highest priorities," said Harrold.
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