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Weed is legal. Should you disclose your use on a life insurance application?

We typically write 20-30 term life policies annually for business owners and other high-net worth individuals, often as part of a buy-sell agreement or key person policy for our small business clients. Our general agency partner gives us access to a medical underwriting director with 25 years of experience, enabling us to match the right carrier with our client-specific needs and health/family history.

One new wrinkle is the legalization of recreational marijuana in California in 2018. How does a life insurance company looks at marijuana use? Here are a few examples from our medical underwriter:

Ex 1: 39 year old male, admits to smoking an occasional marijuana cigarette once a month.  Urine specimen is negative for THC.  All other underwriting criteria are standard or better.  Case will likely be STANDARD (or better).

Ex 2: 28 year old male, does NOT admit to marijuana use on his application or insurance exam.  Urine specimen is positive for THC.  All other underwriting criteria are standard or better. Case will likely be RATED or DECLINED.

Ex 3: 54 year old male, history of chronic back pain controlled with medical marijuana obtained by prescription.  No physical limitations and employed full time.  No disability or extended time off from work.  No other underwriting concerns.  Case could be STANDARD or RATED.

(putting some jargon into understandable terms):

“Standard” = not great (3rd or 4th best risk class) = more expensive.

“Rated” = a LOT more expensive.

“Declined” = might get Standard or Rated sometime in the future, (but maybe not).

If you are thinking about taking advantage of one of California’s new “green businesses,” you may want to consider first locking in a 20- or 30-year term life policy. Once in place, you will then be truly free to choose whether to use.

Those wages your employees put into commuter benefits? No longer an employer deduction.

Wait, what? Yes, you have to read that carefully. Check out the complete explanation from our friends at WageWorks. This is a 2018 little-mentioned change as a result of the Tax Cuts and Job Act (HR 1).

The employee still receives an income tax deduction on the dollars they voluntary put aside for commute-related public transit and parking. And the employer does not have to pay FICA on those funds. But the employer cannot also deduct those same wage dollars as a normal business expense.

WageWorks offers a clear example and deeper explanation here.

Our take: offering pre-tax commuter benefits is still a great (and often required) part of any employer benefit package. But the change will disproportionately affect smaller businesses, that are less likely to reap the full benefits of other business tax cuts that were part of HR 1.

 

Accessing the BlueCard PPO network outside of California

For our clients who are covered on a small business PPO plan from Anthem Blue Cross or Blue Shield of California, your network of providers extends nationwide through the BlueCard program while traveling outside of CA – or if you are based in another state. This includes those enrolled with Anthem or Blue Shield via an exchange: CalChoice or Covered CA for Small Business.

To find coverage with out of state providers, go here from any web browser.

From the big blue box in the middle of the screen, select “In the United States, Puerto Rico, and US Virgin Islands” for your location.

Enter your location (city, state or zip) and plan:

enter location and plan

Under the “Your Plan” drop down menu, you can either enter the number from your medical ID card or you can “Select by Plan Name”:

BlueCard PPO popup

The plan name to choose from the list is BlueCard PPO Basic:

bluecard ppo basic

Feel free to reach out to us at Allpointe with any questions or if you would like any assistance. We are here to bridge the gap between you and the insurance company so please don’t hesitate to call or email us!

Reach for the stars: how to use online review sites to your advantage

The monetary impact of review sites like Yelp, Angie’s List, Google, Facebook and others can be a boon (or devastating) to both new and established businesses.

Seventy-two percent of users are willing to try a business with a 3-star rating, but only 27% of users would look at a business with a 2-star rating. Every increase in overall stars leads to a 5-9% jump in revenues.

How is this an HR issue? Reviewers share their opinions based on your product…and even more importantly, on their interaction with your team. Hiring, training, and retaining engaged employees is the key starting point to better reviews. Resolving a conflict with a customer is an opportunity to convert them into a fan for life.

To learn more, please join us for a free webinar with our partners at HR Answerlink on Wednesday, September 15th. Space is limited – click below to register today.

Allpointe-Yelp-Reviews

Register Now

 

Can an employer reimburse employees for individual health plans?

In short, no.

This used to be a grey area in the tax code (although there were always potential issues with the Department of Labor). But recent rulings from the IRS and the DOL have made it very clear that this cannot be done on any sort of pre-tax basis.

Potential penalties? $36,500.  Per year.  Per employee.

So sayeth the IRS.

So concurreth the DOL.

And the use of a Health Reimbursement Arrangement (HRA) to reimburse premiums tax-free?  Also no good.

The San Francisco HCSO “loophole”

After attending the Thursday, July 14 public hearing of the Government Oversight and Audit committee, I wrote the following email to Supervisor David Campos (as well as committee members Farrell and Chiu and my home district Sup. Cohen). As with my previous email, it has also gone unanswered. I blame my long-windedness.

Dear Supervisors Campos, Chiu, Farrell and Cohen:

This is a follow up to my previous email, after I attended the public hearing re: Supervisor Campos’ proposed HCSO amendment this morning. I will first say that I do in fact agree with him on two points:

– The HCSO has been good for the City — it has vastly increased the number of individuals with access to health care and health insurance.

– Any business (restaurants or otherwise) that are charging an expressly defined “pass-through” of HCSO expenses — but can be proven to not actually make those expenditures on a multi-year basis — are committing fraud and should be held accountable.

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