Welcome! The Spindel Agency Lunch and Learn

Welcome!The Spindel Agency

Lunch and Learn

Issues, Answers and Politics

“The” Issue It Costs To Much

Source: Mercer’s 2004 National Survey of Employer-Sponsored Health Plans

6.9%

18.6%

16.7%17.1%

12.1%

10.1%

8.0%

2.1% 2.5%

0.2%

6.1%7.3%

8.1%

11.2%

14.7%

10.1%

7.5%

-1.1%

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

% Health Plan Cost Increases

Increases in Health Insurance Premiums Compared to Other Indicators, 1988-2004

12.0%32.2%

50.7%

102.3%

238.2%199.6%

170.1%149.7%

123.3%

285.2%

328.4%

0%

50%

100%

150%

200%

250%

300%

350%

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Health Insurance Premiums Overall Inflation Workers' Earnings

Source: Kaiser Foundation and Health Research and Educational TrustThe cumulative increases assume 1988 as the base.

Add an average increase of 10% inflation since 2004 and the price of healthcare has increased over

480%

Health Care Facts

• Total spending was $2 TRILLION or $6,700 per person

• In 2006, employer health insurance premiums increased by 7.7 percent

• Total health care spending represented 16 percent of the gross domestic product (GDP)• It is projected that it will reach 20% next decade

Putting The Cost In Perspective

• It represents 20.6% of our personal expenditures• 38% more than housing • 87% more what we spend on food

• 4.3 times the amount spent on national defense

• Nearly 47 million Americans are uninsured

Who Are The Uninsured in Virginia?

40% of the Uninsured Have Incomes Above 200 Percent of Federal Poverty Level

26.7

33.7

17.6

22.0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Source: Urban Institute Tabulations of the 2005 and 2006 Annual Social and Economic Supplement to the Current Population Survey

301+%FPL

201-300% FPL

100-200% FPL

<100% FPL

Uninsured In Virginia

Of Uninsured 19 to 34 Year Olds – 65% Are Above The Poverty Level

34.9

28.8

26.9

9.5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Source: Urban Institute Tabulations of the 2005 and 2006 Annual Social and Economic Supplement to the Current Population Survey

400+ %FPL

200-299% FPL

100-199% FPL

<100% FPL

It’s Broken: The Government Can Fix It!

No Shortage Of Plans!!Hillary Clinton Senator from New York • Require everyone to get health insurance, subsidized by employers and

the government; pay for it by rolling back tax cuts for households earning over $250,000 and savings in the existing system.

Barack Obama Senator from Illinois• Require that all children have health insurance; pay for it by rolling back

President Bush's tax cuts for households earning over $250,000; aims for universal coverage.

John McCain Senator from Arizona• For free-market, consumer-based system; has pledged affordable

health care for every American without a mandate; says universal health care is possible without a tax increase.

State Universal Health Plans

The Massachusetts Plan

• Massachusetts announced that the cost of its health care insurance plan will increase by 85 percent, amounting to a $400 million increase in 2009

• This makes the saying prophetic: if you think health care is expensive now, just wait until it is "free“.

Other State Plans

• Colorado - proposed a Massachusetts-style plan. It is a single-payer mandate plan that will cost the state, at a minimum, an additional $1.3 billion per year

• California - Gov. Schwarzenegger's plan met defeat in the Senate because of its costly $15 billion price tag

Logic: Setbacks On The State Level Call For National Reform

• Many call the outcomes in Massachusetts, California and Colorado a "setback" and say this is reason for health-care reform at the national level

• “If you get hurt jumping off a single-story building, would you try to jump off a 50-story building and expect a better outcome?”

• Colorado Sen. Scott Renfroe

What’s Driving The Cost

• Aging PopulaceAging Populace• Medical TechnologyMedical Technology• Defensive MedicineDefensive Medicine• Prescription Drug CostsPrescription Drug Costs• Health InsuranceHealth Insurance• Our BehaviorOur Behavior

• Shields patients from much of the true cost of care

• What insurance should be: insuring against random/unexpected events

• What it’s become: a pre-payment of routine services

• What We’ve Come From: major med policies to comprehensive benefits with POS co-pays

OUR BEHAVIOR

The Number One Issue Driving The Cost Of Health Care

• Life Style Choices

Source: IFTF, Center for Disease Control and Prevention (2005)

10%

20% 20%

50%

0%

20%

40%

60%

Access to Care Genetics Environment Behavior

Behavior – the Leading Determinant of Health Status

What’s The Solution?

The best current option for (future) lower premiums are Consumer Driven Healthcare Plans (CDHP)

The Pairing Of:

High Deductible Health Plan (HDHP)

and

A Tax-free Medical Account

• No minimum contribution

• Contributions to HSA account are 100% tax deductible

• Use it or keep it

• Whatever is left at the end of the year, you keep

• For 2008:

• Single – $2,900

• Family – $5,800

• Indexed annually

• Catch-up provision• Over age 55 by 12/31/08• $900 for employee

• $1,000 in 2009

• Eligible medical expenses before insurance deductible• Prescription drugs

• Drug cards are not allowed!

• Eyeglasses or contact lenses

• Dental expenses

• Qualified Long Term Care Insurance Premiums

• All medical expenses as defined by IRC 213(d)

• Multiple mutual funds options available depending on administrator

• Earnings on account funds are tax deferred

• No lifetime maximum

The TFA Benefits How We Can Help

Solutions Since 1928

Who We Are

Largest book of business in the region• 3000+ Group Clients

• 4500+ Individual Clients

Who We Are - Strength In Depth

Who We Are

• Commitment To

• Value Added Services

Our Services

• Flexible Benefits Administration• Customized Employee Benefits Website• Total Compensation Statements• Regulatory Expertise & Service• On-Line Enrollment

• Section 125 (Flexible Spending Accounts)

• Pre-tax premium plans (POP)

• COBRA Administration

BeneFlex

Compliance IssuesHIPAA, COBRA, FMLA, ERISA, Section 125

Total Compensation Statements

Adding Value for Your Employees

Total Compensation Statements

Technology

Accessing Your Benefits On Demand Technology

Every Participating Organization Receives A

Company Specific Login

Password Password ProtectedProtected

Personal Welcome Page

Benefit Plan CostsBenefit Plan Costs

Medical PlansMedical Plans

All Benefits In One All Benefits In One PlacePlace

You Can Obtain Premium Information

Comparison of Medical Plans

MedicalMedical

Benefit Comparison

Online EnrollmentCurrently for large employers

On-Line On-Line Enrollment ButtonEnrollment Button

On-Line Enrollment

On-Line EnrollmentEnter Enter youryour

username and username and passwordpassword

Username:Username: First initial of your first and last name along with the First initial of your first and last name along with the last five digits of your social security number – sv22160last five digits of your social security number – sv22160

Password:Password: First initial of first and last name along with the first First initial of first and last name along with the first three digits of your social security number – sv218three digits of your social security number – sv218

Step 1 – Enter/Update Personal Information

Step 2 - Health Plan Cost Calculator

Health Plan Cost Calculator

Employee chooses Employee chooses enrollment for each benefitenrollment for each benefit

Step 3 – Make Your Benefit Elections

Benefit Elections

• Comprehensive administrative tools

• Tracking of all changes

• Ad hoc report generation

HR Administrative Tool

HR Administrative Tools

The best combination of personal service and value added benefits

Long Term CareLong Term Care

InsuranceInsurance

$80,000.00$80,000.00

This is the cost This is the cost of of

oneone year in year in

a Nursing Homea Nursing Home

TRUE OR FALSE?TRUE OR FALSE?

Disability Insurance and Disability Insurance and Long Term Care Insurance Long Term Care Insurance

cover the same things. cover the same things.

FALSEFALSE

Disability Insurance provides you and Disability Insurance provides you and your family with income if you become your family with income if you become sick or injured and are unable to work. sick or injured and are unable to work. It is not designed to cover Long Term It is not designed to cover Long Term Care expenses. For example, Adult Care expenses. For example, Adult Day Care, Assisted Living Facilities, Day Care, Assisted Living Facilities, Nursing Homes and certified nursing Nursing Homes and certified nursing

assistants to care for you in your home assistants to care for you in your home with ADL.with ADL.

My health insurance orMy health insurance or

Medicare will pay for myMedicare will pay for my

Long Term Care needsLong Term Care needs

TRUE OR FALSE?TRUE OR FALSE?

FALSEFALSE

Medical coverage is designed to Medical coverage is designed to cover “routine” medical procedures cover “routine” medical procedures such as doctor’s visits, outpatient such as doctor’s visits, outpatient procedures and short term hospital procedures and short term hospital stays.stays.

Medicare will not cover the cost of Medicare will not cover the cost of Long Term Care.Long Term Care.

TRUE OR FALSE?TRUE OR FALSE?

Medicaid will cover my Medicaid will cover my Long Term Care expenses. Long Term Care expenses.

Medicaid is an option however, most people do Medicaid is an option however, most people do not find this option very appealing. Medicaid not find this option very appealing. Medicaid

provides medical assistance to needy families. provides medical assistance to needy families. It is a form of welfare. To qualify, you need to It is a form of welfare. To qualify, you need to have a very low income and few assets. have a very low income and few assets.

FALSEFALSE

Example for a husband and wife:Example for a husband and wife:Protected Assets – Protected Assets –

A house, one car, $101,640 of cash or cash A house, one car, $101,640 of cash or cash equivalents and $1,869.00 per month in income.equivalents and $1,869.00 per month in income.

WHY LTC INSURANCE?WHY LTC INSURANCE?

Long Term Care Insurance can Long Term Care Insurance can play a key role in turning a play a key role in turning a goodgood benefits package benefits package into a into a

GREATGREAT benefits benefits package.package.

WHAT IS LONG TERM CARE?WHAT IS LONG TERM CARE? Long Term Care goes beyond medical care and Long Term Care goes beyond medical care and

nursing care to include all the assistance you nursing care to include all the assistance you could need if you ever have a chronic illness or could need if you ever have a chronic illness or disability that leaves you unable to care for disability that leaves you unable to care for yourself for an extended period of time. In yourself for an extended period of time. In addition, if you require substantial supervision addition, if you require substantial supervision due to a cognitive impairment.due to a cognitive impairment.

AActivities of ctivities of DDaily aily LLiving include:iving include: EatingEating BathingBathing DressingDressing ToiletingToileting ContinenceContinence Transferring (from bed to chair)Transferring (from bed to chair)

WHY LTC INSURANCE?WHY LTC INSURANCE?It benefits your employees

LTC insurance helps your employees:LTC insurance helps your employees: Protect their retirement savings from the high cost Protect their retirement savings from the high cost

of careof care Maintain their independence by allowing them the Maintain their independence by allowing them the

choice to receive care in a wide range of settingschoice to receive care in a wide range of settings Relieve caregiver stress, both in their own family Relieve caregiver stress, both in their own family

situation and down the road should they ever need situation and down the road should they ever need care themselvescare themselves

Prepare for the unexpected, if an injury or serious Prepare for the unexpected, if an injury or serious illness forced them to need care, LTC insurance illness forced them to need care, LTC insurance would provide funding for care instead of forcing would provide funding for care instead of forcing the employee to pay out of pocketthe employee to pay out of pocket

WHY LTC INSURANCE?WHY LTC INSURANCE?It makes sense for your business

It helps prevent losses in productivity. It helps prevent losses in productivity. Employees lose time at work dealing Employees lose time at work dealing

with family LTC issues and many can’t with family LTC issues and many can’t come into work at allcome into work at all

LTC insurance helps employees remain at LTC insurance helps employees remain at work by providing resources, support and work by providing resources, support and reimbursement for care expenses reimbursement for care expenses

Perfect addition to a retirement planPerfect addition to a retirement plan

CONSIDER…CONSIDER…

57%57% of caregivers report having to of caregivers report having to go in to work late, leave early or take go in to work late, leave early or take time off.time off.

17%17% of caregivers have to take a of caregivers have to take a leave of absence.leave of absence.

16%16% of caregivers either need to quit of caregivers either need to quit or go from working full time to or go from working full time to working part time.working part time.

WHY EMPLOYEES NEEDWHY EMPLOYEES NEEDLONG TERM CARE LONG TERM CARE

INSURANCE…INSURANCE…Protect their retirement…

Your employees depend on their pension Your employees depend on their pension plans, 401K accounts and other personal plans, 401K accounts and other personal investments to fund their retirement. investments to fund their retirement.

How can they protect their hard earned How can they protect their hard earned savings from being depleted in the case savings from being depleted in the case of a LTC incident today or in the future?of a LTC incident today or in the future?

WHAT EMPLOYERS WHAT EMPLOYERS PROVIDE…PROVIDE…

EMPLOYEE NEEDEMPLOYEE NEED EMPLOYER EMPLOYER RESOLUTIONRESOLUTION

Health CareHealth Care Health Insurance PlanHealth Insurance Plan

Dental CareDental Care Dental Insurance PlanDental Insurance Plan

Income for family in case of deathIncome for family in case of death Life Insurance PlanLife Insurance Plan

Income replacement in case of Income replacement in case of disabilitydisability

Disability Insurance Disability Insurance PlanPlan

Retirement SavingsRetirement Savings 401K Program401K Program

What about….What about….

protection of their protection of their Retirement SavingsRetirement Savings??

LONG LONG TERM TERM CARECARE

LTC INSURANCE THROUGH A LTC INSURANCE THROUGH A BUSINESS…BUSINESS…

It provides valuable protection for both your employees’ needs and It provides valuable protection for both your employees’ needs and your business’ needs.your business’ needs.

1.1. Tax Deductible to CorporationTax Deductible to Corporation

2.2. Create a carve-out plan for key employees (employer can legally discriminate)Create a carve-out plan for key employees (employer can legally discriminate)

3.3. Improves work performanceImproves work performance

4.4. Attract and retain top talentAttract and retain top talent

5.5. Not income to the employeeNot income to the employee

LTC insurance premiums may be tax deductible.LTC insurance premiums may be tax deductible.

When premiums are paid by you (the employer), you When premiums are paid by you (the employer), you can deduct 100% of the premiums paid as a business can deduct 100% of the premiums paid as a business expense. expense.

Businesses that operate as Self-Employed, Subchapter Businesses that operate as Self-Employed, Subchapter C, or Partnership/S Corporation/Limited Liability C, or Partnership/S Corporation/Limited Liability Company can receive special tax considerationsCompany can receive special tax considerations

Most employees can exclude premiums from gross Most employees can exclude premiums from gross income (when paid by their employer) and are not income (when paid by their employer) and are not taxed on the LTC insurance benefits they receivetaxed on the LTC insurance benefits they receive

WHY LTC INSURANCE?WHY LTC INSURANCE?It makes sense for your businessIt makes sense for your business

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FORMFORM

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