1st Insurance of Mason City, Iowa Protection & Security Since 1921
 
     
 
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What's New at 1st Insurance?

Be Smart with Workman's Compensation
Watch Out for Hold Harmless Agreements
Employee Benefit Costs Got You Down?
Key Employee Protection
Medicare Supplement Coverage
Long Term Care
Term Life Insurance
Improvements and Betterments
Host Liquor Liability
Employee Dishonesty
Functional Replacement Cost
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1986
Iowa Extension of Coverage-Iowa Code Chapter 509B
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
Family Medical Leave Act of 1993 (FMLA)
Iowa's Pregnancy Leave Law
Dependent Children and Health Insurance
Leave of Absence Provisions
Be Smart with Workman's Compensation
Workers compensation can be one of the most expensive insurance coverages a business purchases. Adverse loss experience can drive premiums sky high. Contact a 1st Insurance representative to discuss ways to control experience modification factors and lower your work related injury cost.


Watch Out for Hold Harmless Agreements
Everyone is interested in transferring risk. Unfortunately, this can work to your detriment if you are asked or required to assume something you hadn't planned on. If you are asked to sign a HOLD HARMLESS AGREEMENT, contact a 1st Insurance representative to review the agreement and advise you on the insurance ramifications.


Employee Benefit Costs Got You Down?
There are some approaches you can take to control your employee benefit cost. If your situation warrants, you can take advantage of risk management techniques so that you can benefit from good claims experience and avoid financial disaster in case of adverse losses. Contact a 1st Insurance representative for details.


Key Employee Protection
One of the most important assets of your company are your employees. What are you to do if one of your most valuable employees dies or is disabled? Contact a 1st Insurance representatives to discuss protection.
Medicare Supplement Coverage
Medicare supplement insurance is private insurance designed to help pay for some of the gaps in Medicare coverage, such as hospital deductibles and excess physicians' charges. These policies do not cover long-term care expenses. However, of the standardized Medicare supplement policies, Plans D, G, I and J do contain an at-home recovery benefit that may pay up to $1,600 per year for short-term, at-home assistance with activities of daily living for those recovering from an illness, injury or surgery.

Medicare consists of Part A, Hospital Services, and Part B, Medical Services. Hospital Services include hospitalization, skilled nursing facilities, blood while hospitalized, and hospice care. Medical Services include medical expenses in or out of the hospital, outpatient hospital treatment, blood, clinical laboratory services, and home health care including necessary skilled care and durable medical equipment. Medicare does not cover at-home recovery services, foreign travel, extended outpatient prescription drugs, or preventative medical care. Within the Medicare payment system there are deductible and cost sharing provisions, as well as, limitations on amounts of Medicare payments for given procedures or treatments.

The purpose of a Medicare Supplement insurance policy is to pay the Medicare deductibles, Medicare co-insurance deductions, and excess covered charges that have limits specified by Medicare. Some supplemental plans will also pay for emergency care services while outside the USA, prescription drugs and preventative care. Since there are ten standard plans available, different provisions provide for each of the ten plans, which are designated as Plans A, B, C, D, E, F, G, H, I, and J. Most insurance companies will offer one or more of these standard plans. Rates for the standard plans will differ between companies.

Medicare supplement plans are not medically underwritten if purchased within 6 months of your 65th birthday. So despite any health conditions you may have you can obtain coverage if you act within that time frame. The biggest choice you will have to make is to decide the agent, plan, and insurance company you wish to deal with.

We represent Wellmark (Blue Cross/Blue Shield) and the other major providers of medicare supplement insurance. We can advise you on the best plan for you based on your health and financial situation.

To get further details and information, contact a 1st Insurance representative today.


Long Term Care
As of February 1999, a large private room at a Mason City, Iowa nursing home costs $92 a day or $33,580 a year. A double room is $73 a day ($26,645 a year). The odds are, many of us will be in a nursing home at some point, perhaps for several years.

Skilled nursing care in your home is probably going to be in excess of $10,000 a year.

Nationally, one-third of all nursing home expenses are paid out-of-pocket by individuals and their families, and about half are paid by state Medicaid programs. Long term care expenses are generally not paid by Medicare, Medicare supplement insurance, or a major medical health insurance provided by an employer or purchased individually. Medicare will cover the cost of some skilled care in approved nursing homes or in your home, but only in certain siuations. Further, Medicare's skilled nursing facility (SNF) benefit does not cover general "nursing home" care. The SNF benefit is a "post-hospital" benefit, which only covers a relatively intensive level of skilled care furnished during a brief convalescent period after an acute care stay in a hospital. Medicare does not cover homemaker services.

Medicare supplement insurance (see article on this page) is private insurance designed to help pay for some of the gaps in Medicare coverage, such as hospital deductibles and excess physicians' charges. These policies do not cover long-term care expenses. However, of the standardized Medicare supplement policies, Plans D, G, I and J do contain an at-home recovery benefit that may pay up to $1,600 per year for short-term, at-home assistance with activities of daily living for those recovering from an illness, injury or surgery.

Medicaid pays for nearly half of all nursing home care. Medicaid may also pay for some community-based services. To receive Medicaid assistance, you must meet federal poverty guidelines for income and assets and may have to "spend down" or use up most of your assets on health care. (Some assets, such as your home, may not be counted when determining Medicaid eligibility.) When you have spent down your assets, you then will be eligible for Medicaid. Many people begin paying for nursing home care out of their own pockets and spend down their financial resources until they become eligible for Medicaid. They then turn to Medicaid to pay part or all of their nursing home expenses. You should contact your local social security office for information on Medicaid eligibility. (In Mason City, they are located at 208 North Adams, telephone number is 641-423-4325.)

When buying long-term care insurance, there are important policy provisions to consider. Avoid a policy which requires prior hospitalization before nursing home benefits are paid. Policies sold several years ago often had such a provision. The better approach is to consider a policy which determines eligibility of benefits based upon the inability to perform activities of daily living, commonly known as ADLs. Generally speaking, the most common ADLs used by insurance companies are bathing, continence, dressing, eating, toileting and transferring. Typically, benefits are payable when a person is unable to perform a certain number of the ADLs, such as three of the six or two of the six. Note in the policy the definition of what it means by the inability to perform a particular activity of daily living.

Long-term care policies can have elimination periods ranging from 20 to 365 days, meaning that no benefit is paid until the insured is confined to a nursing home beyond the elimination period. Once benefits commence, there will be a maximum payment period ranging from one year to life. Policies can also have provisions to increase benefits based on inflation. Once you are confined to a nursing home, premiums should be waived by the insurer.

Depending on the company, optional benefits may be available. These include spouse discount, third party notification, restoration of benefits, nonforfeiture benefits, and premium refund upon death.

We represent Wellmark (Blue Cross/Blue Shield) and other quality companies. We will provide a comparative analysis of plans best suited for your health and financial situation. To determine what's best for you and your family, and considering your financial situation, you should sit down with your agent for a complete review. To get further details, contact a 1st Insurance representative today.
Term Life Insurance
It seems as though term life insurance is improving all the time. Companies have compiled more statistics on the effects on longevity of high blood pressure, diabetes, excess weight and other medical conditions. This information has led to more liberal underwriting and lower rates.

Different types of term life plans are available, ranging from plans designed to renew at the same level of coverage each year with an increasing premium, to fixed premium plans with decreasing coverage each year, and level premium and coverage for 5, 10, 15, 20, 25, or 30 years. Companies provide discounts for non smokers and insureds considered qualifying as "preferred". Because cost of insurance is relatively low, plan features can be important. The selected plan should be renewable and convertible. Depending upon the individual's situation, coverage for the spouse or children may be important and the ability to increase coverage when significant events occur (such as marriage or the birth of a child). There are a number of quality companies offering plans so it can be confusing and complicated to compare illustrations of coverage.

We represent the major insurance companies providing quality plans at competitive rates. We provide a rate comparison so that you can determine which plan best fits your situation.

To get further details and information, contact a 1st Insurance representative today.
Improvements and Betterments
If you are a building tenant and are making some building changes to better accommodate your business, you need to make some insurance changes to protect your investment. "Improvements and Betterments" coverage can be endorsed to your business insurance.

If you are the building owner, you also need to review your building insurance to make sure your coverage amount is sufficient to avoid any penalties because of underinsurance due to the building value being enhanced because of improvements. Contact 1st Insurance to discuss this coverage.
Host Liquor Liability
Planning a holiday party where alcohol is being served? If you are not in the liquor or beer business and are not making a charge for drinks, you should not have a liability insurance exclusion for this activity. If such an event is in the future, contact 1st Insurance to review your policy.
Employee Dishonesty
It's not unusual to read of a trusted long term employee being caught stealing from their employer. Most businesses have insurance to protect them. However, in our modern, sophisticated current world, new forms of thievery are occuring. Contact 1st Insurance for information on Identity Theft and Theft by Computer.
Functional Replacement Cost
If your business building is an older building with a high replacement cost and a lot more space and features than you need you should consider providing functional replacement cost coverage. This would be especially true if the new building you would construct in the event of an insured loss would be smaller and have a lower cost than replacing your current building. Insuring for functional replacement cost could lower your insurance cost because of the smaller amount of needed coverage. There are some potential pitfalls you should be aware of; be sure to have a good estimate of the new building cost and keep it updated for inflation (don't forget architect's and engineer's fees), and you must include the cost of demolition and debris removal in the insurance amount. The rate charged by your insurer will be higher for functional replacement cost, so a careful evaluation of all factors is required. Call 1st Insurance for assistance.
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1986
COBRA requires that all employers (except the Federal Government, the District of Columbia, and churches) who had twenty (20) or more full-time employees during at least half of the preceding year to offer an extension of group health coverage to any individual covered under a group health plan prior to a qualifying event. Qualifying events include termination of employment (voluntary or involuntary), divorce or legal separated spouse, widowed spouse, disability, spouse of employee electing Medicare, employer filing Chapter 11 Bankruptcy Petition, or an ineligible dependent. Please note the following: • Part-time employees are counted as fractional employees depending upon hours worked per week when determining if an employer is subject to this law. • COBRA must be elected within 60 days of the later of the date the group coverage terminates or the date notice of termination of coverage is provided by the employer. • Continued coverage may be elected for 18 months and in certain situations up to 36 months. • Those electing continued coverage pay the full group rate premium. The employer may also charge an additional 2% administration fee. Premiums are paid to the employer. • Responsibility for compliance with this law rests with the employer relative to employee notification and strict timing regulations. For more information, please see the U.S. Department of Labor’s website (www.dol.gov/ebsa/newsroom/fscobra.html). **This is a brief summary of the above topic and does not provide legal advice. Please consult with your attorney. **


Iowa Extension of Coverage-Iowa Code Chapter 509B
All group contracts must comply with the Iowa Extension of Coverage requirement, including those with 2-19 employees. Iowa Code states that an employer that complies with COBRA will be deemed to be in compliance with this law. Under this law, employees and affected dependents that are continuously insured by the employer’s group coverage during the entire three-month period immediately preceding termination of employment (including layoff and approved leave of absence) must be offered continued coverage for up to 9 months from the date the employee’s coverage would have otherwise ended. Please note the following: • Those electing continued coverage pay the full group rate premium. Premiums are paid to the employer. • Offering continuation coverage to spouse/dependents is required upon termination of employment, death of employee, and dissolution of marriage of an employee. • Continuation must be requested by the member in writing to the employer within 10 days following the latter of the date of termination or the date the employer gives notice of the right of continuation benefits. • Responsibility for compliance with this law rests with the employer relative to employee notification and strict timing regulations. For more information, please see the Iowa Code Chapter 509B. **This is a brief summary of the above topics and does not provide legal advice. Please consult with your attorney. **


Health Insurance Portability and Accountability Act of 1996 (HIPAA)
HIPAA applies to employers of all sizes and to all group health plans. HIPAA is a broad law that offers several provisions for protect employees in regard to health insurance. Here are some of the highlights: • Non-Discrimination – Group health plans may not exclude an otherwise eligible individual or their dependent based on health status or medical history. • Special Enrollment Periods – Group health plans must have special enrollment periods for members that have lost eligibility for other coverage and for marriage, birth, and adoption or placement for adoption. • Pre-existing Condition Exclusion Period Limitations – Limited to 12 months for new hires and special enrollees. Limited to 18 months for late enrollees with a maximum look-back period of 6 months. Pre-existing waiting periods may not be applied to pregnancies, newborns or adopted children if the child is covered within 31 days of birth/placement. • Credit for Prior Coverage – Credit must be given for prior continuous coverage (defined as coverage with no more that a 63-day break in coverage) and pre-existing condition waiting periods must be reduced by prior coverage. • Certificates of Creditable Coverage – Group health plans must provide a written certificate of coverage when the individual is no longer covered under the plan or becomes eligible for COBRA or Iowa coverage continuation. • Privacy Components – Employers must keep all employee medical information private and confidential at all times. It is recommended that all medical information remain separate from other employee information and under lock to maintain confidentiality. For more information, refer to www.dol.gov. **This is a brief summary of the above topic and does not provide legal advice. Please consult with your attorney. **


Family Medical Leave Act of 1993 (FMLA)
Employers that employ 50 or more employees for at least 20 work weeks in the current or preceding calendar year must comply with FMLA. FMLA requires that employers grant eligible employees up to 12 workweeks of unpaid leave during any 12 month period for the following situations: • Birth or placement of a child for adoption or foster care • To care for the employee’s parent, spouse or child who has a serious health condition • Medical leave if the employee is unable to work due to a serious medical condition. For details, definitions, and more information, refer to www.dol.gov. **This is a brief summary of the above topic and does not provide legal advice. Please consult with your attorney. **


Iowa's Pregnancy Leave Law
Iowa's pregnancy leave law applies to employers with four employees or more, and requires that written and unwritten employment policies and practices involving matters such as the commencement and duration of leave, the availability of extensions, the accrual of seniority and other benefits and privileges, reinstatement, and payment under any health or temporary disability insurance or sick leave plan, formal or informal, must be applied to a disability due to the employee's pregnancy or giving birth on the same terms and conditions as they are applied to other temporary disabilities. In any event, the employee must be permitted up to eight weeks of leave for pregnancy-related disability, as needed. For more information, please see the Iowa Code Chapter 216. **This is a brief summary of the above topics and does not provide legal advice. Please consult with your attorney. **


Dependent Children and Health Insurance
Once a dependent reaches the maximum age of 19, he/she must either be a full-time student or be disabled in order to retain coverage as a dependent. Verification notices are normally sent out by the group insurance company a few months prior to the dependent's birth date or target termination date. Please make sure that your employees who have college age dependents watch for these questionnaires and that they return them to the insurance company. If these questionnaires are not returned to the carrier, then the dependent is automatically taken off the plan. Dependent cancellation notices and/or certificates of creditable coverage are then generated indicating termination, but many of your employees are not reading these notices. To get back on the plan later, these dependents may be considered "late entrants" and may have pre-existing condition waiting periods. Claims may be denied. Please educate your members to watch for these notices.
Leave of Absence Provisions
Many employers have questions regarding employees that are not actively at work due to disability, worker compensation or for other reasons and how their group insurance benefits should be handled while they are not at work. Here are a few items to consider regarding these individuals: * Most insurance carriers have an actively at work provision so make sure you are complying with these provisions. Any deviation from this actively at work provision must be approved by the carrier(s). A reasonable period of time to allow an employee to remain on the benefit plan(s) could be anywhere from one to three months. * Employers with over 50 employees should make sure they are complying with the Family Medical Leave Act as far as length of continuation for benefits. * If you allow employees to continue benefits during a leave of absence, we suggest you include a formal policy in your employee handbook so you are consistently applying the policy. You may want to work with your corporate lawyer on the language/provisions that is best suited for your business. Again, these provisions should be approved by your carrier(s). * Typically your group insurance will have the following language: "Employees on Worker's Compensation may be covered as long as the account still views them as ELIGIBLE employees. If the account has terminated the employee, COBRA or Iowa Extension of Coverage may be offered. If the account offers coverage for employees on Worker's Compensation, the rule must be consistently applied. Worker's Compensation documentation must be submitted to establish eligibility." Please contact us if you have questions or need assistance in having these provisions approved by your carrier(s).
 
 
 
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