Tag: Insurance Programs

Offering Health Insurance to Same-Sex Spouses

Under the Affordable Care Act, health insurance issuers in the individual and group markets are generally required to guarantee insurance coverage to every employer and individual that applies. Beginning in 2015, this guarantee will extend to same-sex spouses.

On March 14, 2014, the Department of Health & Human Services (HHS) announced that insurance companies offering non-grandfathered health insurance plans can no longer refuse to offer health insurance coverage to same-sex spouses. In taking this position, the HHS relied on federal regulations prohibiting health insurance issuers from employing marketing practices or benefit designs that discriminate on the basis of, among other things, an individual’s sexual orientation.

According to HHS, an issuer is considered to employ discriminatory marketing practices or benefit designs if the issuer:

  • Offers health insurance coverage to a spouse in an opposite-sex marriage; and
  • Does not offer the same coverage to a spouse in a same-sex marriage that was validly consummated in a jurisdiction where the law authorizes same-sex marriages.

Importantly, the prohibition against discriminating against same-sex spouses applies regardless of the jurisdiction in which the insurance policy is offered, sold, issued, renewed, in effect, or operated, and regardless of where the policyholder resides. This means that insurance companies must offer coverage to legally married same-sex spouses even if they live in a state that does not allow same-sex marriages.

HHS noted that its position regarding coverage for same-sex spouses does not require a group health plan to provide coverage that is inconsistent with the terms of eligibility for coverage under the plan, or that otherwise interferes with the ability of a plan sponsor to define a dependent spouse for purposes of eligibility for coverage under the plan. It only prohibits an issuer from refusing to offer the option to cover same-sex spouses on the same terms and conditions as opposite sex-spouses.

According to HHS, it is only clarifying the current regulations’ prohibition against discrimination based on sexual orientation in a manner that is consistent with the policy of ensuring that all individuals have access to health coverage. However, since “some issuers may not have understood the prohibition,” HHS is not requiring immediate compliance. Rather, health insurance issuers must implement changes for plans or policies years beginning on or after January 1, 2015.

Though fewer than half the states allow same-sex marriages, employers in every state need to be aware of health insurance requirements for same-sex spouses. Beginning in 2015, the focus will need to be on the legality of the marriage rather than the gender of the spouses.

Recent developments with the Affordable Care Act suggest that change rather than stability should be expected. At Setnor Byer Insurance & Risk, we are committed to guiding you through the changes coming in 2014 and beyond. Check back with us periodically for future informational updates about the Affordable Care Act.

If you have specific questions about the Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

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Why You Should Control Your Road Rage

Though many have heard about road rage, few truly grasp the problem. Many people don’t know that:

  • More than 1,000 deaths have been attributed to road rage since 2007
  • Over a 5 year period, reports of extremely angered drivers have doubled, increasing by 170%
  • A review of more than 10,000 incidents by the AAA Foundation for Traffic Safety found that road rage resulted in at least 218 murders and 12,610 injuries

Another thing many people don’t know is that their auto insurance will not cover bodily injury or property damage caused by their road rage. In fact, insurance companies will routinely deny these claims, not because of a specific ‘road rage’ policy exclusion, but because of the nature of road rage itself.

The National Highway Traffic Safety Administration defines road rage as an assault with a motor vehicle by the operator of one motor vehicle on the occupants of another motor vehicle. In other words, road rage is viewed as an intentional act. As far as insurance companies are concerned, this makes all the difference.

Auto insurance typically covers ‘accidents’ that result in bodily injury or property damage. So the question becomes whether road rage can be considered an accident. One court recently said no, an accident is never present when a deliberate act is performed. Since road rage does not qualify as an accident, the court ruled in favor of the insurance company. Given their intentional nature, insurance companies can also deny road rage claims under a policy’s intentional act exclusion.

Since the lack of insurance coverage affects perpetrators and their victims, it is important to avoid road rage incidents whenever possible. The AAA Foundation for Traffic Safety suggests the following:

  • Don’t Offend: avoid cutting other drivers off, driving slow in the left lane, tailgating or making gestures
  • Don’t Engage: steer clear of aggressive drivers, avoid eye contact and get help if necessary
  • Adjust Your Attitude: forget winning, put yourself in the other driver’s shoes and control your own anger

If you would like more information about auto insurance or would like help getting the coverage you need, please contact us.

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Implementing a Drug-Free Workplace Program

Though many believe substance abuse is not a problem in their workplace, statistics suggest otherwise. According to the National Institute on Drug Abuse (NIDA), nearly 75% of substance and alcohol abusers are employed. In addition to costing employers billions of dollars per year, substance abusers are more likely to:

  • Change jobs frequently
  • Be late to or absent from work
  • Be less productive
  • Be involved in a workplace accident
  • File a workers’ compensation claim

To help combat the problem, many employers have implemented a Drug-Free Workplace program. These programs incorporate various elements designed to prevent substance abusers from entering the workplace, identify and assist those already in the workplace, and eliminate continuing abusers from the workplace.

According to NIDA, employers with Drug-Free Workplace programs:

  • Report improvements in morale and productivity, and decreases in absenteeism, accidents, downtime, turnover, and theft
  • Report better health status among employees and family members and decreased use of medical benefits by these same groups

Employers can also reduce their workers’ compensation insurance premiums by implementing a Drug-Free Workplace program. For example, a 5% premium credit is available in Alabama, Florida, South Carolina and Virginia. Employers can save up to 7% in Ohio, and 7.5% in Georgia. Additionally, employers with fewer workplace accidents can also see reduced premiums due to an improved experience modification rating.

States have their own requirements for determining whether a Drug-Free Workplace program qualifies for a workers’ compensation premium credit. Since they can be very specific and technical, it is important to consult with a licensed professional prior to implementing a Drug-Free Workplace program.

If you have any questions about implementing a Drug-Free Workplace program or you would like to learn more about reducing your insurance premiums, please contact us.

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Let’s Talk About Data Security Breaches

The theft of credit and debit card information from Target’s computer systems should serve as a reminder that the risk of a data security breach must be taken seriously. Every organization must have a plan to not only prevent data security breaches, but to respond to them as well.

The first step is to identify vulnerabilities with a risk assessment. Unfortunately, this can be difficult because data security breaches can come from pretty much anywhere, including employees, laptop computers, copy machines and wireless networks. To make the process easier, organizations can perform a self-audit.

The Online Trust Alliance has come up with a series of risk assessment questions that are designed to help organizations identify vulnerabilities and gauge their level of preparedness. For example:

  • Are there any regulatory requirements that are specifically applicable to your business operations or geographic location?
  • What customer-specific data is collected? How, where and by whom is this data stored, maintained and archived? Can you identify points of vulnerability and risk?
  • Is the kind of customer-specific data you collect necessary for business operations? For example, is it necessary to request drivers’ license information or social security numbers?
  • Do you follow best practices for encryption and de-identification processes?
  • Is there an incident response team in place? Is there a clear reporting process in the event of an accidental data loss or a breach?
  • Is there a plan for communicating to employees, customers, partners, stockholders and the media in the event of a breach?
  • Are generally accepted security and privacy best practices followed? If not, why?
  • Is there a privacy policy reflecting current data collection and sharing practices, including the use of third-party advertisers and cloud service providers? Have systems been audited to confirm compliance with written policies?
  • Is there a contact person in the event of a breach? Has a person been assigned to work with the authorities, such as the FBI, Secret Service and State Attorney General Office?
  • Are you willing to sign off on your Data Incident Plan and represent to board members, investors and regulators that it contains best practices for preventing and responding to data security breaches?

This kind of self-audit should encourage discussion and evaluation of an organization’s specific data security risks. And, since the questions are general in nature, they can be used by most organizations, regardless of industry or location.

As we have seen, preventative measures are not foolproof, so organizations should also consider protecting against data security breaches with insurance. Various cyber liability products are available to protect against privacy injuries, such as identity theft, and to cover the cost of complying with various data breach notice laws.

Given the complexity of the risk, an experienced insurance agent should be consulted to ensure that adequate coverage is obtained. If you would like a professional audit please contact us to learn more.

If you would like to learn more about insuring against data security breaches, contact us.

If you would like to learn more about preventing data security breaches, take our online course Information Risk Management: Strategies for Preventing and Mitigating Information Security Breaches.

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Vehicle Sales Can Be Risky Business for Self Storage Facilities

Dealing with delinquent tenants is an unavoidable part of operating a self storage facility. Strict legal requirements make enforcing storage liens and selling tenants’ property a risky proposition. The risk is even greater for those facilities that permit the storage of motor vehicles.

Unlike other kinds of personal property, certificates of title are used to establish ownership of motor vehicles. This means that operators of self storage facilities must take the right steps to make sure the certificate of title will reflect the transfer of ownership from the delinquent tenant to the buyer. Unfortunately, re-titling a vehicle may not be quick or easy, particularly because the process isn’t always obvious and it can vary significantly from state to state.

For example, Florida requires an Application for Certificate of Title with/without Registration, though this requirement is not found in the self storage statute. By contrast, California requires an Application for Lien Sale Authorization and Lienholder’s Certification, a Certification of Lien Sale, an Application for Title or Registration, a Notice of Pending Lien Sale, a DMV letter of authorization to conduct the sale, postal receipts of all notices sent, and a Notice of Transfer and Release of Liability.

The lack of a uniform process for re-titling motor vehicles means that operators of self storage facilities must refer to and abide by their state-specific laws and requirements. However, regardless of what the process involves, operators can still take steps to make things easier while reducing the risk. For example, operators can collect vehicle-specific information and documentation when the tenant signs the lease, such as:

  • Vehicle Identification Number (VIN)
  • Vehicle registration information
  • Copy of Certificate of Title
  • License plate/tag number
  • Lien and lienholder information
  • Name and contact information for all owners of the vehicle

Operators of self storage facilities need to understand the increased effort and risk that come from storing and disposing of motor vehicles. Various insurance options specifically designed for the self storage industry are available, such as Sale and Disposal Liability Coverage.

If you would like more information about Setnor Byer Insurance & Risk’s Self Storage Insurance Program can help protect your facility, please contact us.

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Understanding the National Flood Insurance Program

Property damage caused by flooding is not covered by standard homeowners’ insurance policies, so those facing a flood risk need a separate flood insurance policy. The National Flood Insurance Program (NFIP) provides access to affordable, federally backed flood insurance.

What is a Flood?

The NFIP defines a flood as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:

  • Overflow of inland or tidal waters;
  • Unusual and rapid accumulation or runoff of surface waters from any source;
  • Mudflow; or
  • Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.

What is Covered?

A flood insurance policy generally covers physical damage to building or personal property directly caused by a flood. The NFIP offers coverage for Building Property and Personal Property (contents), which must be purchased separately.

Building Property coverage generally insures:

  • the building and its foundation
  • electrical and plumbing systems
  • central air conditioning equipment, furnaces and water heaters
  • refrigerators, cooking stoves and built-in appliances
  • permanently installed carpeting over an unfinished floor
  • permanently installed paneling, wallboard, bookcases and cabinets
  • window blinds
  • detached garages (up to 10 percent of Building Property coverage)
  • debris removal

Personal Property coverage generally insures:

  • personal belongings such as clothing, furniture and electronics
  • curtains
  • portable and window air conditioners
  • portable microwave ovens and portable dishwashers
  • carpets not covered by the Building Property policy
  • washers and dryers
  • food freezers and the food in them
  • certain valuable items such as original artwork and furs (up to $2,500)

What is Not Covered?

Neither type of coverage protects against:

  • damage caused by moisture, mildew or mold that could have been avoided
  • currency, precious metals and valuable papers
  • property and belongings outside of a building, such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs and swimming pools
  • living expenses, such as temporary housing
  • financial losses caused by business interruption or loss of use of insured property
  • most self-propelled vehicles such as cars, including their parts

If you would like more information about the National Flood Insurance Program or are interested in obtaining flood insurance, please contact us.

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Data Security Breaches: Lessons from 2013

They say that those who fail to learn from history are doomed to repeat it, and 2013 provided many lessons for those wishing to avoid a data security breach. Let’s review some of 2013’s data security breaches so that they do not have to be repeated in 2014.

Target. During the peak of the 2013 holiday season, Target suffered what may be one of the largest data security breaches in U.S. retail history. Target’s breach involved the credit and debit card accounts of about 40 million customers. Though Target believes the data remains safe because it was strongly encrypted, it may be used to gain access to customers’ accounts. There are estimates that this breach may end up costing Target billions of dollars.

Adobe. Adobe Systems, Inc. suffered a data security breach that compromised nearly 3 million records. Hackers were able to access customers’ IDs, encrypted passwords, names, encrypted credit or debit card numbers, expiration dates and other information related to their orders.

Facebook. Facebook was targeted in a sophisticated attack when a handful of employees visited a website that was compromised. This website hosted an exploit which allowed malware to be installed on employee laptops, even though they were running up-to-date anti-virus software. Facebook analyzed the source of the attack and discovered a previously unseen way to bypass security measures and to install the malware.

Washington State Courts. The Washington State Administrative Office of the Courts suffered a security breach on its public website. Though no court records were altered and no personal financial information is maintained on the website, the breach may have exposed up to 160,000 social security numbers and 1 million driver license numbers.

Twitter. After detecting unusual access patterns, Twitter discovered unauthorized attempts to access user data. According to Twitter, approximately 250,000 users may have had their information accessed by the attackers, including their usernames, email addresses, session tokens and encrypted/salted versions of passwords. These users had their passwords reset and their session tokens revoked by Twitter.

New York Times. Chinese hackers infiltrated The New York Times’ computer systems and obtained corporate passwords for its reporters and other employees. According to The New York Times, over the course of three months, 45 pieces of custom malware were installed on their network and used to gain access to computers. To get rid of the hackers, The New York Times blocked the compromised outside computers, removed every back door into its network, changed every employee password and wrapped additional security around its systems.

Evernote. Evernote appears to have been the victim of a coordinated attempt to access secure areas of its network. Their investigation revealed that hackers were able to access user information, including usernames, email addresses and encrypted passwords. Though Evernote believes that the passwords remain protected by encryption, all users were required to reset their account passwords.

These incidents show that data security breaches can happen to any organization, and that they can be very costly. Every organization must be proactive in protecting against data security breaches. Though protective measures should cover everything from the wireless network to the copy machine, organizations should also consider protecting against data security breaches with insurance.

If you would like to learn more about insuring against data security breaches, contact us.

If you would like to learn more about preventing data security breaches, take our online course Information Risk Management: Strategies for Preventing and Mitigating Information Security Breaches.

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Shopping for Insurance: Quality versus Cost

People typically purchase insurance because they have to, not because they want to. For the most part, consumers are happy to obtain the minimum required insurance coverage at the lowest price they can find. That is, until a claim comes along. Only then do they discover that buying the cheapest insurance available wasn’t such a bargain after all.

The quality versus cost argument is nothing new especially when it comes to insurance. Consumers who pay less tend to get less, whether in the form of coverages, limits or financial security. And, when people choose cost over quality, it usually means they are uninformed about what they really need.

As a full-service independent insurance agency, it is our job to help our clients understand their insurance needs. We evaluate, compare and quote various options from multiple insurance companies so that our clients have the right information before making a decision. Though many still choose cost over quality, it is important that they understand what they may be sacrificing.

Low Premiums

Would you rather have automobile insurance that protects you from damage caused by someone who is uninsured or underinsured? Uninsured Motorist Coverage is commonly excluded from a policy to reduce the premium. Rejecting GAP coverage or electing non-stacked coverage are other ways to save money. But these choices come with a risk. When shopping for insurance it’s better to determine what coverage is desired, see how much that coverage would cost, and work with an independent insurance agent to help get the coverage you need at a cost you can afford.

Financial Stability

Although cost is important, the financial strength of an insurance company may be more important. Financially weak insurance companies are more likely to become insolvent or go bankrupt, which means that their policyholders are less likely to get their claims paid. Though purchasing insurance from a financially weak company may be cheaper, how valuable is the money saved on premium if there is no money to pay a claim? An independent insurance agent can help you evaluate the financial stability of the insurance companies you are considering.

Customer Service

Insurance companies don’t typically assign an agent to their customers. Each time you call you speak to a different person which means you have to explain your situation over and over. Look for an agent that offers personalized service. Those are the agents who are willing to go the extra mile to get you what you need. For example, at Setnor Byer Insurance & Risk, our commercial clients enjoy complimentary access to our risk management services to help them manage the risks associated with owning a business.

A solid understanding of your insurance needs is the key to overcoming the quality versus cost argument. An experienced and reputable independent insurance agent can help you purchase insurance that is both economical and effective.

If you would like more information about our insurance products, please contact us.

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Getting Rid of Consumer Report Information with the Disposal Rule

Businesses commonly use consumer reports when deciding whether to make a job offer or extend a line of credit. In the wrong hands, consumer reports may also be used to commit fraud and identity theft. This is why the Federal Trade Commission (FTC) enacted the Disposal Rule.

The authority for the Disposal Rule comes from the Fair and Accurate Credit Transactions Act (FACTA), which requires proper disposal methods by those who use consumer information from consumer reports for business purposes. As required by FACTA, the FTC’s Disposal Rule requires the use of reasonable disposal measures to protect against unauthorized access to or use of consumer information. Individuals and businesses of any size that use consumer reports for business purposes must comply with this rule

The Disposal Rule applies to consumer reports or information that comes from consumer reports. Under the Fair Credit Reporting Act, consumer reports include information obtained from a consumer reporting company that is used or expected to be used for various reasons, such as establishing a consumer’s eligibility for credit, employment or insurance. Credit reports and credit scores are consumer reports. Reports with information relating to employment, check writing history, insurance claims, residential or tenant history and medical history are also consumer reports.

The Disposal Rule, which simply requires reasonable disposal measures to prevent unauthorized access to or use of consumer information, is designed to be flexible. The rule allows organizations and individuals to determine what measures are reasonable by considering the sensitivity of the information, the costs and benefits of different disposal methods and changes in technology.

Under the rule, reasonable measures may include:

  • burning, pulverizing or shredding of papers containing consumer information so that the information cannot practicably be read or reconstructed.
  • destroying or erasing electronic media containing consumer information so that the information cannot practicably be read or reconstructed.
  • after due diligence, hiring a third party to properly dispose the consumer information. Due diligence could include reviewing an independent audit of the disposal company’s operations and/or its compliance with this rule, checking references, requiring certification by a recognized trade association or taking other appropriate measures to determine the competency and integrity of the disposal company.

According to the FTC, these examples are illustrative only and are not exclusive or exhaustive methods for complying with the Disposal Rule.

The Disposal Rule is but one aspect of protecting against a data security breach. Organizational protective measures should cover everything from the wireless network to the copy machine, and should also include insurance.

Various cyber liability products are available to protect against privacy injuries, such as identity theft, and to cover the cost of complying with various data breach notice laws. Given their complexity, an experienced insurance agent should be consulted to ensure that adequate coverage is obtained.

If you would like to learn more about insuring against data security breaches, contact us.

If you would like to learn more about preventing data security breaches, take our online course Information Risk Management: Strategies for Preventing and Mitigating Information Security Breaches.

If you would like to subscribe to our newsletters please click here.

Final Rules Issued for Mental Health Parity and Addiction Equity Act

The Departments of Labor, Health and Human Services and the Treasury issued final rules implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Act). Though interim final rules implementing the Act were published and became effective in 2010, these final rules will become effective 60 days after their November 13, 2013 publication date.

Under the Act, group health plans and group and individual health insurance coverage are required to treat mental health and substance use disorder benefits on par with medical/surgical benefits. Though the Act does not require group health plans to provide mental health benefits or substance use disorder benefits, if they are provided, financial requirements and treatment limitations cannot be more restrictive for mental health and substance use disorders than they are for medical/surgical benefits.

Financial requirements include deductibles, copayments, coinsurance and out-of-pocket maximums, but do not include aggregate lifetime or annual dollar limits. Treatment limitations include limits on the frequency of treatment, number of visits, days of coverage, days in a waiting period, and other similar limits on the scope or duration of treatment.

According to a press release issued by the administration, the final rules include specific consumer protections, such as:

  • Ensuring that parity applies to intermediate levels of care received in residential treatment or intensive outpatient settings;
  • Clarifying the scope of transparency required by health plans, including the disclosure rights of plan participants, to ensure compliance with the law;
  • Clarifying that parity applies to all plan standards, including geographic limits, facility-type limits and network adequacy; and
  • Eliminating an exception to the existing parity rule that was determined to be confusing, unnecessary and open to abuse.

Health and Human Services Secretary Kathleen Sebelius said, “This final rule breaks down barriers that stand in the way of treatment and recovery services for millions of Americans. Building on these rules, the Affordable Care Act is expanding mental health and substance use disorder benefits and parity protections to 62 million Americans. This historic expansion will help make treatment more affordable and accessible.”

The final rules generally apply to group health plans and health insurance issuers offering group health insurance coverage for plan years beginning on or after July 1, 2014; however, they do not apply to small employers with between 2 and 50 employees. Since the Affordable Care Act extended the Act to grandfathered and non-grandfathered individual health insurance coverage, the final rules apply to individual coverage with policy years beginning on or after July 1, 2014.

At Setnor Byer Insurance & Risk, we are committed to guiding you through the constantly changing health care reform landscape. Check back with us periodically for future informational updates.

If you have specific questions about the Mental Health Parity and Addiction Equity Act or the Affordable Care Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

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