IRS Address Taxation of Fixed Indemnity Benefits

DOL Issues Fixed Indemnity Taxation Memorandum
According to this guidance, if an employee is not taxed on the premiums for fixed indemnity health coverage (the premiums are paid by the employer or by employees on a pre-tax basis through a cafeteria plan), any payments from the coverage must be included in the employee’s gross income and wages. These same rules also apply to wellness programs that provide fixed indemnity benefits for engaging in wellness activities.

ACTION STEPS

The IRS’ memorandum does not address how employers should administer fixed indemnity payments that are taxable to employees. When employees are not taxed on the premiums for fixed indemnity coverage, employers should work with their carriers to implement a process for tax withholding and reporting.

To avoid these tax issues, employers should consider requiring that employees pay for their fixed indemnity coverage on an after-tax basis outside of their cafeteria plans.

Fixed Indemnity Health Coverage

Fixed indemnity health coverage pays a fixed dollar amount for certain health-related events (for example, $100 for each medical office visit and $200 for each day in the hospital), policies pay regardless of the amount of medical expenses that the individual actually incurs. Employers sometimes offer fixed indemnity health coverage to their employees in addition to their group medical plan.

Section 105(b) of the Internal Revenue Code (Code) states that the amounts that an employee receives through employer-provided accident or health insurance are not taxable if the amounts are paid to reimburse medical care expenses that were actually incurred. Because benefits under a fixed indemnity plan are not related to medical expenses that were actually incurred, there has been some confusion regarding the tax treatment of these payments.

According to the IRS’ memorandum, the tax status of the payments under fixed indemnity health coverage depends on how the premiums are paid.

  • The payments are not taxable if the coverage is paid by employees on an after-tax basis. For example, if a fixed indemnity plan with premiums paid on an after-tax basis paid $200 for an office visit and the covered individual’s unreimbursed medical costs for the visit were $30, the $200 would be excluded from income.
  • However, if the coverage is paid by the employer tax-free or if employees pay for the coverage on a pre-tax basis through a cafeteria plan, any payments from the plan are taxable and must be included in employees’ gross income and wages (regardless of the amount of medical expenses actually incurred).
Payment Method Premiums Taxed? Payments Taxed?
Employee paid, after tax (or employer paid and imputed as taxable income to employees) Yes No
Employee paid, pre-tax (through a Section 125 plan) No Yes
Employer paid (without imputing payment as taxable income to employees) No Yes

When payments from fixed indemnity health coverage are taxable, they are subject to income tax and employment tax withholding. This may raise administrative issues for employers because the payments under fixed indemnity coverage are usually controlled by the insurance carrier, not the employer.

Thus, when fixed indemnity payments are taxable, employers may need to work with the carriers to determine a process for tax withholding.

Wellness Programs

The IRS’ memorandum also addresses wellness programs where employees pay a pre-tax premium to participate. Because this type of wellness program design is uncommon, the IRS’ guidance appears to be targeted at fixed indemnity plans that label themselves as wellness programs. These wellness programs pay fixed indemnity benefits for participating in the program (for example, $100 for completing a health risk assessment), without regard to the amount of medical expenses incurred by the employee. The IRS concluded that these fixed indemnity benefits are taxable and should be included in employees’ gross income and wages.

Guidance: Five Scenarios

To provide guidance on this issue, the Office of Chief Counsel (OCC) considered five different scenarios in which an employee receives cash payout benefits from a fixed-indemnity plan. The Memorandum makes clear that its conclusion in each of the five scenarios derives from the fact that a fixed-indemnity plan, unlike traditional insurance, pays a benefit that bears no relationship to the amount of health care expenditures incurred by the employee. Whether the benefits are taxable ultimately depends on whether or not the premiums were paid from an amount included in the employee’s compensation. If not, then the benefits are taxable.

Scenario One – 1

Under the first scenario proposed by the OCC, an employer gives all employees the opportunity to participate in a fixed-indemnity plan. Employees pay premiums for the plan with after-tax dollars: the employer withholds the premiums from the employee’s salary, but the amount of the premiums are included in the employee’s compensation. The plan pays employees $100 per medical office visit and $200 for each day in the hospital. The OCC concludes that these payments from the plan are excludible from income because the premiums had been included in the employee’s compensation.

Scenario Two – 2

Scenario two is the same as scenario one, except that the employee’s premiums are paid by the employer at no cost to the employee. This factor changes the analysis. Under this scenario, the OCC concludes that any payments from the plan are included in the employee’s gross income.

Scenario Three – 3

Scenario three is also identical to scenario one, except that the premiums are paid through a salary reduction arrangement under a section 125 cafeteria plan (and, as a result, the premiums are excludible from the employee’s income). The OCC concludes that, as is the case with scenario two, any payments from the plan are includible in the employee’s income.

Scenarios Four and Five

Scenarios four and five address employee wellness plans. In both scenarios, as is the case with scenario three, employees who elect to participate in the plans do so by paying premiums through a salary reduction arrangement under a section 125 cafeteria plan. Under scenario four, the employee receives a cash payment of $100 for completing a health risk assessment; $100 for participating in prescribed health screenings; and $100 for participating in prescribed preventative activities. Under scenario five, the employee simply receives a cash payment each pay period for participating in the wellness plan. In both scenarios, the OCC concludes that the payment from the plans is taxable income.

The Memorandum also addresses the treatment of the payments from the indemnity plans for purposes of employment taxes: Social Security (FICA), unemployment and withholding taxes. The IRS concludes that, in scenarios two, three, four, and five, the benefits paid are subject to FICA and unemployment taxes, and are also subject to withholding.

Conclusion

While this guidance coheres with previous analysis on the status of fixed-benefit health plans and does not disturb the larger question of the exclusions from income under sections 104, 105 and 106 of the Internal Revenue Code regarding employer contributions, it is notable because for the first time, the IRS has addressed the tax treatment of payments under an indemnity plan. Employers should review the Memorandum closely as they design their benefit plans for 2018.

ADDITIONAL INFORMATION

Information contained in this Important Updates—Health-Benefits – Fixed Indemnity Benefits is not intended to render tax or legal advice. Employers should consult with qualified legal and/or tax counsel for guidance with respect to matters of law, tax and related regulations. Creative Benefits & Insurance Solutions provides comprehensive benefits advice and administrative services with respect to all forms of employee benefits, risk management, property & casualty, workers’ compensation, staffing insurance and human resources services. For additional information about our services, please contact us at (586) 992-0404 or email us at service@cbis-lc.com.

DMC Now Out-of-Network With Humana

In the Know & How It Applies |   OCTOBER |  2016

As of October 1, 2016 all of the DMC’s doctors, hospitals, ambulatory surgery centers, urgent care centers, imaging centers, laboratories and home health centers nationwide, are now Out-of-Network for all patients with Humana.  This includes:

  • Humana Commercial
  • Humana Medicare Advantage
  • Humana Medicaid
  • Humana on the Exchange
  • Humana TRICARE

 What DMC centers are affected? 

  • DMC Children’s Hospital of Michigan
  • DMC Detroit Receiving Hospital
  • DMC Harper University Hospital
  • DMC Heart Hospital
  • DMC Huron Valley- Sinai Hospital
  • DMC Hutzel Women’s Hospital
  • DMC Rehabilitation Institute of Michigan
  • DMC Sinai-Grace Hospital

The DMC announce earlier this month that after repeated efforts to find common group, they were unable to reach an agreement on a new contract.

Are any other carrier impacted by this change?

The DMC currently participated with many major health insurance plans other than Humana such as (to name a few):

  • Aetna
  • Blue Care Network
  • Blue Cross Blue Shield of Michigan
  • Cofinity PPO
  • HAP
  • Priority Health
  • United Health Care

For a complete listing of participating insurance plans, please visit the DMC’s website or click on the link below:

DMC Participating Insurance Plans

What this means for clients/members: 

  • Emergency Care: Emergency access is NOT impacted. Clients/Members can continue to receive emergency care at the DMC Emergency Rooms, regardless of the network status with Humana
  • Continuity of Care: Certain patients may be eligible to receive “Continuity of Care” benefits with Humana for a period of time if they need ongoing treatment or already have a procedure scheduled. For questions about ongoing care or benefit coverage, less advise members insured with Humana to call the phone number on the back of their Humana Insurance Card.
  • Out-of-Network Care: Members with Humana PPO may still access the DMC health care provider and hospitals for health care services using their out-of-network benefits.

 

ADDITIONAL INFORMATION

Information contained in this Important Updates—In The Know & How It Applies is not intended to render tax or legal advice. Employers should consult with qualified legal and/or tax counsel for guidance with respect to matters of law, tax and related regulations. Creative Benefits & Insurance Solutions provides comprehensive benefits advice and administrative services with respect to all forms of employee benefits, risk management, property & casualty, workers’ compensation, staffing insurance and human resources services. For additional information about our services, please contact us at (586) 992-0404 or email us at cbis@cbis-lc.com.

Affordable Care Act – Reinsurance Fee

The following Update addresses Section 1341 of the Affordable Care Act established a transitional reinsurance program to stabilize premiums in the individual market inside and outside of the Marketplaces. The transitional reinsurance program will collect contributions from contributing entities to fund reinsurance payments to issuers of non-grandfathered, Affordable Care Act-compliant reinsurance-eligible individual market plans, the administrative costs of operating the reinsurance program, and the General Fund of the U.S. Treasury for the 2014, 2015 and 2016 benefit years. 

How it Applies

 This fee on health plans totals $25 billion, which will be collected over the three-year period from 2014 through 2016. The majority of the money will be used to fund a reinsurance program, which is intended to lessen the impact of adverse selection in the individual market. The fee applies to both insured and self-funded commercial major medical plans effective January 1, 2014 and ends with the last fee payment on January 1, 2016.

Fully-Insured employers will have this fee included in either their monthly fixed premium rates from the carrier or included as a separate line item on their carrier invoices.  The carriers submit on behalf of their fully-insured clients.

Self-Funded employers are required to report a count of lives covered to the Health and Human Services during the fourth quarter of the respective filing year.  The ACA enrollment and contributions submission form is provided online only through www.pay.gov.

What is the fee?

For the 2014 benefit year, HHS offered contributing entities the option to pay:

  • the entire 2014 benefit year contribution in one payment no later than January 15, 2015 reflecting $63.00 per covered life; or in two separate payments for the 2014 benefit year, with the first remittance due by January 15, 2015 reflecting $52.50 per covered life, and the second remittance due by November 15, 2015 reflecting $10.50 per covered life.


For the 2015 benefit year, HHS will offer contributing entities the option to pay:

  • the entire 2015 benefit year contribution in one payment no later than January 15, 2016 reflecting $44.00 per covered life; or
  • in two separate payments for the 2015 benefit year, with the first remittance due by January 15, 2016 reflecting $33.00 per covered life, and the second remittance due by November 15, 2016 reflecting $11.00 per covered life.

 For the 2016 benefit year, HHS will offer contributing entities the option to pay:

  • the entire 2016 benefit year contribution in one payment no later than January 17, 2017 reflecting $27.00 per covered life; or
  • in two separate payments for the 2016 benefit year, with the first remittance due by January 17, 2017 reflecting $21.60 per covered life, and the second remittance due by November 15, 2017 reflecting $5.40 per covered life.

2016 is the last year self-funded employer plans will be required to submit the Reinsurance Fee in accordance to the three year benefit filing fee requiring under the Affordable Care Act.

How does CBIS assist clients?

For those Self-Funded clients that would like assistance from CBIS, as in the past year’s reporting and payments, CBIS will provide the Average Number of Covered Lives enrolled and calculate the Reinsurance Fee.

 

What are Covered Lives?

Covered lives are all covered individuals, both employees and their dependents. For example, an employee who has family coverage including a spouse and two children would be counted as four covered lives.

What is the process self-funded employers must follow to pay the reinsurance fee?

There is a streamlined membership and contribution process through http://www.pay.gov. Pay.gov is a secure, web-based application that serves as the portal where employers can report and submit the required membership data elements. Registration on pay.gov is required in order to complete the reinsurance process.

As part of the membership and contribution process, a contributing entity, e.g. the employer or insurer making the contribution, can begin to collect the data, calculate their annual enrollment count and prepare the supporting documentation.

Additionally, a reporting entity will need to complete the following steps:

  • Register on pay.gov
  • Access and complete the form on pay.gov, titled “ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form.” A copy of this form has been included in the email communication for client’s reference and use.
  • Upload the supporting documentation (this would be the same .CSV format file from last year with the updated numbers).
  • Enter payment information (e.g. payment date and banking information).
  • Self-funded employers should also contact their bank to have the ALC+2 value added to allow for automatic debits

 

What if after receiving the snapshot report clients have questions?

Please feel free to contact your dedicated CBIS Account Representative and they will assist with any questions as well as provide additional guidance and clarification if needed.

ADDITIONAL INFORMATION

Information contained in this Important Updates—In The Know & How It Applies is not intended to render tax or legal advice. Employers should consult with qualified legal and/or tax counsel for guidance with respect to matters of law, tax and related regulations. Creative Benefits & Insurance Solutions provides comprehensive benefits advice and administrative services with respect to all forms of employee benefits, risk management, property & casualty, workers’ compensation, staffing insurance and human resources services. For additional information about our services, please contact us at (586) 992-0404 or email us at cbis@cbis-lc.com.

 

 

Are you ready for Open Enrollment?

FRAUD WARNING:
When shopping for health insurance on the Marketplace (Exchange) be sure to ask for their Federal Facility or Start Partnership Marketplace Unique ID. All licensed professional are required by law to complete training including a federal background check in order to assist individuals with their health care options on the Marketplace.

CBIS Marketplace ID: CBISEXCHANGE
National Producer Number: 976408
Producer Name: Patricia A. Shall

What to Know:

The 2017 annual Open Enrollment for the Health Insurance Marketplace is vastly approaching. November 1, 2016 starts the beginning of annual open enrollment where uninsured individuals may again review available plan options and make decisions as to the best plan to meet their personal and/or family health care needs.

How CBIS can assist:

CBIS can help assist you in finding the right coverage and right budget that fits your household needs.

CBIS has the tools, technology and the access to all the major carriers participating in the Health Insurance Exchange. Let CBIS take the worry out of reviewing the fine print of each available plan design.

Whether you are looking for coverage ON the Marketplace through Healthcare.gov or OFF the Marketplace through several carriers offering Individual plan, CBIS can help.

Give us a call at (586) 992-0404 or email us at cbis@cbis-lc.com to get started TODAY!

Tips for Non Profit Summer camps Insurance

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It is the age old tradition of being the first day of summer camp.  You have spent the last few months putting the finishing touches on your campsite.  You have painted all the walls and gotten all the cabins ready.  You take much pride in being a Non-profit Summer camp director.  It is the night before all of your eager campers arrive and you are very excited yet a little nervous that everything is ready for there 6 week adventure.  There is much responsibility to having kids spend the summer at your camp and also in keeping all the kids safe.  Today I am going to give those summer camp directors  some very useful tips on what types of insurance will protect your camp.

 

First off being a non-profit summer camp has more challenges than a for profit summer camp.  You deal with tighter budgets and different liabilities.    Many directors have the kids sign a waiver but that is just nearly the beginning in keeping yourself protected.   The first type of insurance that is very important to have is General Liability Insurance.  General Liability Insurance protects your nonprofit organization from a wide range of lawsuits and liabilities.   This is a very important insurance to have in case your organization gets sued and the plaintiff claims that your camp was responsible for the child’s injury.  Another positive about this type of insurance is that it can protect your camp if it has damaged property.   Another scenario most camp directors do not want to think about is if some kids decide to steal something.  For instance say there are some boats housed close to the camp and some kids damage the boat or even steal the boat.  General Liability Insurance could protect you from being sued by the owner of the boat.    General  liability insurance can protect you from lawsuits from parents, vendors and various others.

 

Property insurance can be very important to your camp.  Any loss of property due to a fire or other unforeseen event will protect you. If a building on your campground were to burn down property insurance would pay for the building of a new building on the site.   An interesting fact about this type of insurance is that it will pay for the current value of the property.  Due to many items depreciating in value over the years the policy will only pay for what the current value of the item is.  If you bought a computer for $1,000 and now it is only worth $200 you will only be reimbursed for the $200.   Replacement policies cost more but will cover the full amount of an item even if it has depreciated over time. 

 

Another type of insurance that will help you save money is a Business Owner’s Insurance Policy.  It is referred to as a BOP.  This means that you can combine two policies into one.  For instance you can combine your General Liability Insurance with your property Insurance.  You will get a lower rate because you combined the two policies.  Not every non-profit organization applies for this type of coverage.   The following reasons below are the reasons a non-profit would not qualify for this. 

  • Don’t work in high-risk industries.
  • Don’t work in large-scale premises or offices.
  • Don’t need more than a year’s worth of Business Interruption Coverage (a Property Insurance policy that pays for your business to relocate after a covered claim destroys its offices, building, etc.).

 

As the eager campers arrive you can take solace in knowing that you have taken your insurance precautions to make sure this will be a very safe and non dramatic summer.  If there is some sort of an emergency you will have the proper coverage and will be properly covered.  Now you just have to sit back and let the kids enjoy the splendors of summer camp.

 

 

 

 

 

 

Insurance Tips for Lightning Strikes On Your House

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You are sitting on your front porch enjoying a cold glass of lemonade when you start to see the dark clouds starting to roll in.  It is late June and this is prime thunderstorm season.  You suddenly begin to feel some raindrops falling on you.  Then a sudden downpour begins.  The wind starts to pick up and it is time to head back inside your house.  The storm intensifies and the lightning begins.  Repeated quick strikes of lightning.  Lightning  can be a very dangerous part of a thunderstorm.  Not only can it very dangerous to be outside in the lightning it can also be very dangerous to your house.  Today I am going to give you some statistics about lightning and the types of insurance that can protect your house from lightning damage.

 

A very interesting statistic I came across is that there are 20 million air to ground strikes every year in the United States.  Each lightning bolt has over 100,000 volts in it.  In 2009 it was estimated that there were over 185,000 claims filed related to lightning damage on there house.  Many homeowner’s insurance plans should cover lightning related damage.  It should also cover any fire related damage caused by lightning strikes.  It is estimated that for some equipment damaged you may not get fully paid due to the depreciation of the equipment or due to the cost of the deductible.  If the power surge was not caused by a lightning strike you may not be covered for this type of coverage.  Many home owners or businesses  can get surge protection coverage for power surges not tied to lightning.

 

The Cost Of Lightning Damage

Lightning can cause power surges that send energy into phone lines, plumbing, electrical  wires and even ductwork.  These spikes and surges in power can cause much damage.  Surges to electrical wiring can cause arcing which is a spike in energy and this can lead to fires. 

 

Nationwide recommends that homeowners and business owners adopt three main protective measures.

  1. Use point-of-device surge protectors to protect individual electronic devices, like TVs, computers and printers.
  2. Use a service panel suppressor to manage large power surges before they enter your building. Note that a panel suppressor alone may not be enough protection. For instance, a direct lightning strike on your building would bypass the suppressor and cause direct damage to electronic devices unprotected by point-of-device surge protectors.
  3. Get equipment breakdown insurance. This coverage can protect your property if power fluctuations cause damage to products or lead to things like spoiled food, lost income or emergency repairs.

 

So the next time you see a major thunderstorm storm rolling in remember to go inside and stay away from large windows.    If you have the proper insurance and have taken the proper safety precautions you can find solace in knowing you have done everything possible to keep you and your family safe until the thunderstorm blows over.

 

 

Tips for Fireworks Insurance and Safety tips

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What a great day to be an American.  All of your family and friends are enjoying this very special day.  You have the American flag proudly waving  on the front of your house.  Patriotic music is playing on the radio.  The barbecue is about ready to be fired up.  The fireworks show you have planned is just a few short hours away.  What a great way to celebrate the Fourth of July in grand style.  Today I am going to give you some tips concerning fireworks and liability insurance which can help to keep everyone safe. 

 

Fourth Of July fireworks can be extremely fun and entertaining.  It can also be very dangerous.  Many times fireworks displays can go bad and cause great bodily harm or injury.  In a 2005 study it was estimated that fireworks caused 1,800 structural fires and accounted for $39 million dollars in damage.  Any injury or property damage can cause major liability issues to adults or children.  If you have a homeowner’s policy you are covered by any damage the fireworks may cause. Anyone 21 and over is covered by any fireworks damage to property or a person’s well being.  There is one caveat to this.  Children who are over 12 years of age and are teenagers are not covered under this policy.  If your teenager decides to light some fireworks and damage a neighbor’s house they can be held liable.  Children who are 12 and under are excused because many companies feel that it may be an innocent mistake.  Teenagers are not granted that same luxury knowing what they are doing may be every dangerous.

Fireworks Safety Tips

I wanted to give you some fireworks safety tips also.  Never let young children use fireworks.  Many children can suffer great burns to there body even though they do not know what they are doing.  Teenagers and older children should only use fireworks under adult supervision.  It is very important for adults to be handling the fireworks and setting the best safety precautions available.  The person handling the fireworks should always wear safety glasses.  Always have a water hose available when using fireworks.  This could really come in handy and help to prevent serious injuries.  Also be a good neighbor and report any illegal fireworks or explosives to your local Police or Fire Department.

 

So as the sun sets on another Fourth Of July Holiday and it is nearing that time for fireworks, make sure you have taken every precaution and safety measure.  Knowing you are safely and properly prepared will lead to a very safe and enjoyable fireworks show for everyone. 

Pool Safety Tips for Summer

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What a beautiful warm summer day it is! With the family over, the barbecue fired up and the nice swimming pool right next to it… It is time for the first pool party of the year which signifies the start of summer. All of your friends have brought their pool toys and are ready for a very relaxing day swimming and lounging in the pool.

These summer leisure activities are what the season is all about. Just remember that if you are going to be playing outside you need to remember that safety comes first. I am going to give you some ways to make sure your swimming pool has the proper insurance and that the pool is following the latest standards and ordinances.

 

Pool Safety Tips to Consider

A swimming pool makes a great addition to any house. There are ordinances and building codes that must be met when having a swimming pool. One of the most important questions a home owner should ask themselves is, “is my pool safe?” There are hundreds and thousands of pool injuries and drowning incidents every year across the country. Many accidents can be prevented with the proper safety measures.

Does your pool have a fence or a pool cover? Investing in a pool cover could be very valuable when you are not using your pool. It could help prevent injuries and save lives. Installing a fence around the pool can help keep small children or animals out of the pool and to prevent further injury. The width of the fence is important to keep small children from squeezing through. Some fenceless neighborhoods will even require you to put up a lockable fence around your pool for liability reasons.

It is important to keep lifesaving flotation devices all throughout the area and a pool hook nearby to helping in a rescue situation. Always have a first aid kit on hand when children and adults are using the pool in case of an emergency. Always put in “No Diving” signs on the pool walls to prevent diving accidents in shallow water.

Another important thing is to remove all pool toys and devices at the end of the day so curious children do not go into the pool unsupervised. Remember to cover the pool and lock the fence at the end of the day.

 

By following these simple measures your family and friends will have an amazing summer with some very wonderful memories around the pool. So, if you follow a few of these suggestions you will have an summer splashing around in the comfort of your own backyard.

Happy Father’s Day!

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This Sunday is Father’s day. This day brings so many memories to us. From those very special moments in life like dad teaching you how to ride your first bike to playing catch with with him on a warm summer afternoon… Maybe just the two of you having a long talk on the porch and getting some very useful advice. We owe our fathers so much of what we have learned and have in life.

With many fathers working so hard to support their families all throughout the year this is the day that is set aside to give them a day where they can be honored and taken care of. Father’s day is also an amazing day for getting discounts on your insurance. I am going to give you some key discounts you can get for Dad on this special day by focusing on motorcycle insurance and Homeowner’s Insurance and really help to save the family some money.

Getting Dad’s Bike Covered

Many fathers live for taking out there motorcycle on a warm summer afternoon. If you are getting your Dad a brand new motorcycle for Father’s day you must make sure the motorcycle is insured. Motorcycle insurance can be very expensive. One way to lower your Dad’s monthly insurance rate is by having your Dad take a few motorcycle safety courses. Many insurance companies will provide a discount if the owner has completed a safety course.

Be sure to contact the insurance company to make sure the course is approved. If the safety course is approved you could save up to 15% off of your motorcycle premiums. Usually there are two types of programs available the beginner and expert program. Beginner classes teach very basic riding techniques where the more advanced classes teach more advanced biking techniques.

Getting Dad’s Home Covered

Homeowner’s insurance is like your father. You are probably thinking I am way off base but if you think about it your home insurance is always there for you like your Dad. It can help with small or large emergencies. It also gives you a peace of mind at night like your father does when he gives you a late night talk.

There are many different coverages. Standard home insurance is one of the most popular. It helps offer protection from many weather and natural disaster elements. It provided financial help with any damage caused by fire, wind, hail, smoke, theft and other unforeseen disasters. It covers damages up to the limits of your policy.

Also, many policies help with living expenses if, God forbid, you have to live in a hotel for awhile until your house becomes habitable again. Many homeowner’s insurance policies offer discounts. One of the most common is a bundle discount which is granted to someone purchasing a home and car insurance from the same provider.

 

So remember, take time this Father’s day to thank your Dad for everything he has done for you and if you are buying him a motorcycle, remind him to register for his safety course and you will be eligible for some great discounts. Just remember when the wind is blowing through his hair how much more sweeter the ride will be when he has completed everything he has to do to make sure he has the most safe and inexpensive motorcycle ride he can.

Protecting Yourself During an Identity Theft Crisis

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The pavement on the road reflects the heat of the sun creating a wavy haze over the cars in front of you. With each passing moment you inch closer and closer to your mocha frappe latte that will quench your thirst and your afternoon workout a lot easier. As you pull up to the window of the drive-thru the busy cashier is taking another order while handing you your drink. He swipes your card and stares questioningly at the screen. He swipes it again. Declined…

There’s money in there and you know it, so you head to the bank to find out what the deal is. “Mrs. XXXX, your account has been overdrawn by three hundred dollars and your saving account is empty.” Impossible because these accounts had over $10,000 in them last night. There are charges on the account that you don’t recognize. Someone has gotten hold of your information and has stolen your identity.

What is Identity Theft?

Webster’s defines Identity Theft as “The illegal use of someone else’s personal identifying information in order to get money or credit.” This can mean anything from someone getting hold of your credit card information to someone applying for a job with your information. It can happen a thousand different ways.

  • Someone steals your wallet or purse
  • A thief swipes your mail and bank statements
  • Hackers obtain private data from large corporations (Target, Neiman Marcus…)
  • ATM’s fitted with false card readers
  • E-mail scammers
  • Fake websites you’ve created accounts on
  • Someone buys your info from a third party that’s obtained it

Identity theft takes a big bite out of the economy, $21 billion in 2013 alone. Statistics point to younger victims as seeing the highest levels of identity theft. Credit card information is the top target by far, involved in 64% of cases. The younger the consumer, the higher the number of fraud complaints. According to the U.S. Department of Justice, 18 to 24 year old’s saw the biggest rate of identity theft. The Carthage police chief says that could be connected to their increasing use of technology.”***

These are just some examples of how a crook can obtain your personal information. With a world so dependent on technology and every new website insisting that you create a “profile” it seems almost inevitable that someone someday is going to get a hold of your private information.

How are people supposed to remember a password for every site that required a log in? They don’t and people will tend to just keep repeating the same password over and over. This makes it incredibly easy for people to log in to each account because they now have the master key to all the access points.

What to do If Your Identity is Stolen

There are some things that need to be taken care of right away if your identity is stolen. You’ve got to assume that if someone has some of your information then they may have all of it. As the saying goes, “It’s better to be safe than sorry” when it comes to these things.

1. Contact a credit reporting agency. Three national credit reporting companies keep records of your credit history.They will be able to put a temporary (90 day) fraud alert on your credit report. This won’t cost you a penny and all you will need to do is have proof of your identity. Here are the links to the credit reporting agencies.

  1. Experian
  2. Equifax
  3. TransUnion

2. Contact your credit card companies. Thieves will often go straight for your credit cards. It’s quick, they can buy what they want and then they can dump the cards. It’s smart to contact your card companies and let them know that someone has gotten hold of your information. They will be able to pull up your most recent statements and go over all the charges with you.

Sometimes it’s a great idea to keep written records in case of emergency, but it’s not always wise to write everything down. Keeping all of your accounts numbers in one place is a surefire way for a thief to get a hold of information that you don’t want them to have. However, it is smart to keep the contact info for your credit card companies written down and kept somewhere safe in the event that you may need it.

3. File a police report. Call your local police department and let them know that your information has been stolen. They will assist you in determining what further steps need to be taken, what else needs to be taken care of immediately and what you can do if the thief is caught. Make sure to get a copy of the police report for your records.

 

There are some set in stone rules to follow during an identity theft crisis, but each case will be different and each person may be affected in different ways. Remember too that your homeowners policy may cover your losses in the event that your identity is stolen. Make sure to review the policy with your agent to see what the coverage’s are and if you’re not covered, talk to them about getting an endorsement that will get you coverage.

 

*** Bolander, Gretchen. “Identity Theft Now Targeting More Young Adults.” www.Fourstateshomepage.com. N.p., 2 May 2014. Web.