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Archive for January, 2016

Umbrella Insurance – Is it for YOU?

Written by Timothy Shannon on . Posted in Uncategorized

I get many questions concerning Umbrella Liability Insurance coverage and wondering whether it is something that one should add to their insurance portfolio. The easiest way to answer that question is with a question; “Is protecting your assets in the event of a catastrophic loss something that is important to you?”

Many think “Well something like this will never happen to me”. The fact is that for a catastrophic loss to occur really doesn’t take much and unfortunately it happens all too often. Below is an actual case that occurred that I share only to illustrate the simple things that can add up to a major event.

Real-World Case Study: Drowsy Driver Put Lives in Peril

Tired of the unrelenting snowfall, best couple friends, Lori and Scott and Kim and Jay, decided it was the perfect time for a road trip to Las Vegas. After a busy weekend with good memories made, the four headed home with Scott at the wheel. A short while later, Scott dozed off, awoke suddenly and over-corrected, hitting two oncoming cars. All of those involved sustained serious trauma, including head injuries, lung collapse and multiple major fractures. Two of the injured were airlifted to the hospital for immediate treatment. In addition to hospital stays, recovery would include physical and cognitive therapy and Jay needed extensive reconstructive surgery.

After Scott’s auto liability limits were exhausted, his standalone personal umbrella policy responded to cover their care. The umbrella carrier ended up paying a claim in the amount of $750,000.

In most cases for under $300 per year you can have a $1,000,000 extra layer of protection over your auto, home and other underlying liability exposures.  Well worth looking into if you have assets worth more than your underlying liability coverage.  Amounts available in one million increments to $5,000,000 and excess is available over that amount.

Group Health Insurance for Business

Written by Timothy Shannon on . Posted in Uncategorized

Affordable Care Act (ACA) employer mandate now (as of 01/01/2016) requires businesses with at least 50 full-time equivalent employees to provide health coverage for their employees and dependents or face a tax penalty. Many clients in the service industry have asked me “what constitutes a Full Time Equivalent?”

Here is the definition directly from the IRS –

Full-time Employee

A full-time employee for any calendar month is an employee who has on average at least 30 hours of service per week during the calendar month, or at least 130 hours of service during the calendar month.
Full-Time Equivalent Employees

An employer determines its number of full-time-equivalent employees for a month in the two steps that follow:

  1. Combine the number of hours of service of all non-full-time employees for the month but do not include more than 120 hours of service per employee, and
  2. divide the total by 120.

The other significant change that occurred on January 1, 2016 is that  the definition of a small business in California has expanded to include groups with 1-100 full-time equivalent (FTE) employees.

Covered California for Small Business has expanded its eligibility requirements to allow small groups with 1-100 FTE employees to join the program as of January 1, 2016. This “small business expansion,” in combination with the ACA’s employer mandate, means that many businesses may be shopping for coverage for the first time.  If a group’s FTE number is at least 50, the employer will be required to offer coverage to all dependent children up to the age of 26. If the employer chooses to not offer dependent coverage, the employer may be subject to tax penalties under the IRS Employer Shared Responsibility Provisions.

Remember, 01/31/2016 is the deadline for open enrollment in 2016.

Please give us a call if we can help answer any questions for you!


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Timothy G. Shannon, CLF, AIM, LUTCF

Phone: (800) 999-5729
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