Blog
Monday, June 18, 2018

As everyone in Lancaster County is aware by now, a local multi-generational family business was shut down almost overnight due to apparent fraud perpetrated by an employee of the company. This is a terrible situation for everyone involved, and we certainly wish the best to all of the employees and their families who were affected. The question for this blog is, what can we learn from this situation to help minimize the risk to our own businesses, and how might insurance coverage come in to play?

We don’t know the specific details of the alleged fraud that took place, so it’s impossible to say at this time whether insurance coverage could come into play or not. I’m just going to discuss two coverages that could come into play in a fraud situation.

1.) Employee Dishonesty – Sometimes referred to as “Employee Theft”, this is a Crime coverage that protects your business from theft by employees, which is not covered by standard Commercial Property insurance. Most often these are situations where an employee with access to the company funds siphons off money in small amounts over a period of time, and by the time it is discovered there may be tens of thousands of dollars (or more) missing. Sadly, we read about these situations in the newspaper frequently, and oftentimes involving small companies. We find that business owners tend to believe that their employees would never steal from them, until they find out that they have.

This risk of employee theft is something that you can insure against, but you can also mitigate the risk with some straightforward procedural safeguards. These can include:

• Requiring two signatures on all checks
• Having the person who reconciles bank accounts be different than the person who issues checks
• Conduct financial audits
• Maintain oversight of the finances and try to avoid having one person with too much control

While we generally think of Employee Theft being the theft of money, it can also include the theft of inventory, stock, tools, or other business property.

2.) Directors & Officers (D&O) Liability Insurance – Most people are familiar with D&O from a Non-Profit perspective as they understand the desire to be protected from liability for their service on a charitable board. What is less understood is the need for D&O coverage for a privately-held, for-profit business. Once again, while we don’t know the details of what took place in the situation locally and whether coverage would apply or not, it does serve as a reminder why D&O coverage has value even for a privately held company.

Directors and Officers make decisions that may affect anyone who has a relationship with the company: Shareholders, regulatory agencies, creditors, suppliers, competitors and customers. Anyone who believes they have been harmed as a result of those decisions may take legal action, requiring costly legal expenses to defend the company and its directors and officers. If your private company has outside individuals serving on the board, D&O coverage is a “must” to protect those individuals from personal liability. Even if there are not outside individuals, D&O coverage is still critical to protect the company and its officers from potentially crippling legal expenses and judgments. This can include claims from creditors alleging mismanagement of the company resulting in their financial loss.

While we all sympathize and hope the best for the affected individuals in this tragic situation, hopefully we can all learn something as well and use this as an opportunity to improve our procedures to reduce risk, and review insurance plans to make sure we are more adequately covered.

Feel free to reach out if you would like to discuss any of these issues.

Tuesday, June 12, 2018

BCF Group's Jared Martinelli provides some excellent tips on your automobile insurance, including ways to protect yourself and your family with the right levels of liability coverage. To learn more about ways to ensure your auto policy provides the best coverage with competitive premiums, call us at 717-560-7730. 

CLICK HERE TO WATCH THE VIDEO!

Thursday, April 5, 2018
Jared Martinelli

No one likes to openly talk about their death. Combine that thought with insurance and you have a product that no one ever wants to discuss, and that’s life insurance.

As a life insurance agent, this is the dilemma I run into. There are many families that don’t have life insurance that really should. I agree it can be a rather morbid conversation but it is one that needs to be had in order to protect your family.

This is one type of insurance that is often overlooked by families. The reason being is no one is forcing you to buy it. The state of Pennsylvania requires you have auto insurance and your mortgage company requires that you have homeowners insurance. No one is requiring that you have life insurance which means it is up to you! Just because you are not required to have life insurance doesn’t mean it is not necessary to adequately protect your family.

The unexpected death of you or your spouse can have a devastating impact on your family. Life insurance can help ensure that your family continues its normal standard of living. Life insurance can be used to replace you or your spouse’s income, pay off debts, cover children’s expenses, pay final expenses and ensure that your family will be able to survive financially if disaster does strike. If you do not have life insurance NOW is the time to have the discussion.

If you already have life insurance it is important to make sure that the amount you have is still appropriate, as life insurance needs are constantly changing.

Thursday, February 1, 2018

 

2018 Drive Safer Drive Smarter Event SOLD OUT!

Teen Safe Driving Seminar & Interactive Workshops

This is a FREE COMMUNITY EVENT for parents and their teens

April 14, 2018

8:00 am to noon (Registration begins at 7:30 am)

Lancaster County Public Safety Training Center

101 Champ Boulevard, Manheim PA 17545

 

OUR 2018 EVENT IS NOW SOLD OUT!

We are so grateful for all our attendees. Please watch our social media posts for future Teen Safe Driving Events! 

 

Featuring a Very Special Guest: Jacy Good

 

 

 

Jacy Good, a former Lancaster County resident, has become one of the nation's most vocal opponents of distracted driving after a driver on a cellphone caused a 2008 crash that killed her parents and left her permanently injured.

 

 

 

 

Watch this very powerful video: https://www.youtube.com/watch?v=E9swS1Vl6Ok

Visit Jacy’s website – Hang up and Drive - http://www.hangupanddrive.com/

Sample segment aired on TV station (WRAL) in Raleigh, NC - http://www.wral.com/message-from-woman-orphaned-in-crash-hang-up-and-drive/17130233/

 

Additional speakers are:

 

Dale Amspacher, driver education teacher for A Safeway Driving School, will share smart driving tips and habits for teens along with helpful reminders for parents.

 

 

 

 

Officer Sandman, East Hempfield Township Police officer, will talk about DUI checkpoints, the dangers of drunk driving and teens can try his “Beer Goggles” to see the distortion caused by consuming alcohol.

 

 

 

 

 

 

Fun, Interactive Workshops

In addition to Jacy and Steve’s presentation, the “Drive Safer! Drive Smarter!” event will feature four different “stations,” each on a different skill set. These stations will include:

  • Parallel Parking: Dale Amspacher, driver education teacher for A Safeway Driving School, will share smart driving tips and habits for teens, along with helpful reminders for parents.
  • Impaired Driving: Officer Sandman, East Hempfield Township Police, will talk about DUI checkpoints, the dangers of drunk driving and teens can try his “Beer Goggles” to see the distortion caused by consuming alcohol.
  • Car Crash Site: Mike Zimmerman from Goodville Mutual will teach teens how to respond at the scene of an accident.
  • Pre-Check Your Vehicle: Teens will learn the steps to take before starting the engine.

Did you know that teen drivers with involved parents are twice as likely to wear seat belts AND 56% of teens rely on their parents to learn how to drive?

Parents are the key to safe teen driving! STAY INVOLVED!

Attendees will receive:

  • Continental Breakfast
  • Teen Safe Driving Book
  • I.C.E (“In Case of Accident”) Cards
  • Auto ID Holder
  • Giveaways and Prizes
  • And MORE!

The schedule for the “Drive Safer! Drive Smarter!” event is as follows:

7:30 a.m.: Doors open for breakfast and sign in
8:05 a.m. to 8:55 a.m.: Jacy Good and Steve Johnson will speak
9:00 a.m. to 9:25 a.m.: Dale Amspacher will speak
9:30 a.m. to noon: The four “stations” will each operate for 30 minutes throughout the morning, presenting four times so attendees can move in groups among the stations.

Space is limited!  Click the REGISTER NOW button at the top of the page, or call BCF Group at 717.560.7730, or email HeatherG@BCFGroup.net

 

 

Monday, January 22, 2018

Watch our very own Trent Hess in this video entitled “What Limit of Umbrella Insurance Should I Buy?” He’ll provide some excellent tips to help you make some decisions on this difficult question. While his advice is primarily for commercial insurance, his tips can also help you understand how to choose the proper limit for your personal umbrella policy.

CLICK HERE TO WATCH THE VIDEO

Monday, October 30, 2017

by Trent Hess, CIC, CRM
Business Risk Manager

 

As an HR Professional you play a critical role in your employer’s business, and in doing this you are often tasked with some heavy responsibilities. Hiring, firing, disciplining, making benefit decisions, staying compliant with laws, and so much more. These are all duties that unfortunately can invite lawsuits.

As an HR Professional, you can be held personally liable in some situations. I won’t go into detail about what those situations are, because I’m not an attorney and because you probably know this better than me already. What I want to focus on today are 3 insurance coverages that you should consider having your company carry that can help protect you if you are named in a suit.

 

#1: Employee Benefit Liability

 

This provides coverage for errors you make administering employee benefit programs. This one is important for you HR folks, because it protects you if you mess up. I know you never mess up, but if you did, this is what you want. So what are we talking about here?

The classic example involves your company’s Group Health Insurance. Let’s say your company’s policy has a 30 day waiting period. You hire a new employee, they fill out the paperwork after 30 days and give it to you, but it gets lost in the shuffle and falls through the cracks. You never send it in. A couple weeks later the employee has a serious accident at home that requires a hospital stay and surgery, but finds out they have no coverage because of your error. That’s Employee Benefit Liability. It can also apply to Group Life plans, Dental, Vision, etc.

These situations do happen. We’ve had claims, and let me tell you when these situations happen because of your error it makes you sick to your stomach. This coverage can help repair the situation.
This coverage can typically just be endorsed to your General Liability policy for a nominal cost – usually a couple hundred dollars at most. There’s really no excuse not to include this coverage, and a professional broker would have it included for you.


#2: Employment Practices Liability

 

If you’re in the HR world, you’re probably familiar with this one. This is the coverage that protects the company if a suit arises from discrimination, harassment, wrongful termination and other issues that arise out of the employment process. Generally the policies also protect employees, so if you are named in a lawsuit as the HR person, the policy would defend you which is important.

At this point more of our clients than not carry this coverage. If I was an HR professional, I would want to see that my employer has this insurance so that I would be protected if something happened. The cost is dependent on your industry and number of employees. It’s very easy for us to provide you with a pricing indication.

On a side-note, most EPLI policies include a tool that gives you access to HR Professionals (usually attorneys) that you can ask questions of at no cost. Many times they also include a library of HR materials. This is all just value-added Risk Management material that can be very valuable to HR professionals and is really “icing on the cake” to having the coverage.


#3: Fiduciary Liability

 

This is the least used policy of the 3 that I’m discussing here. To be honest with you, not many of our clients carry this coverage. That’s not because it is unnecessary, it’s really because it’s less understood by agents, insurance carriers and you, the insureds. It’s also not as easy to write the insurance.

So what does it do?

The ERISA Act of 1974 creates the possibility that fiduciaries could be held personally liable for alleged errors or omissions or breach of duty with regard to benefit plans. This can involve pension or profit sharing plans and ESOPS among others. But it can also include 401K plans. Even if you hire a 3rd party to manage the plan, it could be alleged that you made a poor choice in what provider to use.

Fiduciary Liability claims include a broad range of allegations, such as:

  • Denial or reduction in benefits
  • Failure to adequately fund a plan
  • Conflict of interest
  • Improper advice or counsel
  • Lack of investment diversity
  • Imprudent choice of mutual fund or 3rd party provider
  • And many more…

Claims can come from current or former employees, or from a government entity such as the Department of Labor. Coverage is usually relatively inexpensive and written on a separate policy than your standard General Liability coverage.

So….

  • Employee Benefit Liability
  • Employment Practices Liability
  • Fiduciary Liability

3 coverages you should be aware of and should explore to properly protect yourself as an HR Professional. Email me, call me, or look me up on LinkedIn. I’d love to answer your questions and talk with you more about this topic.

Thank you!

Tuesday, October 17, 2017

 

 I’m sure you have seen the devastating destruction and heartache that the recent hurricanes have caused to the United States and Puerto Rico. While those of us in the north were not physically affected by the hurricanes, the ripple effect of rebuilding will touch us directly.

Houston alone will need to renovate or rebuild 200,000 plus homes, in additional to local businesses that are in desperate need of repair. Most homes and commercial businesses in Puerto Rico are in dire need of power, repair, and rebuilding. The Florida Keys were impacted from one end to the other. The number of damaged structures is on pace to match the annual output for new homes, and to increase by more than 10% the already planned renovations.

We feel for those who have lost loved ones, belongings, entire homes and businesses. No words can comfort those who have gone through this, and our hearts and prayers go out to them. It’s been amazing to watch the help of first responders, neighborhood volunteers, and those that put their own lives at risk to help others. We are inspired by you.

As rebuilding starts and lives begin to go back to fall back into routine, those that were not directly affected by the storm will start to slowly feel the changes that will take place in demand and pricing. From construction materials, electric, even those to do the physical work, prices will change, and rebuilding businesses will be spread thin. As claim adjusters cut their checks and pay out for damages, the effects of the devastation will slowly creep into the insurance rates of those much further away from the center of these terrible storms.

We wanted to keep you informed of future changes and price increases which may not be felt until about 6-18 months after these devastating events. It might be easier to understand why they are happening when you know the reasons behind the changes.

Monday, October 9, 2017


Are you covered under your auto insurance if you use your car as an Uber? This is a tricky question to answer! Ridesharing is becoming increasingly popular around us. This can be a great way to get around for many people. It’s also a way to make extra income. Here are some things you need to know:

 

 

  1. Some insurance companies will not cover you at all if you use your car as an Uber

  2. When you show yourself as “available” for rides as an Uber driver, your coverage is by Uber only, but are less than your coverage under them if you have a passenger ($50K Injury, $100K total, $25K Property)

  3. While driving with passengers, you are not covered under your personal auto policy at all. Uber will cover you up to $1M Liability and $1M Uninsured/Underinsured Motorist injury with a $1K deductible

  4. If you have state minimum coverages and are an Uber driver you could have much less than you need in the event of an accident

  5. The state of PA is one of the only states that will cover you medically if you get into an accident while driving for Uber. The minimum state limit is $5000.00 for medical which could be much less than what you typically need

  6. If your auto insurance has comp/collision, Uber will only cover this if you have an accident while you have passengers in the car (not in route to the fare). This has a $1K deductible

  7. In the state of Pennsylvania, you must tell your lienholder or lender that you are using your vehicle for ride sharing

 

Some reminders from your friendly agents at BCF: Please check with your agent about your particular carrier’s position on Uber and whether you will be covered by them. State limit coverage (or the coverage that you have while you are showing available on Uber) is something we do not recommend. We don’t write policies at our agency for minimum coverage because of our deep experience in seeing that it is not typically enough to cover you after an accident. We also always recommend more medical coverage than the minimum for the same reasons.

 

Monday, August 21, 2017

As Gen Z heads off to college, they need to secure their mobile devices and update their software to help avoid becoming a victim of a scam or identity theft.

Hackers also take advantage of the "broke college student" stereotype, targeting these young adults with offers that sound too good to be true.

 

Click here to read this important article on protecting your college student from online risks.

 

Did you know that BCF Group offers IDShield products? If you become a victim of identity theft, IDShield will spend up to $5 million to do whatever it takes for as long as it takes to restore your identity.

Click here to schedule a consultation with one of our personal risk managers, or call us at 717.560.7730. 

Wednesday, August 2, 2017

In the early hours of July 28, Republican efforts to repeal and replace the Affordable Care Act (ACA) ended when the Senate fell short of the 51 votes required to pass the Health Care Freedom Act (HCFA), better known as the “skinny repeal bill.” If passed, it would have eliminated the individual mandate penalty and temporarily repealed the employer mandate penalty and medical device tax along with providing states flexibility on certain ACA requirements.

Earlier in the week, separate votes on the Better Care Reconciliation Act (BCRA), the Senate’s alternative to the American Health Care Act and the Obamacare Repeal Reconciliation Act, the “repeal and delay” option, also failed.

Republican leadership in Congress or the Administration may also pursue other ways to dismantle, replace or reform the ACA including regulatory action, regulatory non-enforcement or other options.

What’s Next?

Both parties have indicated next steps may include bipartisan efforts to fix the ACA and stabilize the market.

Senator McCain called for a return to the committee process where they would hold hearings, allow input from both sides and produce a bill that truly delivers affordable health care. The future of health care reform continues to remain uncertain. We will continue to keep you apprised as new developments are released.

ACA Remains the Law of the Land

Regardless of the efforts put forth by both parties, The ACA remains the law of the land. Ongoing compliance with the law is required unless and until official guidance to the contrary is issued. We encourage our clients to continue to be diligent with their efforts surrounding ACA compliance.

Wednesday, June 28, 2017

At the end of 2016, Oregon Dairy was faced with a difficult healthcare renewal. The company's health plan provider was increasing its rates substantially and would not provide information to justify the increase. To make matters worse, Oregon Dairy and employers similar in size are required to meet stringent federal ACA guidelines for minimum coverage and affordability. It was the perfect storm, but Oregon Dairy was committed to weather through it.

With the help of BCF Group benefits, Oregon Dairy experienced one of its most successful benefit renewals in recent history. Not only was the punishing increase mitigated to a single digit, the plan funding was adjusted to allow for savings if claims were lower than expected. Additionally, Oregon Dairy further leveraged its culture of employee health and wellness through preferred health plan pricing for employees who attested to being tobacco-free, which the entire Oregon Dairy campus became in 2016.

BCF Group has been Oregon Dairy’s P&C Broker for the past 25 years. Our Commercial Department has been a strategic partner and key advisor in helping Oregon Dairy structure and maintain a culture of safety, which has led to an improved Risk Profile and better bottom line. Several of the family members place their personal insurance with our firm as well.

They’ve been an important client and friend to our organization in many ways.

CLICK HERE TO READ THE FULL ARTICLE >>

 

Monday, May 15, 2017


 

 

 

 

 

 

 

 

A leading insurance professional organization recently recognized Jennifer Buch, CIC of BCF Group, Lancaster, for dedication and ongoing leadership in the insurance industry. The Society of Certified Insurance Counselors (CIC) honored Mrs. Jennifer Buch for ten years of successfully maintaining the Certified Insurance Counselor (CIC) designation, denoting significant commitment to advanced knowledge and customer service.

“This honor is an acknowledgment of the priority Jennifer Buch places on education and professional growth,” cited the Society’s President, Dr. William T. Hold, CIC, CPCU, CLU. “Customers, associates, and the insurance profession as a whole benefit from such a strong commitment to continuing education.”

The CIC Program is nationally recognized as the premier continuing education program for insurance professionals, with programs offered in all 50 states and Puerto Rico. Headquartered in Austin, Texas, the Society of CIC is a not-for-profit organization and the founding program of The National Alliance for Insurance Education & Research.

Tuesday, April 25, 2017


This is my story, one that illustrates the importance of planning ahead in the event of sudden, unexpected life changes.

Seven years ago my Mom called and asked me to pray for my Stepdad, she thought he had a heart attack and they were on the way to the local hospital. I had to sit down. I had just spoken to him 5 days earlier, not that you can tell by a phone call, but he sounded fine.

My stepdad had a LARGE personality. He owned his own business in a competitive environment. He built it by being smart and shrewd and he was successful. He worked hard serving tourist clientele from Memorial Day through Columbus and made his mark in the small place I grew up.

After my Mom and I spoke, they prepared my Stepdad to take a life flight to Massachusetts General Hospital where he would undergo open heart surgery to repair whatever was going on in his chest. Of course, I was miles away in Pennsylvania where I have spent all of my adult life. I felt helpless. My Mom was also several hours away and traveled to the hospital.

For the next hour or so, I spent my time calling my Sister, who is a nurse and could tell me what to expect, then my Mom, to see if there were any updates, and my Brother, who was on his way to Mass General and would arrive about an hour before my Mom.

The mood shifted when my Brother called me after he had arrived at the hospital. He had just come from the room where they had my Stepdad, the room where they were prepping him for surgery, the room where he went into cardiac arrest for his final time. “He’s gone” my brother uttered. An aortic aneurysm at age 66. I fell to the floor.

A blur followed for weeks. My heart still hurts when I think about how my children won’t remember him and all he had to offer to life. Don left a hole in our lives that was LARGE, just like him. Although this was 7 years ago, as I type the tears come back like it was this past Saturday. And we survive with a gap that just can’t be filled.

He did not have any plans to die like most of us of course, but this shrewd businessman literally had no continuing arrangement for his business, his family, my Mom. I refuse to be angry about it, I loved that man and won’t let this be my memory of him, but I have certainly seen the financial effects on my Mom.

What about you? Do you have plans in place for your spouse, your children, and your business? If you do, is it updated to your lifestyle and natural change in your life? My story is not meant to be exploitive or to seek business (I do work for an insurance agency right?). It’s meant for you to consider the horror of sudden changes in your life, a disability, accident, a death that you really don’t want to talk about but must. When life changes in an instant, or sometimes slowly over time, the last thing you want for your loved ones is for them to worry about is how everything will work when you’re disabled or gone.

It’s something for you to consider and plan. We are here for you.

Heather Groff
heatherg@bcfgroup.net 

Thursday, April 13, 2017

 

A leading insurance professional organization recently recognized Trent Hess, CIC of BCF Group, Lancaster, for dedication and ongoing leadership in the insurance industry. The Society of Certified Insurance Counselors (CIC) honored Mr. Trent Hess for six years of successfully maintaining the Certified Insurance Counselor (CIC) designation, denoting significant commitment to advanced knowledge and customer service.

“This honor is an acknowledgment of the priority Trent Hess places on education and professional growth,” cited the Society’s President, Dr. William T. Hold, CIC, CPCU, CLU. “Customers, associates, and the insurance profession as a whole benefit from such a strong commitment to continuing education.”

The CIC Program is nationally recognized as the premier continuing education program for insurance professionals, with programs offered in all 50 states and Puerto Rico. Headquartered in Austin, Texas, the Society of CIC is a not-for-profit organization and the founding program of The National Alliance for Insurance Education & Research.

Connect with Trent on LinkedIn: https://www.linkedin.com/in/trenthess/

 

SOCIETY OF CERTIFIED INSURANCE COUNSELORS

A Member of The National Alliance for Insurance Education & Research
P.O. Box 27027 Austin, Texas 78755-2027 800-633-2165 Fax 512-349-6194 alliance@scic.com
www.TheNationalAlliance.com

 

 

Monday, February 27, 2017

 

 

 

 

 

 

 

 

 

Hey baseball fans! Want up to SIX free tickets to the Lancaster Barnstormers season home opener? It’s easy!

Just click here to email us with the words "Barnstormers Tickets" in the subject line.

 

We’ll draw one name at random each business day through April 21, 2017, and will email the winners with the good news. Each winner will receive:

  • Up to six general admission tickets to the Barnstormers’ season home opener on Friday, April 28, 2017!
  • In addition to the game against the 2016 Atlantic League Champions Sugarland Skeeters, the winners will enjoy a concert by an awesome Beatles cover band
  • Plus, there is a free t-shirt giveaway to the first 1500 attendees
  • Plus, an incredible fireworks show after the game!

No purchase necessary. Only one winner per family. Giveaway ends April 21, 2017. Don’t worry – we will never share or rent your information.

Take a moment to share this with your network by clicking the social media icons below. GOOD LUCK!

Tuesday, February 21, 2017

Is my Umbrella Limit Enough?

This is a question that we get asked fairly regularly, but unfortunately it doesn’t have an easy answer. If you aren’t aware, an Umbrella policy is an insurance policy that provides an additional layer of Liability protection over your existing Personal or Business Insurance policies. This article is geared towards the business community, but the same concepts certainly apply to your Personal Umbrella as well.
First of all, we can never know how much is “enough.” You can purchase a $10 million Umbrella, but if one of your business vehicles causes a catastrophic vehicle accident we don’t know if this would be enough. The decision comes down to your personal risk tolerance, and which premium amount fits into your budget. What we can do is provide a few rules of thumb that can help to guide you:

 1.) How severe are the risks that your business face? Keep in mind that we are thinking of liability risks, not employee injuries. Employee injuries are paid by your Workers Comp carrier. For many businesses, the most significant risks come from their fleet, especially when heavy trucks or tractors are involved. We all know that it takes just a split-second for an accident with life changing consequences to occur. After vehicles, the next consideration is the Bodily Injury or Property Damage that could be caused by your product, operations or services. Could your product cause someone to die? Could your operations spark a fire that might destroy a costly structure? As unpleasant as it is, you need to consider the worst-case scenarios.


 2.) What assets does your business have? In general, the more physical assets you have, the higher your Umbrella limit should be. This can include real estate, vehicles, equipment, inventory, etc.


 3.) What is the premium for higher Umbrella limits? Sometimes the incremental cost for greater limits simply isn’t much. If another $1 million of protection is only $500, it may be foolish not to increase even if your business isn’t high-risk. The reverse can be true as well. The incremental cost for more protection on a high-risk business may be tough to justify.


 4.) When were your limits last increased? As simple as it is, this can be a reasonable consideration. When you first purchased a $1 million Umbrella 10 years ago it was probably an adequate limit, but as your business grows, inflation happens, and lawsuit values increase it may no longer be sufficient.


Ultimately the Umbrella limit is up to you. Our role is to give you unbiased guidance and help you make a reasonable decision that makes sense for your business.

Questions? Contact:  Trenth@bcfgroup.net 

 

Monday, January 23, 2017

affordable care act logoWhat’s the latest news?
The Senate took action to begin the budget reconciliation process and recent comments from Republican Party leaders appear to favor a “Repeal and Replace” strategy.

Budget Resolution
The Senate (51-48) and House (227-198) both approved a concurrent resolution that directs House and Senate committees to begin working on legislation that will, among other things, repeal pieces of the ACA. This action effectively “kicks off” the budget reconciliation process which allows for the repeal of budget related portions of the ACA with a simple majority (51 votes) in the Senate. Democrats were unsuccessful in trying to amend the resolution protecting certain features of the ACA from repeal or change.

Repeal and Replace
Comments from President Trump and Congressional leaders appear to favor a concurrent “Repeal and Replace” strategy, versus “Repeal and Delay.” Recently House Speaker Ryan remarked that Congressional Republicans and the incoming Trump administration are “in complete sync” and that moving forward with health care reform will be done “concurrently, at the same time repeal and replace”. It is widely expected that Congressional Democrats will not cooperate with or agree to repeal of the ACA without at least a replacement for the ACA.

Congress is expected to make changes to the ACA through reconciliation. Reconciliation allows for expedited consideration of certain tax, spending, and debt limit legislation. Such action may affect provisions in the ACA related to the tax code, such as the taxes, subsidies, and individual and employer mandates penalties. It does not allow a complete repeal of the entire ACA.

Repeal of provisions such as mandated benefits (e.g., prohibitions against preexisting condition exclusions) would require 60 votes in the Senate and there are 52 Republicans in the Senate. The Exchanges couldn’t be dismantled immediately from a practical perspective.

Remember that non-ACA related laws such as HIPAA, ERISA, and the new wellness rules would all still stand.

What’s the process and how long will it take?
The appropriate committees will begin drafting legislation, like any other bill in Congress. Once approved by committees, the bill must be passed by the House. Once through the House, the bill will then be sent to the Senate where it could be amended. If the bill is amended, then it goes through a conference committee to resolve differences between the House and Senate versions. Another round of votes will be needed in both chambers to approve of any amended legislation before it can be sent to the President for his signature.

The bottom line, there is no set timeline and historically this is not a “quick” process.

What will likely happen?
Many provisions of the ACA are expected to be repealed. There could be non-enforcement of others. While a replacement is anticipated, Congress and the Trump administration have not yet articulated a clear plan. Proposals include limitation of employer tax deductions and employee tax exclusions on health coverage, tax credits for purchasing coverage, and expansion of HSAs/HDHPs. It is expected that Congressional Republicans will be meeting shortly after the inauguration with the new administration to hash out the strategy. Hopefully, some details will be provided following that meeting.

Will it be easy to understand/implement?
Dismantling the ACA and implementing a new reform package will likely be even more challenging than the original ACA implementation. Deciphering what stays, what goes, the timing of the changes, along with any new requirements will be difficult for all stakeholders in the health care system.

We will keep you posted as we go through this process.

Friday, January 20, 2017

On December 13, 2016, President Obama signed into law the “21st Century Cures Act” which allows small employers without group medical plans to reimburse individual premiums and other medical expenses of employees under health reimbursement arrangements (“HRAs”), effective with the 2017 plan year, and provides relief from penalties to all small employers reimbursing individual premiums of employees for earlier plan years.  In addition, the Cures Act provides a medical innovation package that funds medical research, accelerates cutting-edge treatments for rare diseases, and makes significant reforms to the mental health system.

 

The Issue

An employer cannot offer employees cash to reimburse the purchase of an individual policy, without regard to whether the employer treats the money as pre-tax or post-tax to the employee.  Such arrangements are subject to the market reform provisions of the Affordable Care Act (“ACA”), including prohibition on annual limits and the requirement to provide certain preventive services without cost sharing with which it cannot comply.  Such an arrangement may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee).  There was relief from this rule afforded to small employers that expired July 1, 2015.  An HRA must also be integrated with a group medical plan.

 

New Law

The Cures Act provides relief for small employers and HRAs which comply with all of the following:

 

1. Employer eligibility

An employer must:

  • Have less than 50 full-time employees (including full-time equivalent employees) in the preceding calendar year; and
  • Not offer a group health plan to any of its employees.

2. Employee eligibility

The HRA must be provided to all “eligible employees.” “Eligible employees” are all employees except that the following employees may be excluded:

  • employees who have not completed 90 days of service;
  • employees who have not attained age 25;
  • part-time or seasonal employees;
  • employees covered by a collective bargaining agreement; and
  • employees who are nonresident aliens and receive no earned income from the employer which constitutes income from sources within the United States.

3. Consistent benefit amount

The HRA must be provided on the same terms to all eligible employees.  The employee’s “permitted benefit” can vary in accordance with the variation in the price of an insurance policy in the relevant individual health insurance market based on:

  • the age of the eligible employee (and, in the case of an arrangement which covers medical expenses of the eligible employee’s family members, the age of such family members); or
  • the number of family members of the eligible employee the medical expenses of which are covered under such arrangement.

The variation permitted under the preceding sentence shall be determined by reference to the same insurance policy with respect to all eligible employees.

 

4. Monthly limits

The monthly limits are as follows:

  • $412.50 ($4,950 annually for someone covered by the HRA all year) in the case of an HRA that only provides for payments for the employee; and
  • $833.33 ($10,000 annually for someone covered by the HRA all year) in the case of an HRA that also provides for payments or reimbursements for family members of the employee).

These amounts are subject to cost-of-living adjustments.

 

5. Source of contributions

Per existing HRA rules, contributions are made by employers and not employees (i.e., there are no salary reduction contributions).

 

6. Eligible Expenses

Expenses for medical care (as defined in Code Sec. 213(d)) incurred by the eligible employee or the eligible employee’s family members, including premiums for individual policies, can be reimbursed.

 

7. Substantiation

The employee must provide proof of coverage in order to be reimbursed.

 

8. Reporting

The amount is reported by the employer on FormW-2.

 

9. Federal Taxation

Contributions and benefits are non-taxable for federal taxation purposes provided the individual has minimum essential coverage. Contributions are deductible to the employer provided the individual has minimum essential coverage.

If applicable, states will need to determine the tax impact under state income tax rules.

 

10. Notice Requirement

Not later than 90 days before the beginning each year (or, in the case of an employee who is not eligible to participate in the arrangement at that time, the date on which such employee is first eligible), the employer must provide written notice to employees including:

  • A statement of the amount of the eligible employee’s permitted benefit under the HRA for the year.
  • A statement that the eligible employee should provide the information described in the bullet above to any Marketplace to which the employee applies for advance payment of the premium assistance tax credit.
  • A statement that if the employee is not covered under minimum essential coverage for any month the employee maybe subject to the Individual Mandate tax for such month and reimbursements under the arrangement maybe includible in gross income.

Penalty for failure to notify, unless it is shown that such failure is due to reasonable cause and not willful neglect, is $50 per employee per incident of failure up to $2,500.

 

Effect on Affordability

A qualified small employer HRA is treated as constituting affordable coverage for a month, thus rendering the individual ineligible for a subsidy in the Marketplace, if the excess of the amount that would be paid by the employee as the premium for such month for self-only coverage under the second lowest cost silver plan offered in the relevant individual health insurance market over 1∕12 of the employee’s permitted benefit does not exceed 1∕12 of 9.5% of the employee’s household income. For any month that an employee is provided affordable individual health insurance coverage under a qualified arrangement, he is not eligible for a subsidy.

 

Effective Date

The new rules outlined above apply to plan years beginning after December 31, 2016.

In addition, transition relief that expired in 2015 has been extended so that small employers can reimburse individual premiums without penalty for plan years beginning before December 31, 2016.

 

BCF Group Comment:  Because the qualified small employer HRA is treated as constituting affordable coverage, it is likely that only higher-income earning workers, those who are otherwise ineligible for tax credits for healthcare coverage through the Marketplace, would take advantage of the new reform.

This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.

Wednesday, September 30, 2015

In Pennsylvania, the threshold for an insurance company to surcharge you for an auto claim is $1550. For any claim payout under this amount, your policy can not be surcharged. But does this mean that your premium will not be affected? Not really. If you try to rewrite your policy or try to switch carriers, the claim can keep you from qualifying for the best rating tiers and prevent you from qualifying for a lower cost on your coverage. In addition, if you file another claim within three years of the accident, your insurance company has the right to cancel your policy. The next time you have a claim that is under the $1550 threshold, you may want to consider paying this yourself. Just because you have insurance does not mean you always have to use it. For additional tips on reducing your costs contact us at JaredM@BCFGroup.net

Friday, June 12, 2015
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Many here in Central PA have been following the story of the large fire at a chemical and fertilizer plant in Adams County. In the following days concerns came to light as fish began to die in nearby streams, and the possibility of contaminated soil and water is being investigated.

Your standard Commercial Property and Liability policies provide very limited coverage for Pollution incidents, and generally provide no coverage for "off-premises" incidents. This means in a situation like in Adams County your company could be on the hook for clean-up costs, Haz-Mat expenses, fines, and liability for surrounding property owners who claim bodily injury or property damage. These costs can be significant.

If your company stores, sells, transports or manufactures chemicals (or anything else that could be considered a "pollutant") you should weigh this risk carefully, determine what risk control steps can be taken, and consider whether Pollution Insurance coverage is appropriate.

If you have questions or wish to discuss this issue, please contact me.