Get Insurance Quote Online: July 2013

Economics Daily Digest: No one really needed that insurance, right?

Ricardo Alonoso-Zalvidar speaks to Roosevelt Institute Senior Fellow Richard Kirsch about the news that the administration is delaying implementation of the employer mandate. Kirsch is outraged about how this will affect employees who expected insurance on Jan. 1, 2014.

Roosevelt Take: Kirsch wrote on how the employer mandate would effect low wage workers.

Regulators to Beef Up Wall Street Rules…Thanks to Republicans?! (MoJo)
Erica Eichelberger asks Roosevelt Institute Fellow Mike Konczal why two Republicans on the FDIC want to tighten regulations on big banks' capital requirements. Konczal's explanation? They think it will reduce the blame on the FDIC if there is another bailout.
Murky Language Puts Homes Underwater (TAP)
David Dayen explains how banks are utilizing unclear language to make a loophole that allows them to dual-track homeowners, or continue pursuing foreclosure while the homeowner submits paperwork for mortgage modification. Until we fix this, people will continue to lose their homes.
How to Make Sure a Growing U.S. Economy Helps the Poor (Scholars Strategy Network)
Lane Kenworthy argues that the only way to ensure that economic growth helps the poor is to change the structure of the social safety net and tie benefits to growth. Otherwise, we leave swaths of people behind, which doesn't seem particularly American.
Making $7.75 an Hour, and Figuring There’s Little to Lose by Speaking Out (NYT)
Michael Powell talks to fast-food workers who are involved in the unionizing efforts in New York City. These workers have no fears about annoying their employers: what's the risk when you're making so little money to begin with?
Payroll Cards Are Under Scrutiny by New York’s Attorney General (NYT)
Jessica Silver-Greenberg reports that following Monday's story in the Times on payroll cards, the New York attorney general has opened an investigation. Employees must give explicit consent to be paid this way in New York, and why would anyone choose all those fees?
Hawaii Becomes Second State To Pass A Domestic Workers Bill Of Rights (ThinkProgress)
Bryce Covert discusses Hawaii's new law, which was signed on Tuesday and brings housekeepers, nannies and other domestic workers under the protection of labor laws such as the minimum wage, overtime, and anti-discrimination laws.
Oh, Right, the Jobs Crisis (The Nation)
John Nichols still sees the jobs crisis as the primary problem facing the U.S., and one that needs to be solved before many others. He's especially concerned with the groups that are struggling worst: people of color and young people.

Roosevelt Take: Roosevelt Institute Senior Fellow Jeff Madrick agrees with Nichols on the importance of the jobs emergency, and has plenty of suggestions on how to solve it from the Rediscovering Government initiative's conference on the subject.

Insurance Firms Warn of the ‘Uninsurable’ Future of Climate Change

It warns that the speed at which global oceans are warming is threatening the industry’s ability to sell affordable policies around the world, with parts of the United Kingdom (UK) and the U.S. state of Florida already facing “a risk environment that is uninsurable.”

And these areas are unlikely to be the last that will experience such problems.

But in the UK, hundreds of thousands of homeowners in areas at high risk of flooding will still be able to insure their properties, after the government struck a deal with the industry.

The deal—introduced as part of the government’s new water bill—comes just weeks before the current agreement is set to expire and follows lengthy negotiations with the Association of British Insurers.

The agreement will cap flood insurance premiums, linking them to council tax bands so that people in high risk areas will know the maximum they will have to pay, while a levy on all UK household insurers will be used to create a fund to cover claims for people in high-risk homes.

The new bill also includes plans to increase competition in the water market and improve drought resilience. Meanwhile the government announced an extra £370 million of flood protection funding for 2015-2016 and committed to increase funding each year to 2020—adding to the £2.3 billion they say is currently earmarked for flood defenses.

There has been rising friction in recent years between the insurance industry and governments around the world who are struggling to shore up flood protection.

The Geneva Association—which is overseen by executives from some of the world’s largest insurance firms—warns that governments will have to step up their action to protect their towns from the effects of climate change.

Warming oceans have already locked-in shifts in climate, even if countries’ attempts to reduce greenhouse gases proved successful.

John Fitzpatrick, secretary general of the Geneva Association said:

Given that energy from the ocean is a key driver of extreme events, ocean warming has effectively caused a shift towards a “new normal” for a number of insurance relevant hazards. This shift is quasi irreversible—even if greenhouse gas (GHG) emissions completely stop tomorrow, oceanic temperatures will continue to rise.

As oceans warm, they expand, contributing to rise sea levels. Melting ice sheets and glaciers are also contributing.

The average global sea has risen nearly 20cm over the past century—with faster rises seen in more recent years. In its most recent report in 2007, the Intergovernmental Panel on Climate Change estimated that the sea levels rose an average of 1.8mm per year from 1961 to 1993 and 3.1mm from 1993 to 2003.

As well as rising sea levels, scientists believe warmer oceans contribute to an increase in evaporation from the surface of the seas, leading to heavier rains and the potential for more storms.

Such factors may have contributed to Hurricane Sandy, which hit New York and New Jersey last year, costing the U.S. economy about $65 billion, warns the Geneva Association.

Earlier this month, New York Mayor Michael Bloomberg announced a $20 billion plan to protect the city from future storms including building flood walls, levees and gates as well as funding for flood proofing measures for property owners and hospitals.

The number of weather catastrophes, including storms, heatwaves and forest fires have risen from around 300 a year in 1980 to around 900 in 2012, according to figures from reinsurer, Munich Re.

The new report calls on governments to invest more in flood defenses and tighten building restrictions in risky locations to mitigate the fallout of extreme weather hazards. They warn of the growing trend for an increasing number, and value, of properties being built along waterways and coastlines—pushing up the cost when disaster hits.

Kidnap and ransom insurance I’m a client… Get me out of here

FOR providers of kidnap and ransom insurance (K&R in the lingo), the past few years have been good. Somali piracy alone generated some $200m in annual premiums at its 2010 peak, according to one underwriter. Abductions for profit or politics have soared from Nigeria to Nicaragua. High-profile cases have helped too: when hundreds of workers were taken hostage at an Algerian gas plant in January, insurers received a flurry of calls, says Henry MacHale of Aspen APJ, a specialist K&R firm.
Most big companies now have some K&R coverage for their staff. Plans typically cover ransoms, the hiring of consultants and negotiators, lost earnings and other costs. A lone businessman in Iraq might pay a premium of $3,000-6,000, while shipping firms have to fork over several million a year to cover large fleets in dangerous areas. All that meant that a market worth about $250m in 2006 doubled in size by 2011.
Now the business is shifting. Somali piracy has dropped off; there have been no documented successful hijackings since May 2012. And although the number of attacks in the Gulf of Guinea overtook those of the East Africa in 2012, quieter shipping lanes there mean fewer potential customers. Yet new markets are opening up. In Africa, India and Latin America the middle class has been growing—and so has the worry about being snatched. For instance, “express” kidnappings are on the rise, negotiators report. Unlike the protracted wrangling more familiar to movie goers, this quicker version involves fast, targeted grabs, followed by shorter periods of detention and smaller ransoms.
At the other end of the scale, says Mark Harris of the Olive Group, a consultancy, some highly professional Mexican bandits now run multiple “cases”, managing kidnaps, negotiations and payments from a single building. Others, such as Terra Firma Risk Management, a negotiation firm, say the most serious cases seem to be getting more protracted, and hardened kidnappers more patient. Trends such as Chinese energy firms moving into West Africa add to the business K&R firms can chase.
To set themselves apart, some are offering “added value,” often aimed at reducing the risk of a kidnapping in the first place. By training clients to avoid trouble, and helping them out when they smell danger, insurers can cut pay-outs. Such measures not only ensure that client get home in one piece, but lower premiums. Governments are fans, too: at the G8 meeting in mid-June, ministers agreed to crack down on the payment of ransoms to terrorists, urging insurers and clients to adopt “good practices” for kidnap prevention.
In an innocuous farmhouse in the village of Remenham, 30 miles west of London, Special Contingency Risks (SCR), a brokerage, has set up an “operations centre” (pictured) to help clients in dangerous places. Manned by ex-special forces soldiers and at least one former spy, it acts as a call centre or crisis room, depending on the situation. Big screens feed news to the staff on duty. Some clients are issued with tracking devices, and their locations are shown in real-time.
If a customer is on business in Libya or Nigeria, says SCR’s Tim Holt, they will be given advice before they leave. If he or she senses trouble brewing while they are abroad, they can call the farmhouse. The team there will then use a network of “black book” contacts, including private security firms, to reach the client in danger. If plans fail and a customer is nabbed, negotiators will huddle with family members and colleagues in a “war room” upstairs.
Doug Milne, SCR’s boss, is cagey about specific cases, but claims about 60 kidnaps per year will be run from the new facility. Extortion and medical evacuation are other orders of business. Insurers include Hiscox, Chubb and Aon, each of which provides crisis management or security to bolster their products. At the outbreak of the 2011 Libyan Civil war, “risk managers”, paid for by K&R insurers, helped co-ordinate the evacuation of hundreds of foreign workers.
The move to a higher-tech approach seems well timed. According to Terra Firma, Latin American kidnappers are getting better at choosing their victims, using intelligence gathered from Facebook and other sources. Crooks who have done their homework tend to pick better targets, choosing those with families or employers who have access to ready cash. Smaller gangs, keen to join in, are learning the tricks of the trade.
Insurance alone does not reduce the chance of being snatched (discussing your policy can see it cancelled—kidnappers will target those with K&R cover). But preparation, and a helping hand when things go wrong, just might improve the chance of getting out alive.

58,000 Californians to lose current insurance under Obamacare

The nation’s largest health insurance company has decided to stop covering individuals in the nation’s largest state.
UnitedHealth Group Inc. said that it will not participate in California’s individual health insurance market beginning Jan. 1, 2014, when Obamacare regulations will take effect, according to the Los Angeles Times.
Last month, insurance giant Aetna also announced that it will no longer cover individual Californians. Together, the companies’ decision to stop providing individual coverage will affect 58,000 existing customers in California.

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The move is a result of new Affordable Care Act requirements for insurance companies to accept all applicants for individual coverage, including those with preexisting conditions. The law also requires insurers provide a bevy of new benefits for their customers.
Problems with implementing the health care law have plagued the Obama administration, despite the president’s oft-repeated assurance that “if you like your health care plan, you’ll be able to keep your health care plan.”
UnitedHealth’s announcement last month that it will participate in only twelve state exchanges beginning in January has sparked concerns about whether the insurance markets will be competitive enough for the health care law to work. Both companies will continue to offer health insurance in California through employers, but this may not be a relief to everyone.
Employer insurance coverage has been a sticky issue during the planning stages of Obamacare. The health care law includes an employer mandate that requires companies with 50 or more full time employees to provide health insurance or to pay a penalty — but defines “full-time” as 30 hours per week. Many companies have introduced plans to reduce employees’ maximum hours to 29 per week in response.
Bloomberg reported Tuesday that the Obama administration is delaying enforcement of the employer mandate until 2015.

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On Monday, House Republicans introduced the Save American Workers Act — a bill that would repeal the health care act’s redefinition of a full-time work week, instead applying the employer mandate to employees that work 40 hours per week.
Indiana Republican Rep. Todd Young, who introduced the bill, made the case that “Americans are seeing their hours cut and their paychecks reduced as a result of the employer mandate.”

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Tags: Barack Obama, California, Obamacare

Administration gives employers until 2015 on health insurance mandate

Patient Joan West (R) receives a check up from Dr. Lisa Vinci at University of Chicago Medicine Primary Care Clinic in Chicago June 28, 2012. (Photo by Jim Young/Reuters)

The Obama administration unexpectedly announced that it has decided to give employers an extra year to comply with a key provision of the health care reform law. In a statement released Tuesday, a Treasury Department official said the administration would give employers until 2015 to start reporting on the insurance coverage they offer to workers.
The Affordable Care Act, President Obama’s signature legislative achievement, requires businesses with more than 50 employees to offer health care coverage that meets basic standards of coverage and affordability. Employers were supposed to start filing annual reports on their compliance next year, and those failing to meet the new standards were facing fines.
Business groups have complained that the reporting mandate is too complicated to enact so quickly, so the administration is extending the deadline—effectively lifting the insurance mandate as well.
“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Assistant Treasury Secretary Mark Mazur said in the announcement. “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”
Mazur urged businesses to file voluntary reports in 2014 as a “real world test of [the] reporting system,” but he said they wouldn’t be fined for noncompliance next year. The new policy will be published as a regulation later this week.
Because most large employers already sponsor health insurance plans, the effect on consumers won’t be dramatic. And workers living below 400% of the federal poverty level will still be eligible for subsidies next year.
Republicans reacted predictably. Senator McConnell released a statement:

“Obamacare costs too much and it isn’t working the way the administration promised. And while the White House seems to slowly be admitting what Americans already know, and what I hear consistently in my travels around Kentucky regarding the regulatory burden on employers, the fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans.”

And GOP Majority Leader Eric Cantor tweeted:
James Klein, president of the American Benefits Council, said the group applauded the decision to delay. “This provides vital breathing room to implement the law in a more thoughtful and administrable way,” he said.
Josh Barro wrote on Business Insider that if the reason for the delay is that the Obama administration couldn’t “get its act together on the reporting requirements,” that would be an embarrassment–but that “the reporting issue may just be a pretext for the delay.” Calling the employer mandate “a bad policy that will discourage job creation,” Barro speculated that the administration “may be looking for a way to avoid imposing it ever.”
At any rate, the new extension will delay the imposition of any penalties until after the 2014 midterm elections.

Administration gives employers until 2015 on health insurance mandate

Patient Joan West (R) receives a check up from Dr. Lisa Vinci at University of Chicago Medicine Primary Care Clinic in Chicago June 28, 2012. (Photo by Jim Young/Reuters)

“Obamacare costs too much and it isn’t working the way the administration promised. And while the White House seems to slowly be admitting what Americans already know, and what I hear consistently in my travels around Kentucky regarding the regulatory burden on employers, the fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans.”

Obama’s Insurance Delay Won’t Affect Many

On Tuesday, the White House announced that it would delay for another year one provision of the 2010 health care reform act. Larger employers will now have until 2015 before they will have to provide insurance or face penalties. The administration’s explanation is that it is listening to businesses’ concerns about getting their coverage ready in time, and trying to be flexible. But what people are really concerned about is whether this will make a difference in health care coverage and the progress of reform.
The short answer is no.
The employer mandate was included in the Affordable Care Act — which I helped design as an adviser to the Obama administration — in order to ensure the continuation of employer-sponsored insurance after the creation of state-sponsored health care exchanges. We didn’t want every employer to simply drop its coverage and send all its workers to the exchanges.
But complying is proving to be more difficult than expected for employers. The act requires businesses with more than 50 employees to provide coverage to their full-time workers or face a penalty of $2,000 per employee. A full-time worker is defined as someone who is paid for 30 or more hours of service a week or 130 hours a month. It sounds simple, but determining who should be counted turned out to be a nightmare.
Hours of service include paid vacation and sick time, as well as things like jury duty. And how do seasonal workers fit in, or people who work just one semester at an academic institution? Employers rightly complained about the complications, and the administration was right to listen.
Delaying enforcement of the mandate won’t hurt the progress of health care reform because, the fact is, the requirement affects very few employers.
There are around six million employers in the United States. The vast majority — 96 percent — are small, employing fewer than 50 workers. Many don’t offer health insurance. For instance, among employers with fewer than 10 workers, half don’t offer insurance. But the employer mandate does not affect them, and they don’t pay a penalty.
Only about 200,000 employers have more than 50 workers. And the vast majority of them — 94 percent or more, according to the Kaiser Family Foundation and Health Research and Educational Trust — already offer health insurance. Thus, fewer than an estimated 12,000 employers fail to offer health insurance and would be subject to the penalty. That means we’re talking about only maybe 1 or 1.5 million workers.
Certainly, for these workers, having health insurance would be a great benefit. And covering more Americans was a central rationale for the Affordable Care Act.
But not having their employers provide insurance doesn’t mean they have to wait much longer for coverage. In October, thanks to the Affordable Care Act, they will be able to buy insurance on the exchanges. They won’t have to worry about having a pre-existing condition, and they will receive an income-based subsidy to help defray the costs.
It is also highly unlikely that the administration’s announcement will encourage any of the other 94 percent of large employers to drop their health insurance. They provide it now with no mandate. No law requires General Electric or Verizon to provide its workers health insurance today. They do it because it makes business sense in terms of attracting and retaining good workers.
Perhaps, after the exchanges go into effect and prove themselves reliable, some employers will be tempted to drop their coverage. But by the time any of them can make the change, it will be 2015, and by then the penalty will be in place.
The employer mandate is overly complicated. Representatives in the House had what was probably a better idea: to make employers devote a certain percentage of their payroll to health insurance, instead of doing it by the number of full-time workers. That would have been a far simpler determination. It was one of those points that was supposed to be resolved in conference committee. But alas, the election of Scott Brown, the Massachusetts Republican, lost the Democrats their supermajority in the Senate, and we had to move forward with the version of the act that had already passed. The good ideas from the House never made it in.
But whatever the merits or demerits of the employer mandate, and despite the headlines this week, postponing the mandate’s enforcement by one year isn’t particularly noteworthy.

Insurance

Economics Daily Digest: No one really needed that insurance, right?

Insurance Firms Warn of the ‘Uninsurable’ Future of Climate Change

Kidnap and ransom insurance I’m a client… Get me out of here

58,000 Californians to lose current insurance under Obamacare

Administration gives employers until 2015 on health insurance mandate

Administration gives employers until 2015 on health insurance mandate

Obama’s Insurance Delay Won’t Affect Many

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