Insurance

4 Medicare Tips: What to Know Before Enrolling

by
Medicare tips

The longer I work in the insurance industry (and the older I get), the more I receive requests for Medicare tips. I’ve written dozens of courses on the topic and regularly teach insurance courses on the subject. Therefore, I’m happy to offer my list of SOME of the must-know information you should have before enrolling in Medicare.

Tip #1: You’re Not Automatically Eligible or Enrolled

A person must earn a minimum amount of wages to be eligible for Medicare (and all Social Security Benefits). In addition, the wages earned have been paid in a job/occupation for which payroll taxes were paid under the Federal Insurance Contributions Act (FICA). The time period for full Social Security benefit eligibility is 10 years of full-time employment. This is also referred to as 40 credits by the Social Security Administration. (Click here to learn more about earning SS credits.)

The only people who are automatically enrolled in Medicare–meaning they don’t need to sign themselves up personally–are individuals who have already applied for Social Security or Railroad Retirement benefits because they:

  • Have been receiving retirement benefits from Social Security or the Railroad Retirement Board for at least 4 months before they turn age 65
  • Are not yet age 65 and have been receiving Social Security Disability Insurance benefits for 24 months
  • Are not yet age 65 and have been diagnosed with amyotrophic lateral sclerosis (ALS, or Lou Gehrig’s disease)
  • Have been diagnosed with End-Stage Renal Disease (ESRD)–regardless of age–and all the following conditions apply:
    • The person’s kidneys no longer work
    • The person needs regular dialysis or have had a kidney transplant
    • Eligibility for Social Security has been established by one of the following:
      • The required credits have been earned under Social Security, the Railroad Retirement Board, or as a government employee
      • The individual is already receiving, or is eligible for, Social Security or Railroad Retirement benefits
      • The individual is a dependent child or spouse of a person who meets one of the previous requirements

If you don’t meet the criteria above, you need to enroll yourself. You can do that online at SSA.gov, in person at a Social Security office, or by telephone. The quickest way to enroll is online–after creating that online account with Social Security.

Tip #2: You Can Only Enroll at Certain Times of the Year

This is probably one of the most important Medicare tips you’ll receive: The best time to enroll in Medicare is during Initial Enrollment Period, which revolves around each person’s 65th birthday. It begins 3 months before the birthday month and ends three months after it. For instance, if your birth is August 4, your initial enrollment period begins on May 1 and ends on November 30.

If you enroll during your initial enrollment period, you will NOT pay a late enrollment penalty. However, if you do NOT enroll during your initial enrollment period, you MAY pay a late enrollment penalty when you do enroll.

The annual Open Enrollment Period runs from October 15 to December 7 each year. Anyone can enroll in Medicare during this time. In addition, those already enrolled in Medicare can change plans during this time. New coverage, as well as any changes, become effective on January 1.

The annual General Enrollment Period runs from January 1 to March 31 each year. Anyone can enroll in Medicare during this period. However, coverage begins on July 1 and enrollment may be subject to a late enrollment penalty.

Click here for more information about initial, open, and general enrollment periods. Several Special Enrollment Periods are available for people who lose existing insurance coverage (such as employer- or group-sponsored health insurance) or who move.

Tip #3: Coverage Isn’t Free

Many people mistakenly believe that because they contributed to the Medicare program through their payroll taxes (FICA), they won’t have to pay a premium for their coverage. Here’s the financial part of my Medicare tips: the scoop about the premiums charged for the various coverage parts:

Medicare Part A/Hospital Insurance: Those who are fully eligible for Social Security benefits (i.e., they have 40 credits) do NOT pay a premium for Part A. Those who are only partially eligible or not eligible at all, may enroll in Medicare and pay a premium. Here’s the monthly premium breakdown:

  • 40 credits = $0
  • 30 to 39 credits = $278
  • 0 to 29 credits = $$506

Medicare Part B/Medical Insurance: Unless they are eligible for Extra Help or also have Medicaid and are eligible for a premium assistance plan, everyone pays a premium for Part B. This applies even if they are also enrolled in a Medicare Advantage Plan (Part C). In 2022, the monthly premium is $170.10. In 2023, the monthly premium will be $164.90.

Medicare Part D/Prescription Drug Coverage: Everyone pays a premium for Part D–unless they are eligible for Extra Help or also have Medicaid and are eligible for a premium assistance plan. The cost for each plan varies, because each plan is sold by a private insurer. Each plan and its premiums are subject to CMS/Medicare rules and state insurance regulations.

Medicare Part C/Medicare Advantage Plans: Like Part D plans, Part C plans are issued by private insurance companies and each plan’s premiums are different. They are also subject to CMS/Medicare rules and state insurance regulations.

Tip #4: Make Sure You Talk to a Trusted Agent

Medicare’s website, medicare.gov, contains the majority of information anyone needs to learn about Medicare eligibility, enrollment, coverages, and how everyone works. Admittedly, not everyone is a computer whiz or equipped with the patience to read through Medicare’s website. That’s why talking to a trusted, professional agent is essential.

Federal law has established guidelines for the sales and marketing of all Medicare plans, and for how people can engage in sales and marketing activities. Click here to review Medicare’s marketing rules and the rules that apply for meeting with an agent.

If any agent, or anyone claiming to be an agent, fails to comply with these rules, find yourself a new agent. And report the person taking advantage of you!

Feel free to ask any questions you might have. I’ll be happy to provide you with more Medicare tips, answer questions, and/or provide you with additional resources. You can reach out to me here.

Insuring Cannabis Businesses – Issues and Problems

by
Illustrate a cannabis plant

Insuring cannabis businesses can be problematic. During the course of the past two years, I’ve written several new insurance continuing education (CE) online and webinar courses for my client, A.D. Banker & Company. One of the most recent webinars is Insuring Cannabis Risks.

The course is the brainchild of inquiries submitted by individuals who attended a free monthly webinar I co-host with A.D. Banker vice president, Pam Reihs. During each 1-hour Insurance Trends Webinar, Pam and I talk about insurance topics of current relevancy. How to insure cannabis businesses is always at the top of the list. Questions we often receive are:

  • Why isn’t cannabis/marijuana legal in all the states?
  • In what states IS marijuana legal?
  • What about hemp, that’s legal, isn’t it?
  • Why is it so hard for cannabis businesses to establish relationships with banks and credit card companies?
  • What insurance companies write insurance for cannabis businesses?

The insurance CE webinar answers these and other questions for licensed insurance professionals. I recently wrote two blog posts for A.D. Banker that summarizes the most important information contained in the course. So, for you insurance and non-insurance people alike, feel free to visit those blog posts:

Check back as I provide ongoing updates about this evolving insurance marketplace. To register for the insurance CE webinar, click here. You can find my insurance webinar schedule here.

Prepare for Hurricane Season

by

In this week’s podcast episode, I talk about how insurance agents can help their policyholders prepare for hurricane season. Here are a few excerpts from the podcast, along with resources that appear at the end of the post:

Did you know?

  • Hurricane season begins on June 1 in the Atlantic and on May 15 in the Eastern Pacific. In all locations, it ends on November 30.
  • The biggest threat during a hurricane is storm surge–especially at high tide.
  • The National Weather Service reports that the number of hurricanes keeps growing each year.
  • During high winds, the 4 biggest areas of weakness in any building are its roof, windows, entrance doors, and garage doors.
  • Not all property insurance policies provide coverage for wind–especially in coastal states.
  • NO standard property insurance policies provide coverage for storm surge caused by a hurricane. This is because, in most states, it is considered a form of flood–which is an excluded peril.

For more information about how to prepare for hurricane season, listen to the entire podcast, which can be found at: https://episodes.castos.com/5e6ccb9ab4cf97-55025247/TMoI-Ep-16-Aug-4-Prepare-Hurricane-Seaxon.mp3

Resources: Prepare for Hurricane Season

Ready.Gov Hurricanes: https://www.ready.gov/hurricanes

NOAA Hurricanes: https://www.noaa.gov/education/resource-collections/weather-atmosphere/hurricanes

National Weather Service Hurricane Safety: https://www.weather.gov/safety/hurricane

Webpage with database of disaster declarations by state: https://www.fema.gov/disasters/

DHS’ DisasterAssistance.gov website: https://www.disasterassistance.gov/

SBA disaster loans: https://disasterloan.sba.gov/ela/Home/Questions

NFIP/FEMA Hurricane Season: https://agents.floodsmart.gov/pacifichurricaneseason

COVID, the Insurance Industry, and our Crystal Balls

by

This week, I ventured down a slightly different path on my podcast. I talked about COVID and insurance, but more about what I believe we need to consider for the future rather than about what is happening today.

Take a listen and then share what YOU think might happen: https://episodes.castos.com/5e6ccb9ab4cf97-55025247/TMoI-Episode-12-MR.mp3

How Homeowners Insurance Works When You’re Working from Home

by

The homeowners policy was designed to insure personal risks, not business risks. For this reason, virtually all coverage for business property and liability is explicitly excluded in the homeowners policy.

Very limited property coverage is included for business personal property. The limit usually ranges between $1,000 and $2,500 if the business property is at your house. The limit is much less for business property anywhere else–like in your car.

Liability coverage for business activities is also severely limited. It only applies to incidents that occur on your property at home, and only for those that arise when:

  • Your house is rented–either occasionally as a residence or when a part of it is rented to 1 or 2 boarders. This does NOT include Airbnb rentals, or any series of rentals. Neither does it include renting your barn to a neighbor who does lawn mower repairs.
  • A portion of your house or other building is rented for use as a private garage, office, school, or studio. Think designating a room for use to give music or dance lessons, or as an office for a writer.
  • An insured who is under age 21 runs a self-employed part-time or occasional business that does not have any employees.

What all this means is that if a person is working from home, any property used for business–regardless of whether it is owned by the individual or the individual’s employer–has very limited coverage. If the employer has insurance for property it owns, that property should be insured specifically on the employer’s policy with an indication it is located at the employee’s home. In some cases, the employer’s failure to cite the location of the property on its policy, especially if the property is valued at more than $5,000 or $10,000, might result in a lack of adequate coverage in the event of a loss.

Potential problems relating to the lack of business liability coverage under the homeowners policy are more serious. In most cases, clients do not visit employees working from home. But if anyone visits your home for business and gets hurt, your unendorsed homeowners policy does not provide any liability coverage. Similarly, if a FedEx or USPS employee trips and falls while delivering business mail or packages, any claim for injuries would not be covered. Basically, coverage for ANY other type of liability (think cyber liability, products liability, etc.) is NOT covered, either.

Endorsements are available to add limited business property and liability coverage to the homeowners policy but, in most cases, it’s probably not adequate. Some insurers also offer a home business endorsement that does include business, or commercial, coverage. That’s probably a better idea.

Remember, even if you’re working from home and your employer does have coverage for property it owns, and its own liability, your employer gets the broadest coverage under that policy. If you’re covered under it, you can still be held personally liable for property damage and bodily injury resulting from business activities conducted at your home.

Unless you buy and add business endorsements to your homeowners policy, you might find yourself uninsured in the event of a loss when you’re working from home.

For more details, listen to this week’s podcast at Taking the Mystery out of Insurance.