Q: What is EPLI Insurance?
A: EPLI Insurance or Employment Practices Liability Insurance covers the employer for exposures relating to employment (i.e. discrimination, wrongful termination et al).
Q: What's the difference between term life insurance and whole life insurance?
A: Term insurance is for people who do not want life insurance to be paid when they die of old age. It is normally purchased to cover a 10 or 20 year period, like when someone with young children want coverage in case they die prematurely. The premiums are cheap, but skyrockets at the end of the term, so most people cancel the coverage. It seldom results in a claim, since most people who buy term buy it when they are young and healthy. If there is a term life death claim, it is usually the result of an accident or a premature death due to an unexpected disease.
Whole Life insurance is as the name implies, it covers your entire life. This insurance is for someone who wants coverage for their entire lifetime. Since this has a greater coverage period, it is more expensive. But on a net basis, whole life is cheaper than term life. When you pay your premiums, a small portion goes to the cost of the life insurance and most goes toward an investment. As you pay your premiums after 20 or 30 years, you likely will have double what you paid in premiums in the investment portion of the policy called cash value. You can use the cash by borrowing it, or you can leave the cash alone, and it will likely (depending on the design) pay for your premiums for the rest of your life.
Q: What is the average cost of malpractice insurance?
A: We get this question all the time, and it depends on which state, specialty, the year of the retro date and the doctor's claims. If you want a ballpark, in CA a non invasive specialty, fully mature, with no claims is $10K a year, and an invasive specialty is $45K. If it is NY, multiply those numbers by 3 or 4.
Q: How much is the most basic professional liability insurance for a small business?
A: It's tough to say because it depends on what they do for a living, but a ballpark small business is $5K to $10K a year.
Q: What is Personal Injury Medical Malpractice?
A: This is a new insurance that allows the patient to buy life, and a product similar to AD&D for claims arising from complications related to a recent surgery. Example, if you die from complications of a surgery, then your family will get a death benefit. If you lose your limb(s) or other functions, then you get a benefit. This new insurance may lower the chances of claims against the surgeon. First, if a family or patient suffers a loss and they get paid under this policy they may be less likely to sue the doctor since they received compensation. Also, this may help negate a patient or family's lawsuit claim alleging that the doctor did not provide adequate information regarding the surgical risk, and therefore never obtained informed consent. How would a patient claim that he/she did not know the risks if he/she buys insurance to protect himself/herself from the surgical risk?
Q: FMLA vs workers comp?
A: FMLA is the Family Medical Leave Act. This provides job protected leave for non job related illness or leave to care for an immediate family member. Workers Comp provides benefits for job related injury disability or death.
Q: Are most ASO also stop loss?
A: ASO is administrative service only. These are the services that the employer needs to self-insure its health insurance; the business that performs this is called TPA or third party administrator. ASO includes claims processing, utilization review, case management, PBM-pharmacy benefit manager, and PPO.
Stop Loss is the insurance that the employer buys to cover himself/herself for catastrophic claims that exceed a defined dollar amount (i.e. $50K or $100K). He/she would also purchase Aggregate Stop Loss Insurance. This covers the employer if his/her total annual claims exceed a defined amount of money. So do all ASO plans have stop loss? Not always. There are large employers who have thousands of covered employees that may feel they do not want to purchase stop loss since their risk is very predictable, and when it is not they have the necessary funds to cover bad years.
Q: Why do you have to issue a broker of record to a broker?
A: This is done when you want to hire a new broker to handle your insurance. Perhaps you currently have the best deal on your insurance, but you find another broker who provides more services than your current broker, and you want to change. You simply sign a letter addressed to all your insurers with your policy number which states, "I am appointing broker X as my new broker and please pay him/her the normal commissions that are being paid in relation to my insurance." You should think about why you are changing brokers. Some clients sign this without knowing what it means or they think it is no big deal. It means the person who is handling your insurance now is going to be fired. It is similar to firing an employee. You would not do this for any particular reason. Also, do not do this midway into the policy if it is for group benefits. Inform your current broker, and make the change 30 days prior to renewal. Since the current broker did the work of shopping all your coverages for free, and he/she is paid a monthly commission throughout the year, if you fire him/her midway into his/her policy then that money goes to the new broker for doing nothing. For all other insurance coverages you can make the change anytime after the renewal, since the broker gets paid the entire commission at the time of binding your renewal.
Q: What are reinsurance triggers in healthcare?
A: Not sure, but reinsurance can trigger on a specific basis, meaning a defined deductible amount or it can be a quota share where the reinsurer takes a percentage of risk over a certain dollar amount.
Q: What does D and O insurance mean?
A: Directors and Officers Insurance protects the current and former officers, directors, managers and employees for claims arising from the operations of the company (not professional liability).
Example: an anti-trust claim or misuse of corporate assets or business interference.
Q: What does a statutory limit mean on a works comp policy?
A: Workers Compensation covers all employees for work related injuries at 100% of the medical bills. It has a disability benefit and life insurance. In return for these free benefits the worker cannot sue the employer for more than what the statute says. In CA this is $1 million. The only way to get more than this limit is if the worker can prove gross negligence.
Example: an employer knew he had a faulty machine and let an employee use it and he/she is severely injured or killed. This is why all employers, especially those who can have a big workers comp claim should buy umbrella liability insurance, since this is the coverage that may respond if you have a claim that exceeds the workers compensation statutory limit. General Liability will not respond.
