tag:blogger.com,1999:blog-64373343952009545652024-03-18T20:33:20.425-07:00Canadian Life and Health InsuranceThis blog is intended to be a space to write about insurance, employee benefits, industry news and financial literacy. I promise I will be as impartial and direct as I can be, if I hold a conflict of interest or personal bias I will state it openly.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.comBlogger93125tag:blogger.com,1999:blog-6437334395200954565.post-1800317179733391232017-05-15T10:32:00.002-07:002017-05-15T10:32:12.013-07:00<div class="MsoNormal">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNjXFXPXbB2Mcyi0zK6LCD-9WJnea0mKDKlnc1M0-xRZedJC2399YBqb0Tt78cJ1wMgkrRrjUsfnTpjBHtXctTGYsJJbxJFpyoQvoGckNGvjdErMdEAX8TLWKuRLwOWA0471ov2GG648In/s1600/IMG_1618.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNjXFXPXbB2Mcyi0zK6LCD-9WJnea0mKDKlnc1M0-xRZedJC2399YBqb0Tt78cJ1wMgkrRrjUsfnTpjBHtXctTGYsJJbxJFpyoQvoGckNGvjdErMdEAX8TLWKuRLwOWA0471ov2GG648In/s320/IMG_1618.JPG" width="240" /></a></div>
Hunched over at a computer? Bent over a bench? Are the long
hours of self employed work taking their toll on your back and neck? Need a
massage or a chiropractor visit, but it is just too expensive?<o:p></o:p></div>
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<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b>What If you could cut the after tax cost of a massage or adjustment by up to 30%?<o:p></o:p></b></div>
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<br /></div>
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As a self employed person, Canada Revenue gives you some
special tools you can use that regular employee’s can’t. One such tool is the
ability to fully deduct the cost of medical and dental expenses against
business income. This includes paramedical practitioners like Registered
Massage Therapy, Chiropractors, Naturopath, Physiotherapists, Acupuncture etc. Furthermore,
these benefits are received by you totally tax free!<o:p></o:p></div>
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<br /></div>
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The Government wants workers to be healthy, so health care
and dental care receive preferential tax treatment when it comes to employee
benefit plans. But “I’m not an employee, I am self employed”, I hear you say.
Not in the eyes of Canada Revenue. You and your business are two separate entities.
And “Your business” can pay for “Your Healthcare” and deduct the whole thing.
You receive the benefit as an employee and it is 100% tax free.<o:p></o:p></div>
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<br /></div>
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Try paying yourself $100 from your company, CRA will tax the
snot out of it. But have your business pay for $100 of health care and you get
it Scott free!<br />
<br />
Now, since this is sanctioned by Canada Revenue Agency, there are, of course,
some hoops to jump through.</div>
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<ol>
<li>You can’t just wave a magic wand and declare
something is “Health Care” and *Presto* it’s tax free. No, you need to create a
Private Health Services Plan (PHSP) a tax sheltering plan sanctioned by CRA.</li>
<li>The PHSP must be managed by a third party, you
can’t setup a PHSP and administrate it for yourself. The third party is
required by Canada Revenue to ensure the medical expenses are legit, and that
if you have arm’s length employees they have an element of privacy.</li>
<li><span style="text-indent: -18pt;">Unincorporated Sole Proprietors have lower
limits than if you have an Incorporated business.</span></li>
<li><span style="text-indent: -18pt;">If you have employees, you must give them a “Like
Benefit” similar to what you give yourself.</span></li>
</ol>
<br />
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<o:p></o:p></div>
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<o:p></o:p></div>
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Private Health Services plans are usually administered by
Trust Companies, or Insurance Companies. The fees and services vary by
provider, but there is often a small one time setup fee, followed by a 10%
administration fee whenever you submit a claim. <br />
<br />
Even after the small administration fee you can still save 10%-30% in income
tax on your healthcare and dental expenses. Furthermore, these dollar do not
attract CPP, EI or Worksafe premiums, further increasing your savings.<br />
<br />
Speak with your financial advisor or an employee benefits specialist (such as
myself) to start your Private Health Services Plan.<o:p></o:p></div>
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<br /></div>
--<br />
Robert Reynolds, Certified Financial Planner, Certified Group Benefits Advisor<br />
Partner - Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. & E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-46164913894056201612016-02-02T12:04:00.000-08:002016-02-02T12:04:55.711-08:002016 Provincial Dental Fee Guide Increases.<br />
<table align="left" border="0" cellpadding="0" cellspacing="0" style="color: #222222; font-family: 'Helvetica Neue', Arial, Helvetica, Geneva, sans-serif; font-size: 12.8px; width: 640px;"><tbody>
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<table border="0" cellpadding="0" cellspacing="0" style="width: 580px;"><tbody>
<tr style="border-collapse: collapse;"><td style="border-collapse: collapse; margin: 0px;" width="580"><div align="left" style="color: #005c84; font-size: 18px; font-weight: bold; line-height: 24px; margin-bottom: 18px;">
Provincial/Territorial Dental Fee Guide Increases for 2016</div>
<div align="left" style="color: #444444; font-size: 13px; line-height: 18px; margin-bottom: 18px; margin-top: 0px;">
<div style="margin-bottom: 15px;">
<strong>Suggested Dental Fee Guide Increases for 2016</strong></div>
<div style="margin-bottom: 15px;">
It’s that time of year when most provincial and territorial dental associations release their annual dental fee guides. Typically, there is an overall increase for dental services provided by general practitioners.</div>
<div style="margin-bottom: 15px;">
Insurance companies use the information contained in the provincial/territorial fee guides to establish reimbursement levels for the dental services employees receive and to ensure that fees are representative of what the majority of dentists charge.</div>
<div style="margin-bottom: 15px;">
The following chart outlines the suggested fee guide increases announced for 2016:</div>
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<tr style="border-collapse: collapse;"><td style="border-collapse: collapse; margin: 0px;" width="580"><div align="left" style="color: #005c84; font-size: 18px; font-weight: bold; line-height: 24px; margin-bottom: 18px;">
</div>
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<tr style="border-collapse: collapse;"><td style="border-collapse: collapse; margin: 0px;" width="580"><img border="0" class="CToWUd a6T" height="355" label="Image" src="https://blogger.googleusercontent.com/img/proxy/AVvXsEiMiA6BsDZUrPQtpdvR8WoGXQR2eqMwk0hQrJ__XhxdWt-Y__NhOVd5lASUV9GvYA7kPIH0seC0zDWUPcKZqxhInO32CXa5ODZ13WVuQz9_TJip_EIbH-kt-7bSJGOiZaBdnkIEuM7J-aOa_yLeMtssyhTZo1BYSpnbDE27XAEAfqjZqYyxxwzBpw=s0-d-e1-ft" style="cursor: pointer; display: block; outline: none;" tabindex="0" width="580" /></td></tr>
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<br />Provided via Empire Life.<br /><br /><br /></td></tr>
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<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-34303784774172742552015-10-20T14:27:00.000-07:002015-10-20T14:27:08.268-07:00Pharmacy Dispensing Fees October 2015I've updated the list of Dispensing Fees for BC for the month of Oct 2015. This was done in a very unscientific method of calling a bunch of pharmacies from different chains and asking what they charge.<br />
<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 400px;">
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<tr style="height: 15.0pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
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<b><span style="color: #666699; font-size: 10.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-hansi-font-family: Calibri;">Pharmacy Dispensing Fees - Oct 2015</span></b><o:p></o:p></div>
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<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156"></td>
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<tr style="height: 15.0pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
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AVERAGE <span style="font-size: 10pt; line-height: 115%;">ALL PHARMACIES</span> <o:p></o:p></div>
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<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
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$ 9.86 <o:p></o:p></div>
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<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245"></td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156"></td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">COSTCO</span> (no
membership required!)<o:p></o:p></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 4.49 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">LOBLAWS</span> (Real
Canadian Superstore)<o:p></o:p></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
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$ 6.99 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
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<span style="font-size: 10pt; line-height: 115%;">PEOPLES</span> PHARMACY<o:p></o:p></div>
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<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 8.00 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
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<span style="font-size: 10pt; line-height: 115%;">LONDON DRUGS</span> <o:p></o:p></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 9.60 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">WAL MART</span> <o:p></o:p></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 10.00 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">OVERWAITEA</span> <o:p></o:p></div>
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<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 10.00 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">SAVE ON FOOD & DRUG</span> <o:p></o:p></div>
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<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 10.00 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">CANADA SAFEWAY</span> <o:p></o:p></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 10.00 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">INDEPENDENT</span> <o:p></o:p></div>
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<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 11.50 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-hansi-font-family: Calibri;">FORBES PHARMACY<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 11.50 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">SHOPPERS DRUG MART<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 11.60 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">REXALL</span> <o:p></o:p></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 11.90 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 15;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245">
<div class="MsoNormal">
<span style="font-size: 10pt; line-height: 115%;">PHARMASAVE</span> <o:p></o:p></div>
</td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156">
<div class="MsoNormal">
$ 12.60 <o:p></o:p></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 184.0pt;" valign="bottom" width="245"></td>
<td nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 116.75pt;" valign="bottom" width="156"></td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 17; mso-yfti-lastrow: yes;">
<td colspan="2" nowrap="" style="height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 300.75pt;" valign="bottom" width="401">
<div class="MsoNormal">
* Lower dispensing fees often correlate to lower drug costs<o:p></o:p></div>
</td>
</tr>
</tbody></table>
</td><td align="right" class="xl64" style="width: 48pt;" width="64"><br /></td></tr>
</tbody></table>
<br />
A good point to remember is that you DO NOT need to be a Costco member to use their pharmacy. Simply tell the greater that you are using the pharmacy and they will let you right in.<br />
<br />
Several Insurance companies have also started Preferred Provider Networks with Costco.<br />Great West Life will give you an extra 10% reimbursement if you shop at Costco.<br />
Benefits By Design will give you an extra $5 reimbursement if you shop at Costco.<br />
<br />
--<br />
Robert Reynolds, CFP, GBA<br />
Certified Financial Planner, Certified Group Benefits Advisor<br />
<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. & E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-55523998510889057182014-03-26T11:40:00.000-07:002014-03-26T11:40:20.348-07:00Using Group Insurance for Uninsurable Business Owners<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiw_uDn8NQcmHj1TbrZq1qLVMgejuZFW-oMznsPEXSEks57vMofy0cnZhPDWivkMMmBP6S5gSbC8x9MbhvOYeaesN1xJAhRWs_MT_qKmHNTwUGEOTYejUt-pdMKpkT1dMcbQ6Hbbv5CoY33/s1600/partnership.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiw_uDn8NQcmHj1TbrZq1qLVMgejuZFW-oMznsPEXSEks57vMofy0cnZhPDWivkMMmBP6S5gSbC8x9MbhvOYeaesN1xJAhRWs_MT_qKmHNTwUGEOTYejUt-pdMKpkT1dMcbQ6Hbbv5CoY33/s1600/partnership.jpg" /></a></div>
I provide insurance funded Buy/Sell agreement for clients of mine who own a business with a partner.<br />
<br />
Essentially if two (or more) guys own a company, and one of them dies, how does the survivor buy out the rest of the company from the deceased?<br />
<br />
Well if the dead guy is married, his wife gets his shares automatically. Does the surviving business owner want to work with the widow? Can the widow replace the dead guy as far as income generation, or jobs that he used to do? No probably not.<br />
<br />
Can the surviving partner get a bank loan to buy back the shares immediate after the death of a partner? Is there a new partner than can buy in? Is there some angel investor that will solve the problem? No probably not.<br />
<br />
What usually happens is that the surviving owner keeps plugging away at the business on his own as best he can, and slowly, over years, buys back shares from the widow, all the while the widow is entitled to half the profits and dividends from the company.<br />
<br />
What they need is a life insurance policy on the lives of each partner designed to pay out to the survivor at the time of death. The survivor uses the insurance proceeds to buy back the shares from the widow. The survivor owns the company outright, and the widow gets her cash.<br />
<br />
But what if one of the partners is uninsurable? Some health condition prevents one partner from getting any coverage. That scenario usually kills the whole deal, since only one partner stands to benefit. There is, however, a creative solution we can use to get around this problem. Since the partners own a business, they likely have an Employee Benefits Plan. This plan probably includes some amount of Life Insurance. Furthermore, in the group insurance world, <i style="font-weight: bold;">"If you are healthy enough to be at work, you are healthy enough to insure". </i>Because of this attitude everyone is approved, to a point. That point is a No Evidence Maximum (NEM). All carriers use a NEM for Life, AD&D, Disability and Critical Illness. A very small group of only 2 or 3 employees is still guaranteed about $150,000 of Life Insurance, no questions asked. In a larger group of 25 employees this No Evidence Maximum might be $250,000 no questions asked.<br />
<br />
By making the beneficiary of the Group Life Insurance the other business partner or the company itself, an insured Buy/Sell agreement can still be implemented. While there are drawbacks to the group insurance method such as limited maximums, annually variable rates, difficulty when changing carriers, possible pre-existing condition exclusions, etc. it is still provides a possible solution where there might have not been one before.<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com2tag:blogger.com,1999:blog-6437334395200954565.post-62185090444608245122012-10-01T11:43:00.001-07:002012-10-01T11:43:11.453-07:00Conflict of Interest - Commissions<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqATB21I9x6FSJZrncCw0Lum2DMxIEvORVhqq5_Iw0aZfdD7b76dGwP402hNHmSsm4q0_hLbNxoeqR7UO9pCYfSsgY55imYx2m9y2D3qoJDr3ozW1nJsfNbhTh8RSF0Yu3ZfovdhRlQXWI/s1600/usedcarsalesman.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="254" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqATB21I9x6FSJZrncCw0Lum2DMxIEvORVhqq5_Iw0aZfdD7b76dGwP402hNHmSsm4q0_hLbNxoeqR7UO9pCYfSsgY55imYx2m9y2D3qoJDr3ozW1nJsfNbhTh8RSF0Yu3ZfovdhRlQXWI/s320/usedcarsalesman.jpg" width="320" /></a></div>
<div class="MsoNormal">
Life Insurance companies (in Canada) create a huge conflict
of interest for their agents. Life Insurance comes in different flavors, Term,
Whole Life, Universal Life. Each policy has its pros and cons and price point. Insurance
companies pay agent with commissions, and commission rates are different
between policies. This causes agents to try and sell inappropriate and too
expensive policies to their clients. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Term insurance is what most people need. If you are a family
and have a mortgage, you will want cheap term insurance, usually a term 10 or
term 20. This will pay off you mortgage and provide income to your family after
you die.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Let’s say you have a mortgage for $200,000 you want paid off and want
to provide $30,000 of income to your spouse for 10 years. You therefore need
about $500,000 of insurance.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Commissions are based off of the first years premiums of the
policy you buy. Some agents also get paid a bonus but I won’t get into that
here.<o:p></o:p></div>
<div class="MsoNormal">
</div>
<ul>
<li>Term 10 pays 40% of the first years premium as commission</li>
<li>Term 20 pays 50% of the first years premium as commission</li>
<li>Whole Life and Universal Life usually pay about 70%.</li>
</ul>
<o:p></o:p><br />
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
As you might guess the higher commission a policy pays the
more expensive it is. Say you are a 40 year old male, non-smoker and want
$500,000 of insurance. A term 10 policy should cost $405/y paying 40%
commission the agent will make $162<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Now the greedy agent will try and sell you a Whole Life or
Universal Life which pays 70% but also costs about $5000 per year. Which stands
to make them $3500 in commission. The agent
stands to make 20 times the commission if they sell you the more expensive
policy. So they push these policies HARD.<o:p></o:p></div>
<div class="MsoNormal">
Not many people are willing to fork over $400 per month, so
what happens is the agent talks them down on the amount of insurance to say
$100,000, which costs $1000 per year, which the client can afford. The agent
still makes 4 times the commission of the Term Insurance sale, but the client
is now drastically underinsured. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Moral of the story, be sure to know what you are buying and for what reasons. Don't be afraid to get a second opinion. Ask friends or family what kind of insurance they have, and why. Better yet, ask how the agent is getting paid, and ask how much. We legally have to disclose that we are being paid a commission, but nowhere does it require us to state dollars and cents. Ask that question, if your agent gets nervous there might be a reason why.</div>
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-26507130907712266262012-06-14T12:11:00.002-07:002012-06-14T12:19:20.095-07:00<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><img alt="Real return bond - long term" src="http://www.bankofcanada.ca/stats/assets/graphs/bond-yields_STATIC_V39057_en.png" style="margin-left: auto; margin-right: auto;" /></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Govt of Canada - Real Return Bond - Long Term</td></tr>
</tbody></table>
<br />
It is a weird time for Life Insurance company financials. On one hand you have MASSIVE corporate profits<br />
<br />
<div style="text-align: center;">
Manulife <span style="color: red;">$1.2 Billion</span> in Q1 2012</div>
<div style="text-align: center;">
Great West Life <span style="color: red;">$451Million</span> in Q1 2012</div>
<div style="text-align: center;">
Sun Life <span style="color: red;">$686 Million</span> in Q1 2012</div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: left;">
And yet, insurance companies are all terrified of the current prolonged low interest rate environment.</div>
<div style="text-align: left;">
Manulife just increased their Universal Life and Term 100 rates again, this is the third or fourth time in a year or two. And earlier today RBC Insurance announced that they had just pulled the plug on all of their long term insurance products.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
RBC today announced they will suspend sales of:</div>
<ul>
<li>RBC Universal Life</li>
<li>Term 100</li>
<li>Long Term Care Insurance</li>
<li>Critical Illness T100</li>
<li>Critical Illness term 75 paid up at 65</li>
<li>Critical Illness Return of Premium on surrender riders</li>
<li>Quantum Disability Insurance</li>
</ul>
<div>
What do these policies all have in common? A long term horizon of age 65, 75 or 100. </div>
<div>
<br /></div>
<div>
Why are many companies raising their rates or as RBC has just done pull products from shelves?</div>
<div>
<br /></div>
<div>
Simply because with the current low interest rates they can't make a profit on these long term policies.</div>
<div>
The way insurance companies finance these long term policies is they buy long bonds, usually 10-30 year maturities. Since these long bonds are paying so little interest (Govt. of Canada Real Return Long Bond is yielding 0.38% as of June 13, 2012) they need to put aside a lot more capital in reserve to pay out future claims. These higher capital reserve requirements mean they either have to increase rates to consumers, or simply say enough is enough and pull the products with long horizons as they simply can't make money off them.</div>
<div>
<br /></div>
<div>
Short term, insurance companies are posting huge profits, long term the future looks shaky especially if interest rates stay low.</div>
<br />
<div style="text-align: left;">
*Edit - I also just got a notice from Industrial Alliance Pacific that they too are increasing rate on July 3 2012.<br />
rates are increasing by 3-10% for long term products such as Universal Life, term 100, Term to 65, Critical Illness and otehr similar long term policies. Something interesting to note, the increase for those age 60+ is only about 3% in most cases, if you are under 60 your increases are 7-10%. Why the difference? Well if you are 60+ you are going to die sooner... </div>
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-80763304250050641992012-05-25T11:34:00.000-07:002012-05-25T11:34:07.770-07:00<div class="separator" style="clear: both; text-align: left;">
Insurance Journal is a industry magaize that I subscribe too. On occasion they put out internesting comparisons of products or insurance companies.This month they have an interesting comparison of Living Benefits products from various insurer. </div>
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<br /></div>
<div class="separator" style="clear: both; text-align: left;">
Below you will find a comparison of the Critical Illness coverage provided by insurance companies across Canada. Not all products are created equal. This list shows the different conditions that are covered or not covered as the case may be. </div>
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<br /></div>
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I have highlighted the products I tend to use in green. You will notice they are the most comprehensive of the bunch.</div>
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<br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7Q_AYgYLGKgaPJvuLEvLSOeLIs6V4G5WjPFcBwpojTh01fZFPdpsa_pdddB7dbbJVhFodlugb4SGx4NvQaUUnuGwHhUivU4BrNXQWwcL263rfalyN3WZkpq7EPdujfYekZDYdO7SiXyVi/s1600/Insurance+Journal+May+2012+-+CI+product+comparison+.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7Q_AYgYLGKgaPJvuLEvLSOeLIs6V4G5WjPFcBwpojTh01fZFPdpsa_pdddB7dbbJVhFodlugb4SGx4NvQaUUnuGwHhUivU4BrNXQWwcL263rfalyN3WZkpq7EPdujfYekZDYdO7SiXyVi/s400/Insurance+Journal+May+2012+-+CI+product+comparison+.png" width="306" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Click to enlarge<br /></td></tr>
</tbody></table>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
They also had a good comparison of Non-Cancelable (good quality) Disability insurance. Manulife has a couple good DI policies, but they aren't included. I don't personally use Manulife's DI policies, but only for the reason that I know RBC and Canada Life better and I have not yet found a situation where Manulife is the better option.</div>
<div style="text-align: left;">
<br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2zEB0XwTLaOiaMwHVEEA5SimIjmpi9LhdUBNJ6ACTC4I53cMm_uvmfNaWmJA-j_HmiKRZoRk277Rdi0NSspZFckAU4yTVGoe8UhLwYjTbWvdsnPb0Ilmw_6rRRogyJwAe8iaWDedkHqi3/s1600/Insurance+Journal+May+2012+-+DI+Non-Can+product+comparison+.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2zEB0XwTLaOiaMwHVEEA5SimIjmpi9LhdUBNJ6ACTC4I53cMm_uvmfNaWmJA-j_HmiKRZoRk277Rdi0NSspZFckAU4yTVGoe8UhLwYjTbWvdsnPb0Ilmw_6rRRogyJwAe8iaWDedkHqi3/s400/Insurance+Journal+May+2012+-+DI+Non-Can+product+comparison+.png" width="306" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Click to enlarge</td></tr>
</tbody></table>
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<br /></div>
<div class="separator" style="clear: both; text-align: left;">
For very high incomes and very skilled professions, Lawyers, Doctors, white collar business owners etc. I much prefer the RBC Professional contract. The wording is from an older DI policy from decades ago and you can actually read it! a 5 year old could read it and understand it. Most newer policies, not so much. It is my opinion that the RBC Professional policy is probably the strongest policy available today, but it is hard to get and is expensive as you might expect.</div>
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<br /></div>
<div class="separator" style="clear: both; text-align: left;">
For Blue Collar business owners, and employees who want a high quality Disability Insurance plan I like Canada Life as their plan is more customizable and you can mix and match options to make a more affordable plan for those that don't need all the bells and whistles built into the RBC plan.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
--</div>
<div style="text-align: left;">
Robert Reynolds, GBA</div>
<div style="text-align: left;">
Certified Group Benefits Advisor</div>
<div style="text-align: left;">
Hendry McKenzie Reynolds Employee Benefits Ltd.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Toll Free: 1-888-592-4614</div>
<div style="text-align: left;">
rob@hmrinsurance.ca</div>
<div style="text-align: left;">
www.hmrinsurance.ca</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
E.O. E.</div>Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-85541296927611243042012-03-27T17:22:00.000-07:002012-03-27T17:22:14.042-07:00Pharmacy Dispensing Fee UpdateThe last time I saw a survey on Pharmacy Dispensing Fees in BC was in June 2009, I posted about it <a href="http://canadianlifeandhealthinsurance.blogspot.ca/2009/12/pharmacy-dispensing-fees-in-bc.html" target="_blank">here</a>.<br />
Since it has been nearly 3 years since that data was collected I decided to make a few phone calls to local pharmacies in Victoria BC. I have compiled the current dispensing fees in the table below<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFs6U072yRUY_BmBnRnA_gj4J2GWtssdQ0gfeclWp4aNY_twT4H75p_HRl-nxe-ud08Fiih-XmcgUDd6ItMfhWrpfWkvXjdpfkCdM1vquWXrhyphenhyphenkuXViZOZbfMFk4z-GwMWwQECzxH2oHeD/s1600/dispensing+fee+March+2012.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFs6U072yRUY_BmBnRnA_gj4J2GWtssdQ0gfeclWp4aNY_twT4H75p_HRl-nxe-ud08Fiih-XmcgUDd6ItMfhWrpfWkvXjdpfkCdM1vquWXrhyphenhyphenkuXViZOZbfMFk4z-GwMWwQECzxH2oHeD/s1600/dispensing+fee+March+2012.png" /></a></div><br />
The blank spaces are pharmacies which are not present in Victoria BC, so I did not call them. Keep in mind that these numbers are from a single location of each company. The location closest to you may very well charge a different rate.<br />
<br />
One neat "secret" I discovered is that you do not need to be a member of Costco to use their pharmacy. Drug costs are also often tied closely to the dispensing fees charged. So it is a safe bet the same drug will cost less at Costco, than at other pharmacies.<br />
<br />
Your mileage may vary.<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-83069767852726133132011-12-08T18:53:00.000-08:002012-01-05T14:25:46.751-08:00Pooled Registered Pension Plan (PRPP)<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGlg-bTB87u2Ir1sJYA-17bRVCGz_UjraoiR4Uq0x9euYGXujd4yBw5kP37IkmNyUFIahJJJHU8lFsk4sVxZE3hp3VtbHpGxW0k1rvKhA11uUOeouA6tVcNJOdVs_mlIcq6MfcLYY6VAnP/s1600/9a3bd0cc_ScroogeMoneyBin.jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="253" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGlg-bTB87u2Ir1sJYA-17bRVCGz_UjraoiR4Uq0x9euYGXujd4yBw5kP37IkmNyUFIahJJJHU8lFsk4sVxZE3hp3VtbHpGxW0k1rvKhA11uUOeouA6tVcNJOdVs_mlIcq6MfcLYY6VAnP/s320/9a3bd0cc_ScroogeMoneyBin.jpeg" width="320" /></a></div><br />
<br />
The Federal Government recently passed Bill C-25 also referred to as <i>the Pooled Registered Pension Plan Act</i>. while still in its infancy, and with many details still to be drawn up, this plan provides yet another method for Canadians to save for their retirement. Standard Life has put out a good summary of what we know thus far. I have linked it below. I have also summarized what I feel are the most important parts.<br />
<br />
<u>Rob's Summary</u><br />
<br />
<ul><li>All employers will be required to offer the plan to all employees working for at least 24 months.</li>
<li>Employees will be "auto-enrolled" and can opt out.</li>
<li>Employees can voluntarily contribute a percentage of their earnings to the PRPP by payroll deductions.</li>
<li>The employer is NOT required to match or contribute (at this time, this could change)</li>
<li>The suppliers of these plans will largely be existing financial institutions such as banks and insurance companies</li>
<li>Investment fees are to be kept to a minimum <1%</li>
<li>Since fees are to be kept so low there will be a very low level of service, there is no overhead to pay for extra service or pay advisors commissions.</li>
<li>All contributions are LOCKED IN</li>
<li>Access to the Home Buyers Plan and Lifelong Learning Plan tax free withdrawals/loans are not allowed</li>
<li>Investments will presumably be a list of funds similar to today, but likely focusing more on Asset Allocation and Target Date/Retirement Date Funds</li>
<li>There is currently no default fund selected but it is expected to be a Retirement Date fund targeting retirement at age 65.</li>
<li>This is likely a good thing for Canadian, as our savings rate is abysmally low, however, as this is currently voluntary, it is doubtful that many employees will participate in the PRPP if employers don't match, and even then there are drawbacks to the PRPP such as the locking in provision and loss of Home Buyers Plan and Life Long Learning Plan when compared to the also voluntary RRSP.</li>
<li>Broker are going to hate the PRPPs. They will pay little or no commissions. Pension managers with large blocks of business are already terrified that their commission stream is going to dry up. There will certainly be a shift in how we as advisors market and sell group savings plans. Many will switch to a fee for service model, provide little or no service, or exit the market all together. It will be interesting to see how the industry reacts to this new plan and its implications on our bottom line.</li>
<li>Similar plans have recently been launched in Australia and the UK. in those countries the employer must match employee contributions, which some expect may come to the PRPP if adoption rates are low.</li>
</ul><div>Everything listed above is correct to the best of my knowledge at the time of writing, as many details have still yet to be finalized they may change in the future. That being said take everything above with a grain of salt, as very little is concrete at this point in time.</div><div><br />
</div><br />
<a href="https://www.standardlife.ca/pdf/ge12773.pdf" target="_blank">Standard Life Summary</a><br />
<br />
<br />
*edit; Spelling<br />
<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-49102121265456991662011-12-08T18:31:00.000-08:002011-12-08T18:31:47.260-08:00Long time no post, here is some marketing jargon I put together recently<h1 align="center" style="text-align: center;"><span style="font-family: "Calibri","sans-serif"; font-weight: normal; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">A more affordable Health and Dental plan </span></h1><h1 align="center" style="text-align: center;"><span style="font-family: Calibri, sans-serif;">where <u>you</u> control the rates!</span><span style="font-family: "Calibri","sans-serif"; mso-ascii-theme-font: minor-latin; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p></o:p></span></h1><div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div class="MsoNormal">You may have heard of the recent bankruptcy of Nortel which left thousands of employees without benefits or pensions. This is because Nortel used a “Defined Benefit” plan. A Defined Benefit plan means essentially “you get this benefit, no matter the cost”. That’s how bankruptcy happens.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">While the world of Pensions have long since made the switch away from Defined Benefit, and towards Defined Contribution plans. The land of Health and Dental insurance has stayed firmly in the world of Defined Benefit. A Defined Contribution plan is just that, a plan where you can control exactly how much you as an employer contribute.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Do you provide the same benefits as 10 years ago? But the price has doubled or even tripled? Double digit increases each year are becoming unsustainable for many businesses’. We have a way to put the control firmly back into your hands. <o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Health Care Spending Accounts (HCSA) are the “Defined Contribution” plan of the Health Insurance world. Each employee receives a defined amount of benefit dollars each year, say $1000 or 3% of salary. The employee can spend these funds on healthcare, dental care, glasses, massage etc. There is no plan design, so the benefits are entirely flexible for the employee, no more “one size fits all” insurance plans. <o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">While employees love the flexibility HCSA’s provide, employers love the ability to budget and control costs. Since the amount of benefit is not tied to an insurance policy, there is no insurance company to raise the rates year after year. If you have 10 employees and they each get $1,000 per year, you know your budget is $10,000 year after year. No surprises at renewal time. You can increase benefits to fight off the effects of inflation or decrease the benefits to keep in sync with the profitability of your business. You are in the driver’s seat.<o:p></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Health Care Spending Accounts are low cost, and low administration. Administration fees are typically 10-15% of paid claims; rather than the 30-40% overhead build into the rates of most group insurance plans. Affordable stop loss policies are also and attractive option to reduce risk in event of a catastrophic claim.<o:p></o:p></div><div class="MsoNormal">If you would like more information on how a Health Care Spending Account might be right for your business, please contact me <o:p></o:p></div><div class="MsoNormal"><br />
</div><div align="center" class="MsoNoSpacing" style="text-align: center;">Robert Reynolds, Certified Group Benefits Advisor<o:p></o:p></div><div align="center" class="MsoNoSpacing" style="text-align: center;">Hendry Swinton McKenzie Insurance Services Ltd.<o:p></o:p></div><div align="center" class="MsoNoSpacing" style="text-align: center;">Toll Free: 1-888-592-4614 or <a href="mailto:rob@hmrinsurance.ca">rob@hmrinsurance.ca</a><o:p></o:p></div><div class="MsoNormal"><br />
</div><br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-35332488635171449322011-08-29T10:26:00.000-07:002011-08-29T10:26:14.143-07:00Lower EHC trend factor used for pricing<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPhciUhq62yyMwHlKE9HaRTJRgVbvd6L4zaeaRaf65DNsIhrXjhssJuhLniXO1-Uw342Nx-kDsLjkdYI4vRlrJFiTLbudRglybYFlfztgMlkl-4j8k_XG2OnaYfvZaWRMZLkP-xiNceSld/s1600/falling-prices1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="280" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPhciUhq62yyMwHlKE9HaRTJRgVbvd6L4zaeaRaf65DNsIhrXjhssJuhLniXO1-Uw342Nx-kDsLjkdYI4vRlrJFiTLbudRglybYFlfztgMlkl-4j8k_XG2OnaYfvZaWRMZLkP-xiNceSld/s320/falling-prices1.jpg" width="320" /></a></div><br />
Sun Life has announced today that they are joining the party started by Great West Life recently of lowering their health care trend factors. Recently GWL dropped their health care trends from 15.5% per year to about 12% per year. Sun Life has just done the same and dropped their trends a similar amount. I fully expect the other carriers to follow suit quickly. <br />
<br />
A refresher on what is a trend factor can be found <a href="http://canadianlifeandhealthinsurance.blogspot.com/2009/11/why-is-my-extended-heath-care-plan.html">here </a><br />
<br />
Sun Life Press Release<br />
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<hr /><br />
<blockquote><span style="font-family: Arial; font-size: x-small;">Sun Life is pleased to announce that we are lowering our Extended Health Care (EHC) trend factor used for pricing.</span><br />
<h3><span style="font-family: Arial; font-size: x-small;">New Trend Factors</span></h3><span style="font-family: Arial; font-size: x-small;">Our new trend factors vary based on the plan design, as indicated in this table:</span><br />
<table border="1" cellpadding="0" cellspacing="0"><tbody>
<tr> <td width="25%"> </td> <td style="text-align: center;" width="50%"><b><span style="font-family: Arial; font-size: x-small;">Annual Trend factor for EHC plans</span></b></td> </tr>
<tr> <td width="25%"><b><span style="font-family: Arial; font-size: x-small;">No Deductible</span></b></td> <td style="text-align: center;" width="50%"><span style="font-family: Arial; font-size: x-small;">11.5%</span></td> </tr>
<tr> <td width="25%"><b><span style="font-family: Arial; font-size: x-small;">With Deductible</span></b></td> <td style="text-align: center;" width="50%"><span style="font-family: Arial; font-size: x-small;">13%</span></td> </tr>
</tbody></table><br />
<h3><span style="font-family: Arial; font-size: x-small;">Why are we making these changes?</span></h3><span style="font-family: Arial; font-size: x-small;">Sun Life continually reviews our financial experience and emerging practices in the marketplace to ensure our products are priced competitively. We’ve identified a lowering of our actual experience of the EHC benefit as a whole – mainly due to reduced drug spending. The reduction in drug cost is primarily a result of two factors:</span><br />
<ol><li><b><span style="font-family: Arial; font-size: x-small;">Market changes:</span></b><span style="font-family: Arial; font-size: x-small;"> As patents on ‘blockbuster’ drugs expire, generic drugs (made with the same active ingredient) replace them at a lower cost. Simultaneously, most provincial governments have legislated lower prices on generic drugs. Together this results in a reduction in overall drug pricing.</span></li>
<li><b><span style="font-family: Arial; font-size: x-small;">Cost management solutions:</span></b><span style="font-family: Arial; font-size: x-small;"> In January 2011 Sun Life launched our Provincial Integration program, to ensure that, on a systematic basis, sponsors do not pay for specialty drugs in circumstances where the provinces have created specialty funding opportunities. Additionally, our in-house pharmaceutical team has several new initiatives in development to help sponsors manage their drug spending more pro-actively going forward. Stay tuned for details.</span></li>
</ol><h3><span style="font-family: Arial; font-size: x-small;">Timing</span></h3><span style="font-family: Arial; font-size: x-small;">These new trend factors are applicable to all renewals using an experience period ending on August 31, 2011 or later. Due to the renewal cycle process, these renewals have <b>a renewal notice date on October 31, 2011 or later, and rate effective date on December 1, 2011 or later</b>, depending on the renewal notice period. We are using these new trend factors in our quotes effective immediately.</span><br />
<h3><span style="font-family: Arial; font-size: x-small;">Questions?</span></h3><span style="font-family: Arial; font-size: x-small;">For more information, please contact your Sun Life Financial group benefits representative.</span></blockquote><br />
<hr /><br />
As I mentioned, <a href="http://canadianlifeandhealthinsurance.blogspot.com/2010/08/new-generic-drug-reform-coming-to-bc.html">here</a>, the province of BC has recently struck a new deal on generic drug pricing, this is finally starting to kick in and impact rates. Furthermore, many of the mentioned "blockbuster" drugs are coming off patent, which means generics will soon be available. This is huge news for drugs the likes of Lipitor, the best selling drug ever, which brings in over $11 Billion in revenue per year. Lipitor's patent expired July 19th, 2010 in Canada. A month's supply of "brand name" Lipitor costs about $150, and generics cost about $10 per month.<br />
<br />
<b>TL;DR You should start to see health care rates stabilize or at least not increase quite so fast. </b><br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0Victoria, BC, Canada48.4286111 -123.365555648.4043286 -123.4024321 48.452893599999996 -123.32867909999999tag:blogger.com,1999:blog-6437334395200954565.post-75884011608211128962011-06-28T11:36:00.000-07:002011-06-28T11:37:33.340-07:00Worst Acting Ever<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEif-hu4op3OTeG6RD5rkZpg32gZby7l6-shsEplXJc0iU9lcjBDZwA_qPrFijrvyocLKap9tDgRYRvVLmhK18nJ72th1yZ8_cVzEOVfDq22TzbLLdD2QmnFSgA736PqhvU98n_ZD4nCvJl5/s1600/worst+acting+ever.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEif-hu4op3OTeG6RD5rkZpg32gZby7l6-shsEplXJc0iU9lcjBDZwA_qPrFijrvyocLKap9tDgRYRvVLmhK18nJ72th1yZ8_cVzEOVfDq22TzbLLdD2QmnFSgA736PqhvU98n_ZD4nCvJl5/s320/worst+acting+ever.jpg" width="216" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">bring on the hate mail</td></tr>
</tbody></table><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCguZ9B20I7mLEilP2FzBuhiQvmBg60mZ-MYwUUABUH7fN0N8PKAmvs6hKFMZbBLjZ4fsJrusyYe-JH0NJZMnrXPgidzoJPugfFUWEXzdwNUJgarEsFBSnXUBFyKC7i5DDdbLiHLL_i73C/s1600/worst+acting+ever.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><br />
</a></div>Please forgive the wooden acting, there is obviously a good reason why these folks are in the insurance biz and not Hollywood.<br />
<br />
Sun Life has started putting up some little videos on Group Benefits. There are two up so far, the first is mostly just an introduction to the video series, don't bother watching it. The second video actually has some substance to it.<br />
<br />
<a href="http://www.sunlife.ca/canada/v/index.jsp?vgnextoid=0ef4e0d4eef60310VgnVCM10000047d2d09fRCRD&appInstanceName=default">Link to Video 2's Page - Plan sustainability – Series 2</a><br />
<br />
Sun Life is surveying their plan members and seeing how they would react to changes aimed to reduce costs on their plan.<br />
<br />
The main result were as follows.<br />
<ol><li>Young people 18-34 just don't care.</li>
<li>Everyone else is in favor of managed plans (drug pre-authorization, generic substitution, maximum drug cost limits) but very unfavorable to reductions in co-insurance, lower dispensing fee maximums and raising premiums.</li>
</ol>Makes sense, the only question it raises for me is the level of understanding on the behalf of plan members. Especially with drug pre-approval, as I have found any time this is used it drives employees crazy. I think they simply stated they prefer pre-approval, because they don't grasp how it works as well as something simple like a lower co-insurance. Prior pre-approval has led to some of the ugliest situations I have run into with drug plans. Green Shield has a program called a Conditional Formulary, where expensive drugs need to be pre-approved. The Dr. would write a prescription, the employee goes to the pharmacy to fill it, and the computer tells the pharmacist that the drug needs pre-approval, or the plan won't pay for it. I then get angry phone calls from the employee, HR and owners. <br />
<ol></ol>Overall I have noticed similar reactions with my own clients, and have been recommending similar changes to help curb rate increases while keeping employees happy. My observations weren't scientific or by survey but it is nice to see them validated.<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-83082139797684585882011-06-14T12:07:00.000-07:002011-06-14T12:07:02.628-07:00Dollar Cost Averaging<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwXbxXvuBkbaMqxSqTn_XO2jKjZvmzKm2Lagv8CLOR6DJ-fYkiEeyAA2u5WUIt4TGxIFew8CTvx6sc4vikl7jK3cVZ4c1iee4Y0ybJPQ9_pYz0tIkxyXp-YjNDPaunUmBbJyK5mC1Iylka/s1600/drip.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwXbxXvuBkbaMqxSqTn_XO2jKjZvmzKm2Lagv8CLOR6DJ-fYkiEeyAA2u5WUIt4TGxIFew8CTvx6sc4vikl7jK3cVZ4c1iee4Y0ybJPQ9_pYz0tIkxyXp-YjNDPaunUmBbJyK5mC1Iylka/s320/drip.jpg" width="320" /></a></div>I highly recommend when talking to clients about investments, that they Dollar Cost Average. This is a simple strategy that can help increase your return, and lower your risk. Most people frantically try and dump a big pot of money into their RRSP right before the deadline. They buy all of their investments for the year on one day at one price. If the price is high, they buy high, if the price is low, they buy low. We all know we want to buy low and sell high.<br />
<br />
I prefer to drip money in on a regular basis, firstly becuase you barely notice a small amount from each paycheque, and secondly to take advantage of Dollar Cost Averaging.<br />
<br />
Because I am buying units every month, I buy a small amount based on the price that day. Some days it goes up, some days it goes down. What happens over a year is that the highs and lows average out. This average unit price is what my return is calculated on.<br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4tXb7iW9sLRvyAe0IXPRmcja-xdy1UutZvbeqU1eH-8271O9BmClu-BB5b7wuQEVcAckgsRVvcLA4vOufwZnPGgS38-WHqq_Yl3RcFDbjU_xMsYIvdBDToqDQjMI3AO2X_ZH-_sL-Hvf0/s1600/%2524RYU7M3R.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4tXb7iW9sLRvyAe0IXPRmcja-xdy1UutZvbeqU1eH-8271O9BmClu-BB5b7wuQEVcAckgsRVvcLA4vOufwZnPGgS38-WHqq_Yl3RcFDbjU_xMsYIvdBDToqDQjMI3AO2X_ZH-_sL-Hvf0/s320/%2524RYU7M3R.png" width="247" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">click to enlarge</td></tr>
</tbody></table><br />
<br />
Take this example, If someone invests $500 per month for a year, and the market falls, they are buying more units for the same $500. If the starting unit price is $10, but over a year the market drops as shown,their average price works out to around $8.75. If the market comes back up to the exact same starting value of $10 per unit, you are actually up 13%, as your average price is $8.75 and the new unit price is $10. you made a profit but the market is at exactly the same point as it was a year prior.<br />
<br />
Gains are also multiplied, if the market increases by 10%, you are actually up 21% as your average price is low. Dollar Cost Averaging works wonders for investing in a down market. Rather than a lost year, you are up double digits. <br />
<br />
The power of Dollar Cost Averaging can be reduced if you already have a large nest egg, and you are dripping in a comparatively small amount each month. The small drip just can't adjust the average much. It often makes sense to pull the nest egg, and redeposit it in chunks over a period of months or years. This works well when you expect a prolonged down market. I did this for several clients in the fall of 2008, when the market was in a prolonged down trend. We were able to reduce the average cost per unit, so when the market came back up to its starting point we were ahead of the game, rather than just back to square one.<br />
<br />
<b>TL;DR - drip money into your investments regularly, and you don't need to worry about timing the market.</b><br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-13096416340223939312011-05-13T12:42:00.000-07:002011-05-13T12:42:51.636-07:00Insurance and LGBT<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu_apF983eK-oIAqRLgEzZFnSYcDD648NEmcLDRulkCM62Ce7Ms8ucWA5DA2UN8mrq0Bc32lfn4OaPWKOe5677V2GsRnSF_b0tapjaHMrdqjg2DHwTEyHzkGjU-J3-VyBkW0x_Ml4Kiw4T/s1600/sex-rb.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu_apF983eK-oIAqRLgEzZFnSYcDD648NEmcLDRulkCM62Ce7Ms8ucWA5DA2UN8mrq0Bc32lfn4OaPWKOe5677V2GsRnSF_b0tapjaHMrdqjg2DHwTEyHzkGjU-J3-VyBkW0x_Ml4Kiw4T/s320/sex-rb.gif" width="320" /></a></div><span id="internal-source-marker_0.024288964849068395" style="background-color: transparent; color: black; font-family: Arial; font-size: 11pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> </span><br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 11pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br />
<span style="font-size: small;"><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">I have a few clients who are Gay, Lesbian, Bisexual or Transgendered hereafter referred to as LGBT. Each time I work with an LGBT client, I find there is a lot of incorrect assumptions or misinformation about if they can get insurance.</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">The simple answer is YES of course you can get life, disability, critical illness insurance.</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Canadian insurance companies make no distinction between any sexual orientation, and neither do I. I have clients and close friends who are LBGT and I am always happy to meet new client and make new friends. I did want to touch on a few bits of the misinformation that I have heard over the years, and just shed some light on a few points.</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: bold; text-decoration: none; vertical-align: baseline;"> </span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: bold; text-decoration: underline; vertical-align: baseline;">Do I have to reveal my sexual preference when I fill out an application?</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">No, there are no questions asked about orientation. The only thing that might give a hint is the beneficiary designation, as you have to indicate relationship and gender of the beneficiary. I will often use the words, “partner” or “spouse”, however, you can put down “friend”, “companion” or whatever term you like.</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: bold; text-decoration: underline; vertical-align: baseline;">Do I need to be legally married to get a “joint” policy?</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">No, as long as there is an insurable relationship (someone stands to lose something if the other dies) anyone can get a joint policy with anyone else.</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: bold; text-decoration: underline; vertical-align: baseline;">Are there any special medical questions I have to answer?</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Nothing that everyone else doesn’t need to answer. Each insurance company has a list of medical questions they ask and everyone applying needs to answer the same questions.</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: bold; text-decoration: underline; vertical-align: baseline;">Are there any questions that I might have a problem with?</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">I hazard to say it, but the only thing remotely possible is the questions regarding exposure to HIV or AIDS. As long as you have made wise choices over the years you shouldn’t have any greater exposure than anyone else. Everyone has to answer these questions.</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: bold; text-decoration: underline; vertical-align: baseline;">What if I am Transgendered, what do I put down for gender?</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">Insurance rates are primarily based on two factors, age and gender. If you are transgendered we use the bits you were born with.</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: bold; text-decoration: underline; vertical-align: baseline;">What if I am undergoing hormone therapy?</span><br style="font-family: inherit;" /><span style="background-color: transparent; color: black; font-family: inherit; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;">You would need to disclose that you are taking medication, you would need to provide, dosage, when you started the program, and if there have been any complications. The underwriters may rate (charge more) or decline the policy, as there are other serious medical issues which can arise from hormone therapy. I haven’t run into this <span style="font-family: inherit;">situation yet personally, so I can’t say for sure.</span></span></span><br />
<div style="font-family: inherit;"><span style="font-size: small;"><br />
<span style="background-color: transparent; color: black; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span></span></div><div style="font-family: inherit;"><span style="font-size: small;">While I am not of that persuasion myself, I am happy to work with anyone who is LGBT.</span></div><div style="font-family: inherit;"><br />
</div><span style="font-size: small;"><span style="font-family: inherit;">I also want to say a special Thank You to my friends Kelzey and Tryce who helped vet this post. </span></span> <span style="background-color: transparent; color: black; font-family: Arial; font-size: 11pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br />
<br />
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 11pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"></span><br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com2tag:blogger.com,1999:blog-6437334395200954565.post-1287627507990308962011-04-26T12:41:00.000-07:002011-04-26T12:41:42.775-07:00Money back guarentee<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwoWL7jLHopnh9SwQT7pvCDUNL5wd62Sex-09q262eQu9bZry76beX3w9bucOa_Lk7y5IQC1aU41CiJA_TwIV8r2zrJyPqI2G7sjJSiPro1ur5B2rGSMu0JrbyC12JzOlceUfJzfo4GtMQ/s1600/Health-care-shield-icon.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwoWL7jLHopnh9SwQT7pvCDUNL5wd62Sex-09q262eQu9bZry76beX3w9bucOa_Lk7y5IQC1aU41CiJA_TwIV8r2zrJyPqI2G7sjJSiPro1ur5B2rGSMu0JrbyC12JzOlceUfJzfo4GtMQ/s1600/Health-care-shield-icon.png" /></a></div><br />
<a href="http://www.equitable.ca/en//">Equitable Life</a>, a company I have a good relationship with and have enjoyed working with in the past has a new offering I wanted to touch on briefly. <br />
<br />
They are calling it Rate Shield, and it is essentially a mini “Refund” plan. Normally Refund is reserved for 100+ member groups, and only one of two carriers still offer it. Equitable will do a Refund plan on your first renewal of a small group starting at 10 members. <br />
<br />
<b><u>It works like this.</u></b><br />
<br />
If you claim less than your Target Loss Ratio (TLR), you get a refund of the difference. You will recall that the TLR is essentially the ratio of administration expenses and Claims Paid. So an example of a TLR of 80.5% means: 19.5% of your premium is going to admin, and the rest, 80.5% is going to pay claims. <br />
<br />
Let’s say your Extended Health Care premium is $30,000 per year, your TLR is 80.5% and at your first renewal you actually claimed 76.5%. You claimed 4% less than budgeted (80.5% - 76.5% = 4%) so in reality you overpaid by 4%. Not any more, Equitable Life will refund you 4% of your premium (4% x $30,000 = $1200). <br />
<br />
You get a cheque for $1200, well not quite, they do charge a $100 admin fee so the cheque is for $1100.Still pretty good. It is a shame they will only do it for the first renewal, I would love to see it as a permanent feature.<br />
<br />
<br />
<br />
On a side note, I have always found that Equitable Life's renewal are very fair, the rates they come up with are almost always dead on what I calculate independently. This basically never happens with any other carrier, except possibly Wawanesa. <br />
<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-76628593357463431092011-04-12T15:07:00.000-07:002011-10-26T10:28:00.847-07:00How to spot a crappy advisor<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1bX4PLbasoSTukUU__p_-NuqaOyL-BOJtfSkSZKQa0U3xNRnCkJsZOQo-PIFgcRaxxCFIKHT2-UkOST5cNAxW460ZnuoAs_QTxZzxhMezXs2NTnx_jyd8kfL9zvRWSmrcHBShgUrSiN0x/s1600/snakeoil.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1bX4PLbasoSTukUU__p_-NuqaOyL-BOJtfSkSZKQa0U3xNRnCkJsZOQo-PIFgcRaxxCFIKHT2-UkOST5cNAxW460ZnuoAs_QTxZzxhMezXs2NTnx_jyd8kfL9zvRWSmrcHBShgUrSiN0x/s320/snakeoil.jpg" width="274" /></a></div>Every so often I am asked to review someones current personal insurance. This is a service I gladly provide for free. In some cases people are well taken care of, in others they got royally screwed by their last agent. Such was the case this week. Lets look at the situation.<br />
<br />
Young couple mid twenties, just married, just bought a house. Mortgage of $500,000 which is co-signed by a parent. No kids yet, but perhaps down the road. No other savings, or assets, on a tight budget as they are "mortgage poor". <br />
<br />
What immediately stands out to me is they need life insurance for the mortgage, as well as disability insurance and possibly critical illness insurance. The husband is working out of the country, so we can't insure him at the moment. If the wife dies, the parents are left with a house and a huge mortgage they cannot pay, same goes for a disability or serious illness.<br />
<br />
What this client needs:<br />
<ol><li>Affordable term life insurance to pay off the mortgage. </li>
<li>affordable disability policy with maybe a 24 month max benefit</li>
<li>affordable critical illness policy covering a year or two's income in the event of a serious illness such as cancer.</li>
</ol><br />
MY solution<br />
<ol><li>$500,000 of Term 10 life insurance, Premium $20 a month</li>
<li>Disability isn't available due to occupation, so substitute with Critical Illness </li>
<li>Two times annual income ($50,000) of Term 10 Critical Illness with Return of Premium after 15 years. Premium $40 a month.</li>
</ol><br />
The other agents solution<br />
<ol><li>$150,000 (not enough) permanent Universal Life (expensive) paid up in 10 years (REALLY expensive) life insurance policy. $90 per month</li>
<li>$250,000 (way too much) Term to 100 (expensive) Critical Illness. $180 per month.</li>
</ol><br />
Stuff like this makes me rage. The client is WAY underinsured for life insurance, yet they are paying nearly 5 times the premium. The policy they get doesn't fit their need as it is designed for people in their retirement and estate planning phase of life. This client has NO NEED for a permanent life insurance policy, other than possibly $25,000 for final expenses. While the life insurance coverage is way too low, the Critical Illness is crazy high. Why do they need a quarter million dollars of Critical Illness Insurance? If you are diagnosed with Cancer, you are off your feet for a year, maybe two. bonkers.<br />
<br />
My solution, which provides them the amount of coverage they need, in the form of affordable policies and costs the client about $60 per month, rather than $270. The client could use the extra $210 to pay down their mortgage faster, save in an RRSP or TFSA, or improve their lifestyle. <br />
<br />
Now why in the world would the other agent set this client up like this? <b>COMMISSION</b>. <br />
<br />
<br />
<div style="text-align: center;"><b><span style="font-size: large;">Total commission for my solution $828.00</span></b> </div><div style="text-align: center;"><b><span style="font-size: large;"><br />
</span></b></div><div style="text-align: center;"><b><span style="font-size: large;">Total commission for the other guys solution $4,076.24</span></b></div><div style="text-align: center;"><br />
</div><div style="text-align: left;"><span style="font-size: large;"><span style="font-size: small;">In my opinion, my solution provides better, more appropriate, and vastly less expensive coverage for this client. I get rewarded with an appropriate compensation of $800 or so dollars. I also have the opportunity to set up an investment account for this client, which can be worth much more commission down the road. </span></span></div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><span style="font-size: large;"><span style="font-size: small;">On the other hand, the other advisor's solution, leaves the client, over and under insured, costs far too much, and pays an exorbitantly high commission. </span></span><b><span style="font-size: large;"><span style="font-size: small;"> </span></span></b></div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><span style="font-size: small;">I can see the temptation to sell the big expensive policies, they provide a big commission, which feeds your family, but it does it at the expense of someone elses family. I see this stuff all the time, far more often than I like. It is usually from younger, new agents, and in the vast majority of cases, agents with a captive insurance company (Clarica, Sun Life, Freedom 55, London Life, Primerica</span><span style="font-size: large;"><span style="font-size: small;">), I am not saying all captive agents do this, but that is where I see it the most. New agents survive on new sales commissions since they have no trailers to rely on. They up-sell to more expensive policies which pay themselves more. </span></span><span style="font-size: small;">Their managers push for higher sales, and higher commissions, so agents push these products on their clients. </span></div><div style="text-align: left;"><span style="font-size: small;"><br />
</span></div><div style="text-align: left;"><span style="font-size: small;">How does a consumer know if they are being taken for a ride? It can be hard to know, especially since the advisor can usually make a case for the product they are selling in any situation. The best tips I can provide are:</span></div><ol><li><span style="font-size: small;">Ask to see a market survey so you can compare rates between companies. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAOgv5MUmHKAVUr0i38e4CwPD9y4f91ofr8sixn3SHzagta-EEfdDuDcCDJWARYvoxyIAFKGcclADhXof44PXz8ZR992iNDot6eQE4lN3h6D24uOAYS5AeJfjaR-IO4Q9K0bGgI_uWW2tJ/s1600-h/Lifeguide.jpg">Like this</a></span></li>
<li><span style="font-size: small;">Ask why the advisor is recommending a specific company. Is the product better, is the price better or are they beholden to only one carrier.</span></li>
<li><span style="font-size: small;">Ask for a second opinion. This will drive your advisor crazy, myself included, but it is the best way to be sure you are getting a fair deal. </span></li>
<li><span style="font-size: small;">Ask what the advisor is getting paid. If it seems extreme it probably is.</span></li>
</ol><span style="font-size: small;"><b>TL;DR Nice young couple gets hosed by a sleazy insurance salesman. </b><i>not me ;)</i></span><br />
<br />
<br />
<hr />Commission Calculations Below I have talked about Commissions before <a href="http://canadianlifeandhealthinsurance.blogspot.com/2009/08/commission_24.html">here</a><br />
<blockquote><span style="font-size: x-small;"><i><u>My Solution</u></i></span></blockquote><blockquote><span style="font-size: x-small;"><i>Term 10 life insurance pays 40% of first year premium, I also get a bonus of around 130% of the base commission.</i></span><br />
<span style="font-size: x-small;"><i><br />
</i></span><br />
<span style="font-size: x-small;"><i>Annual Premium $240</i></span><br />
<span style="font-size: x-small;"><i>Base commission 40% of $240 = $96</i></span><br />
<span style="font-size: x-small;"><i>Bonus commission 130% of $96 = $124.80</i></span><br />
<span style="font-size: x-small;"><i><b>Total commission: $220.80</b></i></span><br />
<span style="font-size: x-small;"><i><br />
</i></span><br />
<span style="font-size: x-small;"><i>Critical illness insurance pays 55% of first year premium, I get the same bonus of 130%</i></span><br />
<span style="font-size: x-small;"><i><br />
</i></span><br />
<span style="font-size: x-small;"><i>Annual Premium $480</i></span><br />
<span style="font-size: x-small;"><i>Base commission 55% of $480 = $264</i></span><br />
<span style="font-size: x-small;"><i>Bonus commission of 130% of $264 = $343.20</i></span><br />
<span style="font-size: x-small;"><i><b>Total commission: $607.20</b></i></span><br />
<div style="text-align: center;"><span style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: center;"><span style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><u><i>Other Guys solution</i></u></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Universal Life pays a commission of 70% of the first year premium + 3% of excess contributions, plus a bonus lets stick with my bonus level of 130% for consistency. </i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Annual Premium $644.40</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Base commission 70% of $644.40 = $451.08</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Bonus 130% of $451.08 = $586.40</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i><b>Total commission $1037.48</b></i></span></div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><span style="font-size: x-small;"><i>Since the UL policy is paid up in 10 years, they are over funding the policy this over funding is commissioned at 3% of excess contributions but paid for each year. So over the life of the policy the commission looks like this. </i></span></div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><span style="font-size: x-small;"><i>Excess Deposit over 10 years, $4440</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Base commission 3% of $4440 = $133.20</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Bonus commission 130% of $133.20 = $173.16</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Total commission 306.36</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Critical Illness insurance pays about 55% of first year premium, lets use the same bonus of 130%.</i></span></div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><span style="font-size: x-small;"><i>Annual premium 2160</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>base commission 55% of 2160 = 1188</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>bonus commission 130% of 1188 = 1544.40</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>total commission 2732.40</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: left;"><span style="font-size: x-small;"><i>Total commission for the other guys solution, $4076.24</i></span></div></blockquote><br />
<hr /><br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-83416431053114973132011-03-11T12:27:00.000-08:002011-03-11T12:29:50.670-08:00Bonds for dummies<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAVmT2Kf_fHDb9pXFuDhyphenhyphenTtB34Uc_VHjTMH0n8G1MdS9e41HubM274Z4qZbIaua4WFowHkhog6niEJ8nObubs8JU6mYoQmkTYyZcwqeU4NvGxwI8z0ljcayebpG3Mgpw353nHwjx8cOMM2/s1600/memoir_au2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAVmT2Kf_fHDb9pXFuDhyphenhyphenTtB34Uc_VHjTMH0n8G1MdS9e41HubM274Z4qZbIaua4WFowHkhog6niEJ8nObubs8JU6mYoQmkTYyZcwqeU4NvGxwI8z0ljcayebpG3Mgpw353nHwjx8cOMM2/s320/memoir_au2.jpg" width="208" /></a></div><br />
<br />
Stocks are easy to understand, you own part of a company --> company makes money --> you make money. easy-peasy. <br />
<br />
Bonds on the other hand confuse the heck out of just about everyone, even <i>(especially)</i> those that sell them. I have read countless dry, boring pages on how bonds work, prices, yields, jargon, and almost all totally uncomprehencible.<br />
<br />
So how do bonds work? Well I think I have a understandable, if not exactly technically perfect, method of explaining bonds, here goes...<br />
<br />
<div style="text-align: center;"><blockquote><b>"My word is my bond"</b></blockquote></div>You have all heard that saying. What does it mean? A bond is a promise, more specifically a promise to pay back borrowed money.<br />
<br />
Say it's lunch time, your friend Jon comes up to you and asks to borrow $10 for lunch money. He promises to pay you back $11 tomorrow. His promise is his bond, he might even write it down on a piece of paper.<br />
<br />
<div style="text-align: center;"><blockquote><b>"I Jon will pay back Steve $11 tomorrow for a loan of $10 today."</b></blockquote></div><br />
Boom we just created a bond.<br />
<br />
We have all the parts of a bond in the example above, we have a bond price, $10. We have a interest rate, $1 per day, and we have a maturity date, tomorrow. <br />
<br />
Now what if you only had $10 to lend, but your other buddy Jack, also wants to borrow $10 for lunch, but Jack gets his allowance tomorrow, so he offers to pay you $12 tomorrow. The bond you bought from Jon just lost value, as the $10 you loaned to Jon for $1 could have earned you $2. On the other hand if Jack only offers $0.50 you look like a star with your bond from Jon. So as you can see the value of your bond changes with the interest rate being paid, as interest rates move higher, your bond is worth less, if interest rates move lower, your bond is worth more.<br />
<br />
What makes interest rates go up or down? Supply and demand, mostly, but also risk. Say Jon and Jack are both competing for your lunch money loan. The one who offers the best interest rate is probably going to win; as long as they are equally trustworthy. <br />
<br />
But what if they aren't equally trustworthy? what if Jon is a stand up, honorable, prompt, courteous and trustworthy guy and you know he is going to <i>most likely</i> pay you back (government bond). On the other hand Jack, is a unreliable, jerk who always breaks his promises. You might think twice about lending to Jack (Junk Bonds). Because people are not as trusting of Jack, and they know they might lose their money, they are less likely to lend to him, that is, unless he offers a higher interest rate. If you know your money is safe with Jon you might lend it to him for $1, but since Jack is less reliable, and you are taking a bigger risk lending to him, you want $3 from him before you are willing to lend to him. The quality of the borrower has a big impact on the interest rate they have to pay to attract investors.<br />
<br />
So that's bonds, not so hard right?<br />
<br />
<b>TL;DR: I would gladly pay you Tuesday for a hamburger today.</b><br />
<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-78235551422893911932011-03-10T13:42:00.000-08:002011-03-10T13:42:39.459-08:00Sound off in the comments<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYaqT1kb81LzK3XjzP9xxm6rRYCymm0R4mxLJyoRPP0Mv9D3bTJ-KVXGI2Y5uRW40Y7ZriLwK7S-N49JShB9vL1sM_c9zy-5URDapiMXEd5nIWMHY1vNus5oDM42ASS4vi0yy_zAEWIRXv/s1600/www.google.com+2011-3-10+13-38.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYaqT1kb81LzK3XjzP9xxm6rRYCymm0R4mxLJyoRPP0Mv9D3bTJ-KVXGI2Y5uRW40Y7ZriLwK7S-N49JShB9vL1sM_c9zy-5URDapiMXEd5nIWMHY1vNus5oDM42ASS4vi0yy_zAEWIRXv/s1600/www.google.com+2011-3-10+13-38.png" /></a></div><br />
Google Analytics is telling me I am getting about 500 unique visitors per month, wow!<br />
<br />
Most are being driven here through Google Searches, and most are in Canada, using Internet Explorer during office hours. Who is out there? Human Resources people? other insurance advisors? employees? business owners?<br />
<br />
Are you finding what you are looking for? Is there something I haven't touched on that you would like to see more information on? Are you in British Columbia and you want to try me out as your benefits advisor? [shameless plug] ;)<br />
<br />
Let me know in the comments below, you can post anonymously, no need to sign in. <br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com1tag:blogger.com,1999:blog-6437334395200954565.post-15510354365975001992011-02-23T13:20:00.000-08:002011-02-23T13:20:25.683-08:00What is the absolute cheapest way to run a benefits plan?<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikpr6ex-8-m4GLdpsXR2usTuvDIqNSiGxfu4f7PlFlv2F6cW_ABc7_ZG7zB4WwN_jVbsnzDnQHZmYCs1vGDQvP5ilcWdDuIaBQhdeZcdG49uZ34p3KhUB3H9aPfaui5ItCvCR0D7pn5zHg/s1600/scrooge_mcduck1.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikpr6ex-8-m4GLdpsXR2usTuvDIqNSiGxfu4f7PlFlv2F6cW_ABc7_ZG7zB4WwN_jVbsnzDnQHZmYCs1vGDQvP5ilcWdDuIaBQhdeZcdG49uZ34p3KhUB3H9aPfaui5ItCvCR0D7pn5zHg/s320/scrooge_mcduck1.png" width="279" /></a></div><br />
1) You need to be big. Rates improve dramatically when you get to above 50+ lives. Size also opens up additional funding methods such as Refund or Self Insurance.<br />
<br />
2) Break out lines of benefits. The carrier that provides the best Life Insurance rate, may not have the best rate for Health Care. Some carriers have sharper pencils or specialize in certain areas. RBC provides really good LTD rates and coverage, but has no health or dental. Green Shield has good rates with health and dental but no pooled benefits such as life insurance. If you want the best rates the market has to offer you need to place the benefits with the carrier that can offer the best rate. This usually results in 2 carriers at least, one for pooled lines and one for health and dental.<br />
<br />
3) Manage it yourself as much as possible: With more than one carrier this can get complex. Sure there are Third Party Administrators (TPA) which will help organize and manage the complexity but they will want a slice of the pie. Also, If you advisor doesn’t have to renegotiate renewals or fight over getting claims paid, why pay full price? Negotiate a flat annual fee, or a dollar per hour rate. <br />
<br />
4) Embrace volatility. Pooled rates might be slightly lower if you take a shorter guaranteed of 12 months over 24 or 36 months.<br />
<br />
5) Self Insure. Health and Dental benefits have big margins in premiums for risk premiums. By self insuring you take the risk and save the charges. You will want a stop loss policy for big health care claims however<br />
<br />
6) Fee for service or percent of paid claims. Self insured plans are usually priced as a percentage of claims paid. IE: if a health care claim of $100 was paid, the administrator charges 10% or $10 to process the claim. Most plans use a percent of paid claims. Bare bones paper pushing can get as low as 6-8% before advisor compensation. Health care is usually more expensive than dental care. A less popular but equally valid approach is a flat fee per claim. With this method it doesn’t matter if the claim is $5 or $500 the administrator charges a flat cost to process each claim. Dental claims are usually a buck or two, pay direct drug claims are a few cents. Something more time consuming like a paper paramedical claim might be $5-$10 each.<br />
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<u><b>TL;DR</b></u><br />
<ul><li>Be big</li>
<li>Shop each line of benefit individually <span style="font-size: x-small;">(Pooled lines: RBC Insurance, SSQ, IAP. Health and Dental: Green Shield, Blue Cross, Claim Secure)</span></li>
<li>Take some risk.</li>
</ul><br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-51570188685179693192011-01-31T13:33:00.000-08:002011-01-31T13:34:48.301-08:00Potential conflict of interest<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg489OsnHTb0AIOYpyXTEV9fune_b6oj4h6qRiTTwSDkabethyphenhyphenK9LLn1boSn8g6rD1CUBpPbh0pQ67TPq5jpFzuKU9jOfRtVPX0CT_MQEtLnYNx3Dv6rn3ca3WF5-emSpT4OmnM2eH0_wZt/s1600/conflict-of-interest.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg489OsnHTb0AIOYpyXTEV9fune_b6oj4h6qRiTTwSDkabethyphenhyphenK9LLn1boSn8g6rD1CUBpPbh0pQ67TPq5jpFzuKU9jOfRtVPX0CT_MQEtLnYNx3Dv6rn3ca3WF5-emSpT4OmnM2eH0_wZt/s400/conflict-of-interest.gif" width="400" /></a></div><br />
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I just wanted to get this out of the way, I have a potential conflict of interest with regards to new Great West Life insurance policies. As I have talked about <a href="http://canadianlifeandhealthinsurance.blogspot.com/2009/08/commission_24.html">here</a> in the past, I am paid primarily through commission for selling polices. The way the commission structure works is shown below in an example.<br />
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Say I sell a Term 10 Life policy, which has an annual premium of $1000. I get paid a basic commission of 40% of the first years premium, or in this case $400. Now, this rate is pretty standard for all carriers, they pretty much all pay the same basic commissions.<br />
<br />
<blockquote>Term 10 = 40%<br />
Term 20 = 50%<br />
Living Benefits (CI, LTD) = 55%<br />
Whole Life, Universal Life, Term 100 = 70% </blockquote><br />
There is a slight conflict if one were to try and up sell to a more expensive carrier for an equal product, but that doesn't really ever happen as the market pressure for the lowest rate keeps the least expensive policies on top. <br />
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Now the part where the conflict comes in, is that there is a second layer of compensation, sometimes called a Bonus or Over ride. The issuing company decides on what Override they would like to pay to an advisor, it usually ranges from 100% to 150% of the basic commission. With GWL I used to have an override of 130%. So on the sample policy above, I would make $400 in base commission and then get a bonus or override of $520 for a total compensation of $920. The override is tied to a level of production, if you don't produce for the company you get a lower bonus. If you produce a lot you get a higher bonus. I received word that my production has not been high enough recently and my override with Great West Life has been reduced from 130% to 0%. Ouch.<br />
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I would love to say that the compensation doesn't determine where I place business, and to the most part it is true. I have companies I like dealing with, which includes GWL, and others which I can't recommend. All things being equal, I will always recommend the best product at the best price for my clients, however, I have to eat, and pay my bills as well. Taking more than a 50% pay cut for the same amount of work is hard to overlook. I have put a good amount of business with GWL over the years, I like them as a company, I like their product line especially their Group, Term and Living Benefits products. However, I like Equitable's Term just as much, I like RBC's Living Benefits just as much, and I like Manulife and Sun Life's Group just as much.<br />
<br />
So if I have an equal product from another company which will pay me twice as much I am going to have to recommend the one that pays me better. Now this is not to say that I would ever recommend an inferior product just because I get paid more. I am talking strictly apples to apples, comparisons here. Manulife's group product is just as good as GWL's, RBCs Disability policies are just as good as GWL's. The rates are often nearly identical as well. So is it wrong to recommend an equal product to a client on the basis that I know I will make twice as much commission? <br />
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In short, I won't be recommending Great West Life policies any more unless absolutely necessary. <br />
<br />
I think the only way to solve this is to provide total disclosure on what I get paid. In the next few days I will be working on a new disclosure statement which breaks down my commissions and bonus rates for all the companies I deal with. <br />
<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-50367247499393579352010-12-16T14:29:00.000-08:002010-12-16T14:29:40.044-08:00Creative Saving<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjYVLdA981So5XJyd_i73Pg57E6knUJv6t-U59BemulrR9VTuGDbrEQAKU0vl-Iu1MFBCV7AvBXNOSCNKgGhKhTuOrUS8JnYPymR0jzMqFuqshTHoPD4qxNLeruwg_YmaW2A7Wb8K02W8s/s1600/Spock-5-Dollar.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjYVLdA981So5XJyd_i73Pg57E6knUJv6t-U59BemulrR9VTuGDbrEQAKU0vl-Iu1MFBCV7AvBXNOSCNKgGhKhTuOrUS8JnYPymR0jzMqFuqshTHoPD4qxNLeruwg_YmaW2A7Wb8K02W8s/s1600/Spock-5-Dollar.jpg" /></a></div>I have lots of tricks up my sleeve for saving bits of money here and there on benefit plans. Here is a list of some of the creative things I can do for your company to help either reduce, or control your benefit plan costs. <br />
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One of the more creative ways of controlling benefit costs is to make your employees more savvy consumers. If they were going out on their own to purchase prescription drugs or professional services with their own money you can be sure they would try and find the best price and value they could for their hard earned dollars. But because most plans are as easy as “Swipe, and go” employees often don’t think of way to save money. It all seems free to them. <br />
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First prescription fills are often the most wasted. When an employee is prescribed a new drug there are many unknowns, will it fix the problem? Will it have side effects? Will the problem go away before the prescription is used up? Most plans have a 3 months supply limit, where the maximum amount of drugs that can be dispensed at any one time is equal to 3 months. We can set up your plan to limit the maximum supply of the first and only the first time a new drug is dispensed. This is a slight inconvenience if the member needs to go for a refill, but each subsequent refill will be for 3 months. The benefits here are that if the drug in question is has some side effects or is ineffective, only a month is wasted, rather than 3 months. <br />
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Dispensing Fees can eat up a lot of plan dollars, for small prescriptions or for prescription of some low cost drugs like antibiotics the $12 dispensing fee you might pay is more than the cost of the medication. Going hand in hand with high dispensing fees are high drug prices. Costco or Wal-Mart have low dispensing fees and often similarly low drug costs, where small or private pharmacies might charge two or three times as much to dispense the same drug, they often also charge a premium for the ingredient as well. Making the employee pay the dispensing fee firstly reduces the costs directly paid by the plan, as well as it makes members shop around for a cheaper dispensing fee (and as a result cheaper drug costs). <a href="http://canadianlifeandhealthinsurance.blogspot.com/2009/12/pharmacy-dispensing-fees-in-bc.html">I have a list of dispensing fees by pharmacy located at this page on my blog. </a><br />
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Say no to 100% reimbursement. Plans will often have 80% coverage for Drugs or dental, but will occasionally leave the professional services (massage, chiropractor, naturopath etc.) at 100% coverage. Because employees see these services as “free” they will tend to take advantage and max out their benefits regardless of if they need the treatment for medical reasons or not. Massage therapy is especially notorious for this. When the member has some skin in the game, a 20% co-pay or even a $5 user fee, they think twice before spending recklessly. <br />
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Physicians recommendations can also be added to paramedical plans, so before a claims will be reimbursed the member must provide written medical evidence, usually in the form of a prescription from their doctor. The recommendations ensure that the treatment received is medically necessary. These referrals are easy for members actually suffering a problem to <br />
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Ensuring proper Co-ordination of benefits can help improve the coverage employees receive as well as improve the bottom line of your plan. if employees have duplicate coverage under their spouses plan, ensure that they are properly setup to take advantage of Co-Ordination of Benefits. If there is duplicate coverage, some of the bills invoiced on your plan perhaps could have been paid under the spouses plan, reducing the total impact on your claims history. <br />
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Deferred Drug Cards (DDC) are a new type of drug cards which have been popular in Quebec for some time but are now just branching out to the rest of the country. Great West Life is a big supporter of Deferred Drug Cards out west. DDC work similar to a Pay Direct Drug Card (PDDC) they allow electronic claims tracking, formulary control, and other benefits brought about by a normal drug card, however, the way the member get reimbursed is different. With a Direct Drug Card the member only pays their portion of the claim as defined by their co-pay. In a plan with an 80% co-pay and a $100 claim, the member only remits $20 to the pharmacy as their share. However, with a Deferred Drug Card the member pays the whole claim cost of $100 out of pocket. The claim starts a timer, the employee will be electronically reimbursed directly to their bank account as soon as one of two conditions is met. <br />
<br />
1) A predefined time period elapses, say 30 days from the claim. <br />
<br />
2) A predefined out of pocket maximum is reached, say $150. <br />
<br />
The employee is out of pocket $100 from their drug claim. Because the member had to pay upfront they take on a more consumer savvy attitude, they think before they buy. The member might decide to go to a cheaper pharmacy, purchase a less expensive drug, take a smaller supply or simply decide they don’t need the prescription filled after all. These choices all reduce the cost of the plan. Once the time period is reached, again lets assume 30 days, an electronic fund transfer takes place and deposits $80 to the members bank account. Similarly, if they incurred another claim inside that 30 day period, which exceeded the out of pocket maximum of $150, the covered portion is deposited to the members account. <br />
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All of these ideas revolve around making your employees better consumers. Take advantage of cheaper vendors, utilize other available coverage, think before you spend. None of these changes create huge savings up front, they do however help control claims and rates over time. The cost of benefit plans is rapidly increasing all the time, these are all perfect ways to slow that increase down. <br />
<br />
<br />
--<br />
<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-50620616712075218052010-11-18T10:54:00.000-08:002010-11-18T10:54:54.138-08:00New ACS Buck Health Care Trends Survey for 2010I am a big fan of the ACS Buck Health Care Trends Survey that comes out each year. This year marks the 6th year of the survey. Basically they track the cost of claims paid by the major insurers in Canada to determine trend factors for drugs, hospital, professional services and dental care.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_DthRrqb_-YPqcp8MnvluZ-NMFD88rpLeYozGAtEi-SapH1rrlOzCDqHO8FwYEV6KXAJdw7t32m-sQHmi24xqsW7JbKCpuJtjavMSOAFwBXhznFld9tFvnWk4PYp4yjrVtKSbvNj1VBNk/s1600/acs+buck+survey+2010.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_DthRrqb_-YPqcp8MnvluZ-NMFD88rpLeYozGAtEi-SapH1rrlOzCDqHO8FwYEV6KXAJdw7t32m-sQHmi24xqsW7JbKCpuJtjavMSOAFwBXhznFld9tFvnWk4PYp4yjrVtKSbvNj1VBNk/s1600/acs+buck+survey+2010.png" /></a></div><br />
<div style="text-align: center;"><a href="http://www.acsbuckcanada.com/ENG/Portals/0/Documents/publications/surveys/HC_Trend_Survey-2010-online.pdf">Health Care Trends Survey 2010</a> </div><br />
I use this report with all my renewals to show the rate at which health care costs are increasing each year. If you are a HR professional or in charge of a benefits plan I recommend giving it a read.<br />
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Source: http://www.acsbuckcanada.com/buckconsultantsca/Default.aspx?tabid=337<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
<br />
E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com1tag:blogger.com,1999:blog-6437334395200954565.post-22891872604092176082010-10-26T11:01:00.000-07:002010-10-26T11:07:49.652-07:00New Agency Managment System.It has been a while since my last post, I have been very busy and there hasn't been too much news in the insurance world the last while.<br />
<br />
One new item is that our agency has purchased a new group insurance software package which is making us more efficient at tracking customer interactions, requesting quotes as well as providing proposals to our clients.<br />
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Some of the nice features from my side of the desk are that I can better build and track requests for quotes. Usually when I make a RFQ one or two companies come back with either incorrect volumes or deviations in the plan designs. This makes it difficult to compare plans, as they aren't apples to apples. I can now track these volume and plan deviations much more simply and clearly so my recommendations are more accurate than ever and clients know exactly what they are going to get.<br />
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<div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX2rDYjugkSt6dwK6YqHY2Rg61SRmoFva4xVRvnB-0OT_IJQL5uV3qxhgDorrtdrX37RyFIPDhRk_UONN4bHvF7pBo3JmT69X4dpfIactaXSxTq9ovqzdG-pS7dHLWoVL_iaWLNT_l8fLz/s1600/Sample+Proposal_Page_2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="494" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX2rDYjugkSt6dwK6YqHY2Rg61SRmoFva4xVRvnB-0OT_IJQL5uV3qxhgDorrtdrX37RyFIPDhRk_UONN4bHvF7pBo3JmT69X4dpfIactaXSxTq9ovqzdG-pS7dHLWoVL_iaWLNT_l8fLz/s640/Sample+Proposal_Page_2.png" width="640" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5b8veMDdnZFZAScR9ypUovbD46n-hE3Id6NcMewQBe3pHtkwhJh0g1n-wy9AAeISXssq4l2acR5sgfyNxJiXtLvCY9UWq37wys-SKYF_0ob0p1QfIpY1SzvPUS-bWRkn2DuASGzAAloTu/s1600/Sample+Proposal_Page_3.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="494" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5b8veMDdnZFZAScR9ypUovbD46n-hE3Id6NcMewQBe3pHtkwhJh0g1n-wy9AAeISXssq4l2acR5sgfyNxJiXtLvCY9UWq37wys-SKYF_0ob0p1QfIpY1SzvPUS-bWRkn2DuASGzAAloTu/s640/Sample+Proposal_Page_3.png" width="640" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZ_MKtyVOHqrGlTszF3laXrhDvQukc1Rkle4fNouDkLG7SJx5Rp5Rnn2CxcWQXeFTZDuObl7Rp3STdltv51U44OZ9f5zy8R46KDmwqRruZ032J5Qkf1T6pAESikY7khc9ssQYU8_YJSmo5/s1600/Sample+Proposal_Page_4.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="494" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZ_MKtyVOHqrGlTszF3laXrhDvQukc1Rkle4fNouDkLG7SJx5Rp5Rnn2CxcWQXeFTZDuObl7Rp3STdltv51U44OZ9f5zy8R46KDmwqRruZ032J5Qkf1T6pAESikY7khc9ssQYU8_YJSmo5/s640/Sample+Proposal_Page_4.png" width="640" /></a></div><div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1hj3Kkis6BoG_Fz08-n87vP8EZi-Cw7W5ktYUiCfcePw_4ziPMl3X248J2g0uFaN-BTLPLuRlXjucy6nnzQUcKVUiab-Muj8qx4u5tTFLi6dN8CwXCKQnpTm6aO0cHTu_kFrVbr6PhlpE/s1600/Sample+Proposal_Page_6.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="494" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1hj3Kkis6BoG_Fz08-n87vP8EZi-Cw7W5ktYUiCfcePw_4ziPMl3X248J2g0uFaN-BTLPLuRlXjucy6nnzQUcKVUiab-Muj8qx4u5tTFLi6dN8CwXCKQnpTm6aO0cHTu_kFrVbr6PhlpE/s640/Sample+Proposal_Page_6.png" width="640" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyYeA9hHdA7zUjIvvkduJQ6gvBxikbu6ovlKT9JrTJgOVBrKcpya3hnAj0HXQS8mpIaXYygsUfTzBFfLyhfJ4TQvIDKjJqSfE9iB6QRKuy8eki2Y8dTxLV1UZo99ggy7hzlTnAgotmEqJc/s1600/Sample+Proposal_Page_7.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="494" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyYeA9hHdA7zUjIvvkduJQ6gvBxikbu6ovlKT9JrTJgOVBrKcpya3hnAj0HXQS8mpIaXYygsUfTzBFfLyhfJ4TQvIDKjJqSfE9iB6QRKuy8eki2Y8dTxLV1UZo99ggy7hzlTnAgotmEqJc/s640/Sample+Proposal_Page_7.png" width="640" /></a></div><br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-z_qiOQ0pgV0zudCiaaVoe78rPtsXrCnW9KAx5eyRxYfJ-CQOgb3sdNNP3LpsrEfKDnioxZCygvPFyXeDQeDDQCM-WHDHWDfB1xHKXkds28_CctzdtCxdHuUWqYuliw0uUqKpivw8OmNX/s1600/Sample+Proposal_Page_8.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="494" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-z_qiOQ0pgV0zudCiaaVoe78rPtsXrCnW9KAx5eyRxYfJ-CQOgb3sdNNP3LpsrEfKDnioxZCygvPFyXeDQeDDQCM-WHDHWDfB1xHKXkds28_CctzdtCxdHuUWqYuliw0uUqKpivw8OmNX/s640/Sample+Proposal_Page_8.png" width="640" /></a></div><br />
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<div style="text-align: center;"><br />
</div>One of the best features from the clients side of the table, is that when they complete the initial employee census I need to produce a quote, I can turn this around and pre-populate application forms for their employees, which GREATLY simplifies and streamlines the enrollment process. An example is given below.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5ZXG5sD_2KplletNygFInRTJuN8Pa6oWjndG4vuofNRDzEnH9te0iDfZKMpHUuFDdDl5KcsIYpmtAWh5PH9WLoZM6cUxaO0iTpNu7FHAg4ZLcM7k_s8X0gEHaar4QXqr-zVbpUjqyhx7f/s1600/EnrollmentPacket(4)_Page_13.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5ZXG5sD_2KplletNygFInRTJuN8Pa6oWjndG4vuofNRDzEnH9te0iDfZKMpHUuFDdDl5KcsIYpmtAWh5PH9WLoZM6cUxaO0iTpNu7FHAg4ZLcM7k_s8X0gEHaar4QXqr-zVbpUjqyhx7f/s640/EnrollmentPacket(4)_Page_13.png" width="494" /></a></div><br />
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Neat eh?<br />
<br />
--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
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E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-84165722903194917802010-08-10T13:10:00.000-07:002010-08-10T13:10:57.067-07:00YoutubeI am on the Youtubes<br />
<object height="385" width="480"><param name="movie" value="http://www.youtube.com/v/v3DXqD8vyyA&hl=en_US&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/v3DXqD8vyyA&hl=en_US&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object><br />
<span style="font-size: xx-small;"><i>Believe it or not this was the best take out of about 10...</i></span><br />
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<b>Olympia Trust</b> <a href="http://www.olympiatrust.com/">http://www.olympiatrust.com/</a><br />
Great for sole proprietors as it allows you to send in funding with claims, you dont have to prefund the trust.<br />
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<b>Benecaid</b> <a href="https://www.benecaid.com/">https://www.benecaid.com/</a><br />
Great for employee groups as there is no setup fee, the trust can be funded monthly, quarterly or annually.<br />
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Blog Post on Health and Welfare Trusts <a href="http://canadianlifeandhealthinsurance.blogspot.com/2009/10/private-health-services-plans-aka.html">http://canadianlifeandhealthinsurance.blogspot.com/2009/10/private-health-services-plans-aka.html</a><br />
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--<br />
Robert Reynolds, GBA<br />
Certified Group Benefits Advisor<br />
Hendry McKenzie Reynolds Employee Benefits Ltd.<br />
<br />
Toll Free: 1-888-592-4614<br />
rob@hmrinsurance.ca<br />
www.hmrinsurance.ca<br />
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E.O. E.Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0tag:blogger.com,1999:blog-6437334395200954565.post-25330121279798841902010-08-03T10:22:00.000-07:002010-08-03T10:22:12.867-07:00New Generic Drug Reform Coming to BCA new agreement was signed between the B.C. Ministry of Health Services, the BC Pharmacy Association (BCPhA) and the Canadian Association of Chain Drugstores (CACDS). The new Pharmacy Services Agreement, available at <a href="http://www.health.gov.bc.ca/pharmacare/suppliers/psa.pdf">www.health.gov.bc.ca/pharmacare/suppliers/psa.pdf</a> will come into effect on July 28, 2010.<br />
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<div style="background-color: white; color: black;"><b>The jist of the new agreement is that generic prescription drugs will be price caped at 35% of the Brand Name drug starting in 2012.</b></div><div style="background-color: white; color: black;"><br />
</div><div style="background-color: white; color: black;"><b>If a Prescription Drug costs $100 the generic equivalent can cost no more than $35. </b></div><div style="background-color: white; color: black;"><b> </b></div><blockquote><div style="background-color: white; color: black;">Implications for extended health plans in BC</div><div style="background-color: white; color: black;"></div><ul><li>If you currently reimburse for Brand Name drugs, change the coverage to Generic and save yourself a bundle.<br />
</li>
<li>If you currently have paper reimbursement of drugs, you automatically have Brand Name drug coverage, as the insurance companies cannot instruct the pharmacy to dispense the generic at the point of sale. <br />
</li>
<li>If you have a paper reimbursement drug plan, you will need to switch to a drug card to allow for a generic drug formulator.<b><br />
</b></li>
</ul></blockquote><div style="background-color: white;"><br />
</div> --<br />
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Courtesy of Manulife Financial <br />
<b><span style="color: #002f80; font-family: Verdana; font-size: medium;">Generic drug prices to be reduced in BC</span></b><br />
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<span style="font-family: Verdana; font-size: x-small;">The BC Ministry of Health Services and the BC Pharmacy Association (BCPhA) and Canadian Association of Chain Drug Stores (CACDS) have negotiated a new Pharmacy Services Agreement that comes into effect </span><b><span style="font-family: Verdana; font-size: x-small;">July 28, 2010. </span></b><span style="font-family: Verdana; font-size: x-small;">Although the agreement is not binding on individual pharmacies, it is expected that most, if not all, pharmacies will comply.</span><br />
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<span style="font-family: Verdana; font-size: x-small;">This is good news as plan sponsors will benefit from the cost-savings attributed to lower cost generics on the PharmaCare formulary. The expected savings between October 15, 2010 and July 3, 2011 is about 3.7% of drug costs. This savings will vary significantly by plan depending on the make up of the plan and demographics.<br />
</span><br />
<b><span style="font-family: Verdana; font-size: x-small;">Generic drug pricing</span></b><br />
<span style="font-family: Verdana; font-size: x-small;">The agreement applies to both public and private payers and the following price reductions will be phased in over the next two years: </span><br />
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<br />
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<table border="1"><tbody>
<tr valign="top"><td bgcolor="#c0c0c0" width="118"><b><span style="font-family: Verdana; font-size: x-small;">Effective date</span></b></td><td bgcolor="#c0c0c0" width="289"><b><span style="font-family: Verdana; font-size: x-small;">Description of change</span></b></td><td bgcolor="#c0c0c0" width="289"><b><span style="font-family: Verdana; font-size: x-small;">Price compared to brand</span></b></td></tr>
<tr valign="top"><td width="118"><span style="font-family: Verdana; font-size: x-small;">July 28, 2010</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">Generic drugs added to PharmaCare since January 1, 2009</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">42% of the manufacturer list price for the equivalent brand</span></td></tr>
<tr valign="top"><td width="118"><span style="font-family: Verdana; font-size: x-small;">October 15, 2010</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">New generics </span><br />
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<span style="font-family: Verdana; font-size: x-small;">Existing generics (on PharmaCare prior to January 1, 2009) </span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">42% of brand</span><br />
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<span style="font-family: Verdana; font-size: x-small;">50% of brand</span></td></tr>
<tr valign="top"><td width="118"><span style="font-family: Verdana; font-size: x-small;">July 4, 2011</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">Existing and new generics</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">40% of brand</span></td></tr>
<tr valign="top"><td width="118"><span style="font-family: Verdana; font-size: x-small;">April 2, 2012</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">Existing and new generics</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">35% of brand</span></td></tr>
</tbody></table><br />
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<b><span style="font-family: Verdana; font-size: x-small;">Dispensing fees</span></b><br />
<span style="font-family: Verdana; font-size: x-small;">The Ministry also announced increases to the PharmaCare dispensing fee. These increases, although applied to the public plan, will result in a shift in marketplace conditions and will erode some of the savings to private payers.</span><br />
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<table border="1"><tbody>
<tr valign="top"><td bgcolor="#c0c0c0" width="118"><b><span style="font-family: Verdana; font-size: x-small;">Effective date</span></b></td><td bgcolor="#c0c0c0" width="289"><b><span style="font-family: Verdana; font-size: x-small;">Dispensing fees</span></b></td></tr>
<tr valign="top"><td width="118"><span style="font-family: Verdana; font-size: x-small;">July 28, 2010</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">Moves from $8.60 to $9.10</span></td></tr>
<tr valign="top"><td width="118"><span style="font-family: Verdana; font-size: x-small;">October 15, 2010</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">$9.60</span></td></tr>
<tr valign="top"><td width="118"><span style="font-family: Verdana; font-size: x-small;">July 4, 2011</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">$10.00</span></td></tr>
<tr valign="top"><td width="118"><span style="font-family: Verdana; font-size: x-small;">April 2, 2012</span></td><td width="289"><span style="font-family: Verdana; font-size: x-small;">$10.50</span></td></tr>
</tbody></table><br />
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<span style="font-family: Verdana; font-size: x-small;">Manulife will adjust our reasonable and customary fees in accordance with these changes. </span><br />
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<b><span style="font-family: Verdana; font-size: x-small;">Re-investing in Pharmacy Services</span></b><br />
<span style="font-family: Verdana; font-size: x-small;">The Province will gradually increase the funding available to support pharmacy in the provision of clinical services. By 2013, the Province is committed to investing $35 million annually for pharmacy clinical services. </span><br />
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<span style="font-family: Verdana; font-size: x-small;">Manulife will continue to work with the BC government and other industry stakeholders to help ensure that group benefits plans continue to be affordable.</span><br />
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<i><span style="font-family: Verdana; font-size: x-small;">For more information on the changes to PharmaCare in BC</span></i><b><i><span style="font-family: Verdana; font-size: x-small;">:</span></i></b><br />
<a href="http://www.health.gov.bc.ca/pharmacare/newsletter/10-007news.pdf" target="_blank"><u><span style="font-family: Verdana; font-size: x-small;">http://www.health.gov.bc.ca/pharmacare/</span></u><u><span style="font-family: Verdana; font-size: x-small;">newsletter/10-007news.pdf</span></u></a><br />
<u><span style="font-family: Verdana; font-size: x-small;"><br />
</span></u><br />
<u><span style="font-family: Verdana; font-size: x-small;"><br />
</span></u><br />
<span style="font-size: x-small;"><span style="font-family: Verdana;">--</span></span><br />
<span style="font-size: x-small;"><span style="font-family: Verdana;">TL;DR - Generic Drugs In BC Just got about 50% cheaper! </span></span><br />
<u><span style="font-family: Verdana; font-size: x-small;"> </span></u>Robert Reynolds - HMR Insurancehttp://www.blogger.com/profile/10939128478955272061noreply@blogger.com0