Blog

Affordable Care Act Enrollment And Plan Changes

We want to make sure everyone is aware of both the Affordable Care Act Enrollment And Plan Changes. Affordable Care Act plans (Also called Obama Care) are those purchased through the Connecticut Exchange via the Access Health Website.   A premium subsidy is only available to those who enroll through the Access health site.  Anthem , Connecticare and Healthy Partners are the three insurance companies available through the exchange.   People that enrolled outside of the exchange are not eligible for any type of premium help.  For those that did enroll via the exchange there rules regarding new enrollments and plan changes for existing members.

New Enrollments–

The general period for someone to register and enroll in a plan through the Access Health site ended on March 31, 2014. The site does not accept new enrollments for the remainder of the year.  A new enrollment window will open in October of 2014.  This will allow new members to apply for a January 1, 2015 start date.

Special Election Period–

Additionally, some people are allowed to enroll in a plan outside of the enrollment period.  This is true if they have a special election reason to do so.  Special elections reasons include, losing group health insurance or an individual health plan during the year, moving to a different state, a change in Medicaid or Husky status and losing COBRA benefits.

Plan Change for existing members–

In fact, Existing members are not allowed to make a plan change outside of the normal enrollment period. This is true, unless they qualify for one of the special election periods above.  A doctor who decides to no longer accept or participate with a Affordable Care Act plan during the year is not a valid reason to make a plan change.

Crowe and Associates is here to help you.  Call us if you have any questions about health insurance.  Please contact us either by phone at (203)796-5403 or by email at Edward@croweandassociates.com.

Income Annuity Information

We have provided you with some Income Annuity Information in this post.  The term “Income Annuity” is a catch all.  We use this term for any annuity that produces guaranteed future income.  There are three types of annuities that can create guaranteed future income.  These annuities are either a SPIA (Single Premium Immediate Annuity), a deferred income annuity or an annuity (fixed indexed or Variable) with an income rider.  All three have different sweet spots which can help someone determine when to use each type.  A review of each is provided below.

• SPIA-

•   A single premium deferred annuity creates immediate income that will last for a pre defined amount of time.   You can use the annuities to provide income for one person for life, or a couple for both lives.  Although, you can also use it for a set amount of time such as 20 years.   The biggest thing to be aware of is that the insured no longer owns the lump sum.  The insurance company and/or bank takes control of the lump sum of money.  They take the money in return for paying a guaranteed income stream that will not change.   If someone puts $300,000 in a SPIA with a life with 20 years certain option, this will guarantee payment for life.  In the event that the investor dies prior to receiving payment for  the 20 years, the beneficiary will receive the income until they have received the total 20 years of payments.   The trade off is that the insured no longer has access to the lump sum of money.

• WHY WOULD SOMEONE USE THIS?-

•  A SPIA will pay out the higher ratio of guaranteed income than the income rider or the deferred income annuity.  This is most useful for someone that has other assets and can afford to dedicate a portion of assets to create a guaranteed income stream.  The lump sum is no longer available so it is important to have other liquid assets if you decide to use this option.

• Deferred Income Annuity-

• The product is very similar to a SPIA. The difference is that income does not start immediately.  It starts at a pre determined future date.  The longer the deferral the higher the future income payment is.  You can calculate payments on a guaranteed bases.  The insured will know exactly how much they will get at that future date.

• WHY WOULD SOMEONE USE THIS?-

• If the insured has a need for future income, this is a good way to create an income stream without having to worry about market performance or  anything else.  They just dedicate the amount of money they need and then they can be sure income will start when it is necessary.  The flaw is that the future  income payout is not competitive with the future income payout that some other riders create.

• INCOME RIDER-

• When an income rider is attached to a fixed indexed annuity or a variable annuity it allows the insured to create a future income at any year they choose.  They do not need to pre determine the year income will be taken and they can see exactly what the income would be in any given year.  They also maintain control over the lump sum investment and can continue to accrue interest on the money.  The income payout exceeds that paid by the Deferred Income Annuity.  It is critical however, that you pick the most competitive company, as the guaranteed payout amounts vary tremendously.  This depends on the company that you choose to  use.  Additionally, there is an annual fee on most income riders.

• WHY WOULD SOMEONE USE THIS?

• If someone is looking for the highest deferred guaranteed income payment, the right income rider is the best option.  In fact, you would also maintain control of the lump sum investment if you use this approach.

CLICK HERE IF YOU NEED A QUOTE

Risk Free Investments

In this post we explain some things about Risk Free Investments.  There are a number of risk free investments (no risk to principal) available to those looking for safe/conservative ways to earn interest on investments.  While it is smart to be conservative when approaching retirement or in retirement, it can be difficult to keep up with inflation only using strategies without market risk.  Money markets, CD’s and Annuities are three popular choices of focus in this post.

Money Markets

While Money Markets are safe and a convenient place to keep cash, they are simply not going to yield any type of meaningful return.

Certificates of Deposit

While better than a Money Market return, CD’s are still averaging less than 2% on a 5 year commitment nationally.  They are certainly safe but will not be likely to keep pace with inflation.  Market Linked CD’s may be a better choice for someone that is looking for the FDIC backing provided by CD’s.  Market linked CD’s provide principal protection but have a variable return that can range from 0% up to 8% or 9% depending on the terms and bank.

There are a number of different crediting strategies used but one of the more common ones is the “Basket of Stocks” approach.  The bank picks out a group of stocks (usually between 5 and 15).  If the overall portfolio is level or positive for the year, you will pay the stated/declared interest rate.  If there is an 8% interest rate declared, that is the amount you would pay for that year.  They repeat this process for the duration of the commitment.  If an 8% declared rate product is on a 7 year surrender schedule, the client will receive 8% for every year the account is positive.  They will receive 0% for years it is negative.   As a result, Market CD’s can be a good approach for the more conservative investor.

Annuities-

Annuities can be a good approach but you must do a great deal of research before you purchase one. There is a big difference between a SPIA, a Fixed annuity and an Indexed Annuity.   A fixed annuity (Also called a MYGA) can offer slightly higher rates than CD’s with the same term years. As of this post, the best 5 year fixed annuity is at 3.4%.

A SPIA (single premium immediate annuity) 

This product is based on your income and is not appropriate for any type of accumulation. Fixed Indexed Annuities can be a great option for account growth.  Although, they can also be a poor choice  this depends on which company and product you choose.  Fixed Indexed Annuities use market indexes (usually the S & P 500) to determine the amount of interest to credit to accounts.

They have crediting methods that provide a portion of the index growth to the account.  This is where there can be a wild difference in companies.  As an example:  One carrier currently credits the gain in the S & P 500 per year up to  a cap which is currently at 2.75%.  This means the most a client can get in a year is 2.75% return regardless of how high the market goes.  There is another carrier that credits 75% of the gain of the S & P over a 2 year period.  This would have provided over 22% interest  to an account in the 2012 to 2013 time period.   Obviously, it is important to choose the plan with the best crediting methods.  Because if you choose the wrong one it can cost a bundle.

CLICK HERE FOR A QUOTE