Industry News

What Officially Went Wrong

A recent post from InsureBlog summarized a 92 page report from The HHS Office of Inspector General on the failure of the Obamacare exchange.  Here are the highlights provided on their blog, which explain the main causes of the Obamacare challenges:

The development of faced a high risk of failure, given the technical complexity required, the fixed deadline, and a high degree of uncertainty about mission, scope, and funding. Still, we found that HHS and CMS made many missteps throughout development and implementation that led to the poor launch. Most critical was the absence of clear leadership, which caused delays in decisionmaking, lack of clarity in project tasks, and the inability of CMS to recognize the magnitude of problems as the project deteriorated. Additional HHS and CMS missteps included devoting too much time to developing policy, which left too little time for developing the website; making poor technical decisions; and failing to properly manage its key website development contract. CMS’s organizational structure and culture also hampered progress, including poor coordination between policy and technical work, resistance to communicating and heeding warnings of “bad news,” and reluctance to alter plans in the face of problems. CMS continued on a failing path to developing despite signs of trouble, making rushed corrections shortly before the launch that proved insufficient. These structural, cultural, and tactical deficiencies were particularly problematic for given the significant challenges of implementing a new program involving multiple stakeholders and a large technology build.

See a related Washington Post article here:

Some Insurance Companies are Losing Money on Obamacare Exchanges

A recent article in the Wall Street Journal details the financial sustainability for insurance carriers as it relates to the Affordable Care Act Exchanges (Marketplaces).  Journalist Anna Wilde Mathews explains why the insurance companies are under pressure to improve their margins on all of their ACA health plan offerings.  For example, a recent analysis of Blue Cross and Blue Shield plans, found that they paid out more for health care in the first three quarters of 2015, than they received in premiums on their Individual plans.

Though the health law has added customers to many insurers' rolls, much of that growth has been unprofitable, reflecting medical costs that have often run ahead of what insurers projected when they set premiums, among other factors.

Also recently in the headlines, CNN Money reported that UnitedHealth expects to lose nearly $1 billion on plans they offer through the Obamacare exchanges.

UnitedHealth, which sat out the first year of Obamacare in 2014, said it is not looking to grow its exchange business. Instead, it has increased prices, eliminated marketing and commissions and withdrawn its top-tier products. In an effort to stem the losses, it is also working more closely with providers and enrollees to manage their illnesses and care.
UnitedHealth warned in November that it might pull out of the Obamacare exchanges altogether in 2017, citing higher-than-expected claims. In particular, it blamed the large number of members signing up outside the open enrollment period who were using a lot of medical services.
Some insurers argue that Americans are waiting until they get sick to sign up and then finding a way to qualify during the so-called special enrollment period, which is traditionally open to those who change jobs, get married or divorced or have a baby. The Obama administration has since said it would tighten the rules for joining Obamacare during this period.

Time will tell if these losses result in higher premiums, higher out-of-pocket costs, or insurance carriers pulling out of the market altogether.

Email Marketing 101 for the Insurance Professional

Times are changing, fast. In the last few years the insurance agent client relationship has changed in a big way. With the development of incredible communication tools it is easier than ever to keep in touch with all of your clients on a personal basis. With tools like a website, email, and social media you can keep your clients in the know while finding new potential clients. Today we will look at email marketing in depth and see how it can be used to keep your old customers and foster new clients.

Email marketing has been around for over two decades, but the tools has gotten considerably better over the years. Now with tracking you can truly understand what your clients want to know more about and what they don’t care about anymore. 

Keeping Up with your Clients

The first thing you should make sure that you need to be doing is keeping in touch with your clients on regular basis. Having a weekly or monthly newsletter just to keep up and make sure they know all of the benefits available to them. By reaching out to your clients and keeping them up to date on benefits, new plans, or just a place for them to email you back and ask a question.

Keep your newsletters short but informative. Have around 5 pieces of content in each newsletter, and explain new things in a language that your clients will understand. By being transparent you will make a strong connection with your customers that will keep them loyal for years to come.

Fostering New Relationships

Keeping up with your current clients is only part of the equation for email marketing. The real potential in email marketing is reaching out to people that are not yet clients to show to them why they need to become your customers. By reaching out to these potential clients and informing them about the perks of signing up with you they will understand what makes you the superior choice to be their agent. 

In this newsletter make sure to include interesting and informative articles and videos on the plans you offer, on the benefits of your company and a simple and easy way that they can contact you for more information. 

Use the Data

After you have sent your emails you need to look into the data and see what interested your subscribers and what they don’t care about. By keeping a constant eye on the data you can easily tweak what you send to be more interesting to your readers. If you do it right people will be excited to get your emails and be interested in what you have to say.


By using email marketing to its fullest you can cultivate the relationships you already have and create new potential relationships so that you can grow your business in a way that was never possible before. 

If you are open and honest in your newsletters you will connect with your subscribers in ways that were only dreamed of years ago, which will lead to real gains in your bottom line.

Want to learn more about how to do email marketing? You can read more about email marketing here.

Azriel Ratz, CEO of Ratz Pack Media, is an expert in social media, email marketing, and online advertising. He has been working in the industry for several years. If you have any questions or comments about this article contact him directly at  

Special ACA Open Enrollment For Small Groups

Guaranteed Availability Provision of the ACA (Affordable Care Act)

If you have small employer groups who don’t meet participation requirements, but want to offer coverage, there is a solution. Between November 15th and December 15th, 2015, there is a special open enrollment window where employers that don’t meet minimum requirements will be able to offer coverage to their employees. Take advantage of this opportunity to compare health insurance plans and write small groups that don’t meet traditional contribution and participation.

Important enrollment reminders for your employer groups:

  • Effective date of coverage: January 1, 2016
  • Deadline for completed applications and all supporting documents: Dec 15, 2015
  • Employer Contribution on the New Group Application must be completed
  • Write “Guaranteed Availability” visibly on the top of the group application
  • Groups that enroll in this period will be subject to recertification at renewal

Be sure to consult your carrier's sales representative for important details and writing requirements related to this one-time special provision. If you submit a group under this special opportunity after December 15, 2015, carriers cannot accept it per ACA guidelines.

Employer Costs and Estimating Best Plan Options for Clients

The Kaiser Family Foundation recently conducted an annual survey of employers providing "...a detailed look at trends in employer-sponsored health coverage including premiums, employee contributions, cost-sharing provisions, and employer opinions. The 2015 survey included almost 2,000 interviews with non-federal public and private firms."

The Wall Street Journal recently published an article based on these results.  Journalist Anna Wilde Matthews wrote that nationally, "...the average cost of employer health coverage passed $17,000 for a family plan this year, despite continued muted growth on a percentage basis..."

In California, CHCF conducted a similar study on employer coverage, costs, and benefits -- and published the results in March, which can be found here:

Using this data and other benchmarks, the BenefitCompare tool automatically makes plan recommendations based on an employee and/or family's anticipated medical claims.  BenefitCompare gives you estimated out-of-pocket costs for local specific claims based off your bronze, silver, gold, or platinum plan.

New Consumer Site Provides Quality Ratings & Costs!

A new site recently released by California state officials is really a breakthrough for consumers of health insurance.  They can now look up the average costs for the most common medical procedures based on location, as well as review the quality ratings of various providers.

The consumer site can be accessed here:

The BenefitCompare tool will include a convenient link to this site for both agents and their employer groups to easily access while narrowing down their plan options.  The hardest part about choosing a health plan is understanding the true cost of premiums, treatments, and cost-sharing.  With this consumer website linked for easy access, it will help employers and their employees have simplicity and clarity as it pertains to their true overall out-of-pocket costs.

Barbara Feder Ostrov of Kaiser Health News covered the details of this new consumer site, along with links to other useful sites for quality reviews of hospitals (affiliated with Medicare), and, "which provides information on the state’s hospitals, doctor groups, nursing homes, assisted living facilities, home health and hospice services, adult day care, and services for the developmentally disabled."  You can access the full article by clicking on the KHN logo on the right.

BenefitCompare is dedicated to making agents' lives easier, so they can provide valuable evaluation tools that aren't available through straight proposals with a general agent.  With this added consumer site, your clients will have a full picture of the true costs of medical care.

See below for a related article on this new state website in the Los Angeles Times:

If you or your client(s) have used the new website, we encourage you to comment below and share your experience.

The Cadillac Tax

Recent ACA discussion has turned to the so-called "Cadillac Tax" (scheduled to take effect in 2018), which is a 40% non-deductible excise tax on employer-sponsored health coverage that provides high-cost benefits.  It's expected to affect over 25% of employers as the regulation is currently written.  Cigna provides the following PDF on their website with more details on how it would work, including IRS requirements:

The Washington Post's Carolyn Johnson wrote in the Wonkbook today:

The next fight over the Affordable Care Act may center on one of its most powerful provisions to contain health care costs — the "Cadillac tax" on the most generous health insurance plans.
A new analysis released this week by the Kaiser Family Foundation estimated that just over a quarter of employers that offer health plans would pay the 40 percent tax in 2018 on at least one plan if they don't make changes. The National Business Group on Health, a nonprofit association of large employers, found that half of its members reported that at least one of their health plans would trigger the tax in 2018. Both groups predicted that the proportion of employers affected would go up significantly over time.
That means many employers are scrambling to find ways to avoid the tax. Ultimately, that will probably mean a combination of paring benefits and shifting cost to employees through high deductible plans, capping or eliminating flexible savings accounts, and offering less generous plans that, for example, limit access to a narrower networks of doctors and hospitals.

"The 'Cadillac tax' will have a very powerful effect on health care costs, and that certainly a good thing. But the way the tax helps to keep health costs down is primarily by shifting it to workers," said Larry Levitt, a senior vice president at the Kaiser Family Foundation who did the analysis. "While it certainly sounds good to control heath care costs, the way it is likely to happen won’t feel very good to consumers."

The opposition to the tax comes from a motley collection of unlikely allies, beyond the usual cast of anti-tax Republicans. In late July, The Alliance to Fight the 40 launched a concerted campaign against the tax, backed by a coalition that puts the insurer Cigna, the labor group Unite Here, the utility Eversource Energy, and school districts on the same side.  The Hill reported that House Republicans will likely put repealing the tax on the fall agenda. Even Hillary Rodham Clinton is concerned.

The Henry J. Kaiser Family Foundation has excellent resources and research on the "Cadillac Tax" and many other topics related to health care reform:

Also related to the Cadillac Tax, published an article on how the regulation might affect FSA's (flexible spending accounts):

As always, we welcome your thoughts and comments below.

Supreme Court Decision on Same-Sex Marriage

Aetna recently notified brokers that their enrollment deadline has been extended for applicable members/spouses affected by the same-sex marriage ruling.  Check each carrier site for how they are applying the ruling to their own members, but they will likely have similar changes to the Aetna updates outlined below.

To summarize the ruling, on June 26, 2015, the U.S. Supreme Court decided that all states must license a marriage between two people of the same sex and honor marriages licensed in another state.  As a result of this ruling, Aetna said that "fully insured health plans offered by Aetna in all states now cover same sex spouses the same way they cover spouses of the opposite sex. "

What this means for Aetna members on insured plans:

  • Members who were legally married on or after June 26, 2015 will have 31 days from the date of marriage to enroll their same-sex spouses.
  • Members who were legally married prior to June 26, 2015 but were not allowed to enroll their same-sex spouses in their fully insured plan now have until August 28, 2015 to enroll their spouses.
  • There will be no special enrollment period for members who were married prior to June 26, 2015 who were allowed previously to enroll their same-sex spouse.
  • Members who miss an enrollment deadline, will need to wait for the next open enrollment period, or experience a qualifying event, before adding their spouse.

According to Aetna, what this means for your clients:

The changes outlined above only apply to insured plans.  Self-funded plans should consult with their legal counsel as they decide how to handle eligibility for same-sex spouses.
This ruling does not impact domestic partnership benefits.  If, however, a group wishes to make a change to domestic partnership benefits, and state law allows it, [Aetna] will make the change at renewal.
Groups may still have the option to choose whether they cover employee spouses, but if they cover some spouses, they must cover all.

Aetna encourages brokers to contact their Aetna Representative with any specific questions or for additional information.

Complimentary HR & Compliance Service for our Brokers

As a free benefit to our BenefitCompare users, we have partnered with HR360 to provide Human Resource help and Benefits Compliance resources.  At HR360, they offer:

  • an HR Library
  • HR Apps, Forms, & Tools
  • Health Care Reform Updates
  • HR Training
  • Guidance on How-to Hire, Manage, and Terminate Employees
  • HR Training Videos

Learn how the HR Library can help your employer group clients by watching a short video on their home page:

From supervising employees…and staying compliant with Health Care Reform…to complying with federal and state labor laws…HR360 provides assistance with attorney-reviewed HR tools, HR guidelines, HR forms and HR training videos.
If you haven't already received an email invite to log into the site, we'll be gradually contacting all of our agent users throughout the year.  If you'd like access to HR360 sooner, just give us a call or click on the "Contact Us" form of our website, we'll get your welcome email sent right away.

We're grateful for all our loyal agent and broker BenefitCompare users and happy to continue to offer outstanding customer service and compliance assistance in the post health reform world.


Zenefits offers online HR & payroll software, along with benefits and insurance management for small and medium employers.  Their website states it offers: online HR Software that gives your team a single place to manage all your human resource needs - payroll, benefits, compliance and more.

In offering these services, they have taken over accounts previously managed by independent brokers and agencies in California (and across the U.S.), giving them a reputation for taking away business to some industry observers.

Employee Benefit Advisor magazine recently featured an article about the CEO and their company, defending its business model, and assuring its readers it is not "anti-broker":

BuzzFeed published another article from the consumer point of view, showing the good and bad that can come from losing that "personal touch":

With its explosive growth and ..."its stated goal of eliminating middlemen like insurance brokers, Zenefits has become a threat to its entrenched competition faster than most startups":

If you're an agent, have you had any clients switch to Zenefits?  Any employers/employees who use Zenefits, please share your comments/experience below.

Taxing Blue Shield of California

Back in August of 2014, Blue Shield of California lost its tax-exempt status after the Franchise Tax Board determined that it no longer qualified as a nonprofit based on its business practices.  The state's audit concluded that they "...stress profitability..." and "...are inconsistent with an organization organized as a nonprofit which desires tax-exempt status." 

Some articles from the Los Angeles Times that covered the story:

For its part, Blue Shield believes it is "a mission-driven organization that answers to members and not shareholders..." and continues to maintain that its mission is "For Care, Not Profit":

A reliable source at Blue Shield told us they do not believe their executives have any incentive to maximize profitability stating, "Since Blue Shield has a 2% net income cap, its rates reflect the cost of health care and not higher profits.  But despite its not-for-profit mission, Blue Shield faces the same market realities and rising costs as its competitors."

Blue Shield states on their website, some of the many ways it distinguishes itself from its competition:

We strive to uphold high standards of ethical business practices in our programs, products, and interactions with everyone we serve. In fact, we have been recognized as one of the World’s Most Ethical Companies in 2012 and 2013 by Ethisphere Institute.
We practice social responsibility as a company, protect the environment and volunteer in local communities. 
The Blue Shield of California Foundation is funded entirely by Blue Shield of California contributions, and has awarded more than $200M in grants since 2005 to community organizations to make healthcare effective, safe and accessible, particularly for underserved communities. The Foundation is also dedicated to ending domestic violence through a coordinated network of service, support, and education.

An article published by Southern California Public Radio, a member-supported public media network, discussed what this will mean for the carrier and the consumers: 

What do you think it means?  Was it a fair decision?  Comment below and share your thoughts!

Health Insurance Carrier Mergers

Recent billion-dollar mergers between carriers has been making news, including Aetna investing $37 billion to acquire Humana, a major player in the Medicare Advantage sector.  In light of these changes, we decided to post articles from various sources on the most recent merger between Anthem and Cigna.  We encourage agents in California to comment below with their opinions and feedback on how this will affect consumers, employers, agents, and shape the future of the industry.

UPDATE August 5, 2015 - Article in LifeHealthPRO addresses the carrier mergers and what it will mean for the health insurance industry:

Cigna Won't Pay Brokers for Individual Sales in 4th Quarter

Cigna recently sent an email to brokers and posted on their website (under "News You Can Use") that they plan to "pay 0% commission" to agents and brokers who sell their Individual and Family Plans in the 4th quarter of 2015.  This will affect all plans sold after 8/22/15 for effective dates 9/1/15 through 12/31/15.  Details of the update are as follows:

Please be advised that we are adjusting our Cigna Individual and Family Plan medical commission schedules effective September 1, 2015. Sales submitted on/after August 22nd for September 1st through December 31st effective dates will earn 0% commission. Commission schedules have been updated on the portal. This decision only impacts business submitted with effective dates of September 1st through December 31, 2015. Business for 2016 will be paid at posted commission rates that will be announced prior to the 2016 Open Enrollment Period.
You are a valued partner, and we appreciate the business that you place with us. We look forward to sharing with you the exciting updates we have planned for 2016 to help you grow your business. Look for future launch meeting information to be sent over the next several weeks. If you have any questions, please contact your New Business Manager or Broker Support.
Thank you,
Cigna Individual and Family Plans

Are you a broker in California who sells Cigna Individual and Family Plans?  Please feel free to comment below and share your thoughts!

Proposed Bill Would Roll Back HRA Penalties recently published an article related to HRA's and small employer compliance issues.  With the ACA in full effect, employers need to stay on top of all the new regulations and penalties.  For those utilizing an HRA, the new bill would change the new rules that disallow small groups from using HRA's to pay employees for health costs:

Employers would be able to use standalone reimbursement arrangements (HRAs) to compensate employees for health care expenses under a bipartisan bill recently introduced in Congress.

The Small Business Healthcare Relief Act (H.R. 2911 and S 1697) would roll back Treasury Department guidance that prohibits employers from using standalone HRAs to compensate employees for health care-related expenses.

You can also review our previous blog posts on this topic:

The Broker's Role and the ACA

                Image Courtesy of

                Image Courtesy of

BenefitsPro recently published an article by Dan Lyons and John Larew called, "Is the Sky Really Falling on Brokers?"  It explored the facts and realities of the post ACA world, along with sharing broker sentiment, broken down by the bulk of their book of business.

Some highlights to take away:

(1)  The days of paper enrollment and face-to-face selling, while still prominent, are giving way to a technological revolution. Online benefits administration and private exchange solutions are an increasingly important part of the business.

(2)  For the right sort of broker — mostly small and focused on individual consumers — we expect to see a variety of service offerings, including guidance and enrollment, become a core part of the health insurance business.

(3)  Brokers are already well aware of one of the strongest strategies for surviving and growing in today's health and benefits marketplace: offering ancillary products such as life, dental, vision and disability insurance.

               Image Courtesy of

               Image Courtesy of

(4)  Take advantage of new distribution mechanisms and technology.

(5)  When the dust settles in a few years, the winners in the benefits space probably would describe themselves not as brokers but as solution providers.

Brokers need to get used to the idea that they’re in an industry that is redefining itself, adopting new tools, creating new business models, and responding to rapidly evolving needs.

They close the article with a profound statement of reality, "The future belongs to the brave, the quick and the adaptable."  See the full article and survey results here:

Consumer Benefits from Having an Agent



As an individual or business owner, you don’t pay any more for employee benefits purchased through an agent or broker than you would if you purchased the coverage directly from an insurance company. Insurance carriers set aside a small portion of the premium to pay brokers a commission, which covers not only the selling of the plan but much of the servicing required. An agent continues to receive commissions as a plan is renewed, so service after the sale – often long after – is just as important as the sale itself. 

Good agents don’t just sell health insurance, they know health insurance. Your agent will show you a variety of plans, explain the benefits and potential shortcomings of all of them, explain the latest health care trends, then help you pick a plan that best fits your needs. Once a policy or plan is selected, the agent will coordinate the complex process of enrollment and/or changing your benefits package. A licensed life and health insurance agent is well-versed in plan installation and enrollment procedures, which lessens the burden on you.

Insurance agents go by many names—they may be called agents, brokers, producers, or health insurance professionals. But the best description of what they do is serve their clients as professional insurance advisors.


Health insurance is an extremely complex product. Before deciding which policy is best, you have to consider a number of factors, some are: the scope of what you want to cover; the degree of risk toleration, the network of medical providers and the monthly cost. 

Health insurance is best looked at as financial protection against the high cost of medical treatment. Advisors educate and advise you on ways to manage this big financial risk. The process is far too big for a one-size-fits-all approach. The professional insurance advisor helps individuals and business owners make informed choices on cost-effective coverage options and provide ongoing service and support. 

Every day, hundreds of thousands of professional health insurance agents and brokers help individuals and employers purchase health insurance coverage that best fits their specific budget and medical needs. More importantly, agents and brokers help their clients resolve day-to-day issues that may arise after the policy is sold.

As benefit specialists, professional health insurance agents and brokers can help you:

  • Design benefit plans
  • Find innovative ways to save you money
  • Resolve claims disputes
  • Conduct enrollments/terminations
  • Solve complex billing issues

Agents and brokers help design and implement cutting-edge health promotion and wellness programs and help their clients comply with state and federal laws like PPACA, HIPAA and ERISA.

As members of a profession that requires a license and has stringent prerequisites of educational course work and testing, agents and brokers serve more in the role of advocates for clients than simply as salespeople. Professional agents and brokers help procure coverage for and service the health insurance and medical care needs of tens of millions of Americans.

Professional agents and brokers have extensive industry knowledge from a design, benefit, pricing and care perspective. Many small employers can’t afford to have this level of expertise in-house and simply do not have the time that it requires to administer a comprehensive, compliant benefits package for their employees.

Professional agents and brokers work very hard to be knowledgeable to keep pace with the ever-changing health care system. There is no way a governmental agency in some far-off location could match the service and value agents and brokers bring to their clients. Agents and brokers are the point of contact for the majority of Americans who purchase health care coverage.


Only agents/brokers can offer advice, compare plans, evaluate variables and sell both inside and outside of the ACA (Obamacare) Exchanges/Marketplaces.  Because agents value client relationships and use the latest technology, they are able to help clients navigate a complex system in a simple way.  They are here to serve the consumer (individuals, families, employers, seniors and more).


A Certified Insurance Agent is a licensed health insurance agent who has passed Covered California's intensive training and certification program.  You have the option of working with a Certified Insurance Agent at no cost to you.


You may use Covered California's Agent Search tool to locate a Certified Insurance Agent close to you or email us on the Contact Page for an Agent Referral near you.

Transition Relief for Small Employers Expires June 30, 2015

One of our favorite colleagues, Fred Cartier, provided some useful content regarding the relief offered to some small employer groups.

The Internal Revenue Service, Department of Labor and Department of Health and Human Services have each issued frequently asked questions stating that employer payment plans (sometimes referred to as premium reimbursement plans) for individual health insurance coverage fail to comply with the Affordable Care Act. Employers that violate this rule are subject to an excise tax of up to $100 per day ($36,500 per year) for each affected employee.   While small organizations are not subject to the ACA’s “shared responsibility” employer mandate to provide coverage or pay a penalty, if they do provide health coverage it must meet a range of ACA coverage requirements.

IRS Notice 2015-17   Issued on Feb 18, 2015, provides transition relief for small employers that used premium payment arrangements for 2014; small employers also will not be subject to penalties for providing payment arrangements for Jan. 1 through June 30, 2015. These employers must end their premium reimbursement plans by that time. Small employers are employers that are not Applicable Large Employers under § 4980H (generally less than 50 full time and full time equivalent employees in prior year). Relief was not given for large employers (those with 50 or more full-time employees or equivalents). Large employers are required to self-report their violation on the IRS’s excise tax form 8928 with their quarterly filings.

Higher pay in lieu of offering health insurance is permissible, as long as the money is not specifically designated (required) to be used to pay for premiums.  However, doing so increases the employees taxable income.  To offset the tax implications It may be possible that an employer can use a payroll vendor to set up post-tax payments to carriers for monthly premiums.  However, the best option may be to implement a group health plan accompanied by a Sect 125 POP plan. 

Know Your Number: New Consumer Credit Protections

In a recent blog post by our friends and colleagues at Goodsell & Co., Inc. Certified Financial Planners, they explained the importance of obtaining and understanding your consumer credit score:

Until recently, you typically had to pay to see your credit score. That’s changed as a result of an initiative by the Consumer Financial Protection Bureau (CFPB). In February, the CFPB announced that more than 50 million Americans now have free access to their credit scores through their credit-card companies, and tens of millions more should have access soon.

In more good news for consumers, the three major credit-reporting agencies agreed to changes that should make it easier to correct errors and reduce the negative credit impact for late payment of medical bills.

Your credit profile can make a big difference in your financial life, not only for major purchases such as a home or car but also for college loans, credit-card terms, and insurance premiums. Your credit profile might even come into play when you apply for a job or rent an apartment. Considering the recent changes, this may be a good time to take a closer look at your credit score and your credit report.

The authors went on to explain the importance of knowing your own credit score:

Three Key Digits

The next time you receive your monthly credit-card statement, look for your score or check your online account. If you don’t see your score, ask when it will be provided. Free access to credit scores is an important benefit that could be the foundation for managing your credit. However, be sure you understand which score you are receiving and how to interpret it.

The most common credit score, and the one typically shared by credit-card companies, is your FICO®score — a three-digit number ranging from 300 to 850; this scoring model from Fair Isaac Corporation comes in several editions and variations. The VantageScore, developed by VantageScore Solutions, used a 501 to 990 scale in the past, but the newest VantageScore 3.0 uses a 300 to 850 scale. Multiple versions of these scores may be available to lenders, and scores might differ among reporting agencies. Even so, knowing at least one version of your score should provide a good clue regarding how a lender might perceive your credit risk.

What’s a good score? It can vary by situation. However, the CFPB published a report in 2013 that classified FICO scores in four categories: superprime (720 or higher), prime (660 to 719), core subprime (620 to 659), and deep subprime (under 620). At that time, it was estimated that 65% of Americans had superprime or prime scores.

New Consumer Protections

There have been recent changes resulting from a lawsuit, that should affect your own consumer rights over the coming months.  Goodsell & Co. provide the following details:

In a March 2015 settlement with the state of New York, the three major credit-reporting agencies — Experian, Equifax, and TransUnion — agreed to changes that provide more leverage and flexibility for consumers. Although the settlement is with a single state, these changes should be implemented nationally over the next 6 to 39 months.3

Reports and disputes. Since 2005, the Fair Credit Reporting Act ensured consumers the right to receive one free copy of their credit reports annually from each of the three major agencies. Under the new agreement, consumers who are disputing their reports will be able to receive a second free copy from each agency within a one-year period.

Even more important, agencies must have trained personnel examine documentation from both the consumer and the lender and make a decision based on the evidence. In the past, the agencies examined documents from the consumer but generally accepted a lender’s assertion regarding a disputed issue. A CFPB report found that, on average, only 15% of disputes were resolved by the agencies and the other 85% were referred back to the lenders.4

Medical debt. About 43 million Americans have past-due medical debt on their reports, often due to difficulties with insurance companies or the strain of paying a large lump sum.5 Credit-reporting firms now have to wait 180 days before adding medical debt to a credit report. In addition, they must remove medical debt from reports when the debt has been paid by an insurance company. Other delinquencies may remain on a report for up to seven years, even after the debt has been paid.

Improving Your Score

And finally, the best advice and what you really need to know:

If your score is lower than you expect or think you deserve, your first step should be to obtain your credit report from each agency and make sure that all versions are correct. Even if you have a high score, you should check your report on a regular basis.

You can order a free credit report annually from each of the three major credit-reporting agencies at or by calling (877) 322-8228. If you find inaccurate information on your report, contact the agency in writing, provide copies of any corroborating documents, and ask for an investigation.

Whether your goal is to improve your score or maintain your current score, the following tips may help.

  • Use at least one major credit card regularly and pay accounts on time. Setting up automatic payments could help you avoid missed payments.
  • If you do miss a payment, contact the lender and bring the account up-to-date as soon as possible.
  • Keep balances low on credit cards and other revolving debt. Don’t “max out” your available credit.
  • Don’t open or close multiple accounts within a short period of time. Use older credit cards occasionally to keep them active.

For more information on obtaining and disputing your credit report, visit:

SOURCE:  Goodsell & Co., Inc. Certified Financial Planners

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright 2015 Emerald Connect, LLC.

Premium Reimbursement is a Costly Violation

Employee Benefit Advisor magazine recently published a timely article (PDF copy at bottom of this blog post) regarding Individual Health plans for Employees, premium reimbursement, and the rules as it relates to the ACA (also known as Obamacare).  The rules get tricky so it's important to stay on top of the latest changes and updates released by HHS and the IRS.

The article starts by talking about ACA compliance as it relates to employer premium reimbursement plans:

"...Employer payment plans (sometimes referred to as premium reimbursement plans) for individual health insurance coverage fail to comply with the Affordable Care Act.  Employers that violate this rule are subject to an excise tax of up to $100 per day ($36,500 per year) for each affected employee.  An employer payment plan is an arrangement in which an employer reimburses employees or pays directly for all or part of the premium for individual coverage. These employer payment plans are considered to be group health plans that do not comply with the requirements of the ACA. An employer cannot reimburse employees for the purchase of an individual market policy, regardless of whether the employer treats the payment as a tax-­free benefit or as additional taxable wages to the employee."

More details are provided in the PDF of the article below, but some key highlights as it relates to some transition relief from the penalties and requirements, are as follows:

"Temporary relief for small employers Earlier this year, the IRS issued Notice 2015­17, which provided transition relief from this $100­ per ­day excise tax. In the notice, the IRS recognized that many small employers provide health coverage by paying directly or reimbursing the cost of premiums for individual policies, and outlined the relief as follows:

Small employers with fewer than 50 full-­time employees (for at least six consecutive months) will not be subject to the penalty for either 2014 or for the period January 1, 2015, through June 30, 2015. This means, however, that small employers are now “on the clock” to fix this payroll practice before the middle of 2015.

All hope is not lost for small employers that have this type of arrangement with their employees. Employers have the right to provide compensation increases to their employees. So long as the employer does not require that an employee use the increase to purchase health coverage, an employer payment plan is not created.  The extra pay will be subject to income and payroll taxes. The employee can do whatever he or she pleases with this extra pay, whether that includes or does not include purchasing an individual health insurance policy."

Agency Tools to Help You Succeed

You have the knowledge, expertise, and experience to properly service your clients.  That trusted agent-client relationship is more valuable now than ever before.  But could you be doing more to market yourself and your agency in the new digital age?

Two books we love on social media marketing are Guy Kawasaki's "The Art of Social Media" and Gary Vaynerchuk's "Jab, Jab, Jab, Right Hook: How to Tell Your Story in a Noisy Social World" - both have excellent, up-to-date guidance on how to tap into the vast and complex world of online social engagement.

Other areas where agents can maintain positive client relationships and keep retention high, while also gaining new loyal customers, are through agency websites and email marketing.  The articles below from leading industry magazines will provide some great guidelines for helping your business continue to flourish.

Do you have your own ideas on what works and what doesn't?  Share them below, we'd love to hear from you and create a growing California agent community.