Fiduciary schmiduciary rule

I think every newsletter or article I get about the financial industry is all about the new Fiduciary rule that advisors will be affected by. Frankly, it is just another way for the government to impose new tactics in protecting long time agents and agencies make even more money and be protected from competition. They want agents to be more liable for the advice they give and make sure they aren't just selling unnecessary investments. The concept is great! Who doesn't want to be sold a crappy investment and if they are sold one they want to make sure the seller is held to the right standard. This just makes advisors charge higher fees in order to offset their insurance costs and pushes more advisors out of the market.
The past few years have seen an increase in Robo-advisors who use technology to help people invest their money. These advisors operate on extremely low fees and allow consumers some much needed flexibility. Under the new rule, these advisors might be put into question and their low fees might be a thing of the past.
A good advisor shouldn't have to worry about these changes. If they truly do act in the best interest of their clients, are competent, and do a good job, they will continue to offer value to their clients and be able to make money. The trouble most advisors have though is getting clients. With more and more competition to the low cost alternatives, it just makes it even more difficult to gain that clientèle and be that long term advisor that people are willing to pay the higher fees to.

American Dream U and Nevada benefits

Nevada Benefits, partnered with American Dream U, has reopened a state of the art, 24 hour access, fully equipped workspaces, whiteboard walled conference room, fully furnished offices, business lounges and video communications center!!  It's been designed not to be "nickle and dimmed" along the way!!  

Can't bet the location in Summerlin right off the Summerlin Parkway and Town Center Drive (1 block from 24 hour fitness and Starbucks!).

Contact Phil Randazzo for more information at phil@nevadabenefits.com or call 702.258.1995

http://www.americandreamu.org

The irrational fear of deductibles and large numbers

Does a $5,000 deductible make you freak out and make you wonder "why the heck am I paying a monthly insurance premium when I have to pay the first $5k of my medical bills?!" Well, you're not the only one. The trouble we have though is asking ourselves, is this assumption really rational?

I think it all boils down to the fact that we like it when other people pay for things. It is much easier to pay an insurance company $100/mo more just to save ourselves $50 on a doctor visit, because when we went to see the doctor we didn't get a bill. We do this all of the time with all sorts of products. Vehicles, Television programming, insurance, furniture, etc. We finance those purchases and break them into monthly costs because we get what we want now and then just pay a little bit later on. Had we been a little more savvy we would have saved our money up, paid cash for the purchase and saved ourselves the extra interest payments and negotiated a better deal.

In order to get over our irrational fears we need to take a step back and think about what insurance really is. It is a safety net meant to help protect us from large financial losses. Insurance companies don't want you to be in a better position after you have submitted claims to them, they just want to make sure you aren't in the worse position. If we were all better off submitting insurance claims we would be looking for ways to profit from them constantly. (some people try, but then they go to jail)

If insurance is there to protect us against large losses, then it makes sense to have a deductible and your monthly payment you pay will determine how much of a deductible you will have. If you can't afford paying $5,000 in medical expenses, maybe consider paying more for your insurance. The trouble is that if you can't afford the higher insurance premiums, then having a higher deductible isn't a bad idea. How often will you meet that deductible? Do you incur medical expenses every year? If so, how much do you really incur? A regular doctor visit might cost you $100. A prescription drug maybe $20 for most people. Insuring yourself against those smaller expenses might not make sense as you pay an additional $100/mo for a policy that gives you a $50 copay to see a doctor as opposed to you paying the entire $100 for that same visit.

The Dummies' Guide to Health Insurance Tax Penalties

- Individuals:

      - 2015: $325.00 or 2% of income, whichever is greater

      - 2016: $695.00 or 2.5% of income, whichever is greater

      - Children 18 and under, the minimum per-person tax is half of that for adults ($162.50). 

      - The tax penalty is pro-rated, so that a person who is not covered for only a single month would pay 1/12th of the tax that would be due for the full year.

- Families:

       - 2015: $975 per family or 2% of family income, whichever is greater

       - 2016: $2,085 per family or 2.5% of family income, whichever is greater

       - The minimum amount per family is capped at triple the per-person tax, no matter how many individuals are in the taxpayer’s household.

- Tax Forms:

        - Those who bought insurance on the health insurance exchanges with the help of federal subsidies will receive a form 1095-A detailed their coverage and have to reconcile their payments with their income level.  HealthCare.gov, the federal exchange that serves 37 states, started to mail out 1095-A forms to customers said all forms should be mailed out by the end of January. This end of month deadline is also the same for state-run exchanges

        - Taxpayers who get their health insurance through their employer or government sponsored programs like Medicare or Medicaid, which will be the majority, will be able to prove their compliance via their tax filing by check a box on their normal tax (1040 series) return validating they had insurance.

        - If you have exemptions to claim, you will need to complete the tax form 8965.

          More information on exemptions: http://obamacarefacts.com/obamacare-exemptions-list/

Emergent vs. Urgent - Planning Ahead for the Minor Stuff

If your health plan is like most, it offers a persuasive disincentive to visit the emergency room when an urgent care center will do. This disincentive often takes the form of a higher 
co-payment for emergency care. (The 
co-payment is your share of the cost.) Moreover, if you go to an emergency room for an ailment that seems questionable as an “emergency”, the insurance company may deny the claim, leaving you on the hook for the entire bill.

PPACA (i.e., “Obamacare”) defines a medical emergency as symptoms which would cause a reasonable layperson to fear that an absence of immediate care could mean a loss of life, limb, or organ; or the loss of function in a limb or organ.

Generally speaking, emergency rooms are connected to hospitals. They are heavily staffed, expensively equipped, and never closed. Patients typically wait for hours to see a doctor. Emergency rooms treat major traumas, broken bones, heart attacks, uncontrollable bleeding, unconsciousness, and the like.

Urgent care centers, by contrast, are free-standing facilities, lightly staffed, less equipped, and open later than normal business hours (but not open all night). Patients typically wait a matter of minutes, not hours, to be see a physician’s assistant or nurse practitioner. Urgent care centers treat flu symptoms, fevers, chills, sprains, headaches, and the like.

One of the most common reasons policyholders go to the emergency room for symptoms that do not meet the PPACA criteria above is a lack of planning. Nevada Benefits recommends that you take a moment now, while you are well, to locate the urgent care centers nearest your home and place of employment; then make a note for future reference. Waiting until you are sick or injured before mapping your way to the nearest urgent care center will prove more difficult than doing so in advance of your actual need.

Of course, if you experience a medical emergency, then you should call 911 or go to the nearest emergency room. Otherwise, an urgent care center, if appropriate to the ailment, can save you money, time, and aggravation.   

Do not hesitate to contact us with any questions about the emergent and urgent care benefits under your plan.

Telehealth- what is it?

Virtual House Call

Telehealth is a word coined to describe a doctor-patient encounter mediated entirely by technology. In its simplest form, telehealth is your primary care doctor hearing your complaint, forming a diagnosis, and recommending an over-the-counter remedy, all in the course of a single phone call. You receive care without darkening your doctor’s door.

In its more evolved form, telehealth is a video link-up through a corporate vendor specializing in just such electronic encounters. Or instead of taking a half-day off work to drive across town and haunt your doctor’s waiting room, you simply use your smartphone to transmit to her office a photo of that mysterious rash.

With carriers like Anthem, Cigna, and UnitedHealth Group expanding their telehealth networks, and pharmacies like CVS, Rite Aid, and Walgreens investing in telehealth platforms, it’s safe to say that multimedia medicine is more than a trend; it’s an important solution to the problem of healthcare scarcity.

Dallas-based Teladoc is at the forefront of this technological movement. Teladoc’s physicians are available for consultation 24/7. Place a call to Teledoc and an experienced, state-licensed, board-certified physician will get back to you in minutes (16 minutes on average). This service is ideal for cold and flu symptoms, allergies, respiratory infections, urinary tract infections, ear infections, sinus disorders, and the like. Teledoc physicians can prescribe certain short-term prescriptions, such as antibiotics.

(Remember, however, that in the event of a medical or psychiatric emergency, you should always call 911. Telehealth is not for emergency treatment. Nor is it for chronic ailments or specialty care; although Teladoc can provide guidance as to whether you require a specialist.)

Perhaps best of all, expenses incurred through Teladoc qualify for reimbursement under your FSA, HSA, and HRA.

The expansion of consumer access to limited healthcare resources is among the great economic and social challenges of our time. Nevada Benefits supports and encourages the spirit of innovation embodied in the telehealth approach.  

Professionals are worse as predictions than the crowd

NPR put out a great podcast that describes a small sampling o how the crowd generally is good at averaging the right guess of what things really are. http://www.npr.org/sections/money/2015/08/07/430372183/episode-644-how-much-does-this-cow-weigh

This goes well with timing of the overall market. It is becoming widely accepted that most fund managers under perform the market almost 95%+ of the time. We all just assume this is the case because they have to charge fees for their services on top of matching the market, but it seems it might be a little more than that. So why do we need fund managers or professionals?

We can always just invest ourselves and try to take a jab at it. We would maybe fall short or maybe we will get lucky and pull ahead. We can also try and become experts, but then if we do we will probably be doomed to under perform just like other experts. I have quite a few clients who do their own investing and actually live off of their income from trading. I kind of put these clients in the same realm of my professional gambler clients. I notice their actual incomes to be quite dismal in the grand scheme of losses and gains, but they sure have some really big roller coaster rides along the way. Living in a gambling town we always hear about the extraordinary big wins, but we never hear about how much was lost to make that money.

Working in insurance I see some these same big mistakes made. People look at insurance as a way to win the jackpot in having someone else pay for your losses. The way insurance is sold is through telling you about one incident where someone had a huge tragic loss and then the insurance came and saved the day. What they didn't tell you was about how much that family spent and the many other families that never used that coverage.

Life never works out the way we plan. We learn good principles and adhere to making good decisions and we create good outcomes. When insuring yourself against anything, take a look at what resources you have and think about what your real risks are. If you are making random decisions in your investments, maybe it would be a good idea to use an advisor who can minimize the downsides. If you are young and have a family, maybe get some term life insurance to protect them if you were to die prematurely. If you have a job that relies heavily on your good health, consider a good disability policy. If you are concerned about staying in good health, make sure and get a good health insurance policy, but don't be afraid of deductibles.

To sum up my question of why do we need fund managers and professionals, it is because we sometimes need some perspective on what we are missing. Maybe we have too much insurance or maybe we are under performing the market and just making less ideal choices. It is always helpful to take a look at what the crowd is doing on average and make sure we are't missing the boat.

Roth or not to Roth

What if you could save money on taxes now and still be able to save money on taxes in the future? Try splitting up your savings by investing in both pre tax and post tax accounts. If you invest 30% or so of your savings into a Roth account or even life insurance, you can use that tax free money to pay the taxes due on your taxable income. If you use Life Insurance as a tax free funding tool you also get the death benefit proceeds to help your family out with the tax issues and complications if you die prematurely.

Assurant Health announcement

Assurant announced on April 29 that they are getting out of the health insurance industry. See the press release here. To those in the industry this doesn't come as a huge surprise as the company stopped paying commissions on new business in January and has been terminating people as soon as the grace periods are over. Does this mean people are going to lose their coverage and be up the boat without a paddle? NO! They still will be covered and Assurant will still pay their claims. As soon as they figure out what is going to happen (either a sale or closing of the business) the insurance company will have to pay their claims and take care of all business for 6 months after they stop the health plans. Anyone who is enrolled in a plan with them now will continue to have business as usual without fear. It sounds like the changes won't go into affect until open enrollment, which means it will be super easy to go searching for a new plan. The question still remains of what will your options be for 2016 and will you be able to keep your doctor? (My guess is yes, but give us a call first to make sure)

How to save and invest your first $1,000

The more I learn the more I realize how naive I am. One of my favorite proverbs I have ever heard is a Haitian saying "What you don't know is bigger than you." When it comes to saving and investing nothing comes more close to that saying. I highly doubt anyone truly know every option available in the open market. There are tens of thousands of mutual funds, ETFs, bonds, stocks, etc that it becomes way too overwhelming. So where do you start?

I took the advice of a great speaker named Ramit Sethi and figured out how to save my first $1000 in an investment. I went online to a discount brokerage Schwab.com and opened up an account. It was just like creating an account anywhere else. I then tried to figure out how to add my bank account information to start transferring money from my bank account to the Schwab account. Since my goal was to start automatically saving, I searched for the section under mutual funds and automatic investing. Finding a good fund can be difficult, so I chose a very low cost fund that ties itself to the S&P 500 and is called an Index fund. There are a lot of index funds available and all they do is mimic the general overall market. There is no guess of what is going on every day and whether or not the company is doing good or bad. There is also no guess as to whether or not the fund is beating the market, because the fund is mimicking the market. If you hear on the news or go online and it shows the market went up 1% today your investments probably went up 1% as well.

Once I told the system to buy by index fund every month I couldn't figure out how to make it actually take the money from my bank account every month. I actually had to communicate with Schwab. I think this is why it is good to have some kind of human helping you such as an advisor or representative. They set up my automatic investing and I was set. Every month on the same day $100 exits my bank account then a couple days later a few shares of the mutual fund is purchased. Simple as that. The minimum you can do with automatic investing is $100, so it will only take you roughly 10 months and you will have your first $1,000.

Dental Insurance

I never knew there was a season for dental work and dental insurance but it seems like Spring is the time! Calls have increased and claims have started rolling in like crazy.
I actually dislike dental insurance. The purpose of buying insurance is to help you with the risk of possible losses. By having many people buy the insurance and have just a few actually make claims, helps keep costs low and makes insurance companies money. Since people typically don't go shopping for dental insurance until their teeth are hurting or they find out they are need of a lot of work, it makes the sale quite difficult. Insurance companies aren't in the business to lose money and they know that people who get cleanings done regularly and that purchase insurance ahead of time typically won't give them large claims, so they institute waiting periods. Group dental insurance plans don't use these when the group is large enough because they know for every one or two people who need work done right away there will be 2-5 people who don't need the work. When you are buying on your own, it is just you and the risk for the insurance company is too great. You will typically see 6 months for minor work and 12 months on major services. Dental Insurance DOES NOT cover implants, so don't even ask. There are a few carriers who will pay a small portion for services from day or year 1, but when they do that that give you small increments each year beyond that.
Dental HMO plans give you access to smaller dentist lists and they give the chance to participate in their low fee schedules. Due to the fact the insurance company isn't really on the line for any other costs, they don't have waiting periods, because you are paying out of pocket for the expenses.
If you need work done now, look into a discount program. If your dentists is a good friend, ask for a cash discount or work out payment plans. When you get insurance know you will wait, but know that you have the protection when you need it in the future.

Are you saving?

In my recent conversations with clients and friends I have been trying to ask the question, "Are you saving your money?" Of all the financial gurus and financial programs I have studied I have learned one common thread that ties them all together: Save money.
I think some people are naturally born with this insight and others are taught it very young. For the rest of us it is just against our nature. The reason we have money is to buy things and since it feels like our resources are so low, when we get anything extra, we spoil ourselves with fun. Saving that money doesn't seem very fun, because it doesn't yield any instant gratification.
I have learned that in order to make saving fun I had to start doing it in a unique way. Just sticking extra money in a bank account or setting it aside doesn't work well for me. I can still see it there and it just sits, never growing or moving, just sits there as worthless cash. So instead of having the money be boring, why not start investing it? You don't have to have a lot of money to start investing. It really isn't all that difficult either. Most people tend to think they need financial advisors or lots of money to start investing. That couldn't be further from the truth. I wouldn't even bother hiring an advisor unless I had a ton of money, because their fees are way too high.
You can open a simple thing called a brokerage account from your favorite on line fund manager like etrade or schwab or Fidelity. You can start by choosing your favorite company where you spend a lot of your moey already and just buy a share or more of their stock. now you have "Saved" your money and purchased something that can be fun to watch. You can watch as your money fluctuates every day and know you own a part of that company you frequent often. If you are willing to set aside regular amounts of $100 or more a month you can just invest in an indexed mutual fund that mimics the stock market. When the market goes up or down for the day you can rest assured your money has done the same thing. When you get bored or want more excitement you can sell those stocks or mutual funds and buy something different. It seems like every rich person I have heard about started out in the stock market doing something similar to that- just buying a few stocks. I think by starting to buy small stocks they got more interested in what was going on. As they got smarter and smarter about the markets they made more and more money.
Sometimes stocks don't grow and you lose money. The good news is you probably won't ever lose all of it. If you hadn't invested you wouldn't have anything left over anyways and probably would much sadder had you done nothing at all. You also gained a lot of experience and can start earning more later.

Affordable Care Act

http://www.exchangenevada.com/blog

Sal Morales, went from paying $560 month in Cobra insurance to about $145 a month through the Affordable Care Act. He also has a network deductible of $500. Here’s how he breaks it down: “There’s one party, the hospital who provides the service. There’s a second party, the patient, who receives the service. And there’s a third party, the insurance, who pays for the service.” What happened with Mr. Morale’s case is that the insurer negotiates a lessor amount for various plans, with a variety of hospitals through multiple agreements for the same hospitals or doctors.

Doctors are paid differently even if two patients have the same insurance company, if the plans are different in any way. To make this simple there are as many price tags for a hypertension checkup as there are insurers and providers.

The question that should be asked is how much is your doctor getting paid, to determine the best deals for coverage. If you have the history of medical procedures from lasts years doctors treatment the insurance company can provide a better assessment as opposed to shopping around to be told the price is more to cover you for the same procedures as last year.

“We’re identifying the procedure, we’re identifying the provider, the date of service and then making sure the amount, the member responsibility has to be in there,” Monzon says.

To get a clearer sense of what health care costs, someone would have to collect enough of those statements from patients at all different hospitals with all different insurance.

There are companies and crowdsourcing projects trying to do just that around the country. And Massachusetts has a law that says insurers have to disclose some of these prices in a way that is accessible to patients.

This story is part of a partnership that includes WLRN, the Miami Herald, NPR and Kaiser Health News.

Nevada Health Link Re-Enroll Email

Yesterday afternoon, Nevada Health Link sent out an email to all users stating that they MUST re-enroll in health insurance for next year or they will lose their subsidies. http://info.nevadahealthlink.com/re-enroll/ It will be a big deal if on January 1 you wake up and see that your current insurance company is sending you a bill for the full amount of the insurance that was being subsidized by the federal government before.
We have already started calling our current clients and informing people of this change and have begun the process to re enroll everyone for 2015. We want this to happen smoothly for each one of our clients and not make them go through the headache on their own. We were successful last year at getting people coverage through Nevada Health Link and we will do it again. It can be a nightmare trying to correct someone else's mistake on the websites. It is extremely important to make sure the information is accurate and that you understand why the questions they are asking are being asked. The first application I did last year was a dummy one I did for myself and I honestly was a little confused and annoyed. I have now done hundreds of these and I have a lot more knowledge and experience to get these done correctly.

We are putting on 2 events in October in Las Vegas to help people understand the changes and make life better for those who attend. Mark your calendar for October 18 and 25th at the YMCA off N Durango at 10am. I think it is a such a blessing to be able to have us work for you and get these done so you don't have to stress. The second best part is having a second person to be on your side in case things don't go 100% smoothly either. I have seen some of the worst technological issues with the website get fixed because we intervened and worked on the case. I know for a fact if those clients were on their own, they would be in the same boat today with no repercussion.