If employers take a proactive approach towards addressing health care costs with their employees, the financial burden of carrying benefits can be softened. By introducing employees to money saving strategies that can reduce the overall cost of health care for the company, rising premium costs can be stopped in their tracks.

Cost Effective Strategies for Purchasing Prescription Medication

Here are a few suggestions that can help employees and employers save on health care costs.

1. When prescribed a new medication at the doctor's office, ask for a sample before filling a full prescription. Pharmaceutical representatives leave samples of many medications with physicians, and this is a cost effective way to see if the medication is beneficial or not. For instance, many patients must try different anti-depressant medications before finding the right one. Instead of having the insurance company pay upwards of $125 for each prescription, patients can try different medication samples until the best results are achieved.

2. Many patients who experience pain and inflammation are prescribed NSAID, or non-steroidal anti-inflammatory, medications. The family of NSAID medications ranges greatly in strength and most drugs are available in brand-name and generic form. Patients should experiment with generic NSAID medications to see if they receive the same results as from their brand-name counterparts. Choosing to go with a generic medication will save the employee money in co-pay costs and save the employer money in overall costs.

3. Doctors generally become familiar with a certain medication and prescribe it over and over again, and at times they must be asked by patients to use an alternative medication on their provider's formulary. When a patient opts to go with a formulary medication instead of a similar non-preferred one, the savings gets passed on to both the employee and the employer.

4. Employees should be reminded to follow the directions of their doctors carefully when taking prescribed medications. Skipping doses of required medications to extend the time between renewals will not save you or your insurance plan any money in the long run. Missing doses or not following the warnings of your doctor can lead to illnesses and hospital stays, which are emotionally draining on your family and financially draining, as well.

Passing Down the Saving to Employees

All of this advice makes sense and is sure to reduce the overall health care costs companies face, but without seeing a difference in the amount employees pay in premiums, workers may not see the incentive of making everyday choices to reduce the cost of health care. Employers must live up to their promise of lowering health care premiums when employees work towards lowering overall expenses, otherwise they will not see why it is worth the effort.

All examples in this article are for purposes of illustration and should not be construed as medical advice. Prices are estimates based on current retail market value.

Return to Amity Insurance E-Newsletter September 1, 2010

Directors and officers liability insurance covers a business's legal liability for "wrongful acts" of its directors and officers acting within their capacity for the business. A typical policy defines "wrongful act" as including errors, misstatements, misleading statements, acts, omissions, neglect, or breaches of duty actually or allegedly committed or attempted by an individual in her capacity as a director or officer of the insured business.

Directors and officers are subject to lawsuits from many sources, including the entity they work for, shareholders, employees, government entities, competitors, vendors, and other third parties such as consumer groups or groups that represent segments of the population. Leaders of all types of organizations are vulnerable, though the source of a legal claim will vary by the type of entity. Most claims against public companies come from shareholders, while employees file most of the claims against non-profit organizations and half the claims against private companies. Customers and competitors are also frequent sources of suits against private companies.

D&O insurance covers many types of claims, including:

* A lawsuit by one shareholder against the majority owners, claiming that the company lost money because the majority gave themselves excessive compensation.

* A key employee leaves one company and joins a competitor as a director. His former employer sues him and the competitor, claiming that he violated his contract and used confidential company information with his new employer.

* Shareholders sue a company and its directors and officers, claiming that they misrepresented the quality of a potential new product when they sought funding for its production.

* A shareholder sues the president of a company for failing to promptly notify shareholders of a major pending transaction and for not pursuing litigation against a partner company that did not live up to its agreement.

* A lender sues a company for allegedly failing to repay a loan.

* Members of a private company's board of directors are sued for allegedly using their positions for personal gain.

* The government sues a company for alleged anti-trust activities.

Even though courts dismissed some of these lawsuits, the legal defense costs were still significant; D&O insurance covers these costs. Because all organizations and their leadership are vulnerable to these types of claims, they should work with professional insurance agents to identify companies that can provide the coverage they need at a reasonable cost. Businesses face many different risks today; consequently, D&O insurance is a necessity.

Return to Amity Insurance E-Newsletter September 1, 2010

According to the car insurance industry, the term "totaled" doesn't have as much to do with damage as you may think. When a vehicle experiences damage from an auto accident, the insurance company is more interested in the cost to repair the vehicle, rather than the overall amount of damage to the car. If the repair costs exceed what the insurance company considers the vehicle to be worth, the insurance company deems the vehicle to be "totaled" and the policyholder is paid the value of the vehicle. While most car owners are familiar will value guides like Kelly Blue Book and the NADA Official Used Car Guide, insurance companies generally refer to their own private databases when determining a vehicle's value.

After making an assessment of your vehicle's damages, the insurance company will make an offer which they feel is fair. The offer is meant to provide you the means to purchase a vehicle of the same style and condition of the one that was "totaled." Insurance companies call this "making whole." For example if you were driving a 5-year old pickup truck with 65,000 miles on it before the accident, your offer should provide you the money to purchase a similar truck with similar miles on it. As an informed policyholder, it is on your shoulders to make certain that your offer indeed makes your situation whole, putting you back behind the wheel of a comparable vehicle.

At times, insurance companies and policyholders cannot agree on a fair payout and drivers must turn to outside sources to help their case. Car owners can hire an independent appraisal service or take their case before an arbitrator. If considering having your vehicle appraised, factor the cost of the appraisal service into the equation and see if it is still a cost effective option. If you seek arbitration, keep in mind that there are binding and non-binding cases when arbitrating, and non-binding arbitration decisions can be appealed in court if you still consider the offer to be unfair.

In most cases, though, offers are easily agreed upon and your vehicle heads off to its final resting place – the salvage yard. Your vehicle will be dissected and sold for parts and scrap, with the insurance company keeping the profits. If you don't want your car to meet this demise, you may opt to keep your damaged vehicle and pay for its repairs out-of-pocket, but this is not always the most economically wise decision.

Car owners who decide to keep their vehicle after it has been "totaled" receive a smaller payout from their insurance company. The offer is reduced by the amount of your deductible and the estimated amount of profits that would have been made from the salvage process. Owners who choose to keep their damaged cars run the risk of not receiving an offer large enough to get the vehicle roadworthy again. Re-insuring the vehicle will also be difficult in the future, as most insurance companies will only extend liability coverage to previously "totaled" vehicles, regarding they pass an inspection by the Department of Motor Vehicles.

Whether you choose to make the repairs yourself or have your vehicle salvaged, it is crucial that you understand how auto insurance companies operate before you are ever involved in an accident. By knowing this information, you will be prepared to get the most out of your vehicle, even if it is "totaled."

Return to Amity Insurance E-Newsletter September 1, 2010

The homeowner's policy does not cover legal liability resulting from the use of motor vehicles that are registered for use on public roads or property or that the law requires to be registered for use at the place where the accident took place. However, it does provide some coverage for vehicles designed to be used off public roads if either the user does not own them or if the accident occurs on an "insured location," as the policy defines that term. The term includes the place where the person named on the policy (the named insured) resides, other residences he acquires during the policy term, premises he doesn't own and where he temporarily resides, vacant land he owns or rents, land he owns or rents where he is building a residence, and other premises he occasionally rents for non-business use.

Therefore, the homeowner's policy will cover him for liability resulting from the use of:

* A motorized wheelchair at his home and surrounding property

* A dune buggy at a beach house he's renting for a week

* A snowmobile he owns on vacant land he owns

* An ATV he rents while he uses it on someone else's property.

It will not cover him if he takes a vehicle he owns off an insured location.

The policy contains special provisions regarding golf carts. It covers the person's liability for use of a golf cart he owns that is designed to carry at most four people and is not designed to go faster than 25 M.P.H. on level ground. Coverage applies only if the accident occurs at a golfing facility or at a private residential community where golf carts can legally travel on its public roads, subject to the authority of a property owner's association, and where an insured person has a residence. Therefore, an individual has coverage if he strikes a person with his golf cart while driving from one hole to another or if he lives in a gated community and damages a neighbor's deck with his golf cart. He does not have coverage if he takes out a mailbox while driving a golf cart down a public road.

The policy covers certain vehicles if the insured person uses them solely to service his premises. For example, he would have coverage for a riding lawn mower that he uses on his own property, but he will not have coverage for it if he also uses it to cut a neighbor's grass. The policy covers vehicles designed to assist the handicapped, but only while they are being used to assist a handicapped person or while they are parked on an insured location. A healthy 15 year-old who takes a handicapped person's scooter for a joy ride does not have coverage.

Because coverage for these vehicles is so situation-dependent, people who own them should discuss the best way to insure them with a professional insurance agent. In some cases, policy changes may be available that will improve the coverage for an additional premium. All motorized vehicles carry a risk of accidents, so it is important to have the right insurance protection in place.

Return to Amity Insurance E-Newsletter September 1, 2010

Totaled Vehicles and Insurance Payouts – What You Need to Know
Car accidents take their toll physically, mentally, and financially on those involved. Take the time now to learn about how insurance companies determine the value of your vehicle and you will have one less thing to worry about if your vehicle is ever "totaled" in an accident…more »

Lowering Health Care Costs Through Smart Healthcare Decisions
The annual insurance renewal process is a difficult time for employees and employers alike, especially when faced with the rising cost of health care. Employers do their best to make the plans they offer affordable, and employees are often unhappy with the amount they must pay to receive coverage for their families…more »

D&O Insurance: A Necessity for Your Business
For the last several years, stories of wrongdoing and bad judgment by corporate managers have filled the headlines. Enron, Worldcom, and Countrywide are just some of the companies that became household names because of mistakes or criminal acts their leaders committed. These stories became big news because they were exceptional…more »

Did you know?
Most businesses carry commercial general liability insurance to cover the business’s legal liability, however this type of insurance usually does not cover claims against corporate officers for their errors in running the company. It is important to cover not only the business as a whole but also the individuals within the organization with Director and Office liability coverage.

Click here to learn more about Amity’s Professional Services including Directors and Officers Liability insurance.

Although your children will probably learn the basics about money in school, it's up to you to teach them how to manage their finances. Here are a few tips to help you raise a money managing genius:

Start early

From the time Junior starts walking and talking, you can start teaching him some important lessons that will put him on the financial fast track. Of course, the complexity of these financial lessons will depend on your child's age.

Teach your preschooler about money by showing her how you use those mysterious green bills to make every day purchases. When you're paying the cashier at the grocery store, explain that you are giving the store money in exchange for the items in your cart.

Once your little urchin learns how to count, you can really get down to business. Help her tally up the coins in her money bank and discuss how much more she needs to buy that fancy Barbie doll. Once your kid is a preteen, show him how you balance the checkbook, pay the bills and deposit checks at the bank.

By the time she's in high school, you should be talking to her about your family budget and investments. You could even check your IRA or 401(k) statement together. Your teen may not fully understand all the specifics right now, but these exercises could plant those first financial seeds.

Make them work for it

If you want your little one to blossom into a true financial planning mastermind, make her work for her weekly allowance. Don't just hand over a wad of cash because she's your little angel. If you set that precedent now, your kid will be in for a rude awakening when she enters to real world.

So, if your son insists that he has to have that super-cool, high adrenaline Xbox game, don't immediately hand it over-make him work for it. Tell him if he really wants that game, he'd better get busy mowing the lawn, taking out the trash and bathing Fido.

Although some parents are anti-allowance, many financial experts say that a weekly allowance is often a great learning tool. Your child will learn that she has to work to earn money, and then she has the option to either spend or save that money in whatever way she chooses.

Before you agree on a weekly allowance, it's important to set some ground rules. Figure out which household chores your child will have to complete each week in order to receive her weekly pay. You can even help her set "financial goals” with her allowance. For example, if your daughter has been eyeing a pair of designer jeans, tell her that she could buy them if she saves up her allowance for a couple of months. This teaches her a valuable lesson about saving

Give him a head start

Want to give your kiddo a financial head start on his path to financial security? If you've got the cash, and they have some amount of earned income, you may consider making a small monthly contribution to an IRA in his name. When it comes to retirement accounts, the sooner you start investing, the bigger the nest egg grows.

Here's an example: if you contributed $56 a month from the day your child is born until her 18^th birthday, her retirement account will grow to $1 million by the time she's 65 (assuming an 8% average annual growth).

If you decide to open an IRA in your child's name, sit down with her and tell her how it works once she's old enough to understand. This will teach her the importance of investing and saving.

Lead by example

Of course, the most effective way to teach your child about money is to demonstrate smart financial planning yourself. You can't rightly tell your child how important it is invest and save when your own savings account is empty and you're busy racking up thousands of dollars of credit card debt.

In other words, if you're going to talk the talk, you've got to walk the walk. After all, children generally mimic their parents' behavior and develop similar habits. So, if you want your child to be financial planning genius, you'll have to become one yourself. He'll almost certainly follow in your footsteps.

With a little bit of encouragement, lots of love and plenty of financial advice, you can put your kiddo on the road to financial brilliance.

Return to Amity Insurance E-Newsletter August 16, 2010

The financial landscape of America is constantly changing and retirement planning must evolve with it. Outdated advice and rigid financial guidelines will not prepare the millions of Baby Boomers who are nearing retirement age to happily exit the workforce. Take a closer look at some of these antiquated suggestions retirement experts have been known to give and see why it no longer makes sense to aim for these "target numbers."

Target Number – 70%

What does it mean?

Individuals should plan on spending about 70% of what they currently make during their retirement years. For instance, a person who made a $100,000 salary during their working years should plan on spending $70,000 per year after retiring.

Why this is wrong:

Life expectancy is on the rise, with the average person living past their 78th birthday. Retirees with pension plans don't have much to worry about, but people with personally financed retirement funds, like 401(k)s and IRA accounts, run the risk of out-living their nest egg.

Certainly retirement is a time of relaxation and enjoyment, so properly budgeting your finances is a must if you want to keep the party going well into your golden years.

Do you have a medical condition that may require long-term care in the future? Or have your relatives lived exceptionally long lives? Take into account these and other relevant factors when determining your investment and post-retirement spending strategies.

Target Number – 4%

What does it mean?

When considering the total amount a retiree has saved, individuals should spend 4% of that total each year during retirement, while keeping the remaining balance properly invested in stocks and bonds.

Why this is wrong:

As the market rises and falls, one's spending habits must do the same. Continuing to spend 4% while your portfolio is having a down year will quickly dry up your assets, while you may find yourself under-spending during times of high returns.

Target Number – 62

What does it mean?

At the age of 62, individuals can begin to receive reduced Social Security benefits. The Census Bureau also reports that 62 is that average age of retirement in the U.S..

Why this is wrong:

Reduced Social Security benefits may not supply the income necessary to retire on, with maximum available benefits coming at 70 years of age. Working a few extra years past 62 can also give you the income necessary to beef up your 401(k) plan or IRA.

Target Number – $1 Million

What does it mean?

This is the target amount you should have saved before retiring.

Why this is wrong:

Some economists are actually now saying that $1 million might not be enough to comfortably retire on. When Scottrade analysts where asked if $1 million was enough money for the average American family, over 70% of them responded "no," further explaining that $2-3 million is now the target amount.

Unfortunately, these numbers don't agree with most Americans' pocketbooks. A recent study of individuals with self-managed retirement plans by the Employee Benefit Research Institute found that workers ages 55 to 64 were saving less than $70,000, much less than what Scottrade analysts feel is ideal.

While these two numbers may not mesh, Americans always find a way to make due with what they have saved. Eliminating debt and avoiding unnecessary spending splurges is the best way to stretch your dollars while heading into retirement. Of course, keeping a close eye on your savings and maintaining a balanced portfolio always helps, too.

Return to Amity Insurance E-Newsletter August 16, 2010

The great thing about social media is that a business's customers can talk about it. The bad thing about social media is that a business's customers can talk about it. When they're happy, social media is a boon, but when they're not, it can be a public relations nightmare. A disgruntled customer can post a negative comment on Twitter or Facebook at 3:30 p.m. on a Sunday, and by 4:00 a few million people may have seen it or passed it on. There is little a company can do to control the spread of this kind of message.

A major concern with social media is that a business may unintentionally violate local laws and regulations, since messages on Facebook and similar sites spread all over the world. Among the areas of concern are:

* Advertising — Businesses may land in hot water if statements on social media sites are false or misleading, if they improperly influence bloggers to write favorably about their products, or if they improperly use user-generated content.

* Defamation — Not all countries defer to free speech rights to the extent the United States does. A statement that U.S. law might not consider defamatory may be just that under the laws of another country.

* Privacy — Social media sites are easy to use; without much effort, employees can publicly reveal trade secrets, information about products under development, troubles within the business, or even private information about employees.

* Employee use — Employees can create a "hostile work environment" (as U.S. law defines that term) by making inappropriate and derogatory posts about their colleagues.

* Securities disclosure — If employees post information that could appear to be an attempt to manipulate financial markets or that appears to be insider information, securities regulators may take action against the company.

There are a number of steps a business can take to manage social media risks, including:

* Developing and enforcing a company policy for using social media

* Designating an individual as the point person for social media

* Learning the requirements of every country's laws and regulations

* Reviewing insurance policies with an eye toward social media risks and purchasing additional insurance to fill in gaps

Social media sites and tools are important ways for a company to market and brand itself. However, they must be used with care and forethought. With the proper controls in place, a company can reap the benefits of social media while minimizing the risks.

Return to Amity Insurance E-Newsletter August 16, 2010

The federal Internet Crime Complaint Center received over 330,000 complaints in 2009, and more than a third of them ended up in the hands of law enforcement. The damages from those referred to the authorities totaled more than a half billion dollars. The Government Accountability Office estimated that cyber crime cost U.S. organizations $67.2 billion in 2005; that number has likely increased since then. With so much of business today done electronically, organizations of all types are highly vulnerable to theft and corruption of their data. It is important for them to identify their loss exposures, possible loss scenarios, and prepare for them. Some of the questions they should ask include:

What types of property are vulnerable? The organization should consider property it owns, leases, or property of others it has in its custody. Some examples:

* Money, both the organization's own funds and those it holds as a fiduciary for someone else

* Customer or member lists containing personally identifiable information, account numbers, cell phone numbers, and other non-public information

* Personnel records

* Medical insurance records

* Bank account information

* Confidential memos and spreadsheets

* E-mail

* Software stored on web servers

Different types of property will be susceptible to various threats, such as embezzlement, extortion, viruses, and theft.

What loss scenarios could occur? The organization needs to prepare for events such as:

* A fire destroys large portions of the computer network, including the servers. Operations cease until the servers can be replaced and reloaded with data.

* A computer virus infects a workstation. The user of that computer unknowingly spreads it to everyone in his workgroup, crippling the department during one of the year's peak periods.

* The accounting department discovers a pattern of irregular small funds transfers to an account no one has ever heard of. The transfers, which have been occurring for almost three months, were small enough to avoid attracting attention. They total more than $10,000.

* A vendor's employee strikes up a casual conversation at a worker's cubicle and stays long enough to memorize the worker's computer password, written on a post-it note stuck to her monitor. Two weeks later, technology staff discover that an offsite computer has accessed the human resources database and viewed Social Security numbers, driver's license numbers, and other personal information.

In addition to taking steps to prevent these things from happening, the organization should consider buying a cyber insurance policy. Several insurance companies now offer this coverage; while no standard policy exists yet, the policies share some common features. They usually cover property or data damage or destruction, data protection and recovery, loss of income when a business must suspend operations due to data loss, extra expenses necessary to maintain operations following a data event, data theft, and extortion. However, each company may define these coverages differently, so reviewing the terms and conditions of a particular policy is crucial. Choosing an appropriate amount of insurance is difficult because there is no easy way to measure the exposure in advance. Consultation with the organization's technology department, insurance agent and insurance company may be helpful. Finally, all policies will carry a deductible; the organization should select a deductible level that it can afford to pay and that will provide it with a meaningful discount on the premium. Once management has a thorough understanding of the coverages various policies provide in relation to the organization's exposures, it can fairly compare the costs of the policies and make an informed choice.

Computer networks are a necessary part of any organization's environment today. Loss prevention and reduction techniques, coupled with sound insurance protection at a reasonable cost, will enable an organization to get through a cyber loss event.

Return to Amity Insurance E-Newsletter August 16, 2010

How to Raise a Money Genius
Want to make sure your little one grows up to be a money genius? It's time to get to work. You may be thinking, "But my son just mastered potty training! However, it's never too early to start grooming your child into a money managing pro. Although your children will probably learn the basics about money in school, it's up to you to teach them how to manage their finances. Here are a few tips to help you raise a money managing genius…more »

Keeping Your Retirement Goals On-Target
Planning for retirement can sometimes feel like studying rocket science, but it doesn't have to be so complicated. Throughout the last decade, economists and financial pundits have come up with "target numbers" to be used as waypoints and objectives for upcoming retirees. At times, individuals have placed too much weight on these experts' advice…more »

Be Aware of Social Media's Risks for Businesses
When just about any business these days is deeply involved with social media, it is apparent that these sites and tools have become mainstream. Indeed, it is hard to imagine that their use will not grow in coming years. They bring businesses to the places where their customers are and enable conversations. However, as with anything, the use of social media comes with risks of which every businessperson should be aware…more »

Don't Forget Insurance for Your Organization's Cyber Risks
The federal Internet Crime Complaint Center received over 330,000 complaints in 2009, and more than a third of them ended up in the hands of law enforcement. The damages from those referred to the authorities totaled more than a half billion dollars. The Government Accountability Office estimated that cyber crime cost U.S. organizations $67.2 billion in 2005; that number has likely increased since then…more »

Did You Know?
The Federal Internet Crime Complaint Center received over 330,000 complaints in 2009, and more than a third of them ended up in the hands of law enforcement. Now more than ever it is important to protect your organization from cyber risks.
Click here to learn more about Amity's Computer Theft and Fraud and Internet Liability Services.