Past Issues
-October 2006Contact us:
Edward Bates
952.944.5044
Peter Thoresen
952.225.0344
Mary Bates
952.942.8355
Jereme
Bates
952.944.2919
Identity Theft
- It’s Not If… It’s When!
Written by Jereme Bates
According to the Federal Bureau of Investigation, identity theft is “the fastest growing crime in America.” In 2006 financial institutions estimated identity theft losses of $8 billion dollars. The average victim will spend 175 hours and up to $25,000 to repair the damage resulting from this crime. So what can we do? Knowledge is power, so we will talk about the facts, how to protect yourself, and what to do if this happens to you.
According to Chubb’s personal security consultant, Paul Viollis of RCS, one of the biggest identity theft myths “is that if you’re not famous, you’re not a potential target for identity theft.” That absolutely is not true. In fact, everyone is a target! A common misconception is that if you fly under the radar or lead a low profile life, you will not be a likely target. The reality is that people who intentionally lead low profile lives, may reflect to others as someone with something to protect. One impressive purchase or donation can move that person to the top of the identity theft list. Mr. Viollis goes on to say that many people believe they are safe, simply because they are careful about shredding their bills. Shredding your bills will not keep you safe. “The most vulnerable path for identity theft is how people communicate. Landline and cellular phones, and unencrypted Internet connections, are prime ways for thieves to obtain private information best kept confidential.”
Well, how then do you protect yourself? One needs to be informed and street smart. Additionally, a person can protect themselves by securing their family’s communication through an encrypted server and running all calls through Security Operation Centers. If you choose to donate money, do so anonymously, through a different name or through an LLC. Mr. Viollis points out that “80% of identity theft originates through acquaintances whom one doesn’t know well.” Identity theft doesn’t always look the same so keep your eyes open when relinquishing sensitive information to on/off site business services, a business consultant, a waiter, store clerk, etc… Running a background check is a wise move for some services.
Besides being street smart, is there anything else I can do? You can buy identity theft protection with your personal homeowners insurance. Make sure that you have adequate coverage and that the deductible isn’t too much to handle. Some homeowners insurance companies offer “Restoration Service” that will help you get back on your feet, by walking you through the recovery process. If you are going to pay for this coverage it is important that you choose a company that is going to assist you in every facet of your recovery. That includes, lost monetary values, crippled credit ratings, the replacement of documentation such as birth certificates, social security numbers, drivers licenses, credit cards, accounts and numbers. When your identity has been stolen, it is no easy task to recover and make things right again.
If you have questions or if you are not sure you are adequately protected, please give me a call to discuss your options.
Jereme
Zinkewicz, Phil. Identity Theft: Rough Notes. Carmel IN 2007
Enhanced Capability at Bates Insurance Group
Written by Ed Bates
On June 11th our company went live with a brand new “Agency Management System”, which more specifically is a company wide computer software. I share this with you to not only apologize in advance for any minor inconvenience you may experience with this installation, but to also take this opportunity to share with you the benefits of this decision. Once we are fully operational, we will have all the same administrative capability that even the largest insurance brokers nationally have available to them. This software allows us to actually enter the computer systems of many of our insurance companies in order to up and down load endorsements or changes to your coverage, acquire exact policy coverage and detail, and much more. We are able to provide many of you with instant insurance certificates and binders from the policy data fields already stored in the system. All of our communications and documents are stored on file so that there is no confusion about what has taken place and why. These records are permanently stored in the system. There is also an integrated accounting system keeping close track of transactions with clients, insurance companies and vendors. Insurance company payables and client receivables are easily reconciled to assure accurate collection and payment of insured’s premiums. I could go on and on about these advantages, but it would virtually take the remaining space in the balance of our 2007 newsletters to review all of the many features and capabilities that are now available to both of us. We have been committed to the best service for our clients since 1988 and now we can say, we have done everything necessary to deliver on that promise. It will take us up to a year to fully integrate all of the features of this new program, but with this initial effort I hope that you conclude that our actions demonstrate how important you are to us.Written by Pete Thoresen
Many of us have heard the term, “Rollover” before. In the financial world, it is commonly used in reference to the basic transfer of monies from a previous employer’s 401k plan to an IRA or another 401k plan. In fact, a rollover can apply to more than 401k plans, and there are different types of rollovers. Yet, for the purpose of this article, let’s keep it simple to understand the former. What a rollover accomplishes, is a transfer of value (cash not the investments), to a desired account platform. If done properly, it liquidates the former investments, transfers those investments to the new account, and avoids penalties or tax liabilities that would otherwise occur from a simple withdrawal or distribution of those assets.A “rollout” is a term that applies to folks that have highly appreciated company stock in their previous employer’s retirement plan. Further, it refers to a tax advantage called, “Net Unrealized Appreciation” (NUA). In short and easy terms, NUA refers to a process which somewhat contradicts the rollover process as it relates specifically to the company stock asset inside the retirement plan. Recall that a rollover requires liquidation (selling the asset), then transferring the cash. Conversely, a rollout requires that you take a lump-sum distribution of the stock assets, and pay the tax consequences for doing so. Yet, unlike other investments which are 100% taxable as income upon distribution, tax on employee stock is based on two parts: 1) Income from the cost basis (what you paid for it) and 2) Capital Gains (today 15% for most filers) on the sale price minus the cost basis. If it is highly appreciated stock, this can be a significant tax difference.
The key is the employee must rollout correctly before rolling over – otherwise the opportunity is lost forever. This strategy may benefit new hires tremendously. You can rely upon our professional assistance if this opportunity applies to you or your employees.
Pete Thoresen
Financial Advisor
Focus Financial Network, Inc.
1000 Shelard Parkway, Suite 400
Minneapolis, MN 55426
Securities offered through Royal Alliance Associates, Inc., Member NASD, SIPC. Advisory services offered through Focus Financial Network, Inc., a registered investment advisor.
Legal Compliance and Group Benefits
Written by Mary Bates
What is a pre existing condition
clause? As an employer who sponsors a group health plan, you
should be able to explain what a pre existing limitation is and how it
applies to a new hire you are thinking about taking on.
A Pre Existing Condition Clause is a limitation of coverage to exclude
under your medical coverage, any “benefit for which medical advice,
diagnosis, care, or treatment (including treatment with prescription
drugs) was recommended or received by this new employee
during the 6 months immediately preceding the enrollment
date.” This exclusion lasts until the new coverage has been
in effect for 12 consecutive months, or for someone entering late, 18
consecutive months. However, credit is
given for each month of continuous qualifying prior coverage
prior to enrollment in the new plan., if provided.
O.K. then, what does that mean? It means that if your
employee went without coverage for more than a 63 days (63 days = COBRA
Election period) they do not have coverage for anything they were
treated for, within the prior 6 months. That limitation can
last as long as 12 months (18 mos. late entrants), with credit being
applied against the limitation for coverage within that
previous 12 months. For example; 3 months uninsured before
joining the new medical plan = 3 Months of Pre Existing
Conditions Limitation.
Why do the insurance companies have pre-existing limitations?
Well, look at it like this; if the pre existing conditions clause
didn’t exist, people would only purchase insurance when it
was necessary and then cancel it when there was no longer a
need. The concept of insurance no longer works under those
circumstances. It would be like trying to buy homeowners
insurance when your house was on fire or auto insurance after you
totaled your car. An insurance company that faces this type
of situation will not be in business very long, and certainly not able
to serve your needs.
The pre-existing limitation applies to everything from prescription
drugs, to doctors visits, etc, so knowing how to explain the limitation
to your new hires or an employee who thinks insurance is just too
expensive, is a valuable asset.
As always we are here to answer any questions or concerns you, or your
prospective/current employees may have on this subject.
In the News
SENIOR GROUP NIXES RX TRIPS TO CANADA
Minnesota senior citizens' group that for a dozen years organized regular trips north to Canada to buy cheaper prescription drugs may have made its last run. On Friday, the Minnesota Senior Federation's bus ferried 26 customers to a pharmacy in Winnipeg, where government controls keep prices lower than in the United States. But a new Medicare drug benefit for older and disabled Americans, plus a stronger Canadian dollar, have slashed in half what had been $1 billion in annual cross-border sales. Half of Canada's 140 or so mail-order pharmacies have gone out of business. Still, Senior Federation executive director Lee Graczyk said people "are still getting gouged on drug prices." Federation members could still see the benefits when they picked up their orders at a storefront pharmacy: Three months worth of 42 prescriptions, bought for $6,605 -- a savings, they estimate, of about 40 percent from Twin Cities retail prices. The bus trips started in 1995, but became a hot ticket in 2001 when newly elected U.S. Sen. Mark Dayton, D-Minn., pledged his Senate salary to fund them. There were about 30 trips in the past six years. The money ended when Dayton didn't seek reelection last year. Friday's trip cost $10,000, with no charge to riders, and was paid for with funds left over from Dayton's largesse. Graczyk said there's some money left, but no new trips are scheduled. "You know, these trips are not cost-effective," Graczyk said. "It's far cheaper to use the federation website to order drugs. But we've done them to make a point: Given the vast wealth of the United States, you shouldn't have to drive eight hours to buy affordable drugs." For some seniors, the new Medicare drug benefit has made trips to Canada unnecessary. But its so-called "doughnut hole" in coverage, the portion of plans where the user must pick up the whole cost of prescriptions, continues to make Canadian suppliers attractive to some Americans. One bus rider, 74-year-old Adrienne Ratliff of Minneapolis, filled only her four most expensive prescriptions in Canada, leaving the rest to be covered by her UCare Minnesota insurer. "I've got to try to keep those costs down," she said. "Last year I financed the last of my doughnut hole costs on my credit card, and I really don't want to do that this year." Drug manufacturers have tried to shut down the Canadian pharmacies serving Americans, many of them online. The U.S. Food and Drug Administration has warned such drugs could be fake or tainted, but so far there have been no reports of either problems. When U.S. drugmakers threatened to cut off supplies to wholesalers who sold to the Internet pharmacies, the pharmacies looked abroad for drugs and have taken orders from the United Kingdom, Germany, Israel, Australia, New Zealand and Spain. Connie Rance, 67, of Minneapolis, will be affected by the doughnut hole in a few months and said she was glad to save $200 on two drugs she bought in Canada. "I don't know if this is the last federation bus trip or not," Rance said. "I hope not. But I'm glad I came. And when I go home, I know some friends who should hear about this drug business with Canada. -Jul 1, 2007 12:30 pm US/Central. WCCO.COMDid you know?
4 habits that will ensure a longer lifespan ... Eating fruits and veggies 5 times daily, Walking for 2.5 hrs per week, Maintaining a health Body Mass Index, No smoking
Quarterly Quote
We make a living by what we get. We make a life by what we give.-Sir Winston Churchill