Partner Buyouts

Partner Buyout Insurance

Partner Buyout

Partner Buyout covers a potential sale or buyback situation when a partner leaves a business. The agreement may specify to whom a departing partner can sell (usually they must sell to someone else in the business), and it also sets a fair price for their share of the business. This protects the remaining partners by guaranteeing that the departing partner will sell their share to a suitable owner, and it protects departing partners by assuring them a fair price for their shares of the business.

Self Funded Insurance Plans

Self Funded Health Insurance Plans

Self–Funded Plans

Self–Funded Plans is self-funded health care provided by larger employers that medically insure their employees with its own funds. The employer takes on the risk for the health care of the employees. Most employer’s contract stop loss coverage from a carrier that covers in the event of a catastrophic loss thereby easing the overall financial risk for the employer. The employer does not pay premiums to an insurance carrier (except of course for the stop loss coverage) but instead simply pays the medical expenses for the employee as the expenses is incurred. Obviously, if the employee has no medical expenses the company saves money.

Financial Planning Strategies For Seniors

Financial Strategies for Seniors

Financial Strategies for Seniors

Financial Strategies for Seniors can show you how to reduce or eliminate taxes on Social Security benefits. When Franklin D Roosevelt first introduced Social Security back in 1935 he was constantly asked if Social Security benefits would ever be taxed. His answer was “NO!” What happened? FDR died and the promise died with him. In 1982 Congress passed a bill call the Omnibus Budget and Reconciliation Act which allowed congress to tax 50% of the Social Security benefits of an individual earning over $25,000 per year or a married couple earning over $32,000 per year. That worked so well that in 1992 Congress added another layer of taxes increasing the amount of Social Security benefits to be taxed to 85% for individuals earning over $28,000 and married couples earning over $44,000. How can you tell if Social Security benefits are being taxed? Look on IRS form 1040, line 17a and see what amount is taxed. Line 17b indicates the dollar amount in tax you paid on your Social Security benefit. Has your advisor caught this on your 1040? If not you are paying more taxes than you should be.

Your CD’s and Treasury Bonds are not paying you much and the market is too risky? As a senior you have worked hard all your life since you were 20 years old. The time to invest was when you were age 20 all the way up to age 60. You have seen the market surge and plunge over the years. The thought of a market plunge at this stage in your life would certainly make you lose some sleep. Could your investments come back? I do not have a time span to regain what I have
lost. I must start living on my savings but I only have 50 or 60% of what I had before the market bottomed out. You put your money in something “safe” like a Certificate of Deposit or a Treasury bond but only making 1 or 2% is not appealing. Is there an alternative? YES! How about a return that has a guaranteed minimum of 2% but yet can earn as high as 10% that is guaranteed never to lose your principle and it is safer than a CD?

Want to have access into a Nursing Home without Long Term Care or spending down all of your assets? Many seniors find themselves without Long Term Care that covers them in the event they need a nursing home because they do not qualify due to underwriting or for some reason never purchased coverage. What happens if and when you, your doctor and your family agree that you need more care, treatment and assistance than the family is able to give? What now? A nursing home costs on average from $60-85,000. You have some assets but your stay at home spouse has nothing to live on if the assets go to the nursing home. Hope is not lost. There is a way to have your assets go to your spouse rather than to the nursing home. Want some information?

Would you like to double or triple the amount of your IRA that you intend to leave to your heirs? If you have 4 children and you would like to leave them $25,000 each you will find that you have another heir…Uncle Sam! How will this work? At the death of the 2nd spouse your IRA is distributed to your 4 children. Taxes will be incurred on each child’s income tax bracket. If each child is taxed on the distribution at 30% each child would receive $17,500 and Uncle Sam would receive $30,000. Is this what you intended? If properly set up your children could receive as much as $50,000 to well over $100,000 after taxes.

Medicare Part D Prescription Drug Coverage

Medicare Part D - Prescription Drug Coverage

Medicare Part D (Prescription Drug Coverage)

Medicare Part D (Prescription Drug Coverage) is run by private companies approved by Medicare, which can either be Medicare Advantage Plans or separate Medicare Prescription Drug Plans. It helps cover the cost of prescription drugs. Each plan can vary in cost and drugs covered.

Medicare prescription drug coverage (Part D) is available to everyone with Medicare. To get Medicare drug coverage, you must join a Medicare drug plan. Plans vary in cost and drugs covered.

Two types of plans offer Medicare prescription drug coverage:

Medicare Prescription Drug Plans. These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.

Medicare Advantage Plans (like an HMO or PPO) are other Medicare health plans that offer Medicare prescription drug coverage. You get all of your Part A and Part B coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.”

Who Can Get Medicare Drug Coverage?
To join a Medicare Prescription Drug Plan, you must have Medicare Part A and/or Part B. To get prescription drug coverage through a Medicare Advantage Plan, you must have Part A and Part B

How to Join a Medicare drug plan?
Once you choose a Medicare drug plan, you may be able to join by completing a paper application, calling the plan, enrolling on the plan’s Web site, or through the MPDPF LINK. You can also enroll by calling 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.

Contact the specific plan you’re interested in to find out how to join. Medicare drug plans aren’t allowed to call you to enroll you in a plan. Call 1-800-MEDICARE to report a plan that does this.

Medicare Part C Advantage Plans

Medicare Part C - Medicare Advantage Plans

Medicare Part C (Medicare Advantage Plans)

Medicare Part C (Medicare Advantage Plans) is a way to get Medicare benefits through private companies approved by and under contract with Medicare. It includes Part A, Part B, and usually other benefits Medicare doesn’t cover. Most plans also provide prescription drug coverage.

Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are health plans offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, the plan provides all your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage.

Medicare Advantage plans always cover emergency and urgent care. Medicare Advantage Plans must cover all the services that Original Medicare covers, except hospice care. (Original Medicare covers hospice care even if you’re in a Medicare Advantage Plan.)

Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most plans also include Medicare prescription drug coverage.

Medicare Advantage Plans must follow rules set by Medicare. However, each plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan).

You usually pay one monthly premium to the Medicare Advantage plan, in addition to your Part B premium.

Different Types of Medicare Advantage Plans

  • Health Maintenance Organization (HMO) Plans
  • Preferred Provider Organization (PPO) Plans
  • Private Fee-for-Service (PFFS) Plans
  • Medical Savings Account (MSA) Plans
  • Special Needs Plans (SNP)
  • Point of Service (POS) Plans (Similar to HMOs, but you may be able to get some services out-of-network for a higher cost).
  • Provider Sponsored Organizations (PSOs) (Plans run by a provider or group of providers. In a PSO, you usually get your health care from the providers who are part of the plan)
  • .

What You Pay in a Medicare Advantage Plan- Your out-of-pocket costs in a Medicare Advantage Plan depend on:

  • Whether the plan charges a monthly premium in addition to your Part B premium.
  • Whether the plan pays any of the monthly Part B premium. Some plans offer this option, usually for an extra cost.
  • Whether the plan has a yearly deductible or any additional deductibles.
  • How much you pay for each visit or service (copayments).
  • The type of health care services you need and how often you get them.
  • Whether you follow the plan’s rules, like using network providers.
  • Whether you need extra coverage and what the plan charges for it.
  • Whether the plan has a yearly limit on your out-of-pocket costs for all medical services.
  • How to Join a Medicare Advantage Plan: Not all Medicare Advantage Plans work the same way, so before you join, find out the plan’s rules, what your costs will be, and whether the plan will meet your needs.
    Contact the specific plans you’re interested in to get more information about their benefits and costs. Once you choose a plan, you may be able to join by completing a paper application, calling the plan, enrolling on the plan’s Web site. Get started comparing Medicare Advantage plans in your area.

    More about Medicare Advantage Plans:

    • As with Original Medicare, you still have Medicare rights and protections, including the right to appeal.
    • Check with the plan before you get a service to find out whether they will cover the service and what your costs may be.
    • You must follow plan rules, like getting a referral to see a specialist or getting prior approval for certain procedures to avoid higher costs. Check with the plan.
    • You can join a Medicare Advantage Plan even if you have a pre existing condition, except for End-Stage Renal Disease.
    • You can only join a plan at certain times during the year. In most cases, you’re enrolled in a plan for a year.
    • If you go to a doctor, facility, or supplier that doesn’t belong to the plan, your services may not be covered, or your costs could be higher, depending on the type of Medicare Advantage Plan.
    • If the plan decides to stop participating in Medicare, you‘ll have to join another Medicare health plan or return to Original Medicare.

    Medicare Part B Medical Insurance

    Medicare part B Medical Insurance

    Medicare Part B (Medical Insurance)

    Medicare Part B (Medical Insurance) helps cover medically-necessary services like doctors’ services, outpatient care, home health services, and other medical services. Part B also covers some preventive services. Check your Medicare card to find out if you have Part B. You pay the Part B premium each month. Most people will pay the standard premium amount. However, if your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you may pay more. Your modified adjusted gross income is your taxable income plus your tax exempt interest income. Social Security will notify you if you have to pay more than the standard premium. If you have to pay a higher amount for your Part B premium and you disagree (even if you get Railroad Retirement Board benefits), call Social Security at 1-800-772-1213. TTY users should call 1-800-325-0778. If you don’t sign up for Part B when you are first eligible, you may have to pay a late enrollment penalty.

    How to Get Part B:

    • If you get benefits from Social Security or the Railroad Retirement Board (RRB), in most cases you’ll automatically get Part B starting the first day of the month you turn 65. If your birthday is on the first day of the month, your Part B will start the first day of the prior month.
    • If you’re under 65 and disabled, you’ll automatically get Part B after you get disability benefits from Social Security or certain disability benefits from the RRB for 24 months. You’ll get your Medicare card in the mail about 3 months before your 65th birthday or your 25th month of disability.
    • If you don’t want Part B, follow the instructions that come with the card, and send the card back. If you keep the card, you keep Part B and will pay Part B premiums.
    • If you have ALS (Amyotrophic Lateral Sclerosis, also called Lou Gehrig’s disease), you automatically get Part B the month your disability benefits begin.

    What You Pay for Part B Services: Costs for Part B services depend on whether you have Original Medicare or are in a Medicare health plan. For some services, there are no costs, but you may have to pay for the doctor’s visit. If the Part B deductible applies, you must pay all costs until you meet the yearly Part B deductible before Medicare begins to pay its share. Then, after your deductible is met, you typically pay 20% of the Medicare-approved amount of the service. You can save money if you choose doctors or providers who accept assignment.

    Medicare Part A Hospital Insurance

    Medicare Part A - Hospital Coverage

    Medicare Part A (Hospital)

    Medicare Part A (Hospital) is the original Medicare insurance coverage and it helps pay for hospital bills. When you sign up for Medicare, you automatically get Part A. Part A covers hospital costs, such as: in-patient hospitalization, nursing services, Hospice care, home health care and blood.

    Most people will not have to pay a monthly cost (premium) for Part A, because they or their spouse paid Medicare taxes while they were working. If you have not paid Medicare taxes through your employment you will have to pay a Medicare Part A premium. The Premium amounts are as follows:

    • You paid Medicare taxes for more than 7.5 years but less than 10 years (30 to 39 quarters, then your premium will be $254.00 per month.
    • You paid Medicare taxes for less than 7.5 years (less than 30 quarters), then your premium will be $461.00 per month.

    Business Overhead Expense Insurance

    Business Overhead Insurance Benefits

    Business Overhead Expense Insurance

    Business Overhead Expense Insurance: How long would your business survive if you were temporarily disabled? How would you pay the salaries of your employees and meet your monthly expense obligations? Some statistics would have you believe at least 50% of persons aged 35 will suffer a disability lasting at least 90 days before they attain the age of 65.

    When a disability occurs, generally three things are sure to happen to a business owner:
    • their regular living expenses will continue to occur;
    • business expenses will continue to occur; and,
    • at this most inopportune time, the income earned from the business will be severely interrupted.

    Business overhead expense (BOE) insurance is designed to reimburse a business for overhead expenses in the event a business owner becomes disabled. This is not the same as personal disability insurance which usually pays benefits to age 65. A business overhead expense policy pays a shorter benefit of one to two years after a waiting (elimination) period. It is generally considered that no business can stay open more than two years if the owner is disabled and the business will either be shut-down or sold.

    These policies also work where there is more than one owner. If there is a business partner each partner can take out a policy to accommodate their share of the expenses.

    The premiums paid for the business overhead expense insurance is a legitimate, tax-deductible business expense; however, the benefits are treated as taxable income when paid.

    Generally, there are two conditions which must be met to trigger the payment of benefits:
    • total disability due to injury or sickness must be present and
    • the expenses covered by the policy must be incurred during the disability.

    Typically, eligible business overhead expenses are:
    • employee salaries
    • employment taxes
    • employee benefit costs
    • rental payments for property and equipment
    • principal and interest on mortgaged business property
    • utilities
    • accounting and legal fees
    • business insurance expenses
    • interest on business debts
    • property taxes
    • general office supplies

    Any agreements and insurance policies within a business must be integrated with the overall plan and objectives of the business. Careful consideration must be given to the selection of the plan which is right for your business and to the method of funding your plan.

    Business Buyouts

    Business Buyout Insurance border=

    Business Buyout

    Business Buyout: It’s not easy to determine a fair price in advance. A company’s owners must agree on a price that, years from now, will represent their firm’s true value. This is obviously a calculated risk: You cannot know today if your business will prosper in the years ahead or struggle to make a profit. Still, picking a fair price or a formula for setting the buyout price is essential. There are five common ways to determine a buyout price:

    1. Fixed price. The partners simply agree on a price for the business and put that number in the buy-sell agreement.

    2. Book value. The partners set a price based on the net value of the company’s assets minus its liabilities as shown on its most recent year-end balance sheet.

    3. Multiple of book value. If a small business has been up and running for several years, its real value is probably greater than its book value. The multiple-of-book-value method takes into account intangible assets that add to a company’s worth such as patents, copyrights, brand names and trade names.

    4. Capitalization of earnings. This method measures a company’s value based on its past profits. This works well for established companies with a solid financial history.

    5. Appraisal. A buy-sell agreement can stipulate that, at the time of a buyout, a professional business appraiser will establish the company’s value.

    No matter which buyout method you and your partners choose, it’s important to have an agreement to avoid future disputes or lawsuits that may delay a transaction or affect the value of your business

    Buy Sell Agreements

    Buy-Sell Agreements

    Buy-Sell Agreements

    Buy-Sell Agreements Most business partnerships start with the best intentions, but not every partnership ends that way. That’s why buy-sell agreements are so important. A buy-sell agreement is a contract between business partners that dictates who can buy a departing partner’s share of the business and establishes a fair price for the partner’s stake. The agreement also describes how to determine a company’s value if all the owners decide to sell.