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Insurance Tidbits

February 2020

Happy February!


Hope you're all doing well during this [hopefully] last month of winter. I have all sorts of great insurance information for you--2020 is going to be filled with new insurance laws, innovative insurance products, and lots of emerging technology. I also have a great deal of other news to share so, without a lot of chitchat, here are the quick links to this month's newsletter topics:
  1. Marijuana and Hemp: Legalization and Insurance Issues
  2. 2020 law changes to retirement plans (the SECURE Act)
  3. Health Insurance: ACA's individual mandate ruled unconstitutional
  4. NEW MONTHLY FEATURE: Q & A
  5. My webinar schedule
  6. Details about the upcoming publication of my book, Taking the Mystery Out of Business
  7. Introducing my podcast
  8. Guest blogging opportunities
  9. Contact Me

Marijuana and Hemp: Where are They Legal?


Legalization


Most everyone in the insurance industry knows that cannabis is illegal. Specifically, federal law in the form of the Controlled Substances Act lists cannabis as a Schedule I drug--which means it has no medically accepted uses and has a high potential for misuse and dependence.

More and more of the states are disagreeing with the perspective of the federal government: either they're legalizing the medical use of marijuana, or they're legalizing it for both medical use and recreational use for adults only. Currently 34 states lave legalized the medical use of marijuana and 11 of them have also legalized recreational use by adults. An additional 27 states have recently introduced legislation to legalize marijuana in some form.

For more details about legalization, check out this blog post I published recently, which has state-specific details, and a link for access to more comprehensive legislative information.


Insurance Issues


When it comes to writing insurance for cannabis--whether it's for marijuana or hemp, or for business/medical/recreational purposes--insurance producers face numerous challenges:
  • How to explain why your clients can't open an account at a federal bank and why they can't deposit their revenues
  • The widely variant coverage forms and policy exclusions
  • The strict underwriting guidelines and warranties that are required before coverage can be issued
  • How to find insurers to issue coverage
  • For agents who sell both private and federal crop insurance:
    • How do I insure marijuana crop insurance in the private market?
    • How do I insure hemp in the private AND federal crop insurance markets?
If you've asked yourself these, or other, questions, here are a few resources for you: I hope this information proves helpful. For updates about this, and other topics, be sure to regsiter for the free monthly Lunch & Learn webinars I cohost with Pam Reihs of A.D. Banker & Company.
 

The SECURE Act


The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law in December 2019 and made a number of changes to rules and taxation for retirement plans. IRAs, annuities, pensions, and defined contribution plans were all affected.

A few of the highlights of concern to most of your clients include:
  • Anyone can now contribute to an IRA, regardless of age, so long as he or she is earning income. The age 70 1/2 cap was repealed.
  • When taking distributions from qualified plans and annuities, required minimum distributions (RMDs) must be taken at age 72 rather than age 70 1/2. Specifically, for people turning 70 1/2 after December 31, 2019, the first RMD does not need to be taken until April 1st of the year after the year in which the individual turns age 72. Thereafter, all RMDs must be taken by December 31 of each year.
  • Rules about inherited IRAs and defined contribution plans changed significantly for those who are not the spouses of the deceased and a limited number of other people--now defined as eligible designated beneficiaries EDBs. This means that, moving forward, the Stretch IRA has been eliminated: funds from the inherited plan must be distributed within 10 years of the account holder's death.
  • Small businesses used to be eligible for a $500 tax credit if they established retirement plans for the benefit of their employees. This tax credit increased appreciably, to $5,000.
For more detailed information about the contents of the SECURE Act and how it may affect you and your clients, you can visit:

ACA's Individual Mandate Ruled Unconstitutional


Beginning in tax year 2019, your clients no longer have to worry about paying a tax penalty if they don't purchase health insurance. In fact, the entire requirement for most Americans to have health insurance has been declared unconstitutional by the Fifth Circuit Court of Appeals.

When the Affordable Care Act became law, most American's were required to purchase and keep in place a specific form of health insurance, referred to as minimum essential coverage (MEC) or pay a "shared responsibility payment." Opponents felt this requirement, referred to as the individual mandate, was unconstitutional and filed suit against the federal government.

The outcome of the litigation resulted in the Supreme Court declaring the individual shared responsibility payment a tax. Because it was a tax--and Congress has the right to impose, collect, and enforce taxes--the Court ruled the individual mandate was constitutional.

The Tax Cuts and Jobs Act of 2017 reduced the tax penalty to $0 effective 1/1/2019. As one would expect, opponents of the individual mandate filed suit again, alleging that if it no longer imposed and collected a tax, the individual mandate was no longer constitutional--using the Court's own reasoning to their advantage.

The Appeals Court agreed with the plaintiffs, which resulted in the unconstitutional ruling. However, the Appeals Court did not agree that the entire ACA should be ruled unconstitutional because of its ruling on the individual mandate. The Appeals Court directed the plaintiffs to return to a lower court after reviewing the entire ACA, and all its provisions, and specifying which provisions could be severed from the individual mandate.

The issue of severability is if primary importance in the outcome of the decision. I'll keep you posted on the outcome of what will likely be another bout of litigation...

Q & A


In this monthly feature, I will answer one or more questions that have been directed to me from students in webinars I've taught in the previous month, or that are emailed to me directly. The question I received the other day relates directly to the first topic in the newsletter, so here it is:

QUESTION: "With medical marijuana becoming legalized in so many states, medical marijuana cards are being passed out in lump sums. What rights do employers have with respect to employees who carry medical marijuana cards?"


ANSWER: Each state has its own employment laws, which apply in addition to federal employment laws. However, each of the states allows employers to establish their own hiring and employment guidelines.

Although medical or recreational use of marijuana may be legal in a particular state, that legality does not automatically translate into an employer being required to allow an employee to work while under the influence of marijuana--even if it's being used medically.

Consider alcohol. Drinking alcohol is legal, but most employers do not permit employees to drink on the job. Furthermore, they establish policies that spell out if and when employees can drink on the job, and what their enforcement policies are.

Here are 2 articles I found that discuss the issue in more detail:
  1. InPublicSafety.com
  2. SHRM.org

My Webinar Schedule


 

Insurance CE Webinars


February 28 | Ethics: Delivering on the Promise
March 10 | Driving Into the Future: Uber, Drones, & Driverless Cars
March 17 | The Health Insurance Marketplace
March 27 | Professional Liability
March 31 | Ethics in the Senior Market


New York Regulation 187 CE Webinars


February 25
March 31
April 28
May 26
June 30

For more information, or to register, visit my website or my landing page on A.D. Banker & Company's website
 

 



Free Lunch & Learn Webinars


I co-host these free, monthly, 1-hour webinars with Pam Reihs of A.D. Banker & Company. They are not offered for CE credit; however, students who attend the entire webinar are eligible for a Professional Development Certificate.

For dates and times, and links to register, visit the Lunch & Learn page of my website.
 

Book Launch Date Coming Soon


Back in 2011, I published the book, Taking the Mystery Out of Business: 9 Fundamentals for Professional Success. The book has since gone out of print and I'm publishing the second edition in late March or early April.

The book cover is in the final stages of design as I write this piece, and I'll be releasing it on my social media accounts (Linked In, Facebook, and Twitter), as well as on my website, as soon as it's complete--hopefully, by the end of the month.

I'll also be offering discounted pricing during the first few days of the book's release to my clients and members of my mailing list, so you might want to suggest that your business associates, friends, and family members subscribe to my blog feed or this newsletter.

Here's the back cover blurb:

Like a good mystery novel, the world of business involves drama and suspense – not to mention a never-ending supply of red herrings.  Taking the Mystery out of Business simplifies a complex subject, showing readers how to identify the killer aspects of the business world and dodge bullets that could inflict fatal wounds.

Business owners, independent contractors, managers, and employees often wear many hats and deal with limited time, budgets, and resources.  In this practical primer, Linda McHenry lays out the fundamentals, providing examples and tips so newcomers to the business world can easily gain an understanding of the challenges they face.

Experienced professionals will benefit from a refresher on basic strategies and how to stay ahead of the competition.

Starting with attitude and covering everything from money management to customer attention, Taking the Mystery Out of Business is a resource for entrepreneurs, employees, and anyone who has questions about the often mysterious world of business.

Taking the Mystery Out of Insurance Podcast


I will be launching my podcast, Taking the Mystery Out of Insurance, within the next few weeks. I plan to record short segments, from 10 to 20 minutes, on topics of interest to insurance professionals--especially those who are either new to the business, or to a particular line of insurance.

Feel free to email me directly if you have a suggestion for a topic you'd like to hear, or if you'd like me to email you directly once the podcast goes live.
 

Guest Blog Opportunities


I will be making 1 or 2 guest blogging opportunities available each month and will consider pieces written on the topics of writing/publishing fiction and insurance. Blog posts must be under 500 words in length and print-ready. I will not accept work that needs editing.

Submit your request via the Contact page on my website.

Contact Linda

My website
Email Linda
LinkedIn
Facebook
Twitter
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