Posts Tagged: insurance
2024 health insurance rates explained by Cheryl Lloyd, VP of Systemwide HR
As Open Enrollment begins, I have heard from many members of our community about how they will be impacted by increased medical premiums for UC plans next year. Nothing I can say will help you balance your monthly budget, but I feel I owe you an explanation of the steps we've taken to maintain quality, choice, affordability and equity.
As someone who takes UC's commitment to high-quality and affordable health benefits very seriously, the premium increases for 2024 are painful. Even with UC covering over 80% of the cost, next year's medical premiums will make a bigger dent in paychecks that need to cover many other critical expenses.
Since we learned that medical costs were increasing for 2024 — nationally, as well as for UC — I have been working with UCOP leadership and Systemwide Human Resources colleagues to figure out how to ease the burden of rising costs on our employees and retirees.
Sacrificing quality or choice was never on the table. UC continues to offer CORE, a high-deductible medical plan, as a $0 premium option for budget-conscious employees who don't anticipate significant medical needs. For other employees, though, it is critical that UC continue to offer plans with a range of features, including low out-of-pocket costs for care and access to UC Health's world-class providers (access that is protected regardless of issues that may arise between UC Health providers and insurance carriers).
After many conversations and budget analyses, UCOP leaders committed to $93 million in subsidies — added to UC's original budget — directed toward lowering premiums. This follows a subsidy of $29.5 million last year, also added to lower premiums for employees and retirees, and several years of premium increases kept in check through well-managed costs and contracts.
As part of UC's commitment to equity, medical plan premium costs continue to be adjusted by salary range and premium increases are distributed equally by percentage across pay bands. For example, the premium for self-coverage in Kaiser increased by 26%; that's an increase of less than $8/month for employees who earn up to $68,000 a year and an increase of $38.58/month for employees who make over $204,000 a year.
The challenge of responding to the complicated factors that affect the cost of health care benefits has not gotten any easier during my four years leading Systemwide Human Resources. We will continue to work closely with our health plan partners to manage costs, to adjust UC's budget to maintain our commitment to quality and affordability, and to listen to and learn from our community.
If you have any questions or feedback, please reach out to Jay Henderson, associate vice president of UC Total Rewards, at healthandwelfarebenefits@ucop.edu.
Sincerely,
Cheryl Lloyd
Vice President
Systemwide Human Resources
How can we navigate changes in the home insurance market?
A wildfire shockwave recently hit California. Maybe you missed it. While there were no large wildfires threatening homes, and the air wasn't thick with smoke like in the Northeast from the wildfires in Canada, a shockwave did hit.
State Farm, California's largest home insurance company, issued an emergency declaration. As I write this, I note that my homeowner's policy is with State Farm, and while this may not affect me today, it could affect me when I choose to sell my home or buy a new one.
State Farm announced they will stop issuing new home insurance policies. Allstate issued a similar policy last year. These actions, in essence, shrink the available pool of insurers in California and are a very troubling sign for all of us. Furthermore, this action may significantly lengthen the time it takes to sell or buy a home in California or may affect our long-term ability to sell in the future and capture the financial values we have in our properties.
The loss of over 43,000 structures to wildfire over the last 10 years has not gone unnoticed by the insurance industry. Increasing fire hazards and skyrocketing costs to rebuild has everyone on notice that business-as-usual is not working.
California's policymakers and the Insurance Commissioner have their hands full with structuring the insurance market, creating a market that manages risk and attracts a diversified pool of insurance carriers, stabilizing insurance availability and affordability, and supporting the real estate sector of California's economy.
As a member of the state's Risk Modeling Workgroup, I can tell you that many approaches are being debated to address our challenges, including 1) allowing reinsurance calculations to be a part of insurance rates, 2) finding other ways to fund the Fair Plan (California's insurance plan of last resort), and 3) allowing catastrophe models to forecast risk in order to better anticipate future losses. With the passage of Proposition 103 in 1988, rate setting has been driven by past claims experience. Most suggest that future losses are likely to be significantly worse than past losses.
On July 13, the California Insurance Commissioner will hold a public hearing on whether rates should utilize catastrophe models that can account for anticipated climate changes and risk mitigation actions taken by property owners. Further, the state's Risk Modeling Workgroup will issue a report on this topic later this summer.
While these approaches are nuanced and complicated to understand, there are many actions that property owners can take to protect the value of their properties and mitigate risks.
Given this period of insurance instability, the best action property owners can take is to understand and mitigate wildfire risks. Reducing fuels, improving defensible space, and hardening the exterior of their structures to heat, flame and ember exposures will help to entice insurance companies to underwrite your property, enhance the ability to sell the property, and improve the odds of the building surviving future wildfires. By marketing the value of these actions, just like the remodeled kitchen or other property upgrades that attract homebuyers, you can market your asset to future insurance companies and buyers. Proactive actions, like upgrading vents, are a key part of the solution.
AB 38 (2019) started this process by mandating that the seller of a property disclose to the future buyer defensible space actions that have occurred for properties in Very High and High Fire Hazard Severity Zones. In 2025, these disclosures need to include home hardening actions based on an established low-cost retrofit list. Over time, these actions are likely going to become key for the negotiation of price and potentially the closure of the sale.
Independent assessment of preventive actions may also be helpful. The Safer From Wildfires program was established in 2023 to help promote insurance discounts for the voluntary adoption of wildfire mitigation actions; in my opinion, it could be used as an insurability assessment as well. Another option is to consider the Insurance Institute for Business and Home Safety's Wildfire Prepared Home designation. Helping your community think through the issues and take collective action to meet a Firewise designation is another approach to consider.
More information about home hardening and defensible space can be found at UC Cooperative Extension's Fire website. And if you need help navigating a recent insurance cancellation, United Policyholders, a consumer rights advocacy organization, has helpful resources.
Wildfire adaptation will not occur overnight, but I believe we have a pathway and clear evidence to demonstrate that these types of specific actions will help all of us live successfully with wildfire in California now and into the future.
Excluded by banks, minorities in California became their own lenders
If you've ever been to a Cambodian-owned doughnut shop, fried chicken restaurant or jewelry store, there's a good chance it was financed by a tontine.
In Cambodia, “tontine” is the name given to a rotating savings and credit association, or ROSCA, an ancient practice that has different versions all over the world. The general concept is that by contributing to a monthly pool that pays a lump sum to a single member, people can make and receive loans as well as earn interest on savings.
The lending circles are especially prevalent in the Cambodian community, where many people don't use banks because of language barriers and a distrust of institutions caused by genocide and economic instability in the aftermath of the Vietnam War.
In Los Angeles, diverse neighborhoods probably wouldn't exist today without ROSCAs, which are most often run by women. When banks wouldn't lend to minorities, the kye helped Koreatown business owners cluster in central Los Angeles. The hui helped finance Chinatown, and tanomoshis helped start some of Little Tokyo's early businesses.
There are also Latino tandas or cundinas, Filipino paluwagans and Ethiopian ekubs, and in South Los Angeles, family investment teams were formed after the L.A. riots to help black people buy property. ROSCAs are called tontines in Cambodia, Cameroon and Nigeria because of French colonization, but in Europe the term “tontine” refers to a different financial instrument created by exiled Italian banker Lorenzo de Tonti, who advised the French crown to use it to finance the Thirty Years' War.
Tonti's tontine is actually illegal in the U.S. The practice was outlawed in the early 1900s after abuses were discovered at insurance companies, prompting a New York judge to call it a “death gamble.” Tontines were sometimes called dead pools, a term you might know as the title of a Clint Eastwood film or the name of a Marvel superhero played by Ryan Reynolds, depending on when you were born.
In Long Beach, where more than 50,000 Cambodian Americans make their home, tontines are especially popular because there is no Cambodian American bank. Even in Cambodia, just 5% of people rely on traditional banks to manage their money, according to a 2015 survey, while 12% exclusively use informal tools like tontines.
Tontines help people pay rent, afford homes, start businesses and, for those like Lynn Hong, 25, ease the burden of student debt. Each month the Cal State Long Beach student contributes a few hundred dollars to the pool and receives small interest payments from other tontine members. In 2021, when she graduates, she hopes to have enough to help her pay off her debts and jump-start her career as a social worker.
“It's like gambling, but it teaches you about saving. It's another way to rebuild relationships within families and friends,” Hong said.
In Los Angeles, home to one of the highest unbanked populations of any metropolis, the popularity of ROSCAs is both a product of discrimination and a tool to fight it.
Broadway Federal Bank, the largest black bank west of the Mississippi, was founded in 1967 to help black people combat discriminatory lending and housing practices. Chief Executive Wayne-Kent A. Bradshaw says minority deposit institutions and ROSCAs function on a similar principle: investing in the community. Bradshaw's mother also participates in a Jamaican ROSCA, known simply as a partner.
“It's based on the very powerful cement of social relationships, where if you break the circle, you'd be giving up your membership in that community,” Bradshaw said.
Nowadays the bank's portfolio has broadened to include all low-income and minority communities, Bradshaw said. About 90% of its loans are focused on creating more low- and moderate-income housing by financing so-called Class C apartment buildings, Bradshaw said. It's a reflection of the fact that explicit housing discrimination has given way to gentrification and a speculative housing market whose negative effects disproportionately fall on minority communities.
At Mission Asset Fund, a San Francisco nonprofit in the rapidly gentrifying Mission District, Jose Quiñonez is trying to turn ROSCAs into a tool to support communities' financial health and fight gentrification. His fund ensures and documents ROSCAs so that payments can help build the participants' credit scores.
“We have this notion that poor people or immigrants are poor because of their own fault, that they're not saving or budgeting right,” said Quiñonez, who was awarded a MacArthur Fellowship grant for his work in 2016. “But this proves that poor people pay their loans back.”
The Mission Asset Fund has provided more than 10,000 no-interest loans to more than 68,000 participants. Despite lending to people who are traditionally seen as high risk, the fund has just 0.7% of its borrowers default.
The fund is partnering with nonprofits across the U.S. to expand the program, including six groups in Los Angeles.
ROSCAs are more popular among older immigrants; it's unusual for younger people like Hong to participate. She has a savings account and a 401(k), so she's no stranger to the mainstream financial system.
But she says tontines help Cambodians learn to trust one another, and that's something a community with many former refugees and genocide survivors really needs.
“It's a risk, but it's a risk that we are taking together,” Hong said.
It's a powerful idea no matter who you are or what is happening in the news. Tontines, ROSCAs and minority banks are gestures of faith and trust in a community, a reminder that sometimes our biggest strength is in one another.
Source: Published originally on Los Angeles Times, Excluded by banks, minorities in California became their own lenders, by Frank Shyong, March 18th, 2019.
Did You Miss the Farmer-to-Farmer Breakfast?
A room full of farmers came out on a rainy Wednesday morning to enjoy breakfast together. Our guest speaker, Domenic Fino of Golden Pacific Crop Insurance Services, came all the way from Dinuba, California. He is a farmer, with a family legacy of farming and has been in the crop insurance business for 17 years.
Revenue - While farm acreage and the number of zeros after the dollar sign may be smaller for local farms, revenue earned is revenue that can be lost and can be insured. Fino explained a type of insurance called Whole Farm Revenue Protection (WFRP) that was designed specifically for small to medium producers with diversified operations and unique specialty crops. WFRP has been around for the last five years but has only been available in Placer and Nevada Counties in the last two years. WFRP is currently available in all counties in all 50 states.
Records - Fino brought a wealth of experience and information to local producers. He helped explain that WFRP works only if the producer is able to keep proper records and has been reporting revenue on their taxes. “Garbage in, garbage out” Fino said, speaking of how important diligence in record-keeping and setting up the policy makes processing easier when there are claims.
Reporting - Whereas most types of insurance require claims to be made right after a loss, WFRP is unique in that a producer may only complete a claim after filing taxes for the year.
Restrictions – At the farmer-to-farmer breakfast, producers also learned of a few crops that are excluded from WFRP, mushrooms and timber. However, there is a program that can provide assistance for those products called Non-Insured Assistance Program (NAP) which is accessed through the Farm Service Agency. Several mandarin growers learned that while you must have at least two crops for WFRP with the second making at least 17% of your revenue, if you only sell mandarins, there is another option.
Single Crop Insurance - Mandarin only crop insurance is already available in six Southern California counties. Any mandarin farmer may request that type of crop insurance in their county. Once enough farmers request a single crop insurance in a county, it can create a bank of information that will eventually make that type of insurance written specifically for that county.
For more information about WFRP, visit the USDA Risk Management Agency website. https://www.rma.usda.gov/Fact-Sheets/National-Fact-Sheets/Whole-Farm-Revenue-Protection-2018
Did you miss this event? If you are interested in learning more about crop or whole farm revenue protection insurance, UCCE can provide information. Call 530.889.7385 or e-mail us, cefake@ucanr.edu or dmacon@ucanr.edu
Interested in attending a farmer-to-farmer breakfast? There is another one right around the corner. Wednesday, February 13, at Happy Apple Kitchen in Chicago Park. Look for a sign-up link coming soon.
Risk - What are You Waiting For?
Risk – What are you waiting for?
As the old saying goes, when it rains it pours. Nobody knows that better than we do right now, literally. For most farmers, rain is a good thing. However, for mandarin growers the amounts of rain and lengthy periods of high humidity are not good for mandarins in the middle of the season. This brings up the issue of risk on the farm. Drought, wildfire, food safety issues, crop loss, rain or frost damage are just a few of those risks.
Despite the periodic heavy rains, Placer and Nevada Counties are considered “abnormally dry” for this time of year according to the national drought monitor. After moderate and severe drought, this may seem like a fairly normal year. With shifting climates the “abnormal” could become normal over time. As we saw this fall, wildfire tore through thousands of homes and hundreds of thousands of acres. It seems the “most devastating wildfire in history” is becoming a headline each year.
While the risk of catastrophic wildfire seems to be increasing each year, rain and frost damage have historically plagued foothill farms. With travel throughout the world as easy as an overnight plane ride, international agriculture pests and diseases are also a real possibility here. I am not trying to scare you - I just want to highlight the need for farmers and ranchers to be aware of and plan for risks, and have the necessary resources to get through it.
Mother Nature is not the only risk; consider the romaine lettuce farmers on the Central Coast who had no market this fall when E. coli was found in that product. Even if one farmer did everything possible to maintain food safety, their crop may have been a total loss. Wouldn't you be glad to have crop insurance or revenue protection in place if you were in their shoes?
You will have the opportunity to hear from a fellow farmer and insurance agent, Domenic Fino of Golden Pacific Crop Insurance at the Farmer-to-Farmer Breakfast on January 9th at the Auburn UC Cooperative Extension office, from 8 to 11 AM. Sign-up today at http://ucanr.edu/survey/survey.cfm?surveynumber=26336 It's time to be informed and prepared to protect your farm.
Resources available on our website:
Risk Management https://ucanr.edu/sites/placernevadasmallfarms/Farm_Business_Planning/FBP_Risk_Management/
Drought Planning - https://ucanr.edu/sites/placernevadasmallfarms/Drought/Drought_Planning/
Financial Resources and Insurance programs https://ucanr.edu/sites/placernevadasmallfarms/Resources/Financial-Resources/