Obamacare Reform; a brief summary

It isn't easy to understand many types of insurance, and in many instances we are in denial of necessity. A new law was passed in 2012 approved by the Supreme Court (!) that will have controversial ramifications. Most notably, if a citizen or family does not have health care, an IRS tax penalty will be enforced (minimum $200/month of not having minimum coverage). Note that the details below are contingent on a NEW plan, and not one prior to 3/23/2010

• Summary of Benefits and Coverage listed at hospitals (kind of like a menu of what is available and what is right for the average person with particular syndromes)
• This helps you compare tiers of coverages:
• Bronze (minimum for family of 4- $20,000)
• Silver
• Gold
• Platinum
• Wider Medicaid* coverage and more claims coverage for accidents that would today be neglected. If a claim is denied, the following must occur:
• You are notified why it was denied
• Notice of right to file appeal (closed in as quickly as 72 hours) or external review
• Preventative health care (!) is exempt from co-pay or deductibles
• Testing, counseling, and vaccinations
• Cancer and disease screenings
• Citizens under age 26 can be covered under parent's health care
• Coverage provided to citizens with Pre-existing conditions
• Cancellation by insurers must be reasonable
• Choose your Primary Physician
• Emergency care out of network requires NO raise in premiums
• All fees are disclosed clearly giving citizens a 'menu'
• Increased jobs for hospital employees and construction workers
• Every health record will be electronic rather than on paper.

NEGATIVES

• Employers may cut down on full time staff and lay off workers to avoid paying for mandated health care of 50+ employees
• Wait times: more citizens are required to have health care will equal more citizens needing to be seen by physicians, creating high demand for hospitals that are already burdened by too many patients
•  More taxes taken out regardless of tiers to support operating fees
• Create tiers of people by increasing our awareness of health care tiers - we have comprehensive knowledge of each tier, so we see that the rich are increasing longevity and utilizing empowering pharmaceuticals. 

WAYS TO OBTAIN INSURANCE

• Through your employer
• Buy insurance privately or through an exchange
• Apply for government programs like Medicaid
• Citizens who cannot find health care for less than 8% of their annual income are exempt from penalties

*Medicaid eligibility: 133% of the federal Poverty level (or $29,700), be a federal resident

• Federal residency requires passing the green card test, and is given only 5 years after the first day you are physically present on American territory after the test. During those 5 years you are a resident alien. You can also gain citizenship through marriage. See my other blog on residency (http://diyjamesesler.blogspot.com/2013/07/residency.html)

As with all ubiquitous,trans-formative mandates, infrastructure will hold the health care reform up. I think within 10 years, everything will be smoothed out, but the subsidies, penalties, and long wait times will cause major upheaval and lack of focus in American way of life (think citizens on strike). In my mind, we are moving away from democracy and laissez faire and taking leaps backward into the Caste system.

Some imperative statistics

San Diego can be very overwhelming, and the stats only reinforce the fact. In downtown alone, there are 90,000 businesses, including 28255 contractors . In San Diego county, population of 3.14 million and nearly 67,000,000 ft^2 of office space, the following businesses are headquartered:

• Reef Sandals
• Bed Bath and Beyond
• Kashi
• Jack in The Box
• Acadia Pharmaceuticals
• Pfizer, Inc.
• Salk Institute
• Burnham Institute
• NuVasive
• Sharp Healthcare
• DivX
• Aonix
• PETCO
• PriceSmart
• Cricket
• Jump Mobile
• Qualcomm
• WD-40
• Cymer
• Mad Catz
• Sempra Energy
• Envision Solar
• Kyocera
• DC Shoes
• Callaway Golf
• Taylormade Golf
• Cobra Golf
• Jenny Craig Inc.
• Upper Deck
• Hewlett Packard
• Oracle

Retirement Plans and diversification

Diversify. We hear it all the time. My understanding was just to put money into different industries in the stock market to be diversified. Now I understand that Any platform where you put money in and take out a different amount is investing. The possibilities are limitless, but here are a few of the most infamous arrangements.

• Real estate
• Rent is an ugly word, if you have the down payment, invest today.
• Equity (Market value of your property minus what you owe) is easy to borrow against.
• Things to know:
• What is interest % on the mortgage
• What is your down payment, and can you truly afford it?
• Homeowners insurance for uncontrollable perils (basic is fire, lightning, etc.)
• Who will rent your place? Is it rentable? Will you live-in?
• Who to buy with (I like the Z-Group for High end, great reputation)
• Is everything up to code? Building regulations are always being updated
• *note that interest on mortgages and points to get the mortgage loan are deductible
• Taxes
• Anyone getting a 1099 can deduct many many items that aren't reimbursed by the contractor (Above the line):
• costs to earn business, or any otherwise business expenses, retirement savings
•  Itemized (below the line) ddt's: Gas, uniforms and clothing, dues to clubs and any entertaining of clients is deductible
• Stocks and Bonds
• Know the industries and read the news, my strategy is long-term
• Understand how companies make money and is the price good in comparison to the financial position of the companies
• Scottrade is a fabulous platform, very user friendly
• Stop Losses to sell at any price is useful, thanks Vito Russo
• Venture capitalism
• Never be emotionally invested because even if you think they are your friends, owners often force you to work more for less money and might waste your money in vain
• Research competitors
• Know what the vision and aim are
• Know what the financial position is for the first year (balance sheet)
• Retirement accounts (intuitively all of investing should be retirement oriented)
• Roth IRA (taxed as deposited can withdraw at 60 y.o.)
• Withdraw before 59.5 y.o. incurs a 10% penalty subject to exceptions
• The earnings the IRA itself accrues are taxable when distributed (aka taken out)
• Non-qualified distributions are made before age 59.5
• Exceptions: you become disabled (with constraints), are equal payments over the holder's lifespan, are for medical expenses out of pocket over 7.5% of AGI, payment of med insurance after 12 weeks unemployment, are used for a $10K first time home purchase, for qualified higher education expenses, or are used to satisfy a tax levy.
• For funds converted from Traditional to Roth, the penalty does not apply if the conversion was more than 5 TAX years prior to the extent they are includable as AGI
• Withdrawal from traditional IRA is taxable and subject to penalty only on earnings from the principal, where the proportion of non-deductible contribution to earnings is used to determine that of the withdraw. (i.e. 60% of total IRA is earnings so 60% of withdrawal is taxable and penalty)
• So, if you are 50 or younger and see the need to have money without the 10% penalty, convert the traditional IRA to Roth because after 5 tax years, the money is penalty free.
• If $15K is converted to Roth in 2012 and $10K in 2015, $15K has no penalty in 2018, and the sum of both have no penalty in 2021. 
• Traditional IRA benefits a holder because the amount is taxed at the time of distribution (which means that the principal is tax deferred and gains more on the same rates since the principal is greater). If $5K is put into both accounts at a 30% tax bracket, $1500 is taken immediately from the Roth so only $3500 can appreciate in the IRA, where the traditional makes exponential gains on the full $5K.
• Traditional IRA (taxed as withdrawn can withdraw at 60 y.o.)
• 401 K 
• pension or a steady pay when you stop working for retirement
• often matched
• Cafeteria Plan

Inland Marine, Property floaters

Need help insuring tools or even personal property? Limits are standardized and not subject to your experience modification or even your business' riskiness like other forms of coverage. All you need is to know what limits are right for you.

• Office contents up to $30,000
• Misc. Tools up to $20,000
• Computer systems (option for data, media, and excess coverage) up to $15,000 total
• Scheduled Equipment
• Most common form of insurance in America
• Equipment with value greater than $1,500 each (lesser value in misc. tools)
• If you rent equipment from others, only $25,000 limit is available
• For each item, must include
• Year of item
• Description or name
• Serial or ID number
• Type of equipment (heavy or light)

Professional Liability Malpractice (Errors and Omissions)

If you find yourself giving advice or providing a service based on your expertise as opposed to selling a tangible product, you ultimately are liable for any problems arising out of such advice. To keep yourself protected, you will need Malpractice insurance (medical field), or errors and omissions insurance (for everything else).
You, like 100% of my clients, are not informed how to go about getting a cheap (usually from $50 per year) rate and what to submit or where. Typically, I can submit the following to one of ONYX's exclusive carriers:

• Application detailing work (provided by the carrier)
• Resume of the individual to show work experience (just a glimpse is fine)
• Insurance requirements needed based on the contract you have signed with the hospital, agency, practice, or employer in general (sample of contract signed is submitted ot carrier)

Housing Market on the rise!

Want to show great (!) thanks to Lee for doing everyone a huge service with his real estate company, Lee Avery Realty http://www.sandiegohousingnews.com/. That said, the market has seen very steady activity all this year regarding housing sales, and while some are resales, most will be new builds.

Detached houses are getting snatched off the market typically in less than 80 days, and pricing has hovered around $500K for such homes. Sales each month in 2012 were from 1500 up past 2000. The chart below proves housing is back on the rise in San Diego county. What this will mean most importantly is more emphasis put on the construction industry, more investing in the housing sector, and a huge boom in the economy over the next 10 years with interest accruing.

These are the times to get involved, and though it may be unclear how to proceed, make sure you get to work investing! The only thing stopping you from riding the wave is you!

Business owners' Policy

Of course, a business Owner’s Policy combines great standard benefits of an aleatory insurance contract for a very minimum premium.

·        Included here are business property and business liability coverages in an easy to manage package deal.

·        Your small to medium business will be protected against theft, VMM, Fire, and other basic perils.

·        Also insured are inventory, fixtures, furniture, buildings, equipment, and more whether owned or leased.

·        Loss of business income is endorsable simply by checking a box, typically at no cost to the policy holder. If a catastrophic event disrupts your business income, most policies will cover rent or other continuing costs.

·        Also endorsable is data breach coverage, which includes prevention costs, recompensation if a breach occurs, as well as defense coverage if a small business is sued because of a breach.

·        EPLI (employer practices) is not included in CA, but is endorsable, limits typically are $10000. Some policies offer a team to swoop in after a catastrophe to help keep a business afloat.

Restaurant insurance: (need Acords 125,126,131,140)

• $1M/$2M or $2M/$4M
• Damages to your rented premises $300K
• Medical Expenses $5K
• Completed Operations Coverage
• Personal and Ad Injury
• Liquor liability $1M
• TIV up to $20M
• Loss of Income for 12 months with EE (BOP only, not CPP)

My first sale and so much more!

I began this journey at the beginning of the year. Todd Budde of ONYX financial indicated he needed help in his brokerage. He invited me to a BBB mixer, and though I didn’t meet many people, I saw business transacting all around me. So, I signed up for the prelicense training online courses. 52 hours total, I studied 4 – 5 days per week for nearly 8 hours each day. The videos were incredible and the information was very intuitive. I realized at some point that there is an infinite knowledge one can gain about personal and commercial insurance; I was thrilled! This stuff is practical – who knew car insurance could cover your medical bills if you are hit by a car walking down the street or that if you are in France and your wedding ring mysteriously disappears, your homeowners insurance can cover it? Not me! After I got the certificate, I scheduled a test date 2 days later. Nervously, I finished the exam in less than half the time, and made 80%! 

I passed, but now how to transition from studying to practicing? I was appointed with Todd. I am an independent field underwriter, and while I can generate leads, he also supplies many for me. The first day, we did some calls and I was acclimating, though with his 8 years experience in this business, he made it look easy. He is literally dedicated to each and every customer and he seems to never think about them as clients: they are his friends, and he will break his back for them and works 10 hours every day for them, even at over 50 years old. 

His dedication to ONYX is enthusiastic and hugely inspiring; I found myself matching his enthusiasm and using some of his same colloquialisms; I am his biggest fan. My first sale came on my 2^nd day; Mark Taylor of San Diego. When I spoke with him, all he wanted was a bond, as a small contractor. Bonds are inexpensive and do not typically generate commission. So I waived the commission to beat a competitor by $5 at $460. I called Mark 3 times, and I emailed him. He laughed on the third call and joked about my persistence and persuasiveness. When I sent him the invoice, I got this email (today):

James!   you are one persistent dude!   You remind me of me when I was 24 years old!     As I told you today, this is good that you are this way!   Visualize your goal and think about it every day!   Then pray also to God daily and He will deliver what ever it is you desire!   Don't give up!

I am starting a 3 day job tomorrow (finish on Sat.) so I should have the full amount on Monday to send to you!

GO JAMES GO!!!!!

Your friend,

Mark Taylor

Even though I made $0 on the sale, I realized that these are the people I want to work for, not bosses breathing down my neck like I have been dealing with for 9 years in restaurants. It’s more than a job, it’s a career; and they are more than customers, they are friends!