COVID-19 Procedures: All business with the Commission should be through electronic filing systems, email, or by telephone. For public health safety, in-person visits to SCC offices are suspended. Filings or other deliveries are permitted by drop off at main entrance. On-site staff is minimal and processing of such deliveries may be delayed.
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AUG 30, 2021
RICHMOND – Natural disasters can take a major toll on businesses and sidetrack the best laid plans and projections. Many businesses do not reopen following a natural disaster and some fail within one year after disaster strikes.
Whether you are an individual or a business, you are vulnerable to natural disasters that may include hurricanes, floods, tornadoes, wildfires and earthquakes. Even disasters far away can impact your business by disrupting supply chains and communications. Small businesses are particularly vulnerable when it comes to natural disasters since they often have fewer resources, locations and employees to help them become operational again.
Advance planning is essential to safeguard employees, protect assets and minimize disruptions to your business. Having an emergency disaster plan and a business continuity plan in place, as well as adequate insurance coverage, can reduce the risk to a business and help it recover faster.
The State Corporation Commission's (SCC) Bureau of Insurance (Bureau) strongly encourages small businesses to review their insurance coverage regularly and adjust it, as needed. When evaluating a business’s insurance needs, consider the possibility of a natural disaster. Know what your policies cover and how much money you may need to make repairs and pay employees, creditors and yourself in the event of a disaster. "How you plan for and respond to disasters can determine whether your business survives," said Virginia Insurance Commissioner Scott A. White. “Protect yourself and your business against the unexpected by having the right insurance coverage and updating it regularly.”
Consider whether additional or separate coverages are needed. For example, separate insurance coverage may be needed for certain types of disasters such as floods and earthquakes because these typically are not covered by standard business insurance policies. Similarly, businesses may need to buy separate automobile insurance for cars and other vehicles because standard business policies cover only real property. Also consider business interruption insurance, which may help cover the loss of income that a business suffers after a disaster.
Small business owners also can take additional steps to protect their employees, property and operations, such as the following:
- Determine whether the business is in an area at high risk for certain types of disasters, such as floods or fires.
- Develop and update business continuity plans to share with employees. Make sure the plan includes current employee contact information, backup vendors or suppliers and a temporary relocation site.
- Develop a system to communicate with employees, vendors, suppliers and customers and procedures for work processes and payroll during a disaster or business interruption. Keep in mind that employees might be working from different locations and that internet and other critical business services might not be working normally.
- Have disaster provisions at the workplace, along with evacuation maps and access to a working radio and mobile apps to receive instructions from local authorities.
- Compile an inventory of computer hardware as well as other assets and equipment and keep it in a safe place. Back up all personal and company data on a regular basis in case information is lost during a disaster.
- Keep copies of important records (such as building plans, insurance policies, bank accounts, employee contact information and other priority documents) in a safe, waterproof and fireproof place. Keep a set of records online (employing strong security measures) or at an off-site location.
- During a disaster, depending on the risks, ask employees to shelter in place or evacuate immediately.
- After a disaster strikes your business, contact your insurance agent or company immediately and ask what information is needed to file a claim.
The Bureau of Insurance offers free guides specifically geared to businesses. To learn more, contact the Consumer Services Section of the Bureau of Insurance Property and Casualty Division toll-free at 1-877-310-6560 or in Richmond at 804-371-9185 or visit scc.virginia.gov/pages/Insurance.
For additional emergency preparedness information relating to disasters, visit vaemergency.gov.
Contact: Katha Treanor, 804-371-9141
AUG 18, 2021
RICHMOND – The 2021 Atlantic hurricane season already has had a busy start with eight named storms and one reaching hurricane strength. The State Corporation Commission’s (SCC) Bureau of Insurance (Bureau) reminds Virginians that late August to early October is often the most dangerous and active time for tropical storm activity – and the potential property damage those storms can cause.
If you have not already reviewed your property insurance, the Bureau urges Virginians to do so now as the hurricane season is underway. Whether you’re a homeowner, renter or business, protect yourself financially by making sure you have the coverage you need before disaster strikes.
Hurricane season officially runs from June 1 to November 30. Even areas hundreds of miles from the coast can be impacted by the high winds, heavy rains and flooding that accompany hurricanes and tropical storms. You may have a difficult time increasing your insurance coverage once a hurricane develops in the Atlantic and until the threat has passed, so review your coverage now and make any necessary changes.
“Disasters can happen anywhere and anytime. Don’t wait until it’s too late to protect yourself and your property from a hurricane or other disaster,” said Virginia Insurance Commissioner Scott A. White. “Assess your risk now and make sure you have the coverage you need before a storm begins to brew.
The Bureau encourages Virginians to talk to their insurance agent or company if they have questions about what is and is not covered, how to reduce property damage and what to do if damage does occur.
Most homeowners, renters and commercial insurance policies do not cover losses due to flooding. Talk to your insurance agent about flood insurance or visit the National Flood Insurance Program’s website at www.floodsmart.gov to learn more about protecting your home or business from damage due to floods, surface water or storm surge. There is typically a 30-day waiting period for a new flood insurance policy to take effect.
The Bureau also encourages Virginians to create a detailed home inventory with photos, videos and serial numbers of your belongings. The National Association of Insurance Commissioners’ (NAIC) free smartphone app can facilitate this process. Place your insurance policies and home inventory in a safe place and take them with you if you must evacuate. These records will contain your policy numbers and the phone numbers of your insurance companies in case you have questions or need to file a claim.
If your property is damaged by a hurricane, contact your insurance agent or company as soon as possible. To protect your property from further damage, make necessary emergency repairs. Document all damage to your property and include photographs, notes and repair-related receipts.
Policyholders should consider the following questions related to potential hurricane damage when reviewing their policies:
- Does your homeowners policy contain a special deductible for wind or hurricane losses? These deductibles are applied separately from any other deductible on a homeowners policy and may be written as a flat amount, such as $1,000, or applied to a loss as a percentage of the insurance coverage on the dwelling.
- Does your homeowners policy provide coverage for such things as sewer backup? Most homeowners policies do not provide coverage for sewer backup, but policyholders may purchase additional coverage for this.
- Are vehicles covered in the event of a hurricane or windstorm? If you have other-than-collision (or comprehensive) coverage for your vehicle under your automobile policy, your vehicles generally will be covered for flood and wind damage.
To learn more, contact the Bureau of Insurance Property and Casualty Division toll-free at 1-877-310-6560 or in Richmond at 804-371-9185. The Bureau’s specially trained staff can assist consumers with their insurance-related questions and concerns. The Bureau also offers free consumer guides for homeowners and commercial property owners with information about what to do when a disaster strikes. These are available on the disaster readiness section of its website at scc.virginia.gov/pages/Disaster-Readiness.
For additional emergency preparedness information relating to hurricanes and other types of disasters, visit the Virginia Department of Emergency Management website at www.vaemergency.gov.
Contact: Katha Treanor, 804-371-9141
JUL 23, 2021
RICHMOND – After anywhere from months to more than a year of virtual learning due to the COVID-19 pandemic, many students will soon be heading to college campuses for in-person instruction during the fall semester. In addition to new courses, teachers, friends, surroundings and living accommodations, it also can mean new insurance needs.
The State Corporation Commission’s Bureau of Insurance encourages Virginians to make sure their back-to-school checklist includes a thorough review of their own and their student’s insurance needs. “Know before they go what your student’s insurance needs will be and make sure they have the right coverage,” said Virginia Insurance Commissioner Scott A. White. “Protect yourself and your family by reviewing insurance coverage for your student’s health, auto, living space and belongings and make sure they understand the coverage.”
The Bureau offers the following insurance considerations for parents and students:
College students have several options for getting health insurance. Under the federal Affordable Care Act (ACA), students may stay on their parents’ health insurance until age 26. If your student remains on your health insurance policy, make sure he or she has a copy of all insurance cards and understands what services are covered and how to obtain referrals, if necessary, before seeking treatment. Under some health insurance policies, your student would need to find a physician or hospital within the carrier’s provider network – except for emergency care – or pay more out of pocket.
Students who do not have health insurance through a parent's policy, or who have limited coverage due to provider networks or service areas, may opt to purchase a student health insurance plan through their college or university. Students also can apply for a private health insurance plan through the health insurance marketplace at HealthCare.gov. Students may qualify for a Special Enrollment Period for health insurance at HealthCare.gov.
College students often take many valuable items with them to school including computers, printers, televisions, bicycles and mobile phones. Consider how much it would cost to replace everything in your student’s dorm or apartment should a theft or disaster occur.
For students who live in on-campus student housing, their parents’ homeowners or renters policy may cover their belongings if they are stolen or damaged. However, there may be limits to the amount of coverage provided for such items. Some items such as jewelry or expensive electronics may require special coverage. In the event of a loss, policy deductibles may also apply.
Students living off-campus should consider renters insurance, an inexpensive form of coverage that protects personal property and insures the tenant in case someone is injured while on their leased premises. Landlords’ policies generally only cover the structure, not the possessions of renters. Renters insurance premiums vary depending on the location and size of the rental unit and the value of your possessions.
Encourage your student that, no matter where he or she lives, it’s important to make a list of his or her belongings. An inventory will help you and your student determine how much insurance is needed and, if a loss occurs, the inventory can be used to file a claim. The National Association of Insurance Commissioners offers a free smartphone app that makes creating an inventory easy. Parents may also want to use this opportunity to update their own home inventory as well.
For students planning to take a car to school, parents should ask their insurance agent or company about coverage availability and rates for the city and state where the college is located before deciding whether to keep the student’s car on the family policy. Also, make sure you know that state’s minimum requirements for auto insurance coverage. Students who maintain good grades may be eligible for a good student discount on the vehicle’s insurance premium.
Students whose names are on the title for a car must purchase their own policy. However, they may be able to stay on their parents' policy if their parents own the vehicle they will use at school. Let your insurance agent know where the vehicle will be stored if the address is different from what is on the policy.
The Bureau of Insurance encourages parents and students to shop around and compare policy provisions and premiums. Read any insurance policy carefully and make sure you understand exactly what is covered, exclusions, deductibles and limits. If you have questions or concerns, contact your insurance agent or company.
For more information, contact the Bureau of Insurance toll-free at 1-877-310-6560 or in Richmond at 804-371-9741 or visit its website at scc.virginia.gov/pages/Insurance.
Contact: Katha Treanor, 804-371-9141
JUN 30, 2021
RICHMOND – Mutual funds and exchange traded funds (ETFs) are popular options for many investors who are saving for retirement and other financial goals. They often offer a cost-efficient way to invest in professionally managed portfolios of securities. As with any investment, however, investors should understand their benefits, risks and costs.
When comparing funds, investors should review each fund’s prospectus, shareholder reports and portfolio holdings and evaluate their overall risk/return profiles. Expense ratios also are an important consideration when reviewing funds since, over time, they may reduce a fund’s earnings. Investors can find a fund’s expense ratio on the brokerage company’s website, by searching for the fund’s ticker symbol or in the fund’s prospectus (under Shareholder Fees).
An expense ratio is a fund’s total annual operating expenses expressed as a percentage of its assets. For instance, a one percent expense ratio means that for every $1,000 you have invested, you'll pay $10 in expenses per year.
Mutual funds and ETFs charge shareholders an expense ratio – which is how they pass on a fund’s operating costs to their shareholders on an ongoing basis. The expense ratio reflects all recurring fees a fund charges, such as management fees, administrative fees and distribution or service fees.
Since operating expenses are deducted from a fund’s assets, the return to investors is reduced. Thus, investors should be aware of how operating expenses could impact their investment for any particular fund.
In addition to expense ratios, investors may pay other fees depending on which fund type they choose. Investors may also pay brokerage fees or fees to purchase or redeem shares of a fund (sales load). These are separate from the expense ratio.
Ron Thomas, director of the State Corporation Commission’s (SCC) Division of Securities and Retail Franchising, encourages investors in Virginia to always consider the total fees and expenses they will be charged in connection with any investment. “When investing, remember that all fees and expenses you pay reduce the return on your investment,” he said. “Make sure you consider a fund’s expense ratio as well as sales loads and any other fees when evaluating the overall cost of investing in that fund. Even small differences in fees and expenses can mean a big difference in your returns over time,” he said.
Thomas encourages Virginians to understand the basics of mutual funds and ETFs before investing in them, noting, however, that questions and inquiries regarding fees associated with mutual funds and ETFs should be directed to the United States Securities and Exchange Commission (SEC) as the SEC has authority over such matters. Still, as with any type of investment, he reminds investors to protect themselves financially by defining their objectives when investing, balancing risk versus reward, researching details about an investment, understanding all costs associated with buying, owning and selling that investment, and regularly monitoring their investments.
To learn more about expense ratios, visit the North American Securities Administrators website. For additional resources regarding securities and investing, or to find out if an investment or the person offering it are properly licensed or registered in Virginia, contact the Division of Securities and Retail Franchising in Richmond at 804-371-9051 or toll-free at 1-800-552-7945, or visit its website at scc.virginia.gov/pages/Consumer-Investments.
Contact: Katha Treanor, 804-371-9141
JUN 24, 2021
RICHMOND – Although the arrival of summer means sun, fun and travel for many, it can also mean increased risks. Among other things, these risks can include stolen luggage and other belongings; collisions on busy highways; illness while away from home; back yard pool and grilling mishaps, or misadventures on boats, jet skis, recreational vehicles (RVs) and all-terrain vehicles (ATVs).
The State Corporation Commission's (SCC) Bureau of Insurance reminds Virginians to make sure their summer to-do list includes checking with their insurance agent or company to ensure they have the appropriate insurance coverage in the event of an illness, theft or mishap.
“Whether you are traveling, boating, hosting a summer cookout or installing an underground pool, don’t let a lack of insurance coverage ruin your summer fun and put a strain on your wallet,” said Virginia Insurance Commissioner Scott A. White. “Anticipate summer hazards now and minimize their financial damage by ensuring your insurance coverage is adequate and up-to-date.”
Keep your home, vehicles, belongings and personal information safe, especially when away on vacation. Know how much your auto and homeowners insurance will cover if someone steals your belongings from your vehicle, home or yard. If you plan on hosting an event at your home (such as a yard sale or neighborhood cookout), know what type of insurance you need if a guest is injured or if there’s property damage. Know, too, your insurance coverages if severe summer weather damages your home and vehicles while you’re away. Also, understand any deductibles or coverage limits that may apply.
Whether you are at home or away this summer, update your home inventory. This will help to ensure your homeowners or renters policy provides enough coverage for your belongings. It can also help facilitate the claims process if damage or theft occurs. Separate coverage may be needed for high-cost items such as jewelry, art or electronics. The National Association of Insurance Commissioners' free smartphone app – myHome Scr.APP.book – makes creating a home inventory quick and easy. This app is available through iTunes and Google Play.
In the event of hurricanes or prolonged heavy rains, keep in mind that homeowners, renters and commercial insurance policies issued in Virginia typically do not provide coverage for damage to your home and belongings due to floods, surface water or storm surges. However, the federal government does sell insurance covering direct flood and flood-related damage to homeowners, renters and businesses in eligible communities through its National Flood Insurance Program (NFIP). In most cases, there is a 30-day waiting period for a new flood insurance policy to take effect. To learn more about this program, contact your insurance agent or the NFIP at 1-800-427-4661 or visit floodsmart.gov. Some private insurers offer flood policies, so check with your insurance agent about the availability of a private flood insurance policy. In either case, ask whether your flood policy provides coverage for your personal property.
If you are planning a summer trip, become familiar with your health insurance coverage in case you are injured or get sick and require medical treatment in an urgent care facility or hospital while traveling out-of-state or abroad. Bring health insurance information with you on your trip, such as identification cards and contact details for all family members.
If you’re driving a long distance for vacation or to visit friends and family, make sure your auto insurance policy meets your specific needs before you leave. Check your liability limits to ensure adequate protection against personal injury or property damage arising from an accident while travelling. Keep your insurance company's contact information and a copy of your insurance card with you when you drive and know what to do if an accident occurs.
It you plan on boating or jet skiing, exploring with RVs or ATVs, or hosting a yard sale or pool party, ask your insurance company or agent if you are adequately covered.
For information about a variety of insurance-related topics, contact the Virginia Bureau of Insurance in Richmond at (804) 371-9741 or toll-free at 1-877-310-6560 or visit its website at scc.virginia.gov/pages/Insurance.
Contact: Katha Treanor, 804-371-9141
JUN 15, 2021
RICHMOND – Each year, seniors lose significant amounts of money due to financial exploitation. Many cases of financial abuse are never reported, which can happen when seniors or those helping them don’t recognize the signs of financial abuse.
Financial abuse can take many forms. Identity theft; online and telemarketing scams; unauthorized use of checking accounts, debit and credit cards, and the abuse of legally granted powers for individual assistance are just a few examples. Perpetrators may be strangers, family members, trusted friends or caregivers, court-appointed guardians, financial professionals or others.
On World Elder Abuse Awareness Day (June 15), the State Corporation Commission reminds financial professionals and all Virginians to look for signs of elder financial abuse.
“Senior financial exploitation can happen anywhere, any time and to anyone,” said Ron Thomas, director of the State Corporation Commission’s Division of Securities and Retail Franchising (Securities Division). “Perpetrators often strike when seniors are most vulnerable such as during a health crisis or after the death of a loved one. For many seniors, social isolation and increased reliance on the internet for many daily activities only compound the problem.”
Thomas encourages Virginians to recognize the warning signs of senior financial exploitation and steps that can be taken to report such abuse. Some red flags that may signal financial abuse are as follows:
- Surrendering passwords and control of finances to a new or overly protective friend or caregiver;
- Unusual activity in bank or investment accounts, including large, frequent or unexplained withdrawals or transfers between accounts;
- Sudden changes to beneficiary designations or to legal or financial documents such as power of attorney, wills, trusts, retirement accounts or insurance policies, or suddenly missing documents;
- Unexplained financial activities, such as checks made out to cash or written as “gifts;” unusual loans, or disappearance of assets, valuables or securities;
- Fear of friends or family members, or a sudden change in feelings toward them;
- A lack of knowledge by a senior about their financial resources or their reluctance to discuss financial matters, and
- Suspicious signatures on checks or other documents.
Thomas urges Virginians who suspect they or a loved one are the victims of investment fraud or possible senior financial exploitation to contact the Division of Securities and Retail Franchising at 804-371-9051 in Richmond or toll-free at 1-800-552-7945, by email at SRF_General@scc.virginia.gov, or on its website at scc.virginia.gov/pages/Consumer-Investments.
The North American Securities Administrators Association (NASAA), of which the SCC Securities Division is a member, also has developed resources to help identify fraud and to provide information on how to report suspected elder financial abuse. These resources are available on NASAA’s “Serve Our Seniors” website at serveourseniors.org/about/investors/.
Contact: Katha Treanor, 804-371-9141
JUN 11, 2021
RICHMOND – Social media and online chatrooms allow today’s investors to connect more frequently with one another than ever before. While these resources make investing more accessible to greater numbers of people, they also pose significant risks to the Virginia investor community, especially novice investors, if not approached with caution. The State Corporation Commission (SCC) urges all Virginians to use caution when using online resources, including smartphone investing apps, to invest.
Danny Taylor, the chief of investigations for the SCC’s Division of Securities and Retail Franchising, notes that social media campaigns and online forums can be misleading. This is because investors on those platforms can influence the trading volatility of a stock by raising interest in a certain company.
“Reddit happens to be a very large platform for younger investors, as well as TikTok,” Taylor said. He added that investments related to the recent cryptocurrency surge are one of the biggest issues that his division is currently facing.
Investors who closely follow social media about trending investments could be at risk of making decisions before considering all of the important information about those investments. To address this problem, the North American Securities Administrators Association (NASAA) recently issued an investor awareness advisory to help investors avoid making emotional decisions that can negatively impact their long-term investing strategy:
- Resist the pressure created by social media chat platforms and buy/sell indicators influenced by social opinions. Do your homework on the sources making recommendations about an investment.
- Check the registration status of both a security’s promoter and the security itself before making any purchase.
- Make sure you fully understand how trading on margin and options work before undertaking such a strategy. Margin and options trading are generally riskier than simply buying or selling securities.
- Keep your long-term investment goals in mind before being pressured into any volatile investment.
The SCC’s Division of Securities and Retail Franchising offers a full list of resources that investors may use to keep themselves safe online.
For more information on securities regulation and registration in Virginia, contact the Division of Securities and Retail Franchising at 804-371-9051 in Richmond or toll-free at 1-800-552-7945. For more information, visit the Division’s website at scc.virginia.gov/pages/Consumer-Investments, or visit the North American Securities Administrators Association’s website at www.nasaa.org.
Contact: Ford Carson, 804-371-9141
MAY 28, 2021
RICHMOND – Although ocean-related weather is relatively quiet now, with only one named storm so far this year, the 2021 Atlantic hurricane season begins on June 1 and follows an active 2020 hurricane season that serves as a stark reminder of the need to plan ahead for hurricanes. After a record-breaking 2020 season with 30 named storms, 13 hurricanes, six major hurricanes and 12 storms that made landfall, forecasters are predicting another above average hurricane season for 2021. Although Virginia was spared the brunt of last year’s storms, certain areas of the Commonwealth felt them indirectly in the form of remnant rainfall and accompanying floods.
Hurricane season runs from June 1 through November 30 each year. The State Corporation Commission’s (SCC) Bureau of Insurance (Bureau) encourages Virginians to review their insurance policies now to make sure they have the coverage needed if a hurricane or other disaster strikes. Once the threat of a hurricane or other weather system arises, it may be difficult to find an insurance company willing to write related coverage until the storm passes.
“Tropical cyclones such as hurricanes are among the strongest and most destructive forces of nature. All it takes is one storm to change your life dramatically, so the time to plan is NOW, said Virginia Insurance Commissioner Scott A. White. White encourages Virginians to review their insurance policies as part of their disaster preparedness checklist. “Assess your risk and make sure you have the coverage you need to repair or replace your home and property if they are damaged or destroyed during a hurricane or other disaster. Contact your insurance agent or company or the Bureau of Insurance if you have questions,” he said.
Even areas hundreds of miles inland from the coast can experience floods and other damage caused by hurricanes’ high winds and torrential rains. In fact, most hurricane damage comes from flooding, not high winds. Even minor floods can cause extensive damage to your home, business or belongings.
Keep in mind that homeowners, renters and commercial insurance policies issued in Virginia typically do not provide coverage for damage to your home and belongings due to floods, surface water or storm surges. However, the federal government does sell insurance covering direct flood and flood-related damage to homeowners, renters and businesses in eligible communities through its National Flood Insurance Program (NFIP). In most cases, there is a 30-day waiting period for a new flood insurance policy to take effect. To learn more about this program, contact your insurance agent or the NFIP at 1-800-427-4661 or visit floodsmart.gov. Some private insurers offer their own flood policies, so check with your insurance agent about the availability of a private flood insurance policy. In either case, ask whether your flood policy provides coverage for your personal property.
Some homeowners insurance policies contain a special deductible for wind or hurricane losses. These deductibles are applied separately from any other deductible on the homeowners policy. Some insurance companies automatically include a wind or hurricane deductible, while others offer this deductible at the policyholder’s option. Wind or hurricane deductibles may be written as a flat amount, such as $1,000, or they may be applied to the loss as a percentage of the insurance coverage on the dwelling. Remember that the deductible is the amount that you are responsible for paying before the insurance company pays its portion of a claim.
As part of the preparation for any potential disaster, the Bureau encourages policyholders to prepare a complete inventory of their personal property including photographs, videotapes and serial numbers. The National Association of Insurance Commissioners’ free smartphone app – myHOME Scr.APP.book – can facilitate this process. If possible, keep your insurance policies and home inventory accessible in a safe, waterproof and fireproof place.
If your property is damaged by a hurricane, contact your insurance agent or company as soon as possible. Make necessary emergency repairs and take reasonable steps to prevent further damage to your property. Compile a list of all damage to your property and include photographs, notes and repair-related receipts. In the event you must evacuate, know the name of your insurance company and take your homeowners, auto and other insurance policies and your home inventory with you or make sure you have saved these important documents electronically. The policies will contain your policy numbers and the phone numbers of your insurance companies in case you have questions or need to file a claim.
The Bureau of Insurance offers free consumer guides for homeowners and commercial property owners with information about what to do when a disaster strikes. These and many other consumer insurance guides are available at scc.virginia.gov/pages/Insurance. The Bureau’s specially trained staff stand ready to assist consumers with their insurance-related questions and concerns. For more information, contact the Consumer Services Section of the Bureau’s Property and Casualty Division toll-free at 1-877-310-6560 or in Richmond at 804-371-9185. For additional emergency preparedness information relating to hurricanes and other types of disasters and hazards, visit vaemergency.gov.
Contact: Katha Treanor, 804-371-9141
APR 28, 2021
RICHMOND – More Virginians who buy health insurance through HealthCare.gov (the Marketplace) may now qualify for financial help with those premiums. Virginians who already receive financial help could be eligible for additional savings on health insurance coverage following Congress’ passage of the American Rescue Plan of 2021 (ARP).
According to the U.S. Department of Health and Human Services, approximately 77,000 uninsured Virginians are newly eligible for tax credits that reduce the cost of their health insurance premiums. An estimated four out of five enrollees may be able to find a plan for $10 or less per month with these tax credits. A family of four with household income of $90,000 could see premiums reduced by approximately $200 per month.
Following a Special Enrollment Period that began earlier this year, enrollment is now open through August 15 – no qualifying life event is necessary. If you already are covered through the Marketplace, you will need to re-enroll to take advantage of the new savings.
In Virginia, if you change from a health insurance plan not offered through the Marketplace to the same plan issued through the Marketplace, your cost-share accumulations – money you have paid out of pocket for medical services during the plan year – will transfer. Also, in Virginia, you can change to any Marketplace plan under the same insurer and your cost-share accumulations will transfer as long as the policyholder remains the same. It is important to understand, however, that when changing to a plan offered by a different insurer, your cost-share accumulations will not transfer.
“Whether you are uninsured, underinsured or looking for more savings on your health insurance, now is a great time for Virginians to review their health insurance coverage,” said Victoria Savoy, director of the Virginia Health Benefit Exchange. “The Special Enrollment Period and the American Rescue Plan offer an opportunity to save money on your health insurance premiums, increase your coverage, and sometimes both.”
NEW under ARP:
- Many Virginians now qualify for help paying for health coverage, even if they were not eligible in the past. The previous cap of 400 percent of the federal poverty level to receive premium tax credits has been removed. Premium savings are now available that cap the cost of the benchmark plan premium at 8.5 percent of household income.
- Most people currently enrolled in a Marketplace plan qualify for additional savings.
- Any excess 2020 tax credits owed back under reconciliation are now forgiven. This relief may affect how you complete your 2020 tax return. The IRS issued a news release outlining this relief on April 9. Visit www.irs.gov/newsroom/news-releases-for-current-month to review the release entitled, “IRS suspends requirement to repay excess advance payments of the 2020 Premium Tax Credit; those claiming net Premium Tax Credit must file Form 8962.”
- Consumers eligible for unemployment insurance benefits for as little as one week in 2021 may be eligible for $0 premium coverage with a low or no deductible. Visit Healthcare.gov to shop for coverage.
- Consumers who lost their job or had hours reduced may be eligible for free COBRA benefits from April 1-September 30, 2021. If qualified, your employer should provide information by May 30, 2021.
To enroll, update or change health insurance plans during the 2021 Special Enrollment Period, visit Healthcare.gov through August 15. Current enrollees must update their account to take immediate advantage of available savings. To do that, they must log in, review their application, make any necessary changes to their information, and submit their application to receive an updated eligibility determination before continuing to enroll.
Virginians who are new to the Marketplace and want to take advantage of these cost savings should visit Healthcare.gov or call 1-800-318-2596 (TTY: 1-855-889-4325). Coverage begins on the first day of the month after a plan is selected. For example, coverage will start June 1, 2021, for plans selected in May.
Virginia-based navigators are available, at no charge, to help consumers shop for and enroll in health care coverage. Visit coverva.org/en/find-help-in-your-area for local help.
For additional information about shopping for health insurance, visit the State Corporation Commission’s (SCC) Bureau of Insurance website at Shopping for Health Insurance in Virginia. To learn more about the Special Enrollment Period, visit the SCC’s Health Benefit Exchange website at scc.virginia.gov/pages/Details-for-Consumers.
Contact: Katha Treanor, 804-371-9141
MAR 24, 2021
RICHMOND – For Virginians enrolled in a high-deductible health insurance plan (HDHP), the State Corporation Commission’s Bureau of Insurance (Bureau) encourages residents to understand the potential benefits of opening a health savings account (HSA).
Similar to a flexible spending account (FSA), an HSA allows you (or your employer) to set aside money annually on a pre-tax basis to pay for qualified medical expenses upon enrollment in an eligible HDHP. The funds in an HSA also may be used to pay deductibles, copayments, coinsurance and other qualified health-related expenses other than premiums. Currently, consumers can contribute annually a maximum of $3,600 (individuals) or $7,200 (families) into an HSA.
HSAs are designed specifically to use with HDHPs and can be helpful since HDHPs often have both higher annual deductibles and out-of-pocket maximum limits than other types of health plans. Consumers should understand, however, that HSAs are not available for all HDHPs – which must meet minimum deductible amounts and annual out-of-pocket limits to qualify for use with an HSA. For 2021, an HDHP that qualifies for an HSA must have a deductible of at least $1,400 for an individual or $2,800 for a family. Additionally, consumers should understand that HSAs have maximum limits on annual payments. Currently, HSAs limit yearly out-of-pocket expenses (including deductibles, copayments and coinsurance) to $7,000 for an individual and $14,000 for a family for in-network services.
“HSAs may offer individuals more control over their healthcare dollars and an opportunity to lower their healthcare costs by providing an incentive for them to become more cost-conscious when utilizing medical services,” said Virginia Insurance Commissioner Scott A. White. “HSAs allow individuals to pay for current health expenses and save for future qualified medical expenses on a pre-tax basis. However, it’s important to understand exactly how they work,” he said.
If you are considering an HSA, the Bureau encourages you to keep several important things in mind. First, HSAs are used only with high-deductible plans – and not all high-deductible plans are eligible for HSAs. Check with your health insurer to determine eligibility. Additionally, if shopping for insurance plans on the Affordable Care Act (ACA) marketplace, check to see if a high-deductible plan is HSA-eligible.
Second, health savings accounts (unlike FSAs) are owned individually. This means that, if you change jobs or insurance plans, your funds remain in your HSA. Unspent money in an HSA rolls over from one year to the next, so it can be used for future medical expenses. Additionally, if you enroll later in a health plan that is not HSA-eligible, you will not be able to make additional contributions to your HSA; however, any existing funds in your HSA can be used for qualified medical expenses.
Third, since you own the funds in an HSA, you may withdraw money from your HSA for items other than qualified medical expenses. Consumers, however, should be aware that such withdrawals are subject to income taxation, as well as an additional 20 percent penalty tax if you are under 65 years old.
Fourth, although an HSA looks similar to an FSA, they are not the same. FSAs also allow individuals to contribute pre-tax money for qualified medical expenses, but are owned by the employer, are not as flexible as an HSA, and have smaller annual contribution limits ($2,750 in 2021). Additionally, account funds in an FSA must be used within a single year or grace period.
Finally, the Bureau encourages consumers to keep a record of healthcare transactions, including receipts for medical expenses paid with HSA funds. These receipts may help establish that your withdrawals were used for qualified medical expenses.
For questions about HDHPs used with HSAs, contact your insurance company or agent or the Bureau’s Life and Health Division toll-free at 1-877-310-6560 or in Richmond at 804-371-9691. For consumer guides and other information about a variety of insurance-related topics, visit the Bureau’s website at www.scc.virginia.gov/pages/insurance
Contact: Katha Treanor, 804-371-9141
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