“God, help us remember that the jerk who cut us off in traffic last night is a single mother who worked nine hours that day and is rushing home to cook dinner, help with homework, do the laundry and spend a few precious moments with her children.

“Help us to remember that the pierced, tattooed, disinterested young man who can’t make change correctly is a worried 19-year-old college student, balancing his apprehension over final exams with his fear of not getting his student loans for next semester.

“Remind us, Lord, that the scary-looking bum, begging for money in the same spot every day (who really ought to get a job!) is a slave to addictions that we can only imagine in our worst nightmares …

“Help us to remember that the old couple walking annoyingly slow through the store aisles and blocking our shopping progress are savoring this moment, knowing that, based on the biopsy report she got back last week, this will be the last year that they go shopping together.

“Father, remind us each day that, of all the gifts you give us, the greatest gift is love. It is not enough to share that love with those we hold dear. Open our hearts not to just those who are close to us, but to all humanity. Let us be slow to judge and quick to forgive, show patience, empathy and love. ”

Amen.

Best to you. May your season be truly bright.

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

I’m writing this on the “First Day of Christmas” (12 days before the 25th– or do the “12 days of Christmas” start on Christmas? Ah well…it’s the holidays.), and I’ll tell you what–this past weekend, I got a dose of what the holidays are *really* about…

Shopping.

I say this, with a good helping of eye-rolling. Whichever faith tradition you hold dear, it’s likely to have become extremely commoditized and “shopping-ified” (look, I’m an financial planner–not a word smith) around this time of year.

And we all complain about it, reliably, loudly and regularly–yet there we are at JCPenney, stocking up on plastic toys and off-brand cologne, all to “celebrate” the holiday. (And that’s a taste of my weekend, by the way…and I’m tired!).

Now, far be it from me to decry the operation of a healthy economy, but may I make a humble suggestion? Regardless of your tax-deduction needs, consider making GIVING a large part of your holiday plans.

In fact, I was a bit provoked to write more about this topic by the comment of a neighbor, so read on for some strong words about *why* you should be giving, and doing it now…

Thomas Marshall’s
“Real World” Personal Strategy
Six Reasons You Should Be Giving To Non-Profits, NOW

I was at a holiday party recently, and as often is the case, when I tell someone my profession this time of year, I got cornered for tax tips.

That happens often, but what doesn’t happen often is when I mention giving to charity, my listener gets angry and provoked and launches into a diatribe about why charities are terrible investments, etc. etc., ad infinitum.

I was too interested in avoiding an argument with this gentleman, so instead of saying this, I thought it (later, of course). Here’s what I WOULD have said to the Angry Scrooge, six reasons why you should be giving money to charity, right now–regardless of the impact the money will create…

1. Tax Rate Leapfrogging.
You can bump yourself into a whole different (lower) tax rate, at times, by reducing your taxable income. That’s one to consult with us about, if you wonder if you’re on the fence.

2. Your heart changes.
Studies show (http://www.livescience.com/health/080320-happiness-money.html) that when individuals spend money on gifts for friends or charitable organizations, their happiness increases — while those who spend on themselves get no such boost. Even Scrooge can agree that everyone wins.

3. You can double your money without doing any work.
Instead of simply sending off your money, why not find out if anyone is offering to match? Sites like www.DonationDoubler.org have lists of companies that will match your charitable contribution. Find one you like and suddenly you contribution goes twice as far!

4. You’re just going to blow it on something dumb anyway.
As pious as you are, there’s still extra money in your budget somewhere. Create a budget for charity donations, then take some of your extra money (each month or each year) and donate it to charity. Use your spending money to make a difference instead of spending it on Brookstone junk you’ll use once. And if you think you don’t have enough, take that extra 2% you’ll be earning next year and put that toward a charity fund. For someone making $30,000, that’s about $500!

5. Face it: If you don’t help now, you never will.
Don’t pretend that instead of giving money, you’re going to donate time. When was the last time you volunteered at a soup kitchen? Don’t let your mind fall for this trick. Send the money now or you’ll end up giving nothing.

6. Be a leader, not a follower.
This is the biggie, in my opinion. There’s just something that happens in your psyche when you cut a big (or relatively big) check to someone in need, or to a charity organization. You feel more powerful–more dynamic. You signal to your own unconscious: “Money doesn’t rule me. I have more than enough, so much more than enough that I’m giving it away.” Then, of course, something special often happens: more money seems to find itself in your hands.

I’m not advocating a mystical pay-it-forward scheme; I’m simply making the observation over years of being a student of how money “works”. And, it just seems to find itself in the hands of those who give it away.

So–was any of this convincing? Did it help you see things in a new light? Let me know…

And remember– I’m in your corner!

www.myverpa.com

Health care reform is beginning to take effect, but little attention has been paid to the effect on prescription drugs. The law spells out new benefits and regulations affecting the whole pharmacy arena. Prescription drug changes will be phased in between now and 2020, many starting within the next 12 months.
Some of the more significant changes, such as in Medicaid and Medicare, may shift costs to patients, employers and health plans. Many of the significant changes in the prescription drug field will be starting in this year:
• Medicare Part D coverage gap rebate checks go out. One of the first steps to gradually eliminating the coverage gap, or the doughnut hole, in Medicare Part D benefits will be to give Medicare patients whose drug costs reach the coverage gap in 2010 a one-time $250 rebate check from the Centers for Medicare & Medicaid Services (CMS).
• Retiree drug tax exemption will be eliminated. The tax exemption to employers that receive the Retiree Drug Subsidy for providing prescription drug coverage for retirees eligible for Medicare has been eliminated. The actual change does not occur until 2013, but many companies are accounting for the liability now. Many large companies have already indicated they anticipate taking an earnings hit as a result of this change. As a result, companies may consider other ways of providing benefits or could even cut benefits to lessen the impact.
• Lifetime limits will be disallowed. By the end of September, health plans will not be allowed to put lifetime limits on the dollar amount of coverage provided to their members. This provision extends to prescription drug benefits.
• Federal upper limit changes begin. The federal upper limit on pharmacy reimbursement for multiple-source drugs has changed from 250 percent of the average manufacturer price (AMP) for the least-expensive therapeutically equivalent drug to 175 percent of the weighted average, as determined by the most recently reported monthly AMPs of multiple-source drugs available at pharmacies.
• The Early Retiree Reinsurance Program starts. This $5 billion fund helps employers defray the cost of their retiree health insurance. This temporary reinsurance program will reimburse 80 percent of claims between $15,000 and $90,000 for employer-sponsored retiree coverage of individuals 55-64 years old who are not active workers or eligible for Medicare. For employers to take full advantage of the program, they will have to merge their pharmacy and medical claims data, which is typically handled by two different vendors.

The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.

Employee benefits such as dental insurance did not get much attention during the health care reform debate, even though some consumers have difficulty affording them. In fact, one in four Americans under 65 lacks dental insurance, according to the National Center for Health Statistics.

It is not just employees who have difficulty paying for the coverage. Many employers are still struggling in this economy and need to trim expenses wherever possible. In some cases, rather than dropping the coverage, companies will offer voluntary benefits. That means employees pay all the costs but get lower rates through a group plan.

Another option that reduces costs for employers is the discount dental plan. Such plans feature a negotiated discounted rate for typical services such as dental exams, fillings, crowns, root canals and cleanings with participating dentists. Discount dental plans allow savings in the range of 10 percent to 60 percent. Discounts for specialty care such as orthodontia or cosmetic dental procedures range from 15 percent to 20 percent.

That helps employees keep benefits, but total costs still fall to workers. Some employers that want to provide coverage and cut costs can split the difference with a hybrid plan. Hybrid dental plans combine the advantages of a discount plan with the flexibility of a traditional plan. Discounts are extended to members who receive care from an in-network dental provider at negotiated fees once insured benefits have been exhausted, or for adult orthodontia or cosmetic care, which may not be covered by the insured portion. The discount dental plan provides access to care at a reduced fee.

Premiums are often half the cost of a typical insured plan. In addition, the insurance company may not find it necessary to impose the typical annual plan maximum benefit of $1,000 to $2,000.

The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.

The health-care reform legislation has many consequences, but one that has not received much attention is a new calorie-labeling requirement for restaurants and even vending machines.

The law would require restaurants with 20 or more establishments to post the calorie counts on menu boards and next to each item in vending machines. The information will be similar to the information on food products bought at the supermarket. Restaurants were previously exempted from that law.

Some argue this is a key part of controlling obesity, because people are eating out more these days and are uncertain about how many calories they are consuming. In fact, the Center for Science in the Public Interest (CSPI) said children eat twice as many calories at restaurants than at home.

People might be shocked by some of the numbers. Consumers might not be surprised to find out the Guacamole Bacon Six Dollar Burger at Carl Jr.’s is 1,117 calories (more than half the calories a person should have in a day). But they might be shocked to learn that the double beef taco salad with dressing that they might have had at the Steak ‘n Shake has 1,051 calories.

Research shows people are not very good at judging calories on their own. A Cornell University study found that people make nearly 20 times more daily decisions about food than they are aware of — an average of around 250 each day.

Portion control is another practice the calorie information can encourage. At McDonald’s, for example, a small order of french fries is 210 calories. But supersize that and it’s 610 calories. Consumers might also be misled by the fixings. At Steak ‘n Shake, a junior order of fries is a mere 166 calories. But go for the chili cheese fries and you have consumed a whopping 1,279 calories.

In other words, the calorie labeling is sure to add a whole new dimension to the question, “Do you want fries with that?”

One of the key parts of health care reform was the establishment of health insurance exchanges, which states would have to set up by 2014, the year in which most of the law’s provisions go into effect.

The exchange is intended to create a more organized and competitive market by establishing standard levels of health insurance plans – labeled platinum, gold, silver and bronze – according to federal rules. With plans offering required benefits, they could be compared with each other. An exchange is supposed to encourage lower prices through retail competition and make it easier for individuals and small groups to shop for insurance. It also makes the coverage portable, because a policy sold through the exchange would not be tied to employment.

Those who can shop in the exchanges are:

• Workers at companies with fewer than 100 employees
• Workers at companies that do not provide health insurance
• People who are self-employed
• People who are unemployed
• Retirees who are not eligible for Medicare.
• Small businesses
• Medium-size and large businesses, after 2017

Exchanges are required to make certain that policies are “in the interest” of buyers. The exchanges cannot set premiums, but they can reject plans if companies cannot successfully justify rate increases. By 2014, companies will not be able to discriminate against those with pre-existing conditions.

If a state opts out entirely, the federal government would be able to set up an exchange.

The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.

With the clamor about the health care reform law, one of its most significant provisions has not had much attention. The Community Living Assistance Services and Supports (CLASS) Act establishes a new, public long-term care (LTC) insurance program.

The bill will not assist with Americans’ long-term care needs immediately because it requires people to pay into the system for five years before receiving benefits. Much is still being hammered out in the implementation of the new program but many expect that the system will not be put into place until 2013. That means benefits would not be paid out until 2018.

It is a voluntary program in which participants can have the monthly premium deducted from their paychecks. The premiums, which would be determined annually by the U.S. Health and Human Services Secretary, have been estimated to be anywhere from $65 to $240 a month. Participants would be able to receive from $50 to $75 a day to meet LTC needs such as bathing, dressing, getting in and out of bed and using a toilet (for those who become disabled). Recipients would be able to use the money for care in the home or at a facility.

Although some in the insurance industry have praised the legislation for bringing attention to the issue of long-term care, they also say the program could be counterproductive. That’s because the benefit is less than daily care costs now, which are hundreds of dollars. People might not buy private LTC insurance because they believe they will be covered by the government program – only to find the payout is inadequate when they need it most.

Proponents of the plan say the payment is not meant to cover all of a person’s LTC needs, but will help relieve the burden. For example, it would allow people to hire help for part of a day, allowing a disabled person to remain at home.

The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.

Richmond, Virginia (Thomas P. Marshall) – Amid the debate about health care reform, some employers are already taking steps to control costs and at the same time improve productivity with wellness programs.

The idea is in the Senate version of the health care reform bill, and some people have criticized it because they say it penalizes people for lifestyle choices. Generally speaking, the programs would set certain goals, such as cutting smoking, dropping weight and reducing high cholesterol, and tie them to reductions in health care premiums. Some programs even offer a cash reward.

And what has some critics concerned is that some programs charge penalties if people do not meet the criteria. The Senate bill would allow insurers to penalize subscribers at a higher rate, even thousands of dollars, for not meeting the wellness targets. The idea has support among Democrats and Republicans, who have been proposing a version of this for the past few years.

But, controversy aside, it is clear that more companies and other entities are interested in the programs for controlling costs and boosting morale.

At Florida Health Care Plans, 93 percent of the employees qualify for wellness benefits, according to The Daytona Beach News-Journal. The insurer pays 80 percent of Weight Watchers dues, access fees to area gyms and 100 percent of any health care premium increases for eligible employees, who are nonsmokers with a body mass index less than 27.5.

Hudson Technologies, a company covered by the insurer, said between 75 and 80 percent qualify for the company to pay an extra 10 percent of employees’ health care premiums. The company’s program started slowly, with one success at a time.

“One person’s success just snowballs,” said Pam Price, Hudson’s human resources director. The company found absenteeism dropped substantially and has noticed that employees are more engaged.

Roy Braddy, Hudson’s director of supply chain management, used to be a 325-pound smoker of up to two Marlboro packs a day, the newspaper reported. He was able to get rid of blood pressure medicine, inhalers and the breathing machine he needed just to be able to sleep.

“To be rid of that shame (of being overweight) is so liberating,” he said. “It brings out a new part of your personality and it’s really cool.”

The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.

Visit www.myverpa.com for more information

Starting this year, thanks to a provision in the Pension Protection Act (PPA), qualified payouts from annuities with a tax-qualified long-term care insurance (LTCi) rider are now income-tax-free. The new tax treatment of these combination or hybrid products has been hailed as one of the most significant events affecting the insurance industry in years.

The new rule dramatically enhances the value of LTCi. For instance, a hybrid annuity contract purchased in 2010 for $100,000 grows to $250,000 over the years. If the insured requires qualified long-term care, he or she can withdraw the entire $250,000 without paying income tax on it. Another provision under the PPA says the $150,000 gain on the original value can be tax-free as well. If the insured needs only a small amount to cover qualified long-term care, the fund will be taken from the principal rather than from any gains.

The favorable tax treatment applies to payments from reimbursement contracts where insureds submit claims and are paid for qualified LTC benefit expenses incurred. These payouts are totally income-tax-free.

For contracts where carriers pay a fixed daily or monthly benefit regardless of the expenditures actually incurred, the Internal Revenue Code stipulates a per diem rate or other periodic basis. For 2010 the limit on the exclusion for payments made is $290 per day. So an insured could collect payouts of $8,700 monthly (assuming a 30-day month) tax-free. Any amount above that is taxable.

People who already own annuities or life insurance can use the 1035 exchange to acquire a hybrid annuity with an LTCi rider without paying any taxes. Basically, the insured switches from a tax-deferred to a tax-free vehicle when funds are used to pay for LTC expenses.

For instance, an annuity holder exchanges an existing variable annuity originally purchased for $100,000 that now has a value of $400,000 for a combo product with a rider that adds $200,000 of LTC protection. All portions of gain paid out from the hybrid contract to reimburse LTC expenses will be income-tax-free.

It is important to note that any existing policy with a death benefit or income guarantee will be forfeited in such an exchange. Any surrender penalty that applies should also be taken into consideration.

www.myverpa.com

The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.

There’s more to coffee than just perking up your energy level. New medical studies suggest that drinking coffee can help reduce the risk of developing diabetes, prostate and liver cancer, and Parkinson’s disease.

Drinking more than three or four cups of coffee, regular or decaffeinated, helps reduce the risk of getting Type 2 diabetes by as much as 36 percent, while every additional cup of coffee consumed each day could reduce the risk of diabetes by 7 percent, a study published in the Archives of Internal Medicine revealed.

Meanwhile, men who drink six or more cups of coffee every day, regular or decaf, have a 60 percent lower chance of advanced or lethal prostate cancer than those who don’t drink coffee, according to separate studies affiliated with the Harvard School of Public Health – this despite the findings that men who drink large amounts of coffee are also more likely to smoke, exercise less, and be overweight. These are factors known to increase the risk of prostate cancer.

Drinking one to two cups a day of the beverage reduced the risk of liver cancer, and drinking up to four cups increased coffee’s protective benefit, a Japanese study concluded. Other medical research links coffee to providing protection against Parkinson’s disease, the Mayo Clinic reported.

Researchers believe it’s the antioxidants known as polyphenols that are behind the benefits. A cup of coffee contains a higher level of polyphenols than do green tea, herbal teas and cocoa. The average adult consumes 1,299 milligrams of antioxidants from coffee every day, making it the biggest source of those precious natural chemicals in the diet.

However, doctors say these studies do not suggest that you drink coffee by the gallon. Too much of it can make you jittery, keep you awake at night, cause headaches and elevate cholesterol levels. Also, sugar and cream add extra calories. Coffee may be good for the body, but people still need regular exercise and a healthy diet.

The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.