On April 29, 2022, the IRS released Revenue Procedure 2022-24 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2023. The IRS is required to publish these limits by June 1 of each year.
These limits include:
- The maximum HSA contribution limit;
- The minimum deductible amount for HDHPs; and
- The maximum out-of-pocket expense limit for HDHPs.
These limits vary based on whether an individual has self-only or family coverage under an HDHP.
Eligible individuals with self-only HDHP coverage will be able to contribute $3,850 to their HSAs for 2023, up from $3,650 for 2022. Eligible individuals with family HDHP coverage will be able to contribute $7,750 to their HSAs for 2023, up from $7,300 for 2022. Individuals age 55 or older may make an additional $1,000 “catch-up” contribution to their HSAs.
The minimum deductible amount for HDHPs increases to $1,500 for self-only coverage and $3,000 for family coverage for 2023 (up from $1,400 for self-only coverage and $2,800 for family coverage for 2022). The HDHP maximum out-of-pocket expense limit increases to $7,500 for self-only coverage and $15,000 for family coverage for 2023 (up from $7,050 for self-only coverage and $14,100 for family coverage for 2022).
Action Steps
Employers that sponsor HDHPs should review their plan’s cost-sharing limits (minimum deductibles and maximum out-of-pocket expense limit) when preparing for the plan year beginning in 2023. Also, employers that allow employees to make pre-tax HSA contributions should update their plan communications for the increased contribution limits.
HSA/HDHP Limits
The following chart shows the HSA and HDHP limits for 2023 as compared to 2022. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.
Elizabeth Flores is a Client Executive at Gulfshore Insurance and a trusted advisor to organizations in developing competitive, cost-effective benefit plan solutions that set employers apart from their competitors. She works with CFO’s and HR Directors to develop strategic plans that will achieve desired outcomes for their benefits programs. Comments and questions are welcome at eflores@gulfshoreinsurance.com
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in employee benefits insurance including group medical, dental, vision, life insurance, short and long term disability, voluntary life, employee assistance programs, wellness programs, individual life insurance, and more. Our insurance and risk management advisors are experts can provide valuable services including benefits plan design and administration, human resources support, funding options, compliance assistance, benefit administration, and enrollment services. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
On April 12, 2022, OSHA launched its National Emphasis Program (NEP) for protecting workers from heat hazards in indoor and outdoor workplaces. Through the program, OSHA will conduct heat-related workplace inspections before workers suffer preventable injuries, illnesses or fatalities. The NEP is effective on April 8, 2022, and will remain in effect for three years unless canceled or extended by a superseding directive.
NEP Background
The NEP establishes heat priority days when the heat index is expected to be 80 degrees Fahrenheit or higher. On those priority days, OSHA will:
- Initiate compliance assistance in the targeted high-risk industries; and
- Continue to investigate any alleged heat-related fatality/catastrophe, complaint or referral regardless of whether the worksite falls within a targeted NEP industry.
The NEP encourages employers to protect their workers from heat hazards during heat priority days by providing them with access to water, rest, shade, adequate training and acclimatization procedures for new or returning employees.
High-risk Industries (Appendix A)
The NEP targets over 70 industries that present a high risk for heat hazards. OSHA identified these industries based on Bureau of Labor Statistics and OSHA report data, which finds that high-risk industries exhibit the following:
- High numbers or incidence rates of heat-related illnesses;
- An elevated number of days away from work or high numbers of severe cases of heat-related illnesses;
- The highest number of heat-related general duty clause violations and hazard alert letters over a five-year period; or
- The highest number of OSHA heat inspections since 2017.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
Of all businesses that close down following a disaster, more than 25 percent never open their doors again. While there’s no way to lower the risk of a natural disaster from hurricanes, there are critical measures that can be taken to protect your company’s bottom line from nature’s fury. A disaster plan and adequate insurance are keys to recovery.
Disaster Recovery Plan
No matter how small or large a business, a business impact analysis should be developed to identify what an operation must do to protect itself in the face of a natural disaster. Large corporations often hire risk managers to handle this task and some companies hire consultants with expertise in disaster planning and recovery to assist them with their plans. But small businesses can do the analysis and planning on their own using these strategies:
- Set up an emergency response plan and train employees how to carry it out. Make sure employees know who to notify about the disaster and what measures to take to ensure safety and limit property losses.
- Write out each step of the plan and assign responsibilities to employees in clear and simple language. Practice the procedures set out in the emergency response plan with regular, scheduled drills.
- Consider the things you may initially need during the emergency. Do you need a back-up source of power? Do you have a back-up communications system?
- Decide on a communications strategy to prevent loss of customers. Post notices outside your premises; contact clients by phone, email or regular mail; and place a notice in local newspapers.
- Protect employees and customers from injury on the premises. Consider the possible impact a disaster will have on your employees’ ability to return to work and how customers can return to your premises, or receive goods or services.
- Compile a list of important phone numbers and addresses. Make sure you can get in touch with key people after the disaster. The list should include local and state emergency management agencies, major clients, contractors, suppliers, realtors, financial institutions, insurance agents and insurance company claim representatives.
- Keep duplicate records. Back-up computerized data files regularly and store them off-premises. Keep copies of important records and documents in a safe deposit box and make sure they’re up to date.
- Even if your business escapes a disaster, there is still a risk that the business could suffer significant losses due to the inability of suppliers to deliver goods or services, or because of a reduction in customers. Businesses should communicate with their suppliers and markets (especially if they are selling to a business as a supplier) about their disaster preparedness and recovery plans, so that everyone is prepared.
- Protect your building. If you own the structure that houses your business, integrate disaster protection for the building as well as the contents into your plan. Consider the financial impact if your business shuts down as a result of a disaster. What would be the impact for a day, a week or an entire revenue period?
- Identify critical business activities and the resources needed to support them. If you cannot afford to shut down your operations, even temporarily, determine what you require to run the business at another location.
- Find alternative facilities, equipment and supplies, and locate qualified contractors. Consider a reciprocity agreement with another business. Try to get an advance commitment from at least one contractor to respond to your needs.
- Protect computer systems and data. Data storage firms offer off-site backups of computer data that can be updated regularly via high-speed modem or through the Internet.
Review Your Insurance Plan
Make sure you have sufficient coverage to pay for the indirect costs of the disaster—the disruption to your business—as well as the cost of repair or rebuilding. Most policies do not cover flood or earthquake damage and you may need to buy separate insurance for these perils. Be sure you understand your policy deductibles and limits.
For a business, the costs of a disaster can extend beyond the physical damage to the premises, equipment, furniture and other business property. There’s the potential loss of income while the premises are unusable. Your disaster recovery should include a detailed review of your insurance policies to ensure there are no gaps in coverage. This includes property insurance, business interruption insurance and extra expense insurance. Even if your basic policy covers expenses and loss of net business income, it may not cover income interruptions due to damage that occurs away from your premises—such as to your key customer or supplier or to your utility company. You can generally buy this additional coverage and add it to your existing policy.
Most business owners are complacent about natural disasters until it happens to them. It’s only when the owner has gone through a disaster that a disaster plan, including purchasing the proper insurance, is usually considered.
Don’t let a lack of insurance coverage or poor planning destroy your business. Contact Gulfshore Insurance to learn more about disaster planning and to determine your best insurance coverage needs.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
June 1st marks the start of the Atlantic hurricane season. While we anxiously await what’s in store for the 2022 season, let’s look back at the top 10 lessons learned from years past:
1. Understand Hurricane & Wind Deductibles – Often, one of the most frequently misunderstood policy provisions of property insurance policies is the wind deductible. Make sure your deductible is applied per structure, not per total insurable value. Know how the percentage is calculated and know that the percentage deductible changes when the insurable value changes. Here are five things every condominium association must understand about their hurricane deductible.
2. Know Your Coverage – Some of the most common questions we receive concern coverage, and whether the association or unit owner is responsible. The master policy must cover all portions of the condo property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications. Coverage for the following is excluded: floor coverings, wall coverings, ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments. However, drywall, doors, windows, baseboards and shutters may be the maintenance responsibility of the unit owner, but they are the primary insurance responsibility of the association. Even if the condo bylaws or documents state that drywall, windows, shutters, etc. are the primary responsibility of the unit owner, Florida statute 718.111 dictates otherwise. This helpful checklist highlights what’s covered and what’s not.
3. Know Your Exclusions – It is important to understand that insurance policies may have specific exclusions and conditions for each type of coverage. A property insurance policy exclusion is a provision contained within your policy language that explicitly declares that certain types of loss will not be covered by your policy. Essentially, the “exclusions” contained within your policy are the exceptions to the general statement of property insurance coverage. Of course, property insurance policies vary considerably. So, there may be many different types of loss that are excluded within your specific policy. Some examples of losses that are frequently subject to policy exclusions in Florida include wind driven rain, landscaping, and debris removal.
4. Evaluate the Need for Excess Flood Insurance – Experiencing a flood can be overwhelming for condo associations because they must deal with a wide range of damage—from property to common area to individual units—and multiple owners. All residents that live in special flood hazard areas are typically required to purchase flood insurance as a stipulation of their mortgage. However, sometimes this coverage is not enough. If it would cost more to rebuild or replace the property than the National Flood Insurance Program (NFIP) provides, an excess flood policy is encouraged. As hurricanes have shown, storm surge can completely level and destroy homes. So, what can you do to get excess flood coverage?
5. Evaluate Need to Levy Special Assessment – When Hurricane Irma hit our area, there was some very heavy cleanup and repair costs for many condominiums and neighborhoods. Of course, none of those unexpected costs were in the association’s budget for the year. So, how do associations pay for this type of damage and the associated repair bills? There are basically three ways to pay these bills: Borrow from the bank, raise the regular assessments in the following year’s budget, or levy special assessments. As most associations don’t want to pay bank interest unless necessary and they also don’t want to raise regular assessments that much year to year, the most chosen method is levying special assessments.
6. Consider a Line of Credit – We have seen several communities take out a line of credit with a lending institution to obtain the funds necessary to make any repairs suffered from Hurricane damage. The association has the right and duty to manage, maintain, and operate the common areas, and a loan is a proper way to meet this obligation under Florida law. Many banks will consider making a loan or extending a line of credit to your association as it is primarily secured and collateralized by the assessments paid by the unit owners, and thus it is a relatively safe loan for the lender.
7. Review Subcontractor Requirements – Following a disaster, there is typically a need to hire contractors to handle repairs. Hiring an unqualified contractor and potentially squandering your insurance proceeds exposes board members to potential personal liability. While accidents and claims cannot always be avoided, to some degree, risk can be contractually transferred to reduce the impact on costs associated with claims. It can all be confusing, but it is critical to ensure your association is transferring all third party risk and only retaining what is appropriate. Here is a list of recommendations to include in a subcontractor or vendor agreement that can be used to protect your association from the negligence of others.
8. Get Prepared Before the Next Hurricane – Two critical components to weather safety are to 1) prepare for the risks and 2) to act on those preparations when alerted by emergency officials. Our Hurricane Preparedness Guide is designed to assist Community Association Boards of Directors and Property Managers on how to be best prepared in the event of a serious storm or other disaster. Below are a few tips:
- Make sure to pre-contract with vendors each year and include details on how soon they will arrive after the “all-clear” is given.
- Pre-determine a remote office site.
- Use the association’s website, mobile app, and voicemail outgoing message to give information to residents.
- Publish a priority repair and reinstatement list, to inform residents of what will be restored first in the community.
- Create a Hurricane Preparation Resource Guide that includes:
- Useful contacts
- Resource Checklist
- To-Do list for when there is a Tropical Storm or Hurricane Warning
- To-Do list for when the Tropical Storm or Hurricane has passed
9. Ensure Adequate Reserves – What happens when an association encounters large or unexpected expenses as a result of a hurricane? Where does the association get the money to repair or replace these? At those times, the association’s reserve fund comes into play. Adding money to your Association’s reserves is a tough sell to members. However, the reality is that many associations (upward of 70%) are woefully undercapitalized. They can pay the day-to-day bills as long as nothing unexpected happens, but something always comes up. Continue reading…
10. Handling Claims in the Aftermath of a Disaster – Make sure you partner with an insurance agency that specializes in associations and has a robust claims and risk management division. It is critical to work with an agency that has experienced Claims Advocates that are also licensed claims adjusters who can assist you with potential claims. Further, ask your insurance agent to provide you with a copy of their agency’s disaster preparedness plan and details on how they’ll function and prioritize your association’s needs after the storm. This is especially important if the agency you partner with has never experienced the aftermath of a hurricane and post-disaster claims management. Learn more.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
Each year, we review market conditions and trends that may impact your insurance renewal premiums, providing you with an educated look at how they may impact your association’s budget. Below we break down what you can anticipate for the remainder of 2022, including current renewals.
Overview:
Since 2017, the United States has been the recipient of an unprecedented number of natural disasters, e.g., record number of named storms, historically impactful winter storm, rampant wildfires on the west coast etc., that have collectively caused more than $500 billion in insurable losses through 2021. Many of the property carriers that underwrite these exposures are the same carriers that underwrite associations in Florida. While some of these events may not have directly impacted Florida, all of them had a substantive impact on the interconnected property insurance market with respect to increasing reinsurance costs, carrier capacity issues, and high levels of underwriting selectively/discipline being applied.
Unfortunately, there are other issues impacting the market that are isolated to Florida. Simply stated, there is a litigation crisis in Florida. Hurricane Irma, to a large extent, was the catalyst for exposing this systemic problem. As an example, recently as last year, Florida only accounted for 8% of homeowners’ insurance claims filed across the country but was responsible for generating 76% of all lawsuits filed against insurance carriers. Shocking, right? It is related to a litigation system that has been heavily leveraged and taken advantage of by many. As a result, doing business in Florida as a property insurance carrier has become quite unprofitable. Many carriers that were traditionally relied upon to provide competitive options to associations have either pulled out of the market completely, heavily restricted what limited capacity they can deploy, or raised their rates substantially.
Another major unexpected variable that has adversely impacted the market is the collapse of Champlain Towers South in Surfside, Florida. As a result of this tragedy, underwriters are now intensely focused on building age, structural integrity, protective devices, updates, upgrades, construction, and proximity to the coast. For older structures, some carriers are requiring structural engineering reports in order to consider the risk. In addition to property carriers, some primary and excess casualty carriers are making these underwriting requests as well.
Mitigating the historically challenged Florida insurance market requires resolve in the state legislature to pass a sweeping set of reforms. Solving these insurance issues is no easy undertaking and will require expansive legislation. There were legislative proposals this session designed to address the insurance crisis along with reforms related to the condo collapse, but unfortunately, nothing was passed.
To combat this difficult market, associations should continue to take proactive measures to become a better overall risk. This includes focusing on building envelope integrity projects; maintaining buildings; conducting proactive risk management; having properties inspected; and obtaining structural engineering reports.
Even amidst these challenging market conditions, opportunities still exist. Association specialists at Gulfshore Insurance have been successfully protecting community associations throughout Florida for more than 50 years. As an Acrisure Agency Partner, we use our global leverage in the marketplace to secure additional markets on our clients’ behalf, and we have been successful in identifying the very best available combination of pricing, terms, and conditions for our clients despite these challenges in the marketplace.
Markets:
New carriers writing property including wind in Florida:
- Vantage Risk Specialty Insurance Co: AM Best A- XII, offering Property including Wind/Hail, subject to underwriting.
- RenaissanceRe Specialty US Ltd: AM Best A+ XV, offering Property including Wind/Hail, subject to underwriting subject to underwriting.
- Trisura Specialty Insurance Co: AM Best, offering Property Excluding Wind/Hail for Condos, including Wind/Hail for Homeowners Associations.
Carriers no longer writing new business in Florida:
- American Platinum
- Indian Harbor Insurance Co
Carriers in liquidation:
- American Capital Assurance Corp
- Avatar Property & Casualty
- Florida Specialty Insurance Co
- Guarantee Insurance Co
- Gulfstream Property & Casualty Insurance Co
- Sawgrass Mutual Insurance Co
- St Johns Insurance Co, Inc
- Sunshine State Insurance Co
- Windhaven Insurance Co
Renewals:
- Rates continue to increase. In general rates are up 15% to 30% on desirable accounts. 30%+ on challenged accounts.
- Some accounts are being non-renewed for various reasons (carrier, underwriting, losses, lack of updates, lack of carrier capacity).
- In general, carriers are limiting New Business offerings. Some markets are more inclined to renew a marginal account, as opposed to offering a new quote on a more desirable account.
- Capacity is limited and this will continue as we progress toward and through Hurricane Season.
- Layering Property is becoming necessary as opposed to carriers offering coverage for the Full Insurable Value.
- Many accounts renewing from Layered Programs require restructuring, as these same markets are either providing less capacity, or stopped writing in Florida altogether.
- Primary & Buffer layers are proving to be most difficult.
Property:
- Markets with capacity are not seeing expected returns for investors and are reducing the amount of limit for high hazard situations or exiting Florida altogether.
- Reconstruction costs are rising.
- Inflation, increased reconstruction costs, supply chain issues, and other economic variables are driving up Insurable Replacement Values at 10 to 20%.
- Accounts where the carrier determined the insured values are insufficient, can expect the carrier to internally adjust the limits of insurance, to a more satisfactory level.
- Accounts which carriers have determined to be undervalued should expect adjustments to Real Property limits. Some carriers do this internally, regardless of an appraisal.
- Additional restrictions of underwriting guidelines and terms may adversely affect clients in 2022.
- Unfortunately, property insurance reforms were among the bills that did not pass. Some industry leaders are asking the Governor for a Property Insurance Special Legislative Session.
- It is becoming increasingly more important for agents to clearly communicate post loss mitigation efforts, repairs, and updates to secure the required capacity for renewals.
Ancillary Products:
CGL/Primary Casualty:
- The primary casualty space is hardening. The tower collapse last year is affecting carriers desire to insure properties with a similar profiles (older, high rise, coastal).
- Philadelphia Indemnity has indicated they are non-renewing all accounts over four stories, built prior to 2000, and within one mile of the coast.
- Aspen Specialty is essentially non-renewing all habitational accounts.
- Rates are increasing 10 to 30% and, in some cases, accounts need to be rewritten with a different carrier.
- Markets that continue to underwrite in this space are applying more coverage exclusions, restrictions, and limitations with their offers.
Excess Casualty:
- Several markets have lost all of their capacity and are non-renewing all accounts.
- The remaining markets have tightened guidelines and are adding no-drop down provisions to their form.
- Older coastal, high-rise structures lacking sprinklers and/or updates are outside of most underwriting guidelines.
- Carriers that are able to provide a lead option are limited, with very challenging risks requiring multiple carriers to complete the first $5 to $10 million.
Flood:
- Flood Risk Rating 2.0 took full effect on April 1, 2022.
- Under Risk Rating 2.0, Flood zones will not be used in calculating a property’s flood insurance premium following the introduction of Risk Rating 2.0. Instead, the premium is calculated based on the specific features of an individual property.
- Under Risk Rating 2.0, statutory discounts are being applied to keep increases at a maximum of 18% (glide path).
- Grandfathering of Flood Zones and/or Base Flood Elevations will no longer factor into the rating.
- FEMA has not yet given specific details of how grandfathered properties will be affected by Risk Rating 2.0, other than to say that “all properties will be on a glide path.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
