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Yacht Crew Insurance, Disability, Retirement and more

Discussion in 'General Yachting Discussion' started by olderboater, May 3, 2017.

  1. olderboater

    olderboater Senior Member

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    From my first looks at yacht professions, I've had the concern as to what those in the profession had in the way of protection, starting with medical insurance and including disability and then retirement. I see independent captains who appear very exposed in that regard. I see those who have worked out of the country and have years without even social security salary accruing to their benefit. This came to mind as a captain in another thread mentioned breaking a foot and having to turn down a lucrative trip.

    We saw all this as we hired crew but we've provided our crew with a broad range of benefits. However, I'm interested in what others of you have or don't have, including especially those of you who are independent. I worry about injuries or about you no longer being able to perform your job, either short term or long term. We had a member here before who was in a motorcycle accident. I know of others who have had major illnesses.

    So, what do you have, not have? What worries you? How at risk are you?
  2. AMG

    AMG YF Moderator

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  3. olderboater

    olderboater Senior Member

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    I'm aware of such management companies as we've dealt with one on charters and on some other things. I'm not sure what percentage of owners in the US or even the Caribbean use such or what benefits they provide through them. I'm sure it varies by location, but in your experience, have those served by such a company had disability coverage and a retirement plan?

    One thing I see is that many owners and crews are avoiding as many taxes as legally they can. However, in most countries, retirement programs are only set up to benefit tax paying citizens. As to disability, it's a more complex issue. Also, I'm not sure which have benefits that cover accidents when not working. A lot of crew works on contracts for a season at a time or go from one boat to another. If doing so, and there's a gap between contracts, how are they protected during that time?

    A lot of members here are self employed Captains and typically little protection.
  4. Ormond Bert54

    Ormond Bert54 Senior Member

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    My experience with small business is basic healthcare for one, maybe 50% paid coverage for the rest of the family, zero disability, zero life insurance, 14-30 days combined paid time off/sick leave, zero pension, zero 401k. If Trump reduces corporate taxes and regulation, this might change. Small business these days spend their money on taxes, regulation, insurance of every imaginable type (except policies for the staff) and frivolous lawsuits. There is very little left for the staff.
  5. olderboater

    olderboater Senior Member

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    Total BS. We own a small business and provide all those and we're profitable. I'm not getting into a political discussion, just talking about the yachting industry.
  6. Pascal

    Pascal Senior Member

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    If health insurance had not become a socialist wealth redistribution scam where people could afford a reasonable policy and didn't have to subsidize others then we wouldn't be having this discussion.

    I would would still be paying about $300 A month
    For health insurance with a reasonable $2000 to $3000 deductible.

    Instead I am paying $700 with a $7000 deductible because I have to pay for illegal immigrants, women who think $50 a month for contraception is too much or people who made the wrong decisions. Or old guys who need their viagra... or sl-ts... sorry loose women who think free abortion is a right.

    And the **** TV commercials for all kind of medicines

    And the cku fing lawyers who run tv ads recruiting clients supposedly hurt by the same drugs advertising in the previous spots.

    if we were in a normal non socialist system, I would have no problem paying my own health insurance, just like I pay for car insurance or home/boat insurance.

    Why does an employer have to provide heath insurance ... it should be a benefit to attract people, nothing more.
  7. olderboater

    olderboater Senior Member

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    I asked a simple yacht related question and getting virtually no answers but a lot of political rants. Could we just answer the question asked and leave out politics to other places.
  8. Pascal

    Pascal Senior Member

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    My post was not political. I was just stating that if healthcare costs were not out of control and if some of us were not forced to pay for others, then employer coverage would not be needed.

    Simple.

    Employer provided benefits are perks, they should not be an entitlement
  9. olderboater

    olderboater Senior Member

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    Well, your statements as to why our health insurance is so high were either political or misinformed. I don't fault you for that as the amount of misinformation heard daily on health care is staggering with it coming from politicians, doctors, insurers, employers, and others who all have an axe to grind or a reason to have skewed opinions overriding facts. Those who have done comparisons of health care costs in the US vs. elsewhere have figured out the following. Basically, our hospital costs and our drug costs are by far the most expensive for the same services and same medications when compared to other countries. We absorb a disproportionate percentage of the costs of the development of drugs. We do not regulate those costs. An additional reason is that most medical care in other countries is provided through a single payer system, much like Medicare or Tricare in the US without the cost of the administration and profits of insurers. Hospitals are also operated for profit by private companies and in many countries the major hospitals are government owned and not for profit. We have some very basic issues with our health care system not attributable to the factors you describe.

    There are two other places in health care that the US differs from other countries. We typically do more tests and more procedures for the same conditions than others. That is a bit of a positive and a bit of a negative. Then also, we aren't as healthy. We have more conditions that appear to be a result of our stressful lives resulting in more of certain conditions and, earlier onset of problems.

    You attack our system as socialist when in fact most of the countries with less expensive medical care operate socialist based health care systems, far more so than ours.

    You mention lawyers and malpractice insurance costs are a factor in the cost of medical care, although not major like the items mentioned above and more in certain fields than others. For instance, obstetrics and delivery of babies is a field of outrageous malpractice costs due to basic human nature and juries. Baby dies, jury is going to be extremely generous with parents. Limitations on malpractice claim limits have long been talked about.

    Then as to employer provided benefits. Well, again, in most countries, all workers are provided benefits, through employer taxation. Employers provide benefits in most countries in that way. As to the US, in most professions employer provided benefits are traditional and standard. That's the way to get people covered. You use the word, entitlement. Well, I do feel every working person should be entitled to have certain basic benefits and there are two ways to insure that, government or employer. I would note also that as an employer, I can provide benefits cheaper than you, as an individual, can buy them. Now, the government can provide them cheaper than I can.

    But back to the topic at hand. It is people in the yachting industry not having adequate health insurance, disability protection, sick benefits, dental coverage and retirement programs. Those who are independent businessmen lack it for the same reason as most small business owners. Those who work for yachts may or may not have it. However, much of flagging of vessels is aimed toward reducing crew pay and benefits. If you're on a US flagged vessel, you're covered through social security toward at least some retirement. If you're on a foreign flagged vessel, it's a different story.

    Now, this wasn't presented as a topic to go into all the problems with health care in the US and worldwide (don't for one moment think other countries don't have issues too). It was to address what kind of protections yacht crew has and doesn't have and the exposure of those in the industry.

    It was a topic just created out of concern of how many of you are out there without or with very expensive, high deductible health insurance, how many have no income at all if they get injured either while working or not, and how many have serious worries about retirement. I see the situations many are in and it worries me. This is worry for others, not myself. I have similar worries for those in other industries, but since this is a yacht forum, I was discussing here those in the yachting industry.
  10. bayoubud

    bayoubud Member

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    AMEM!!! If the system was ran right the employer would pay a fair salary and the employee would be responsible to provide their own everything. Not up to politicians to dictate every imaginable vote buying freebie for all.
    Sorry, ob if could not resist, wish I could answer your question.
  11. leeky

    leeky Member

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    In all the verbiage underneath what I highlighted in red, you didn't explain why Pascal's health insurance went from $300 per month with a $2000-$3000 deductible to $700 per month with a $7000 deductible. What you describe in that verbiage didn't just happen recently and account for Pascal's change in rates, but something else did. What could that change be? Pascal doesn't seem to be the one that's misinformed.
  12. d_meister

    d_meister Member

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    olderboater: Thank you first for the concern you've always demonstrated for not only your own yacht employees, but for the culture as a whole. I think that insurance, disability, and retirement is very rarely considered, because there are so many young people in the industry. We all remember when we were bullet proof and had no horizon's on our time line. Also, insurance is sometimes muddled by the existence of the Jones Act. Many crew people think that the Jones Act is health insurance, whereas the limitations of responsibility on the part of vessel owner is, as I understand it, simply "Maintenance and Cure". Very simply put, it amounts to the vessel owner being responsible for a seaman's room, board, wages, and medical costs until the point of Maximum Medical Improvement. A healed amputation from a line handling accident could be Maximum Medical Improvement.
    The obverse of the Jones Act coin is that yacht brokers or insurance brokers seem to never advise yacht owners of their exposure under the Act. I'm not an attorney versed in the fine points of the Jones Act, just pointing out that it exists and is not well understood in this industry. It may be that the provisions of the Act are part of an international agreement where other countries are similarly bound, to speak to your question of Foreign Flags.
    In my experience as a Captain, medical insurance tends to be a traveling partner of IRS forms W-2 and, less so, form 1099. In other words, if crew is paid by a business entity, insurance sometimes comes with the salary. Captains and crews with long term single employer tenure are the exception, in this industry. I would estimate turn-over at around two years, and that doesn't provide for an ongoing insurance experience. Ideally, we would like to have insurance and retirement that we can own and control, and then negotiate employer financial participation, rather than the onerous method of joining an employer's policy for the typically temporary period of employment and then dealing with migrating to another plan before the transfer period expires.
    As you point out, a business joins an insured pool and the insurance costs are less per person than if an individual purchases it. Maybe a pro in the insurance industry could chime in with a plan that we can all join as a group and not only reduce insurance costs for us all, but make it more accessible to those who don't have it? It would seem to me that we're a pretty low risk group.
    Finally, thank you, olderboater, for rebutting what is always the loudest voice in the room. The same voice that enjoys affordable insurance for cars and other property because a large enough group pays to cover his risk exposure, is unwilling to join a medical insurance risk pool because someone else may benefit from his contribution. The other types of insurance are affordable because enough people are required to have the insurance by state DMV laws and lending institutions.
    The point that amuses me is that those people who think that they can vote against the medical and welfare costs that are incurred by indigent citizens, end up paying for them, anyway. When, for example, an unemployed, uninsured person goes into a private medical center with appendicitis and has a successful operation without means to pay for it, there are many taxpayer funded programs that pay the medical costs at full tilt retail. It happened to me. Worst case, it ends as a tax deduction for the institution.
    So, I seem to recall that there have been insurance professionals on this forum, How about it? Can we form a group?
  13. Ward

    Ward Senior Member

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    OB's summary of how health care works in the US and some of the trade-offs of socialized vs. private wasn't an attempt to explain what happened to someone's insurance costs. From where I sit (on the Canadian side of the border), it's a pretty concise, and very balanced summary of the current situation.

    More in line with the topic: here in Canada, one option for very small businesses (including self-employed) to control their health care costs is to set up a Personal Health Spending Plan (PHSP). An employer can set up a PHSP and pay into it (and deduct the amount), and then the employees can use that money for any health care (within fairly broad limits). The benefit to the employer (especially if you're self-employed) is that it's fully deductible, whereas normal health care spending has minimums and ratios of what you can claim.

    That's a bad explanation, here's the description in Wikipedia: https://en.wikipedia.org/wiki/Private_health_services_plan

    Is there anything similar in the US for self-employed individuals?
    Last edited: May 4, 2017
  14. olderboater

    olderboater Senior Member

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    I don't know the specifics of what happened on Pascal's insurance. I do know many reasons for individual insurance rising. I also know some still getting individual policies for less than he's paying. The market is geared toward group coverage. We have companies every year refusing to offer individual. Then others just quote it outrageously high. Group plans right now are available with $2000 deductible and the cost for individual coverage is $300-350 and family is around $1000 or so. Still outrageous, but insurers are assuming spouses could have their own insurance and if they don't then they must be poor risks.

    There have been a lot of industry moves blamed on one law or another for decades. The reality is that health insurer earnings have continued to rise. Only 60-80% of the revenues go to patient care. A lot of profiteering taking place. I won't argue that there haven't been changes that have impacted rates, but that's been true other times too. There is a lot of profit in the supply side of medical care. If you broke it down to the actual costs of the care it would probably be half what it's costing now. There are scary aspects and no one should pay $700 for an individual policy with a $7000 deductible.

    Every state is different but in FL one of the courses to reduce premium costs is to incorporate and then go after group plans, either on your own or in association with others. There has at different times been talk of a formal organization of yacht professionals which would then have a group plan. Accountants do it, lawyers do it, why not captains.

    There are many factors at play in rising insurance prices for individuals. One of them is "because we can."
  15. Norseman

    Norseman Senior Member

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    A friend of mine own this insurance company and he is happy to bind a policy for Yacht crews and Owners.
    https://mhginsurance.com/

    Say hello from me.
  16. olderboater

    olderboater Senior Member

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    Not hard to find the insurance. Just a lot of people in the industry without it.
  17. Marmot

    Marmot Senior Member

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    If the "industry" you are talking about is larger charter yachts then the Maritime labor Convention (MLC) covers most of what you ask about.

    If you mean the little privately operated recreational boats with part time or non-professional crew then the situation more closely resembles itinerant farm laborers. They get whatever the owner chooses to offer, or not.

    In keeping with the political side of things, this is America after all and one is free to starve to death under an overpass if one chooses or has no choice.
  18. dennismc

    dennismc Senior Member

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    Pascals costs are interesting, apparently the average family in Canada, pays approx $13.500 annually in various social taxes as their health care coverage, this was 24 months ago, drugs, dental, eyecare not included, semi private Hospital rooms not included. That in comparison to the US dollar etc seems a real bargain, looking at the economy of scale between US and Canadian populations there does seem to be a very large disparity in costs and availability as we have Ins. Co's here who, will cover small groups with basic coverage and indeed Workmans Compensation coverage is mandatory for all employers as are contributions for Canada pension and Unemployment insurance coverage This might lead one to the conclusion that politically speaking, socialized medicine is a better value that privately run, the major exception of course is where does the money come from for high risk drug and medical equipment development, hopefully never from a Government agency. Interesting analogy in that private education systems seem to produce a better product than socialized ones ?
  19. Pascal

    Pascal Senior Member

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    I ll tell you why my premiums and deductibles shot up... I am paying for other people insurance. Plain and simple.

    Last year, my GF had the exact same bluecross plan but her premium were half of mine because she qualifies for subsidies.

    It s a vicious circle... the fewer people can afford insurance, the more uninsured end up at emergency rooms and those costs to hospitals are passed on to the other patients with insurance or who can not afford not to pay their bill

    Personally I don't mind the high deductibles. I feel insurance is for important stuff and I ve always selected the highest possible deductible whether for health, car or boat insurance. But i expect the premium to reflect that choice.

    As to the European system mentioned earlier in the thread, it has been 30 years since I left France. Back then, and from what I hear the model is still the same or worst..."securite sociable", which is not retirement but government run health insurance, is funded by payroll taxes to the to the tume of 20% if you memory is right. And I doubt it went down... so basically the more money you make, the more your employer pays. Fair? Certainly not. This also explains why the unemployment rate has always been much higher has employers payroll taxes are too high

    The problem we have here is that so far no effort has been made to lower the costs. The so called Affordable Care Act had no provision to make health care affordable. Sadly I don't see anything yet in the new bill passed my the house which will reduce costs although hopefully some cost reductions will be implemented thru regulations

    I rarely go to a doctors office... maybe every couple of years. Last time I went was in June to get stitches on a 3" cut I got on my foot as a result of an encounter with a hose clamp in the ET. I was shocked to see how many non medical staff was buzzing around the back office Equally expensive each exam room was outfitted with a large touch screen with speech recognition so the doctor could dictate detailed pages of notes... just to cover his behind... fear of lawsuits.

    We pay for all this. And more. All the waste... all the fraud... here in Miami you have thousands of minivans shuttling senior citizens to medical offices where they are over tested and over prescribed.

    And the list goes on.
  20. Pascal

    Pascal Senior Member

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    Exactly... government run programs are usually much more costly. Look at the Veterans Administration here in the US is you want a taste of government run healthcare.

    Indeed same with education. School choice is a big topic nowadays with big government fans freaking out over it but the fact is that privately run charter school do a better job for 30% less.

    There should be a safety net for those who can't afford healthcare or who have serious medical issues but not going over board like covering viagra, sex change treatment or even contraception.

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