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Healthcare Provider Update: Verizon collaborates with Aetna as its primary healthcare provider, offering a range of health plans and services to its employees and their families. Looking ahead to 2026, the healthcare landscape is poised for significant change, as record hikes in Affordable Care Act (ACA) premiums are anticipated. With some states facing increases exceeding 60%, many individuals could see their out-of-pocket premiums rise by more than 75%, particularly if enhanced federal premium subsidies are not extended. This scenario could create an additional burden for Verizon employees, emphasizing the importance of strategic planning for healthcare coverage amidst such dramatic shifts in costs. Click here to learn more
According to a study conducted by the National Institute on Aging, about 80% of individuals aged 65 or older are suffering from at least one chronic illness, including terminal illnesses such as cancer or heart disease. While dealing with a terminal illness can be challenging for anyone, it is important for the elderly to be aware of the medical and emotional support available to them. Palliative care, for instance, can provide comfort and alleviate pain and stress associated with a terminal illness, while hospice care can provide end-of-life care and support. The earlier one seeks out these resources, the better equipped they will be to manage their condition and make informed decisions about their future. (Source: National Institute on Aging, published on September 14, 2020).
What Is It?
Upon learning that you have a terminal illness, you may wish to promptly begin planning for your current needs and the future needs of your survivors. Specifically, you will want to provide enough money, insurance, and assets to ensure that you will be comfortable during your final months and that your survivors will receive an adequate income after your passing.
By communicating your wishes to your family and implementing certain legal documents (e.g., health-care proxy, living will, durable power of attorney), you can make decisions regarding your medical care and prepare for the possibility of incapacity. You will also want to ensure that your estate is distributed to your survivors in accordance with your desires if you are an Verizon client dealing with this or a similar circumstance.
Meeting Your Current Financial Needs
- Ensure you have sufficient liquid assets to satisfy your current needs--Determine if the cash in your savings account, money market fund, or other liquid account is sufficient to cover your expenses during your final months. Consider withdrawing funds from your retirement account, applying for any insurance benefits to which you may be entitled, or selling your life insurance policy to a viatical settlement company if none of these options are feasible.
- Consider making withdrawals from your retirement account --You may request a distribution of funds from your defined contribution plan to cover your medical expenses. This is known as a hardship distribution, and it is limited to the amount required to satisfy your immediate financial needs. To be eligible for a hardship distribution, you must lack access to other resources that could satisfy this need.
Caution: A hardship distribution from a defined contribution plan is subject to income tax. However, if you are disabled, or if the distribution is used to pay qualified medical expenses, the 10 percent early withdrawal penalty won't apply.
Apply for Disability Benefits That You Are Entitled to
Once you have satisfied the elimination (waiting) period, you may be eligible for disability benefits under a group or individual disability income insurance policy. Check your policy or contact Verizon if you are unsure whether a disability policy covers you.
Review Your Life Insurance Policy for Ways to Raise Cash
You may be able to borrow against or obtain accelerated death benefits from your life insurance policy. Your policy may also include a premium waiver, so that after you've been disabled for a certain period of time (typically six months), the insurance company will pay your insurance premiums, saving you some money.
Caution: Borrowing against your life insurance or taking accelerated death benefits will reduce the benefit paid to your survivors.
Consider Viatical Settlements
The transfer of an insurance policy to a third party constitutes a viatical settlement. This third entity is typically a company or group of investors specializing in such sales. In general, you will receive between 45 and 85 percent of the face value of your policy when you sell it. This distribution is generally tax-free if your life expectancy is less than 24 months. Nevertheless, Verizon customers must be aware that there are disadvantages. For instance, your beneficiaries on your life insurance policy will no longer be your survivors, and receiving a viatical settlement may disqualify you from receiving Medicaid.
Providing Financially for Your Survivors
Buy More Life Insurance
If you believe that the death benefit your survivors will receive from your life insurance policy will not be sufficient to meet their needs and you have a life insurance policy through Verizon, find out if you can purchase additional coverage during the open enrollment period without providing proof of insurability. Also, examine your existing life insurance policy to determine if you are eligible to purchase additional coverage without providing proof of insurability. If you are taking out a loan to buy consumer products, you may be able to purchase credit life insurance to pay off the loan in the event of your death.
Caution: Proceeds from a life insurance policy are generally nontaxable to your beneficiaries. However, those proceeds are includable in your gross estate for estate tax purposes if they are payable to your estate, your executor, or an individual or trust legally obligated to pay estate debts.
Make Sure That Your Survivors Will Have Access to Needed Funds
Your survivors may require funds to cover their day-to-day living expenses as well as funeral and burial costs. You can provide for them with life insurance, but you may also want to make sure they have access to liquid assets (such as currency held in CDs, savings accounts, and checking accounts). If necessary, add your spouse, child, or another survivor to your account so that they can access the funds as co-owners after your death.
Tip: Consider adding your spouse as a joint owner on your credit card account if you want to make sure that he or she has access to the credit line after your death, particularly if your spouse currently has no credit established in his or her own name.
Find Out What Benefits Your Survivors Will Be Eligible For
Your survivors may be eligible for Social Security survivor benefits, benefits from the U.S. military (if you are an active or retired service member) or benefits from your qualified retirement plan. If you are already retired from Verizon and you chose to provide a survivor's annuity for your spouse, he or she may continue to receive income from your retirement annuity after your passing.
Even if you are not yet retired from Verizon, your spouse or another beneficiary may receive a lump-sum death benefit from your qualified plan.
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Tip: Continuing payments made to your estate (if named as beneficiary) or to a family member may be includable in your gross estate for estate tax purposes.
Make Use of Appropriate Planning Opportunities to Minimize Potential Federal Estate Taxes
Your estate will be exempt from federal gift and estate tax if its value is less than the applicable exclusion amount. Nonetheless, if your estate exceeds the applicable exclusion amount, you should consider implementing strategies to minimize potential estate taxes, such as making gifts in the amount of the annual gift tax exclusion each year to any number of recipients (this figure is inflation-indexed, so it may change in future years), transferring property to your spouse, or making charitable contributions.
Estate Planning Concerns and Opportunities
Review Your Will or Make One
Our Verizon clients who have a will should evaluate it and make any necessary modifications. If you do not have a will, you should create one with the assistance of an attorney immediately. You should appoint a guardian for your minor children (if you have any), name an executor for your estate, and specify how your assets will be distributed after your death in your will.
Ensure That Your Estate Is Liquid
Now is the time for these Verizon customers to ensure that their estate has sufficient liquid assets to cover estate settlement expenses. If your survivors are forced to liquidate assets in order to meet their obligations, they may lose income or assets that you had earmarked for them. There are numerous methods to ensure the liquidity of an estate, including distributing illiquid assets to heirs in a will, selling estate assets prior to death, and establishing a buy-sell agreement if you are a business owner.
Planning for Incapacity
When you have a terminal illness, you must prepare for the time when you will be unable to manage your own affairs. If you become incapacitated and unable to manage your finances or sign legal documents, a durable power of attorney will grant the person of your choice the authority to act on your behalf. Consider executing a healthcare proxy if you want this individual to have authority over only healthcare-related decisions.
You may want to effectuate a living will if you want to ensure that no procedures are performed to prolong your life. By making your wishes known while you are still competent, a living will can also prevent your family from having to make traumatic decisions on your behalf.
Tip: To protect yourself from people who may think you are incapacitated when you aren't, ask your doctor to sign a physician's certificate certifying that you are able to sign and execute legal documents.
Income Tax Planning Concerns
If you are no longer able to work for Verizon, you may be required to liquidate your investments, retirement funds, or insurance policies to cover your expenses. By controlling when income or gains are recognized, it is possible to control taxation. Additionally, these Verizon customers should keep track of their medical expenses in the event that they qualify as deductions against their taxable income.
Making Decisions About The Future
Planning for Medical Care
Maintaining health insurance coverage is essential if you have a terminal illness. If you discontinue your coverage, it will likely be impossible to purchase more. If you lose coverage as a result of losing your job with Verizon, you should plan to purchase COBRA insurance to maintain coverage. Additionally, these Verizon customers should evaluate the coverage limits of their health insurance to determine if their policy will cover in-home care, including hospice care, if they do not need or desire hospital care.
Planning Your Funeral
Numerous individuals may prefer arranging their own funerals because they can ensure that the funeral and final arrangements are exactly as desired. It may also be beneficial for your family, as they will not have to make difficult decisions while grieving.
Tip: If you are a veteran of the U.S. Armed Forces, find out what death benefits you are entitled to. For instance, you may be eligible for burial in a national cemetery, final honors, a headstone, a flag, or other benefits.
Making an Organ Donation
For Verizon customers who wish to become organ donors, make arrangements immediately. Discuss the situation with your family, as they may be disturbed by your desire to become an organ donor. Ensure that they comprehend your decision before proceeding. Check with your local department of motor vehicles or consult your doctor for information on organ donor programs.
Conclusion
Just like how taking care of your car with regular maintenance can prevent costly repairs down the line, investing in your health and wellness through preventative measures can also save you from expensive healthcare bills in the future. In the same way that getting an oil change can extend the life of your vehicle, taking steps to improve your health, such as exercising regularly and eating a balanced diet, can help you live a longer and healthier life. By investing in your health now, you can save money and stress in the future.
How does the Verizon Pension Plan facilitate retirement income for long-term employees, and what specific benefits can employees expect when enrolling in the retirement program provided by Verizon? What unique features does the Verizon Pension Plan offer compared to other retirement plans an employee might have encountered, and how can employees maximize the benefits of these features throughout their career at Verizon?
Verizon Pension Plan Benefits: Verizon's Pension Plan offers substantial benefits aimed at facilitating a secure retirement for long-term employees. Upon enrolling in the retirement program, employees can expect defined benefits that are based on their salary and years of service, ensuring a predictable and stable income after retirement. Unique to Verizon, compared to some other plans, may include options for early retirement under certain conditions and a choice between annuity payments or a lump-sum distribution upon retirement. Employees can maximize these features by planning for long-term service and considering their retirement income needs early in their careers.
In what ways can employees at Verizon strategize their rollover decisions when transitioning from the Verizon Pension Plan to other retirement savings plans upon leaving the company? What factors should be considered by Verizon employees to ensure they are making informed choices regarding rolling over funds to a traditional IRA or another qualified employer plan?
Rollover Strategies: When transitioning from the Verizon Pension Plan to other retirement savings options upon leaving the company, employees should strategize their rollover decisions carefully. Factors to consider include the tax implications, the investment options available in the rollover destination, and the timing of the transfer to avoid penalties. Verizon employees should evaluate the benefits of rolling over to a traditional IRA or another employer's plan, considering their future financial needs and retirement goals.
What are the implications of the recent IRS limits for 2024 concerning contributions to retirement plans for Verizon employees, and how does Verizon align its offerings with these federal regulations? Additionally, how can Verizon employees best take advantage of these limits to enhance their retirement savings while adhering to tax regulations?
IRS Contribution Limits: The implications of IRS limits for 2024 are critical for Verizon employees as these limits dictate how much can be contributed tax-deferred into retirement plans. Verizon aligns its offerings with these federal regulations by adjusting contribution limits in their plans accordingly. Employees are encouraged to maximize their contributions to take full advantage of tax-deferred growth, especially when IRS limits increase, thereby enhancing their retirement savings while adhering to tax regulations.
How does the special tax treatment for lump sum distributions from the Verizon Pension Plan affect employees who receive their benefits early or have specific circumstances, such as being born before 1936? What options do these employees have to manage their tax burden effectively, and how can they best navigate these complicated rules while planning for their retirement?
Tax Treatment of Lump Sum Distributions: The special tax treatment for lump sum distributions from the Verizon Pension Plan can significantly affect employees who opt to receive their benefits early or under specific circumstances like being born before 1936. These employees have options to manage their tax burden effectively by opting for ten-year averaging or capital gain treatment on eligible distributions, allowing for a potentially lower tax rate on their pension benefits.
For surviving spouses and alternate payees of Verizon employees, what are the specific benefits available under the Verizon Pension Plan? How do these benefits compare to those available to employees, and what steps must surviving spouses or alternate payees take to ensure they receive their entitled benefits without delays or complications?
Benefits for Surviving Spouses and Alternate Payees: For surviving spouses and alternate payees, the Verizon Pension Plan offers benefits similar to those available to employees, such as annuity payments or lump-sum options. These beneficiaries must take certain steps to ensure they receive their benefits without delays, such as providing necessary documentation and adhering to plan rules. The plan details and processes for claiming benefits should be clearly understood to avoid complications.
How can Verizon employees utilize the resources available through the Verizon Benefits Center to better understand and manage their retirement benefits? What specific tools and services does the Benefits Center provide, and how can these resources assist employees in making informed decisions regarding their pension plan options?
Utilizing Resources at the Verizon Benefits Center: Verizon employees can utilize various tools and services provided by the Verizon Benefits Center to manage and understand their retirement benefits. The Benefits Center offers personalized consultations, detailed plan documentation, and tools for estimating pension benefits and planning retirement income, assisting employees in making informed decisions about their pension plan options.
What challenges might Verizon employees face regarding eligibility and tax withholding when receiving their pension payments, and how can they mitigate these issues? It's crucial for employees to understand the mechanics of eligibility regarding rollovers and payment processing; what key pieces of information should they be aware of to avoid unexpected taxes?
Challenges in Eligibility and Tax Withholding: Verizon employees might face challenges regarding eligibility and tax withholding when receiving pension payments. Understanding the plan's criteria for eligibility, the implications of rollovers, and the impact of mandatory withholding on distributions is crucial. Employees can mitigate these issues by consulting with the Verizon Benefits Center or a tax advisor to ensure compliance and avoid unexpected taxes.
What is the process for Verizon employees wishing to initiate a direct rollover from the Verizon Pension Plan, and what documentation will they need to prepare? Can employees receive assistance from the Verizon Benefits Center during this process, and how does using a direct rollover benefit them compared to other forms of payment?
Direct Rollover Process: The process for initiating a direct rollover involves deciding the destination of the rollover (traditional IRA or another employer plan), completing necessary documentation, and potentially seeking assistance from the Verizon Benefits Center. A direct rollover helps in avoiding immediate taxes and maintaining the tax-deferred status of retirement savings.
In terms of retirement preparedness, how does the pension plan at Verizon accommodate employees’ needs for financial security in their senior years? What additional education or resources does Verizon provide to assure that employees fully understand their retirement options and the importance of planning ahead?
Retirement Preparedness: Verizon's pension plan is designed to accommodate the financial security needs of employees in their senior years. In addition to the pension benefits, Verizon provides educational resources and planning tools to ensure employees understand their retirement options and the importance of early and consistent retirement planning.
How can employees reach out to the Verizon Benefits Center for further information about the pension plan and other retirement benefits? What specific contact methods are available to employees, and how can these interactions enhance their understanding and management of retirement benefits provided by Verizon?
Contacting the Verizon Benefits Center: Verizon employees seeking more information about their pension plan and other retirement benefits can reach out to the Verizon Benefits Center through various contact methods such as phone, email, or online portals. These interactions are crucial for enhancing understanding and effective management of retirement benefits, ensuring employees make the most of the benefits available to them.
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