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Will Cattle be next? Will we owe our soul to the Company Store? :???: :cry:


Cargill offers health plan to farmers

Associated Press

MINNEAPOLIS - Farm families have a new option for covering their medical bills - let agribusiness giant Cargill Inc. help pay them.

Cargill rolls out a program with Wells Fargo & Co. on Friday in which Cargill will put money into farmers' health savings accounts (HSAs) in exchange for pledging to sell Cargill a certain portion of their corn, soybean or wheat crops.

Minnetonka-based Cargill says its Harvest Health program gives farm families a new way to control their rising health care costs, while the company benefits by getting a more predictable supply of grain.

Cargill officials said they decided to launch the program because they kept hearing from farmers that they were being squeezed by escalating medical and insurance expenses.

"We need our farmer-customers to do well for us to prosper in turn," said Mark Tracy, an assistant vice president in Cargill's Risk Management business.

Privately held Cargill is among the nation's largest grain and food processors.

Participants will first sign up for tax-exempt HSAs through Wells Fargo and for high-deductible health plans (HDHPs), either through a Cargill online partnership or their local insurance agent. A qualifying HDHP might have a $2,500 deductible for a family policy, but a customer could choose one with a higher deductible and lower premiums, or vice versa.

Farmers would also decide how much money they wanted Cargill to put into their HSAs, and then work with the company to figure out how much of their next harvest they'd have to pledge for that.

The mechanism for that is complicated but will be familiar to farmers who sell their grain on the futures markets. Farmers sell futures to lock in a guaranteed price rather than take the risk that crop prices will fall.

For example, a farmer participating in Harvest Health might contract to sell Cargill 11,000 bushels of corn for fall delivery at a maximum target price of $2.60 a bushel. They'd receive $28,600 for the grain at harvest - but Cargill would put $1,000 into the farmer's HSA within five to 10 business days.

The farmer could then use that money immediately to pay health care expenses that fall under his or her insurance policy's deductible, or let it build and earn interest in the HSA tax-free to cover future medical bills.

Cargill will contribute up to the legal maximum of $5,450 for a family and $2,700 for individuals, though it will cap the amount of grain for which it will contract at 25 percent of a farmer's total crop. The minimum grain contribution to participate is 3,000 bushels.

The main benefits to Cargill, spokesman David Feider said, are that the program gives farmers an incentive to deliver their grain to Cargill instead of a competitor, its traders will know better how much grain they'll have to work with, and Cargill's logistics, storage and other units can plan better.

In many farm families, one or both spouses works in town at a job that might not pay much but includes health care benefits. Harvest Health may be most attractive, however, to families that have to buy their own insurance - families like Kevin Paap's.

Paap and his wife grow corn and soybeans near Garden City in south-central Minnesota. He said their insurance and uncovered health costs come directly out of the family budget, and exceed what they pay for food.

"I would be one of those persons that certainly would be interested in hearing more about a product like this," said Paap, who is also president of the Minnesota Farm Bureau.

Having a spouse work in town to get insurance isn't an option for every farm family, Paap said. Sometimes those towns are too far away, or they don't offer enough jobs with good health insurance.

Feider said Cargill surveyed corn and soybean producing states and determined that 98 percent of farmers have some kind of health insurance. About two-thirds are in traditional plans while the rest are in high-deductible plans.

Cheryl Meyer, a CPA in the New Ulm office of Larson, Allen and Wieshair, said she would recommend Harvest Health to her farmer clients.

Meyer said she's seeing more farmers and companies switch to the combination of health savings accounts and high deductible health plans. While these plans increase the risk of out-of-pocket expenses, they also carry lower premiums, she noted.

And money deposited in HSAs can stay there and grow for years until it's needed - the money doesn't go away as it does in the health care flexible spending accounts offered by many employers, she said.

Harvest Health is available beginning Friday in 18 states where Cargill's AgHorizons marketing assistance unit has a presence: Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, Tennessee, Texas and South Dakota.

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