Category Archives: Opinion
By Jason Alderman
Must-Know Facts About Insurance Open Enrollment
If you buy your own health insurance, add this important date to your yearend to-do list: November 15.
That’s the date open enrollment is available for individual healthcare plans offered through the Healthcare.gov site, your respective health insurance marketplace (https://www.healthcare.gov/medicaid-chip/eligibility/) or independent agents in your community.
If you’re working for a company that provides your health insurance, chances are your open enrollment period has already begun. The SHOP insurance marketplace, open to small businesses and nonprofits with 50 or fewer full-time employees, also begins taking online applications November 15.
If you buy your own personal or family coverage, don’t wait until November 15 to start planning your 2015 coverage decisions – do it now.
Here are six things you should know to get started:
1. Timing is tight. Last year’s health insurance enrollment process lasted six months. This year, it’s only three – November 15 to February 15. You may be able to enroll outside of those dates if you’re facing a major life change like a divorce, birth of a child or marriage; otherwise, that’s your window.
2. Sticker shock is a possibility. Obamacare didn’t guarantee cheap healthcare coverage; it guaranteed available healthcare coverage. Keep in mind that if you bought health coverage last year, your insurer will automatically re-enroll you on December 15 for new coverage effective January 1. However, that’s no guarantee that your monthly premium will stay the same. Some experts are predicting only modest increases (www.cnbc.com/id/102055144#.), but depending on where you live, your premiums might go up or down. And if your 2013 carrier grandfathered your 2014 coverage, those changes may go well beyond price.
3. Your doctors and hospitals might change. Hospitals and physician practices scrutinize the state of the health insurance market very closely. Their income depends on it. In 2013, some medical practices made news by dropping insurance plans altogether and accepting only cash or credit; others changed the insurance plans they would honor. Something to keep in mind: the best way to confirm that you’ll still have access to your favorite doctor and hospital choice is to pick up the phone. Your doctor’s website may list the particular insurance plans his or her practice may accept, but don’t expect the list to be current. Call your practitioner or their business office to confirm they’re sticking with your plan or any you’ve chosen to use instead. You don’t want to be surprised with enormous out-of-network costs later.
4. Planning future health needs is important. If in the next year you’re planning to expand your family, undergo elective surgery or other factors that could affect how you’ll use the healthcare system, query the plans about specialists, prescriptions and other specific services before you sign up. It could save you thousands in potential out-of-pocket costs.
5. Coverage isn’t immediate. Depending on when you enroll during the open enrollment period, your actual coverage may not start until two to six weeks later. Check effective dates of coverage for every plan you’re evaluating to make sure the timing addresses your particular needs.
6. You can get help. Personal referrals from friends and fellow professionals to particular plans and agents are always a good way to start your enrollment search. There may also be nonprofit assistance within your community or state to help you evaluate individual plans. On the national level, nonprofit Enroll America runs a nationwide site (www.enrollamerica.org/resources/in-person-assistance/) with specific tools and resources for help in your search.
Start now to build a good toolbox full of online and personal resources to help you with your 2015 health insurance search.
By Jason Alderman
7 Ways to Cut Your Holiday Expenses
When it comes to holiday spending, waiting in store lines all night and jostling for discounts will mean very little if you don’t have a budget that shapes your finances year-round. With the average U.S. household spending $600-$700 in 2014 for the holidays, putting that money together shouldn’t be a game of chance. Here are some tips to get it right:
Before you make a list, plan. How’s your debt? Do you have an emergency fund or any savings put aside? Start the holiday season by getting a handle on what you owe and what you’re spending day-to-day. Then plan a holiday budget (www.practicalmoneyskills.com/YourHolidayBudget) as early as possible that allows you to spend wisely.
See what spending is really necessary. It’s tough to cut young kids off a gift list, so turn to the adults. If your finances are limited, it’s worth asking adult friends and family members if they’d consider a gift swap or forego gifts altogether. They might actually think it’s a good idea.
Attack your everyday expenses. Want to afford the holidays? Consider evaluating some expensive habits. Try reducing the amount you are spending on expensive nights out. Cook at home and bring your lunch to work. Use public transportation. Compare and cut your auto and home insurance premiums. Turn down the thermostat, dump magazine subscriptions, gym memberships and any other budget item you’re not using. You’ll find that savings build quickly.
Browse before you buy. Assuming you’ve made a tight gift list, create a gift budget (www.practicalmoneyskills.com/YourGiftLog) tracking precisely what you’re willing to pay for every item. For must-have, non-negotiable gifts, you may have to pounce before Thanksgiving Day and Black Friday and Monday for both price and selection. Also, don’t forget to budget for holiday entertainment www.practicalmoneyskills.com/EntertainmentPlanner). It’s a potentially huge cost. Plan ahead and don’t waver.
Create your own Holiday Club. Online savings and money market accounts can allow you to set aside your holiday budget in small amounts throughout the year and they’ll pay better rates than the last few banks offering Holiday Club savings accounts.
Watch gas and shipping. Smart shoppers weigh the value of store trips versus online shopping. They also keep an eagle eye for advertised online and shipping discounts. Sign up for special deals and coupons, consolidate in-person trips to stores and make sure you review return policies at online and bricks-and-mortar stores before you buy. Paying return fees or missing a window to return a gift entirely can cost big money.
Keep good records. Whether you track your finances on paper or on a computer, develop a system that allows you to match your holiday list to what you spend every year. Good recordkeeping not only allows you to track the numbers, but also prevents you from duplicating gifts or overspending year to year. And it’s always a good idea to keep a list of what you get from others to make sure you’re thanking people appropriately.
Finally, consider whether it’s worth making new holiday traditions that go beyond gift giving. Some families consider contributing throughout the year to a joint vacation or reunion fund to bring everyone together. You might also consider the needs of aging or needy relatives who need assistance with chores, transportation or pet care. The holidays are what you make them.
New Program for an Old Problem
By Lu Nelsen, Center for Rural Affairs
For many rural folks, colder weather means higher energy costs. It’s the time of year when energy efficiency and conservation can make the biggest difference. As you search for ways to save money while keeping the house warm, consider taking a long look at your local utility.
That’s because Secretary Tom Vilsack recently announced the first loans under a new Energy Efficiency and Conservation Loan Program. These loans can be used by rural electric cooperatives across the country to invest in techniques and technologies that can reduce energy use.
The best part? Interest rates for these loans are some of the lowest available. By financing energy efficiency and conservation at such affordable rates, this program creates new economic opportunities. That can mean a lot to small businesses and rural communities alike.
The first to take advantage are the North Arkansas Electric Cooperative and Roanoke Electric Membership Corporation. North Arkansas Electric Coop will use this funding to expand their energy efficiency program, providing funds for energy efficient lighting, insulation, a geothermal installation, weatherization, and other energy saving measures. Roanoke Electric Membership Corporation will now finance appliance, heating, ventilation, and air conditioning system replacements for residential consumers.
This program is a big deal. One of the most common problems folks run into when considering an energy efficiency or renewable energy project is a lack of affordable funding. This makes financing available to help people in rural areas invest in projects that keep the house warm while putting money back into their community.
Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.
USDA recently announced several changes to Farm Service Agency (FSA) loan programs, changes designed to help more beginning farmers and ranchers. The new “interim final rule” will increase the Microloan limit from $35,000 to $50,000. This program provides a simplified application process and a seven year payback.
Microloans can be used for approved operating expenses, such as seed, fertilizer, utilities, land rents, marketing, distribution, living expenses, livestock, equipment, hoop houses, tools, irrigation and delivery vehicles.
USDA is also changing the “experience” requirement for FSA Direct Farm Ownership loans. Previously, applicants had to prove they participated in the operations of a farm for at least three years. Beginning farmers across the country identified this restriction as a real barrier. It is not reflective of current realities in which new farmers enter agriculture.
The change will allow beginning farmers and ranchers to substitute one year of that three-year requirement with a formal farming apprenticeship, operation or management of a non-farm business, leadership or management experience while serving in any branch of the military, advanced education in an agricultural field, and significant experience in a farm-related agricultural career.
USDA also proposes changing the types of farming entities eligible to apply, potentially opening the door to non-majority investors who are not actively farming or managing the operation. We’ll watch these changes closely. The deadline to submit public comments on these changes to the USDA is December 8, 2014. Contact Traci Bruckner, firstname.lastname@example.org, for more information.
By Jason Alderman
Are Extended Warranties Worth the Cost?
Are these costly add-ons worth the expense or simply a sucker bet intended to boost the seller’s bottom line? It depends on whom you ask.
According to consumer watchdog organizations like the Federal Trade Commission and Consumer Reports, extended warranties and service contracts often don’t make strong financial sense. However, some people find extended warranties reassuring, especially for large purchases with electronic components that can go awry and are expensive to repair or are easily broken.
Before you buy an extended warranty, do your research and consider these points:
Does it overlap with the manufacturer’s warranty? Don’t pay twice for duplicate coverage.
- Many credit cards automatically extend the manufacturer’s warranty for up to a year on purchases – for free.
- Before purchasing, check the company’s track record with your state’s Department of Insurance, the Better Business Bureau and independent reviewers like Angie’s List.
- Service contracts might not cover specific product parts or repairs. If the terms don’t list a part or function as specifically covered, assume it’s not.
- Carefully review the contract for deductibles, limits on the number of allowable service calls, exclusions and clauses that allow the company to deny coverage – for example, if you don’t follow their instructions for routine maintenance.
- Ask whether the retailer handles repairs itself. You may be required to mail the product to a repair center, so factor in shipping costs if they’re not included.
New cars typically come with a basic factory warranty that covers most components for at least 3 years or 36,000 miles (sometimes more), as well as separate warranties for items like the powertrain, corrosion and roadside assistance.
Before purchasing an extended car warranty from the dealer or a third-party vendor, consider:
- If you plan to sell the car before the basic warranty expires, an extended warranty probably doesn’t make sense; however, if you’ll likely keep the car for many years, it may.
- Don’t feel compelled to buy an extended warranty immediately. Policies can usually be purchased months or years later – although the cost will increase as the car ages.
- If buying an extended warranty through the dealer, find out whether it’s backed by the manufacturer (which means you can go to any dealership throughout the country) or by a third party, which could limit your repair options considerably.
- Most carriers sell a variety of plans at varying costs, duration and mileage limits – everything from basic powertrain-only policies to comprehensive bumper-to-bumper coverage.
- Ask whether the warranty can be transferred to a new owner – that’ll boost resale value.
- Extended warranties are also available for used cars. They’re more risky to buy than new cars and thus may be better candidates. However, the older the car, the more expensive – and limited – the coverage likely will be.
As an alternative, consider putting the same amount into a savings account. That way, if the product breaks, you’ll have enough money on hand to replace it. If not, you’ll have a nice chunk of change.
Bottom line: If it will make you sleep more soundly, consider extended warranties for your major purchases. Just do your homework first and realize that peace of mind may cost much more than any repair bills you ultimately need.