medical insurance en-US New Job? Don't Make These 7 Mistakes With Your Benefits <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/new-job-dont-make-these-7-mistakes-with-your-benefits" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Woman making mistakes with new job benefits" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In September 2016, total nonfarm payroll employment in the U.S. <a href="">rose by 156,000</a>. If you were among those Americans who recently landed a new gig &mdash; or plan on landing one within the near future &mdash; congratulations! But as you get your benefits and retirement planning set up at your new workplace, don't make these seven mistakes.</p> <h2>1. Not Setting Up Your New Retirement Account Before December 31st</h2> <p>Make to sure to set up your new employer-sponsored retirement account before December 31st. Otherwise, you won't be able to reduce your 2016 taxable income by making contributions before Tax Day (April 17th, 2017) or the day you file your federal tax return, whichever is earlier. If you wait until the new year to set up your retirement account, any contributions made before Tax Day will reduce your 2017 taxable income &mdash; and you'll lose the opportunity to reduce your 2016 AGI (Adjusted Gross Income) by any contributed amount.</p> <h2>2. Not Completing a 401K or IRA Indirect Rollover</h2> <p>If you had a balance of less than $5,000 in your previous job's 401K or IRA plan, there is a good chance that you received an automatic cashout with a 20% withholding from your employer for applicable taxes. From the last day of your employment, you have 60 days to put the entire balance of the previous retirement account (including the mentioned 20% withholding!) into a new employer-sponsored retirement account that accepts rollovers. This process is known as an indirect rollover.</p> <p>You'll get that 20% withholding money back from the IRS in next year's tax return. In the event that your new employer's retirement account doesn't accept a rollover from your previous account, consider opening an IRA with a local financial institution before the 60-day deadline. (See also: <a href="">A Simple Guide to Rolling Over All of Your 401Ks and IRAs</a>)</p> <h2>3. Leaving W-4 Forms Alone</h2> <p>Depending on a variety of factors, your old W-4 tax withholdings may not cut it at your new gig. To figure out whether you're withholding too much (or too little), grab all of your latest pay stubs, find a copy of last year's tax return, and visit the online <a href="">IRS Withholding Calculator</a>.</p> <p>After punching in your data, this tool will provide recommendations on how to adjust your W-4 with your new employer to make sure that you meet your tax liability and minimize your refund. There's no sense in over-withholding and expecting a large refund, since the IRS doesn't pay interest while it sits on excess withholdings. That's money better kept in a savings or retirement account, where it can gain interest and compound over time.</p> <h2>4. Missing the Deadline to Make an Additional Estimated Tax Payment</h2> <p>If the IRS Withholding Calculator were to tell you that you're seriously behind your tax liability, you'll probably need to make amends <em>pronto, </em>lest you end up owing Uncle Sam at tax time. It's to your benefit to make an additional estimated tax payment to reduce or eliminate such a liability. For example, in the event that you know that there is an end-of-year bonus or commission check arriving before January 17, 2017, you have the option to use part of that check to make an estimated tax payment with <a href="">Form 1040-ES</a>.</p> <p>Make sure to use the IRS Withholding Calculator to estimate the right amount to mail to the IRS with Form 1040-ES and keep a photocopy of both the form and check for your own records.</p> <h2>5. Not Enrolling in a New FSA Plan Within 30 Days</h2> <p>You have up to 30 days from your hire date to enroll in an employer's flexible spending account (FSA). If you miss that deadline, you'll have to wait until your company renews its FSA plan, your plan administrator announces an open enrollment period, or you have a qualifying life event, such as changing marital status or having a baby.</p> <h2>6. Forgetting About Balances in Previous FSA Accounts</h2> <p>You may be so busy training at your new job and completing paperwork that you forget about remaining benefits at your previous employer. Check the rules from your previous FSA account regarding the expiration date of available money once you separate from your old employer. Most FSA plans provide a grace period to use the money, but some of those deadlines may be as early as the end of the month in which you separate from your employer. Unless you use your FSA funds in full by the applicable deadline, you'll lose them all.</p> <h2>7. Going More Than Two Months Without Health Coverage</h2> <p>As you're transitioning from one job to the other, keep an eye on the start and end dates of previous and current health plans. Under the Affordable Care Act (ACA), better known as Obamacare, you owe a fee for any period greater than two months in which you, your spouse, or your tax dependents don't have qualifying health coverage. In most cases, the penalty fee is 1/12 per month of <a href="">2.5% of your household income</a> or $695 per adult, whichever is higher.</p> <p>Being uncovered for only one to two months, qualifies you for a <a href="">short gap exemption</a> and you're not liable for the fee. Find out whether or not you're able to claim a health coverage exemption with <a href="">'s Exemption Screener</a>.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Damian Davila</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">The One Question You Need to Answer to Choose the Best Plan on the Health Care Marketplace</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">6 Health Insurance Benefits You&#039;re Probably Not Using</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">Left a job? Do a rollover.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">5 Vital Things to Remember When Buying Health Insurance</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">Going Without Health Insurance in 2015? Here&#039;s What It&#039;ll Cost You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career Building Insurance Retirement 401 k affordable care act benefits employers flexible spending health care IRA medical insurance new job obamacare rollovers taxes Mon, 31 Oct 2016 10:00:07 +0000 Damian Davila 1822947 at I’ve Lived Both Sides of the Healthcare System. This Is What I've Learned. <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ive-lived-both-sides-of-the-healthcare-system-this-is-what-ive-learned" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Health" title="Health Of The Nation" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>This debate has been furiously argued on both sides for several months, so I thought I&rsquo;d throw my hat in the ring. I lived with the British National Health Service (NHS) until I was 26 years old, and then I moved to America. For the last 9 years, I have lived with private healthcare.</p> <p>Obviously this is just one man&rsquo;s opinion. You have your own opinion, and that&rsquo;s cool. That&rsquo;s what&rsquo;s great about this country. What is also great is that we can talk openly about this in a public forum, and (hopefully) spark some intelligent debate and questions. So, let me first begin with my experiences from both sides of the pond.</p> <h2>Living With The British NHS</h2> <p>You will hear horror stories about British healthcare, and I will be the first to say the system is not perfect. But it is no archaic nightmare filled with medieval torture devices and untrained doctors. On the whole, my treatment was great.</p> <p>When I wanted to see a doctor, I saw a doctor. No co-pay. It was the doctor of my choosing, and my family has had the same GP since way before I was born. He was always being retrained on new techniques, and he wasn't overzealous with a prescription pad. When I made an appointment, I was seen within 10 minutes. If I came in without an appointment, the wait could be an hour or more. I never waited longer than 90 minutes, and that was only because I was a walk-in. When I saw my GP, I was never rushed in and out of the consultation room.</p> <p>I had several small operations in Britain and everything went very smoothly. The wait from diagnosis to treatment was a few weeks. This may not be the case for everyone, but it was for me. Every hospital I ever went to was clean, efficient and, well, full. Yes, I will admit that there are too few hospitals, but that never stopped me getting treatment in a timely manner. When my sister had a baby, she was in a beautiful room which she shared with one other lady. It wasn't a private room, but it wasn't like a M*A*S*H ward either! And it's also worth noting that private insurance is available in Britain as an addition to standard coverage. BUPA is one example. So, if you have the money, you can upgrade to private rooms, jump ahead on a waiting lists, that kind of thing.</p> <p>Doctors and nurses, in my honest opinion, usually seemed quite happy with their work. However, most doctors in Britain earn a far more modest income than in the U.S. As far as I know, it's not a sticking point, but then again I'm not a doctor. I'm sure some salivate when they see the amazing salaries commanded by many U.S. doctors.</p> <p>Were there major downsides? Well, taxes were higher to help pay for the NHS. But, there were usually no co-pays, and prescriptions were filled at a standard price (around seven pounds last time I checked). There are definitely limits imposed on people in Britain, too. For instance, you may have to reach a certain age to be entitled to a hip replacement. And as I said, hospitals are sometimes few and far between. My own parents usually have to travel to the next town for some treatments because the hospital within their town is small and has limited services. But I never had to stand in line for a day to see a crummy, overworked doctor. It was not some &ldquo;Glenn Beck Nightmare&rdquo; with rusty beds, abandoned wards and filthy patients roaming the hallways of darkened hospitals. I was just fine, healthy, and happy.</p> <h2>My Treatment In The U.S.</h2> <p>Great. I can't deny it at all. I've had plenty of co-pays over the years, but I think that equates (kind of) with paying higher taxes for healthcare in Britain. Here, I pay out of pocket; back there I was paying before I saw my money.</p> <p>Prices for my medicnes, until this week, were fine. I have always been on a $10/$20 plan for generics and name-brand. That did just change, and now I dread the day when I may have to take a name-brand drug, as I am no longer covered for those.</p> <p>My waiting times here have been great, too. They were the same as in Britain, with no wait for scheduled appointments and up to an hour for a walk-in. The operations I had went fine, were painless, and came with a small $50 outpatient fee. My wife had two babies here, both births went very well, we had our own private room, and each time our total cost was just $200 (I saw the bill that went to the insurance company...$20,000!).</p> <p>Overall, when I was privileged enough to have good insurance through an employer, I was fine. But now, that's no longer the case, and I'm just hoping none of us ever get really sick or need major drugs, as we'll see ourselves facing huge bills.</p> <h2>In conclusion...</h2> <p>After living with both systems, and seeing very little difference in the actual quality of treatment, I have to say that I am for a public plan. The idea of making a profit healthcare, well it just leaves an incredibly nasty taste in the mouth. Knowing that while some people are being denied coverage for the most puerile reasons, CEOs and shareholders of these companies are earning billions of dollars, it's just plain wrong.</p> <p>Right now, a friend of our family is facing untold horrors because of the healthcare system. They are millions of dollars in debt because their daughter was diagnosed with cancer and they could not afford the $1200 per month for private family health insurance. They could lose everything, and at the same time still have to support a sick little girl. Is this fair? Not when you know that vast, vast sums of money are wasted in our current system, and that money goes to pad the bank accounts of the wealthy.</p> <p>It&rsquo;s an argument I&rsquo;ve been having with people for years. &ldquo;What&rsquo;s wrong with profit, what are you, a socialist?&rdquo; Not at all. Profit is great and I applaud it. If you want a Ferrari, and you can afford it, by all means go and line the pockets of the Ferrari company. I don&rsquo;t care. If you want an Omega watch, go get one. I hope Omega makes a fortune. If you buy Starbucks coffee, you are making the Starbucks corporation rich, and I say good for them.</p> <p>But here&rsquo;s the thing.</p> <p>No one needs a Ferrari. No one needs an Omega watch. No one needs a coffee from Starbucks. For that matter, no one needs most things that are available today, from your average family-sized pizza to a luxury home in the Hamptons. They&rsquo;re all wants.</p> <p>People NEED healthcare. It's that simple.</p> <p>They need to live. They need help when they&rsquo;re sick. They need operations to fix broken legs or arms, or heart transplants, or brain surgery. It&rsquo;s not like they can say &ldquo;nah, I&rsquo;m just not really digging this whole cancer treatment thing, I&rsquo;ll shop around and see if I can pick up a DIY version at Sam&rsquo;s Club.&rdquo;</p> <p>Now, when you couple a &ldquo;need&rdquo; with profit, you get slammed. We all saw it with the massive rise in gas prices not so long ago. How many of you stopped driving completely? It just didn&rsquo;t happen, because we need gas to get around. So, we paid the price and the oil companies had demolition derbies with Rolls Royces.</p> <p>Healthcare for profit, that&rsquo;s even worse in my book. There is all this talk of &ldquo;death panels&rdquo; and old people being denied coverage, but these things already exist! There are people employed by health insurance companies to keep costs low and profits high. That&rsquo;s why this enormous and ever-growing list of pre-existing conditions exists. My doctor once told me he was wary of removing a suspicious mole I had because I may not get future coverage for skin cancer! What kind of madness is this?!</p> <p>To a health insurance company, it&rsquo;s a risk and rewards game. They give you coverage, but it&rsquo;s all conditional. They can deny coverage at will it seems, and they give you lifetime maximums that, because costs keep rising, are now being met, even by children. I recently read a story of a young boy who can <a href="">no longer receive new prosthetic arms</a> because he&rsquo;s hit his max. But something tells me the CEOs are still getting big bonuses and rising salaries.</p> <p>And then there&rsquo;s the issue of switching jobs. Sometimes, you can&rsquo;t leave a company even if you want to because you cannot give up the health benefits. It&rsquo;s called &ldquo;golden handcuffs&rdquo; and it can cause real misery.</p> <p>I had none of the above problems in Britain. Did I have to wait for operations? Yes. But it wasn&rsquo;t a long wait. In all honesty, my care and service was almost identical to the service I receive here, except it was all paid for out of taxes. I paid more taxes than I do here, but not a lot more. And I can tell you this&hellip;no one EVER goes bankrupt in Britain because of medical bills. No one. Not a soul. No one worries about medical bills. It&rsquo;s not an issue.</p> <p>You should not fear for your health. You should not be afraid that an illness could lead to <a href="" title="Wise Bread's Guide to Bankruptcy">bankruptcy</a>. You should not be terrified of the cost of simply staying healthy and alive. And corporations SHOULD NOT profit from healthcare. Because at the end of the day, you and your life will always be less important than the price of their stock.</p> <p>Now, feel free to mow me down with comments, but consider this. Unlike most people, and most of you, I have lived with both types of healthcare. And I choose the public option. There is nothing to be afraid of. Do the research, forget the hype and fear mongering. In your current healthcare system, over <a href="">$700 billion is wasted</a> each year in administration costs! You deserve affordable healthcare.</p> <p>For further reading on the current healthcare debate, check out our sister site, <a href="" http:="""" the-us-healthcare-system-the-good-the-bad-and-the-ugly="">The U.S. Healthcare System: The Good, The Bad, And The Ugly</a></p> <ul> <li><a href="">The U.S. Vs. The World On Healthcare Quality</a></li> <li><a href="">Solidarity (At High Costs): The French Healthcare System</a></li> <li><a href="">Socialized Medicine In Britain: Is It Really That Bad?</a></li> <li><a href="">End Of Life Care: The Big Bad Wolf Of Healthcare Reform</a></li> <li><a href="">The Underinsured: The Sleeping Giant In The Healthcare Crisis</a></li> <li><a href="">Understanding The Healthcare Reform Debate: The Uninsured</a></li> </ul> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Paul Michael</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">How About a Price List at the Hospital or Doctor’s Office?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">How to Examine Your Healthcare Plan and Save</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">Health Care Reform: Good for People Like Me</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">What You Need to Know About Your FSA</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">Critical Illness Insurance For Wise Patients</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Health and Beauty Insurance Barack Obama healthcare medical insurance Private Health public health Mon, 07 Dec 2009 15:00:03 +0000 Paul Michael 3892 at The Best 4-Step Plan to Manage Your Medical Correspondence <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-best-4-step-plan-to-manage-your-medical-correspondence" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="file folders" title="file folders" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>If you've ever seen a doctor or been covered by health insurance, you'll relate to this. You sift through a pile of mail, and in it are two letters from your health insurer, a couple more from your doctor, one from your dentist, a packet from your employer's HR department, and something else from your Flexible Spending Administrator. If you have any kind of chronic illness or have recently switched insurance, the volume of this correspondence could be significant. How do you process the deluge of statements, notices, and bills for your healthcare? As with any good personal finance problem, there is a 4-step plan.</p> <p>While many insurers are allowing members to opt out of hardcopy mail in favor of emailed statements and e-alerts, the same concepts still apply as they would with hardcopy mail. Each piece of information you receive needs to be processed. Processing them with these four steps could make the difference between overlooking important pieces of information due to disorganization or staying a step ahead of your medical providers and payers and getting your bills resolved correctly.</p> <h3>1. Is it relevant or is it junk?</h3> <p>As with other types of correspondence you receive, the first thing to determine is if what you received from your insurer, provider, or employer is junk or relevant. Many pieces of correspondence that are relevant to you and should not immediately be discarded. A good rule of thumb is that anything pertaining to a specific medical service (bill, statement, Explanation of Benefits (EOB)) is probably something you'll want to either review carefully or save for future reference. Other pieces &mdash; standard privacy disclosures, announcements about services, and other form mailers &mdash; can probably be quickly discarded after a quick once-over.</p> <p>One word of caution: During your employer's open-enrollment season, be a little extra cautious about what you toss out. This is a time of year when it is worth doing an extra review of that seemingly low-value mail, as it could inform you of an important benefit or enrollment deadline. More than one person has had to spend hours correcting a benefits problem because the piece of paper they tossed out needed to be filled out and returned by a deadline.</p> <p>Doing this first triage step alone should get rid of a third or more of the medical documentation you receive.</p> <h3>2. Does it pertain to an <i>unresolved</i> medical bill or recent service?</h3> <p>They key word here is &quot;unresolved&quot;. Any documentation you receive related to a medical service that has yet to be settled, either by you or your insurance, should be saved in some sort of &quot;active&quot; file. It is likely that you will want to cross-reference an EOB from an insurer with the bill from the provider. In many cases, such as a Labor and Delivery, there might be multiple medical bills that you will need to compare with your EOBs to make sure everything ties together. If digging into an EOB is at all intimidating or confusing, you may find this guide on <a href="">how to read an EOB</a> helpful.</p> <p>On the other hand, if the correspondence you receive simply refers to some past medical bill or service that you believe has been paid accurately, such as an EOB showing that your insurer paid in full, you can skip to step 4.</p> <h3>3. Do you need to call someone?</h3> <p>Occasionally, you will open a piece of correspondence that sets off a red flag: Your insurance has denied an entire claim. Your doctor billed you $350 for a flu shot. Your provider says the entire bill is your responsibility because they have no insurance on file, even though you are fully covered. In these cases, pick up the phone and talk to whoever the information is from. HealthHarbor's guide to <a href="">dealing with health insurance denials</a> can help point you in the right direction on who to call and what to say if it is more than a simple issue.</p> <p>In most cases, your healthcare provider's office and your insurer will both have customer service representatives who can help with the more basic issues. If it becomes complex, get ready for multiple calls or written correspondence, complete with whatever documentation you've filed away for that visit or service. Don't forget about the patient's secret weapon when it comes to insurance issues &mdash; your employer's benefits department. They carry much clout as the ultimate buyer of insurance policies.</p> <h3>4. File, shred, or submit to your FSA?</h3> <p>Once you've gone through the above three steps &mdash; you've determined if correspondence is even relevant, you know if it refers to an open or closed medical bill, and you are satisfied that you don't need to straighten out any problems, you can file or shred the documentation.</p> <p>For any service that has yet to be fully resolved financially, keep the documentation in a folder exclusive to either open medical bills or that particular service, depending on your level of organization. If the service has been paid, you can either place the document in a longer-term file (if you are the filing type) or simply shred the document. We recommend shredding due to the sensitive nature of many medical documents. Before you do, however, make sure nothing on the bill &mdash; such as a copay &mdash; can be submitted to your Flexible Spending. If so, process it and wait for the reimbursement check to come or funds to show up in your bank account before shredding the documentation.</p> <p>Keep in mind that most larger insurers now give you access to EOBs and other documents online, so filing paper isn't as important as it used to be.</p> <p>In short, each step of this process should reduce the amount of paper you have floating around your desk. More importantly, it will separate the wheat from the chafe when it comes to healthcare documents. Knowing which one or two of those ten documents are really important, and which require action, will help you use your time well and get the most from your health insurance and medical providers.</p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p>This is a guest post by Heather Johnson, Director with <a target="_blank" mce_href="" href="" title=""></a>.</p> <p>Find more tips on HealthHarbor:</p> <ul type="disc"> <li><a target="_blank" mce_href="" href="" title="Saving Money at the Doctor's Office">Saving Money at the Doctor's Office</a></li> <li><a target="_blank" mce_href="" href="" title="Dealing With a Bad Health&amp;nbsp;Insurance Company">Dealing With a Bad Health&nbsp;Insurance Company</a></li> <li><a target="_blank" mce_href="" href="" title="Interactive Tool for Finding&amp;nbsp;Discounted Generic&amp;nbsp;Drugs&amp;nbsp;">Interactive Tool for Finding&nbsp;Discounted Generic&nbsp;Drugs </a></li> </ul> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Heather Johnson</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">5 Workouts (Besides CrossFit) That May Actually Be Hurting You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">15 Wonderful Uses for Witch Hazel</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">Your SSN Can Now Be Accurately Guessed Using Date and Place of Birth</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">Debit Or Credit? Which One Should You Choose At The Checkout?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">How I got two CEOs to listen to my complaints</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs General Tips Health and Beauty filing mail medical insurance Fri, 30 Oct 2009 13:00:03 +0000 Heather Johnson 3770 at Not free to be poor <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/not-free-to-be-poor" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Bench in herb garden" title="Bench in Herb Garden" class="imagecache imagecache-250w" width="250" height="233" /></a> </div> </div> </div> <p>Nobody wants to be poor.  It&#39;s a <a href="/voluntary-simplicity-versus-poverty">dangerous and constrained position</a> to be in.  But there are people out there (me, for instance) who are relatively happy to live at a fairly low standard of living.  Choosing to live at a low standard of living means you don&#39;t need to earn as much money--which opens up a huge range of possibilities that ordinary people don&#39;t have.  The way society is organized now, though, that&#39;s not a safe option.</p> <p>The classic early retirement strategy is simple to describe:  Earn a good salary, live frugally, save (and invest) the difference.  If you want to retire very early, you need a pretty big gap between what you earn and what you spend.  You also need to know how little you can afford to live on.  To those ends, living frugally is a double-win:  It frees up money to save and invest, plus it also acts as a &quot;proof of concept&quot; for your standard of living in retirement.</p> <p>(When you&#39;re unhappy with your job, it&#39;s easy to look at your spending and think to yourself, &quot;You know, if I didn&#39;t have to go to work every day, I wouldn&#39;t need to spend so much on X&quot; (where X can be just about anything from booze to vacations to video games).  While there&#39;s some truth to that, most people are smart enough to know that the thing to do is to cut your budget <strong>first</strong>.  It would suck to retire early and then discover that you&#39;re miserable without your X, whether it&#39;s a country club membership or a daily frufru coffee drink.)</p> <p>As I say, simple to describe.  It&#39;s even pretty simple to do, as long as you&#39;re willing to live below your means.  The problem, especially for Americans, is that it isn&#39;t safe.</p> <p>Suppose you do this.  Suppose you get a small, cheap apartment that&#39;s within walking distance of most of the places you need to go.  You quit driving much, parking (or even selling) your car.  You shop your closet for clothing, let your wardrobe dwindle, and only buy versatile, classic items that are made to last.  You eat a frugal diet with lots of in-season veggies and little or no meat.  You forgo new gadgets and toys, and you seek out cheap entertainment such as free concerts, museums, and libraries.</p> <p>Suppose, through such means, you get your expenses down to the point that you can <a href="/how-much-do-i-need-to-retire-how-much-can-i-spend">fund your lifestyle</a> entirely from your investment return.  (Short of that, maybe your investment return can fund a large enough portion of your living expenses that you can choose any sort of work that appeals to you, even if the pay is very low.)</p> <p>Are you now free to retire?  No.  At least, not if you live in the United States.  You have too many huge contingent expenses.</p> <p>A few of these can be dealt with through careful planning.  You can estimate how much you&#39;ll need to buy a new car every so often.  You can estimate how much you&#39;re going to have to spend to put your kids through college.  You can estimate what you&#39;ll need to cover an occasional new roof, furnace, air conditioner, window, door, hot water heater, and so on (generally not an issue if you rent).  But even if you have savings to cover these items, there are some contingent expenses that are simply unknowable.  In particular, you might get sick or injured, and find yourself bankrupted by medical bills.  </p> <p>Huge <a href="/things-to-insure-things-not-to-insure">contingent expenses</a> are exactly what insurance is for, and it works pretty well for protecting you against the loss of your home in a fire or of your car in a collision.  But, at least in the United States, it doesn&#39;t work worth crap for health insurance.</p> <p>Health insurance in the US is not only expensive, it&#39;s also uncertain.  Even if you can afford it, if you&#39;ve ever been seriously ill, there&#39;s a pretty good chance that no one will sell it to you at any price.</p> <p>There are other contingencies that the potential early retiree needs to worry about--investment losses, for example, or soaring prices for basic necessities like food--but they&#39;re relatively straightforward to deal with.  Having more than than the absolute minimum to cover your frugal lifestyle is wise.  A <a href="/best-asset-allocation-for-your-portfolio">well-diversified investment portfolio</a> that includes some foreign stocks, some bonds, maybe some real estate and precious metals can be expected to hold up pretty well.  A fraction of your retirement income should be in the form of an annuity (such as a pension), and a fraction should be inflation-protected (such as <a href="/tips-and-i-bonds">TIPS or I-Bonds</a>).  A willingness to do some sort of paid work (to only semi-retire, as it were) adds to your options as well.</p> <p>Sadly, none of these really solves the problem of medical insurance.  (Well, bumping your investment portfolio up by a few million dollars would be a partial solution, in the sense that most health insurance has a maximum payout of a few million dollars anyway, so with enough cash, you could just carry that risk yourself.  But that&#39;s just a further example of the fundamental problem that there&#39;s no ceiling on your potential liability.)</p> <p>I think everyone suffers as a result of the way we do health care in the United States.  How many people are working at jobs they don&#39;t like, or staying married to people they don&#39;t love, simply to keep their health insurance?  What if those people were unleashed to follow their bliss?  Everyone would be better off--them, their children, the people they&#39;re (unhappily) working for, the people they&#39;re (unhappily) married to, the people who could appreciate whatever they might be creating, if they weren&#39;t stuck in some job they no longer enjoy.</p> <p>I&#39;m looking forward to the day when society is organized such that I can pick a standard of living, arrange to earn that much money, and feel confident that ordinary bad luck won&#39;t ruin my life.  I want to be free to be poor.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Philip Brewer</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">Health Care Reform: Good for People Like Me</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">37 Ways You’d be Better Off as a Bum</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">6 Ways Meditation Can Make You a Money Master</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">6 Ways Millennials Have Changed Money (So Far)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">How to Think Like a Billionaire When You’re Broke</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Insurance Lifestyle asset allocation health insurance investing medical insurance poverty voluntary simplicity Mon, 07 Jul 2008 21:25:48 +0000 Philip Brewer 2221 at The Dirt on Travel Insurance <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-dirt-on-travel-insurance" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src=" insurance.jpg" alt="travel insurance" title="travel insurance" class="imagecache imagecache-250w" width="250" height="168" /></a> </div> </div> </div> <p class="MsoPlainText">Ah…to enjoy your next vacation with or without travel insurance – that is the question. Nothing is going to happen to you when you’re enjoying your vacation, we know that. But what if? As with all insurance, it is a gamble. There are those who have made claims and swear by it, and others who avoid insurance like the plague. </p> <p class="MsoPlainText">In the world of travel insurance, no two policies are the same. Different activities and locales are covered in different ways between insurance companies, and even within the same company you can see different terms and conditions. The information below will help you sift through the weird and crazy world of travel insurance. </p> <p class="MsoPlainText">&nbsp;</p> <h2>Different Kinds of Coverage</h2> <p class="MsoPlainText">There are three main types of travel insurance you can decide on your needs for. </p> <p class="MsoPlainText"><strong>Trip Cancellation</strong></p> <p class="MsoPlainText">Trip Cancellation insurance is often offered to you at the time of booking your flight, and in many cases is not available to you after the ticket is purchased. It will refund all or a part of your non-refundable travel costs if you need to cancel your trip or cut it short due to a personal or family medical emergency. There are tons of stipulations around the coverage, how and when it’s purchased, and what is consequently covered. However if it is an expensive trip involving long-haul flights, it may well be worth your while. </p> <p> <strong>Baggage Loss/Theft</strong></p> <p class="MsoPlainText">With this type of insurance, the value (or a portion thereof) of your travel belongings is reimbursed to you upon loss, damage, or theft of your loot. How the stuff is valued for reimbursement purposes varies, and coverage also changes according to how or where it was lost. Expect to provide purchase receipts and pictures or other forms of proof of ownership before getting any money back. You will usually have to wait 48 hours before even being able to file a claim, so if your luggage was lost and you’re sick of wearing the same outfit you flew in, you will likely have to shell out some bucks out of your pocket for new clothes that won’t be covered. All in all, unless you are travelling with some really expensive stuff, this type of insurance is more of a hassle than a help. Besides which, you may already have this coverage…see below for more information on that. </p> <p class="MsoPlainText"><strong>Accident / Medical Emergency</strong></p> <p class="MsoPlainText">This is the most commonly purchased (and arguably practical) type of travel insurance, and covers or reimburses unexpected medical expenses incurred during your trip. If it was an accident, what you were doing or where you were doing it when you were hurt matters; some policies cover sports like skydiving and scuba diving while others don’t. Certain locations in political turmoil or getting hurt during a terrorist attack might also be off the list of covered events. And if you become ill, don’t expect to see a cent from the insurance company if they can prove that the illness was a result of or related to any pre-existing conditions. </p> <p class="MsoPlainText">However having said all that, you can’t anticipate some accidents or medical conditions cropping up, and if you are in a foreign country, are prone to heart attacks, or participating in a hazardous activity, this coverage may be worth its weight in gold. </p> <p class="MsoPlainText">&nbsp;</p> <h2>How Much Should You Pay</h2> <p class="MsoPlainText">The older you are, the more you can expect to shell out for Accidental/Medical insurance. Likewise though, you will statistically have a greater chance of making a claim too. The general rule of thumb is that the cost of your travel insurance should be around 5% of the cost of your trip. </p> <p class="MsoPlainText">I remember talking to a fellow who was travelling with his 90 year old mother. The cost of insurance for her was astronomical (definitely more than 5%), but he justified the cost because of her age and health, knowing how much it would cost him if he were uninsured and something happened to her. Peace of mind is not to be underestimated when making travel insurance decisions. </p> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText">&nbsp;</p> <h2>Things to Consider Before Buying</h2> <p class="MsoPlainText">You may already have coverage. As I alluded to in <a href="/credit-card-insurance-no-thanks" target="_blank">another article</a> (and as pointed out in the comments to a more <a href="/top-seven-reasons-why-i-use-my-credit-card-for-everything" target="_blank">recent post</a>), you may automatically have some travel insurance coverage by virtue of charging your trip to your credit card. You may also already own the coverage through your existing health insurance plan, home owner’s insurance, or even life insurance. It is worth a call to each of these insurers to find out if you have coverage, so as not to over-insure yourself and spend money on premiums where it need not be spent. </p> <p class="MsoPlainText"><strong>Here are some questions to ask your credit card company:</strong></p> <ul> <li>Do you provide travel insurance and what does it include?</li> <li>Does it cover family members traveling with me?</li> <li>Do I have to purchase my flights on that credit card for the trip to be covered? </li> <li>What are the limitations?</li> </ul> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText"><strong>Ask this of your health insurer:</strong> </p> <ul> <li>Am I covered outside of the country?</li> <li>Does the service coverage include ambulance?</li> <li>Are there any limitations? </li> <li>Is airlift available and included in an emergency?</li> </ul> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><strong>Questions for your rental/homeowner insurance company are following:</strong></p> <ul> <li>Does my policy cover my belongings when I take them out of the house?</li> <li>Does my policy cover my baggage if it is lost or delayed during a vacation?</li> <li>How long do my bags have to be missing before I can make a claim?</li> <li>What will I need to provide in order to make a claim? </li> <li>If I pack valuables, such as art or jewellery, are they covered? </li> </ul> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText"><strong>And finally, some questions for your life insurer are:</strong></p> <ul> <li>Am I covered if I die in a foreign country?</li> <li>What are the benefits - and limitations - should I die or suffer loss of limb in an accident abroad?</li> <li>In the case of death (overseas or in-country), will my policy cover the cost to ship my body home? </li> </ul> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText">&nbsp;</p> <h2>Do I Really Need It? </h2> <p class="MsoPlainText">Armed with the information above, the decision to buy travel insurance is an individual one and full of grey areas. Here are some questions for you to ponder: </p> <ul> <li>What are the chances of something happening while you are away? </li> <li>Do you have a sick parent or sibling, whose untimely death might cut your trip short? </li> <li>Are you in good health but generally aging, such that an accident abroad might take a greater toll on you? </li> <li>Or are you travelling to a country where medical expenses are pricey (like anybody traveling to the US from another country), or where access to medical care is remote and would entail an expensive airlift? </li> <li>Lastly, are you planning on participating in any higher-risk sports or activities that might increase your chances of getting hurt?</li> </ul> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText">&nbsp;</p> <h2>Okay, So I Need Travel Insurance…</h2> <p class="MsoPlainText">Having done the leg work to determine that you still need or want coverage, next comes the daunting task of comparing quotes, policies, and offerings. </p> <p class="MsoPlainText">I found a few interesting resources for getting comparative quotes at <a href="" target="_blank">Insure My Trip</a> (through which I purchased my most recent travel insurance plan) and <a href="" target="_blank">World Nomads</a>. I also checked out what <a href="" target="_blank">Travel Cuts</a> had to offer, and they have relatively easy-to-understand lingo in their fine print. </p> <h2>Things To Remember…</h2> <p class="MsoPlainText">Remember, please do go over the policy’s terms with a fine tooth comb before signing on the dotted line. Each company will differ in their terms, and even within one company there can be discrepancies between plans. </p> <p class="MsoPlainText">Once purchased, <strong>it is important not only to carry the policy number and claims/info telephone number with you at all times while travelling, but also to leave the same information with somebody at home</strong>. That way if something happens and you can’t wrestle with the claims department yourself, you have somebody at home who can advocate on your behalf. And always – always – <strong>call the insurance company as soon as something happens that could result in a claim</strong>. Sometimes they won’t cover you if you incur a medical expense before calling them first or are taken to a hospital that’s not on their list. </p> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText">Happy Travelling!</p> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText"><em>Disclaimer: I have no vested interest in travel insurance or any of the sites mentioned.</em> </p> <p class="MsoPlainText">&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Nora Dunn</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">How to Travel in Style...For Free</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">The 7 Rules of Budget Travel</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">Make Your Hobby Pay Its Way</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">The 5 Best Folding Bicycles</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">The Cost of Full-Time Travel</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Cars and Transportation Lifestyle accident insurance Art and Leisure baggage insurance flight insurance medical insurance travel insurance trip cancellation insurance Wed, 21 Nov 2007 01:02:02 +0000 Nora Dunn 1415 at