Health Insurance Decision Time

Once again it is time to make health insurance decisions. If you are insured through your workplace, your deadlines will be determined by your employer. If you are insured through Medicare (including Medicare Advantage plans), you have between now and December 7 to make changes; your best resource for unbiased assistance in Iowa is the Senior Health Insurance Information Program. Similar resources are available in other states, as well.

If you are not yet eligible for Medicare, and do not have affordable insurance available through an employer, then the Health Care Marketplace is the place to turn for quality health insurance plans* that do not consider pre-existing conditions. The base premium for plans in the Marketplace is affected by your location, your age, and use of tobacco. That is because health care costs vary by location, and are higher for people who are older and who use tobacco. Two other factors also affect your cost:

  • Type of plan (bronze, silver, gold, platinum) you choose. All of these plans are quality* plans, but it is valuable to understand the difference. Bronze plans have the lowest premiums, because they have higher deductibles and co-payments. Premiums increase as you go up in metal value. Platinum plans have the highest premiums, but lower deductibles and co-pays. This post from 2014, when the Health Care Marketplace was new, provides more detail.
  • Your income. That’s right. Two people might pay different premiums even if they are both 30-year-old non-smokers who live in the same county and both chose a silver plan. The Marketplace is designed to provide more help in paying for health insurance to people who need it more. So when you enroll in a Marketplace plan, you will estimate what your household’s income will be for 2022. Based on that estimate, the system determines what your share of the premium for a silver plan should be, and the remaining amount will be covered by an Advance Premium Tax Credit, which is an estimate of how much help you are eligible for. All this is based on a baseline silver plan; you will get the same amount of help toward your premiums regardless of what “metal color” plan you choose. At the end of they year, your tax return will show your actual total income for the year. The actual income will be used to determine your final Premium Tax Credit amount. If you received too much or too little in advance, the difference will be taken care of on your tax return, by either increasing or decreasing your tax refund or the amount of tax you owe when you file. The Kaiser Family Foundation offers a useful tool to give you an idea of how much help you may be able to receive.

Open enrollment for 2022 health plans in the Marketplace continues through January 15, but if you want your coverage to begin as early as possible (January 1) then you need to enroll by December 15. Enrolling between December 16 and January 15 will get you coverage that begins February 1. Enroll online at www.healthcare.gov OR call 800-318-2596. A link is also available to find local help. You have the option to choose (filter) whether you wish to find an agent/broker OR would rather get help only from an assister.

*What do I mean by “quality” plans? The biggest factor is that a quality plan covers all ten essential types of health care. By contrast there are plans (sometimes referred to as “junk plans”) that purport to provide health coverage, but exclude certain categories. I’ve heard of situations where people are excited to get health insurance, but then when need arises they discover it doesn’t cover hospitalization, or it only pays $100/day toward hospital care, or has some other substantial limitation. In addition marketplace do not have annual or lifetime limits on what they will pay for an individual’s care. Another key “quality” factor is that the plans have been actuarially evaluated as providing appropriate coverage for an appropriate cost. In other words, they are not set up to make big profits for the company.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Confused about recent Federal Student Loan changes? Look no further!

If the Federal Student Loan changes over the past 18 months weren’t confusing enough, the U.S. Department of Education recently announced several more that may leave you wondering how you are affected this time around. The original COVID-19 Emergency Relief measures are tentatively set to expire on January 31, 2022, but the new provisions are either permanent, expire on October 31, 2022, and/or impact a smaller group of borrowers:

  • On August 20, the U.S. Department of Education announced that eligible Servicemembers would automatically, and retroactively, receive a 0% interest-rate benefit if they deployed to areas qualifying for imminent danger or hostile fire pay. This is not a new benefit; however, Servicemembers previously needed to submit a form, with supporting documentation, to find out if their loans and deployment qualified for the 0% interest waiver. 
  • Several updates have been made over the past few months regarding Federal Student Loan Servicers. PHEAA (FedLoan Servicing), Granite State, and Navient will no longer service U.S Dept of Ed-owned loans when their contract expires. Current borrowers will receive numerous notifications throughout the loan transfer process. Watch for those notifications: be sure to save the information or respond as requested.
  • The often-troubled Public Service Loan Forgiveness (PSLF) Program is receiving a giant makeover. Some of the provisions are temporary, while some remain unchanged. Regardless, these changes are significant and remain in effect until October 31, 2022. 

Are you still unsure of how these changes affect you? Contact an Iowa State University Extension and Outreach Financial Educator today! 

The information provided is educational in nature to help you make your own informed decisions and is not intended to substitute for professional advice or serve as an endorsement of any financial product or service. Consult with licensed professionals prior to implementing any of the information provided to determine the course of action is best for you. 

Ryan Stuart is a Human Sciences Specialist, Family Wellbeing, with Iowa State University Extension and Outreach. Ryan will be joining the regular blog team soon, so watch for more posts from him.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Getting a Leg Up

 

Next week, it will be 2 years since I took the Remote Work Certificate Course. It was not until I took this class that I realized that I have been working in a REMOTE job for more than 20 years now…meaning that I work from a remote site away from my employer’s headquarter.  As a specialist working for Iowa State University Extension and Outreach, I am house in a county office and serve multiple regions, coming to the ISU campus only three or four times a year.  We had been ZOOMing long before COVID hit, working, meeting, teach and hosting educational programs statewide and beyond.

It turns out that more than half of all U.S. job are remote work.  I was surprised to learn that there are more workers over the age of 40 than under 40 working remotely…I thought remote work would mostly appeal to the younger generation. In reality, 86% of the US workforce WANTS to work from home. The bad news is…currently only 3% of NEW job posts are transparently advertised as remote work.  It is for this reason that Iowa State University Extension and Outreach offers the Remote Work Certificate Course.  At the end of the month-long course, participants can schedule time with a career coach for assistance in creating goals, identifying jobs, working through a checklist, creating an online presence, and identifying networking opportunities.

There are plenty of reason why someone would want to work from home:

  • Employees can save more than $7000 per year in employment related expenses.  With the rising cost of gas, I predict that number to rise even more.
  • The opportunity for career advancement. Women make up 42% of the leadership in remote companies.
  • Professionals with experience working remotely are 63% more likely to earn $100,000/year than those that have never worked remotely…making it worth your time to learn the skills needed to work remotely.
  • 96% of U.S. employees NEED some flex in their current job because of aging parents or the needs of small children.

For more information about the Remote Work Certificate Course, visit our website. The next class begins the first Monday of next month and registration ends soon, so register now.

~Brenda

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Buying a Home? Be Informed!

Buying a home is a major decision. In fact, it involves several major decisions. But most of us do it very few times in our lives — perhaps only once. That means that, unlike other consumer decisions (buying groceries, choosing a cell phone plan), we don’t have much opportunity to practice, or to learn from experience.

Without much chance to learn from experience, then we need to look for other ways to learn everything that will help us make well-informed home-buying decisions. Completing “A Home of Your Own,” a self-paced learning option from ISU Extension and Outreach, can help build the knowledge and skill needed to make those big decisions with confidence.

Topics include selecting a home that fits your needs, choosing a lender and understanding loan terms, navigating through the closing process, and more. The final section of the course focuses on being a home owner — including how to maintain your home’s value. After finishing the course, you will receive a certificate of completion which you can show to your prospective lender to meet any home ownership education requirements they may have.

The course costs $45 (per person or per couple), and is available 24/7 so you can use it at your convenience. Learn more!

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Medicare Open Enrollment – So What?

Medicare’s annual open enrollment period for 2022 coverage began last Friday and continues through December 7. But why does it matter? Most people enroll in Medicare when they turn 65 — doesn’t that take care of it? The answer is: probably not.

NOTE: Even if you are too young for Medicare, this blog post may be worth your attention if there are people you care about who are enrolled in Medicare. I’d encourage you to touch base with them to make sure they understand their options, and the mailings they are receiving, and help them get help if they need it.

During open enrollment each year, consumers have options to make changes. They also may receive a small deluge of marketing mail, email, and perhaps even phone calls. It’s important that they understand what their options are, and that they pay attention to mailings — especially those from Medicare itself (CMS – The Center for Medicare and Medicaid Services) AND from their current insurance company(ies). There are generally three types of choices consumers make during Open Enrollment:

  • Prescription Drug (Part D) Plan. This may be the most common decision people make during open enrollment. Most Medicare participants also enroll in a separate insurance plan to help cover prescription costs. These plans are offered by CMS in partnership with private insurance companies, and you may literally have dozens of plans to choose from. Some people make the mistake of assuming that if they like their current plan, they should just stay with it. The reason that’s a mistake is that plans can change substantially from one year to the next. Maybe this year, your plan covered your medications nicely, with low co-pays; but next year, they could choose to drop one of your medications or attach a much higher co-pay. So even if your own medications haven’t changed, it is smart to use the Medicare on-line tool to see which plans offered in your area will cover your medications at the lowest cost to you. (SHIIP can help with this — see below)
  • Medicare Advantage Plan. Some consumers choose Medicare Part C (Advantage) plans instead of traditional Medicate Part A and B. These are managed care plans operated by private insurance companies in partnership with CMS; they generally have a defined network of participating hospitals, doctors and other medical providers. They often cover services not covered by traditional Medicare (including vision or dental care), but may also have more restrictive coverage on some services as compared to traditional Medicare. Many Advantage plans also have prescription drug coverage built in. These plans can change from year to year as well, and open enrollment is the time to make a change if you wish to.
  • Medicare Supplement Plans. Many consumers who use traditional Medicare Part A and B also enroll in a supplemental insurance plan, sometimes referred to as Medigap insurance (because it covers gaps – including deductibles and co-pays – that Medicare does not cover). These plans are offered by private insurance companies. Open enrollment is also a time to evaluate your supplement coverage.

Health insurance is complicated for people of any age. Fortunately, excellent help and information is available through the Senior Health Insurance Information Program (SHIIP). SHIIP is an office within the Iowa Insurance Division, so it is completely non-commercial and not sales-oriented. Note: similar agencies are available in other states too. The SHIIP website offers a wealth of information. In addition, they have a helpline during business hours at 800-351-4664 (TTY 800-735-2942). Most valuable of all, however, is the corps of highly-trained volunteers located in counties across the state. Find SHIIP volunteers near you! These SHIIP volunteers kick into high gear during fall open enrollment, typically offering appointments to help consumers understand their options for Part D (Prescription coverage) and other coverage.

If you, or someone you care about, need help during Medicare Open Enrollment, I urge you to connect with your local SHIIP resource today! For general information about Medicare, the annual “Medicare and You” handbook is the best starting point.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Be Vigilant – Forever

A friend of mine received a letter recently telling her that her application for a home equity loan was denied. But here’s the thing: she didn’t APPLY for a home equity loan!

Did she just laugh and throw the letter away? NO, thank goodness – she knew this could indicate a serious problem. It didn’t take long to learn more – all she had to do was contact the lender that had sent the letter.  It turns out that someone ELSE had used HER name and social security number to apply for a home equity loan of several thousand dollars. The loan was turned down due to a couple of small inaccuracies on the application. If the imposter had gotten all the details correct, my friend might have been “on the hook” for that loan – a victim of identity theft.

Do you remember the Equifax data breach a while back? My friend’s information was compromised in that data breach, which is likely how these imposters got her information. That breach was FOUR whole years ago!  Many people went “on alert” for months after that breach – but are they still maintaining that vigilance?

There’s a lesson here for all of us: if your information has ever been compromised in any data breach, you must be vigilant forever. Once the information is out there, the “bad guys” can sit on it for years, even decades, and then start to use it. And frankly, even if you are not aware that your information has ever been compromised in a major breach, you should still be fully vigilant, because not all data leaks are exposed, or exposed promptly. This may feel a little discouraging – how can we possibly protect ourselves?

Credit Freeze. The good news is that we DO have options! One of the most effective steps we can take to reduce our identity theft risk is to put in place a security freeze (known as a “credit freeze”) on our files at all three of the major credit reporting agencies. This became a free option for all consumers thanks to a federal law passed after that infamous Equifax breach. With a credit freeze in place, no one can open any kind of credit account in our name. Even WE cannot open an account in our OWN names with a credit freeze in place.  My example: two years ago I bought a new car, and borrowed part of the cost. I got home from completing the loan paperwork, and almost immediately got a call from the lender: “Hey, we can’t process your loan application till you lift the freeze on your credit file.” He told me which credit reporting agency he was using, and I went into my records to find the information I needed to lift the freeze. I was able to lift it temporarily – just 3 days – and then the freeze went back into place, so I was protected once again.

A credit freeze is an incredibly valuable protection against imposters opening accounts in our names. The Consumer Financial Protection Bureau provides information about how to “freeze” your credit file. (https://www.consumerfinance.gov/about-us/blog/free-credit-freezes-are-here/)

Check Your Credit Report. Checking your credit report regularly does not prevent identity theft, but it does help to detect it — and like many other situations, early detection can minimize the damage you experience. The one safe resource for free credit reports is www.annualcreditreport.com, a joint project of all three national credit reporting agencies (Equifax, Experian and TransUnion). In normal times each consumer is eligible for one free report per year from each of the agencies (a total of three per year). However, during the COVID emergency, until April 20, 2022, we can check our credit reports weekly if we wish. When you receive your copy, carefully review it and dispute any errors you discover. The Consumer Financial Protection Bureau offers a helpful credit report checklist.

Report ID Theft. If you do discover, as my friend did, that your identity has been used fraudulently, be sure to report the incident at the Federal Trade Commission Identity Theft webpage, www.identitytheft.gov. This site outlines steps you can take to defend yourself, and is a good first stop for identity theft victims.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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URGENT – Mortgage Forbearance Deadlines this Week!

We mentioned Mortgage Forbearance earlier as a helpful tool for homeowners who are having trouble with their mortgage payments. Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances. The CARES Act (passed back in April of 2020) required that when a mortgage is backed by a Federal Agency, the borrower is automatically eligible for 3-6 months of forbearance if they are experiencing financial hardship resulting (directly OR indirectly) from COVID-19. Forbearance creates a helpful reprieve for struggling families.

The deadline to apply for forbearance under the CARES Act is September 30, 2021 IF your mortgage is backed by HUD/FHA, USDA, or the VA! That means NOW is the time for action. NOTE: if your loan is backed by Fannie Mae or Freddie Mac, there is not currently a deadline for requesting an initial forbearance.

Not Sure About Your Mortgage? Contact your mortgage company and ask them about your mortgage — asked if was backed by any of the agencies listed above. It that answer is “yes,” and if you are struggling with payments and bills, apply right away: ask your mortgage company to provide the needed application materials.

What does it mean to have your mortgage “backed” by a government agency? That simply means that when you bought your home, you qualified for special terms – often a lower down payment, reduced fees, or preferential interest rate thanks to a government program. I remember that when I bought my first house it was an FHA Loan; many first-time homebuyers qualify for special terms, and others do as well. If you are not sure, there is no harm in asking!

The Consumer Financial Protection Bureau provides more information about forbearance. Financial assistance for homeowners at imminent risk of foreclosure may be available as well; the Iowa Finance Authority provides more information, about help that is currently available, and notes that more assistance, authorized under the American Rescue Plan Act, will be available within the next several months.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Prioritizing Bills

When money is tight, we sometimes have to make VERY difficult choices. 

What do I mean by “difficult?” I’m NOT talking about “which sweater should I buy?”  That does not qualify as a difficult choice in the true sense of difficult choices. I am talking about “I have 8 bills to pay, and I can only pay 5 of them.”

When you need to consider which bills to pay, a key is to ask “what would be the consequences of not paying each bill?” With that in mind, there are three types of bills that generally need top priority. These are bills that are necessary to:

  1. Keep you safe and healthy (for example, picking up your prescription medicines)
  2. Keep you housed (for example, paying rent or mortgage)
  3. Keep your employment (for example, renewing your professional license, or keeping transportation to work)

These three priorities go beyond actual bills, too. For example, buying groceries is not a “bill,” but having healthy food is essential to keeping you and your family safe and healthy. Likewise, if driving is the only way to get to work, then your car needs gas. Applying those three priorities will help you make the difficult choices about what bills to pay and what money to spend.

Asking for help is important too. Sometimes direct help is available for your bills; for example, the Low Income Home Energy Assistance Program (LIHEAP) can help with heating/utility bills if you qualify. In other cases, getting help with something else can free up some money for your bills. For example, getting food from a food pantry would make money available to pay more of your bills.

Using these three priorities is a short-term solution. When you’re in a difficult situation, you need a short-term plan to get you through the week or the month. But when the problem continues over time, the short-term solution is no longer enough. Longer-term changes will be needed, such as increased income, or a permanent reduction in expenses.

If you face a situation where long-term changes are needed to resolve your financial challenges, it is often wise to seek help assessing your situation. ISU Extension and Outreach specialists can help you examine your options. We cannot tell you what to do – only you can make that decision – but we may be able to help you identify new options, or thoroughly assess the pros and cons of various actions. Find and contact your local educator here.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Aging Safely – Self or Others

While we’re all aging, some of us are further along in the process than others! But even you’re still very young, you probably have people you care about who might be labeled an “older adult.” With age comes certain privileges and freedoms, but we also have to acknowledge that aging also brings cognitive changes as well as physical changes. This is true even for those with no cognitive impairment or dementia – everyone’s brain changes as they age.

This cognitive aging can lead to “diminished financial capacity” – a term used to describe a decline in a person’s ability to manage money and financial assets to serve his or her best interests, including the inability to understand the consequences of investment decisions. Some errors that occur due to diminished financial capacity may be minor, like forgetting to pay a bill, but serious errors that threaten our financial security are possible.

Happily, there are steps we can take to protect ourselves and those we care about. These steps include:

  • keeping important documents organized and easy to find;
  • providing names of “trusted contacts” to your financial professionals;
  • creating (or updating) a power of attorney;
  • and more.

The Consumer Financial Protection Bureau (CFPB) provides a practical breakdown of steps that will protect you as you age, and also steps to help you assist an older friend or relative you are concerned about: Planning for diminished capacity and illness. None of us likes to think about possible future problems, but if something happens, we know we’ll be glad we did!

NOTE: People of all ages can be injured in accidents or suffer illness that diminishes ability to manage finances and make decisions. The steps outlined by the CFPB are appropriate for adults of all ages to consider.

For more details about cognitive aging and how it affects different types of mental functioning differently, see a trio of articles from The Center for Retirement Research at Boston College, starting with Cognitive Aging: A Primer.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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New Option on the Advance Child Tax Credit Portal

Families can now easily update their mailing address in the IRS Child Tax Credit portal. This is very important for families who choose to receive their payments in the mail, rather than by direct deposit.

To use the portal, go to the IRS Child Tax Credit page and select “Manage Payments.” The portal now allows users to:

  • Change their mailing address;
  • Switch from receiving a paper check to direct deposit;
  • Change the account where their payment is direct deposited; or
  • Stop monthly payments for the rest of 2021.

If you run into challenges using the portal, our July 12 post offers a few tips. An earlier post explains what is different about the Child Tax Credit in 2021, including who is eligible for the expanded credit. If you previously were eligible, based on your income in prior years, but are no longer eligible now, you might consider opting out of the advance payments, which are being sent monthly on the 15th of each month through the end of 2021.

Log into the portal by midnight (Eastern Time) on August 30 if you want the changes to kick in for the September 15 payment. The IRS expects to add a few more functions to the Child Tax Credit portal in coming months, including the ability to:

  • Add or remove children in most situations;
  • Report a change in marital status; or
  • Report a significant change in income.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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