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Tag Archives: health plan

Home / Posts Tagged "health plan"

10 COVID-19 Stimulus Benefits for the Self-Employed

February 10, 2021 by Liam Lane Posted in Renting Tagged 401(k), Business Income, cons, Coronavirus, covid-19, Credit, Credit Card, credit cards, crisis, Debt, earnings, Education, Emergency Fund, estate, existing, Family, Federal Reserve, federal student loans, Finance, Financial Wize, FinancialWize, freelancers, Get Out of Debt, health plan, hsa, Interest Rates, IRA, keep, Life, Loans, Make, Manage Money, money, More, Mortgage, News, paycheck, Personal, personal finance, principal, pros, Pros and Cons, rent, Retirement, retirement funds, savings, Savings Account, second, Security, Small Business, spouse, Student Loans, tax, Taxes, Unemployment

If you’re self-employed with financial hardships due to the pandemic, there are various stimulus benefits that can provide relief. Use these ten options to improve your personal and business finances.

By

Laura Adams, MBA
September 30, 2020

Coronavirus Aid, Relief, and Economic Security (CARES) Act became law on March 27 as the largest stimulus legislation in American history since the New Deal in the 1930s. Here are ten ways it provides relief for individual solopreneurs and small business owners.

1. Getting lower interest rates

On March 3, the central U.S. bank, also known as the Federal Reserve or Fed, made a surprising emergency interest rate cut of half a percentage point. That’s the largest single rate cut since the financial crisis of 2008. While this move wasn’t part of a coronavirus stimulus package, it was an aggressive cut meant to prepare the economy for problems the pandemic was expected to cause.

An economic recovery could take a few years, which likely means the Fed rate will stay near zero through 2023.

In mid-September, the Fed reiterated its promise to keep interest rates near zero until the economy improves and the unemployment rate declines. They indicated that a recovery could take a few years, which likely means the Fed rate stays near zero through 2023.

While savers never celebrate low interest rates, they’re beneficial to borrowers. In general, the financing charge on variable-rate credit cards and lines of credit goes down in lockstep with interest rates. Carrying a balance on your personal and business credit cards may be slightly less expensive, depending on your card issuer and type. For instance, if your card’s annual percentage rate or APR is 20%, your adjusted rate could go down to 19.5%.

If you have a fixed-rate credit card, the APR doesn’t change no matter what happens in the economy or with federal interest rates. Also, note that if you pay off your balance in full each month, a credit card’s APR is irrelevant because you don’t pay interest on purchases.

2. Having more time to file taxes

Earlier this year, the due date for filing and paying 2019 federal taxes was postponed from April 15, 2020, to July 15, 2020. You didn’t have to be sick or negatively impacted by COVID-19 to qualify for this federal tax delay. It applied to any person or business entity with taxes due on April 15, 2020.

If you missed the tax filing deadline, be sure to request an extension.

Most businesses make estimated tax payments each quarter. Those payment dates have shifted, too. The 2020 schedule gives you more time as follows:

  • The first quarter was due on July 15, 2020, which changed from April 15, 2020
  • The second quarter was due on July 15, 2020, which changed from April 15, 2020
  • The third quarter was due on September 15, 2020
  • The fourth quarter is due on January 15, 2021

Individuals and businesses can request an automatic extension to delay filing federal taxes. But it doesn’t give you more time to pay what you owe for 2019, only more time to submit your tax form—until October 15, 2020.

If you missed the tax filing deadline, be sure to request an extension. Individuals must file IRS Form 4868, and most incorporated businesses use IRS Form 7004.

However, depending on where you live, you may have to pay state income taxes, which have not been postponed. If you need a state tax filing extension, check with your state’s tax agency to determine what’s possible.

Taxes due on any date other than April 15, 2020—such as sales tax, payroll tax, or estate tax—don’t qualify for relief.

3. Getting more time to contribute to retirement accounts

You typically have until April 15 or the date of a tax extension to make traditional IRA or Roth IRA contributions for the prior year. But since the CARES Act postponed the federal tax filing deadline, you also have until July 15 or October 15, 2020 (if you requested an extension) to make IRA contributions for 2019.

However, this deadline doesn’t apply to retirement accounts you may have with an employer, such as a 401(k). Nor does it apply to self-employed accounts, such as a solo 401(k) or SEP-IRA, which correspond to the calendar year.

4. Getting more time to contribute to an HSA

Like with an IRA, you typically have until April 15 or the date of a tax extension to make HSA contributions for the prior year. Under the CARES Act, you now have until July 15 or October 15, 2020, to make HSA contributions for 2019.

To qualify for an HSA, you must be covered by a qualifying high-deductible health plan. In early March, the IRS issued a notice that a high-deductible health plan may cover COVID-19 testing and treatment and telehealth services before meeting your deductible. And just as before the coronavirus, you can pay for medical testing and treatment using funds in your HSA.

5. Delaying tax on retirement withdrawals

While you typically must pay income tax on retirement account withdrawals that weren’t previously taxed, the good news is that for a period, you can delay or avoid tax altogether. The CARES Act gives you two options for withdrawals made in 2020:

  • Repay a hardship distribution within three years to your retirement account. You can replace the funds slowly or all at once, with no change to your annual contribution limit. If you take money out but return it within three years, it’s like you never took a distribution.
  • Pay taxes on a hardship distribution from your retirement account evenly over three years. If you can’t pay back your distribution, you can ease your tax burden by paying one-third of your liability for three years. 

Since withdrawing contributions from a Roth retirement account doesn’t trigger income taxes, it’s a good idea to tap a Roth before a traditional retirement account when you have the option.

6. Skipping early withdrawal penalties

Most retirement accounts impose a 10% early withdrawal penalty if you take make withdrawals before age 59.5. Under the CARES Act, if you have a coronavirus-related hardship, the penalty is waived.

Under the CARES Act, if you have a coronavirus-related hardship, the penalty is waived.

For instance, if you, your spouse, or a child gets diagnosed with COVID-19 or have financial challenges due to being laid off, quarantined, or closing a business, you qualify for this penalty exemption. You can withdraw up to $100,000 of your retirement account balance during 2020 without penalty. However, income taxes would still be due in most cases.

The no-penalty rule applies to workplace retirement plans, such as 401(k)s and 403(b)s. It also applies to IRAs, such as traditional IRAs, Roth IRAs, and SEP-IRAs.

Since you make after-tax contributions to Roth accounts, you can withdraw them at any time (which was also the case before the CARES Act). However, the earnings portion of a Roth is subject to income tax if you withdraw it before age 59.5.

7. Getting larger retirement plan loans

Some workplace retirement plans, such as 401(k)s and 403(b)s, permit loans. Typically, you can borrow 50% of your vested account balance up to $50,000 and repay it with interest over five years.

You can delay the repayment period for a retirement plan loan for up to one year.

For retirement plans that allow loans, the CARES Act doubles the limit to 100% of your vested balance in the plan up to $100,000. It applies to loans you take from your account until late September 2020, for coronavirus-related financial needs.

You can delay the repayment period for a retirement plan loan for up to one year. For example, if you have $20,000 vested in your 401(k), you could take a $20,000 loan on September 30, 2020, and delay the repayment term until September 30, 2021. You’d have payments stretched over five years, ending on September 30, 2026. Any amount not repaid by the deadline would be subject to tax and a 10 percent early withdrawal penalty.

Note that individual retirement accounts—such as traditional IRAs, Roth IRAs, and SEP-IRAs—don’t allow participants to take loans, only hardship distributions.

8. Suspending student loan payments.

Starting on March 13, 2020, most federal student loans went into automatic forbearance until September 30, 2020, due to the CARES Act. On August 8, the suspension of student loan payments was extended through December 31, 2020.

On August 8, the suspension of student loan payments was extended through December 31, 2020.

The suspension covers the following types of loans:

  • Direct Loans that are unsubsidized or subsidized
  • Direct PLUS Loans
  • Direct Consolidation Loans
  • Federal Family Education Loans (FFEL)
  • Federal Perkins Loans

Note that FFEL loans owned by a private lender or Perkins loans held by your education institution don’t qualify for automatic forbearance. However, you may have the option to consolidate them into a Direct Loan, which would be eligible for forbearance. Just make sure that once the suspension ends, your new consolidated interest rate wouldn’t rise significantly.

During forbearance, qualifying loans don’t accrue additional interest. Even if you have federal student loans in default because you haven’t made payments, zero percent interest applies during the suspension period.

Additionally, missed payments during the suspension don’t get reported to the credit bureaus and can’t hurt your credit. Qualifying payments you skip also count toward any federal loan repayment or forgiveness plan you’re enrolled in.

However, if you want to continue making student loan payments during the suspension period, you can. With zero percent interest, the amount you pay gets applied to your principal student loan balance, enabling you to get out of debt faster.

With zero percent interest, the amount you pay gets applied to your principal student loan balance, enabling you to get out of debt faster.

If you’re not sure what type of student loan you have or the pros and cons of consolidation, contact your loan servicer. Even if your student loans are with private lenders or schools, they may offer relief if you request it.

9. Having Paycheck Protection Program (PPP) loans forgiven

The PPP is part of the CARES Act, and it supports small businesses, organizations, and solopreneurs facing economic hardship created by the pandemic. The program began providing relief in early April 2020, and the application window ended in early August 2020.

Participating PPP lenders coordinated with the Small Business Administration (SBA) to offer loans to businesses in operation by February 15, 2020, with fewer than 500 employees. Loan amounts could be up to 2.5 times the average monthly payroll up to $10 million; however, annual salaries were capped at $100,000.

For a solopreneur, the maximum PPP loan was $20,833 if your 2019 net profit was at least $100,000. The calculation is: $100,000 / 12 months x 2.5 = $20,833.

When you spend at least 60% on payroll and 40% on rent, mortgage interest, and utilities, you can have those amounts forgiven from repayment. Payroll includes payments to yourself, but you can’t cover benefit costs, such as retirement contributions, or payments to independent contractors.

In other words, a solopreneur could have received a PPP loan for up to $20,833, paid the entire amount to themselves, and not repaid it by having the load forgiven. Using a PPP loan for qualifying expenses turns it into a grant.

The best part about PPP loan forgiveness is that it won’t qualify as federal taxable income. Some states that charge income tax have indicated that they won’t tax forgiven amounts.

However, if you have employees, the PPP forgiveness calculations and requirements are more complex. For example, you must maintain reasonable salaries and wages. If you decrease them by more than 25% for any employee (including yourself) who made less than $100,000 in 2019, your forgiveness amount will be reduced. 

PPP loan forgiveness also depends on keeping any full-time employees on your payroll. But if you had employees who left your company voluntarily, requested a cut in hours, or got fired for cause during the pandemic, your loan forgiveness amount won’t be reduced for those situations.

The best part about PPP loan forgiveness is that it won’t qualify as federal taxable income. Some states that charge income tax have indicated that they won’t tax forgiven amounts.

However, not all states have issued their rules on taxing PPP forgiveness. So be sure to get guidance if you live in a state with income tax.

You must complete a PPP Loan Forgiveness Application and get approved by your lender to qualify for forgiveness. The paperwork should come from your lender, or you can download it from the SBA website at SBA.gov. Most PPP borrowers have from six months after loan disbursement or until the end of 2020 to spend the funds. 

The forgiveness application explains what documents you must include, and they vary depending on whether you have employees. Once you submit your paperwork, your lender has 60 days to decide how much of your PPP loan can be forgiven.

If some or all of a PPP loan isn’t forgiven, you typically must repay it within five years at a 1 percent fixed interest rate. You don’t have to start making payments for ten months after loan disbursement, but interest will accrue during a deferral period.

10. Getting SBA loans

In addition to PPP loans, the Small Business Administration (SBA) offers several loans for businesses and solopreneurs facing economic hardship caused by a disaster, including the COVID-19 pandemic.

  • Economic Injury Disaster Loan (EIDL) can be up to $2 million and repaid over 30 years at an interest rate of 3.75 percent. You can use these funds for payroll and other operating expenses.
  • SBA Express Bridge Loans gives borrowers up to $25,000 for help overcoming a temporary loss of revenue. However, you must have an existing relationship with an SBA Express lender. 
  • SBA Debt Relief is a program that helps you make payments on existing SBA loans for up to six months.

Depending on your state, you may qualify for unemployment assistance, which allows self-employed people, who typically are ineligible for unemployment benefits to get them for a period.

This isn’t a complete list of all the economic relief available for small businesses and solopreneurs. There are federal tax initiatives, funds from local and state governments, and help from private organizations that you may find by doing a search online.

How to manage money in uncertain times

When it comes to surviving uncertainty, such as how COVID-19 will affect the economy, those who have emergency savings will feel much less financial stress than those who don’t. That’s why it’s essential to maintain a cash reserve of at least three to six months’ worth of living expenses in an FDIC-insured bank savings account.

If you don’t need to dip into your emergency fund, continue shoring it up when possible. If you don’t have a cash reserve, accumulate savings by cutting non-essential expenses, and even temporarily pausing contributions to retirement accounts. That’s a better option than succumbing to panic and tapping your retirement funds early.

If you don’t need to dip into your emergency fund, continue shoring it up when possible.

If you find yourself in a cash crunch, contact your creditors before dipping into any retirement accounts you have. Many lenders will be willing to work with you to suspend payments or modify existing loan terms temporarily.

RELATED: How to Reduce Money Anxiety—Compassionate Advice from a Finance Pro

My new book, Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers, covers many strategies to earn more, manage variable income, and create an automatic money system so you can strengthen your financial future. It’s a great resource if you’re thinking about earning side income or have already started a business.

Many economic factors that affect your personal and business finances aren’t under your control. Instead of worrying, look around, and figure out how you can create more income or cut unnecessary expenses. Working on tasks that you can control gives you more clarity and helps manage stress in uncertain times.


About the Author

Laura Adams, MBA

Source: quickanddirtytips.com

What Is A Health Savings Account?

February 10, 2021 by Liam Lane Posted in Insurance Tagged Auto, away, budget, Debit Card, Family, Featured, Fees, Finance, Financial Advisor, Financial Wize, FinancialWize, Grow, Health Insurance, health plan, Home, How To, Insurance, insurance premiums, invest, investment, investments, keep, Main, money, more money, mutual funds, paycheck, Personal, personal finance, pharmacy, proof, Purchase, Retirement, save, savings, Savings Account, savings accounts, Spending, Starting Out, tax, Taxes
Good Financial Cents
pay for certain medical expenses.

It also allows you to use the money for other qualifying expenses such as medical equipment, prescribed medicine, and copays.

You can specifically use funds from the HSA on:

  • dental treatment
  • hospital services
  • contact lenses
  • chiropractic care, and
  • crutches, among others

All in all, you can use the money from your HSA to pay for just about any type of medical expense.

Best of all though, the money you use to pay for these expenses comes out 100% tax-free.

The most amazing thing about an HSA is that it offers triple tax savings.

There is no other account available that offers this type of benefit.

Your contributions are pre-taxed, the growth of the funds within your account is tax-free, and when you withdraw money from your account to pay for qualifying medical expenses, the money comes out tax-free.

Sounds pretty amazing, doesn’t it?

The amount of money you could save in taxes over your lifetime by contributing to an HSA could easily amount to tens or even hundreds of thousands of dollars.

How Do I Open an HSA?

To open a health savings account, you must be enrolled in a high-deductible health plan (HDHP) through your work or individually.

As long as you have an HDHP, you have the option to open and contribute to an HSA.

And opening your HSA is also a pretty simple step. There are a number of banks and other financial institutions where you can open an HSA.

There could be fees associated, so be sure to do some homework.

Once opened, you can contribute up to a maximum amount to your HSA on an annual basis. For 2020, the maximum contribution is $3,550 for an individual plan and $7,100 for a family plan. 

For 2021, the maximum contributions are $3,600 for an individual plan and $7,200 for a family plan. There’s also a catch-up contribution of an additional $1,000 if you’re 55 or older.

Within the HSA, typically after a certain amount has been accumulated, you can invest these monies within various mutual funds offered by your respective HSA.

Where you open your HSA will determine what investment options you have available.

So, What is A High-Deductible Health Plan?

Okay, let’s take a step back to define what an HDHP is so I don’t lose you.

For an individual plan, the IRS states that an HDHP must offer a minimum deductible of $1,400 with an out-of-pocket maximum of $6,900 for 2020, and $7,000 for 2021.

For a family plan, The HDHP must offer a minimum deductible of $2,800 with an out-of-pocket maximum of $13,800 for 2020, and $14,000 for 2021.

The IRS can update and adjust these figures every year.

Many companies today offer both a standard health insurance option, such as a PPO or HMO, along with an HDHP.

Compared to a standard health insurance plan, an HDHP has a higher annual deductible but lower monthly premiums. High deductible health plans typically possess these characteristics:

  • For every family, the HDHP uses one calendar year for the deductible.
  • HDHPs still deliver the same quality health insurance.
  • After meeting the deductible, an HDHP can cover expenses up to 100%.
  • HDHPs can be considered more affordable than other health plans. However, it truly depends on your personal and family medical situation.

With the above being a few advantages of an HDHP, there is one major disadvantage you must understand:

You could face the potential for higher out of pocket expenses since you’re on the hook until you reach the threshold of the deductible.

If you don’t have the money set aside or can’t pay for it out of monthly cash flow, then an HDHP might not be the right policy for you, especially if you and your family are prone to regular doctor and hospital visits.

How Does an HSA Work?

So now that we’ve established you have to be participating in an HDHP before you can open an HSA, let’s dig a little more into how the policy works.

If you are an employee, you can set up your health savings account through a trustee such as a bank. However, most employers who offer an HSA will most likely already have a relationship established with an institution where you will open your account.

Once your account is opened, it then comes down to determining how much you want to contribute out of your paycheck. And, if you’re lucky, your employer might even be willing to make contributions to your HSA as well.

If your employer makes a contribution, it is not included as income; however, it does count toward your maximum annual contribution.

How Much Should I Contribute to the HSA?

When it comes to determining how much you should contribute, it truly depends on your own personal situation.

With all things being equal though, I always recommend contributing as much as you possibly can up to the maximum.

In 2020, the maximum is $3,550 for individuals, and $7,100 for families. For 2021, the maximum contributions will be $3,600 for individuals, and $7,200 for families.

And, if at all possible, I recommend not touching the money in your HSA and letting it grow so you can use it for health care expenses in retirement. Try to pay for current health care expenses out of your cash flow or other savings.

Granted, I know this isn’t possible for everyone, but the longer you can take advantage of the tax-free growth of the HSA without tapping into it, the more money you will have to withdraw 100% tax-free for medical expenses in retirement.

Does an HSA Expire?

Your health savings account does not expire. You can keep your account for as long as you want regardless of if you decide to change your insurance plan or change jobs.

Also, if you have an Archer MSA, you can place that money into your HSA.

Don’t confuse an HSA with an Archer MSA or flexible spending account (FSA) in terms of carryover policies and contribution limits, even though all three accounts can be used for medical and healthcare costs.

Unlike an FSA, the HSA doesn’t have the use-it-or-lose-it restrictions. An HSA will carry over year after year.

Pros and Cons

Advantages Of An HSA

Here are the notable benefits of an HSA and why so many people have chosen to set one up:

  • An HSA is a pre-tax benefit. Contributions into the account are made before being taxed. This is extremely beneficial as it can lower the amount you pay in taxes.
  • Growth in an HSA is tax-deferred and most likely tax-free. The growth of your investments within your account are tax-deferred and most likely will be tax-free as long as they are used for qualifying medical expenses.
  • Money used in an HSA for qualifying medical expenses is 100% tax-free. Thus the power of triple tax savings. Contributions go in pre-tax. Once invested, they grow tax-deferred, and when your money is withdrawn for qualifying medical expenses, it comes out 100% tax-free. There’s no other account in the United States that offers triple tax-savings.
  • There is no use-it-or-lose-it concept. The funds in your account are always yours. The only way they go away is if you spend them.
  • An HSA is flexible. The money in your account has a wide range of uses including most medical expenses, prescription medications, office visits, eyewear, etc. Another benefit of an HSA is that you may use it for the health expenses of your dependents as well.
  • More control over medical expenses. Basically, you’re trading reduced monthly premiums for the possibility of higher out-of-pocket expenses. If you are in good health and doctor visits don’t occur that often throughout the year, then an HSA could allow substantial savings.

Disadvantages Of An HSA

  • There is a high deductible requirement. You may find it hard to come up with the required amount of money to meet a high deductible for your out-of-pocket expenses. This can be the case even though you have lower premiums every month.
  • The costs of healthcare can show up unexpectedly. You cannot predict the future, and your health expenses may suddenly go beyond what you expected. When this happens, you may find yourself lacking the money needed to pay for medical expenses.
  • You have to handle the pressures of having an HSA. You may choose not to seek medical care even when you need it because you do not want to touch your HSA funds or pay for them out-of-pocket.
  • There are penalties and taxes. While the HSA is tax-free for medical expenses, that’s not the case if you have to withdraw it for other reasons. When you withdraw money before you turn 65 and it’s for a non-qualified expense, you will be taxed and receive a 20% penalty. However, if you withdraw money for non-qualified expenses you will still pay taxes, but the 20% penalty is waived.
  • You must do some recordkeeping yourself. It is important to keep a record of all your withdrawals, healthcare expenses, and the receipts that come with them. They will be your proof that you used them for eligible healthcare expenses.
  • There are some fees to pay. While it may vary by institution, your health savings account may require you to pay a fee per transaction or for monthly maintenance. However, these fees are typically pretty reasonable, and the institution may waive those fees if you keep and maintain a minimum balance.

How To Set Up An HSA

Setting up an HSA is simple. If one is provided through your employer, then it’s just a matter of signing when you are hired or during open enrollment.

If you’re self-employed though, you’ll have to find a bank or financial institution in which to open your account. In general, you do not need a certain amount of money or a minimum balance in the account to qualify for an HSA. But, some administrators may be willing to waive fees in the event you maintain a minimum balance.

Of course, when you are just starting out with your health savings account, an institution that offers a lower minimum balance can save you some money in fees.

1. Learn about fees and see if they can be waived

When looking for the most suitable place to open your health savings account, fees and investment options should be priorities. Ultimately, you can make a comparison of several providers and pick the right one for you.

2. Identify Your Goals

The main purpose of setting up an HSA is to have some assistance in covering your medical expenses either now or in the future. Any money left over in your account, as long as it is invested, can grow and earn interest.

With that being the case, you need to determine whether you’re going to use your HSA for current medical expenses or let the account grow over time to use in retirement for the inevitable expenses that won’t be covered by Medicare.

It doesn’t necessarily have to be one or the other, but having a plan in place can help you identify if and when you want to withdraw money from your account.

3. Understand Your Investment Options

It is essential to assess what investment options are available in a specific health savings plan. You will know it’s the best plan if the HSA provides a wide variety of options with low expense ratios.

4. Pay Attention to Convenience

Convenience is a vital factor regardless of if you pick an HSA at a major institution or a small bank. An ideal HSA will allow you to withdraw funds and contributions easily. For instance, an HSA will give you a debit card that you can use at a doctor’s visit or a pharmacy.

You can find HSA custodians that have ATMs and several branches across the country. There are also smaller institutions that communicate with their customers via a website, telephone, or mail.

5. Assess the Costs

The monthly and annual fees vary among banks. Your account balance and your funds also determine the fees you will have for your HSA. Some providers will require you to have a minimum balance first. Make sure to know what a bundled fee covers as well as the schedule of fees.

Alternatives to Using a Health Savings Account

The information above states the rules on how you can qualify for a health savings account such as enrolling in an HDHP.

But, what if you do not qualify? What are your alternatives?

Other Health Plans Sponsored By Employers

  • Stand-alone Health Reimbursement Accounts (HRAs): HRAs are used by small businesses to reimburse their employees for health insurance and out-of-pocket medical expenses.
  • Flexible Savings Account (FSA): FSAs are plans established by employers which allow for reimbursement of eligible medical expenses, tax-free. However, you cannot use them on health insurance premiums.
  • Healthcare Reimbursement Plans (HRPs): HRPs are plans funded by employers to be used for the individual reimbursement of their health insurance premiums, tax-free. HRPs do not have a maximum annual contribution.

PPO Health Insurance Plans

A PPO plan is a program in which an insurance company and healthcare providers have an agreement to provide discounted fees to their members.

Joining a PPO will enable you to acquire some discounts on healthcare expenses such as a doctor’s visit, an emergency procedure, or prescription drugs purchase.

IRA Accounts

An IRA is a kind of investment that is set up at a financial institution or a brokerage firm.

Over time, you add money to your account, and you may use the money to acquire investments like bonds, mutual funds, and individual stocks.

You may also withdraw the money at a later date and use it as an income during retirement.

Final Words

While there are some alternatives to a Health Savings Account, it is essential to make sure that you qualify for it to reap its benefits. The good thing about an HSA is that you have full control of the money in your account.

Consult your bank about their health savings plans and talk to a broker or a financial advisor to help you review your options.

This is a post from Clint Haynes, a Certified Financial Planner and Financial Advisor in Kansas City, Missouri. He is also the founder and owner of NextGen Wealth. You can learn more about Clint at his website NextGen Wealth.

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Good Financial Cents, and author of the personal finance book Soldier of Finance. Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.

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Source: goodfinancialcents.com

3 Tips for Finding an Affordable Health Insurance Plan

February 10, 2021 by Liam Lane Posted in Insurance, Personal Finance Tagged Auto, budget, car, Credit, credit report, Credit Score, Debt, Family, Finance, Financial Wize, FinancialWize, government, Health Insurance, health plan, Insurance, keep, market, money, Personal, personal finance, Relationships, save, Spending, tax
July 25, 2019 &• 4 min read by Alice Stevens Comments 0 Comments

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Disclaimer

The discounts and cost-sharing offered by health insurance plans are well worth the premium payments. However, premiums can be tricky to work into your budget. It’s important to find an affordable health insurance plan that offers good coverage.

Whether it’s open enrollment and you’re trying to find a better plan or you qualify for a special enrollment period and are making changes to your current health plan, here are three tips for finding an affordable health insurance plan:

  • Set a budget and research current rates
  • Check out the health insurance marketplace
  • Use comparison websites wisely

Set a Budget and Research Current Rates

Calculate how much you spend on health care annually with your current plan. Include monthly premiums and out of pocket expenses. Understanding this will help you know how much you’re currently spending on health care and help you compare costs of new plans.

The next step is to understand the current rates for the number of people you’d have on you plan and the coverage level you want. Again, keep in mind that the cost of health insurance includes premiums, the deductible, and out of pocket expenses. Knowing the rates and cost-sharing trends will help you recognize a good deal on a health insurance plan.

Understanding what you’re currently spending, setting a budget, and looking at current rates will help you find a plan that’s a good fit for your health and financial situation.

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Check Out the Health Insurance Marketplace

HealthCare.gov is the health insurance marketplace used by most states. However, some states have their own marketplace website. These marketplace websites only list plans that cover the essential health benefits, per the Affordable Care Act. These benefits include prescriptions, maternal care, mental health, hospital care, preventive care, physical therapy, and emergency services.

When these health insurance exchanges were initially rolled out, the federal government offered subsidies on premiums for individuals and families with qualifying incomes. Although these subsidies are still available, the government stopped compensating insurance companies for them under the Trump administration.

Because HealthCare.gov and state-specific marketplace sites only list qualified plans, they are a great resource for finding comprehensive coverage plans at affordable premium rates.

HealthCare.gov allows users to compare up to three plans side-by-side, check covered prescriptions, and enroll in a plan. Once you select a plan, you have to make a note to yourself of the plan you chose otherwise you’ll loose track of it when you’re filling out the enrollment forms. While it does take some time to fill out the required information when enrolling, the process is smooth and convenient.

Use Comparison Websites Wisely

Private health insurance comparison websites are also great tools to use when exploring all of your options. However, it’s important to use them wisely.

Not all of the plans listed on these sites offer coverage for the essential health benefits, which means these sites can list a larger number of health insurance plans. While there is potential to save some money by only purchasing the coverage you need, read the plans carefully to make sure that the health services and prescriptions you need are covered.

These websites are extremely useful for health insurance shoppers because they list plans from multiple health insurance companies. While they offer great value to site users, they also generate leads and sales for health insurance companies or independent insurance agents. In many cases, this is a win-win situation.

However, the order of the listings on some websites is affected by these sales relationships. Look for any disclosures like this on the comparison sites you use. These disclosures are usually located at the bottom of the webpage. If there is a disclosure, keep it in mind as you use browse health plans. This way you’ll be better able to find affordable plans that meet your needs.

Be selective of the comparison sites you use and only use sites that show you plan options without requiring contact information. A few comparison sites worth considering are HealthMarkets, HealthCare.com, and GoHealth.

HealthMarkets is a useful health plan comparison website. Users can compare individual and family plans, catastrophic plans, short term plans, Medicare and Medigap plans, and Marketplace plans from more than 200 companies.

HealthMarkets users can also work with licensed agents online or via phone or in-person meeting. The agents can help clients understand their options better and answer questions. This service is offered free to HealthMarkets users.

Another comparison website HealthCare.com focuses its selection of plans on individual and family plans, Marketplace plans, Medicare plans, and Medigap plans. It has over 13,000 health plans listed on its site. If you want to compare Marketplace plans to off-exchange plans, then HealthCare.com is a great resource. HealthCare.com also has licensed insurance agents available to help clients.

GoHealth allows users to view temporary insurance, individual and family plans, and Medicare plans on its website from over 300 companies. Like HealthMarkets and HealthCare.com, GoHealth has licensed insurance advisors available for clients to work with.

GoHealth also offers GoHealth Access plans. These plans are designed to supplement health insurance with prescription, dental, and vision discounts. GoHealth Access members also have a personal health assistant. Some plans include video consultations with a doctor, critical illness insurance, and accident insurance.

Understanding the market rates, setting a reasonable budget, and using helpful websites like HealthCare.gov and other comparison websites will make the search for an affordable health insurance plan simple. On comparison websites, you can view health plans offered by multiple companies, which saves you the hassle of looking a different companies separately. These tools will help you find the plan that best fits your budget and health needs.

About the Author

Alice Stevens Headshot

Alice Stevens loves learning languages and traveling. She currently manages debt and tax relief, life/healthy insurance and car warranty content for BestCompany.com.

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