Open Enrollment for Health Insurance and Medicare Is Happening Now

Guest post by Maria Pippidis, Extension Educator, University of Delaware Cooperative Extension

Are you spending too much on health insurance? It’s time to do a health insurance check up! 

Open enrollment for the Health Insurance Marketplace (November 1, 2022, through January 15, 2023) for those under age 65 and Medicare (October 15 through December 7) for those over 65 is happening now. Even if you have health insurance already, comparison shopping can help you save money and get better coverage. It is important to compare not only the premium costs but also other out of pocket costs like deductibles, copayments and coinsurance in relation to how often you use health care services. There are also options for dental insurance. Think back about how you have used health care services in the past to help you do an estimate of how much these other out of pocket costs might affect the choice of plans you consider.

Remember, for health insurance marketplace plans, prevention services like annual check ups with your primary care provider or gynecologist are covered at no charge.

For those under age 65, use the healthcare.gov website to see options for you and your family or for covering employees if you are a small business. Depending on your income and the state you live in you will have a variety of health insurance policy options and tax credits or tax subsidies. Here are some examples for a family of 4 with 2 children under 18 years of age in Delaware:

  • If your income is below $38,295/year you may qualify for the Children’s Health Insurance Program (CHIP) or Medicaid. 
  • An income range between $38,295 and $69,375/year will provide coverage with tax credits on premiums and reduced deductibles, copayments, and coinsurance.
  • An income range between $69375 and $111,000 will provide coverage with reduced premiums.

This is just an example and the income ranges will be based on your family size and your state. By going to the website and adding your specific information, you’ll get a better sense of the costs and coverage. I personally have seen farm operators save thousands of dollars by exploring the marketplace for health insurance options. Even if you have off farm employment covering your whole family, it might be worth exploring the healthcare marketplace options for those not working off farm and your children.

You can explore options online or you can get help by talking to a health insurance navigator. The healthcare marketplace website in your state will provide information about who are certified providers that can assist you in better understanding your options. These individuals have been trained to provide information about the plans. Note that some insurance brokers have been certified as well; these individuals can inform you about the marketplace plans and other plans for insurance organizations which they represent. There are also navigators/assistors who work with non-profit, government or health care organizations who are certified.

For those who are 65 and older, use the medicare.gov website to see which Medicare Advantage Plans or Medicare Supplemental (Medigap) plans are available in your area. You can comparison shop these plans very easily on the website. My advice is to ignore the TV commercials and the junk mail regarding Medicare plans. Rather use your State Health Insurance Assistance Program. You can find your local contact by visiting this website https://www.shiphelp.org/ and searching by your state. This program can assist you by setting up a free counseling session with a trained volunteer at a convenient site near you. Their goal is to empower people with Medicare to better understand their options and enable them to make the best health insurance decisions for themselves. The counselors can help you better understand your options to help you make the best decision for you related to Medicare, Medicaid, Medigap (Medicare supplement insurance), Medicare Part D, long-term care insurance and other types of health insurance. There is no charge for the service.  

Though it takes a bit of time, invest in yourself  because no matter what age you are, reviewing your health insurance coverage is one of the best ways to stay financially and physically healthy in the coming year.

Just for Teachers: A Student Loan Forgiveness Program of your Own

Teachers, you are appreciated! Student loan forgiveness has been given much attention over the last few years, particularly Public Service Loan Forgiveness (PSLF). However, there are other loan forgiveness opportunities. One such program is Teacher Loan Forgiveness, which provides a path to either $5,000 or $17,000 of loan forgiveness for elementary, middle, and high school teachers. Like any other loan forgiveness program, there are several notable eligibility requirements.  

Time. To be eligible for Teacher Loan Forgiveness (TLF), you must complete five, consecutive and complete academic years of employment in a position considered to be full-time. Absences under military orders, the Family and Medical Leave Act and for certain post-secondary education create exceptions to this policy.

School. Loan forgiveness is for K12 teachers who work at a school or educational service agency designated as serving low income individuals. The Department of Education publishes a list of schools and agencies that meet this criteria. Removal of a school from this list does not disqualify the teacher from loan forgiveness, as long as one full year meets this eligibility criteria. 

Credentialing. To qualify for loan forgiveness, teachers must be considered highly qualified for the duration of their five qualifying years. This means they have at least a bachelor’s degree and have met their state’s certification requirements. 

Loan.  Loans must be Direct or FFEL Program loans made after October 1, 1998, and must have been made before the end of the five qualifying years discussed under the time requirement above. This means that new student loans obtained during these five years are eligible for forgiveness. 

Who gets the $17,000?  For teachers who meet the above criteria, there are two career paths to this higher benefit. One is teaching math or science at the secondary school level. The other is as a special education teacher at any level, elementary through high school.  All other teachers remain eligible for $5,000 in student loan forgiveness.  

What about TEACH grants?  The federal Teacher Education Assistance for College and Higher Education (TEACH) program is a separate program from TLF and teachers can benefit from both.  TEACH offers grants up to $4,000 in annual financial aid to full-time undergraduate and graduate students who are enrolled in a teaching degree program.  Grant requirements include four years of service. TEACH and TLF service periods can run simultaneously. More information is available on the government student loan website. Here you can find additional details, application information, and links to the FAFSA. 

Fall is For FAFSA

October 1 of each year marks the date that the FAFSA (Free Application for Federal Student Aid) becomes available. Students who wish to receive any form of student loan or grant from the federal government must complete and submit it. Most states and colleges also require completion before schools offering aid and formulating a financial aid package.  Even some scholarship foundations and other private grantees will ask for the FAFSA.  

The financial aid process can feel somewhat mysterious for both students and their families.  The first step is to complete the form.  It is available on the StudentAid.Gov website and can be submitted online or mailed.  If sent in electronically, the Department of Education processes your application in about three days, and then makes the information available to all of the schools you chose to list on the form.  Each school then uses the information you documented on the FAFSA to determine how much aid you are eligible to receive if you attend that school. Aid can be a combination of subsidized loans, unsubsidized loans, grants, and scholarships. 

To determine a student’s financial package, the financial aid office evaluates a complex formula.  The parts of the formula are the cost of attendance (COA) and an Expected Family Contribution (EFC). The outcome of this formula will determine the amount and mix of student financial aid. 

Cost of Attendance. The COA takes into account the variety of costs that the student will incur in order to reasonably complete their education.  This calculation includes tuition and fees, living expenses such as lodging and food, books and related resources, dependent care expenses if the student is a caregiver, travel to and from the school, costs of disability accommodation, and reasonable study abroad costs if applicable.  

Expected Family Contribution. The EFT is the portion of costs that the student and family are expected to pay toward the cost of attendance.  The EFT is also a formula, and factors in the size of the student’s family, the number of students attending higher education (for now), most forms of income, and certain assets. Whether home equity is considered or not can depend on requirements of some private institutions

Be careful with deadlines.  While the FAFSA can be completed and submitted any time between October 1 and June 30, many schools have earlier deadlines, especially for specific scholarships and grants.  Additionally, even some federal grants are available on a first-come-first-served basis, and the opportunity for those funds can close once the budget is used. 

Next year, there will be many changes happening to the FAFSA application.  These changes will not be in effect until the 2023-2024 application period, but they will be discussed in an upcoming post so families can plan accordingly. 

Auto Insurance 101

While many of us drive a car, most of us have no understanding of our auto insurance policy. What do the numbers mean like 50/100/25 coverage? How often should I compare rates with other insurance companies? Or, understand terms like liability, collision, bodily injury, etc. I guess we will call this auto insurance 101.

Let’s start with when you need to get insurance. You can buy a car, new or used without purchasing insurance, unless you are borrowing/financing the car. It is when you request a license plate that you are required to show proof of insurance. For most of us that happens simultaneously with buying the car. The requirement is actually proof of liability coverage as needed for registration, which is covered under what is called compulsory automobile coverage. Liability is when you are held responsible for the damage to another or their property. 

50/100/25???? These are simple numbers to explain how you are covered by your insurance policy. It falls into three categories: per person, all persons, and property for each accident. The 50 actually means that each individual is covered up to $50,000 per person in an accident; 100 is $100,000 in payments to all persons in an accident – this is also referred to as bodily injury coverage. And you guessed it, 25 is $25,000 for property damage. 

States vary on minimum requirements. For Maryland, it is 30/60/15. Now think about this, how quickly would someone’s medical bills reach that 30 or 50 limit. So, who would be responsible for payment after that? It could be you. Think carefully when making decisions about how much coverage you need. 

Now if you have a loan on your car, the lender may require some additional coverage such as collision coverage or comprehensive physical damage. This is to protect the lender from losing money if something happens to the car. Collision coverage is just as it sounds; if there is a collision, the insurance fixes it. Comprehensive physical damage is to cover the car if something else happens like a hail storm puts dents in your car. 

The cost of your policy is determined by how much coverage you want and other factors such as the value of the car, safety features on the car, miles driven, how well you drive, age, gender, etc. Another item to consider is how often to compare insurance prices. Ideally, I suggest you get quotes every year, but at least check every other year. You may be surprised how much money you can save by switching plans. 

Ready, Set, Go Tax Free Week!

People are starting to wind up their family vacations. With that comes returning to school. One of the pros of this time period is that many states offer a tax free week or weekend (that is if your state charges a state sales tax). So why should you care? It saves you money. People are finding it more and more difficult during this time period to make ends meet. Shopping during tax free week or weekend is one of those strategies you can use to save a little money.

Think about this. In Maryland, the sales tax is 6%. This means for every item of clothing you buy; you pay a 6% sales tax. For example, if I bought a shirt for $50, I would pay a state sales tax of $3. So let’s say, I bought $500 worth of clothes for my family during tax free week. I just saved myself $30. Some of you may think “that’s not much” but every little bit helps.

Now each state has its own set of rules when it comes to tax free week or weekend. In Maryland, it is a tax-free week that begins on the second Sunday of August. This year it begins on August 14th and end on August 20th at midnight. It applies to qualifying clothing and footwear under $100. It also applies to the first $40 of a backpack or book bag. If you are looking for a good summary, you may find this information sheet helpful. For detailed information about Maryland’s tax free week, visit the Maryland Comptroller’s website.

So, I mentioned that not all states offer a tax exempt week. That led me to look around on the internet to find out which states offered the incentive. I found two websites containing interesting information about state taxes. I am not endorsing either site. I am just sharing what I found. I encourage you to visit each state’s website for specific information. With that said, this website provides a list of states that offer tax exempt weekends or weeks. The other website I found interesting includes information about sales taxes for each state.

Well that’s my tip for the month. Enjoy the rest of the summer. Take advantages of the time now before you start your busy fall schedule.

Public Service Loan Forgiveness: Temporary Waiver and an Oct. 31 Deadline

As the “Breathing Room” name implies, this blog is intended to offer you a break from life’s deadlines, stressors, and workloads, and give you a chance to take a breath, focus on yourself, and enjoy.  But, if you….

  1. Have federal student loans
  2. Are employed by any type of government or nonprofit organization
  3. Want to qualify for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program, and
  4. Want to make sure you receive maximum credit for your participation,

don’t take a break quite yet.  Now is the time act before the October 31, dare we say it, deadline.

The Public Service Loan Forgiveness Program (PSLF), was created to increase the applicant pool for government and nonprofit jobs. PSLF is a federal program designed to provide an incentive to attract job seekers to employment in much needed, but often lower paying, service work. A component of the 2007 bipartisan College Cost Reduction and Access Act, PSLF promised to forgive the outstanding federal student loan debt for qualifying workers once they have made 120 monthly payments. However, the program was created without a clear, long term plan for implementation. With legislative and executive branch turnover, problems arose.

Public Service Loan Forgiveness had strict qualification requirements (which you can read about here,) and required specific action steps (which you can read about here,) to maintain that qualification.  However, once eligibility began in 2017, many individuals had their PSLF application rejected because of missed requirements, poor guidance, and misunderstandings. Many fixes were implemented over the ensuing years.

PSLF Waiver. In late 2021, the US Department of Education announced a short term PSLF Limited Waiver. As the name implies, the Waiver, which is set to expire on October 31, 2022, waives many of the original qualifying requirements. For a limited time, payments made under the wrong loan type, payments made late, and payments made prior to a new consolidation all count.  Additionally, educators who receive teacher loan forgiveness can count their qualifying time towards PSLF, and active-duty service members can count months of deferral or forbearance toward their 120 qualifying payments.

What, specifically, has changed for the Temporary Waiver until October 31? Here are a few of the major items:

Consolidated loans. Previously, consolidating student loans restarted the 120 payment count. Under the Waiver, payments made prior to the new consolidation loans now count.

Loan type. Under normal PSLF requirements, only payments for Direct Loans counted. Through the Waiver, borrowers receive credit for payments made on FFEL or Perkins loans as well. But, they MUST be consolidated into a direct loan before the October 31 deadline.

Teacher Loan Forgiveness. Teachers have their own loan forgiveness plan which provides limited dollar forgiveness after five years. Normally, outstanding loan balances would then also be eligible for PSLF after another 120 months. The Waiver allows those two time periods to run concurrently, and payments made during the teacher forgiveness window now count toward the 120 PSLF months.

Payment Plan. Payments made under graduated or extended payment plans are now accepted under the Temporary Waiver, but the loans must be consolidated into an income-driven payment plan prior to the October 31 deadline.  

Late and Partial Payments. Previously not counted toward the required 120, late and partial payments are now being retroactively added to the total needed to qualify. This should be done automatically, but borrowers should check. Similarly, certain periods of forbearance or deferment now count. This is a particular benefit to active duty military members.

This post is not a comprehensive list of changes under the Temporary Waiver. Check with your servicer, read through the government-provided information at StudentAid.Gov, complete the required forms and other actions by the October 31 deadline.

Then, breathe!

Dealing With Inflation!

How do we deal with inflation? The cost of goods has increased around 8% over the past year. The income for most has remained constant or only slightly higher during that time. If you are not careful, you will find yourself spending more than your income. Unfortunately, many people don’t notice as they use their credit card to make up the difference or don’t notice until they receive their credit card statement. I want to share a few simple strategies to offset some of the increase.

The price of gas is one of those areas with the largest increase and therefore the first tip is to drive less. This is accomplished by planning your trips. We like the convenience of getting items when we want them. Consolidating trips can reduce the amount of gas used as well as the wear and tear on your car.

Have you ever used coupons? Maybe now is the time to start. Using coupons can reduce cost and in some cases provide you with free items. Look around coupons are out there. A simple search on the internet can provide you with a list of sources. You also get them in the mail or newspaper.

Use your merchandise cards. The gas station I use has a merchandise card. I scan the card and instantly get 3 cents off my gasoline. It also provides me with a free doughnut and coffee on occasion. Many grocery stores offer them as well.

If you are purchasing large items like a refrigerator or even a car, think about delaying those items for a few months. When it is time to purchase, compare prices. The recommendation is to compare prices at three different locations. You would be surprised how stores mark up prices on certain items to reduce prices on others. Their goal is to get you in the store. Your goal is to save money!

Think about a household audit. You don’t realize how many items you have drawing power that you are not using. Unplug it! What about those lights? Turn them off when you leave the room. Now your thermostat, adjust it a little higher in the summer and a little lower in the winter. Remember, little things add up.

I also need to emphasize the importance of a spending plan. You need to know where your money is going. Analyzing your spending plan will inform you of the habits you developed like buying coffee every morning. It may not seem like much, but every trip costs you $2-$10. 

These strategies may seem simple, but little things add up. Be savvy and save!