6 Ways Student Loans Could Impact Your Credit Score

ways-student-loans-could-impact-credit

When most 18-year-old college freshmen sign on the dotted line to take out federal student loans, they’re not thinking about credit scores. They’re thinking about class schedules, life goals and avoiding the infamous “freshman fifteen.”

But the truth is that student loans can (and do) impact your credit scores from the very moment you take them out. Whether you’re a brand new college student who hasn’t even started repaying student loans yet or a 30-something still struggling to pay back that debt, you need to understand how student loans can impact your credit scores and your ability to borrow. (You can see how your student loans may be affecting your credit by viewing two of your credit scores, updated every 14 days, on Credit.com.)

1. They’ll Likely Open Your Credit File

Most straight-from-high-school college freshmen don’t have a credit file to speak of before taking out student loans. But because the federal government doesn’t require good credit for most types of student loans, that doesn’t matter. As soon as you take out a loan, you’ll have a credit file opened, likely with all three major credit reporting bureaus. This is the start of your credit history and subsequent numerical credit scores.

2. They Can Help Establish a Longer Credit History

One portion of your credit scores comes from the length of your credit history. The longer you’ve had credit, the higher your score will be. For many students, student loans are their first piece of credit. And because they’re likely to stick around on your credit reports for ten years or more while you’re in repayment, student loans can give your score an automatic lift.

3. On-Time Payments Can Keep Your Score Growing

On-time payments are the most heavily-weighted portion of the credit score algorithm. After all, lenders want to be sure you’ll repay your loans on time each month. Paying your student loans on time from the time you enter into repayment can keep your credit scores growing, slowly but steadily.

One thing to note here is that if you have to put your loans into deferment or forbearance due to financial hardship, this shouldn’t harm your credit scores. Call the lender as soon as you know you’ll be unable to keep making payments. They can put the loan into forbearance, which will stop payments for a while. This doesn’t get you out of repaying the loan, of course, but it will save you from late payment reports on your credit scores.

4. Missed Payments Can Quickly Tank It

Steadily repaying your loan with on-time payments will increase your scores, but slowly. On the flip side, missing payments can tank it, and quickly. However, most federal student loan servicers won’t report a payment as late until it’s been 60 days late by the end of the month. So you often have more grace with these loans than other types. Still, it’s best to get into the habit early on of making on-time payments each and every month.

5. They Can Help You Add Variety to the Mix

A few high school and college students have other debt coming into the student loan process. For instance, you might have a low-limit credit card on your report already. If this is the case, adding student loans as an installment loan can add variety to your credit file. Because variety is one thing lenders look for, this can also help boost your credit scores.

6. Resolving Delinquency Can Immediately Increase Your Score

Resolving delinquency on other types of loans isn’t always easy, and the delinquency reports may take months or even years to recover from. This isn’t always the case with student loans. If you lose your job, for instance, and miss three months’ worth of payments, your score will quickly fall. But if you later work out with your lender to back-date the deferment of your loan, they can forgive those late payments, effectively erasing them from your credit scores.

It’s better to never become delinquent on your student loans, of course. But if you do, resolving the problem as quickly as possible can help you increase your credit scores almost immediately.

Bonus: Your Debt-to-Income Ratio Can Be Important

It’s a common misconception that a person’s debt-to-income ratio — the amount of your minimum payments each month versus the amount of income you make— is a part of your credit scores. It’s actually not. Credit bureaus don’t know how much money you make, and they don’t really care. As long as you’re meeting your obligations each month and your credit utilization rate is in good shape, your credit scores should stay intact. (Note: Your credit utilization rate, also referred to as your credit-to-debt ratio, is essentially how much debt you’re carrying versus the amount of credit extended to you. For best credit scoring results, it’s generally recommended you keep the amount of debt you owe below at least 30% and ideally 10% of your total available credit limit.)

Lenders, on the other hand, care about debt-to-income ratio very much. If 50% of your monthly income is eaten up by minimum debt payments, you’ll likely have trouble obtaining a mortgage.

So even though your minimum student loan payments in comparison to your monthly income don’t affect your credit scores, they can affect your ability to borrow. This is why it’s so important when taking out student loans to examine how much your chosen career is likely to earn you. Then, compare that to what you’re likely to pay in minimum student loan payments before you sign on the dotted line for that loan.

Image: sturti

The post 6 Ways Student Loans Could Impact Your Credit Score appeared first on Credit.com.

7 Tips to Save on Electronics

shopping for TV electronics in the store

Everyone wants the latest and greatest when it comes to electronics, but keeping up with frequent technological updates on products could have you broke in a year’s time if you’re not careful.

Instead of shelling out your life’s savings to keep up with the changes, consider following some of these suggestions to stay up on tech trends and keep your budget in the green.

1. Sell your old devices to help fund the new ones

Especially if your old iPhone, television or PlayStation is in good condition, you should be able to sell your device (sometimes directly back to the provider, depending on what the device is, although selling it yourself privately could get you more of a profit) and use the money to put towards investing in the newer model. Here’s a guide from Consumer Reports with three good options for selling back your old phones and gadgets, and of course the old standbys of Craigslist and eBay will probably work, too.

2. Negotiate for a better price

As with most consumer products, electronics are usually negotiable, especially during times of year when suppliers are desperate to move items to make room for new things (like at the end of the holiday season, for example, or at the beginning of spring). When it comes to haggling, keep in mind that while it never hurts to try asking for a discount no matter where you’re making your purchase, you might be more likely to get what you ask for when you shoot for an independent or regional store, rather than a big chain.

3. Go for the ugly packaging

If a package looks like it’s been opened or the label has been ripped off — but everything inside seems totally fine and the product actually still works — ask the manager for a discount for taking the battered and bruised packaging off his hands. You should be able to get at least 10 or 15% off right away.

4. Buy it online

Heading to the store to pick out your very own new tech goody might seem like more fun, but by ordering it online you can search around for added coupons that could save you a ton. Check out places like Slickdeals.net, Bargain Jack, techbargains.com and RetailMeNot.com to get your search started.

5. Do your research

One of the easiest ways to avoid overspending on tech goodies is to do your research on when new versions of products are coming out so that you don’t end up buying something that you’ll only want to turn around and replace with the newer option a couple months down the road. Most big-name products tend to have releases around the same time every year anyway (like new iPhone models in September, for example), so get to know those schedules and you’ll never be left with the older version right before something newfangled becomes available.

6. Only buy the more expensive options when it’s really necessary

While it’s true that upgrades are likely to have more bells and whistles that you’ll want when it comes to big products, for other, smaller tech products, sometimes the cheaper options can be just as useful. Take cables, for example. You could dish out hundreds for expensive, long-range cables that promise all kinds of things, but in most cases a generic, high-speed cable that you’ll find for a couple bucks at the store will work just fine. Be sure to check online for reviews of the product before buying it, and stay away from dollar store or flimsy looking options and you should be fine.

7. Avoid the warranty

Whether or not you decide to purchase the additional warranty on an item will be up to you (and might just be determined by how careful you are with your tech toys), but in most cases it simply doesn’t pay. Check out this piece for more on why.

The post 7 Tips to Save on Electronics appeared first on MagnifyMoney.

Turned off by Traditional Burials, Families Find For Creative Ways to Honor Loved Ones

Illustration by Kelsey Wroten
Illustration by Kelsey Wroten

Sumi Garcia doesn’t have to go far to visit her mother’s final resting place. She just steps out in front of her home and takes in the vivid pink blooms dotting the Bougainvillea tree she planted last year.

When Garcia’s mother passed away in March 2016, 42-year-old Garcia knew a traditional burial was out of the question. Her mother, Olga Orta, had always wanted to be cremated and for her ashes to be spread in a forest.

Sumi Garcia and her mother, Olga Orta
Sumi Garcia and her mother, Olga Orta

The thought of spreading her mother’s ashes in a forest that might one day be converted into buildings was too disturbing, said Garcia, who lives in Miami, Fla. So she found a more creative way to honor her mother’s wishes.

She saw an advertisement for a new company called Bios on Facebook. Bios, which was founded in 2013 by brothers Gerard Moliné and Roger Moliné, developed a special urn that grows into a tree when paired with ashes from a cremation. Over time, the urn decomposes, leaving the plant intact.

The urn, which comes with seeds of your choice, vermiculite, coco-peat, and instructions, costs $145. Garcia chose the Bougainvillea easily. It was one of her mother’s favorites. “It’s not only helping the environment but it’s so nice to see your loved one grow into this beautiful tree,” she said. “It’s kind of like they are still alive in a physical form. It’s amazing to see how much she’s grown.”

Families can easily shell out over $7,100 for a traditional funeral today, according to the most recent data from the National Funeral Directors Association (NFDA). That’s nearly 30% more than funerals cost just a decade ago.

The high cost of the typical American funeral is one reason why a growing number of people, like Garcia, are choosing lower-cost (and often environmentally friendly) alternatives.

Here are a few:

Green Burial

Traditional burials can actually be quite harmful to the environment and even funeral workers themselves. For example, formaldehyde, used during embalming to preserve the body, has proven to be toxic to embalming professionals, causing sore throats, coughing, scratchy eyes, and nosebleeds in the short term and cancer in the long run.

Cremations pose their own environmental hazards. The process releases greenhouse gases like carbon dioxide, as well as other known toxins and carcinogens into the atmosphere.

One way to reduce your carbon footprint after you’ve passed away is to opt for a “green” burial. Green burials, as defined by the Green Burial Council, aim to reduce environmental damage, protect the health of funeral workers, and reduce carbon emissions.

“This is sort of a new concept to the industry, so you might have to seek out a natural burial ground,” says Rachel Zeldin, founder and CEO of I’m Sorry to Hear, an online service that helps consumers search and compare prices for funeral services in their area. “But they are a super, super beautiful way to have a funeral.”

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Sumi Garcia chose to bury her mother’s ashes in a special urn offered by startup Bios, which incorporates ashes into soil that nourishes a tree or plant of the buyer’s choice.

The deceased is buried in a vessel made of organic materials, such as a burial shroud or a simple casket made of untreated wood, or directly into the ground (with or without a liner) if the cemetery allows. The Green Burial Council has a list of certified burial products.

Green burials can also be kinder to your wallet, since you can typically forego the costs of an expensive service, casket, and embalming. The cost of the burial will depend on the cost of the provider that you choose and where you’d like to be buried. For example, startup company Coeio has developed a bodysuit that you can be buried in for about $1,500. The suit is lined with a mixture of mushrooms and other biological material, the company says, to “help the body return to the earth, clean toxins in the soil, and deliver nutrients to plants.” At that price point, the Coeio suit costs much less than the average burial with a viewing, but could cost more than a direct cremation, which can cost as little as $495, according to the Funeral Consumers Alliance.

Finding a natural burial ground is the tricky part for anyone considering a green burial. Zeldin recommends seeking out funeral homes that are a bit more progressive.

Direct Cremation

The first and most commonly chosen alternative to a full casket burial is cremation. According to data from the Funeral Consumers Alliance (FCA), the number of cremations has grown from roughly 600,000 in 1999 to a projected 1.6 million in 2016. This year, nearly one in every two funerals will involve cremation.

The median price of a viewing and cremation is $6,078, according to the most-recent NFDA data, about $1,000 less than a viewing and burial. You could also choose to skip the viewing and have an end-of-life celebration elsewhere, in which case you would only take on the cost of a direct cremation. It’s hard to nail down a typical price for cremation services. Prices for direct cremation nationwide can range from $495 to as high as $7,595, according to the FCA.

Always ask the funeral director what their “direct cremation” service actually includes, as it could exclude the actual cost of cremation. A report released this year by the FCA found that among the 142 funeral homes they surveyed, about 22% of them advertised cremation prices that didn’t include the actual cremation of the body.

You can contact a cemetery, a funeral home that offers cremation services, or a stand-alone crematorium to arrange the cremation and have the body moved.

Body Donation

Donating your body or organs is not only a more benevolent option when it comes to handling the deceased, but also a very cheap one, costing less than $100 and oftentimes nothing. For example, Anatomy Gifts Registry, a nonprofit body donation program, pays for every part of the process except for a shipping and handling fee to send the ashes back to you. Many other programs don’t charge anything.

“Not only is [body donation] great for our society because it allows people to do research and medical training, but it’s a really great option for those who either have a desire to donate or really have no money,” say Zeldin.

You have two options with body donation. You can either donate your entire body, or just your organs, but you can’t do both. That’s because body donation requires a body to include organs.

When you donate your body, it can be used to help with medical or military research, whereas if you donate your organs, they could go to save a life.

If you’re interested in donation, you’ll need to contact a medical school or research facility or connect with a national body donation program such as Science Care or MEDCURE that can complete that step for you. The body is usually cremated after donation, then the ashes are sent back to the family after a few weeks. Some programs cost nothing, others may have you pay a small shipping fee to receive the ashes.

You can make the process easier on your family by pre-registering your body for donation or signing up as an organ donor. Read more about body donation here.

Home Funeral

A home funeral happens when the family takes on all after-death care and responsibilities before burial or cremation. The National Home Funeral Alliance (NHFA) says home funerals emphasize a “minimal, non-invasive, and environmentally friendly care of the body.” That includes filing the death certificate and other paperwork that a funeral director would normally do. According to NHFA, the cost of a home funeral should land somewhere under $200, minus your local cremation or burial costs.

If that sounds daunting, don’t worry, you can ask for help from a funeral educator or guide. Check out the NHFA website to find helpful resources including death certificate templates. Your  family can care for the deceased at home or technically anywhere else as long as the church, nursing home, hospital. etc. allows it. Those who choose this route typically do so because they want to grieve in private.
These are just a few of the more common alternatives to traditional burial, but there are new companies developing new methods of handling the deceased cropping up each year. The takeaway here is to do your research and you may find a disposal method that appeals to you more than the old-fashioned way.

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Going on a Job Interview? These 5 Signs Could Mean You’re Getting Hired

signs-you're-going-to-get-hired

The job interview went well — or at least you think it did. You were cool and confident, answering questions with ease and projecting a friendly, professional demeanor. At this point, you’re pretty much guaranteed to get hired, right?

Not so fast. You might think the job interview went well, or you might think it was a bust, but unless you’re paying attention to how your interviewer behaved, you could be making all the wrong assumptions about your chances. Employers often give subtle clues as to how they feel about you during an interview. Sometimes, those indicators — such as an ultra-short interview or lack of follow-up questions — are a sign you’re not making the grade. Others, like positive body language and relaxed chitchat, suggest you’re making a positive impression.

Being able to read an interviewer can give you a lot of insight into your ultimate chances of getting a job, but it’s not foolproof. As with most other things in life, there are no guarantees when it comes to job searching. You could have wowed the interviewer, but budget cuts or other issues might cause a company to put a hold on hiring, or a more impressive candidate could have walked in the door right after you.

For those reasons, job searchers should temper their expectations, even when they receive positive feedback from interviewers, according to HR expert Alison Green.

“Even if the interviewer says, ‘You’re just what we’re looking for,’ or, ‘We’re so excited to have found you,’ or, ‘I can’t wait to have you start,'” you may not get the offer, she wrote on the blog Ask a Manager. “[T]hings change — better candidates appear, budgets get frozen, an internal candidate emerges, the position is restructured and you’re not longer the right fit for it, a different decision-maker likes someone else better, one of your references is wonky and makes them gun-shy, or all kinds of other possibilities.”

Nonetheless, some things employers say during job interviews can generally be taken as positive signs. If these five things happen, there’s a reasonable chance you’re going to get hired, or at least move on to the next step in the screening process.

1. You’re Asked for References

At most companies, checking references is the final step in the hiring process. They’ve already decided they want to hire you, but they want to do their due diligence before making it official. If your interviewer ends your conversation with a request for references, it’s a good sign. But know that some employers might ask for references as a matter of course, so being invited to hand over email addresses for your former bosses isn’t a guarantee an offer is forthcoming.

“Generally a request for references is a good sign,” Lars Schmidt, founder of Amplify Talent, told HR Bartender. “Most organizations only ask if you’ve passed the initial interview vetting, and they view your candidacy positively. It’s not a guarantee of offer, but it’s an indication they’re feeling favorable enough about your potential to get more insight.”

2. You’re Asked to Stay Longer

When a 30-minute interview stretches to an hour, things are looking up for your job prospects. A longer interview can signal the employer is interested in getting to know you and learning more about your experience. On the other hand, a very short interview is often a red flag.

“Nine times out of ten, if the interview time was a lot less than the actual time allocated — you haven’t got the job,” according to a post recruiter Rebekah Shields wrote on LinkedIn. “They have made their mind up quickly and do not want to go into any more depth into the job or with you.”

3. You’re Introduced to the Team

When a one-on-one interview turns into a meet-and-greet with the rest of the office, you may already have a foot in the door. At this point, you’ve probably proved you have what it takes to do the job. Now, your interviewer wants to introduce you to potential co-workers so you can both make sure the position is a good culture and personality fit. But pay attention to the nature of the tour you’re given. A general spin around the office is more likely to be standard interviewing procedure, while introductions to key players may be a sign you’re seen as something special.

“When hiring managers are keenly interested in you, they oftentimes want to get the opinions of others,” Lynn Taylor, a workplace expert and author of “Tame Your Terrible Office Tyrant,” told Business Insider. “That may include their peers, their bosses, and your peers.”

4. You’re Asked About Other Possibilities

If a company is really interested in hiring you, they want to make sure they’re not going to lose you to another employer. When your interviewer asks about whether you’re interviewing other places, what your timeline is for making a decision about your next career move or if you have an offer on the table, they’re trying to figure out how quickly they need to act before you get away.

“They’re getting an idea of how active you are in the interview process,” Devony Coley, senior consultant for recruiting firm WinterWyman, told Fast Company. “Are you starting your search? Testing the waters? Or do you have other solid opportunities? This question helps them know if they need to step up their hiring pace so they don’t lose you.”

5. The Timeline Is Specific

When an interviewer says “we still have a few more candidates to interview” or “we’ll be in touch soon,” it’s hard to know for certain where you stand. The employer is being vague or noncommittal, either for reasons of politeness or because they’d prefer to keep their options open. When someone gives you a firm date for when they hope to make a hiring decision, like “we’ll get back to you on Thursday,” that can be seen as a good sign.

“If an interviewer is interested in a candidate, they may even ask when you’d like to or need to have their decision by,” Bryan Brulotte, president of MaxSys Consulting & Staffing, wrote on LinkedIn. “They won’t let you leave without knowing what your timeline looks like.”

[Editor’s Note: It’s important to remember that some employers review a version of your credit reports as part of the application process. Because of this, it’s a good idea to find out where your credit stands ahead of time so you have an idea of what they might see. You can see a free credit report summary, updated every 14 days, on Credit.com.]

This article originally appeared on The Cheat Sheet.

Image: SIphotography

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5 Possible Benefits of Changing Your Bills’ Due Dates

benefits-of-changing-your-bills'-due-dates

Paying bills is a tedious necessity, and for many, it’s also an ongoing source of stress. According to the 8th annual Billing Household Study from Fiserv, a financial services provider, 35% of consumers paid at least one bill late in the past 12 months, and 65% also paid a late fee.

So, why are these people struggling to meet their billing deadlines? Common reasons include forgetfulness, lack of funds and personal life obligations. If any of these reasons sound familiar, it might be a good idea to consider how your billing due dates factor into the equation. These are five ways requesting a timeline shift from your providers could could really benefit you.

1. Saving Money

Late fees are the immediate consequence of missed payments, but the financial woes don’t stop there. Frequent missteps can lead to increased interest rates on your revolving accounts (like credit cards), driving up your balances and making it more difficult to get out of debt. Paying your bills on time can help you avoid these issues and ultimately save money.

2. Promoting Credit Health

Payment history is the greatest factor considered in credit scoring, and you can’t afford to ignore the effects of late payments. According to Equifax — one of the three major credit bureaus in the U.S. — even a 30-day late payment can damage your credit significantly. In contrast, paying your bills on time can help give you a strong payment history and benefit your credit. Not only that, but keeping your debt level low in relation to your overall credit limit (also known as credit utilization) can benefit your credit scores. Experts recommend keeping your debt below at least 30% (ideally 10%) of your total available credit, which can be hard to do if you’re tacking on late fees. (You can see how your credit is currently fairing by viewing two of your credit scores for free, updated every 14 days, on Credit.com.)

3. Removing Memory from the Equation

According to a 2013 Citigroup survey, 61% of people miss bill payments due to forgetfulness. Coordinating your payments to fall on the same days each month — the 1st and 15th for example — gives you a better chance of remembering your financial commitments. If you still fear memory troubles, it might be a good idea to sign up for bill auto-pay to remove human error from the equation. Most credit and service providers offer this option for free, but you’ll want to check with your individual provider to be sure.

4. Streamlining the Payment Process

Fiserv’s survey found that consumers pay bills using a variety of methods and doing so could contribute to making it hard to keep track of all your bills and their due dates. According to Fiserv:

  • Consumers used six different payment methods per month in 2015, up from 2.9 methods in 2014.
  • A reported 21 million households changed their bill payment method on a monthly basis in 2015, a 40% increase from the previous year.
  • Of those who participated in the study, 21% still receive all paper bills, while 54% use a mixture of paper and online/mobile options — 25% consider themselves paperless consumers.

By changing your billing due dates, you may also feel inspired to commit to a consistent method of payment. Doing so could help you track spending and streamline your monthly finances, helping you keep those bills paid on time (and those credit scores in great shape).

5. Preserving Credit Repair

This may not apply to everyone, but to those it does, it’s a big one. Recovering from past credit damage is an extreme challenge, but that’s especially true if you don’t change the behaviors that contributed to the downfall of your scores. In fact, preserving your scores could be more difficult as it improves. Typically, a single late payment made a few years ago won’t still be hurting your credit today, as long as you rebounded and have made consistently timely payments. Of course, on the other hand, a recent late payment could drop your scores.

How to Change Due Dates

Changing your billing due dates can usually be done with a simple request, which can be done online, on the phone phone or in person. Although credit and service providers aren’t legally required to make this type of shift, explaining your reasons and commitment to timely payments could work in your favor.

Image: shironosov

The post 5 Possible Benefits of Changing Your Bills’ Due Dates appeared first on Credit.com.

Boss Asking for Wired Money? It Could Be a Scam

impersonating-CEOS

It’s much easier to steal $1 million from one person than $1 from a million people, so naturally that’s where identity thieves have taken their “industry.” Small-dollar credit card fraud is old, tricking corporations into wiring millions of dollars overseas is in.

At the root of the latest scariest trend in identity fraud is a new twist on an old scam routine: impersonation. But in this con criminals aren’t impersonating a teenager in trouble to trick Grandma into wiring $1,000. They are impersonating executives with urgent requests to pay multi-million-dollar invoices. The scam works because employees naturally want to please their boss.

How the Scam Works

“Glen, I have assigned you to manage file T521,” read one such message sent by a scammer impersonating an executive. It was provided by the American Institute of Certified Public Accountants (AICPA) in a recent report on this kind of fraud.

“This is a strictly confidential financial operation, which takes priority over other tasks,” the message continued. “Have you already been contacted by [name of person and company]? This is very sensitive, so please only communicate with me through this email, in order for us not to infringe SEC regulations. Please do not speak with anyone by email or phone regarding this.”

Thirty minutes later, the “executive” convinced the employee to make an upfront payment toward an acquisition in China. “Glen” wired $480,000, and didn’t become suspicious until the “boss” asked for a second payment worth millions.

In professional circles, the crime goes by the pedantic name “business email compromise,” but there’s nothing bland about the trend. Reports of the crime to the FBI’s Internet Crime Complaint Center have soared — from 1,198 incidents during 2013 to a total of almost 16,000 in the FBI’s most recent report in 2014. Worse yet, losses have grown 1,300% since January 2015, to almost $1 billion.

Individual firms have been hit hard. One technology company reported in an SEC filing last year that it had been hit by a con that led to “transfers of funds aggregating $46.7 million.”

In its report, the AICPA said the scam is so successful because criminals do a lot of legwork to prepare.

“Cybercriminals conduct extensive research online to mimic a company’s email protocols, design and structure. They monitor social networks to target employees who have a working relationship with the senior executive attributed to the fake email,” the report said. “It’s all meant to be plausible enough to persuade the employee to be responsive to the senior executive’s request and to bypass the controls associated with a wire transfer.”

Other elements that make the crime work so well, according to the report:

  • The email address is substantially similar to the purported sender’s address, with very minor, subtle differences. The email display name may appear correct, but when the cursor hovers over the email address, a different underlying address is displayed. For example, if the actual address is CEO@victimco.com, the impersonator address might be CEO@vicitmco.com. (Note the misspelled domain.)

  • Requests occur when the executive is traveling and cannot be contacted.

  • There is an element of urgency or secrecy regarding the disbursement.

  • The amount is within the normal range of transactions so as not to arouse suspicion.

  • Other employees are referred to or copied in the email, however, their email addresses are also modified.

Executive ID theft can take two main forms, the report says. In the first, an employee receives a rather panicky email from a supervisor saying a transaction must be ordered immediately to complete some kind of secret business deal. In the second form, dubbed “strong-armed vendor request,” a criminal pretends to be a vendor with an outstanding invoice — often based on a real invoice. The criminal then asks the payment be redirected to an account they control.

“The fraudulent email contains a PDF file of an invoice that appears to be from the trusted supplier, and the email text and header information appear to contain the hallmarks of an actual business communication from the supplier,” the report said.

At its core, business email compromise is the same old internet scam: There’s the usual time pressure technique, designed to confuse targets so they drop their guard, and the usual irrevocable payment method, such as a wire transfer.

“This sophisticated type of cyberattack is stealing millions of dollars from companies in a manner that should be particularly concerning to company stakeholders because it persuades employees to ignore internal controls,” said Annette Stalker, owner of Stalker Forensics and chair of the AICPA’s Forensic and Litigation Services Committee. “Executive impersonation bypasses the security systems that company IT departments have put in place to neutralize cyberattacks by going where companies and their employees are most vulnerable: their email systems.”

How to Protect Yourself

The time-tested internet fraud advice still holds true: If you ever feel unusual pressure from someone to make any kind of payment, back away from the computer and take a stroll around the block. Hit the pause button. Nearly all scams would fail if victims didn’t bow to time pressure that criminals utilize as their tool of choice. And stick to procedure when making payments, be they $10 credit card transactions to buy a pair of winter gloves or $10 million payments to overseas vendors. Don’t let someone talk you into doing an end-around — such as a one-time wire transfer to a new account — when you are dealing with money. Pauses and procedures are your best fraud-fighting tools.

If you do fall victim to a scam and your personal information is compromised, be sure to keep an eye on your credit, as this can indicate possible fraud. A sudden drop in credit scores, for instance, is a big sign that your identity has been stolen as are mysterious credit inquiries on your credit report. You can view a free snapshot of your credit report, updated every 14 days, on Credit.com.

Image: monkeybusinessimages

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4 Easy Ways to Achieve Vacation-Level Relaxation Without Traveling

relax-without-traveling

Vacations can be expensive — there’s the cost of travel itself, as well as lodging expenses and all the money you drop once you get where you’re going. When it’s all said and done, you could potentially spend thousands of dollars on a getaway.

But aside from emptying our wallets, vacations can help us decompress and cut back on stress. But there’s a way to enjoy the same result without having to overspend on a vacation. Here’s how you can save money by achieving epic relaxation without ever leaving your hometown.

1. Disconnect From Technology

Modern technology keeps us continuously plugged in, something many people tie to causing high stress levels. Think about it: Your boss can now email you when you’re home, and social media can constantly bombard us with information.

It can be beneficial to step away from digital communications once in a while. To help you relax, consider turning off the TV, smartphones and computer at least a few evenings a week, if you can. At the very least, you can try to remove tech from your bedroom so that you can wind down before going to sleep, as research has shown that the light from screens throws off our sleep cycles and melatonin production.

2. Establish a Zen Place

There’s a reason we go on vacations to relax. Perhaps we find it easier to unwind in a place we don’t associate with work or home responsibilities. But you can establish a place at home that’s used just for relaxing and in time your mind can start to associate that place with a calm, tranquil mindset.

The exact nature of your relaxation space depends on your resources and preferences. You may have a backyard or room to devote to relaxing, or you may only have extra floor space. But whether it’s a garden patio, relaxation room or beanbag chair next to your bookshelf, you can designate a certain space at home for relaxation.

To help boost the relaxation vibe in that space, consider repainting calming colors on the walls, listening to tranquil sounds (relaxing music) or adding accessories such as plants or Zen sand gardens. You can also try to remove anything from that space that stresses you out – like phones, mail and other stressors.

3. Hire a Pro

Massages, spa days and yoga classes are just a few examples of services that can help you relax. Sure, a trip to the spa may be a seen as an unnecessary extravagance, but it is likely less expensive than a vacation and could be worth the investment. After all, relaxation professionals can help you recharge and refresh. If this is outside of your budget, there are less expensive alternatives you could consider, too, like finding free yoga instruction videos online or soaking in your tub at home instead of at the spa.

4. Revisit Your Own City

Relaxation doesn’t all have to take place within your home. In fact, you can reacquaint yourself with your own neighborhood. Whether you’re in the city, country or somewhere in between, your region should have some great attractions you may not have checked out before (or perhaps it’s just been a while). Try approaching your area from the perspective of a tourist: What would you recommend they try if they were visiting your area?

Whether it’s hiking, museums or fine dining, you can get a vacation-level experience by discovering (or rediscovering) the best your town has to offer. You could develop a new appreciation for your region and find new places to explore and enjoy to boot.

No matter how you decide to relax, whether through yoga, a zen garden or something else, it’s a good idea you don’t overspend — after all, you don’t want to find a good relaxation tool just to find out it’s landed you in credit card debt. To help you stay on the right track, consider using this free tool to see how your spending is affecting your financial goals, like maintaining a good credit score.

Image: m-imagephotography

The post 4 Easy Ways to Achieve Vacation-Level Relaxation Without Traveling appeared first on Credit.com.

5 Things You Should Know Before You Plan a Funeral  

Illustration by Kelsey Wroten
Illustration by Kelsey Wroten

At around $7,100, a traditional funeral with burial and a viewing is a large expense for most families. The costs, which are often compounded with grief over a loved one’s passing, can make planning as emotionally draining as it is financially exhausting.

The key to a successful funeral experience is doing as much of the work and research as you can before you need it.

“Look at this as a business transaction the same way that you would look at buying a car or selecting a contractor,” says Joshua Slocum, executive director of the Funeral Consumers Alliance (FCA), a nonprofit consumer advocacy organization for the funeral industry.

Preparing yourself with these next few bits of information can ease some of the stress involved.

Here are 5 things you should know before you plan a funeral:

1. Your Loved One’s (or Your Own) Wishes

Much of the conflict that can arise when planning a family funeral can be avoided if the family knows exactly what their loved one wants before they pass away.

“The best time to have a funeral planning conversation is while the person is still alive,” Slocum says. He suggests pre-planning by having an open conversation with the family members who will survive you so you will make the process easier and calmer, and “it will cause you less anxiety to start [planning] before [a family member] dies.”

The conversation should be detailed and helpful. Slocum suggests focusing on what would be meaningful for the deceased and how the deceased wants to be celebrated, but also what would be meaningful and manageable for those left behind. He or she should put their desires in writing as well, letting a designated family member know where to find the document when it is needed.

Having the deceased’s wishes in hand can also help curb any impulsive or unnecessary expenses during the planning process.

“You don’t want to be cheap or feel like you’re not giving that person what they deserve, but how much you spend does not equate your love for that person,” says Rachel Zeldin, founder and CEO of I’m Sorry to Hear, an online service that helps consumers search and compare prices for funeral services in their area.

The National Funeral Directors Association (NFDA) encourages having “the talk of a lifetime” through their program with the same title. They provide tips and information about speaking with your loved ones about death at talkofalifetime.org.

2. How to Shop for a Funeral Home

Pricing for the same services can range widely for different funeral homes in the same metro area. According to a recent survey by the FCA and Consumer Federation of America, the price of a direct cremation ranges from as low as $495 to as high as $7,595 nationwide, among the 142 funeral homes they surveyed. With that in mind, you should shop around.

“The most important thing is to be a smart shopper. Don’t just purchase from the funeral director your family has always gone to,” said Slocum. Even if you do use the same director, he says if you shop around, “at least you can use them with peace of mind that you didn’t overpay.”

You should begin your search online, and call or visit the funeral homes to get price lists to compare. I’m Sorry to Hear has a comparison tool you can use to search through funeral homes in your area. You should also check to see if there is a local FCA in your area, as they will likely have compiled and sorted a list of providers and pricing in your area.

3. The Funeral Home’s Licensing Status

Double-check to ensure that the funeral home you’re considering is licensed. The requirements vary from state to state, but most require some length of formal education and regular continuing education for funeral directors to remain licensed. For example, Alabama requires funeral directors to complete high school, two years of apprenticeship, and get eight hours of training every two years. The NFDA has a full list of each state’s requirements online. In most states, the license is also required to be displayed in a public area.

Stephen Kemp, a board member of the NFDA and the director of Haley Funeral Directors in Southfield, Mich., advises checking before you speak with the director, as “there have been cases of unlicensed people doing licensed work in areas that don’t have checks and balances.”

Checking first could save you time and money, since using an uncertified funeral home could cause delays in filing paperwork and services, or possibly lead to legal trouble.

“The whole purpose of licensing and being professional is so that the family has some recourse,” said Kemp. “This is not just somebody taking care of car parts. This is your mother, father, child, infant, who you cared about, and you are entrusting us with that responsibility.”

In addition to access to a wealth of knowledge and expertise, when you work with a licensed director you have an extra layer of legal protection with the licensing organization. If the director doesn’t follow through on promises or acts unprofessionally, you could report them to the state’s licensing board, and they can be penalized accordingly. Unlicensed work is also illegal by nature and could mean delayed or incomplete work for you.

4. The Budget

According to Kemp, much of the misunderstanding between consumers and funeral directors comes from two issues that the consumer can solve before they arrive:

1. The family doesn’t know what kind of service they want to have, and

2. The family does not come in with a budget.

We just addressed planning the funeral before you show up. In addition to that (and just as you would with any other large purchase), you should know how much you plan to spend on the entire funeral from the service, to the casket, to the disposition.

Come in with a firm budget and be prepared to stick with it. “Don’t get upsold or cross-sold on the viewing before the cremation,” advises Zeldin.

5. Your Rights and Protections

The most important thing you should know when you are speaking to a funeral director is that you have federal consumer protections under the Funeral Rule, enforced by the Federal Trade Commission.

The rule grants you the right to:

  • Buy only the arrangements that you want, so don’t feel obligated or forced to buy a package that includes services that you don’t want or that aren’t required, such as embalming.
  • Get price information over the telephone without providing personal information such as your name, address, or telephone number.
  • A written price list or general price list that should include all of the funeral home’s services, which you can see when you go there in person. You’re allowed to take that list home with you, too. Every funeral home should have similar lists since standard items are required to be on it.
  • See a written price list for caskets and outer burial containers before you see them. Sometimes the casket list is on the general price list, but usually it’s on a separate price list, so you might have to ask for it. Remember: caskets are not legally required for cremation in any state, and outer burial containers are not required by state law anywhere in the U.S. either.
  • Provide the funeral home with a casket or an urn that you didn’t buy from them. The rule says the funeral provider can’t refuse to handle or charge you a fee to handle a casket or urn that you bought elsewhere.
  • Get a written explanation for any legal cemetery or crematory requirement that requires you buy any funeral goods or services.
  • A written statement of everything you are buying before you pay for it. The funeral home has to give it to you right after you make the arrangements. That way, you can look over it and see each component that you are buying and the cost associated with it.

With these 5 things in mind, you should be all set for your conversation with the funeral director. Read this article before you head over to the funeral home to find more information about how that process should go.

The post 5 Things You Should Know Before You Plan a Funeral   appeared first on MagnifyMoney.

Guide to Enrolling in an Obamacare Plan on Healthcare.gov

   obamacare Affordable Care Act paper family

Health insurance protects millions of Americans from paying full price for their medical expenses. But buying the right insurance isn’t an easy task for people looking to sign up for an Obamacare plan through the federal health insurance marketplace (Healthcare.gov). This year, the average consumer will have to wade through 30 unique plans from several different insurers to make their choice.

In this guide, we will cover the facts that you need to know when selecting an insurance plan through the federal health care exchange.

What terms should I know before I apply?

Understanding basic health insurance terminology can help you make a more informed decision about your options. These are the common terms you should know.

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Health care costs

Monthly premiums. The amount you pay each month for your health insurance.

Deductible. The amount you pay for covered health services before your insurer begins to cover part of your costs.

Out-of-pocket maximum/limit. The highest amount you will pay for covered services in a year.

Co-insurance. Your share of the costs of a covered health care service. This is the percentage you must pay out of pocket after you have met your annual deductible. You pay a specific co-insurance amount until you meet your out-of-pocket maximum.

Co-payment. A fixed amount you pay for a covered medical service, typically when you receive the service or prescription.

How these costs work together. Consider a scenario where you purchase an individual insurance policy with a $368 monthly premium, a $2,000 deductible, 20% co-insurance, and a $5,000 out-of-pocket maximum.

You will pay $4,416 in monthly premiums ($368 every month).

If you receive a $20,000 medical bill, you will pay:

  • $2,000 to cover your annual deductible (100% of costs up to $2,000)
  • $3,000 in co-insurance (20% of costs over $2,000 deductible until you hit your out-of-pocket maximum of $5,000)
  • $0 in medical costs after you hit your out-of-pocket maximum (in this case the additional $15,000 is covered by your insurance)

Total annual cost:

$5,000 to cover medical bills + $4,416 in monthly premiums = $9,416

Plan Types

Metal Levels. The health care exchanges — both federal and state-run exchanges — classify health insurance plans into four metal categories. The levels are bronze, silver, gold, and platinum. Metal categories are based on how you and your plan split the costs of your health care.

Bronze. Bronze plans offer the least amount of estimated coverage. Insurers expect to cover 60% of health care costs of the typical population. These plans feature the lowest monthly premiums, the highest deductibles, and high out-of-pocket maximum expenses.

Silver. Silver plans offer moderate estimated coverage. Insurers expect to cover 70% of health care costs, and plan members cover the remaining 30%. If you qualify for cost-reduction subsidies, you must purchase a silver plan to access this extra savings. In 2014, 67% of people who were eligible for a subsidy chose a silver plan.

Gold. Gold plans offer high levels of estimated coverage. Insurers expect to cover 80% of health care costs, while plan members cover the remaining 20%. These plans feature high monthly premiums, but lower deductibles and out-of-pocket maximums.

Platinum. Platinum plans offer the highest level of protection against unexpected medical costs. Insurers expect to cover 90% of medical costs, and plan members cover the remaining 10%. These plans have the highest monthly premiums and the lowest deductibles and out-of-pocket maximums.

EPO: Exclusive Provider Organization. Medical services are only covered if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency).

PPO: Preferred Provider Organization. You pay less for medical services if you use the providers in your plan’s network. You may use out-of-network doctors, specialists, or hospitals without a referral. However, there is an additional cost.

POS: Point of Service. You pay less for medical services if you use providers in the health plan’s network. You need a referral from your primary care doctor to see a specialist.

HMO: Health Maintenance Organization. These plans focus on integrated care and focus on prevention. Usually coverage is limited to care from doctors who work for or contract with the HMO. Generally, out-of-network care isn’t covered unless there is an emergency.

Provider Network. Most insurance plans have preferred pricing with a group of health care providers with whom they have contracted to provide services to their members.

Cost Savings

PTC: Premium Tax Credit. The federal subsidy for health insurance that helps eligible individuals or families with low or moderate income afford health insurance purchased through a health insurance marketplace.

APTC: Advance Premium Tax Credit. This credit can be taken in advance to offset your monthly premium costs. The subsidy is based on your estimated income and can be taken directly from your insurer when you apply for coverage. You must repay credits if you qualify for a smaller subsidy once taxes have been filed. You can learn more about repayment limitations here.

Cost Reduction Subsidies. If you earn between 100% and 250% of federal poverty line, you may qualify for additional savings. This extra savings reduces your out-of-pocket maximum, and it offers assistance with co-pays and co-insurance.

Individual Mandate (Tax Penalty). If you can afford to purchase health insurance and choose not to, you will be charged an individual shared responsibility payment, in the form of a tax penalty. There are a few qualified exemptions, but if you don’t meet those, you will be fined.

For the 2016 tax year, the individual mandate will be calculated two ways:

  • 2.5% of household income (up to the total annual premium for the national average price of the marketplace’s bronze plan)or
  • $695 per adult and $347.50 per child (up to $2,085)

You are responsible for the greater of the two.

Catastrophic Plans. People under age 30 or with hardship exemptions may purchase catastrophic health insurance plans. These plans offer very high deductibles (over $6,850) and high out-of-pocket maximums. Catastrophic plans may offer savings above the metal grade plans, but you can’t use a premium tax credit to reduce your monthly cost.

Preventative Care. All health insurance plans purchased through the health care exchange cover some preventative care benefits without additional costs to you. These benefits include wellness visits, vaccines, contraception, and more.

Government Health Plans

Medicaid. A joint federal and state program that provides health coverage to low-income households, some pregnant women, some elderly, and people with disabilities. Medicaid provides a broad level of coverage including preventative care, hospital visits, and more. Some states provide additional benefits as well.

Medicaid Expansion. The Affordable Care Act (ACA) gives each state the choice to expand Medicaid coverage to people earning less than 138% of the federal poverty line. The primary goal of the ACA is reducing the number of uninsured people through both Medicaid and the health insurance marketplace. The Kaiser Family Foundation keeps track of expanded Medicaid coverage by state.

CHIP: Children’s Health Insurance Program. This program was designed to provide coverage to uninsured children who are low income, but above the cutoff for Medicaid eligibility. The federal government has established basic guidelines, but eligibility and the scope of care and services are determined at the state level. Your children may qualify for CHIP even if you purchase an insurance policy through the health care exchange. You can learn about CHIP eligibility through the marketplace or by viewing this table at Medicaid.gov.

Who can buy insurance through a health care exchange?

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Since the introduction of the Affordable Care Act (ACA), most Americans can purchase health insurance through a health care exchange. However, incarcerated people and those living outside the United States cannot purchase insurance through the marketplace.

Most long-term, legal immigrants to the United States may purchase insurance. Healthcare.gov maintains a comprehensive list of qualified immigration statuses for purchasing insurance through the marketplace.

Just because you’re eligible to purchase insurance through the health care exchange doesn’t mean it’s the most cost-effective. That’s why it’s important to weigh all available health insurance options.

Will I qualify for a health care subsidy?

One major factor to consider when weighing the options is your expected subsidy. 85% of people who purchased insurance through a health care exchange qualified for a health insurance subsidy. The subsidy, or premium tax credit, brought average monthly premiums down from $396 to $106.

To qualify for a subsidy, you must meet three standards:

  1. You must not have access to affordable insurance through an employer (including a spouse’s employer).
    1. Affordable insurance for 2017 is defined as individual coverage through an employer that costs less than 9.69% of your household’s income.
    2. You can check that your insurance offers minimum value coverage by having your human resources representative fill out this form.
  2. You must have a household Modified Adjusted Gross Income between 100% and 400% of the federal poverty line.
    1. You can calculate Modified Adjusted Gross Income using this formula:
      Adjusted Gross Income (Form 1040 Line 37) +
      Nontaxable Social Security benefits (Form 1040 Line 20a minus Line 20b) +
      Tax-exempt interest (Form 1040 Line 8b) +
      Foreign earned income and housing expenses for Americans living abroad (Form 2555)
  1. You’re not eligible for coverage through Medicaid, Medicare, the Children’s Health Insurance Program (CHIP), or other types of public assistance. Some states have expanded Medicaid to anyone who earns up to 138% of the federal poverty line.

How can I calculate my subsidy?

The easiest way to calculate the subsidy you will receive is to use a subsidy estimator from Healthcare.gov or the Kaiser Family Foundation. Both calculators estimate your subsidy based on the information you provide. They also help you understand what factors affect your subsidy estimations.

Your income, household size, and the cost of premiums in your state factor into your subsidy. Premium tax credits can help reduce the amount that you will spend on monthly premiums to a set percentage of your income. This subsidy can bring the marketplace’s silver plan into the affordable range set by the Affordable Care Act.

The price of your silver plan determines the subsidy you receive, but you can use this same subsidy for other plans as well. For example, if you purchase a gold plan, you will spend no more than 9.56% of your income on premiums.

Below you can see the maximum amount you will spend on insurance premiums based on your income.

For an Individual

% of Poverty Line (2016) Income (Based on 2016 Federal Poverty Line) Max Silver Premiums as a Percent of Income Max Monthly Silver Plan Premium Cost after Subsidies Special Notes
100%-138% Lower 48 States:
$11,880-$16,394
Alaska:
$14,840-$20,479
Hawaii:
$13,670-$18,865
2.03%-3.35% Lower 48 States:
$20.08-$45.77
Alaska:
$25.10-$57.17
Hawaii:
$23.13-$52.66
Check if you qualify for expanded Medicaid.
139%-250% Lower 48 States:
$16,513-$29,700
Alaska:
$20,627-$37,100
Hawaii:
$19,001-$34,175
3.41%-8.18% Lower 48 States:
$46.93-$202.45
Alaska:
$58.62-$252.90
Hawaii:
$54-$232.96
You may qualify for cost-reduction subsidies if you purchase a silver plan.
251%-400% Lower 48 States:
$29,819-$47,520
Alaska:
$37,248-$59,360
Hawaii:
$34,312-$54,680
8.21%-9.66% Lower 48 States:
$204.01-$382.54
Alaska:
$254.84-$477.85
Hawaii:
$234.75-$440.17
If you earn more than 400% of the poverty line, you will not qualify for subsidies.

For a Family of Four

% of Poverty Line (2016) Income (Based on 2016 Federal Poverty Line) Max Silver Plan Premiums as a Percent of Income Max Monthly Silver Plan Premium Cost after Subsidies Special Notes
100%-138% Lower 48 States:
$24,300-$33,534
Alaska:
$30,380-$41,924
Hawaii:
$27,950-$38,571
2.03%-3.35% Lower 48 States:
$41.11-$93.62
Alaska:
$51.39-$117.04
Hawaii:
$47.28-$107.68
Children will qualify for CHIP. Check if you qualify for expanded Medicaid.
139%-200% Lower 48 States:
$33,777-$48,600
Alaska:
$42,228-$60,760
Hawaii:
$38,851-$55,900
3.41%-6.41% Lower 48 States:
$95.98-$259.61
Alaska:
$120-$324.56
Hawaii:
$110.40-$298.60
Children in 46 states will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.
201%-250% Lower 48 States:
$48,843-$60,750
Alaska:
$61,063-$75,950
Hawaii:
$56,180-$69,875
6.45%-8.18% Lower 48 States:
$262.53-$414.11
Alaska:
$328.22-$517.73
Hawaii:
$301.96-$476.31
In some states, children will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.
251%-400% Lower 48 States:
$60,993-$97,200
Alaska:
$77,383-$121,520
Hawaii:
$70,155-$111,800
8.21%-9.66% Lower 48 States:
$417.29-$782.46
Alaska:
$529.43-$978.24
Hawaii:
$479.97-$899.99
In a limited number of states, children qualify for CHIP up to 375% of the poverty line. If you earn more than 400% of the poverty line, you will not qualify for subsidies.

What circumstances might affect my eligibility for a subsidy?

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Your subsidy can change if your circumstances change. It’s important to plan ahead if any of these special circumstances apply to you.

Families with kids. In most states, if you earn less than 200% of the poverty line, your kids will qualify for the Children’s Health Insurance Policy (CHIP). If your children qualify for CHIP, you cannot purchase subsidized insurance for them, but your individual coverage may still be subsidized.

Families where one spouse has work coverage. Some employers only offer health insurance to their employees. Spouses and children cannot get coverage through work. In that case, you can purchase insurance with a subsidy through the marketplace exchange.

Families with expensive employer coverage. If you can purchase family coverage through your or your spouse’s employer, then you will not qualify for subsidies. The tax code states that if an employee can gain individual coverage for himself or herself for less than 9.69% of total household income, then the insurance is considered affordable. Coverage for the family isn’t factored into the affordability calculation.

The so-called “family glitch” traps 2-4 million people and requires them to pay high prices for premiums. If you are caught in this situation, your children may qualify for CHIP. However, uncovered spouses and children must purchase insurance or pay the individual mandate penalty.

Minnesota Senator Al Franken has proposed a Family Coverage Act that may rectify the tax code, but it has not been passed.

Getting married in 2017. If you’re getting married in 2017, your subsidy depends on your combined income. In the months preceding your marriage, your income is one-half of your and your spouse’s combined income. Once you get married, your subsidy is based on your joint income and your qualifying family.

You need to report a marriage to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Getting divorced in 2017. If you get divorced or legally separated in 2017, you must sign up for a new health insurance plan after you separate. Your subsidy will be based on your income and household size at the end of the year. However, you will need to count subsidies received during your marriage differently than subsidies received when you’re legally separated.

For the months you are married, each spouse divides advanced subsidies received to each new household. If spouses cannot agree on a percentage, the default is 50%. If the plan only covered one taxpayer and his or her dependents, then the advanced tax credits apply 100% to that spouse.

Divorce reduces your income, but it also reduces your household size. These factors change your estimated subsidy in opposite directions. Your subsidy changes will depend on the magnitude of each change.

Reporting a divorce makes you eligible for a special enrollment period. When you enroll in a new plan, the exchange website will help you estimate your new subsidy for the remainder of the year.

Giving birth or adopting a child. You have 60 days from the birth or adoption of your child to enroll them in a health care plan. If you miss this window, your child will not have health coverage, and you will pay a penalty. However, if you enroll your child in a timely manner, you can expect your subsidy to increase.

Report the birth or adoption of a child to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Turning 26. If you’re on your parents’ insurance, generally you can stay until you have turned 26, but you should check your plan to be sure. You will have a 60-day special enrollment period to get your own plan from the health care exchange when you turn 26.

You may also be eligible for a special enrollment period from an employer-sponsored health plan. If you fail to have health insurance for more than three months, you will pay a penalty.

Losing employer coverage. If you lose employer-based health coverage, you can either enroll in COBRA or purchase a plan through the health care exchange. Once you enroll in COBRA, you become ineligible to purchase subsidized coverage through the exchange.

You need to report job status changes to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Changes in income. Premium tax credits are based on your annual income. If you increase your income, you will be expected to pay back some or all of the advanced premium you received. If you earn more than 401% of the federal poverty line, all premiums need to be repaid. If you earn less than 400% of the federal poverty line, you may have to pay back $2,500 of advanced premiums per family or $1,250 for individuals.

You need to report income changes to avoid under- or overpaying your premiums throughout the year.

Moving. Most insurance plans that you purchase through the marketplace are state and county specific. If you move, you need to report the move through the insurance exchange.

Moving may affect your subsidy (if you move to or from Alaska or Hawaii), but it does affect the plans available to you.

How do I apply for insurance?

Applying for insurance takes 30-60 minutes if you have all the necessary information ahead of time. This is what you should gather before you apply:

  • Names, birthdates, and Social Security numbers for all members of the household
  • Document numbers for anyone with legal immigration status
  • Information about employer-sponsored health plans
  • Tax return from previous year (to help predict income)
  • Student loan documents
  • Alimony documents
  • Retirement plan documents
  • Health Savings Account documents

The website interface for the federal exchange is simple, but answering the questions may be confusing. It’s important to fill out the application as accurately as possible so you can enroll in the best health insurance plan for you.

We’ve done our best to clarify the confusing portions in our step-by-step process below.

A note on state-run health care exchanges

Each state has the right to choose whether to run their own health care exchange, or to use Healthcare.gov, the federally run exchange. Seventeen states run their own health insurance exchanges.

The state-run exchanges perform the same functions as the federally run exchange. They allow you to estimate your tax credit and to purchase insurance. As a consumer, you must provide the same information to your state as you would on the federal exchange.

While the online user experience will vary when states adopt their own online marketplace, the Affordable Care Act is a federal law and a federal program. This means that the requirements and benefits do not change from state to state even if the exchange platform changes. If you have trouble navigating either the state or federally run health care exchange, you can get free help from knowledgeable experts.

Family and Household Info

Start the application by filling out contact information and basic information about members of your household. Even if a member of your family will not need coverage, include them in your application.

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The website will help you determine if a member of your household has insurance options outside of the health care exchange. It will also help you determine if a person is a dependent. For the purpose of the health care exchange, your family includes all the people included on your income tax filing.

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You need to know Social Security numbers, birthdates, immigration status, disability status, and whether each household member can purchase health insurance through an employer plan.

Income and Deductions

Next, you’ll estimate your income for the upcoming year. Include all the following forms of income:

  • Jobs
  • Self-employment income (net)
  • Social Security benefits
  • Unemployment income
  • Retirement income
  • Pensions
  • Capital gains
  • Investment income
  • Rental/royalty income
  • Farming and fishing income
  • Alimony received

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Afterward, you’ll enter deductions. The application calls out student loan interest and alimony paid, but you should estimate all “above the line deductions” that should be included. These include:

  • Retirement plan contributions: 401(k), 403(b), 457, TSP, SEP-IRA, simple IRA, traditional IRA
  • Contributions to a Health Savings Account
  • Self-employed health insurance premiums
  • Tuition and fees paid
  • Educator expenses (up to $250 per teacher)
  • Half self-employment tax
  • Moving expenses
  • Early withdrawal penalties from a 1099-INT

Do not double-count income or deductions since you’ll fill out these forms for each person. If you make a mistake, you can edit it when you review your household summary.

Additional Information

Finally, you’ll fill out a few other miscellaneous details that will allow the application to confirm that you are eligible for subsidies or marketplace insurance.

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It’s especially important that you have accurate information about job-related coverage for you and your family. This information will determine your eligibility for subsidies and other government programs.

Completing Enrollment

After you complete the application, you can review and submit it. At this point, the system will suggest which members of your household should complete CHIP or Medicaid applications. The remaining family members can enroll in a health insurance plan.

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How do I decide what plan type is best for me?

Before you choose a plan, you’ll decide whether to receive advanced or deferred subsidies. Most people with predictable income and household size should take most or all of the subsidy upfront. However, if you expect to undergo a major life change (such as an increase in income, a marriage, or a divorce), consider taking less of your subsidy in advance.

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Then you can look for a plan. For people shopping for 2017 coverage, the average number of plans available is 30. Rather than comparing every plan, we recommend creating criteria around the following variables:

  1. Monthly cost. Consider how the monthly premium will affect your budget. This does not mean you should choose the plan with the lowest premiums, but you should consider the price. People without chronic conditions who have adequate emergency savings may consider opting for low monthly premiums.
  1. Deductible and co-insurance. Do you have the emergency fund or income you need to cover a small medical emergency? A broken arm, stitches, or an unexpected infection can lead to hundreds of dollars in medical costs. If you have a high-deductible plan, you’ll need to cover these costs without help from the insurance company. If possible, choose a plan with a deductible that you could comfortably cover out of your savings or income.
  1. Maximum yearly cost. Add the annual cost of your premiums plus your out-of-pocket maximum to determine your maximum yearly cost. In a worst-case scenario, this is the amount you will pay out of pocket. People with chronic conditions that require heavy out-of-pocket fees should try to limit their maximum yearly cost. A plan with a higher maximum yearly cost may represent a higher risk.
  1. Services and amenities. All insurance plans from the marketplace cover the same essential health benefits, but some plans will offer unique services such as medical management programs, vision, or dental coverage. High-deductible health plans allow you to contribute to a tax-advantaged Health Savings Account.
  1. Network of providers. It’s important to be sure that your preferred medical providers contract with the plan you choose. Not every doctor is “in network” with every insurance plan. You can check each plan’s provider directory before you choose the plan.

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Once you determine your criteria, look for plans that fit your needs and ignore the rest.

Using the exchange website, you can filter and sort plans based on these factors. Most people need to balance cost and coverage to find a plan that works for them.

Where do I get help for free?

Due to the complex nature of the marketplace exchange, the exchange provides marketplace navigators. Marketplace navigators are professionals who provide free, unbiased help to consumers who want help filling out eligibility forms and choosing plans. You can find local marketplace navigators through the health care exchange website. Most of the time you can find someone who speaks your language to meet you in person.

Outside of the exchange, nonprofit organizations are working to help people gain coverage by teaching them about their insurance options. Enroll America offers free expert assistance to anyone who makes an appointment with in-person application assistance. You can use the connector below to make an appointment with one of their experts.

Insurance brokers can offer another form of help. Brokers aim to make it easier for consumers to apply for and compare insurance plans. Insurance brokers have relationships with some or all of the insurance companies on the marketplace. Using a broker will not increase the price you pay for a plan, and it will not affect your subsidies. However, online brokers may not have 100% accuracy regarding a plan’s details. It’s important to visit a plan’s website before you enroll in a plan.

If you want to work with a broker, consider some of these top online brokers. PolicyGenius compares all the plans that meet criteria that you establish, and they serve up the top two plans that meet those criteria. HealthInsurance.com makes applications quick and easy, and the site specializes in special enrollment help.

What happens if I don’t apply for insurance?

In most cases, you must enroll in health insurance or you’ll have to pay a penalty.

The penalty for 2017 hasn’t yet been released, but the 2016 penalty was calculated as the greater of 2.5% of your income (up to the national average cost of a bronze plan) or $695 per adult and $347.50 per child (up to $2,085). This steep penalty means that most people will be better off purchasing some health insurance.

However, under certain circumstances you can avoid buying insurance and dodge paying the penalty. These are a few of the most common exemptions:

 

  • Member of a qualifying health care cost-sharing ministry (501(c)(3) whose members share a common set of ethical or religious beliefs and have shared medical expenses in accordance with those beliefs continuously since at least December 31, 1999.
  • Low income, no filing requirement: If you do not earn enough income to file taxes, then you are automatically exempt from paying a noncoverage penalty.
  • Coverage is unaffordable. For 2017, if you cannot obtain individual employer coverage or a bronze plan for less than 9.69% of your income (after applicable subsidies), you may opt out of coverage.
  • Joint individual coverage is unaffordable. For 2017, if you and your spouse combined cannot obtain individual employer coverage or a bronze plan for less than 9.69% of your income (after applicable subsidies), you may opt out of coverage.
  • Short coverage gap (you went without insurance for less than three months).
  • Lived abroad for at least 330 days.
  • General hardships such as homelessness, eviction, foreclosure, unpaid medical bills, domestic violence, and more (exemption must be granted through a marketplace exemption).
  • Unable to obtain Medicaid because your state didn’t expand Medicaid (exemption must be granted through the marketplace).
  • Received AmeriCorps coverage (exemption must be granted through the marketplace).
  • Members of qualified religious sects who do not obtain government benefits (exemption must be granted through the marketplace).

Although you will not pay a penalty, you may still want to seek out catastrophe insurance or some other insurance to help you deal with high potential health costs.

What happens if my plan was canceled?

Recently, some insurers dropped their insurance plans from the health care exchange. As a consumer, you cannot assume that the plan you chose in the past will be around next year. Unlike previous years, you will not qualify for an exemption if your plan dropped in 2017. This means that you may need to purchase new insurance or pay a penalty.

Even if your plan remains in place, important variables like the deductible, the premiums, or the coverage may have changed.

Whether you’re shopping for a new plan, or reviewing an old plan, take these steps before open enrollment ends.

  • Update your personal information on your application. Your income, household size, where you live, and more will affect plan and subsidy eligibility. It’s important to keep your application up to date. The plan that fit you last year may no longer be appropriate, but you won’t know unless you keep the information current.
  • Review your plan before you re-enroll. You should receive a notification in the mail if your plan has been changed or canceled. Take the time to understand if the changes affect you.
  • Compare plans that fit your needs. Consider enlisting free help from a health care navigator, a nonprofit, or a broker to help you decide.
  • Choose the plan that best fits your needs and your budget.

Work to make the most informed decision possible

Choosing a health plan seems like a daunting task, but you can get all the help and information you need to make an informed decision. Your health and your pocketbook matter, and we want to help you protect both.

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