MONEY Shopping

You May Already Be Too Late for the Hottest Holiday Toys

141210_EM_HottestToys
If your kid wants Disney's Frozen Castle & Ice Palace Playset, let's hope you bought it already. Richard Drew—AP

Favorites from Frozen, Legos, and more are gone from store shelves or going fast. Expect to pay up if you don't want to disappoint.

If you still have Disney’s Frozen Castle and Ice Palace Playset on your holiday gift list this year, you may already be out of luck.

With Christmas approaching, the $119 toy—made by Mattel Inc—is sold out. Of course, you can find it at resellers for about $225 and even as high as $700 on eBay. There are still plenty of other Frozen-themed toys available—but only for now.

Industry analysts, poring over results from the Thanksgiving holiday week, say the hottest 25 toys have already hit their price lows and will only get more expensive as Christmas nears and the remaining inventory flies off stores’ shelves.

The silver lining? Retailers made a huge bet on toy inventory this holiday season—ordering twice as many shipments of Legos as last year, for instance, according to research firm Panjiva.

Expect fierce price competition at major retailers like Wal-Mart Stores Inc and Target Corp, which carry thousands of toys, notes Jim Silver, editor-in-chief of Time to Play Magazine.

“There will be huge promotions going on,” he predicts.

The sales will not be nationwide shopping events like Black Friday, but will pop up sporadically, culminating in major sales on Dec. 20, the Saturday before Christmas which experts expect to be an extremely heavy shopping day.

“One by one, either loudly or quietly, they will be rolling out some amazing deals,” says Panjiva CEO Josh Green.

Early Birds Get Hot Toys

Consumers love sales, but Silver notes they may be very disappointed if they can’t find the hottest toys.

Besides the sold-out Frozen Castle, there are 12 to 15 items which are currently hard to find, including the Max Tow Truck. It is listed currently around $128 on Amazon.com, depending on color—well above its list price of $59.99. Another hot item is the Imaginext Supernova Battle Rover—currently available for $109.99 at Toys R Us, slightly below the list price of $119.

There are also about 25 to 30 toys that will sell out in the next two weeks, Silver says, especially the most popular new toys in the Lego, Barbie, My Little Pony, FurReal Friend, and Nerf lines.

Toys with a movie or popular culture tie-in drive demand, while interactive pets tend to be short-lived fads (think Zhu Zhu Pets or Furby).

“There are clear bets by retailers—orders for Frozen toys and My Little Pony toys are up massively versus 2013,” says Green.

Most hot toys hit their price lows on Cyber Monday, according to data firm MarketTrack. This year, for example, the FurReal Friend Get Up & GoGo dog, which has a manufacturer’s suggested retail price of $59.99, was being offered for $49.99 at most stores in early November. It went down to $39 just before Thanksgiving and hit $27 on Amazon on Cyber Monday.

The very next day, the dog, which responds to commands from a remote-control leash, was back up to $39. The price is now fluctuating at most stores because of limited supply.

Similarly, the My Little Pony Friendship Rainbow Kingdom Playset, which lists at $39.99, was on sale for $35 at Target on Black Friday and bottomed out at $19.99 on Cyber Monday on Amazon for a half-price sale. It is now back up to $34 at Wal-Mart and Toys R Us.

What should shoppers do if they want the hottest toys?

“Grab the hot items early and then get bargain toys when you can,” Silver says. But you may have to wait until next year to employ this strategy.

 

MONEY Shopping

Why You’re Shopping More for Yourself This Holiday Season

woman trying on shoes at store
Jason Hetherington—Getty Images

Is that giant TV in your shopping cart a gift—or for you? With more people snapping up holiday deals for themselves, retailers are starting to cater to these self-gifters.

Jill Bascou looked like a typical holiday gift shopper standing in line on Thanksgiving Day shortly after the Target in Marlton, New Jersey opened at 6 p.m.

Except she wasn’t buying for other people.

The 39-year-old was waiting to get herself an iPad. In her cart was the xBox her husband had been coveting, and her father was in another part of the store hunting down a giant, cheap TV—for himself.

Retailers call this self-gifting. Look at a major store’s circular advertising holiday gifts—from the $5 toasters at Kohl’s to a $279 Dyson vacuum at Target—and you’ll see the top draws are items people typically buy for themselves.

Marshal Cohen, chief retail analyst at NPD Group, started tracking the trend of self-gifting six years ago, after interviewing a shopper on Black Friday at a Macy’s.

The woman had a huge pile of clothes over one arm and a smaller pile on her other. Cohen was surprised to learn that woman was buying the big pile for herself. Her mother and sister were the designated recipients of the other pile.

Now 30% of purchases over the Thanksgiving holiday are attributed to self-gifting, Cohen says. Surveys from the National Retail Federation bear this out, showing that 77% of shoppers took advantage of discounts to buy for themselves over the holiday weekend.

Toys are the obvious exception, but almost everything else—the TVs, the home goods, even the clothing—are items that people are often buying for themselves.

Retailers have been catching on, adjusting inventories and messaging. Kathy Grannis, spokesperson for the NRF, points to a pop-up gift tag ad recently on Gap’s website that read “From Us to You,” and was clearly meant to engage self-gifters.

For clothing retailers, Grannis says the enticements to shoppers are often in the form of a significant discount off the whole store. Old Navy offered half off everything on Thanksgiving Day, which drew Sarita Henriquez, 36, of Burlington, New Jersey, to shop for herself, with no set spending limit in mind.

“I’m being greedy this year,” Henriquez said as she waited in her car for the store to open at 4 p.m.

“I hear self-gifting reported as greediness, but there’s really more nuance than that,” says Kit Yarrow, a consumer psychologist and author of Decoding the New Consumer Mind.

Yarrow breaks down self-gifting holiday shoppers to three types: those buying special things like outfits and decor in order to be more social; those delaying purchases because they are expecting bargains, and those who are buying on impulse based on what’s available.

Impulse buyers are the key target for retailers’ special doorbusters. These are folks like the Hartman brothers, (Ed, 25, Shawn, 24, and Tyler, 21) who, while visiting family for Thanksgiving, each waited for cheap TVs at a Best Buy near Cherry Hill, N.J. to put in their own homes.

Cohen’s advice for shoppers who missed out on the early sales and are still waiting for big discounts: “Be patient and wait for the price to come to you.”

Don’t obsess over getting the absolute rock-bottom prices if it means delaying what you want, Cohen adds. You can always return an item if you find it for less and try to get the store to price match—as long as you have your receipt.

And just wait until you see next year’s sales.

“Retailers will figure this out,” says Cohen. And then Thanksgiving week will be even more about self-gifting, “and then there will be another set of doorbusters for later in December.”

MONEY buying a home

How to Beat Newly Hot Real Estate Markets

Buying in a hot market can be tough. These tips can help beat the competition.

How much house will $2 million get you in the United States these days?

You could buy 25 pretty nice four-bedroom, two-bath homes in Cleveland, Ohio. Or, you could get just one modest ranch house in Los Altos, California, the most expensive real estate market in the country, according to a new survey by Coldwell Banker.

But, then again, you would probably get beat out by an all-cash buyer offering a higher bid.

Competition is fierce in today’s emerging hot real estate markets because the inventory of available properties is still extremely low. In areas like Silicon Valley, though, the economy is humming and buyers have plenty of money.

Los Altos is in the middle of the action, surrounded by the corporate headquarters for Google, Facebook and dozens of other major tech companies, as are other California cities: Newport Beach, Saratoga, Redwood City and Los Gatos, the rest of the top five on Coldwell’s list.

As other markets heat up around the country, buyers can learn a few things from what’s happening in some of the hottest places.

NEW MATH

If there is one thing Silicon Valley’s techies know, it’s algorithms. You’re going to need one in today’s top markets to figure out how far above asking you need to bid.

Sumi Kim Hachmann, a 32-year-old researcher at Quora.com, snagged her three-bedroom, one-bath house in Menlo Park last year after six months of trying. Each time she found a house she liked, she crunched the square footage and comparable sales to figure out how much to bid, refining her math each time she lost out.

She liked a fixer-upper listed at $1.1 million, and was willing to bid $100,000 over asking. Her agent told her to double that, at least. She did, but the sellers countered. The house sold for $1.4 million to somebody else

“That was definitely discouraging,” Hachman says. “But it was a learning experience.”

Next time, she went in with a strong offer that amounted to $1,000 per square foot, and won. Now, a year later, she’s incredulous that houses in the neighborhood are going for double that.

While price is largely controlled by location and size, you need to add a premium to your offer if you need a mortgage, says Joe Brown, managing broker of a Coldwell branch in Los Altos. Bids being equal, sellers prefer all-cash because there is less risk. Price will still prevail, though, so a higher bid from a qualified buyer with a mortgage should win.

Another caveat: Keep contigencies out of the purchase agreement. Doing this is difficult for mortgage-seekers because banks typically require that the purchase price match the appraised value of the house. With prices going so far above asking, that can get tricky.

“You either ask them to put a lot more down or have them sign something that they will waive the appraisal contingency,” says Ducky Grabill, a founding agent of Sereno Group realty, who is based in Los Gatos.

Grabill also suggests having the lender call the listing agent and let them know they will guarantee the financing.

LOWER EXPECTATIONS

Another strategy is to buy below your price point, says Brown. If you have the resources for a $2 million house but cannot compete with stronger buyers, then aim for $1.5 million and turn it into the house you want.

This is a modification of the old “buy the worst house in the best neighborhood” adage. But you cannot just sit on this kind of property and hope it will appreciate; you’ve got to renovate.

That’s what Amy Bohutinsky, chief marketing officer of real estate site Zillow.com, did with her own purchase of a fixer-upper in the Seattle area two years ago.

“If you buy it with the intent of fixing it up, it can be an easier way” into a house than engaging in a bidding war, Bohutinsky says.

She also recommends expanding the boundaries of your search: considering for-sale-by-owner properties, preview listings like Zillow’s “Make Me Move” section and “coming attractions” on listing sites.

BE READY

It is not enough anymore to show up at an open house pre-qualified for a mortgage and with a letter that sells yourself. You may need to have an engineer or other inspector come along, says Sereno Group’s Grabill.

She had a client recently clinch a $2 million all-cash deal after his first viewing, but only because he was able to do his due diligence on the foundation issues immediately.

This buyer was one of those bidding down on a property. He was really in the market for more like $2.5 million, and will put the remainder of his budget into fixing it up.

“They are throwing so much more money at properties to get it. It’s a little crazy,” Grabill says.

MONEY homeowners insurance

Why You Soon May Have to Pick Up More Home Repair Costs

measuring tape with money
Bart Sadowski—Getty Images

Insurers are moving from flat deductibles to higher ones based on the value of your home. Here's what you need to know about this change.

Two years after Superstorm Sandy, State Farm agent Jen Dunn is busy explaining new insurance math to her customers in upstate New York. Instead of the dollar-amount deductibles they have been used to for years, she is now writing their policies based on percentages.

For many, it means turning the typical $500 deductible into 1% of the insured value—for a $250,000 house, that means a gasp-producing $2,500.

“My clients who have been offered this initially say, ‘I don’t like this,'” Dunn says. But then she explains that the higher amount is usually offset by a lower annual premium. If they go years without a claim, they can save in the meantime.

Jason Corbett, 39, who lives in central Georgia, is using a 1% deductible. Because Corbett’s rural home is valued at slightly less than $200,000, it was a better deal than a flat $1,000 deductible. The difference between the two deductibles was only a couple of hundred dollars. However, he saved money by lowering his premium, so over time the difference in his out-of-pocket costs will be negligible.

If he had a $300,000 home and the deductible was double what he pays now, “that would be a different decision,” says Corbett, who writes a personal finance blog.

State Farm, the largest U.S. property and casualty insurance company by market share, says a “significant” number of its policies now have percentage deductibles. Other carriers, like Allstate Corp, USAA, and Nationwide, also offer the option to consumers in certain states, but the prevalence is not yet tracked nationwide. The practice is near-universal in Texas at this point, according to that state’s insurance office.

With a percentage deductible policy, things are a little different than the old-fashioned flat rate. Here are seven things you need to know:

1. Do not be afraid of high deductibles

You might be used to $500, but a higher deductible could actually be better for you.

“It’s a very smart move to buy high deductibles if you can afford it,” advises J. Robert Hunter, director of insurance for the Consumer Federation of America.

The main reason? Every claim you make against your homeowners insurance can raise your rates. One claim pushes it up an average of 9% and two claims will raise it by 20%, according to a recent study by insuranceQuotes.com. So you want to pay out of pocket for small claims anyway.

2. The 1% deductible is not a percentage of your loss

The new terminology makes people think of health insurance, but homeowner claims do not work that way, says Jim Gavin, director of insurance information services for the Independent Insurance Agents of Texas trade group.

Rather, the out-of-pocket deductible you have to pay before the company will cover any claims is based on a percentage of the insured value of your home—which is not the market value or the appraised value, but the cost of replacing your home should it burn to the ground and need to be rebuilt.

For example: If a kitchen fire damaged your $250,000 home with a 1% deductible, and it cost $5,000 to repair the damage, you would receive a check from the insurance company for $2,500 after paying the other half yourself.

3. Your out-of-pocket costs will regularly increase

Your $500 deductible stays flat forever, but a percentage deductible will go up incrementally over time as the insured value of your home rises.

Some homeowners may not even notice this, like Will Harvey, 34, of Tyler, Texas, who is five years into a 1% policy on his home. “If it went up, it wasn’t enough for me to remember it,” he says.

4. You will still have other deductibles on top of the basic rate

Many homeowners have add-on clauses like a 5% hurricane deductible that is common in coastal areas, or 2% for wind and hail damage. Many states require separate coverage for earthquakes and floods.

Those all still apply on top of the basic coverage for fire and theft, says Amy Danise, editorial director of Insure.com. So if you have any damage that is caused by a specified risk, you will have to pay out of pocket first for that.

5. Your might be able to pay down your percentile

If 1% is too much for you, you may have the option to accept a higher premium to lower out-of-pocket costs—going from 1% to half a percent or some other fraction. The value to you depends on how much your house is worth and how much you can afford to pay out of your savings if something goes wrong, says State Farm’s Dunn.

6. You can still shop around

Even in Texas, where almost every company offers a deductible of at least 1%, or sometimes up to 1.5% or 2%, some carriers still do things the traditional way. Texas insurance agent Criss Sudduth says the customers who might benefit more from a flat-fee policy are those whose premiums do not actually go down despite the percentage policy—either because the weather risks are too high or because their personal credit is bad.

7. You should still figure out your dollar amount

After years of hearing complaints from consumers who are confused, the Texas legislature passed a bill recently requiring carriers to explain what the percentage deductible translates into, in dollars.

In other states, if your carrier does not do this, you should find out the information yourself and write it on your declarations page, says Deeia Beck, public counsel and executive director of the Texas Office of Public Insurance Counsel.

MONEY Travel

3 Top Retirement Trips That Won’t Break Your Budget

Bartolome Island, The Galapagos.
Bartolome Island, The Galapagos. Ray Hems—Getty Images

That retirement dream trip may carry a harsh real-world price tag. Here's how save on costs and still travel comfortably.

Where is retirement going to take you? If you’re like most people, you’re dreaming of grand European tours, African safaris, maybe even Antarctica.

But even if you think you’ve budgeted generously for trips, you might get a harsh dose of reality when you see the actual price tag. A couple that puts aside $10,000 a year for travel may only be able to pull off one major trip per year, with maybe some left over for smaller jaunts.

What Patrick O’Brien, 71, and his wife Bobbie, 68, found out is that you can’t get too far on that. So what the O’Briens have done is a combination of lowering their expectations and raising their budget. They nixed Australia from their list, but over the years have done about 10 group tours, including two weeks in Alaska this year.

Here’s what three of the most popular trips for retirees will cost you:

GRAND EUROPEAN TOUR

How popular is the big European trip for retirees? Consider this: Viking River Cruises, one of the largest riverboat cruise operators, will carry more than 250,000 passengers in 2014 with a median age of 55, and 75% of them will do one of their European riverboat tours. The majority of those will sail from Amsterdam to Budapest, or some portion thereof.

Cost: A mid-tier balcony stateroom for an eight-day Rhine cruise in the spring will run about $8,000 for a couple, not including airfare, which can cost $600 a ticket from New York. Excursions and food are included, but not tips.

Budget tip: Off-season cruises are always cheaper, but on this route, Viking marketing executive Richard Marnell says the late-fall Christmas market specials are a big draw. “It has a feel and a vibe – they are an artisans’ heaven,” Marnell says.

GREAT WALL IN CHINA

Thelma Tiambeng-Bright’s dream retirement trip was to go to China, a feat she accomplished last year on a tour with YMT Vacations. The 70-year-old retired teacher, who lives in Duncanville, Texas, flew to California to join the group, which then flew to Beijing. From there, she saw the Terracotta Army, cruised the Yangtze River, saw the Great Wall and then Shanghai.

Cost: Tiambent-Bright’s 12-day trip cost about $4,000, including airfare. The current discount rate for a couple is $2,400, with $1,500 for airfare from a destination like Dallas.

Budget Tip: Travel with a buddy or significant other, if you can. Tiambent-Bright says she pays $600 to $800 extra on any trip she goes solo.

GALAPAGOS ISLANDS

For Patrick and Bobbie O’Brien, their dream retirement trip was to see the extraordinary wildlife of the Galapagos Islands, off Ecuador. They took an 11-day journey with Road Scholar, which was previously known as Elderhostel, a popular nonprofit group that plans educational trips for seniors.

One important feature for their budget was that the trip was all-inclusive. “We want to know how much money we will spend, and the nicest part is that there are no extra costs—you don’t have to worry about tipping or side trips,” says Bobbie O’Brien.

Cost: $8,000 for a couple, not including airfare to Quito, which will add $1,700.

Budget tip: When you want to go on the big trip, set it and forget it, suggests Peg Walter, a 70-year-old retiree from New York. “I cringe when I see the amount, because you pay for the whole thing in one lump sum,” Walter says. But then by the time she goes on the trip, she’s able to just enjoy herself because there are no extras involved on most of her tours.

“I call them ‘SKI’ trips —Spend the Kids’ Inheritance,” Walter jokes. “We’re not rich by any means, but we say, let’s try to use wisely what we have so we have memories.”

MONEY 401(k)s

5 Ways to Get Help With Your 401(k)

Most 401(k) plans now offer financial advice, often for free. Workers who take advantage of these programs tend to earn higher returns.

UPDATED: OCT. 7

When Chris Costello wanted to test his new online 401(k) advice service called blooom, he asked his sister if she would let him peek under the hood of her account.

What Costello found was typical of workers who do not pay much attention to their accounts—it was allocated badly, leaving her behind on her retirement goals.

In his sister’s case, she had put her funds in a money market account when the recession hit in 2008 and never moved them back into the market.

“It’s been like four or five years of recovery, and she had made like $10,” says Costello, who is co-founder and chief executive of blooom.

Overall, workers have more than $4.3 trillion invested in 401(k) plans, according to the Investment Company Institute. Yet many of the 52 million workers who participate in 401(k) are not good at making their own investment choices, experts say.

Studies show that workers who get investment advice from any source do better than those who receive no advice.

The difference can be more than 3% a year on returns or up to 80% over 25 years, according to a recent study by benefits consultant Aon Hewitt and 401(k) advice service Financial Engines.

“Left to their own devices, people either do nothing at all or pick poorly,” says Christopher Jones, chief investment officer at Financial Engines, the largest provider in the advice sector as ranked by assets under management.

So where can employees turn for guidance?

1. Start with your human resources department

You might already have access to advice, says Grant Easterbrook, an analyst who tracks online financial services for New York-based consulting firm Corporate Insight. He says even his own colleagues do not know they have access to free financial advice as an add-on benefit.

If you work at a big company, you might be one of the 600 clients of Financial Engines. Their free services include allocation advice and performance data. Other companies may employ consultants to give advice during open-enrollment periods or give access to calculators and other advice through the website of the 401(k) provider.

Employees at smaller companies might have to venture further to get help. “Three out of four participants don’t have access to an employer-based advisory tool,” says John Eaton, general manager of 401K GPS. “But there are a lot of DIY solutions out there.”

2. Get free advice on the Web

The Web offers a lot more these days than standard retirement calculators. You can obtain detailed advice on allocating funds in your specific retirement plan from several providers.

At FutureAdvisor and Kivalia, to name two, all you have to do is type in the name of your company and the system will generate a sample portfolio. You will then have to take that allocation advice and implement it on your own.

3. Pick managed funds or target-date funds

If you do not want to get too involved in the process—even to just pick a simple selection of index funds—your company will typically offer some kind of managed fund or target-date fund, a diversified fund linked to a future retirement date that gradually gets more conservative as you age, in their mix of choices.

When you allocate your money into these types of funds, you are buying the management expertise that comes with them, timed for a retirement date in the future. Sometimes that comes with stiff fees, so be sure to check the fine print, says Easterbrook.

“Absent engagement, it’s a reasonable approach to take,” adds Shane Bartling, a senior retirement consultant for benefit provider Towers Watson & Co.

4. Pay to have somebody manage it for you

Financial Engines has 800,000 subscribers who pay a percentage of their assets under management to monitor their 401(k) accounts and make changes accordingly. Others are GuidedChoice, which offers its services through providers such as ADP, Schwab, and Morningstar, which reaches 99,000 different plans.

Start-ups are emerging as well, either charging a flat fee such as $10 a month or a fee based on how much money you have.

401K GPS, which launched in 2011, operates primarily through investment advisers and small employers. There is also blooom, MyPlanIQ, Co-Piloted and Smart401k.

5. Do not opt out of auto-enrollment

The majority of people will still do nothing, but that may be a savvy option. Financial Engine’s Jones says some companies are making workers re-enroll in 401(k) plans and defaulting them into managed accounts to get them to diversify.

“When we do that, about 60% of population will stay in these programs,” says Jones. About 15% of active investors will opt out because they are already getting advice.

UPDATE: In the auto-enrollment section, the default allocation was corrected.

MONEY Health Care

The Real Reason You’re Spending More on Health Care

Getty Images
Getty Images

A new survey finds that health insurance premiums are rising at a modest rate. But workers are facing far higher out-of-pocket costs.

U.S. health insurance premiums are going up only 3% this year, to an average of $16,834 for a family. Workers will pay about 20% of that cost, or $4,823, according to a study released today.

The Kaiser Family Foundation’s 2014 Employer Health Benefits report says that rate increases are slowing from recession highs that ran far above inflation rates. In the past 10 years, healthcare premiums rose a cumulative total of 69%.

However, the big leap in deductibles offsets the good news for consumers.

“If you told the average working person that healthcare costs were at record-low increases, they’d look at you like you were a little bit crazy,” says Kaiser chief executive officer Drew Altman. “Out-of-pocket costs are way up, while their wages are relatively flat.”

While insurers and employers kept premiums in check over the past few years, deductibles are up 47% since 2009. The average deductible now stands at $1,217—at least $1,000 for 41% of workers and $2,000 or more for 18%.

The shift to high deductibles is even starker at companies with fewer than 200 employees. Some 61% of these workers have deductibles of at least $1,000.

“This has a big impact on working people,” says Altman. “It can be a real disincentive to get care.”

Kaiser surveyed 2,052 employers from January through May.

During open enrollment season, when employees choose their healthcare plans for the following calendar year, most do not pay close attention to their choices. A recent study by insurer Aflac shows that 41% of workers spent less than 15 minutes researching their benefits in 2013, and 90% keep the same benefits year after year.

Some companies only offer limited choices or even just one option. Even so, employees need to make other decisions during open enrollment and need the information supplied at that time to make crucial budgeting plans, says Kathryn Paez, principal researcher for the American Institutes for Research.

Among her suggestions:

  • Compare the summary of benefits and coverage for each available plan.
  • Come up with a rough estimate of how many doctor visits you typically have in a year and what medication costs will be.
  • If you foresee any major costs, like for the birth of a child or root canal surgery, consider contributing to a flexible spending account or health savings account for this purpose. For 2015, workers can put up to $2,500 in a flexible spending account and $3,350 in a health savings account for an individual and $6,550 for a family.

 

MONEY Benefits

The Best Company Benefit That You’re Ignoring

Roll of medical gauze unrolling
Gregor Schuster—Getty Images

New rules let you carry over unused funds in your healthcare flexible spending account, and more employers are adding that option. So that's one less excuse for why you're not signing up for this valuable perk at work.

The U.S. Treasury Department changed a rule last October to allow employees to roll over $500 of unspent flexible spending account money, ending years of a use-it-or-lose it policy, but most workers have yet to reap its benefits.

Only 8% of U.S. companies adopted the FSA program this year, according to data from Alegeus Technologies, the largest provider of benefit administration services.

But that figure could jump to as much as 50% in 2015, predicts Alegeus executive chairman Bob Natt.

FSAs allow workers to set aside pretax money for healthcare expenses.

Employees will likely find out if their company is taking part in the rollover program when they get their open enrollment benefit information this fall.

Those offered the new option will be able to place up to $2,500, pretax, in their FSAs, and roll over as much as $500 of unspent money at the end of the year. Those who continue in traditional FSA plans will have to use all their funds by year-end, or when a grace period stipulated by their companies ends.

But the program’s participation rate is meager. About 33 million Americans contribute to an FSA each year. That number includes only a quarter of the workers eligible for it at large corporations, according to benefit consultant Mercer.

That enrollment could be boosted by the new rollover benefit, Alegeus’ Natt says, allowing both employees and employers to benefit from not paying tax on those contributions.

Indeed, there’s already some evidence of the new rule’s pulling power.

PrimePay, a third-party benefit administrator, which heavily promoted the rollover option to clients last year, saw a 30% adoption rate. The companies that participated saw a 17% increase in participants and contribution dollars.

“I was a little disappointed at first,” says Steve Jackson, PrimePay’s senior vice president for strategic development and channel sales. “But then as I saw what Alegeus was finding nationwide, it seemed better.”

FSAs can still be a hard sell to employees.

Rod Leveque, 39, who works in communications in Claremont, Calif., contributed to his FSA for the first time last year, after four years at a company that offered the option. Leveque says his decision was spurred by an impending LASIK eye surgery, for which he expected expenses.

Next year? “I doubt I will continue to participate,” he says. “I don’t think the $500 rollover would sway me, either,” he adds, because his typical medical expenses do not make it worthwhile.

If your company does adopt a rollover model, Natt’s advice is to put at least $500 in, because you are at no risk of losing it. If you leave the company and still have a balance on the books, however, you’ll need to spend that balance down.

Related: How to Pick a Health Plan That’s Right for You

Do you have a personal finance question for our experts? Write to AskTheExpert@moneymail.com.

MONEY Health Care

What It Really Means When Your Doctor Says He Doesn’t Take Insurance

A denial may not be as straightforward as it seems. Here's what your doctor's policy could be—and what that could mean for your medical bills.

Some doctors really mean it when they say they do not take health insurance. For others, it is more of a nuanced statement.

Consumers trying to decipher the difference have to ask a lot of questions to figure out how to manage their bills.

Here are the three key scenarios facing consumers:

1. “I do not take your insurance, but I will work with you on the price.”

A growing number of doctors simply are not taking contracts with insurance companies, although the concentration varies by region and by specialty. That leaves patients to pay the market rate the doctor charges, and then submit a receipt to get reimbursement for out-of-network coverage, if they have it.

In some cases, the pickings can be slim for in-network docs. For example, 45% of psychiatrists do not participate in insurance networks, according to JAMA Psychiatry.

“The burden of getting the forms right and getting all the paperwork is placed on the physician,” says Dinah Miller, a psychiatrist who practices in Baltimore and co-authors a blog called Shrink Rap. “If you’re seeing eight or nine patients a day, and several bounce, it’s a lot of uncompensated time.”

Primary care physicians are opting out, too. Some are moving to a concierge model, in which patients pay a subscription fee like $150 a month to see their doctor.

Membership in the Association of American Physicians and Surgeons, a conservative-libertarian group of private-pay doctors, increases by about 10% a year, says Jane Orient, executive director of the organization, which has 5,000 members.

Many doctors who say they don’t take insurance will make deals with patients on an individual basis. One key negotiating tip is to know what your in-network rate would be, typically a discount of about 40%, suggests Joe Mondy, a spokesman for insurer Cigna.

You can get this information through your provider’s online tools or by calling the customer service line. But Mondy says to be aware that the private provider is not bound to accept that price.

2. “I will submit the receipt for you, see what I get from the insurance company and work with you on the difference.”

This process is typically referred to as balance billing. It is largely frowned upon for in-network charges, and even restricted in some states. But it still goes on in the private-pay world, and often results in a confusing morass of paperwork.

Even insurance executives find themselves negotiating the fray. Chris Reidl, director of product for national accounts at insurer Aetna, paid an up-front fee to one doctor and then submitted the bill to the insurance company. When the insurance company reimbursed the doctor for the visit, the office refunded the fee she had paid.

Consumers need to be on top of this process and pour over their benefits statements to track the various payments. They also need to keep after their doctors’ offices to get their money back.

3. “I will try to negotiate a better rate with your insurance company.”

Some providers have back-channel communications with insurance companies, trying to get a better reimbursement so their patients end up paying less out of pocket.

Amy Gordon, a lawyer focusing on benefits issues at McDermott, Will & Emery in Chicago, facilitates some of these discussions, trying to get everyone on the same page.

Gordon gives the example of a chiropractor who has a number of patients on one employer’s plan. The going rate for a visit is $200, and the out-of-network reimbursement offered is $50. The provider has to choose whether to charge the patients the remainder or discount it.

“Being out $150 for one person is bad, but being out that much for 10 people is worse,” she says. So the provider tries to get more from the insurance company, and the insurance company tries to get the provider to join its network. The insurer and the doctor may end up settling on an $80 reimbursement, and the patients only have to pay the equivalent of a $20 co-pay.

“A lot of this can be avoided with planning, and finding if there is an acceptable in-network provider,” Gordon says. “If you still want to go out of network, you can ask the insurance company to give you an estimate of what they would pay, and then you can at least make a more informed decision.”

MONEY Kids and Money

Would You Spend $60 for Your Kid’s Lunch Box?

Laptop Lunches Bento Set with Sandwich and Yogurt.
PB& J in a Spiderman lunch box, or a Laptop Lunches bento set with carrots and yogurt? Laptop Lunches

In search of toxin-free, reusable, leftover-friendly lunch gear for their children, some parents are willing to pay a premium.

When it comes to kids’ lunches, we’ve come a long way from PB&J, an apple, and a cookie in a brown paper bag.

Beau Coffron, of Fremont, Calif., packs his daughter’s school lunches in stainless steel containers that cost at least $20 a pop. He apportions all of her food into little compartments, making cartoon characters like Charlie Brown and animal shapes such as tigers and llamas out of the ingredients. Her sports water bottles cost about $10, and the sack to carry it all came with the lunch kits but would retail separately for about $25.

Everything is toxin-free and reusable, naturally.

What started as simply a creative way to pack lunches has become a movement in the U.S. to reduce waste from individual packaging, save money by buying in bulk, make use of leftovers, and have toxin-free food containers—and share it all on social media.

Coffron, who posts pictures of these lunches on his blog, is part of this wave of moms and dads who are willing to pay much more than the cost of a box of plastic baggies at the dollar store for these benefits.

Parents who are investing in fancy lunch gear say it’s worth the upfront costs because it lasts longer than disposable items. The annual savings from reusable items amount to an average of $216 a year, according to a study by U-Konserve, whose lunch kit runs $39.95.

While popular in Japan, Bento-style lunch gear, where a variety of food is packed in small containers or compartments in a specialized, lidded tray, is still a very small portion of $1.4 billion food storage industry, according to research firm Euromonitor International. However, the small companies that sell these products report phenomenal U.S. growth during the last several years as the trend has exploded.

Laptop Lunches, one of the oldest and biggest of these companies, launched in 2002 and now sells more than 500,000 units a year, according to the company. On the smaller end of the spectrum is PlanetBox, which sells under 100,000 units a year. Launched five years ago, PlanetBox says sales are up 150% the last two years.

Products vary from all-in-one solutions like PlanetBox, which has a $59.99 Bento lunch kit with a bag and stainless steel lunch tray, to multi-piece solutions like Laptop Lunches’ $32.99 kit. A simple Goodbyn tray with three compartments runs $8.99.

That’s a lot of cash for something that is likely to end up lost within the first week of school, which is why more manufacturers are offering customization. For example, PlanetBoxes offers magnets to put on cases and Goodbyns come with stickers so that the items are easily recognizable in the lost-and-found bin. The heft of these products makes children realize they need to take care of them, too.

Mix and Match

Investing in one expensive lunch kit might not be enough, which is why there’s some mixing and matching that goes on, parents say.

Venia Conte, based in Las Vegas, has two PlanetBox lunch kits, in case one gets misplaced or is dirty, plus a couple of LunchBots lunch kits, which run $20 for the stainless steel containers. She also uses stainless steel food thermoses, which cost around $25 each, plus $1.50 re-usable napkins from Etsy.com and various water bottles.

“When you look at their shoes, which they grow out of in six months, $50 for a lunch box doesn’t seem so bad,” says Conte, who blogs about her lunches to keep herself engaged for 180 days a year.

While the bento lunch fad has been ongoing in Japan for years, most of the companies selling these products in the U.S. emerged after the recession in 2008.

“When I started the business, parents were like: $25 for a lunch box, that’s like way too expensive. But parents are factoring that equation differently,” says Sandra Harris, founder of ECOlunchbox, whose three-compartment stainless steel kid’s tray runs $12. “Now, BPA-free is a household word,” she says, referring to the Bisphenol, a chemical that is found in polycarbonate plastics.

For Tammy Pelstring, who started Laptop Lunches, the biggest surprise has been the community that has sprung up around these lunch kits, fueled by social media. Her company started before Pinterest and Instagram, so the first thing she noticed was people posting photos on Flickr of lunches packed in her lunch boxes—thousands upon thousands of them.

“We completely hit on something,” Pelstring says. “There’s this joy that people get when you create a beautiful lunch. It feels really good.”

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