MONEY Health Care

Millions of Obamacare Enrollees Are Missing Out on This Big Savings

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Cost-sharing reductions that lower deductibles are only available to health exchange members with silver plans.

More than 2 million people with coverage on the health insurance exchanges may be missing out on subsidies that could lower their deductibles, copayments and maximum out-of-pocket spending limits, according to a new analysis by Avalere Health.

Those who may be missing out are people with incomes between 100 and 250% of the federal poverty level ($11,770 to $29,425). Under the health law, people at those income levels are eligible for cost-sharing reductions that can substantially reduce their out-of-pocket costs. But there’s a catch: the reductions are only available to people who buy a silver-level plan.

(Cost-sharing reductions are a different type of subsidy than the premium tax credits that are available to people with incomes up to 400% of the poverty level regardless of the type of plan they buy.)

In its analysis of exchange income data for those enrolled in the health insurance marketplaces in 2015, Avalere found that 8.1 million individuals with this coverage had income levels that should have qualified them for cost-sharing reductions. But only 5.9 million received the reductions, which are automatically applied if people enroll in silver-level plans.

Some of those who were eligible probably bought cheaper bronze-level plans, says Elizabeth Carpenter, a vice president at Avalere.

“Surveys show that people shop for plans based on premiums,” Carpenter says. “But if somebody forgoes cost-sharing reductions in order to pay a lower monthly premium and then has an unexpected accident or illness, their out-of-pocket exposure is likely to be higher.”

Silver plans pay 70% of medical costs, on average, while bronze plans pay 60%.

Consumers with a silver plan are thus responsible for paying 30% of their medical costs in deductibles and copayments or coinsurance, up to a maximum of $6,600 for an individual and $13,200 for a family in 2015. Cost-sharing reduction subsidies reduce those out-of-pocket costs. People with incomes that are 150% of the federal poverty level or less are on the hook for no more than 6% of their costs (instead of 30%); those with incomes up to 200% of poverty pay no more than 13%; and those with incomes up to 250% pay 27% at most. Consumers who are eligible for cost-sharing reductions also have lower maximum out-of-pocket spending limits.

In 2015, a standard silver plan has a $2,556 average annual deductible for medical and drug costs for single coverage on the federal exchange, according to a Kaiser Family Foundation analysis. (KHN is an editorially independent program of the foundation.) Cost-sharing reductions would cut the average deductible to $2,077 for someone whose income was between 200 and 250% of poverty, and to $737 for someone whose income was between 150 to 200% of poverty. Someone whose income was 150% of poverty or lower would have a deductible of just $229 for a silver plan.

Kaiser Health News (KHN) is a nonprofit national health policy news service.

MONEY Workplace

Uber Drivers Would Earn $5500 Per Year in Benefits if Paid as Employees

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ANDREW CABALLERO-REYNOLDS—AFP/Getty Images An UBER application is shown as cars drive by in Washington, DC on March 25, 2015.

If recent rulings in California and Florida are upheld, Uber drivers could be treated as employees there.

Uber drivers in six major U.S. cities would receive paid holidays and health care benefits worth an average of $5,500 a year, plus thousands more in mileage reimbursement, if the company provided them with the same benefits as its full-time employees, according to a new NerdWallet study.

The California Labor Commissioner’s Office ruled in June that Barbara Berwick, who worked as an Uber driver for just under two months, was an employee of the company rather than a contractor. The ruling ordered Uber to reimburse Berwick $3,878 for mileage and tolls plus $274 in interest.

Similarly, the Florida Department of Economic Opportunity decided in May that former Uber driver Darrin McGillis had been an employee, entitling him to unemployment benefits, according to a report in the Miami Herald.

While both decisions apply to the individuals involved only and Uber is appealing, if upheld, drivers across the nation could be motivated to seek status as full-time Uber employees.

The decisions related specifically to expenses and unemployment insurance. Drivers stand to gain even more if Uber recognizes them as full-time employees. Based on what Uber offers employees, drivers might expect:

  • Fully covered health insurance, including dental and vision benefits
  • Nine paid holidays
  • Business-driving reimbursement

Uber already provides auto insurance for drivers when they are carrying passengers or are available for trips, but drivers still need to buy coverage for personal use of their cars.

Paid holidays

In a report released in January, Uber said that 14% of its over 160,000 drivers in the U.S. worked at least 35 hours a week. Uber said drivers working full-time earned an average of $17.56 an hour nationwide. Figuring an eight-hour workday, the average hourly wage adds up to $1,264.32 for the nine paid holidays each year if the drivers were full-time employees.

Based on the hourly wage reported by Uber in each city, we calculated the total amount drivers could gain if they were paid for the nine holidays in six places.

  • Boston: At an hourly wage of $20.78, drivers could see $1,496.16 for nine holidays.
  • Chicago: At an hourly wage of $16.21, drivers could see $1,167.12 for nine holidays.
  • Los Angeles: At an hourly wage of $17.07, drivers could see $1,229.04 for nine holidays.
  • New York: At an hourly wage of $29.65, drivers could see $2,134.80 for nine holidays.
  • San Francisco: At an hourly wage of $26.17, drivers could see $1,884.24 for nine holidays.
  • Washington, D.C.: At an hourly wage of $17.70, drivers could see $1,274.40 for nine holidays.

Health insurance

NerdWallet looked at average annual health care expenditures in each city to evaluate what this benefit could mean for drivers. Based on our analysis, here’s the value of health care that drivers could expect to get each year from Uber if they become full-time employees:

  • Boston: $4,518
  • Chicago: $3,982
  • Los Angeles: $2,859
  • New York: $3,585
  • San Francisco: $4,312
  • Washington, D.C.: $4,450

This could mean savings for drivers who are paying for insurance or more health care for drivers who are avoiding medical treatment because of the cost.

Mileage reimbursement

Reimbursement of car-related expenses has the potential to be the biggest benefit. Berwick, the California driver, put in 6,468 miles for Uber in just under two months, according to the decision, which ordered Uber to reimburse her at the IRS rate, currently at 57.5 cents a mile. Berwick’s driving, extrapolated to a full year, would add up to 38,808 miles, meaning $22,315 in reimbursement.

The reimbursement rate is intended to cover the expenses of driving, including gas, oil, insurance, repairs, tires, maintenance and depreciation. AAA estimates the actual cost per mile for a small sedan is 58.2 cents for drivers who put on 10,000 miles per year, 44.9 cents at 15,000 miles a year and 38 cents for 20,000 miles a year.

Berwick won mileage reimbursement because California requires companies to provide it to employees. While there’s no federal requirement, NerdWallet assumed for the purposes of this study that Uber would provide reimbursement at the IRS rate in other states because the company is based in California.

Read next: Uber Reveals How Much Its Drivers Really Earn…Sort Of

Auto insurance

Uber provides liability and uninsured motorist coverage while drivers are on a trip for the company. When drivers are available for trips, Uber provides lesser protection that applies when personal insurance doesn’t cover an accident. But drivers still need to buy policies for personal use of their vehicles. With that in mind, here are average annual car insurance rates for each of the six cities:

  • Boston: $1,174.50
  • Chicago: $1,243.52
  • Los Angeles: $1,175.61
  • New York: $1,614.71
  • San Francisco: $1,013.90
  • Washington, D.C.: $1,390.88

Compare quotes side-by-side using NerdWallet’s auto insurance tool

Methodology

NerdWallet assumed for the purposes of this study that Uber would provide drivers with the same benefits as it gives current full-time employees, including nine paid holidays; fully paid medical, dental and vision plans; and mileage reimbursement at the IRS rate.

We calculated holiday compensation using Uber data on average hourly earnings of drivers who worked a full-time schedule. We estimated the value of the health care package using Bureau of Labor Statistics data on per capita health expenditures. We compared the IRS reimbursement rate for mileage with AAA’s reported cost per mile for a small sedan driven over 20,000 miles a year.

Average annual car insurance rates for each location are from NerdWallet.

NerdWallet staff writer Aubrey Cohen contributed to this article.

More From NerdWallet:

TIME Health Care

Nearly 90% of Americans Now Have Health Insurance

TIME.com stock photos Health First Aid Kit
Elizabeth Renstrom for TIME

Rates of uninsured Americans has dropped in the first three months of 2015

The number of uninsured Americans has continued to decrease in 2015, according to new federal data released Wednesday.

According to a new report from the U.S. Centers for Disease Control and Prevention’s National Center for Health Statistics, in the first three months of 2015, 29 million Americans were uninsured, which is down 7 million from 2014. For adults between the ages of 18 to 64, the uninsured rate dropped from 16.3% in 2014 to 13% from January to March 2015.

Among people under the age 65, the researchers found that the percentage of people with private insurance coverage through the Health Insurance Marketplace or state-based exchanges increased from 6.7 million in the last 3 months of 2014 to 9.7 million in the first 3 months of 2015.

Overall, from January through March, the percentage of people in the U.S. who were uninsured was 9.2%. During that time period, adults ages 25 to 34 were twice as likely as adults between ages 45 to 64 to not have health insurance coverage.

The researchers note that since 2013, the greatest declines in the number of uninsured Americans were among adults who were poor (family income below poverty threshold) or near-poor.

MONEY Health Care

7 Times You Can Switch Health Plans Outside of Open Enrollment

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Adam Hester—Getty Images

See if these qualifying events pertain to you.

Q: When my employer offered open enrollment last year, I enrolled in a high-deductible health plan. I see now that this wasn’t the best plan for my situation and would like to switch to a policy with a lower deductible and higher premium. How can I change plans mid-year?

A: Choosing health insurance is a difficult and often confusing task, so for many people, open enrollment is a time of hand-wringing and guesswork. Unfortunately, you may be stuck with your current plan until the next open enrollment period. But in some cases, you might qualify for what’s known as a “special enrollment period.”

You may qualify for a mid-year policy change.

Your eligibility for special enrollment depends on whether one of the following “qualifying events” have occurred in your life:

  • Loss of coverage due to:
    • Divorce or separation
    • Job loss or reduced hours
    • Death of spouse who maintained your coverage on their policy
    • Loss of dependent status
  • Marriage
  • Birth or adoption of a child

Some insurance carriers allow for additional qualifying events, such as gaining citizenship. Contact your human resources representative or insurance company to find out if there are additional qualifying events under your policy.

If you experience a qualifying event, you’ll generally have a minimum of 30 days to choose another plan. If you purchased a plan on the ACA or state marketplaces, you’ll have 60 days.

If you don’t qualify, there are other ways to save.

Since qualifying events are uncommon, it may be more helpful to cut down on health care costs to lessen the burden of your deductible. Here are a few ways to save:

Make full use of your HSA.

Because you have a high deductible health plan (HDHP), you qualify for a Health Savings Account (HSA). These are typically offered through your employer and allow you to set aside tax-free money to help cover medical costs — such as that deductible. If your employer doesn’t offer an HSA, you can sign up for one before the next open enrollment period through a bank or investment firm. Most HSA administrators allow you to contribute to the account throughout the year.

You mentioned that you’re willing to pay a higher monthly premium when you get a new plan. Consider setting aside the additional money you’re willing to put toward higher premiums into your HSA until you can switch plans.

Always review your medical bills for errors.

Experts estimate that 80% of medical bills contain errors. If you’re paying out-of-pocket to cover your deductible, these errors could be costing you. Look for errors such as duplicate charges, charges for services you didn’t receive, or charges that are too high for the services you did receive.

Negotiate lower balances.

Your “total due” isn’t set in stone. If you’re having a hard time paying off a medical bill, contact the billing office and see how they can help. From cutting the balance to allowing you to make reasonable monthly payments, medical providers are often willing to negotiate.

Plan for next open enrollment.

High-deductible health plans are a gamble of sorts and aren’t right for everyone. Unless you have plenty of extra cash set aside, you could be stuck holding some significant bills if an unexpected emergency or illness arises.

Next open enrollment, take your time. Estimate your health care expenses for the upcoming year, and determine how much each plan will set you back. Finally, don’t be afraid to ask your human resources department or the insurer tough questions. That’s what they’re there for.

More From NerdWallet:

MONEY Kids and Money

The Real Price of Having a Baby

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The hospital where you give birth plays a huge role in how much you'll pay out of pocket.

Which hospital parents pick to deliver their baby can have serious cost consequences, according to a new study.

Hospital costs for women who had no maternal or obstetric risk factors to complicate childbirth ranged from less than $2,000 to nearly $12,000, the analysis of discharge data found. The wide variation in cost means that for expectant parents, it can pay to shop around.

The variability was surprising, says study co-author Dr. Jessica Illuzzi, an associate professor of obstetrics, gynecology and reproductive sciences at the Yale School of Medicine.

“We limited our sample to low-risk women, a uniform group, so finding that variability” was unexpected, she says.

The study, published this month in Health Affairs, analyzed data from 267,120 births at 463 hospitals that were collected from the 2011 Nationwide Inpatient Sample, part of a project sponsored by the federal Agency for Healthcare Research and Quality. Estimated average hospital childbirth facility costs per maternity stay ranged from $1,189 to $11,986, with a median of $4,215. The figures did not include professional fees for obstetricians, midwives or anesthesiologists, who generally bill separately for their services.

Since consumers increasingly face high deductibles and increased cost sharing for medical care, giving birth at a high-cost hospital could add significantly to their out-of-pocket costs, Illuzzi says. Some government agencies and other organizations now report data related to childbirth, including cesarean delivery rates and details about delivery costs and charges by hospital.

The federal government’s Hospital Compare website reports the percentage of pregnant women who had elective deliveries one to three weeks early that weren’t medically necessary.

The study found that hospitals with higher rates of cesarean deliveries, among other factors, were more likely to have higher facility costs. Hospital rates of cesarean delivery for low-risk births varied widely, from 2% to 39%, the study found.

According to the study, pricier care didn’t necessarily lead to better outcomes. Hospitals with higher estimated costs were significantly more likely to have serious complications among low-risk childbirths.

The study notes that adding professional fees to the cost estimates and including newborn care in addition to maternal care might result in different cost patterns than those found in the study.

Nearly 4 million children are born each year, and childbirth is the No. 1 reason for hospital admissions.

“There’s so much attention being paid to the cost of care today, but little attention is paid to maternity costs, the leading cause of hospitalization,” Illuzzi says.

Read next: Is it Cheaper to Have a Baby When You’re 26 or 36?

Kaiser Health News (KHN) is a nonprofit national health policy news service.

MONEY Debt

Living Out of a Suitcase Was The Best Thing for My Family’s Finances

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Richard Drury—Getty Images

Friends were shocked when we told them we were selling everything and moving from one country to the next, but we wouldn’t have it any other way.

The year was 2013, and by all outward appearances, my husband, William, and I were living the good life in St. Louis.

He was finishing up his MBA and had an internship at a well-known consumer-products company that was sure to put him on the corporate fast track—all while running his own successful tutoring and test-prep business on the side.

I was juggling getting my Ph.D. in reproductive epidemiology while also being a mom to our pride and joy, Desmond, then 2.

But during William’s last semester in the MBA program, our family took a life-altering trip to Spain as part of his study abroad offering. What was just supposed to be a three-month trip overseas turned into two years … and counting.

Since then, we’ve lived and worked in five different countries, from Hungary to Peru—and have even added to our brood along the way.

Our nomadic lifestyle may seem a bit unorthodox to some—family and friends were shocked when we told them we were selling all of our belongings to pack up and ship out—but we wouldn’t have it any other way.

The best part? It’s done wonders for our finances.

Truth be told, the career and life paths we’d always envisioned for ourselves weren’t quite panning out.

Despite the fact that most business students would have killed to have William’s internship, he was disillusioned by corporate life.

The monotony of his day-to-day routine coupled with having to work for someone else, just didn’t feel natural to him. He wanted something more.

I was feeling a similar dissatisfaction. I’d been working on my Ph.D. for almost five years, and continuing my research while caring for a little one left me struggling to maintain motivation. I was gradually falling out of love with academia.

All of this prompted William to pose a question before we embarked for Spain for his study abroad program: What if we didn’t come back to the states at semester’s end?

What if we stayed in Europe for a few more months—one last hurrah before putting down roots?

I thought he was crazy.

We had a toddler and a mountain of debt—more than $100,000 in student loans between us, a $25,000 business loan, and about $6,000 of credit card debt. We couldn’t go gallivanting around Europe like carefree college students.

But when I saw he was dead serious, it stirred something in me. I couldn’t help but feel like maybe this could be an amazing adventure for our little family.

So we got out of our lease, moved our stuff into storage, and found an apartment in Barcelona through Airbnb for $1,200 a month—not supercheap, but still less than the $1,500 we were spending to rent a home in St. Louis.

Once we settled in Spain, William had yet another crazy idea: What if we never went back and instead built out his tutoring business overseas?

We had both been employees of the company back when we lived in Salt Lake City, and when the opportunity arose, the entrepreneur in him decided to take out a business loan to buy the company from its previous owners.

When we moved to St. Louis for his MBA program, William continued to manage the business remotely, hiring two codirectors to oversee the roughly 15 tutors we employed back in Salt Lake City. He drew a salary of about $35,000—but being abroad made us realize there was an even greater opportunity to make money.

William could meet with international schools throughout Europe and pitch them our services, in which one of our tutors would spend a few weeks doing SAT/ACT prep at their schools to help students who wanted to attend college in the U.S.

I believed in the plan, but the thought of living in—not just visiting—so many different countries terrified me. But if we were going to try this, it was now or never.

So I put my Ph.D. on hold and became our family’s Chief Travel Officer.

5 Countries, $300 Rent, $0 Credit Card Debt

We stayed in Barcelona for about five months, taking in the culture, loving every minute—and mapping out our next destinations based on whether there were international schools close by, our interest in the region, and the cost of living.

Our next, three-month stop was Budapest, Hungary, which was a much cheaper place to live. By avoiding renting in a tourist area, we were able to get a great apartment for just $300 a month.

It was then that I realized how living abroad could actually be good for our finances because, if we planned well, life could be so much cheaper.

When the holidays rolled around, we headed back to St. Louis to sell all of our personal belongings and officially leave our U.S. life behind. But, first, we made a pit stop in Rome—which is when we discovered that our second baby was on the way!

Giving birth in a safe place where I felt comfortable, was important to me, which is why we chose to live next in Colombia. I was born there and still had family there, so it was comforting to know we’d have some support.

After finding a fully furnished apartment in Bogota for $900, we headed out there in February 2014—and welcomed our second son (named Roman, in a nod to Italy) in the spring.

We didn’t have international health insurance at the time, so we paid out of pocket for the birth, which only added up to $1,800, including all of my prenatal visits. Since then, we’ve gotten family coverage for just $200 a month.

In the eight months that we were in Bogota, William took countless meetings, nabbing new contracts and growing the business even more. He gradually increased his salary to about $45,000 a year, and the company helps subsidize such expenses as flights for business meetings, as well as our rent. I also brought in occasional income by doing some freelance research and public-health data analysis on the side.

While we don’t get a tax break from living abroad—we still have to file U.S. income taxes—we do get some tax write-offs for any business-travel-related expenses we have to cover.

This new life has allowed us to get our $6,000 credit card balance down to zero last year—and pay off our $25,000 business loan.

And while chipping away at our student loans will be a slower endeavor, we’ve been able to contribute to a 529 college savings account for Desmond, open a trust account for Roman, and maintain an emergency savings fund of about $2,000.

Our next goal will be to resume contributions to a Roth IRA, which we’d put on hold during graduate school.

Living frugally, of course, helps a lot. For starters, we always opt for cheap housing, even if it means choosing less-prime neighborhoods. Our rent abroad—including furnishings, WiFi and utilities—has averaged $1,000, which is about $500 less than what we were paying in St. Louis.

But, without a doubt, our biggest savings has come from no longer having to pay for gas, insurance and repairs for two cars—we quickly familiarize ourselves with public transportation in every new city. I also do a lot of cooking at home, using seasonal and local ingredients as much as I can, to save money.

In cities where the cost of living is higher, we keep stricter tabs on our expenses, so we know when we’re close to going beyond our budget. Plus, living out of suitcases means we can’t accumulate much stuff—so no extravagant shopping sprees for us!

These frugal habits have accompanied us in the five countries we’ve lived in—Spain, Hungary, Colombia, Peru and Mexico—and the dozens of places we’ve visited. We’re currently back in Bogota, but it’s off to Japan next to build an East Asian client base.

The Intangible Perks of Our International Life

One of my initial concerns with living abroad was how the kids would adjust, but they’ve taken to the nomadic life with ease.

Desmond has attended four different preschools, and in just a few short months, we’ll enroll him in an all-Japanese kindergarten. Once he gets to first or second grade, we plan to home-school because we know international schools can get very pricey.

In our opinion, these experiences have helped shape Desmond into an outgoing, fearless kid—not to mention that he now speaks Spanish fluently!

People ask how long we plan to keep up our gypsy lifestyle. The honest answer: I’m not sure. There are times when I think I’d love to own a permanent home, but then I look around and realize that we’re living most people’s once-in-a-lifetimes.

We’ve spent the past few years marveling at Machu Picchu, taking overnight train rides through Transylvania, and braving the outdoor markets of Santiago.

We may not be millionaires, but we also aren’t struggling. When we started this journey, the company had one international class. We have 11 classes starting this fall, and even more in the works for the spring semester—which has more than doubled our profits.

Over the last few years, my most fulfilling memories have been watching my children play with kids who speak different languages and hold different beliefs. I’ve also come to realize that the best memories happen when you’re willing to surrender a little control and embrace the unexpected.

At the very least, what our nomadic life has taught us is that when we finally do settle down, we won’t need a great, big house with a fancy car to be happy. I’ve learned that you don’t need to have a permanent address to feel like you have a home.

–As told to Maryanne Hayes


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MONEY Medicare

Why You Should See a Dentist Before You Retire

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Peter Dazeley—Getty Images

Most seniors pay for dental care out of pocket.

If you plan to retire soon, add this item to your to-do list: a visit to the dentist before your dental insurance disappears.

Retirees transitioning to Medicare are often surprised to learn that the program does not cover routine dental care or more complex procedures.

Overall, 40% of the 65-plus population has some form of dental benefit, according to the National Association of Dental Plans. For seniors who use Medicare Advantage managed care plans, about half offer very limited coverage for cleanings and exams. A small percentage of seniors have dental insurance from a former employer, and Medicaid covers dental care for low-income residents in some states, although benefits vary. Some buy individual commercial plans or have coverage through an association such as AARP.

But most seniors just pay for dental care out of pocket – the mean expense for Americans age 65 and older was $870 in 2012, according to the Agency for Healthcare Research and Quality, a research arm of the U.S. Department of Health and Human Services.

The costs can be far higher for more complex procedures. The average cost of a crown in New York City is $2,500; a periodontal procedure in Los Angeles costs $1,700, according to Fairhealthconsumer.org, a service that tracks prices of healthcare and health insurance.

Those numbers help explain why 34% of seniors had not seen a dentist in two years in 2010, and 22% had gone without care for the past five years, according to the Kaiser Family Foundation (KFF).

“Dental care is conspicuously absent from the health care coverage for older adults,” says Dora Fisher, director of older adult programs at Oral Care America, a nonprofit group that advocates for better oral health.

Medicare celebrates its 50th anniversary later this month, and adding basic dental coverage is on the wish list of many health policy experts reflecting on the program’s future.

Research shows clear links between poor oral health, diabetes and heart disease. One out of four Medicare beneficiaries has edentulism – that is, they no longer have any of their natural teeth, according to KFF; that can cause other health issues, such as nutritional deficiencies and problems with speech.

Pricing Options

Premiums for private plans, are reasonable – PPO plans cost around $15 per month, Ireland says. But individual coverage is not as robust as group dental plans. “Most have waiting periods before coverage for major procedures begins, and the dollar caps on coverage may be lower,” she says.

Ireland adds that dental insurers have been negotiating with the federal government to offer individual standalone dental plans (independent of health insurance) through the Affordable Care Act insurance exchanges, and she hopes expanded offerings will start showing up in 2016 or 2017.

Dental plans are available on many exchanges now, but they can only be purchased along with general health insurance. That effectively cuts out seniors, who are covered by Medicare.

Consumer advocates are pushing for Medicare to pay for dental care made necessary by other procedures that the program does cover. The Center for Medicare Advocacy (CMA), a non-profit legal organization, has filed lawsuits on behalf of cancer patients who have been denied coverage for dental procedures made necessary due to aggressive radiation of the head and neck.

“Medicare covers what happens to the patient’s eyes even though it doesn’t provide routine eye care – but there’s no coverage for this type of extreme dental care, and people are ending up in the hospital with infections,” says Margaret Murphy, an associate director and attorney with CMA. The Centers for Medicare and Medicaid Services did not respond to requests for comment.

The litigation has not been successful so far, but CMA has not given up. “We’re trying to figure out where to go with it next,” Murphy says.

MONEY health insurance

What’s the Difference Between a HSA and a FSA?

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Chris Stein—Getty Images

And which should I use?

I recently started a new job and am choosing my health insurance benefits. It looks like I have the option of using a health savings account (HSA) or a flexible spending account (FSA) to set money aside for medical costs. But I don’t know which is better, and the language in my benefits paperwork is confusing. Can you help?

Answer:

Setting aside money for health care costs is a savvy move, but your confusion is understandable. Choosing the right health benefits can be tricky, and with several key differences between HSAs and FSAs, it literally pays to get this decision right.

Both HSAs and FSAs allow employees with health insurance to set aside money for health care costs referred to as “qualified expenses,” including deductibles, copayments and coinsurance, and monthly prescription costs. Sometimes employers will also contribute funds to these accounts. In most cases, you receive a debit card for your account and can use it to pay for qualifying expenses throughout the year. Both types of accounts have tax benefits, too, although those benefits aren’t the same.

In general, electing to sign up for an HSA or FSA is smart. Knowing which one to select and how to get the most out of it will take some education.

Are you eligible for an HSA?

Health savings accounts are not available to everyone. This is the first key difference, and if you aren’t eligible for an HSA, it makes your decision much easier. Only people who have high deductible health plans, or HDHPs, can select an HSA.

For 2015, an HDHP is defined as health insurance with a deductible of $1,300 or more for an individual or $2,600 or more for a family. To qualify for an HSA, this HDHP must be your only health insurance plan, you must not be eligible for Medicare and you cannot be claimed as a dependent on someone else’s tax return.

Important differences between FSAs and HSAs

As you can see in the following table, there are several additional differences between these accounts. Things like your flexibility in contributing, the ability to keep your unused balance and additional tax benefits make HSAs the wisest choice if you have the option. Still, either account stands to save you money and make budgeting for medical costs easier.

Health savings account (HSA) Flexible spending account (FSA)
Eligibility requirements
  • No eligibility requirements
Contribution limit
  • 2015 contributions capped at $2,550
Changing contribution amount
  • You can change how much you contribute to the account at any point during the year.
  • Contribution amounts can be adjusted only at open enrollment or with a change in employment or family status.
Rollover
  • Unused balances roll over into the next year.
  • With a few exceptions, FSAs are “use it or lose it,” and you forfeit any unused balance.
Connection to employer
  • Your HSA can follow you as you change employment.
  • In most cases, you’ll lose your FSA with a job change. One exception: if you’re eligible for FSA continuation through COBRA.
Effect on taxes
  • Contributions are tax-deductible, but can also be taken out of your pay pretax. Growth and distributions are tax-free.
  • Contributions are pretax, and distributions are untaxed.

You cannot choose both, unless …

If you qualify for an HSA, you cannot elect to set up both an HSA and an FSA, unless the FSA is a “limited purpose” FSA. Your HR representative will be able to tell you if this is the case at your new job.

A limited purpose FSA works like a regular FSA but can be used only for vision care and dental expenses. If you expect to have high medical costs throughout the year, or want to maximize contributions to your HSA while minimizing your withdrawals, using a limited purpose FSA for expected vision and dental expenses could be a smart choice.

Which should you choose?

Both accounts have benefits that can make managing your out-of-pocket medical expenses easier throughout the year. But you should opt for an HSA if you qualify, if for no other reason than the limits are higher and you can carry over your contributions from year to year. If you don’t qualify, sign up for the FSA.

A good rule of thumb as you begin thinking about how much to contribute: Start with enough to cover your deductible, expected medication costs, anticipated doctor’s visits and any planned treatments or surgeries. Also, don’t be afraid to ask your HR representative as you come across questions; you can’t be expected to know all of the ins and outs of your new benefits.

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TIME Uber

Why the Obamacare Decision Is Great for Uber

Berlin's Taxis As German Court Considers Uber Technologies Inc. Ban
Bloomberg—Bloomberg via Getty Images A passenger holds a HTC Corp. smartphone displaying the Uber Technologies Inc. car service application (app) as they sit in a taxi in this arranged photograph in Berlin, Germany, on Monday, Nov. 24, 2014.

The gig economy should be celebrating this week

Uber may have publicly praised Supreme Court’s Friday decision clearing the way for nationwide same-sex marriage, but a decision that came a day earlier promises a bigger impact on the ride-hailing company.

The Supreme Court on Thursday issued a decision preserving federal tax credits tied to the Affordable Care Act, also known as Obamacare. The ACA is an essential ingredient in the success of the so-called “gig economy,” wherein workers serve as independent contractors on a flexible schedule for on-demand service companies like Uber, Postmates, Instacart and more.

Because Uber and many companies like it consider their workers independent contractors instead of employees, they’re not required to provide those workers with health insurance, as the ACA only mandates that employers extend coverage to full-time employees. That loophole saves the companies a tremendous amount of money. Obamacare’s subsidies for individual insurance buyers, meanwhile, make it easier for Uber drivers and similar workers to get affordable coverage, making the work more attractive.

Uber CEO Travis Kalanick reportedly said at a November dinner that Obamacare is “huge” for his company because it frees up more workers to come drive cars for Uber when they might otherwise be tethered to a job that offers health benefits. “The democratization of those types of benefits allow people to have more flexible ways to make a living,” Kalanick said at the dinner. “They don’t have to be working for ‘the man.'” (An Uber spokeswoman confirmed Kalanick’s comments, but declined to elaborate further.)

Indeed, when Uber recently surveyed its drivers about whether they would prefer a “9-to-5 job with some benefits and a set salary” or one where they could make their own schedule, 73% said they would forgo the benefits package in favor of freedom, according to a report the company released in January. And Uber is making efforts to help its drivers get insured, announcing late last year a partnership with Stride Health to guide workers in choosing a plan on the government insurance exchanges.

It’s unclear, however, how much Uber is actually spending, if anything, on this ancillary benefit: Stride’s services are already available for free to anyone. A spokeswoman for Uber says drivers who use Stride through Uber’s “customized” app would “save time” because their personal information would already be “pre-populated” into tool.

Still, how much longer Uber might capitalize on a combination of Obamacare and employment status rules remains up in the air. A California labor board recently found that a single Uber driver was more accurately characterized as an employee, not an independent contractor. While that decision is non-binding, it has called into question Uber’s policies regarding health insurance and other benefits. On-demand grocery service Instacart, perhaps seeing the writing on the wall, recently announced that it is experimenting with turning some of its workers into part-time employees in what could be the first step in a broader trend across gig economy companies.

For now, however, Uber is safe to celebrate. Had the Court gone the other way Thursday, it may have found its business model in serious jeopardy.

This article originally appeared on Fortune.com.

TIME

Looking To Stay On Your Partner’s Insurance? It May Be Time To Get Married

Empire Blue Cross Blue Shield health benefits cards are arra
Bloomberg—Bloomberg via Getty Images Empire Blue Cross Blue Shield health benefits cards are arranged for a photograph Tuesday, September 27, 2005.

Domestic partner benefits may become a lot less common.

It’s official. The Supreme Court ruled 5-4 in favor of legalizing gay marriage across the U.S., opening up the rite of commitment to any person regardless of their sexuality.

It’s a historic moment–and the last thing that’s on many peoples minds is insurance. (Though, quick reminder! The Supreme Court also made an important decision yesterday to uphold Obamacare subsidies.)

But, now that the right to marry is extended to everyone, many companies could start streamlining their benefits packages and take away the perk of insurance coverage for domestic partners, according to analysis by Aon Hewitt. If you want to stay on your significant other’s employer-sponsored insurance policy, now may be the moment to pop the question.

Such a move could affect both gay and straight couples who may opt to be committed partners but not marry, which is more common for the Millennial generation. Nearly 9.2% of Millennials co-habit with a partner, nearly twice the rate of Gen Xers at the same age, according to the Pew Research Center.

About 77% of employers currently offer same-sex domestic partner health care coverage, according to data from Aon Hewitt. Such benefits were a way for companies to even the benefits playing field for couples who couldn’t legally wed. But many companies could opt out of that offering, streamlining their benefits (and costs) to only cover spouses–now that all people have equal access to marriage.

Some companies, including Delta Air Lines and Verizon Communications, had already started to eliminate domestic partner benefits in states where gay marriage was legal prior to the Supreme Court ruling. Those policies will likely be extended now that marriage is widely accessible, making insurance benefits available only to legal spouses–gay or straight.

“The main idea is to make things fair for everyone,” Verizon spokesman Ray McConville, told the Wall Street Journal. “Currently, if you’re a guy living with a longtime girlfriend or vice versa, you don’t have the ability to get health insurance for your partner.”

Streamlining benefits helps companies ease the cost of administrative functions, especially when it comes to applying different standards to employees in various states, said Aon Hewitt.

Other companies, like Google, IBM and Dow Chemical, offer domestic partner benefits to all couples and don’t envision getting rid of the perk anytime soon. They see it as a way to attract top talent, recognizing that some people simply prefer not to marry.

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