MONEY Obamacare

Everything You Need to Know About the Latest Challenge to Obamacare

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Robert A. Di Ieso, Jr.

Next week the Supreme Court will hear arguments in a case that could have a huge impact on millions of consumers. Here's what it's all about.

The Affordable Care Act is once again before the Supreme Court.

On March 4, the justices will hear oral arguments in King v. Burwell, a case challenging the validity of tax subsidies helping millions of Americans buy health insurance if they don’t get it through an employer or the government. If the court rules against the Obama administration, those subsidies could be cut off for everyone in the three dozen states using healthcare.gov, the federal exchange website. A decision is expected by the end of June.

Here are five things you should know about the case and its potential consequences:

1. This case does NOT challenge the constitutionality of the health law.

The Supreme Court has already found the Affordable Care Act is constitutional. That was settled in 2012’s NFIB v. Sebelius.

At issue in this case is a line in the law stipulating that subsidies are available to those who sign up for coverage “through an exchange established by the state.” In issuing regulations to implement the subsidies in 2012, however, the IRS said that subsidies would also be available to those enrolling through the federal health insurance exchange. The agency noted Congress had never discussed limiting the subsidies to state-run exchanges and that making subsidies available to all “is consistent with the language, purpose and structure” of the law as a whole.

Last summer, the U.S. Court of Appeals for the Fourth Circuit in Richmond ruled that the regulations were a permissible interpretation of the law. While the three-judge panel agreed that the language in the law is “ambiguous,” they relied on so-called “Chevron deference,” a legal principle that takes its name from a 1984 Supreme Court ruling that held that courts must defer to a federal agency’s interpretation as long as that interpretation is not unreasonable.

Those challenging the law, however, insist that Congress intended to limit the subsidies to state exchanges. “As an inducement to state officials, the Act authorizes tax credits and subsidies for certain households that purchase health insurance through an Exchange, but restricts those entitlements to Exchanges created by states,” wrote Michael Cannon and Jonathan Adler, two of the fiercest critics of the IRS interpretation, in an article in the Health Matrix: Journal of Law-Medicine.

In any case, a ruling in favor of the challengers would affect only the subsidies available in the states using the federal exchange. Those in the 13 states operating their own exchanges would be unaffected. The rest of the health law, including its expansion of Medicaid and requirements for coverage of those with pre-existing conditions, would remain in effect.

2. If the court rules against the Obama administration, millions of people could be forced to give up their insurance.

A study by the Urban Institute found that if subsidies in the federal health exchange are disallowed, 9.3 million people could lose $28.8 billion of federal help paying for their insurance in just the first year. Since many of those people would not be able to afford insurance without government help, the number of uninsured could rise by 8.2 million people.

A separate study from the Urban Institute looked at those in danger of losing their coverage and found that most are low and moderate-income white, working adults who live in the South.

3. A ruling against the Obama administration could have other effects, too.

Experts say disallowing the subsidies in the federal exchange states could destabilize the entire individual insurance market, not just the exchanges in those states. Anticipating that only those most likely to need medical services will hold onto their plans, insurers would likely increase premiums for everyone in the state who buys their own insurance, no matter where they buy it from.

“If subsidies [in the federal exchange] are eliminated, premiums would increase by about 47%,” said Christine Eibner of the RAND Corporation, who co-authored a study projecting a 70% drop in enrollment.

Eliminating tax subsidies for individuals would also impact the law’s requirement that most larger employers provide health insurance. That’s because the penalty for not providing coverage only kicks in if a worker goes to the state health exchange and receives a subsidy. If there are no subsidies, there are also no employer penalties.

4. Consumers could lose subsidies almost immediately.

Supreme Court decisions generally take effect 25 days after they are issued. That could mean that subsidies would stop flowing as soon as July or August, assuming a decision in late June. Insurers can’t drop people for non-payment of their premiums for 90 days, although they have to continue to pay claims only for the first 30.

Although the law’s requirement that individuals have health insurance would remain in effect, no one is required to purchase coverage if the lowest-priced plan in their area costs more than 8% of their income. So without the subsidies, and with projected premium increases, many if not most people would become exempt.

5. Congress could make the entire issue go away by passing a one-page bill. But it won’t.

All Congress would have to do to restore the subsidies is pass a bill striking the line about subsidies being available through exchanges “established by the state.” But given how many Republicans oppose the law, leaders have already said they will not act to fix it. Republicans are still working to come up with a contingency plan should the ruling go against the subsidies. Even that will be difficult given their continuing ideological divides over health care.

States could solve the problem by setting up their own exchanges, but that is a lengthy and complicated process and in most cases requires the consent of state legislatures. And the Obama administration has no power to step in and fix things either, Health and Human Services Secretary Sylvia Burwell said in a letter to members of Congress.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Ask the Expert

The Right Way to Kick Your Kid Off Your Health Insurance

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Robert A. Di Ieso, Jr.

Q. I am covered by my employer’s health plan, but I’m not happy with it. My son is 21 and currently covered under my plan. While I realize that I am not eligible for Obamacare, I am curious if I can terminate my son’s policy so that he might be eligible.

A. Since the open enrollment period to sign up for coverage on the state marketplaces ended Feb. 15, in general people can’t enroll in a marketplace plan until next year’s open enrollment period rolls around.

If you drop your son from your employer plan, however, his loss of coverage could trigger a special enrollment period that allows him to sign up for a marketplace plan. Whether he’s entitled to a special enrollment period depends on whether his loss of coverage is considered voluntary, say officials at the Centers for Medicare & Medicaid Services.

In general, voluntarily dropping employer-sponsored coverage doesn’t trigger a special enrollment period for individuals or their family members. But if you drop your son’s coverage on his behalf without his consent, his loss of coverage wouldn’t be considered voluntary and your son could qualify, according to CMS.

Whether he’ll be eligible for premium tax credits to make marketplace coverage more affordable is another matter, says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities.

If you claim him as your dependent, he generally won’t be eligible. If you don’t claim him as your dependent, he would have to qualify for subsidies based on his own income.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Health Care

Why You’re Still Paying for Birth Control Even Though It’s “Free” Now

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Laura Johansen—Getty Images

Most women with private health insurance can get contraception for free, but a lack of information means some are still paying out of pocket—even when they shouldn't be.

A record scratch sounded in my head one weeknight this January, when a pharmacist at my local drugstore told me my birth control pills would—for the first time—cost more than $50 a month.

Strange, I thought, since I could have sworn I heard contraception was one of the preventive health services that are free under the Affordable Care Act, and that the law was rapidly expanding access for most women, with at least 67% of insured women on the pill paying $0 (up from only 15% in 2012), according to a recent study by the Guttmacher Institute. Perplexing.

After all, I don’t work for an exempted religious organization or a company such as Hobby Lobby, which in a Supreme Court case last year won the right to deny contraceptive coverage because of conflicting beliefs. And the same pills—Ortho Tri-cyclen Lo—cost me nothing under my old health plan. Sure, I had switched insurance companies in the new year (to Aetna, the third largest in the country), but I’d opted for a high-premium Gold plan. A monthly copay on par with the cost of an iPod shuffle seemed hefty and unfair.

So I left the pharmacy empty handed and went home to call Aetna.

My happiness was brief when a customer service agent informed me that—while most brand-name pills had a copay—I could simply switch to a free generic version of the same compound. The problem? Turns out there is no generic version of Ortho Tri-cyclen Lo yet. So I was trapped, much like women whose insurance companies have denied them coverage for the NuvaRing, reasoning that they can take generic pills with the same hormones—even though the Department of Health and Human Services has been clear that the ring is a distinct form of contraception (and should therefore be free).

I hesitated to simply choose a different generic for a reason that should not surprise the many other women who have tried multiple birth control methods: Switching from pill to pill in the past caused me side effects, which thankfully subsided once I finally found one that worked for me.

“People respond differently to different pills and a change can cause side effects like irregular bleeding and headaches,” says Jill Rabin, an ob-gyn and professor at Hofstra North Shore-LIJ School of Medicine. “There’s no predicting how someone will do unless they try it.”

The pressure I felt to switch seemed especially unjust given this aspect of the law: While women can be charged a copay for brand name drugs when an equivalent generic is available, this Department of Labor FAQ explains, “if, however, a generic version is not available, or would not be medically appropriate for the patient” as determined by her doctor, “then a plan or issuer must provide coverage for the brand name drug … without cost-sharing.”

When I brought my dilemma (and the fact that I was a journalist planning to write about it) to Aetna’s director of communications, Susan Millerick, she took swift action. Within a week, I had my Ortho Tri-cyclen Lo, free of copay.

“It is always Aetna’s intent to abide by the laws that govern our health benefits coverage, and to fairly interpret and apply all laws and regulatory guidance on behalf of our customers and members,” Millerick wrote in an email.

Millerick’s explanation for what had happened suggests any woman would be wise to question any insurer denial for contraceptive; she said Aetna’s “service reps erred” in not telling me about the option to appeal the copay. I should have been told that I could just ask my doctor to call and verify that I really needed my pill and that a different generic would not suffice.

The good news for many women is that simply being informed of your options—and getting your doctor on your side—may be enough to go from paying a wallet-draining copay to nothing at all, says Rabin.

“Figuring out the best contraception that minimizes cost and maximizes efficacy is a conversation that should be between doctor and patient,” Rabin says. “Most doctors don’t want that decision taken out of their hands and would be happy to help make that call for their patients.”

For those women who encounter more resistance than I did—or find, as Kaiser Health News reported, that certain insurers are even trying to wriggle out of covering generics—there are other resources to turn to, like the National Women’s Law Center. Their website has clear instructions on how to fight back if you think your insurer is unfairly denying you free birth control, with templates for appeal letters and a free hotline (866-745-5487) for additional assistance.

Even with all the progress, thousands of women have been contacting the NWLC’s hotline in recent months after running into problems getting free contraceptives, says Mara Gandal-Powers, a lawyer at the NWLC.

Generally, the biggest obstacle to free birth control access right now is ignorance, she says. Many women—and their insurance representatives, doctors, and pharmacists—aren’t on the same page about whether their particular contraception should have a copay or not. Instead of doing a double take at the cost of their contraceptives, Gandal-Powers says, some women never question the charge.

That’s a compelling reason to double check your insurer, pharmacist, and even doctor’s assumptions.

“There is definitely a lot of education that still needs to happen,” says Gandal-Powers, “not just among women themselves but also among health care providers and pharmacists.”

Beyond a lack of education, a few more obstacles to universally free birth control remain. Besides the religious exemption, there’s also a subset of insurance plans that are “grandfathered” in such a way that they don’t have to cover contraception right away—though they will in coming years. Enrollment in grandfathered plans is dropping, with only 26% of covered workers enrolled in a grandfathered health plan in 2014, down from 56% in 2011, according to the Kaiser Family Foundation. Another exception is self-funded student plans.

The takeaway? If you’re paying more than $0 for birth control, it can’t hurt to do a little digging. If you are lucky (and persistent), you could end up pushing your insurer to better comply with the law—and save hundreds of dollars a year, to boot.

MONEY Health Care

Why Your Next Doctor’s Bill Could Be Surprisingly Painful

Figuring out if a medical provider is on your health insurance plan isn't always as straightforward as you'd think. And that can mean a much higher bill than you expect.

“Is this doctor in my insurance network?” is part of the litany of questions many people routinely ask when considering whether to see a particular doctor. Unfortunately, in some cases the answer may not be a simple yes or no.

That’s what Hannah Morgan learned when her husband needed surgery last fall to remove his appendix. When they met with the surgeon at the hospital emergency department near their Lexington, Ky., home, Morgan asked whether he was in the provider network for her husband’s individual policy, which he bought on the Kentucky health insurance exchange. The surgeon assured her that he was. When she got home, Morgan confirmed that he was in network using the online provider search tool for her husband’s plan.

But when she read the explanation of benefits form from the insurer, the surgeon’s services were billed at out-of-network rates, leaving the couple on the hook for $747.

The surgeon’s office later told her that he belonged to two different medical groups. One was in Morgan’s husband’s health plan network, the other wasn’t. Following multiple phone conversations with the surgeon’s office and the insurer, the in-network rates were applied and the Morgans’ share of the bill shrunk to $157.

“I did everything I was supposed to do,” says Morgan, 26. “You feel kind of hopeless. I thought I did it right, and there’s still another hoop to jump through.”

Consumers who use out-of-network providers can rack up huge bills, depending on the care required. Health maintenance organizations generally don’t cover any non-emergency services provided by physicians or hospitals outside the plan’s network of providers. Preferred provider organizations typically do cover out-of-network services, but pay a smaller percentage of the charges, 70% instead of 80%, for example. Out-of-network services may have higher deductibles and higher out-of-pocket maximums as well.

Although it’s not routine, physicians may belong to more than one medical group, say experts. Surgeons, for example, may join a couple of medical groups to expand the number of hospitals that they’re affiliated with.

Even then, sussing out in-network providers may not be straightforward. Just because a medical group is in someone’s provider network, consumers can’t be confident that all the physicians in the medical group are also in network.

“Physician groups can be in network even though individual physicians in that group may not be,” says Susan Pisano, a spokesperson for America’s Health Insurance Plans, a trade group.

That situation might occur if some of the physicians in a medical group agreed to accept the rates negotiated with an insurer, but others did not, says Dr. Jay Kaplan, an emergency physician who’s president-elect of the American College of Emergency Physicians. The physicians who didn’t accept the network rate would be out-of-network for a patient, even if other members of the medical group were in network.

Consumer advocates say the lack of transparency is unfair to consumers.

“It’s 2015. Federal law requires Americans to buy health insurance,” says Mark Rukavina, a principal at Community Health Advisors in Chestnut Hill, Mass. “There’s something fundamentally wrong when you can only figure out what questions to ask after the fact.”

In addition to confusion about doctors who are part of more than one practice, consumers may also run into billing troubles if their doctor operates practices in different locations and accepts different insurance plans at each, say billing experts.

A podiatrist may see patients at one office location two days a week, and at another office location the rest of the week. Each practice may accept different insurance plans, and a patient may be in network only at one location.

If the physician’s office submits the paperwork to the insurer with the tax identification number for the wrong office location, the patient may get hit with an out-of-network charge. In that case, the patient may have to contact the doctor’s staff and ask them to resubmit the charges through the other practice. Generally that should solve the problem, experts agree.

Adding to the confusion is the fact that even if a physician is in a consumer’s insurance network, the hospital or clinic she works at may not be or vice versa. When undergoing a procedure or treatment, the patient could get hit with out-of-network facility and other charges.

More consumers may face out-of-network problems as health plans shrink the size of their provider networks in an effort to keep costs down.

“Health plans work very hard to see that consumers have the information they need and resources to turn to when they have questions,” AHIP’s Pisano said, noting that the Healthcare Financial Management Association and AHIP’s foundation have online guides to help consumers. Still, she added, “There is clearly also a responsibility on the part of providers to be more transparent.”

Consumers such as Morgan shouldn’t have to bear the burden when that is unclear, says Rukavina.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Health Care

The Obamacare Open Enrollment Deadline Has Been Extended

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Getty Images

You can get more time if you tried to buy health insurance on the federal marketplace—but some states are offering more generous grace periods.

Did you miss the February 15 deadline to buy health insurance for 2015? The Department of Health and Human Services announced that you may have one more week to get insured.

If you tried to buy health coverage on the federal marketplace but couldn’t because of long wait times or website glitches, you may qualify for this special enrollment period. If you bought health insurance through the federal marketplace last year, however, you will not be allowed to make any changes to your coverage during this one-week extension.

Try again by going back to HealthCare.gov from now through February 22. You’ll need to attest that you couldn’t enroll by the deadline because of a website or call center problem.

After the deadline, that’s it—you won’t be able to buy individual health insurance for 2015 unless you have you have a “qualifying life event,” like marrying, divorcing, having a baby, moving, or losing your health coverage.

If you live in one of the 13 states with their own exchanges or the District of Columbia, the rules are a little different. Most states have announced extensions of some sort. In some states, you get more time only if you tried to sign up before February 15; in others, everyone has more time. Check acasignups.net for a good round-up of state policies.

Washington state currently offers the longest deadline extension: Residents have until April 17 to enroll. “This is the first year that residents may incur a tax penalty for not having health insurance under the Affordable Care Act,” Richard Onizuka, chief executive officer of Washington’s exchange, told the Wall Street Journal. “This special enrollment window will allow these individuals—as well as those who experienced difficulty completing their applications—additional time to get enrolled for 2015 coverage.”

That’s right: If you were uninsured in 2014, you could owe a penalty on your taxes this year. This year, the penalty is either $95 per person in your family (capped at $285), or 1% of your income (capped at the price of the national average premium for a bronze plan), whichever is higher. Go uninsured in 2015 too, and you could owe even more next year.

For more on buying a policy for 2015, check out this full guide to Obamacare open enrollment.

MONEY Health Care

What to Know About Obamacare Open Enrollment This Year

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Jeffrey Coolidge—Getty Images

The Obamacare deadline to sign up for a policy is February 15. Here's what you need to do to make sure you're covered.

Update: The Obama administration has announced a special open enrollment period for people who did not realize they would need to pay a tax this year. So you have one more shot to get insurance for 2015, from March 15 to April 30. Here are our tips from February.

Time is running out. The open enrollment period for buying individual health insurance for 2015 ends February 15. Miss this important deadline, and you could remain uninsured all year—and face a steep tax penalty.

As of early February, about 9.9 million Americans had purchased or re-enrolled in private health insurance through the federal and state insurance exchanges created by Obamacare. But an estimated 29 million Americans remained uninsured as of the end 2014, according to the Commonwealth Fund.

Anne Filipic, president of Enroll America, a non-profit that educates Americans about health insurance, says too many people still don’t know that they can get financial assistance if they are struggling to pay for coverage.

“There has been a lot of confusion and misinformation,” Filipic says. “For a lot of people, they’ve heard of the ACA or Obamacare, but they don’t know what it means for them.”

Here’s what next week’s deadline means and what you need to know about getting covered in time.

1. February 15 is a hard deadline.

The window to buy individual health insurance for 2015 runs from November 15, 2014 to February 15, 2015. After that, you won’t be able to buy a policy this year unless you have extenuating circumstances. You may have to remain uninsured until 2016 (open enrollment for 2016 coverage doesn’t begin until next October).

There are exceptions. If you marry, divorce, have a baby, move to another state, lose your employer health insurance, or experience another “qualifying life event,” you can sign up for health insurance any time. You have 60 days after the event to enroll in a new health plan.

2. You have choices where to shop.

Under the Affordable Care Act, aka Obamacare, you can buy private insurance through government-run shopping websites, also called exchanges or the marketplace. Some states run their own sites; others use the federal government’s site. You can find the option for your state at Healthcare.gov, where you’ll also be able to see if you qualify for financial help with your premiums.

You don’t have to shop on a government-run exchange. You can also get insurance from web brokers, such as getinsured.com, gohealth.com, or ehealthinsurance.com. But if you qualify for a premium subsidy, make sure you get a plan that is sold on the government marketplace.

3. If you can’t afford insurance, you may qualify for help.

Almost half of uninsured Americans say they didn’t sign up for Obamacare because they thought they couldn’t afford it, according to a Kaiser Family Foundation poll. Generally, that shouldn’t be the case. The government will pay for part of your health insurance if you earn between 100% and 400% of the poverty level.

The poverty level varies based on your family size. A single person earning between $11,670 and $46,680 this year is eligible for a tax credit. So is a family of four earning between $23,850 and $95,400. With a tax credit, your health insurance will cost between 2.01% and 9.56% of your total income.

The Department of Health and Human Services found that 87% of the people who bought a health plan on the exchanges got financial help, and those people paid an average of just $82 a month. “This is a little known fact for many people,” Filipic says.

And if you earn less than the poverty line? The plan was for households making less than 138% of the poverty line to enroll in Medicaid, a state-administered health care program for low-income Americans. Here’s the catch: The Supreme Court ruled that the federal government could not force states to expand their Medicaid programs.

As a result, some people in the 21 states that did not expand Medicaid may earn too much to qualify for Medicaid but earn too little to qualify for an Obamacare tax credit. The Kaiser Family Foundation estimates that 18% of uninsured Americans fall in this so-called “coverage gap.” Fortunately, about 30% of uninsured Americans are eligible for tax credits to buy private insurance. Another 18% are eligible for Medicaid.

4. If you’re not covered, the penalty is going up.

Another reason not to miss this deadline: Under Obamacare, most Americans are required to have a qualified health insurance plan, or pay a fine.

If you went without health insurance for more than three months in 2014, you could owe the IRS up to $95 per person in your household (capped at $285 for large families), or 1% of your income, whichever is higher. And if you go without health insurance this year, the penalty increases to $325 per person (capped at $975) or 2% of your income. The penalty increases again in 2016.

However, you can qualify for an exemption, including for financial hardship. “Most people who are uninsured will qualify for an exemption because there’s a lot of exemptions,” says Karen Pollitz, senior fellow at the Kaiser Family Foundation. You can apply for most exemptions right on the tax return; you can apply for other hardship exemptions using this form.

5. You can ask an expert to help you enroll.

Still confused? Get help. All across the country, there are thousands of experts, sometimes called “navigators,” who can assist you in-person, for free.

Getting help is especially valuable if you aren’t sure if you are eligible for financial help, Pollitz says. Oftentimes, assisters work year-round for free clinics or other public agencies, so if you’re in the Medicaid “coverage gap,” an assister might be able to connect you with other resources, such as nutrition assistance or free community health services. Plus an ACA navigator or another adviser could help you tally up your income and see if you can claim a tax credit.

You can find an assister near you on the government’s site, localhelp.healthcare.gov. Or sign up for an appointment online using Enroll America’s connector tool at getcoveredamerica.org/connector. There are about 65,000 appointments available before February 15 at some 4,000 locations, and Enroll America offers contact information for another 11,000 locations. “There’s help out there waiting for you,” Filipic says.

6. Even if you bought health insurance last year, you should shop again.

If you bought health insurance on the exchanges last year and then did nothing, you’ve been auto-enrolled in that plan or a similar plan from the same insurer. But you can still switch plans until February 15.

Take a minute to see if that’s still the best deal, especially if you chose the least expensive plan in the first go-round. Last year’s cheapest plans have gotten 9.5% more expensive, on average, according to an analysis by the New York Times. You may be able to lower your monthly premiums by switching.

And your benefits can change too, including your deductible and out-of-pocket maximums.

Another reason to re-enroll is to see if you qualify for a bigger tax credit. “Your tax credit from last year was also automatically renewed, but it may or may not be the right amount,” Pollitz says. “Even if your income didn’t change at all, you probably qualify for a little more tax credit just because you got older. It’s based on a benchmark plan for someone your age.”

And while you’re at it, think about how you liked your health coverage in 2014. “Are you satisfied with the network? Were you able to get in to seeing the doctors you wanted to see? Were there a lot of hassles getting your claims paid?” Pollitz says. “Now is a good time to see what your options are.”

This article was updated to clarify that you can claim most tax penalty exemptions on your tax return, and premium subsidies are only available for plans sold on the government marketplace.

MONEY #financialfail

Don’t Make the Mistake I Made with an Inheritance

JD Roth
JD Roth

Financial blogger J.D. Roth 'fesses up to Farnoosh Torabi about his biggest financial fail

Back in 2006, J.D. Roth started the award winning personal finance website GetRichSlowly.org, which Money named the web’s most inspiring personal finance blog. He is also an author of the e-guidebook Be Your Own CFO and a creator of www.moneytoolbox.com.

His biggest financial fail happened about a decade ago when he received an inheritance. Here’s how it happened, as told to me on my daily podcast So Money.

I’m going to share a fail that typifies how I used to think, and then I’m going to share one that shows that I still don’t have it all figured out.

In 1995, my father died after a long battle with cancer and he left a little bit of life insurance. I think I got $5,000 or something like that, and at that time I had over $20,000 in credit card debt.

If I had been smart, I would have paid off some of that credit card debt, but I wasn’t. Instead, I went out and bought a new computer and video game stuff.

So, here I am with a chance to knock off a quarter of my debt, and instead I end up spending even more money. And to me this is an example of the kind of failures that I used to have all the time…

By 2004 I had over $35,000 in consumer debt. I was living paycheck to paycheck. I was in really bad shape.

Now, more recently I feel like I’ve really got my act together… but I still make mistakes from time to time.

One happened in 2014 because I was too much of a procrastinator. I knew that I needed to get three different medical procedures done and because of the way my health insurance works with the deductibles and all that, it would make sense to get them all done during 2014.

Well, I dragged my feet and dragged my feet scheduling them and I wasn’t able to get them all done during 2014, so I’m going to end up paying the deductible twice basically because I didn’t think ahead.

And to me it’s just an example of how, even for folks who write about money and know what they ought to do, we still make mistakes sometimes.

Every day, MONEY contributing editor Farnoosh Torabi interviews entrepreneurs, authors and financial luminaries about their money philosophies, successes, failures and habits for her podcast, So Money—which is a “New and Noteworthy” podcast on iTunes.


More from Money.com

MONEY Taxes

You Just Got a Break If You Messed Up Your Obamacare Tax Credit

The IRS will give you more time to pay back any excess premium subsidies when you file your taxes.

Consumers who received too much in federal tax credits when buying insurance on the health law’s marketplaces last year got a reprieve of sorts from the Internal Revenue Service this week. Although they still have to repay some or all of the excess subsidies, the IRS won’t ding them with a late payment penalty if they don’t repay it by the April 15 tax deadline.

“They’re trying to make this work,” says Timothy Jost, a law professor at Washington and Lee University who’s an expert on the health law.

Under the law, people with incomes between 100% and 400% of the federal poverty level ($11,670 to $46,680 for an individual in 2014) who did not have insurance through their job could qualify for tax credits to make premiums more affordable. They could elect to have these subsidies paid in advance directly to the insurance company, and many did. A typical tax credit was about $3,000 annually.

The amount people received was based on an estimate of their 2014 income. At tax time, that amount has to be reconciled against consumers’ actual income on IRS Form 8962. If consumers or the marketplace underestimated their 2014 income, they may have received too much in tax credits and have to pay back some or all of it.

How much people have to repay is based on their income and is capped at $2,500. People with incomes over 400 percent of the poverty line have to repay the entire amount, however.

This penalty reprieve only applies to the 2014 tax year. The IRS will allow people to repay what they owe on an installment basis. But be forewarned: Interest will continue to accrue until the balance is paid off.

MONEY Financial Planning

The Most Important Money Mistakes to Avoid

iStock

Smart people do silly things with money all the time, but some mistakes can be much worse than others.

We asked three of our experts what they consider to be the top money mistake to avoid, and here’s what they had to say.

Dan Caplinger
The most pernicious financial trap that millions of Americans fall into is getting into too much debt. Unfortunately, it’s easy to get exposed to debt at an early age, especially as the rise of student loans has made taking on debt a necessity for many students seeking a college education.

Yet it’s important to distinguish between different types of debt. Used responsibly, lower-interest debt like mortgages and subsidized student loans can actually be a good way to get financing, helping you build up a credit history and allowing you to achieve goals that would otherwise be out of reach. Yet even with this “good” debt, it’s important to match up your financing costs with your current or expected income, rather than simply assuming you’ll be able to pay it off when the time comes.

At the other end of the spectrum, high-cost financing like payday loans should be a method of last resort for borrowers, given their high fees. Even credit cards carry double-digit interest rates, making them a gold mine for issuing banks while making them difficult for cardholders to pay off once they start carrying a balance. The best solution is to be mindful of using debt and to save it for when you really need it.

Jason Hall
It may seem like no big deal, but cashing out your 401(k) early has major repercussions and leads you to have less money when you’ll need it most: in retirement.

According to a Fidelity Investments study, more than one-third of workers under 50 have cashed out a 401(k) at some point. Given an average balance of more than $14,000 for those in their 20s through 40s, we’re talking about a lot of retirement money that people are taking out far too early. Even $14,000 may seem like a relatively easy amount of money to “replace” in a retirement account, but the real cost is the lost opportunity to grow the money.

Think about it this way. If you cash out at 40 years old, you aren’t just taking out $14,000 — you’re taking away decades of potential compound growth:

Returns based on 7% annualized rate of return, which is below the 30-year stock market average.

As you can see, the early cash-out costs you dearly in future returns; the earlier you do it, the more ground you’ll have to make up to replace those lost returns. Don’t cash out when you change jobs. Instead, roll those funds over into your new employer’s 401(k) or an IRA to avoid any tax penalties, and let time do the hard work for you. You’ll need that $100,000 in retirement a lot more than you need $14,000 today.

Dan Dzombak
One of the biggest money mistakes you can make is going without health insurance.

While the monthly premiums can seem like a lot, you’re taking a massive risk with your health and finances by forgoing health insurance. Medical bills quickly add up, and if you have a serious injury, it may also mean you have to miss work, lowering your income when you most need it. These two factors, as well as the continuing rise in healthcare costs, are why a 2009 study from Harvard estimated that 62% of all personal bankruptcies stem from medical expenses.

Since then, we’ve seen the rollout of Obamacare, which signed up 10.3 million Americans through the health insurance marketplaces. Gallup estimated last year that Obamacare lowered the percentage of the adult population that’s uninsured to 13.4%. That’s the lowest level in years, yet it still represents a large number of people forgoing health insurance.

Lastly, as of 2014, not having health insurance is a big money mistake. For tax year 2014, if you didn’t have health insurance, there’s a fine of the higher of $95 or 1% of your income. For tax year 2015, the penalty jumps to the higher of $325 or 2% of your income. While there are some exemptions, if you are in a position to do so, get health insurance. Keep in mind that for low-income taxpayers, Obamacare includes subsidies to lower the monthly payments to help afford health insurance.

MONEY Benefits

Why Some Same-Sex Couples May Have to Marry Now

Same-sex wedding toppers on top of aspirin bottle
Sarina Finkelstein (photo illustration)—Getty Images (2)

With same-sex marriage legal in 35 states and D.C., a few employers are starting to roll back back health insurance and other benefits for domestic partners.

Until recently, same-sex couples could not legally marry. Now, some are finding they must wed if they want to keep their partner’s job-based health insurance and other benefits.

With same-sex marriage now legal in 35 states and the District of Columbia, some employers that formerly covered domestic partners say they will require marriage licenses for workers who want those perks.

“We’re bringing our benefits in line, making them consistent with what we do for everyone else,” said Ray McConville, a spokesman for Verizon, which notified non-union employees in July that domestic partners in states where same-sex marriage is legal must wed if they want to qualify for such benefits.

Employers making the changes say that since couples now have the legal right to marry, they no longer need to provide an alternative. Such rule changes could also apply to opposite-sex partners covered under domestic partner arrangements.

“The biggest question is: Will companies get rid of benefit programs for unmarried partners?” said Todd Solomon, a partner at McDermott Will & Emery in Chicago.

It is legal for employers to set eligibility requirements for the benefits they offer workers and their families — although some states, such as California, bar employers from excluding same-sex partners from benefits. But some benefit consultants and advocacy groups say there are legal, financial and other reasons why couples may not want to marry.

Requiring marriage licenses is “a little bossy” and feels like “it’s not a voluntary choice at that point,” said Jennifer Pizer, senior counsel at Lambda Legal, an organization advocating for gay, lesbian and transgender people.

About two-thirds of Fortune 500 companies offer domestic partner benefits, but only a minority is changing the rules to require tying the knot, said Deena Fidas, director of the workplace equality program at the advocacy group Human Rights Campaign.

Because same-sex marriage isn’t legal in all states, “many employers operating in multiple states … are retaining their partner benefit structures,” said Fidas.

Most companies making the changes, including Verizon, are doing so only in those states where same-sex couples can get married. And most give workers some time to do it.

“We gave them a year and a quarter to get married,” said Jim Redmond, spokesman for Excellus BlueCross BlueShield, which made the change for employees shortly after New York allowed same-sex unions.

Employers that offer domestic partner benefits — for both same-sex and opposite-sex partners — generally allow couples in committed relationships to qualify for health and other benefits upon providing documents, such as financial statements, wills, rental agreements or mortgages, proving they are responsible for each other financially.

Such benefits were particularly important before the federal health law barred insurers from rejecting people with pre-existing medical conditions.

“We had clients over the years who were living with HIV … the only health insurance they had, or had hope of getting was their partner’s, through a job,” said Daniel Bruner, director of legal services at the Whitman-Walker Health clinic in Washington D.C. “Now folks have more health insurance options.”

After the Supreme Court ruled the federal Defense of Marriage Act unconstitutional in 2013, the portion of the health insurance premium paid by employers on behalf of the same-sex spouse was no longer taxable under federal rules, although state taxes often applied where such marriages were not legal. When state marriage laws change, so do those tax rules.

In Arizona, Dena Sidmore and her wife, Cherilyn Walley are saving more than $300 a month in taxes on the health insurance from Walley’s state job, which covers them both. The savings came after the state’s same-sex marriage bar was thrown out by the courts in October.

They didn’t marry for benefits. They already had coverage under domestic partner requirements affecting Arizona state workers. They simply wanted to be married. Indeed, they tied the knot in September 2013, after driving all night to Santa Fe, N.M., where same-sex marriage was legal.

“It was lovely,” Sidmore said of the ceremony at the courthouse. But for her, the real change came when Arizona’s bar on same-sex marriage was overturned by the courts. She remembers thinking: “This is real. It’s not just a piece of paper.”

After the courts lifted the same-sex marriage ban, Arizona dropped its domestic partner program. State workers had until the end of last year to marry if they wanted to keep a partner on benefits.

Sidmore has no objection to employers requiring a marriage license for benefits because “spousal benefits require marriage,” although she thinks there should be exceptions for older residents who might face the loss of pensions or other financial complications if they remarry.

Benefit experts recommend that employers consider what it might mean for workers if benefits are linked to marital status — especially those that operate in states where same-sex marriage is not legal.

While some couples, like Sidmore and Walley, may be willing to travel to tie the knot, others may not want to, or may be unable to afford it. Additionally, some workers may fear if they marry, then move or get transferred to a state where same-sex marriage is barred, they would face discrimination.

Joe Incorvati, a managing director at KPMG in New Jersey, married his partner, Chuck, in 2013 when it became an option. “We’d been together for 38 years, so it just seemed natural,” he said.

KPMG offers domestic partner benefits and does not require employees to be married for eligibility. While he’s comfortable in New Jersey, Incorvati said it could be a problem if his company wanted to transfer him to a state where same sex marriage is not legal.

Even though his work benefits would remain the same, “Would I have the same rights as in New Jersey?” Incorvati asked. “The answer may be no.”

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

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