Affordable Care Act (Obama Care)
Yesterday the ACA healthcare exchanges formally opened. For most of us who have health insurance, there is nothing we need to do. However, there are certain groups of people and businesses that need to pay attention and make some decisions between now and March 31, 2014.
If your employer offers you health insurance, not much will change, unless the company changes the plan being offered. Those with individual policies can still keep their coverage, but if you have a pre-existing condition, the exchange may offer you cheaper coverage, as the ACA is not allowed to discriminate based on your health condition. In general, it appears that older individuals may get more affordable coverage compared to younger individuals, but it is difficult to generalize, as pricing varies depending on State, county and even zip code in some instances. There are tax subsidies available to individuals and families, depending on your income.
If you do not have insurance by January 1, 2014, you might face a fine. In 2014 it is 1%of annual income or $95, whichever is higher. This fine is scheduled to go up every year. You might be exempt if you have been uninsured for less than 3 months of the year, have income too low to file a tax return or are a member of an Indian tribe.Children up to the age of 26 can still be insured on their parents policy.
Small businesses with fewer than 50 full-time equivalent employees (more than 30 hours/week) don’t have to do anything differently in 2014. If they offer coverage, they can continue to do so. If they don’t offer coverage, they are not legally bound to offer it. However, they have the opportunity to purchase insurance through new marketplaces called the SHOP system. All the policies sold on SHOP have to cover essential basic healthcare services, which cannot discriminate against companies with workers with high medical bills. Small businesses with fewer than 25 employees could qualify for a tax credit to help pay for insurance.
New Mexico opted to run its own healthcare exchange, but because it wasn’t planned to be ready by the roll out date, has opted to go with the federal exchange until the State’s exchange is up and running. However, the New Mexico Health Insurance Exchange website, www.NMHIX.com, states that its SHOP component is operational.
For more information, start at the official federal site, www.HealthCare.gov. Good luck!
Yesterday the federal government “ran out of money”. A partial shutdown is not as scary as it seems. Money still flows into the federal coffer, Social Security checks go out,and interest payments on the national debt continue to be made. Essential services are open like the post office, weather service, prisons, food inspections, air traffic control, the military and border control. On the downside, passport services and national parks are closed and non-essential federal workers get furloughed. Historically government shutdowns have not significantly affected the market and economy overthe long-term, but the pundits are working overtime to scare investors about the ramifications. If you are a federal worker, who may be furloughed, hopefully you have a sufficient emergency fund to tide you over during this period.
Ten Commandments of Successful Investing
Charles Ellis, in his book, Winning the Loser’s Game – Timeless Strategies for Successful Investing has 10 tips of financial wisdom to impart. I will try to paraphrase them:
- Save – spend less than you make
- Don’t Speculate – you are an Investor not a speculator
- Don’t invest for tax reasons – we hate to pay taxes, but take the big picture into account
- Your home is not an investment – you have to live somewhere, but taxes, insurance and maintenance costs are higher than we expect
- Avoid Commodities – they generally don’t keep up with inflation
- Find out how financial sales people are compensated – whose interests are they protecting – their pocket books or yours?
- Don’t invest in new or untried investments – chances are the sales person does not even understand how they work
- Don’t invest in bonds for safety – here I strongly disagree with Ellis. Bonds are for safety and stability.
- Commit to Financial Goals and an Asset Allocation – then stick to these goals
- Distrust your Feelings – our emotions are our worst enemy when investing. It leads us to buy high and sell low.
In August my business management group meeting was held in Chicago. It was great to meet the 3 new members of the group and we all learned a lot. Over the Labor Day weekend, Roberta and I escaped to Silver City. We stayed in a cute cabin overlooking the historical Georgetown silver mining settlement – the quiet was wonderful. I vowed never to run another half-marathon again, but Roberta coaxed me into it. Last weekend we ran the “Run to Break the Silence” 20K trail run, on the scenic Sandia Pueblo lands. Once again, I vow to never run that distance again!
Contact me for a review meeting if needed. Please plan early for setting up an appointment. Feel free to pass this newsletter on to whoever may be interested