5 Things You Should Know Before You Plan a Funeral  

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Illustration by Kelsey Wroten
Illustration by Kelsey Wroten

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

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

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

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

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

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

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

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

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

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

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

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

2. How to Shop for a Funeral Home

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

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

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

3. The Funeral Home’s Licensing Status

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

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

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

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

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

4. The Budget

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

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

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

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

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

5. Your Rights and Protections

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

The rule grants you the right to:

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

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



Guide to Enrolling in an Obamacare Plan on Healthcare.gov

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Desperate young couple with many debts reviewing their bills. Financial family problems concept.

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

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

What terms should I know before I apply?

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

obamacare 2017

Health care costs

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

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

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

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

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

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

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

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

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

Total annual cost:

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

Plan Types

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

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

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

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

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

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

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

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

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

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

Cost Savings

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

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

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

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

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

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

You are responsible for the greater of the two.

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

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

Government Health Plans

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

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

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

Who can buy insurance through a health care exchange?

family in debt

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

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

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

Will I qualify for a health care subsidy?

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

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

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

How can I calculate my subsidy?

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

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

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

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

For an Individual

% of Poverty Line (2016) Income (Based on 2016 Federal Poverty Line) Max Silver Premiums as a Percent of Income Max Monthly Silver Plan Premium Cost after Subsidies Special Notes
100%-138% Lower 48 States:
2.03%-3.35% Lower 48 States:
Check if you qualify for expanded Medicaid.
139%-250% Lower 48 States:
3.41%-8.18% Lower 48 States:
You may qualify for cost-reduction subsidies if you purchase a silver plan.
251%-400% Lower 48 States:
8.21%-9.66% Lower 48 States:
If you earn more than 400% of the poverty line, you will not qualify for subsidies.

For a Family of Four

% of Poverty Line (2016) Income (Based on 2016 Federal Poverty Line) Max Silver Plan Premiums as a Percent of Income Max Monthly Silver Plan Premium Cost after Subsidies Special Notes
100%-138% Lower 48 States:
2.03%-3.35% Lower 48 States:
Children will qualify for CHIP. Check if you qualify for expanded Medicaid.
139%-200% Lower 48 States:
3.41%-6.41% Lower 48 States:
Children in 46 states will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.
201%-250% Lower 48 States:
6.45%-8.18% Lower 48 States:
In some states, children will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.
251%-400% Lower 48 States:
8.21%-9.66% Lower 48 States:
In a limited number of states, children qualify for CHIP up to 375% of the poverty line. If you earn more than 400% of the poverty line, you will not qualify for subsidies.

What circumstances might affect my eligibility for a subsidy?


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do I apply for insurance?

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

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

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

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

A note on state-run health care exchanges

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

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

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

Family and Household Info

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


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


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

Income and Deductions

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

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


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

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

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

Additional Information

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


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

Completing Enrollment

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


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

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


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

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


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

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

Where do I get help for free?

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

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

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

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

What happens if I don’t apply for insurance?

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

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

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


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

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

What happens if my plan was canceled?

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

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

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

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

Work to make the most informed decision possible

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


College Students and Recent Grads, Life Events

Will You Get Real Value from an Online Degree?

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Will You Get Real Value from an Online Degree?

In search of higher education, lucrative careers and better credentials, nearly 6 million Americans are enrolled in some kind of online course, according to data from the Online Learning Consortium. Distance learning programs tout online courses as an efficient and low-cost way to complete a degree. But are they worth the time and financial investment?

Here’s what to consider before you enroll in an online learning program:

What it really costs

For students looking to complete distance learning programs at in-state schools, the cost probably won’t vary much from traditional students attending classes in person. However if you’re comparing for-profit online schools to out of state public universities, for-profit schools tend to have lower tuition costs on average ($15,610 vs. $23,893 per year). Before you enroll in a for-profit university you should note that it is more difficult to obtain scholarships and grants when studying at a for-profit school.

Degree mills (for-profit schools that aren’t accredited such as American Central University or Golden State University) offer the lowest degree prices, but these institutions offer little in the way of education, and they drag down the appeal of all online degrees. Check to see if your school is accredited here.

A lower sticker price for an online degree might not translate to a lower out of pocket to you as a student. Before committing to an online institution, consider cost saving measures such as attending a Community College for two years and applying for scholarships at an in-state, public school. In many cases, this will end up being your lowest cost option.

However, if distance learning is right for you, you will qualify for subsidized loans if you attend any accredited school (this includes some for-profit online schools). If the school you plan to attend is accredited by one of the national or regional accrediting commissions (see this list to learn more), you will be eligible to receive the Pell Grant and Stafford or Perkins loans.

Online Degree Completion

Students in online only programs complete courses and degrees at a slightly lower rates than students in traditional programs. This may be due to a lower level of student support for online students, or the fact that more distance learners have both career and family demands in addition to their education.

Because online degrees have lower completion rates, you should ask yourself whether you have the time and resources that you need to complete your degree; if you don’t, it’s not worth the money. If your primary goal is to learn and continue your education, you may that Massive Open Online Course (MOOCs) through Khan Academy or Coursera fit your needs with negligible out of pocket costs.

What you won’t get from an online program

If you earn an online degree through a traditional university, employers will perceive your degree as on par with traditional degrees from that school. For example, a Master’s Degree in Statistics from Texas A&M is equally valuable if you earned the degree through their distance education program or while attending class on campus. However, not every employer views online for-profit universities favorably. Top tier online schools are working to change sentiments, but you should research the acceptance in your field before pursuing a degree from a for-profit institution.

Distance education programs offer fewer networking opportunities compared to traditional schools. Online students do not have as much access to professors or peers as traditional students which is a drawback during the learning process and the job search process, but recently, high quality online schools offer new technology to help their students network and job search.

You also shouldn’t expect as much hands-on help in your coursework as an online student. Distance learners need to be self-directed, and able to pick up complex concepts on their own. Students may need to teach themselves computer programs, and they will be expected to do labs or other physical projects on their own.

Advantages of online degrees

Online programs from top-tier online universities and not-for-profit universities offer high quality education that may increase your marketability. You can earn your degree with greater flexibility than in a traditional education model, and you may be able to earn your bachelor’s degree even while you hold down a full-time job and raise your family.

Depending on the school you choose and your financial aid package, an online degree may have a lower out of pocket cost compared to a traditional classroom setting. Online universities accept more transfer credits than traditional universities which can help you complete your degree faster and reduce your costs.

Especially for adults hoping to complete a degree, distance learning and online universities offer advantages that traditional schools cannot.

Is an online program for you?

The value of an online degree depends upon how you want to use it. If a degree will allow you to advance in your company or your industry, and you want to earn your degree while working then an online degree offers value above what a similarly priced brick-and-mortar school offers. Distance learners have increasing opportunities to study in a field that aligns with their personal and career goals.  Popular degrees for distance learners include healthcare administration, business administration, information systems and psychology, but hands on fields like nursing and elementary education continue to make inroads for students pursuing their degree online.

On the other hand, if you’re not a self-directed learner, or your industry frowns on online education then the money will be wasted. Degrees from non-accredited universities aren’t going to be worth the money for most people.

If you choose to pursue an online degree, be sure to compare the out of pocket cost to you (including fees), consider whether you have the time and resources to complete the degree, and line up your funding ahead of time. It’s also important to weigh your expected increase in income against the cost of the degree. Online degrees aren’t a slam dunk in value, but you may find that it’s the right choice for you.

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Reviews, Student Loan ReFi

DRB Student Loan Refinance Review

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Students throwing graduation hats

Updated October 26, 2016

DRB is a bank that offers a highly competitive student loan refinance product. In addition to the low rate, DRB offers some decent loan perks that sets it apart from others.

According to DRB, someone who refinances $100,000 has the potential to save up to $15,000 over the life of a 10 year loan. And in special circumstances like disability or financial hardship, DRB may completely forgive loans or allow for partial payments. Read on for the ins and outs of a DRB loan to see if it’s the right refinance for you.

Loan Details

DRB will refinance up to 100% of Federal, private and Parent PLUS loans. The minimum amount you can refinance is $5,000 and loan terms are available for 5, 7, 10, 15 and 20 years.

Fixed interest rates are available from 4.45% to 7.45% APR. Starting variable interest rates are available from 3.89% to 6.54% APR. If you choose a variable interest loan, the rate will fluctuate throughout the loan term depending on market conditions. Only consider variable interest if you can pay off your student loan refinance quickly. Otherwise, you might be taking too much interest rate risk since your interest has the potential to increase over time.

The interest rates above include a 0.25% discount for using auto-pay. You just need to set up automatic payment from any checking account in order to get the auto-pay discount.

[Look into refinance options on our table here.]

Loan Qualifications

You must be a working U.S citizen or permanent resident with a degree from an accredited U.S. school program to be eligible. In terms of creditworthiness, DRB requires you have the following:

  • Student loans in good standing
  • At least $54,000 of annual income
  • A credit score of 680 or above
  • A debt-to-income ratio below 40%
  • No late payments, collections or bankruptcies on your credit report

A cosigner is not required to be eligible for refinancing although you’ll probably need one if you only meet the minimum credit score or income requirements above. DRB does not have an official co-signer release program. However, a representative of DRB confirmed to MagnifyMoney that DRB will consider a co-signer release upon request of the borrower on a case by case basis.

DRB will ask for documents to backup the details of your application like photo ID, pay stubs, proof of graduation and student loan pay off statements.

Fees & Gotchas

DRB is very transparent with fees. There are no fees for origination or loan prepayment. There’s a late fee of 5% or $28 (whichever one is less) for payments that are over 15 days late. DRB also charges $20 for returned checks or electronic payments whether it’s due to insufficient funds or a closed account.

Pros and Cons

Low interest is the major pro of refinancing with DRB. Loan benefits like forbearance, deferment and loan forgiveness are other advantages. DRB may forgive loans if you die or if you can prove a significant reduction in income due to disability. Hopefully these situations don’t occur, but it’s good to know you and your family is covered if it does.

On a less morbid note, DRB offers full or partial forbearance of payments if you can prove that you’re going through financial hardship. You may also qualify to pay just $100 per month while you complete a full-time post-graduate training program like an internship, fellowship or residency. If you graduate less than 6 months before refinancing, DRB may allow you to defer payments for up to 6 months.

There aren’t many disadvantages of going with DRB other than it not having an official co-signer release program with explicit qualification terms. This may be a turnoff for cosigners since your loan will likely appear on his or her credit report until it’s repaid.


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Student Loan Refinance Alternatives

How does DRB stack up to other available student loan refinances?

SoFi has a higher rate cap for fixed interest and a higher starting rate cap for variable interest than DRB. SoFi currently offers variable rates from 2.23% to 6.28% APR and fixed rates from 3.50% to 7.74% APR (if you sign up for autopay). However, the SoFi refinance does come with a benefit comparable to DRB called unemployment insurance. If you’re laid off, SoFi will pause your payments and help you find a new job.

SoFi logo

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CommonBond has similar rates to DRB. Fixed interest rates are available from 3.50% APR and variable interest rates are available starting at 2.23% APR (if you use autopay). Although to qualify for the CommonBond refinance you must have obtained a degree from one of the graduate programs on its eligibility list. On the other hand, DRB will refinance any loan (graduate or undergraduate) from an accredited program in the U.S.

Commond Bond bank

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Who Will Benefit Most From This Refinance?

The DRB refinance may work out really well for people who need to complete a post-graduate training program before finding a job in their profession. Since DRB allows for reduced payments in this circumstance, you’re given some leeway until you can earn your full professional salary. Still, you should compare the benefits of any Federal loans you have to the benefits of a refinance before making a decision.Customize Student Loan Offers with MagnifyMoney tool

 *We receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.  



What You Should Know About DirecTV NOW — AT&T’s New $35 Streaming Platform

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

TV Television production concept. TV movie panels

AT&T finally announced the price for DirecTV NOW, it’s hotly anticipated streaming service for cord cutters. The “mobile-centric platform” will cost $35 a month and it will be available by the end of November.

In the true spirit of innovation, the price of the new service — which offers on demand and live programming from 100 premium channels — was announced in a Facebook Live interview with The Wall Street Journal on Tuesday.

DirecTV NOW, which was first announced in March, can be viewed on smartphones, tablets, smart TVs, set-top boxes, PCs, and other devices. The service will include channels from networks  like A+E Networks, Scripps, Fox and NBCUniversal, according to Variety.

AT&T’s new service will directly compete with live services like Sling TV, which offers 30 premium channels at $20 a month. Like Sling, DirecTV Now will also have add-on options. However, the $35 price might sound steep to folks used to paying between $7 to $15 per month for on-demand streaming services like Netflix, Hulu and HBO NOW.

Is it worth it?

AT&T offers more than three times as many channels as Sling, which could make it worthwhile to Sling customers feeling bored by their current options. The fact that it offers live streaming of TV shows gives it an edge over streaming services like Hulu and Netflix, which air shows and movies with a delay.

DirecTV NOW could also offer mobile TV viewers a big break on their cell phone bills. AT&T will not charge viewers for using data to watch shows on the platform.

AT&T Chief Executive Randall Stephenson said the service’s low pricing is intended to help “drive down prices in the marketplace.”

The news comes just days after the company inked a $85.4 billion deal to buy Time Warner in one of the largest media deals to date. The merger is expected to be carefully scrutinized by federal regulators.

The company has yet to release more information about DirecTV Now, but you can check AT&T’s DirecTV site for updates.



5 Things Millionaires Understand About Investing

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retirement retire millionaire happy couple on the beach

The idea of investing like a millionaire can seem complex — and, for some, a little intimidating. But let’s bust some myths about becoming a millionaire. There are no top-secret ingredients needed. When you figure out their investing recipe, you’ll find out the habits that helped millionaires achieve seven-figure status are remarkably simple.

And no, you don’t need a finance degree, access to a Bloomberg Terminal, or even much investing knowledge at all to invest your way to a million bucks. According to a 2014 Spectrem Group survey, 20% of millionaires said they did not consider themselves knowledgeable about investing, and 60% of those who consider themselves fairly knowledgeable admit they still have a lot to learn.

Here are a few ways you can invest like a millionaire right now.

Millionaires know how to tune out the noise and stay focused

Millionaires know how to tune out the noise and stay focused

Millionaire investors know that when it comes to money, perception is not always reality. No matter what the headlines on cable news networks or social media say, you should never let those messages sway your investing strategy.

Take Twitter (TWTR), for example. When the social media site went public in November 2013, the media covered the event obsessively. And when Twitter debuted on the stock exchange, its stock value shot up 73% the first day, making it the most traded stock of the day. But what happened since then? Twitter has lost more than 55% of its share price. A $1,000 investment in Twitter back in 2013 would be worth less than $400 today. CNBC’s Jim Cramer was still singing Twitter’s praises back in June 2015. Had you invested then, however, you would have lost 13% of your money.

The same knowledge works in reverse. When the market is performing poorly, it feels logical to get your money and run. But you could actually lose money in the long-term. Smart millionaires develop an investment strategy, and they stick to it (for the most part) come what may. Checking up on investments and reading too much into headlines can actually be harmful. It is best to set up recurring dates to check your investment strategy in advance instead of being reactionary and checking only when you see good or bad news.

Millionaires know success doesn’t have to be complicated

Millionaires know success doesn’t have to be complicated

Your investment strategy does not have to be complex in order to be effective. There is nothing wrong with a simple investing strategy; in fact, the most successful strategies can be explained to children.

For example, famous investors like Warren Buffett and Jack Bogle have long championed the merits of investing in index funds. While a regular mutual fund attempts to pick a select group of the best companies, an index fund on the other hand allows investors to own a share of every company. The strategy behind index funds is that you are able to invest in many companies at once, without putting all of your eggs in just a few baskets.

Or, look at it this way: Instead of trying to find all the best-selling books individually, you can just buy a piece of every book in the bookstore. Barnes & Noble doesn’t shut down every time one book fails to sell well, because it has thousands of others on the shelf to balance out its risk.

Not only do index funds often beat their more complex (and expensive) counterparts, they’re actually the most common investment choice for millionaires.

Millionaires know when to act their age

Millionaires know when to act their age

Your investment portfolio is a living, breathing organism that will change over time and need to be adjusted accordingly. Asset allocation — the amount of money you have in stocks and bonds — will be responsible for the bulk of your investing success.

If you’re in your 20s or 30s, keeping 80% to 90% of your portfolio in stocks may be fine depending on how you feel about risk. But your allocations should shift over time, becoming increasingly more conservative with age. It’s generally considered unwise to have so much of your investment funds invested in stocks when you are five to 10 years away from retirement. Millions of people during the Great Recession were hurt tremendously by the market crash because they were too heavily allocated in stocks.

One rule of thumb to check your allocation is to subtract your age from 110. Doing so should give you the percentage you should be investing in stocks. Someone who is 35 years old, for example, should have about 75% of their money in stocks and 25% in bonds. Though it isn’t a perfect rule of thumb, it does give you a general idea of whether you’re going in the right direction.

Again, your risk tolerance is almost as important as your allocation. If you are 90% allocated in stocks and you wake up in a cold sweat each night because you’re worried about the market, you might be better off allocating more into bonds. Of course, you might miss out on big gains when the stock market does well, but at least you’ll be able to sleep at night. An easy way to invest your age is to invest in target date funds. These funds are tied to your estimated retirement date and their allocations will automatically adjust as you age.

The key is staying invested even during the down times. Don’t panic because of a drop in the market. In most cases if you’re properly allocated, you should have nothing to worry about in the long term.

Millionaires probably didn’t wait until they were millionaires to start investing

Millionaires probably didn’t wait until they were millionaires to start investing

You don’t have to wait until you have a lot of money to get started in the market.

If a worker were to save just $5,000 a year between ages 25 and 65, it would be possible to become a millionaire. That breaks down to about $417 per month. If you’re putting this in a 401(k), you could be getting a match, meaning you wouldn’t have to put in the full $417. If $417 still feels like a lot of money, you can invest less, but you’d likely have to do it for a longer period of time. There is nothing wrong with starting small, but no matter what you have, it is imperative that you start.

Most workers would do well to open a 401(k) and set aside a percentage of their paycheck each month. If your job offers a matching 401(k), you should at least max out your contribution to capture the full match. That match is like a guaranteed return on your money, something the stock market can’t offer. If you aren’t quite ready to explore 401(k) or IRA options, consider saving a small amount of your pay each month.

Millionaires know cash isn’t always king


As stated earlier, we have a natural aversion to risk. There are many people who feel it is in their best interest to wait until it’s the “right time” to invest or would rather just invest in something with a much lower return because it feels safer.

In their latest guide to retirement, the folks at J.P. Morgan show how investing in cash can seriously limit your ability to grow your wealth.

Let’s start with Noah: He is very conservative. He invests in no individual stocks and no mutual funds. He’s just afraid of losing his money. From ages 25 to 65 Noah invests $10,000 every year in very safe investments like money market accounts and CDs. Assuming he gets a generous average return of 2.25%, Noah would have $652,214; he put in $400,000 of that amount on his own.

Quincy on the other hand also starts investing $10,000 at age 25 each year and stops at age 35. Quincy decides to take on more risk by investing his money in mutual funds. With an average return of 6.5%, he would have $950,588 by age 65!

Though Noah invested four times the amount of money, he’s still nearly $300,000 behind Quincy. Millionaires know the key to investing isn’t to avoid all risk, but instead to take the right amount of risk given the situation.

Ready to make your first million? Check out our tips on how to buy your first stock and kickstart your 401(k).



The Unfulfilled Promise of ‘Smart’ Credit Cards

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

plastc card

The idea seemed brilliant in its simplicity: Combine all the credit cards in your wallet into one slick, card-sized gadget with a chameleon-like magnetic stripe that could be swiped anywhere. All-in-one cards promised the end of bulging wallets forever.

Coin, the first well-funded entrant into the category, made a huge first impression thanks to a slick social media campaign and viral videos — one was seen 10.2 million times on YouTube. Imitators like Plastc and Swyp jumped in on the excitement and into the fray.

Frank Barbieri, a tech enthusiast and investor, was among the first to spot and share an ad for Coin.

“I was excited about the promise,” said Barbieri, who paid $50 on the spot to get in line to be among the first Coin customers.

The company said it wanted to raise $50,000 via pre-orders when it opened the doors on Nov. 13, 2013.  It reached that goal — theoretically, 1,000 orders — within 47 minutes.

But minutes have turned into hours, days, and years … and those early enthusiasts are still waiting for their one card to rule them all. Coin has come and gone. Its wearable payments technology was sold to FitBit in May, and the company stopped producing its flagship product. What’s left of the category seems little more than Facebook pages where frustrated consumers beg for the status of their pre-orders.

Failure to Launch


Plastc, which was considered a close competitor to Coin when it launched in October 2014, is currently taking orders for its $155 product but has yet to ship a product. The company says it has 80,000 pre-orders and has raised $9 million in revenue since its launch. But it has repeatedly disappointed consumers with delays. Earlier this year, the ship date was bumped from April to August or September, according to a message attributed to CEO Ryan Marquis and posted on several online venues, including Reddit. The message offered consumers an opportunity to get a refund, but Marquis urged folks to be patient.

Graphic For Story Card


“I hope you stick around. Plastc Card is going to be an AWESOME product,” he wrote.

In July, the company announced another delay, blaming a typhoon that wreaked havoc with its parts suppliers in Asia. The release date was pushed into the fourth quarter of 2016.

When we reached out to Plastc, the firm said it was shipping orders “in late Q4 (Nov/Dec) of this year.”   But separately, CEO Ryan Marquis said on a Facebook video released in late September that only a small group of buyers would receive their cards this year, as part of a test group, and the rest wouldn’t be shipped until next year.

“Stop lying to your (way too) loyal customers about when this outdated product is going to ship,” wrote Steve Bierfeldt on the firm’s Facebook page. Bierfeldt, a 30-something who lives in the New York City area, told me he ordered the product more than a year ago. After this latest delay, he requested a refund.

During a Facebook Live chat on Sept. 29, 2016, Plastc CEO Ryan Marquis apologized for production delays.
Plastc CEO Ryan Marquis apologized for production delays during a Facebook Live chat on Sept. 29, 2016.

“I hope you stick around.”

“They’ve missed 3 or 4 public deadlines, and there is nothing to indicate they have a working prototype, much less a finished product,” Bierfeldt said. “It certainly seems they are stringing along customers and hoping the bottom doesn’t drop out. I hope they can pull it together because the idea of the product is a good one.”

Plenty of Plastc consumers aren’t convinced the product will ever arrive, and aren’t shy about complaining. On Plastc’s Facebook page, the firm is currently offering a T-shirt giveaway, leading another buyer to write, “Want my card not a damn T-Shirt.”

Plastc did not answer additional questions about the consumers’ frustration.

Michigan-based Stratos card got a lot of attention when it launched and began shipping some all-in-one cards in May 2015, but in another sign of how tough the market is, the firm nearly went under less than a year later. At the 11th hour, Stratos sold to Ciright One, a Pennslyvania-based firm working on a similar product. Ciright’s “One” card will pitch a slightly different angle, promising to help consumers keep track of their gift card balances, while also allowing use of credit cards.  The firm’s website says its One Card will ship in 2017.

Bad Timing and Mixed Results

Bad Timing and Mixed Results
Plastc, which is currently taking orders for its $155 product, says it has 80,000 pre-orders and has raised $9 million in revenue. But it has repeatedly disappointed consumers with delays

Why are all-in-one cards, and their elegantly simple idea, such a dud? There are plenty of reasons.

The key technology involved, which predates Coin, is called “dynamic magnetic stripe.” Installed on a gadget like Coin, it would theoretically allow consumers to load multiple cards onto the same device.  Then it would change, chameleon-like, so it would look like the original bank-issued piece of plastic to any point of sale terminal. Fine so far.

But Coin and its ilk had bad timing. Barbieri was lucky enough to get an early version of Coin, but he found he could hardly use it anywhere. Just as Coin arrived, stores began abandoning the magnetic stripe in favor of EMV chip debit and credit cards. Coin had no way to deal with that.

“So it was a complete bust. [I] had to carry cards anyway,” Barbieri said.

But the chip issue is just the beginning of the problem faced by all-in-one card makers, says James Wester, a payments analyst at IDC Financial Insights. He’s not surprised that gadget makers shipwrecked while trying to change the way consumers spend money. Many tech firms have run aground before.

“Trying to participate in the payments space is very hard,” Wester says. “A lot of folks who try, find out the hard way.”

For starters, Coin and its imitators had to do the near-impossible: compete against a product that’s free and simple. Bank plastic doesn’t cost anything and works pretty much immediately. Cards like Coin cost money and have to be loaded and maintained.

“Is [carrying too many cards] a problem worth paying $50 to solve?” Wester asks. “When your largest competitor is a free product, that’s going to be really hard.”

As is clear from the continuing angst over conversion from magnetic stripes to chips — not to mention the fits and starts suffered by giant entrants Apple Pay and Google Wallet — old consumer payment habits die very hard. People don’t want to have to think about how they spend money; they just want it to work.

Coin, which had shipped two versions of its product, gave up earlier this year and sold its technology to Fitbit. A message sent to CEO Kanishk Parashar wasn’t returned.

Silver Linings

The long-awaited Swype card shipped its first batch of cards this summer, after prolonged delays. However, the card has one major flaw: it is not EMV chip-enabled.

Swyp shipped its first batch of long-awaited cards this summer after prolonged delays. Users are already complaining about the card’s major flaw: it is not EMV chip-enabled.

Not that all all-in-ones are giving up. Swyp, which promises a similar product it calls the “smart wallet,” shipped a batch of cards this summer to consumers who pre-ordered them.  But these cards suffer from the same problem as Coin’s first batch: they only work as magnetic stripe cards, and can’t be used to complete EMV chip transactions.

Swyp is no longer taking pre-orders for them.  The firm says on its website that the cards will go on sale next year. It also says Swyp will support both EMV and NFC in the future, but doesn’t say when.

Wester, who comes across as very cynical of all-in-one cards, thinks that firms like Plastc might actually have a window of opportunity created by the current chaos in payments. Consumers are still frustrated by the clunky changeover to chip credit and debit cards, and the associated slowdowns at checkout. Adoption of mobile phone payment or other schemes using wireless Near Field Communication (NFC) tap-and-pay technology has been sluggish too.

NFC-enabled plastic allows “contactless credit cards,” which are popular in Europe, but are nearly unavailable in the U.S. And that could be an opening for a card like Plastc. (On its site, the firms says it will support NFC, but not chips, at launch). Tap-and-pay NFC transactions can be nearly instantaneous, which might attract consumers and create a value proposition, Wester said. And if they are integrated into wearable devices, which is Fitbit’s master plan, they could give runners an easy way to grab a bottled water without slowing them down.

Still, Wester repeated many times, creating a brand new form of payment is among the most challenging areas of technology innovation. It’s so challenging that he offers his entrepreneurial friends this advice:

“If you have money to burn on a smart idea, don’t go into payments,” he said. And if you have money to burn on a product, consider spending it on something other than a pre-order for a payments gadget.

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College Students and Recent Grads, Featured

What To Do if a Student Loan Refinancer Rejects You

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What To Do if a Student Loan Refinancer Rejects You

After researching the pros and cons of refinancing student loans, you might be excited to go through with the process. Perhaps you’re looking to lower your interest rate, or you want to release a co-signer from a student loan.

While you may be set on refinancing your student loans, submitting an application isn’t a guarantee of approval. When you apply, the lender will likely take your credit, income, other debts, employment status, and possibly other factors into account.

But a denial on your first application doesn’t mean you’re locked out from ever refinancing. Instead, take the time to understand what influenced the decision and determine your best next step. 

Find Out Why Your Application Was Denied

Student loan refinancers look at many aspects of an applicant’s personal and financial life when deciding whether or not to approve a loan. The process sometimes starts with prequalification, when you share information about yourself and the company performs a soft inquiry on your credit. A soft inquiry lets the company examine your credit reports, but doesn’t affect your credit score.

You could find out you won’t qualify for refinancing during the prequalification phase. For example, based on your income and debt obligations, you could be turned down because you don’t have enough free cash flow — your monthly income minus monthly debts. Usually, lenders like to see your debt-to-income ratio under 40%.

Phil DeGisi, chief marketing officer at student loan refinancer CommonBond, says the company will tell you why you were denied if you don’t meet the company’s criteria. “If the person has questions or doesn’t understand what that means, they can call customer service and we’ll answer any questions they have about their application,” DeGisi said. Taking time to figure out why your application was turned down can help guide your path toward approval in the future.

You could prequalify for refinancing but wind up getting declined during the underwriting process. It’s at this point that the lender is likely to do a hard pull on your credit, which could affect your credit score. (Check with the lender before submitting for prequalification to see if it performs a hard or soft inquiry.) Amanda Wood, director of business and product development at online lender SoFi, says that could happen if “something you shared with us initially doesn’t match up after you’ve submitted more information, like pay stubs and identity verification.” Common examples include a recent bankruptcy or insufficient free cash flow. 

Try Again with Another Lender

You could still be approved from a different lender, even if you were handed a rejection already. “Everyone looks at different factors, and we all make different judgments on eligibility,” DeGisi said. However, there are some basic rubrics, and “the type of person that’s generally going to be most successful is someone who can afford their monthly payments.”

If you have terrible credit and poor cash flow, the chances of getting approved are quite small with any lender. You could get denied even if you have a stellar credit score because of poor cash flow, or if you have great cash flow but a poor credit history. Approval isn’t everything either; in some cases you might get approved, but the interest rate is so high it doesn’t make sense to go through with the refinancing.

Wood points out that regardless of whether or not you’re approved, “it’s a good idea to check out all your options and see not only who will approve your loan, but what companies offer the best rates and terms, and have low or no fees.” You may be able to determine a company’s fees by reading the fine print before submitting an application or going through prequalification.

Be cautious when applying for refinancing with multiple companies as the resulting hard inquiries could impact your credit score. However, it makes sense to go ahead and shop around within a certain time frame. Depending on the credit-scoring system, multiple hard inquiries for student loans made within 14 to 45 days are weighted as a single inquiry for credit-scoring purposes. That means the damage to your credit score will be kept at a minimum.

Increase Your Eligibility and Try Again Later

Take steps to improve your chance of being accepted later by working on the factors that you believe, or the company told you, impacted the denial decision.

Employment is often a requirement to qualify for refinancing, and if you don’t have a job, that’s where you’ll likely want to start. In the meantime, consider alternative federal student loan repayment plans mentioned below.

If you have a job but not enough free cash flow, you’ll need to focus on decreasing your monthly payments, increasing your income, or both. Perhaps you could negotiate a raise or take on an additional part-time job. The extra income will help one side of the equation, and you could increase your cash flow even more by putting the money toward debt payments.

Picking up a contractor side gig, such as driving for a ride-sharing company, might not factor into your income unless you’ve had the job for at least two years because the lender wants to see two years’ worth of tax returns. However, paying down debt with the extra money will still help your cash flow.

Your credit history and score are often important factors as well. Learning how your actions affect your credit, and what will help your credit going forward, are valuable lessons that can help you now and in the future.

Building a strong credit history filled with on-time payments can take a long time, but a few actions can have a more immediate effect. Start by reviewing your credit reports — you can get a free copy from each bureau at AnnualCreditReport.com — and disputing errors that could be hurting your credit. If you often have a high balance on your credit cards, keeping the balance below 20% to 30% of the available credit might help your score.

Look into Alternative Federal Repayment Plans

If you’re having trouble making student loan payments, refinancing might not be your only option. Both Wood and DeGisi recommend looking into the different federal repayment plans available to borrowers with federal student loan.

There are several income-driven plans that base borrowers’ monthly payments on their income. You may also be able to put your federal loans into deferment or forbearance, which lets you temporarily halt payments — although interest may still accrue. 

The Bottom Line

Refinancing student loans can help you save money on interest, lower your monthly payments, and allow you to release a co-signer from your loan. Receiving a denial letter is disappointing, but it doesn’t mean you’re boxed out for life. Try again later after improving your financial profile. In the meantime, if you’re having trouble making federal student loan payments, consider switching to a different payment plan.


Featured, Health

Here’s How Much More Your Obamacare Plan Will Cost in 2017

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

obamacare Affordable Care Act paper family

As widely expected, millions of Americans who rely on Obamacare for health insurance will face higher premium costs going into 2017. Premiums will rise 25% on average, according to a new report released by the U.S. Dept. of Health and Human Services (HHS). That’s one of the largest year over year spikes premiums have seen since the marketplace opened in 2013.

A 27-year-old woman who paid $242 for a benchmark silver plan in 2016 will now face a premium of $302 before tax credits. The silver lining here is those three words: before tax credits. Roughly 85% of Obamacare customers currently qualify for tax credits that can offset the cost of their premiums. The average subsidy in 2016 was $290/month. Tax credits can help offset rising premium costs, but they depend largely on household size and income. Beginning in November, consumers can calculate their tax credit for 2017 here.

How much premiums will rise depends largely on the state where consumers are shopping. In states where major insurers have exited the federal marketplace, premiums will see much higher gains. Further contributing to rising premiums, insurers are now raising prices in order to recoup losses they’ve incurred since entering the Marketplace in 2013. For example, BlueCross BlueShield reversed its decision to exit the marketplace in parts of Arizona in September. But as a condition of its decision to stay in the marketplace, the company said it would raise premiums by more than 50%. The company will have very little competition this year. Arizona lost a total of six major insurers this year, bringing the total number of insurers offering plans on the marketplace from eight to only two.

Arizona customers will feel those price hikes now. A 27-year-old in Arizona will pay a whopping 116% more for a benchmark silver plan in 2017, according to HHS.

Minnesota consumers relying on Blue Cross Blue Shield for coverage were also unlucky this year. Citing losses of $500 million over its three year run on the state’s exchange, BCBS decided in June to pull all but one plan from Minnesota’s state-run healthcare marketplace, leaving more than 100,000 Minnesotans without plans. The benchmark silver plan will rise an average of 59% for a 27-year-old in Minnesota going into 2017.

The silver lining

The government report focused largely on positive news for Obamacare consumers going into 2017.

Three-quarters of Marketplace customers in states using the federal health care exchange (Healthcare.gov) will be able to find plans with a monthly premium under $100 after factoring in tax credits. On average, these consumers will have 30 different insurance plans to choose from.

But the number of individual insurers offering plans in states has decreased in many states. Pennsylvania and Ohio each lost five insurers. Arizona lost six, the largest loss of any state. In several states, including Alaska, Arkansas, Wyoming, and South Carolina, only one major insurer offers plans on the marketplace. When there are fewer insurers operating in a given state, there is less competition and, as a result, potentially higher rates for consumers.

The Bottom Line:

This all means one thing for Obamacare consumers facing open enrollment Nov. 1: It is more important than ever to shop around and compare plans. If customers don’t shop around, they will simply be re-enrolled in their 2016 coverage. And if their 2016 plan is no longer available, the marketplace will stick them in a similar plan that could cost much more.

“In 2017, more than 7 in 10 (76 percent) current Marketplace enrollees can find a lower premium plan in the same level by returning to the Marketplace to shop for coverage rather than re-enrolling in their current plan,” according to the report.

MagnifyMoney has several tips for people who found out that their Obamacare plan has been dropped.

The open enrollment period of marketplace health plans is a crucial time to save and select the right coverage for your family’s needs. Open enrollment for Obamacare consumers begins November 1 and ends January 31. You can shop for plans in advance right now by visiting Healthcare.gov or your state insurance marketplace.

Source: HHS
Source: HHS


Featured, Investing

How the Stock Market Could React if Trump or Hillary Wins

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Whether Hillary Clinton or Donald Trump wins the U.S. election this November, the question for investors is how that victory might affect the stock market.

If Clinton wins, will health care companies like Aetna prosper? If Trump wins, will oil companies like Exxon and Shell, surge?

Historically, the presidential election has had little long-term impact on the U.S. stock market. “The market responds more to Fed policy and economic conditions more than who is president,” said Sam Stovall, Chief Investment Strategist with CRFA.

Stovall looked at how the stock market has fared under past U.S. Presidents. Overall, markets from 1945 to 2016 gained 9.7% under Democrat presidents and 6.7% under Republican presidents, according to his findings. But it’s hard to say whether those gains were tied directly to the person sitting in the Oval Office.

Nonetheless, decisions the president makes can have lasting impacts on certain industries, which could have an impact on market value for publicly traded companies in those industries.

stock market graphic

MagnifyMoney reached out to a handful of experts to find out how the market might look the day after Election Day (and beyond).

Here are their predictions:

If Trump wins …

Donald Trump

Stovall noted there’s a lot of concern that a Trump victory would send the market into a nosedive. But any dip in the market would eventually level out. “If it falls, it won’t be for too long,” Stovall says.

Trump has vowed to cut regulations across many industries and let markets rule, which could lift markets if he is elected, says Jeff Auxier, president and CEO of Lake Oswego, Ore.-based Auxier Asset Management. “The perception is he would cut taxes and regulations,” he says.

For example, Trump has said that he will allow insurance companies to sell insurance across state lines, which could boost their business.

The insurance industry would particularly benefit from Trump’s insistence on deregulation, Auxier suggests. Lately, the U.S. government has worked to block a pair of potentially lucrative insurance mergers — marriages between Anthem-Cigna and Aetna-Humana. All signs point to less federal regulation under a Trump presidency.

Most large financial service companies favor a Trump triumph. “Banks favor less regulation,” Stovall says. Under a Clinton administration, some of the mega banks such as Bank of America and Citigroup would likely face pressure to shrink. In other words, they may be forced to sell off businesses and reduce total assets. If regulations under Trump declined, Capital One Financial Corp. (COF) and Discover Financial Services (DFS) stand to gain.

Another industry that might celebrate a Trump victory is construction and engineering.

“Any companies associated with building roads and bridges like engineering firms will benefit,” Auxier says. Some specific companies that could see revenues rise include Granite Construction (GVA) and Sherwin-Williams (SHW), the paint company. Stovall says these companies could do well under Clinton as well, who has said she would spike investment in infrastructure.

Large oil and energy companies would welcome a Trump victory since they prefer less regulation, a hallmark of the Republican agenda, Stovall adds.

For-profit colleges have been battered by regulations and would bounce back in a Trump presidency, Auxier suggests. Under Trump, companies such as Apollo Education Group and Lincoln Tech could “come back from the dead,” he says.

If Clinton wins …

Hillary Clinton

If Clinton wins the election, renewable stocks would prosper and many health care stocks could do well. On the downside, biotech and retail stocks might falter.

Many retail stores and restaurants are concerned about a Clinton election, Stovall says. “Retail is worried about a $15 an hour minimum wage,” Stovall says, which Clinton has supported.

On health care, don’t expect much difference if Clinton is elected. “[A Clinton victory] is basically a continuation of the Obama administration,” Stovall says. “She represents more of the center of the two candidates and that would make for less uncertainty. Wall Street doesn’t like uncertainty.”

Despite that fact that Aetna cut back its Affordable Health Care coverage in 11 states, and Humana and UnitedHealthCare also reduced coverage, the Obama administration has noted that millions of people still maintain their health plans. Health care companies can opt out of offering coverage and then return, so it’s not necessarily a permanent trend.

Under a Clinton administration, large managed health care firms, HCA Holdings (HCA), Tenet Healthcare Corp. (THC), and Molina Healthcare (MOH) could prosper as more companies drop out of the marketplace, creating less competition.

But Stovall also notes that Clinton has focused on capping the rising cost of drugs, which could trouble the pharmaceutical industry.

If Clinton wins, “biotech will shake in their boots,” Stovall adds. Clinton has stressed that controlling drug prices and avoiding massive price hikes is critical. She has said she will look to regulate and curtail pharmaceutical price increases, specifically highlighting the recent controversy over Mylan’s decision to drastically increase the price of EpiPens.

“Biotech and pharma companies would likely suffer from promised price caps. However, hospital management companies will prosper since we won’t be back to the old pattern of uninsured individuals using emergency rooms as their primary care facilities,” Stovall asserts.

While a Trump victory could likely be good news for oil stocks, a Clinton victory could send renewable energy stocks soaring.

“Democrats would be pushing for renewable energy and putting more restraints on energy,” Stovall says. Hillary Clinton has supported President Obama’s Clean Power Plan, which intends to set a national limit on carbon pollution, and she has stated that “the Obama plan is a major step forward to combat climate change.”

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