personal finance – TheNewsHub

Health-care costs hit a post-pandemic high. These moves during open enrollment can help

Harsh — Mon, 14 Oct 2024 17:03:55 +0000

About 165 million Americans get their health insurance through work, and yet most don’t spend much time considering what their employer is offering in the way of benefits and what it will cost.

In fact, employees only spent about 45 minutes a year, on average, deciding which benefit options suit them best, a report from Aon found.

Open enrollment season, which typically runs through early December, is an opportunity to take a closer look at what’s at stake.

And, for starters, costs are going way up.

post-pandemic high, according to WTW, a consulting firm formerly known as Willis Towers Watson. U.S. employers project their health-care costs will increase by 7.7% in 2025, compared with 6.9% in 2024 and 6.5% in 2023, the firm said.

Because of higher costs, employers are considering new ways to adjust their plan offerings, WTW found.

To that point, 52% of companies said they plan to implement programs that will reduce total costs, and just as many intend to steer to lower-cost providers and sites of care, which may mean a narrower network of doctors from which to choose.

Currently, employers subsidize about 81% of health-care plan costs, on average, while employees pay the remainder, according to professional services firm Aon.

However, some of the higher costs will also inevitably get passed on to employees.

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Roughly one-third, or 34%, of employers expect to shift some of the expense to employees through higher premiums or by raising co-pays on high-deductible health plans in the year ahead, the WTW report found.

The cost per employee is expected to jump 5.8% on average in 2025, marking the third consecutive year of health benefit cost increases above 5%, after a decade of averaging only around 3%, according to a separate report by consulting firm Mercer.

“These are changes employees will feel,” said Beth Umland, Mercer’s research director of health and benefits.

For workers, health-care expenses are already high: Family premiums for employer-sponsored health insurance rose 7% this year to an average of $25,572, KFF’s 2024 benchmark employer health survey found. Workers are responsible for more than $6,200 of that amount, while employers pick up the rest.

“With cost increases reaching a post-pandemic high, companies are concerned about the burden it’s putting on their workforces, especially since it affects decisions about insurance coverage and care,” Tim Stawicki, WTW’s chief actuary of health and benefits, said in a statement.

health savings account, or HSA, which can help with additional health-care costs.

To be able to use an HSA, you must have an eligible high-deductible health plan. The IRS defines “high-deductible” as at least $1,650 for self-only plans or $3,300 for family coverage for 2025.

The IRS also determines the maximum allowed contribution each year: The new HSA contribution limit for 2025 will be $4,300 for individuals, up from $4,150 in 2024, and $8,550 for families, up from $8,300 in 2024. Employees 55 or older can make an additional $1,000 catch-up contribution over the IRS annual limits.

HSA contributions then grow on a tax-free basis, and the funds can cover out-of-pocket expenses, including doctor visits and prescription drugs, including expensive weight-loss medications.

As costs continue to go up, HSAs are a key safety net for managing these out-of-pocket expenses, WTW’s Ihrke said. Any money you don’t use can be rolled over year to year.

“Make sure you are considering how to put some money into that savings account so you can use it to pay for a doctor’s bill or save it for future years,” Ihrke explained.

policy, a move many advisors recommend.

Gallagher.

“More so than ever we are seeing employers looking to address the broadening needs in their workforce,” said Tom Kelly, principal in the Gallagher health and benefits practice, and “today’s employees are looking for more holistic wellbeing support.”

Ozempic is driving up the cost of your health care, whether you can get your hands on it or not

Harsh — Fri, 11 Oct 2024 15:45:20 +0000

About 165 million Americans rely on employer-sponsored health insurance, and yet workers may still not get the coverage they want — particularly when it comes to drugs such as Novo Nordisk’s weight-loss drug Wegovy and diabetes drug Ozempic.

About 1 in 3 employees are looking for more resources to combat obesity, according to a recent report by consulting firm Gallagher. Glucagon-like peptide-1 treatments such as Wegovy and Ozempic, which mimic hormones produced in the gut to suppress a person’s appetite, are considered game changers on this front.

These blockbuster weight-loss drugs have skyrocketed in popularity in the U.S. but are still not universally covered — even though “Americans have higher rates of obesity and diabetes and more behavioral health conditions today than ever before,” according to Trilliant Health’s “2024 Trends Shaping the Health Economy” report.

Cost is a key issue.

Although research shows that obesity drugs may have significant health benefits beyond shedding unwanted pounds, organizations representing U.S. insurers have said concerns remain about the high price involved in covering those medications, which are nearly $1,350 per month for a single patient.

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The price tag for GLP-1 medications, along with the large number of workers who could potentially benefit from using them, are a big driver of higher health-care costs, several studies show. Already, prescription drug costs jumped 8.6% last year, due in part to a surge in the use of GLP-1 drugs, according to a recent report by Mercer.

“Is that significant? Yes,” said Sunit Patel, Mercer’s U.S. chief health actuary.

Patients on these medications need to complete months, if not years, of continuous treatment.

“It becomes a lifelong drug,” said Gary Kushner, chair and president of Kushner & Company, a benefits design and management company. “That’s a pretty expensive commitment.”

expensive weight-loss drugs to some extent. Another 27% are considering adding coverage in the year ahead, according to the survey by Mercer.

Still, “not everyone who wants it can get it,” Patel said.

On the flip side, 3% of employers have recently removed coverage for these drugs and 10% of companies that currently cover them are considering removing them for 2025.

To improve access to weight-loss drugs, many businesses would have to pay even more — and health-care costs are already reaching a post-pandemic high, with employers and employees set to shell out significantly more for coverage in 2025, according to WTW, a consulting firm formerly known as Willis Towers Watson. U.S. employers project their health-care costs will increase by 7.7% in 2025, compared with 6.9% in 2024 and 6.5% in 2023.

Among employers’ greatest concerns was how to cover increasingly sought-after weight loss drugs, a Kaiser Family Foundation survey also found.

“Employers face the challenge of integrating these potentially important treatments into their already costly benefit plans,” Gary Claxton, KFF’s vice president said in a press statement.

Packages of weight loss drugs Wegovy, Ozempic and Mounjaro.

Picture Alliance | Getty Images

FDA-approved for the treatment of Type 2 diabetes.

“Most employers cover Ozempic for diabetes, they don’t necessarily cover it as an anti-obesity medication,” said Seth Friedman, pharmacy and health plans practice leader at Gallagher.

That makes it even trickier for employees to navigate whether they can get access to the drug and if it will be covered by their insurance. “They see that it’s covered but they get rejected,” Friedman said.

A 2023 survey by the International Foundation of Employee Benefit Plans found that 76% of the companies polled provided GLP-1 drug coverage for diabetes, versus only 27% that provided coverage for weight loss — leaving many workers shut out.

“Obviously, there is demand for them, and it’s not for diabetes, it’s for weight loss,” said Kushner.

“Looking ahead to 2025, about half of large employers will cover the drugs for weight loss,” said Beth Umland, Mercer’s research director of health and benefits. However, “even when they do, there are guardrails around who can use it.”

Demand for these treatments is only expected to increase — but the added controls for coverage are also helping to keep costs in check.

Nearly all employers have some sort of “utilization management” restrictions in place, such as a prior authorization requirement, according to Gallagher’s Friedman.

For some companies, that may mean workers must try other weight-loss methods first or meet with a dietitian and enroll in a weight-loss management program. Others may require a threshold for body mass index, or BMI, of at least 30, depending on how the plan is set up, Friedman said.

This information is available during open enrollment, which typically runs through early December.

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Pesky medical bill? Many people don't take a key step to manage that debt, study finds

Harsh — Fri, 20 Sep 2024 16:39:19 +0000

Consumers may feel their medical bills are unyielding, inflexible, set in stone. But that’s not always true: A new study shows patients can often reap financial benefits by disputing charges that seem erroneous or by negotiating for financial relief.

Of consumers who don’t reach out to question a medical bill, 86% said it’s because they didn’t think it would make a difference — but “the experiences of those who did reach out provide evidence to the contrary,” according to a new University of Southern California study.

About 26% of people who called because they disagreed with a charge or couldn’t afford to pay it got their medical bill corrected after the outreach, according to the study, published in August. Roughly 15% got a price reduction, 8% got financial assistance and 7% saw their bills canceled outright.

“Of the people who did reach out, most of them got some recourse through self-advocacy,” said report co-author Erin Duffy, a research scientist at the USC Schaeffer Center for Health Policy and Economics.

Researchers polled 1,135 U.S. adults from Aug. 14 to Oct. 14, 2023.

About 1 out of 5 respondents reported receiving a medical bill with which they disagreed or could not afford within the prior 12 months. About 62% of them contacted the billing office to address the concern.

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“If you can’t afford to pay something, or [if a bill] doesn’t seem right or match what your care experience was, you should call and ask questions about that,” Duffy said.

Savings can extend into the hundreds or even thousands of dollars, depending on factors like a patient’s health insurance and the type of medical visit or procedure, said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida.

analysis of medical bills for adults age 65 and older found that patients “face a complex billing system with a high likelihood of errors and inaccurate bills.” Often, inaccurate bills result from erroneous insurance claims and occur more frequently among consumers with multiple sources of insurance, the CFPB said.

Common errors included missing or invalid claim data, authorization and precertification issues, missing medical documentation, incorrect billing codes, and untimely filing of claims, the report found. Such mistakes contributed to the “rejection of claims that would otherwise be paid,” it said.

“[Bills] go all over the place,” said McClanahan, founder of Life Planning Partners and a member of CNBC’s Advisor Council. “And there’s no transparency or rhyme or reason for how [providers] decide to charge.”

Doing nothing and avoiding payment of medical bills is likely not a good course of action: It could have negative financial consequences, such as late fees and interest, debt collection, lawsuits, garnishments, and lower credit scores, according to a separate CFPB resource.

“If something seems egregious, question it,” McClanahan said.

request an itemized bill from the provider or hospital, and look for errors or duplicate charges, according to PatientRightsAdvocate.org. Research the fair market price for a service and use that information to negotiate, the nonprofit group said.

If something seems egregious, question it.

Carolyn McClanahan

physician and certified financial planner based in Jacksonville, Florida

The phone number for your medical provider’s accounting or billing office will be on your billing statement, the CFPB said.

Here are three other questions to consider asking about your itemized bill, according to the regulator:

Do charges reflect the services you received?

If you have insurance, do the bills reflect the payment by your insurance and reflect what the provider understood would be covered?

Do any of the charges indicate a service was “out-of-network” when it wasn’t?

When calling a provider about a medical bill, keep a journal about the communication, McClanahan said. Write people’s names and what was discussed, and get a commitment of when you’ll hear back.

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Still haven't filed your taxes? Here's what you need to know

Diksha — Fri, 14 Apr 2023 20:07:40 +0000

New York
CNN
—

So far this tax season, the IRS has received more than 100 million income tax returns for 2022.

That means tens of millions of households have yet to file their returns. If yours is among them, here are some last-minute tax-filing tips to keep in mind as the Tuesday, April 18 deadline approaches.

Not everyone has to file on April 18: If you live in a federally declared disaster area, have a business there — or have relevant tax documents stored by businesses in that area — it’s likely the IRS has already extended the filing and payment deadlines for you. Here is where you can find the specific extension dates for each disaster area.

Thanks to many rounds of extreme weather in recent months, for instance, tax filers in most of California — which accounts for 10% to 15% of all federal filers — have already been granted an extension until Oct. 16 to file and to pay, according to an IRS spokesperson.

If you’re in the armed forces and are currently or were recently stationed in a combat zone, the filing and payment deadlines for your 2022 taxes are most likely extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or left) the combat zone. This IRS publication offers more detail.

Lastly, if you made little to no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not be required to file a return. But you may want to anyway if you think you are eligible for a refund thanks to, for instance, refundable tax credits such as the Earned Income Tax Credit. (Use this IRS tool to gauge whether you are required to file this year.) You also are likely eligible to use IRS Free File (intended for those with adjusted gross income of $73,000 or less) so it won’t cost you to submit a return.

Your paycheck may not be your only source of income: If you had one full-time job you may think that is the only income you made and have to report. But that’s not necessarily so.

Other potentially taxable and reportable income sources include:

Interest on your savings
Investment income (e.g., dividends and capital gains)
Pay for part-time or seasonal work, or a side hustle
Unemployment income
Social Security benefits or distribution from a retirement account
Tips
Gambling winnings
Income from a rental property you own

Organize your tax documents: By now you should have received every tax document that third parties are required to send you (your employer, bank, brokerage, etc.).

If you don’t recall receiving a hard copy of a tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.

Here are some of the tax forms you may have received:

W-2 from your wage or salaried jobs
1099-B for capital gains and losses on your investments
1099-DIV from your brokerage or company where you own stock for dividends or other distributions from their investments
1099-INT for interest over $10 on your savings at a financial institution
1099-NEC from your clients, if you worked as a contractor
1099-K for payments for goods and services through third-party platforms like Venmo, CashApp or Etsy. The 1099-K is required if you made more than $20,000 in over 200 transactions during the year. (Next year the reporting threshold drops to $600.) But even if you didn’t get a 1099-K you still must report all the income that you made over third-party platforms in 2022.
1099-Rs for distributions over $10 that you received for a pension, annuity, retirement account, profit-sharing plan or insurance contract
SSA-1099 or SSA-1042S for Social Security benefits received.

“Be aware that there’s no form for some taxable income, like proceeds from renting out your vacation property, meaning you’re responsible for reporting it on your own,” according to the Illinois CPA Society.

One very last-minute way to reduce your 2022 tax bill: If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so for last year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). That will reduce your tax bill and augment your retirement savings.

Proofread your return before submitting it: Do this whether you’re using tax software or working with a professional tax preparer.

Little mistakes and oversights delay the processing of your return (and the issuance of your refund if you’re owed one). You want to avoid things like having a typo in your name, birth date, Social Security number or direct deposit number; choosing the wrong filing status (e.g., married vs single); making a simple math error; or leaving a required field blank.

What to do if you can’t file by April 18: If you’re not able to file by next Tuesday, fill out Form 4868 electronically or on paper and send it in by April 18. You will be granted an automatic six-month extension to file.

Note, however, that an extension to file is not an extension to pay. You will be charged interest (currently running at 7%) and a penalty on any amount you still owe for 2022 but haven’t paid by April 18.

So if you suspect you still owe tax — perhaps you had some income outside of your job for which tax wasn’t withheld or you had a big capital gain last year — approximate how much more you owe and send that money to the IRS by Tuesday.

You can choose to do so by mail, attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.

Or the more efficient route is pay what you owe electronically at IRS.gov, said CPA Damien Martin, a tax partner at EY. If you do that, the IRS notes you will not have to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.

If you opt to electronically pay directly from your bank account, which is free, select “extension” and then “tax year 2022” when given the option.

You can also pay by credit or debit card, but you will be charged a processing fee. Doing so, though, may become much more costly than just a fee if you charge your tax payment but don’t pay your credit card bill off in full every month, since you likely pay a high interest rate on outstanding balances.

If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing for an extension and making a payment to your state’s revenue department, Martin said.

Use this interactive tax assistant for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions pertaining to your individual circumstance on income, deductions, credits and other technical questions.