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Archive for the ‘work benefits’ Category

Saving Money on Healthcare

Tuesday, January 11th, 2011

A few good stories about how to save money on healthcare: The New York Times has an interview with a physician on when and how to bring up the subject of cost and ways to try to lower your bill. I’ve done this myself; I have no prescription coverage at all. When I mentioned this to my doc, she sent me home with a bag burgeoning with free samples of a prescription medication. Always ask for the generic version of the drug a doctor is prescribing, and compare prices; I’ve found warehouse clubs and discount stores offer the best deals.

Separately, The Wall Street Journal has a piece on home-testing kits for conditions such as high cholesterol, that allow people to keep tabs on their health without having to see their physician on a regular basis and deal with a burdensome co-pay. The story offers advice on making sure you’re buying a legitimate kit, and when you may want to take the results to a doctor.

Also check out CNNMoney’s story on a health care solution from Sam’s Club: “For $99, buyers of the program get an annual subscription to a web-based program that includes an at-home blood screening test that tracks an individual’s cholesterol, blood sugar and hemoglobin levels. That information is then used to create a personalized Prevention Plan that identifies, prioritizes and explains users’ health risks and recommends steps to improve their health. Buyers of the program also get access to a 24/7 nurse line, two health coaching sessions, recommended prevention screenings, schedule and alerts based on age, gender and risks and a physician summary that can be shown to a doctor.”

Meanwhile, if you’re interested in the health care debate, check out this story “How American Health Care Killed My Father” by David Goldhill from an issue of The Atlantic last fall. It’s a long but worthwhile read, underscoring why the new law isn’t really going to solve the health care financial crisis (health care now devours 18 percent of GDP).

Goldhill discusses the evolution of employer-sponsored health insurance, which was a historical accident: With wage controls set in place following the second World War, employers competed for talent by offering comprehensive health benefits. The system was institutionalized after Congress provided employers with a tax break for these benefits in the 1950s.

What Goldhill does brilliantly is explain why those “free” health benefits are killing your pocketbook. Employer-provided health insurance is like landlord-provided air conditioning — you use a ton of both resources when you don’t have to foot the bill. But here’s the problem: You are. The money has to come from somewhere. As Goldhill describes it:

“In 2007, employer-based health insurance cost, on average, more than $12,000 per family, up 78 percent since 2001. I’ve run several companies and company divisions of various sizes over the course of my career, so I can confidently tell you that raises (and even entry-level hiring) are tightly limited by rising health-care costs. You may think your employer is paying for your health care, but in fact your company’s share of the insurance premium comes out of your potential wage increase. Where else could it come from?

“Let’s say you’re a 22-year-old single employee at my company today, starting out at a $30,000 annual salary. Let’s assume you’ll get married in six years, support two children for 20 years, retire at 65, and die at 80. Now let’s make a crazy assumption: insurance premiums, Medicare taxes and premiums, and out-of-pocket costs will grow no faster than your earnings—say, 3 percent a year. By the end of your working days, your annual salary will be up to $107,000. And over your lifetime, you and your employer together will have paid $1.77 million for your family’s health care. $1.77 million! And that’s only after assuming the taming of costs! In recent years, health-care costs have actually grown 2 to 3 percent faster than the economy. If that continues, your 22-year-old self is looking at an additional $2 million or so in expenses over your lifetime—roughly $4 million in total.

“Would you have guessed these numbers were so large? If not, you have good cause: only a quarter would be paid by you directly (and much of that after retirement). The rest would be spent by others on your behalf, deducted from your earnings before you received your paycheck. And that’s a big reason why our health-care system is so expensive.”

Think about it: Does your auto insurance cover oil changes or door dings? Does your homeowner’s cover the paint job needed after a long winter, or cleaning the gutters? Unless someone has a chronic condition, health insurance should work the same way: A high-deductible, low-cost catastrophic policy and a health savings account that allows the consumer to set aside their own cash tax-free for doctor’s visits and prescriptions — and keep it if they don’t use it.

Any thoughts or tips on saving money on health care?

Unique Job Search Tactics That Work

Wednesday, June 23rd, 2010

In my June 24 Yahoo!Finance column, I look at some unique job-search tactics that helped unemployed folks find new jobs. A recent survey by CareerBuilder.com found nearly a quarter of hiring managers have seen attention-grabbing methods, which in some cases led to a new hire. A few examples:

Survey respondents said some job seekers used the “show-me-what-you-got” method: One candidate applying for a casino table game position came into the manager’s office and started dealing on the desk while pretending to talk to players, which demonstrated her guest-service skills. A prospective teacher brought in a box of props to demonstrate her teaching style. Another person came prepared with unique business cards featuring the company’s logo and a self-introduction brochure.

Other new hires demonstrated the value they could add to the company: One candidate sent in a letter that explained how to solve an issue the company was having with a certain type of technology. Another wrote a full business plan for one of the firm’s products with his resume submission. A third created a full graphics portfolio on the company’s brand. Here are a few other tips gleaned from the experts I interviewed for the story:

1. Leave a trail of “digital crumbs” so employers can find you.

“If you’re not on Linkedin or Facebook, or don’t have a Twitter account or a website, we can’t find you, and if we don’t find you, we can’t call you,” says Dave Perry, managing partner of Perry Martell, an executive search firm in Ontario, Canada. “Most people will get up in the morning and apply to jobs online for hours and get nothing but frustration. All it really takes is sitting down for a couple of hours to think about how you are going to leave a trail of digital bread crumbs so some recruiter somewhere who is looking for someone like you can find you easily.”

2. Get your resume hand-delivered to HR.

If you don’t know anyone at a specific firm you are targeting, find the name of anyone at the company, even if it’s the CEO, and snail-mail your cover letter and resume to that person, says Cynthia Shapiro, career strategist and author. (See below for a way to find names.) “They will open it up and hand it over to HR or the hiring manager, but it will look like a hand-delivered submission from that department – it’s a great way to get them to read it first,” she says. Make sure the resume is on 100 percent cotton paper, she says: “Psychologically, the thicker and nicer the paper, the more substantial the candidate appears.”

3. Get on ZoomInfo.

“Most large Fortune 500 companies have a subscription to Zoom Info, as do executive recruiter firms,” says Perry. “Recruiters have become very adept at micro-targeting candidates rather than running an ad and sifting through 10,000 responses for an ad on a job board. We’d rather talk to the six people we know who are qualified.” Zoom Info has created an application that job hunters can use for free. It also launched a program last year that gives new users eight weeks of free access to all 65 million people in its database, so you can find the right people to target in your search.  Click here for more info.

Let’s say you want a job in engineering. You can do a Zoom Info resume search for the vice president of engineering at the ten or 12 companies you are targeting – finding both current and past employees. Perry suggests calling former employees with this pitch: “This is unusual, but I know you used to work at XYZ Company, and I’m looking for a job there. Can I ask you a couple of questions about this department?”

Have your script worked out, Perry says, and nine in ten people will tell you want you need to know. That information can be used to create a targeted letter, focusing on the successes you have had in the past dealing with similar challenges or issues. (Obviously, don’t suggest the company has problems or mention your source. You might say, “Many firms in the industry have faced ____ issues, which I managed successfully at my last firm by doing x, y and z.”)

Have you used an unusual tactic to find and land a new job? Comment here or email me at laura at laurarowley dot com.

Making Smarter Financial Choices

Sunday, March 28th, 2010

In my latest Yahoo!Finance column I interviewed Sheena Iyengar, Columbia business school professor and author of The Art of Choosing, which looks at how people can make better choices. I asked her why she thought consumers make poor financial choices.

“Money is supposed to be meant for exchange but it’s come to be much more than that,” Iyengar says. “There is so much more baggage associated with it; we judge people based on how much or how little they have, or how they use it.

“We expect people to know how to be organized about its distribution in their lives but we don’t give people any training,” she continues. “On top of that, money is no longer tactile and concrete. It’s become something quite abstract and that becomes harder for us to see and experience its growth and shrinkage. When you put something on a credit card it feels very different than using cash. I think all of those things are involved when you decide how to spend your money.”

Another problem is the sheer number of choices. In a study for Vanguard, Iyengar found that the more investment choices a company 401(k) plan offered, the lower the participation rate among employees. Participation rates fell from a high of 75 percent for the smallest plans, which had four funds, to 70 percent for plans with 12 or more funds. When the number reached 30, participation began to slide again – to a low of about 60 percent for plans with 59 funds.

“It’s easy to sign up on the spot when you have only five choices, but when you have 50 it seems reasonable to mull things over for a while,” Iyengar writes. “Unfortunately, as you keep delaying the decision, and days turn into weeks, and weeks into months, you might forget your 401(k) altogether.”

If this is your situation, try the following simple steps:

1) Ballpark your retirement needs using this calculator from ESPlanner.com, a tool created by Boston University economist Laurence Kotlikoff. (It takes about a half hour to complete.) Don’t balk at doing the exercise because you’re concerned you can’t achieve the goal. Darthmouth economist Anna Maria Lusardi has found people who make an attempt to estimate their retirement savings goal ultimately save more than those who don’t – so the effort is worth your while.

2) Try to gauge your tolerance for risk using a tool like this one, from Rutgers University.

3) Bring the results of the two steps above, and the list of your 401(k) investment options, to a fee-only financial planner who charges by the hour to help you choose funds. You can find one at garrettplanningnetwork.com or napfa.org. Budget $100 to $200 for the effort.

4) Once you know how you’d like to allocate your savings, set a timetable and a specific date for executing on the planner’s suggestions so you don’t let it slide. Contribute at least enough of your salary to get any match the company may offer. (I personally max out my retirement contributions.) If you can’t afford the max, make a commitment to increase your contribution by 1 percent every time you get a raise.

Understanding Flexible Spending Accounts

Saturday, September 26th, 2009

For many employers, the fall season brings open enrollment — that once-a-year opportunity for workers to change their benefit packages. But the vast majority of workers stick with the status quo: A recent MetLife survey of 1,000 people finds 77 percent of employees plan to maintain current work benefits, while 10 percent plan to increase them and 11 percent will cut back.

Many workers don’t make changes because they don’t recognize the upside of some benefit programs. A 2008 survey of human resources managers found only 21 percent believe their employees have a good understanding of the company’s benefits. One issue is that workers may get little guidance: 40 percent of the firms in the survey require workers to self-enroll to receive benefits.

In a nutshell, an FSA allows workers to have money deducted from their paychecks pre-tax to pay for out-of-pocket health care expenses as well as the costs of dependent and child care (including summer camp for children under 13 when both parents are working). I’ll explain the details in this post — but if you prefer the video version, check out my recent appearance on ABC News Now’s “Money Matters.”

For example, someone in the 25 percent tax bracket who spends $2,000 a year on qualified medical expenses (or a qualifying day care center) would save that 25 percent — or $500 — if he sets aside the money in an FSA and has his employer reimburse him for those costs. (You also save on Social Security, Medicare and state taxes, so the savings are even higher.)

By law, the maximum contribution to a dependent care FSA is $5,000; there is no legal limit on health care FSAs, but employers typically limit them to $5,000 as well, experts say.

Here are five questions to ask to make the most of your FSA:

1. Do I have expenses that qualify to be paid out of an FSA? Go to www.irs.gov and check out Publication 502 to see which of your medical expenses qualify, and 503 for child care expenses. (The IRS dubs them “Flexible Spending Arrangements.”) It can be anything from co-pays to eyeglasses to the cost of a weight loss program if the weight loss is ordered by a doctor.

2. How much do I spend out-of-pocket each year on these expenses? Get a firm handle on that number by looking back through your checkbook and credit card statements. Flexible Spending Accounts are “use it or lose it” – in other words, if you don’t spend the money you set aside, you forfeit it. So it’s important to add up the numbers – that will give you an idea of how much to set aside in the account. A mom of three I interviewed for my recent Yahoo!Finance article on this topic used Mvelopes.com to track her spending, so over a period of a year or two, she knew precisely how much to set aside for medical expenses for her child’s asthma and other costs. That will save her family hundreds of dollars over the course of the year.

3. What’s my tax bracket? This tells you how much you’ll save by using an FSA. Many people don’t know their bracket off the top of their heads. Assuming you filed the standard Form 1040, look at Line 43 of last year’s tax form. That’s your taxable income. (If you expect to earn more or have more deductions this year, just add and subtract those factors to get an estimate of this year’s taxable income.) Then go to irs.gov and look at the federal tax tables to figure out your bracket. Then multiply the amount you would put in the FSA by the bracket, and that’s roughly your savings. ($1,000 in FSA x 25% = $250; $1,000 – $250 = $750 in actual cost.)

4. How does my plan work in terms of reimbursing qualified expenses? It’s important to talk to your co-workers who have used your company’s FSA. An FSA is only as good as the plan administrator. Some companies have administrators that make the FSA very easy to use – for example, they’ll issue employees a specific debit or credit card for their FSA spending. Others require you to jump through a lot of hoops – for example, filling out and faxing paperwork to prove the expenses are qualified.

Ask your co-workers how responsive the plan administrator is, what their call center is like, how often they approve or reject claims, and what the appeal process is like. (For some people, the savings aren’t worth the time they have to put in to get their claims approved and paid for with their own money!)

5. What happens with my FSA if I leave the company or lose my job? You typically have to use the money before you depart. So if you think your job is in jeopardy, schedule those dental and medical checkups, get prescriptions refilled and get a new pair of eyeglasses. You can submit the paperwork as long as the expense is incurred before your termination. In addition, you can sign up to extend your FSA benefits under COBRA (you don’t have to sign up for the COBRA health insurance itself to continue your FSA). But you have to pay in the monthly amount you committed to, plus a 2% charge.

One last note: Aside from the open enrollment period, you can also make changes to your FSA plan if you have a qualifying life event – if you get married or have a child for example. For more on FSAs, see this Yahoo!Finance column.

How to Get a Raise in a Soft Economy

Wednesday, May 28th, 2008

What’s the trick to getting a raise in a soft economy? 

Economists expect continued weakness in the labor market this year, according to a survey by the Philadelphia Federal Reserve Bank. Employers will shed 45,000 jobs a month on average in the current quarter, forecasters predict, and unemployment will rise to 5.5 percent from 5.1 percent by the fourth quarter. 

At the same time, companies are expected to hand out raises of 4 percent this year, according to a survey by the Washington-based Economic Research Institute. For example, at my brother’s wedding over Memorial Day weekend, I chatted with a friend and HR executive who said his firm is still doling out raises to top performers, even though the company is in the battered financial services sector. 

The key, experts say, is to steer clear of some common pitfalls in your quest for a bigger paycheck. Here are the top seven: 

Mistake No. 1: Assuming you can’t ask for a raise. 

“People have a surprising amount of power even in a sluggish economy,” says John Challenger, chief executive officer of Chicago-based outplacement firm Challenger Gray & Christmas. “Unemployment is still only around 5 percent, and that’s very low.” 

Cynthia Shapiro, a California-based career coach and author of “Corporate Confidential: 50 Secrets Your Company Doesn’t Want You to Know — and What to Do About Them,” agrees. 

“They’ll break the budget if you make a compelling enough case and they’re worried about keeping you,” she says. “A lot of people will sit back and say ‘I’m doing such a good job, they’ll notice and offer more money’ — but they’ll assume you’re happy if you don’t ask for anything.” 

Mistake No. 2: Justifying your request for a raise. 

Soaring prices for food, gasoline, and other staples may prompt you to seek a pay hike — but that’s not what your boss wants to hear. 

“Most people ask for money because they personally need more money — they say, ‘I just had a baby’ or ‘we just bought a house’ or ‘I lost money in stock market’ or ‘I’ve been here a long time and work really hard,’” says Shapiro. “Don’t ask because you feel you deserve or need more — make a case that you are critical to the company’s success.” 

There are essentially only four measures of performance — quantity, quality, cost, and timeliness, says Robert Lorber, an executive coach and co-author of “Who Are You and What Do You Want?” to be published this month. 

“Look at what you can do that adds value,’” he says. “Can you bring in new customers, reduce costs, improve efficiencies, or boost sales? Then you’re open to asking for more money. If your company is in crisis mode, your job is to make sure your bosses understand how you can be part of solution.” 

Search Salary.com to find the current market rate for your position, taking into account years of experience, the size of your firm, and the region of the country in which you work. Then base the pitch on your accomplishments.

Mistake No. 3: Asking at the wrong time.

Don’t wait for your review to make the request. “Ask when you just did something that made you look like a star,” Shapiro says, such as landing a major client, saving your department a bundle of money, or receiving a glowing email for your marketing campaign. 

Don’t ask the month after you’ve taken a holiday, Challenger suggests: “There’s no question that you have a right to your vacation, but if you ask after you’re gone ten days, you’ve lost some impact.” Know whether your boss is a morning or afternoon person, and time your proposal accordingly, he adds.

Mistake No. 4: Tooting your own horn too loudly. 

Rather than widely proclaiming your triumphs, build key alliances with people across the company who are working on the firm’s highest priorities, Shapiro suggests. “In a down economy, if you want to be promoted when the dust settles, be generous with your time,” she says. “Offer yourself in service to other people. Get people around you talking about how great you are. Then you don’t have to toot your own horn.” 

Meanwhile, be wary of grabbing the spotlight and outshining your boss. “Make it your responsibility to keep that relationship strong,” says Challenger. “Your raise request will be met much more favorably if you and your boss are simpatico.”

Mistake No. 5: Promoting your unconventional style.

Emulate how people at the top look, dress, talk, and behave, both at work and company social events. “They’ll have a dress code, a language — maybe they all play golf or have an MBA — whatever it is, that’s your path,” says Shapiro. “People at the top hate looking at lower levels and seeing one of their own. They’ll pull you up to their level if you look like you belong there.” 

Use a resource like LinkedIn, a professional networking site with more than 20 million members, to research career paths of people at the top. Sign up for free and create a profile page that basically reads like a resume, including the companies for which you’ve worked. Once you enter that information, you can click the name of your current employer to display every other LinkedIn member that works at the firm. Click on their profiles to view their education, tenure, and experience. 

Also adopt the causes of the people in the C-suite, Challenger advises. “Look for what your boss does in public service, and join in, whether it’s doing sustainability and green projects or volunteering at a food bank,” he says. “It’s a good way to raise visibility.”

Mistake No. 6: Listening to what the company says instead of watching what it does. 

Pay attention to who the company rewards rather than listening to its lip service about values. “Most people don’t keep their eyes open,” Shapiro argues. “They focus on their work and think if they do a good job and are talented, they’ll be taken care of. But only 50 percent is how talented you are — the other 50 percent is being culturally savvy about your company.” 

For example, Shapiro describes a Fortune 100 company that strongly promoted a new work-life balance program. 

“They did it to appease the shareholders, because they had earned a reputation for being slave drivers,” she recalls. “They continued to reward and promote the people who put in major hours. People who didn’t have their eyes open — who were leaving to go to their kids’ soccer games — got crunched in the process. Sometimes companies preach ideals they can’t live up to; it’s meant for PR, not for the employees.” 

Shapiro counseled a manager at another firm who was laid off while on maternity leave. “She thought, ‘I’m a VP, of course they’ll take care of me,’” Shapiro recalls. “I asked her, ‘What’s the precedent? What have they done for others who went on maternity leave?’ She realized every single one of them had never come back.”

Mistake No. 7: Quitting when you don’t get the raise you want. 

If you can’t get the raise you seek, you’ll likely find it by switching jobs — but don’t quit your current gig, says Shapiro. “In a down economy, the trick is to look for a new job while currently employed,” she says. “Look from the solid foundation of a current job; you’ll always get more offers.” 

(Adapted from my Yahoo!Finance column)

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