Money Crashers: How to Deal With the Family Glitch in the Affordable Care Act

Have you heard about the "family glitch" in the Affordable Care Act (Obamacare)? A month ago, I hadn't. I stumbled across an article about it in Consumer Reports while researching something else — and the more I read about it, the madder I got. Because here's the thing: This so-called "glitch," which has left an estimated 2 to 4 million Americans with no access to affordable health insurance, was by no means accidental. On the contrary, it was a deliberate move by the IRS and the GAO to interpret the wording of the law in a way that would grant health care subsidies to as few people as possible, saving the government money.

Here's how it works: Say you're a worker who has access to a health plan through your job, and the premiums cost only 9 percent of your income. So for you, everything is fine. The problem is, your family also needs insurance, and your workplace doesn't provide any subsidies for them. So if you were to enroll your spouse and kids under your workplace plan, your premiums would shoot up to 15, 20, even 25 percent of your income. So you would think your family should qualify for a subsidy, since they clearly don't have access to "affordable" health insurance through your job.

Except, according to the way the IRS has chosen to interpret the wording of the ACA, they do. Because the part of the law that talks about whether a workplace health plan is "affordable," for purposes of granting subsidies, bases it on the employee's "required contribution" toward the premiums, which can't be higher than 9.56 percent of income for the year 2018. But that same phrase, "required contribution," also appears in the section of the law dealing with the individual mandate. And in this section, the term refers to the percent of the worker's income that they'd have to pay for a "self-only" policy—one that covers the worker only, and not any of their family members. If the required contribution toward a self-only policy is over 8 percent, this section says, you aren't subject to the individual mandate and don't face a penalty for failing to buy insurance.

So the crafty IRS and GAO looked at these two passages and said, "Oh, would you look at that! This section defines affordability based on the 'required contribution,' and that section defines the 'required contribution' based on the cost of a self-only policy. So, clearly, that means if the worker can buy a self-only policy for less than 9.56 percent of household income, that means the family, by definition, has access to affordable care—no matter how much it would actually cost to cover the rest of them. Yes, we know, this will leave a lot of families with no access to affordable care, but what can you do? That's what the law says! If you want to fix the loophole, you'll have to get Congress to agree on an amendment to the law. Good luck with that!"

Learning that this huge loophole exists, and has existed for over five years now without ever coming to my notice, made me think this was a subject we clearly needed to cover on Money Crashers. I tackled this topic hoping to educate readers about, first of all, what the "family glitch" is and how many people it affects, and second, what people caught in this gap can do to get around it. And I feel like I succeeded in the first goal—but with the second, not so much. Because the more I researched, the more I discovered there are no good solutions here.

That's not to say there are no solutions. For instance, most children caught in this coverage gap—though not all—can get insurance through the Children’s Health Insurance Program (CHIP), which  covers children whose parents can’t get affordable coverage for them at work but aren’t poor enough to qualify for Medicaid. But for spouses, well, that's a different story. Your options are pretty much (a) pay the exorbitant rates for the workplace plan, (b) sign up for the cheapest plan you can find in the Health Insurance Marketplace (if that's any cheaper), (c) sign up for a cheap but crappy "short-term insurance" plan that provides next to no coverage, or (d) get a job solely for the insurance benefits.

I wish I could offer some more useful advice here, or at least some glimmer of encouragement that the problem will be fixed soon—but with the atmosphere in Washington these days, I think we shouldn't hold our breath on that. But we can, at least, make some noise about it. We can pester our Representatives and Senators ad nauseam, demanding that they do something about this problem, and spread the word about it as much as possible to others in the hopes that they will do the same. It may not be much of a chance, but it's the best one we've got.

How to Deal With the Family Glitch in the Affordable Care Act

Money Crashers: How to Stop Living Paycheck to Paycheck

My latest piece for Money Crashers is about another topic I have been fortunate enough to have no personal experience with: living paycheck to paycheck. Apparently, this places me in the minority, as a survey I found at CareerBuilder says more than three-quarters of American workers currently live this way. Even among people making over $100,000 a year, nearly one in ten said they always or usually lived paycheck to paycheck.

Based on this survey, it looks like simply making enough money isn't the key to escaping the paycheck-to-paycheck trap. So what is?

I looked into what experts at Forbes, The Balance, U.S. News, and Quicken Loans had to say on the subject, and boiled their advice down to a six-step plan:

1. Track your spending
2. Make a budget
3. Cut your expenses
4. Boost your income
5. Jump-start your savings
6. Stay on target

There's more to it than that, of course, and you can learn all the details in the article, as well as what definitely won't help (relying on debt). Read about it here: How to Stop Living Paycheck to Paycheck.

Money Crashers: 4 Fears That Cost You Money

I got the idea for my latest Money Crashers article after reading some article or other about investing. I forget just where it was, but it pointed out that trying to keep your money "safe" actually has risks of its own: if you've stashed all your money in a bank account earning 1 percent interest while inflation is at 2 percent, it will steadily lose value. This got me thinking about how the fear of losing money, in this case, actually costs you money, and I wondered if I could spin that idea out into a whole article.

After mulling it over, I decided this wasn't enough material for an article all by itself. However, it occurred to me that there were probably other kinds of fears that could be equally costly, and after some pondering and poking around the Internet, I came up with three others to cover: fear of missing out (FOMO), fear of social isolation, and fear of failure.

The new article covers how these four fears can bypass your reason and lead you into foolish, costly decisions—and what you can do to overcome them. Read it here: 4 Fears That Cost You Money and How to Overcome Them

Money Crashers: How to Lock or Freeze Your Credit and Why You Should Do It

When Equifax got hacked last year and let a bunch of people's personal data slip into the hands of thieves (oopsie, our bad!), I read a lot of articles urging me to freeze my credit. Although the experts argued convincingly that a credit freeze was the single best way to protect your stolen data from misuse, I was resistant to the idea. For one thing, it seemed like a lot of hassle: I'd have to contact each of the credit bureaus separately to set it up, and get a separate PIN from each, which I'd have to make damn sure not to lose or else I'd never be able to thaw my credit again. And when I did want to thaw my credit, I'd have to wait two or three days for the thaw to take effect, which would mean I couldn't just decide to, say, shop for a new auto insurance policy (a process that involves pulling your credit file) whenever I happened to have a few hours free. And finally, to add insult to injury, I'd have to pay for it—a separate $5 fee to each of the three bureaus.

Despite these objections, I finally did decide to go ahead and put the freeze in place (after I'd finished my insurance shopping). I figured I wouldn't need to open any new accounts for a while, and when I did, I'd just have to plan ahead and deal with the hassle and the expense.

Fortunately, as it turns out, I no longer have to. In fact, most of my objections to freezing my credit were overturned by a new federal law that took effect last month. You can now freeze and thaw your credit at will, without having to pay a fee, and without having to wait more than an hour when you want the freeze lifted. So nearly all the problems that made me hesitate to freeze my credit are now gone, while all the benefits that made me decide to do it after all still apply. In short, it's a better deal than ever.

In my latest Money Crashers article, I explain what freezing your credit means and outline the benefits of doing it, along with the few drawbacks that still remain. Then I explain how to do it with each of the three bureaus. I also talk about the potential benefits of freezing your child's credit to protect them from identity thieves, who view a child's pristine credit history as pay dirt. (Doing this is a lot more work than freezing your own credit, but it could be worth it for the peace of mind it gives you.)

How to Lock or Freeze Your Credit and Why You Should Do It

Yard-sale haul 2018

This year, Brian and I weren't able to devote quite as much time as usual to shopping the local town-wide yard sale, which took place this weekend. We'd already arranged with my dad to go to the Princeton football game on Saturday if the weather was good, and as of Friday the forecast was calling for "cloudy and delightful," so we had to limit our Saturday sale-hopping to just a couple of hours in the morning in order to make a 1pm kickoff.

So we planned out our abbreviated trip strategically, examining the list of sales and focusing our attention on a two-block square on the south side of town that had the highest concentration of sales—and particularly, the most sales that were limited to Saturday only. We walked out on Benner Street, turning off here and there to catch any scattered sales we passed en route, then went down the whole length of Felton Street (which is basically one big yard-sale block party) and back up South Second, then across Raritan and back home by way of Montgomery to grab an early lunch and take off for the game. We covered perhaps two miles in total, but probably managed to hit about 30 sales.

Most of these, not surprisingly, had nothing we needed. Our house is pretty much fully furnished and equipped, and while I took the time to browse every rack of women's clothing we passed, I knew the odds of finding something that fit both my size and my tastes were pretty slim. And the one item Brian had really been jonesing for—an accordion—we'd actually managed to pick up at a flea market for $60 the previous weekend. So basically, we were just cruising the sales looking for targets of opportunity: interesting books, board games, and any little miscellaneous items that looked like they'd either be useful for us or make good holiday gifts for family and friends.

However, since we managed to hit so many sales in this relatively short trip, we actually found several things that looked worth the price (which was never more than two bucks, so we pretty much grabbed anything that looked potentially interesting). Here's what we got:

• Three books for ourselves. At the very first sale we passed, I picked up an English translation of the "Figaro trilogy" by Beaumarchais, which was the original bases for the operas "The Barber of Seville" and "The Marriage of Figaro." (I hadn't previously been aware there was a third play in the series, so that will make an interesting new discovery.) At one of the Felton Avenue sales, we found the second Rabbi Small mystery, Saturday the Rabbi Went Hungry, which I started reading to Brian that very afternoon on the way to the game. And at one of the last sales we passed on our way home, we got the first volume of "Lumberjanes," a comic book series co-written by Noelle Stevenson, whom we've seen and appreciated as a guest on "Critical Role."
• Three possible gift items. First, we picked up a young adult fantasy novel that looked like a promising gift for one of our older niblings (side note: this word is apparently the gender-neutral form of "nieces and/or nephews"), though we're not sure which. We also found this set of princess-themed wooden beads for my princess-obsessed, four-year-old niece. Finally, we took a gamble on a box of card tricks, since we recalled that one of our nephews used to have a mild interest in magic; if we learn that he's over that by now, maybe we can pitch it to one of the other niblings.
• Several potentially household useful items. One item I was specifically on the lookout for was wooden clothespins, since I ran a load of laundry last week and actually had to leave some things off the line because I ran out of pins. So when I found a big Ziploc bag full of them for 75 cents, I grabbed it, and now the limiting factor on how much we can hang is the amount of space on the clothesline. We also spent 50 cents on a new multi-meter, since our old one, which could no longer measure anything but voltage, had been converted into a prop for Brian's steampunk costume. Brian also spent $1 on an orphaned luggage strap, which will replace a broken one on his new accordion. And we picked up a nice little wooden box that a seller offered us for free; we're not quite sure what we'll do with it, put it should be useful for something.
• One game. For $1, we found a copy of the quirky game Guillotine, in which the players are French revolutionaries competing to assemble the most prestigious collection of heads. We'd played it before and enjoyed it, so we figured it was worth a buck even if it might be missing a few cards—but when we got it home, Brian was able to verify that it was in fact complete, so this was a particularly good deal.

For only two hours, this was a pretty good haul, and probably provided us with as much entertainment as watching Princeton mop up the field with Lehigh. (We left in the middle of the third quarter, when Princeton was ahead 52 to 7 and it was starting to rain. At least Lehigh won the battle of the bands, as theirs was at least three times the size of Princeton's.)

This morning, we ventured out again, this time aiming for a spot on the north side of town where I'd identified another cluster of sales, including several scheduled for Sunday only. Unfortunately, many of the sellers apparently were either put up by the weather (a light drizzle) or too tired out after the previous day to set up shop again. Many of the sale sites on our list had no sale in site, though some of them had boxes of slightly damp stuff marked "free" sitting out by the curb. We poked through those and through the tables at the few sales we actually passed, but found little of interest. However, Brian picked up a few items mostly for their amusement value: a yo-yo, a pair of colorful dice, and a "protein structure coloring book" dating from 1979. It was only a little set of photocopied sheets, but he just had to pick it up to show his coworkers, since his workplace recently developed two coloring books of its own.

But before calling it a day, we decided to cross Raritan and head down South First, which we hadn't made it to on Saturday—and there we encountered the madhouse that is the annual Congregation Achavas Achim jumble sale. This is basically a huge assortment of stuff all thrown together willy-nilly: clothing, books, games, kitchen items, and various tchotchkes all sprawling across numerous tables and the ground. When we hit this sale in 2014, we hunted through the mass of miscellany and found nothing of interest except a can of walnuts, but the price on that was good enough to encourage us to keep trying.

This time, our efforts were rewarded, as out of the vast unsorted mass, we managed to pick out two interesting-looking puzzles. One was a three-dimensional jigsaw of an old-fashioned globe, complete with a stand to display it on if you actually manage to complete it; the other appeared to be a wooden puzzle like these, but when we got it home and sorted out the pieces, it actually turned out to be two separate puzzles—both the sphere and the truncated cube from this set. We haven't decided yet whether to keep these or give them as gifts, but either way, they were a good enough find to justify the trip.

So, in total, we spent about four hours at the sales, covered maybe four or five miles, and picked up 16 items for just under $12. That's a pretty good return on our investment of both time and money, and a nice start on our holiday shopping.

Money Crashers: What Do Rising Interest Rates Mean for You?

Interest rates have been at near-zero levels for so long, everyone's kind of started to get used to it. Now that the Fed has finally started to slowly, slowly edge interest rates back up again, you keep seeing panicky stories about what the rising rates are going to do to the stock market and the economy as a whole.

So I thought maybe it wouldn't be a bad idea to write a nice, calm, thoughtful story about what rising rates actually mean for consumers—both good and bad. Because yes, there definitely is an upside, especially for frugal folks like me who have been frustrated over the past decade that all the money we're keeping in the bank hasn't even earned enough interest to keep pace with inflation.

My new Money Crashers piece explains how rising interest rates could affect:

• Borrowers, who will now pay more on credit cards and variable-rate loans (but not on fixed-rate loans, like student loans or most mortgages);
• Savers, who will once be rewarded for keeping money in the bank;
• Home buyers, who will probably pay a higher rate for a new mortgage, but will also probably pay less for the house itself;
• Investors, who will see better returns on bonds, but more volatility in the stock market (though probably not the long-term losses that panicky investors are expecting);
• The overall economy, which could see a drop in consumer spending in the short term, but—surprise!—is actually likely to grow in the long term;
• The national debt, which has reached ridiculous levels and will become more and more costly to service, eating up a bigger and bigger share of our federal budget until...well, no one really knows what, if anything, the federal government will actually do to fix the problem, but it's not likely to be any fun for anyone concerned.  

Then I outline some steps ordinary consumers can take to adjust to the new normal (which is actually the same as the old normal, for those who are old enough to remember it), such as reducing debt, locking in interest rates on any new debts while they're still relatively low, shuffling investments, and building an emergency fund and plenty of insurance to get them through hard times if and when they hit.

Here's the whole, non-panicky story: What Do Rising Interest Rates Mean for You? – Effects & How to Prepare

Recipe of the Month: Cannellini Beans with Cabbage and Pasta

Slipping in just ahead of the deadline, our Recipe of the Month for September is "Cannellini Beans with Cabbage and Pasta," out of Mark Bittman's How to Cook Everything. I'd actually bookmarked this recipe months if not years ago as something we should try, but we never got around to it until last week. We had some cabbage in the fridge, and I was looking for something to do with it besides our usual old standbys (Rumbledethumps, Indian-spiced cabbage, or the "Bow Ties and Cabbage" out of Vegetariana). We read through the ingredients for the recipe—cabbage, pasta, olive oil, leeks, celery, fresh thyme, veggie stock, and cooked cannellini beans—and found that we happened to have all of them right on hand, so this was clearly the time to give the recipe a try.

This dish isn't very complicated to make. Briefly, you boil the cabbage for just a few minutes ("until just tender") in one big pot, then use that same water to cook the pasta; meanwhile, you sauté the leeks and celery in a big skillet until they're soft, add the thyme and stir for one more minute, and finally stir in the cabbage, beans, and stock, season it, and heat it through. When the pasta's all done, you drain it and toss everything together, and serve it up with Parmesan cheese.

We didn't make this recipe exactly as written, however. It calls for half a cabbage to half a pound of pasta, but what we had in the fridge was more like a third of a cabbage, and Brian didn't want to have any left over. So he decided to make a half recipe, thereby using up a quarter-pound of rotelle that he also happened to have left over, but with a little bit more cabbage than the recipe called for. The "sprig" of thyme he added was also probably rather larger than Bittman had in mind (you can see it in the photo, resting on top of the pasta in the pot).

Fortunately, the dish appeared to stand up pretty well to the minor liberties. It was a bit heavy on the cabbage, but not too bad, and thanks to our favorite Penzey's vegetable stock, the veggies were quite flavorful. So was the pasta itself, since Brian has lately taken to following Bittman's advice to salt the water liberally when making it—a good tablespoonful of salt to a large pot of water. This innovation has caused us to adjust all our pasta sauces accordingly, adding a lot less salt than we used to, and I personally found that this dish didn't need any added Parmesan to raise its flavor. The half-plus recipe he made was enough to feed us both for dinner, with a little bit left over for the next day's lunch.

All in all, I think this dish will be a very useful addition to our repertoire. Cabbages are one of the few fresh veggies that remain cheap and decent-tasting all winter long, so we buy them fairly regularly, and it will definitely be handy to have a new way of using them that's both easy and satisfying. And if we get tired of it, we can always try the variant version of the recipe, "Chickpeas with Cabbage and Pearl Couscous," which spices it up with a tablespoon of harissa (north African chili paste). That ought to make a good warmer-upper for the winter months.