2016 - Page 2 of 7 - Best Money Moves

Donald Trump, the Affordable Care Act and Your Employee Benefits

by Emily Pfund | Nov 16, 2016 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this helpful, and we’d love your feedback.

Were your employees struggling in the wake of last week’s election results? Many employers across the country reported employees were distracted in the wake of the news no matter who they voted for. Trump supporters, like President-elect Trump himself acknowledged, were surprised that he won. Hillary Clinton supporters were extremely disappointed she lost.

Now that some of the shock from last week’s presidential election results has passed, we’re looking toward the future. President-elect Trump has proposed policies that could have massive impacts on the employee benefits industry, from repealing and replacing the Affordable Care Act and making changes to Medicare and Medicaid to changing federal tax laws. Here’s what five leaders in the employee benefits industry think of Trump’s policies and how they will change the industry for benefits providers.

More employers are offering to help their employees pay off student debt. Is this set to be the hottest employee benefit of 2017?

Got bit by a duck? A sick pet llama? These are some of the craziest reasons your employees have called in sick.

Is your company struggling to hold on to top talent? Adding these four employee benefits to your company’s benefits packages may help lower your turnover rates.

Financial wellness programs are only beneficial to companies if employees are motivated to use them. Here are some ideas for overcoming the common hurdles to creating an effective, transformational financial wellness program.

Frequent relocations and deployments can create financial hardships for military members and their families. The Federal Trade Commission is stepping up to help them manage their money and make important financial decisions.

The U.S. is the only developed nation that doesn’t guarantee a temporary paid leave for new parents. However, in states with paid parental leave laws, businesses report no negative impacts of profitability or productivity, and found such policies improved employee morale.

There’s more to employee benefits than just providing medical insurance. A recent study found that employees enrolled in more than three nonmedical benefits are more likely to feel financially secure.

Financial stress isn’t just an American problem. A recent survey in the U.K. found that 31 percent of people say financial issues are their top cause of stress and 63 percent lose sleep over their finances.

Small business owners often have difficulty finding employee benefits vendors who want to work with them. New companies are stepping up to bridge that gap and help small business owners streamline their benefits, HR and payroll services.

Did you find this Best Money Moves roundup useful? Please let us know. Email us at info@bestmoneymoves.com.

Wells Fargo, Unauthorized Accounts and Your Financial Life

by Emily Pfund | Nov 9, 2016 | Blog

In September, the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo $100 million for creating millions of unauthorized accounts in customers’ names. These deposit and credit card accounts were created without their customers’ permission.

In addition to being a huge breach of customers’ trust – we expect banks like Wells Fargo to guard and protect our personal and financial information, not abuse it – these unauthorized accounts may have damaged these consumers’ credit scores and had other sorts of impacts on their finances. Here are three ways victims may have been hurt:

Credit Scores May Be Lower. Wells Fargo credit cards opened in victims’ names may have lowered credit scores by shortening the average account age on their reports, which is one of the factors credit agencies use to calculate scores.
Tougher to secure other loans. It may have also made it more difficult for consumers to secure other loans, as having too many open lines of credit is seen as a red flag by some lenders.
Unauthorized fees were paid. The unauthorized credit cards Wells Fargo employees opened also included annual fees and other charges, which the customers didn’t realize or paid unknowingly, since the fees were charged to the credit card or were paid from deposit accounts. Apparently some Wells Fargo employees even temporarily moved customers’ money from legitimate accounts into new, unauthorized accounts, which may have resulted in overdraft fees or other charges, according to the CFPB.

So what can you do to protect yourself against unauthorized bank accounts?

If you’re a Wells Fargo customer, go to your local Wells Fargo branch and ask to see a list of all the accounts opened in your name. If you find an account you didn’t open, check to see if you were hit with any fees or charges because of that account. If you were, you’re entitled to part of the $2.5 million in restitution Wells Fargo has been ordered to pay affected customers.

Next, check your credit report regularly. By law, everyone is allowed one free copy of their credit reports from each of the three major credit reporting agencies (Equifax, Experian and TransUnion) each year. Go to annualcreditreport.com to get your reports and then review them, checking for any bank accounts, credit cards or loans that you don’t remember applying for.

If you find suspicious accounts, file a dispute with the credit reporting agency. Each credit reporting agency has a process for disputing items on your report. After you file the dispute, they and the bank or company involved with the questioned account will investigate the issue. You can also have a note added to your credit report that will explain the situation to future creditors who pull your file.

Finally, decide whether you should close the account. Regular checking or savings accounts won’t impact your credit score, so those can be closed without any repercussions. However, an unauthorized credit card in your name could be affecting your debt-to-credit ratio (potentially even improving it) and closing it might negatively affect your score. Be aware of this possibility before closing the account, especially if you’re counting on your credit score for a mortgage or loan application in the near future.

Even if you aren’t a Wells Fargo customer potentially impacted by these unauthorized accounts, it’s always a good idea to do several annual checks of your credit report to look for suspicious accounts or debts, which can be a sign your identity has been stolen. Your bank might also offer alerts for your accounts, which send you a text or email when your account dips below a certain amount. This sort of tool can help you catch acts of fraud and stay on track with your spending budget.

Even if you don’t suspect you’ve become a victim, regularly review your financial accounts for accuracy. The sooner the fraud is detected, the sooner you can stop the crooks from doing any more harm and begin fixing the damage they may have already caused.

Open Enrollment and Financial Stress: What Employees Need to Know

by Ilyce Glink | Nov 2, 2016 | Blog

One of the biggest sources of financial stress Americans face is healthcare: both finding the coverage they need and the cost of obtaining it.

Open enrollment season for the US Health Insurance Marketplace is here and it’s time for those employees without adequate coverage (an estimated 13.8 million) to choose their plans and prepare for the associated costs. Unfortunately, this period can cause confusion and financial stress, especially if your workers don’t have a clear understanding of what they need to do and how much it will cost.

Here are some of the biggest issues that come up during enrollment season and what you can do to guide your employees through this process.

1. Deciding between old and new healthcare coverage

Open enrollment is the time of year when your employees are able to choose a new healthcare plan that covers their medical needs and, if the employer will pay for it, those of their family. Unfortunately, the easiest option is to not make any changes at all, and simply proceed with the same plan from last year. For many employees, this could mean overpaying or paying for coverage they don’t need. Your workers will then stress their budgets and leave themselves vulnerable in the event they need care for which they don’t have coverage.

The best way to conquer this hurdle is to ensure your employees are aware of their options and their responsibility to choose a plan. If you don’t provide this benefit, encourage your employees to compare new plan options to their current coverage by sending them to Healthcare.gov. That way, they can get started with the right resources and see if there’s a better plan option for them.

2. Figuring out what’s affordable and adequate

Once your workers know where to start, they’ll need to find the best coverage for their health needs. This should start with them reviewing their prior plan, seeing which coverage they still need and determining if there’s any coverage they no longer want or something new they need. Health Insurance Marketplace plans all cover things like pre-existing conditions and preventive care, so your workers don’t need to concern themselves with missing out on these offerings.

Your employees do need to worry about whether they can afford the coverage they want. Often – unless there’s an ongoing medical issue for which an employee needs specific coverage or they require a plan for their dependents or they want to keep the same doctors or providers – the most common issue is choosing between plans with higher deductibles or higher premiums.

A higher deductible means their budget is less stressed now, but costs may have to be covered out of pocket when they receive care, whereas a higher premium adds to their monthly bill now but often means lower out-of-pocket costs for future care. Finding the right balance can help lower their level of financial stress.

3. Understanding the deadlines and penalties

In addition to understanding their coverage, your employees must be aware of the deadlines for choosing a plan and the penalty for going without.

The current enrollment season runs from November 1, 2016 through January 31, 2017, though employees must choose a plan by December 15th in order for it to be effective starting January 1.

Your workers must meet these deadlines or they’ll risk having to pay a penalty of at least $695 on their federal tax returns for not having healthcare coverage. That fee could be even higher as it can also be calculated as a percentage of their income (2.5 percent in 2016).

This is a substantial bill, especially when you consider how little most Americans save. If you want your workers to avoid this additional financial stressor, take the time now to help them find the right health care coverage.

For more information about Best Money Moves, email info@bestmoneymoves.com.

How Many Americans Struggle with Financial Stress? The Answer May Surprise You

by Emily Pfund | Oct 28, 2016 | Blog

How many Americans struggle with financial stress? The answer may surprise you. Even though the Great Recession is mostly behind us, the majority of Americans are still stressing out about their finances.

In a recent study by Northwestern Mutual, 85 percent of people surveyed said they feel financial anxiety and 28 percent said they worry about their finances every day. On top of that, 36 percent said their stress about financial issues has increased, rather than decreased, over the last three years.

That’s a lot of financial angst. It takes a toll, and not just in one area of your life. Northwestern Mutual asked these financially stressed adults how their financial stress impacts the rest of their lives and here’s what they said:

70 percent said it’s negatively impacting their happiness
70 percent said it’s negatively impacting their moods
69 percent said it’s negatively impacting their ability to pursue their dreams or interests
67 percent said it’s negatively impacting their health
61 percent said it’s negatively impacting their home life
51 percent said it’s negatively impacting their social life
41 percent said it’s negatively impacting their career

Basically, the study found that stress and anxiety about your finances bleed into almost every other facet of your life. It’s difficult to focus on your job or enjoy downtime with friends and family if your focus is always on your money and how you’ll make ends meet this month. And, money continues to be the top-cited factor in divorce.

An employee’s financial stress impacts the people around them at work too. For example, A report from Health Affairs found that employees reporting high levels of stress cost their employers an average of $413 more per year than their more relaxed coworkers, according to the Consumer Finance Protection Bureau. Add that to the business costs of a stressed employee’s reduced productivity, and employers have a big interest in seeing that their employees are financially stable.

The CFPB’s report also cites a study that found employees who underwent nine hours of classroom financial wellness training and had up to five one-on-one counseling sessions with a financial planner measurably improved their financial health. Employee’s requests for loans from their 401(k) accounts – often a last-ditch attempt to make ends meet – stopped entirely and their installment debts decreased by 14 percent. They were also less likely to be paying their bills late.

We know that financial stress isn’t limited to your finances. That’s why the Best Money Moves team is so dedicated to helping people dial down the root causes of financial stress. We ask employees to tell us what’s stressing them out, and we provide the information and tools they need to target that stress point and relieve it, whether they need to get out of debt, build a savings safety net or work toward their financial goals. If they ever need guidance along the way, our accredited Money Coaches are just a phone call away, 24 hours a day.

Want to try it for yourself? Email us at info@bestmoneymoves.com to get a free trial!

3 Money Moves that Might Haunt You and How to Avoid Them

by Ilyce Glink | Oct 26, 2016 | Blog

Not every money move is a good one, but some can come back to really haunt you.

Consider these potentially scary money moves: Borrowing money for your children’s education; helping a friend by co-signing a lease or mortgage; and, opening an account to get an attractive benefit. These money moves could be a force for good or, if they go awry, they could haunt you for years.

The good news is that with some preparation and research your employees can avoid these financial nightmares and the financial stress that comes along with them.

Here are three financial decisions that could come back to haunt your employees along with some ways they can limit the damage.

1. Accepting loan terms without crunching the numbers first

Student loans are one of the biggest financial burdens for employees. Millennials are overrun with debt but their parents have, in many cases, co-signed for those loans and often have separate loans as well.

Much of the problem comes from borrowers being unprepared to pay these loans back out of the income they’re able to earn after graduation. It’s easy for borrowers to accept student loans without thinking twice – especially when it seems like everyone else is doing the same – but without some planning and forethought, these loans can wreak havoc on your employees’ finances for years, limiting their opportunities for buying a home and saving for retirement. That’s why it’s so important to crunch the numbers before signing your name to the loan documents.

While we started off by talking about student loans, this logic applies to car loans and mortgages, too. Before accepting the terms (and the money), encourage your employees to estimate their future monthly payments and make sure it’s an amount they can comfortably afford.

Otherwise, they’ll end up having to make hard decisions years down the line, like moving back home to afford their student loan payments or having to sell and downsize to a more affordable house. It seems simple, but taking a few minutes to run the numbers can help your employees avoid committing themselves to a future they can’t afford.

2. Co-signing without understanding the pitfalls

When you co-sign a loan, it’s often to help a child, relative or friend obtain something they couldn’t get on their own, like a loan or a lease. It’s a kind, helpful gesture, but also a risky one because it makes the co-signer legally responsible for the payments – the whole payment, should the person who signed the loan default.

Your employees might think they’re only being nice by co-signing a loan for a family member or friend, but make no mistake: if the original signer defaults or even stops making payments temporarily, the co-signer will be left footing the bill.

That could mean they’re stuck paying for two homes, two cars or an education they didn’t receive. It may also affect their credit history (which will now be tied to the credit of the co-signer, and may get dinged when payments are missed) and their ability to qualify for future loans.

You and your employees don’t have to refuse every request to co-sign (many parents help their adult children this way), but they need to take the responsibility seriously and understand the ramifications. Co-signing can evoke strong emotions, but it’s OK to voice concerns if the situation doesn’t make sense. Talking through the options could lead to a solution where your workers aren’t putting their finances at such a huge risk.

3. Opening accounts on the spot

Retailers often ask customers to sign up for store-branded cards at checkout, promising a moderate one-time discount or no interest for six months. Airline-branded credit cards often do the same in airports offering large sign-up bonuses and sometimes the deals seem too good to pass up. Unfortunately, these offers almost always have a downside.

The cardholder might have to spend a certain amount – much more than they normally would – in the first few months to actually receive the points or, if the card promises no interest, they could be charged interest retroactively for not paying off their entire balance by the end of the introductory period.

Suddenly the lure of a free flight has gotten your employees deep in debt and stressed over paying their monthly bills, when a quick read of the fine print would have shown them the important deadlines and details they needed to know.

If your employees routinely open new accounts without checking the fine print, they could also put themselves at risk of having their personal information stolen. The more companies that have this data, the higher the risk of it being exposed. And when your employees get in the habit of freely giving out details like their social security number, it could simply be a matter of time before that decision comes back to haunt them.

As we’ve learned, regularly reminding your employees to make smart money decisions does make a difference, so take action to help them avoid these terrifying fates.

For more information about Best Money Moves, email info@bestmoneymoves.com.