Financial Planning Challenges for Double-State Dwellers

Are you a double-state dweller? In other words, do you live up north in the summer and head south with the “snowbirds” each winter? Do you have an out-of-state vacation home where you stay each summer? If you own property in two different states, you could face some complicated financial issues. Fortunately, a skilled financial advisor can help you resolve these problems with some careful planning.

If you call two different states your home, here are a few potential challenges you could encounter:

Permanent residency confusion

If you own a vacation home in another state, you probably consider one state your “home,” and the other state just a place you like to visit. However, the governments of those two states may look at it differently. Depending on whether or not these states deem you a resident, you could pay a hefty price.

For example, let’s say you live in Michigan, but you head south to Florida to live in your vacation house for a couple of months each winter. First of all, because you own property in more than one state, your estate could be subject to probate in both Florida and Connecticut. Additionally, there could be severe income tax issues. While Michigan has relatively high income tax, Florida has no state income tax at all.

First and foremost, you need to determine whether you are considered a resident of both states. Generally, if you spend more than 183 days in a state, that state is more likely to see you as a permanent resident. However, this is just a simple rule of thumb. When it comes to financial planning, things can get much more complicated.

If you want to more strongly establish your permanent residency, you should register to vote there, keep your driver’s license and car registration in your main state and set up your financial accounts with banks and brokerages in your home state. You should also hold onto any financial records that document your residency and keep receipts that show where you are living during a certain time of year.

Probate problems

If you own property in more than one state, your estate could be subject to probate in both states. This means your heirs could be heavily taxed after you die, and they may not receive as big of an inheritance as you had hoped.

To help resolve probate issues, many financial experts say you should place any property you own in a second “nonresident” state, such as a vacation home or condo, into a revocable trust. This ensures the property will be passed onto your beneficiaries free of probate.

Health insurance complications

People who own property in two states should also take a close look at their health insurance coverage. Generally, health care plans cover only a specific geographic area. Therefore, if you split your time between Maine and North Carolina, you may need to purchase two health care policies to make sure you are covered in both states.

Alternatively, you could switch to a different type of health care policy. For example, if you have an HMO (health maintenance organization), your insurance likely won't cover medical costs if you visit a doctor outside of your network. However, if you switch to a PPO (preferred provider organization), your health insurance will cover at least a portion of the costs if you go out-of-network.

Homeowner's insurance issues

You should also review your homeowner's insurance coverage if you spend considerable time in another state. Your coverage may change if you leave your home unoccupied for a long amount of time. Additionally, if you’re renting a home or condo in another state, you will need to purchase renter’s insurance to protect your personal items inside the home.

If you split your time between two states, you could face these financial issues and many others. You may want to meet with a financial professional who can help you plan carefully and overcome these types of challenges.

Anthem Care Comparison Now Covers Entire State

All Anthem Blue Cross group members in California now have access to Anthem Care Comparison, our ground-breaking online tool that launched in 2008 to select geographic areas in the state. Care Comparison provides total estimated costs associated with all aspects of nearly 40 specific medical procedures performed at local area hospitals and medical facilities.

Tackling Three Major Money Challenges in a Slow Economy

Our current economic environment is a little scary—and depending on your unique situation, it may seem downright terrifying. Unfortunately, these tumultuous times have driven many consumers into a frenzied panic, but it’s important to stay calm and keep sight of your overall financial goals.

With the proper planning, it is possible to save for your financial goals even in today’s harsh economy. Here’s some advice when it comes to saving up for three of the most daunting money challenges:

Buying your dream home

If you’re looking to save up for and buy a home, you have your homework cut out for you. First and foremost, you need to take a close look at your current finances. Do you earn enough to pay a mortgage payment? How much can you afford to spend? Will buying a home detract from your other financial goals, like saving for retirement or your child’s college education?

Experts say you should spend no more than 28% of your gross income on home costs, including your mortgage, property taxes and homeowner's insurance. If the expenses of buying and owning a home add up to more than 28% of your annual earnings, the time may not be right for you.

If you’re currently carrying around a hefty load of debt, you should focus on paying that down before you buy a home. Your total debt expenditures, including credit card debt, student loans, car loans and home debts should add up to no more than 36% of your gross income.

Before you even start home shopping, order a credit report. Most lenders require a credit score of at least 720 before they’ll offer you a loan on even the cheapest mortgages.

If your credit score is high enough to qualify you for a mortgage, the next step is choosing the right mortgage. While adjustable-rate mortgages (ARMs) typically include lower payments than fixed-rate mortgages, fixed-rate mortgages offer the peace of mind of an unchanging mortgage payment. While your monthly mortgage amount can change with an ARM, it will always remain the same with a fixed-rate mortgage. Plus, in recent months, fixed-rate mortgages have become more affordable. Therefore, experts are strongly encouraging homebuyers to go with a lower risk fixed-rate mortgage.

Saving for college

College costs are sky-rocketing, and the price tag increases almost every year. While a select few receive scholarships to pay their way, most students end up taking out student loans, which eventually have to be repaid. If you don’t want your child to be stuck paying back loans for years to come, it’s up to you save up for the hefty price of tuition.

You'll want to consider a Coverdell and/or a 529 college savings plan. Earnings in these plans grow tax-free, and withdrawals are not taxed as long as they are used for legitimate education expenses. You can put as much as $2,000 into a Coverdell each year, but you can contribute far more to 529 plans—sometimes up to $300,000 per person.

If you can’t save enough to cover the college tab in full, you may want to explore government loans. These loans are typically cheaper and offer fixed interest rates. However, every unique family’s situation is different. Talk with a financial professional about the most effective way to save up for your child’s higher education.

Building a nest egg

When it comes to planning for retirement, it’s never too early to start saving. Far too many consumers wait until a year or two before retirement before they come up with a retirement plan. According to the 2007 Retirement Confidence Survey, only 60% of workers say they are currently saving for retirement. Unfortunately, those who wait are often the people who outlive their money.

If you want to ensure a comfortable retirement, you need to start saving right away. Diversification is key—if you put all your eggs into one basket, and that basket takes a fall, your retirement savings could be gone in a blink of an eye. Experts say you should have no more than 5% of your net worth in any one position.

If your employer offers a 401(k) or another employer-sponsored retirement plan, by all means take advantage of it. If you put a certain amount into these funds, employers will generally match you contributions.

If you don’t have a retirement plan at work, open an individual retirement account (IRA). In 2009, you can contribute as much as $5,000 to a traditional or Roth IRA and up too $6,000 if you’re 50 or older.

Of course, every person will have unique financial needs after retirement. Meet with a financial advisor to come up with a winning retirement game plan. A professional can help you set realistic retirement goals, recommend the best investments and keep you on track.

HSAs Add Flexibility to Your Health Care Dollars

Health savings accounts (HSAs) provide a tax-advantaged way to save for and pay for your and your family's health care expenses. With an HSA, you set funds aside to pay for health care expenses that are not covered by your health care plan. You receive a tax deduction for amounts you contribute to the HSA, and amounts you withdraw to pay for qualified health care expenses are also free of tax. HSA account funds are invested, giving the HSA growth potential beyond the amount of the contributions you make. Amounts remaining in an HSA at the end of the year carry forward for use in subsequent years.

In order to be eligible to open an HSA, you need to be covered by a high deductible health plan (HDHP) and, generally, have no other health plan. The HDHP can be the coverage you have through your employer, or a policy that you've obtained on your own. An HDHP is defined as a plan with a minimum deductible of $1,100 for individual coverage/$2,200 for family coverage, and annual out-of-pocket maximums of $5,600 individual/$11,200 family (these amounts are for 2008 and are indexed annually for inflation). The plan can include coverage for preventive care that is not subject to the deductible, and still qualify as an HDHP.

Starting in 2007, your maximum annual HSA contribution is based on the IRS limit for your type of coverage, rather than your HDHP's deductible. For 2008, the max contribution for self only coverage is $2,900 and $5,800 for family coverage. Before 2007, the contribution could not exceed the deductible of your HDHP. Unlike many other tax breaks, the HSA contribution maximum does not phase out for individuals at higher income levels.

Because the premium cost for an HDHP will be less than that for a plan with a lower deductible, you can use the amount you save on your health plan premium to contribute to an HSA. Then, you can make additional contributions, if desired, up to the maximum amounts described above. Individuals who are age 55 or older are permitted to make extra "catch-up" contributions (until they enroll in Medicare).

What can you use your HSA for? HSAs were created to pay for health care expenses, and so long as a withdrawal is used for a medical care expense, it will be free of tax. "Medical care" is defined by Sec. 213 of the IRS Tax Code, and includes the types of health care services and supplies that you would expect: physician and hospital services, lab tests, prescription drugs, dental and vision expenses, and the like. A handy guideline as to what is considered a medical care expense is IRS Publication 502. An HSA cannot be used to pay the premium for the HDHP (unless you are on COBRA, or are receiving unemployment benefits).

The philosophy behind HSAs urges individuals to take more charge of, and to be more responsible for, how their health care dollars are spent. For example, instead of paying hefty premiums for extensive health care coverage you may not want or need, you buy a lower cost health plan with a higher deductible. This HDHP still will protect you from the cost of catastrophic health care expenses. However, because it does not provide first-dollar coverage for most care, you face decisions similar to those you make in other purchasing situations: Do I really need these services? If so, am I getting value and quality for the price I pay? In other words, for non-emergency situations, the HSA encourages you to shop around before spending your health care dollars.

If you think an HSA might be right for your situation, your insurance agent or broker can help you get started in setting one up. Many insurance companies sell HSAs that are packaged with an HDHP, and also provide the investment management of the HSA funds. However, any HDHP can be used, so long as it meets the qualification requirements set by law. HSAs also may be established through banks and other financial institutions.

UnitedHealthCare Responds to Swine Flu Concerns

Hello all. I just got this email from UnitedHealthCare and wanted to share it with all of you.
As you may have heard, this past weekend, the United States declared a public health emergency in response to the recent reports of swine flu. UnitedHealthcare wanted to immediately update you on swine flu, offer you and your clients' resources for additional information and let you know what we are doing to address the situation.
What is Swine Flu?Swine influenza, or "swine flu", is a highly contagious acute respiratory disease generally found in pigs, caused by one of several swine influenza A viruses. Although humans do not normally get the disease, the current strain of the virus is contagious, and human infections can occur, according to the World Health Organization (WHO).
Why Has a Public Health Emergency Been Declared?The U.S. public health emergency declaration allows the federal government to free up additional resources to help address this situation, much like it recently did during the public health emergency declarations for the recent flooding in Minnesota and North Dakota.
What Are The Symptoms of Swine Flu?Swine flu symptoms are very similar to seasonal influenza and generally include fever, fatigue, lack of appetite and coughing, although some people also develop a runny nose, sore throat, vomiting or diarrhea, according to the Centers for Disease Control and Prevention (CDC). Individuals should use reasonable precautions if they suspect they may have been in contact with swine flu and contact their primary physician for specific advice. UnitedHealthcare fully insured members can also contact Care24®, a 24-hour toll-free telephone line staffed by registered nurses.
What is UnitedHealthcare Doing to Address this Situation?We are tracking and responding to developments surrounding this situation. We have strong partnerships in the public and private sector, including the CDC, local and state health agencies. We are prepared to fully leverage all available resources, including more than 10,000 in-house clinical experts to address this situation, if needed. We want to assure you, your clients and members that we will judiciously consider all information and are fully prepared to meet your clients' service needs if this situation escalates.
More InformationFor the most up-to-date information, frequently asked questions and more, please refer to the CDC or WHO Web sites:
www.cdc.gov/swineflu/http://www.who.int/en/
We will continue to keep you, your clients and members updated as new information is made available. Please visit UnitedeServices.com or UnitedHealthcare.com for the most up-to-date information.

Ten Tips for Shrinking Your Medical Bills

Word on the street is that health care reform is on the way, but medical costs are still phenomenally high at the moment. Health care spending in the U.S. reached a whopping $2.4 trillion in 2008, according to the National Coalition on Health Care.
Unless you and your family members all happen to be incredibly healthy folks, you’ve probably felt the financial impact of ever-rising medical expenses. These days, all it takes is one trip to the emergency room or a visit to a medical specialist—and suddenly your mailbox is flooded with medical bills.
Fortunately, there are a few ways you can cut down on your annual health care costs. Here are ten medical bill slashing tips that could save you a boatload of money:
Find a primary care physician: In this day and age, many patients simply stop by the local urgent care center when they aren’t feeling well. These centers are fast, convenient and affordable. While going to a primary physician may seem passé, it’s still important to develop a relationship with a doctor you know and trust. Because a primary care physician takes time to get to know you and your medical history, they are more likely to diagnose you correctly and make well-educated decisions about your overall health—which could save you time and money in the long run.
Save on prescriptions: Ask your doctor to prescribe you generic drugs instead of costly brand-name drugs whenever possible. Most health insurance companies charge lower co-pays for generic drugs. You could reduce your prescription costs by $10 to $40 per medication.
Avoid the emergency room: Don’t go to the emergency room unless you actually have a medical emergency. Find out if your physician or pediatrician provides after-hours services or ask if they can recommend an urgent care center. This could save you a trip to the hospital and a great deal of money. Figure out which hospitals are in your health care network and keep the address and phone number on hand. Study your plan’s rules about ambulance services and emergency room co-pays. If an emergency does arise and you’re not sure what to do, call the 24-hour emergency help line number located on the back of your insurance card.
Cut back on specialist visits: Go to your primary care physician before you make an appointment with a specialist. Your regular doctor may be able to help you with your medical problem without a costly visit to a specialist.
Stay healthy: If you quit smoking, keep your weight at a healthy level, exercise regularly, take prescribed medications and get regular check-ups, you’ll save untold amounts money in the long-run on health care expenses. Plus, healthy lifestyle changes can help you keep chronic diseases under control, which means you won’t have to pay as much for costly treatments and prescriptions.
Review your meds: Discuss your regular medications with your primary care doctor every so often. Talk about how long you’ve been taking the prescription, whether it’s working or not and what negative side effects it may have. You and your doctor may decide you no longer need the medication.
Question expensive testing: If your doctor says you need to get an MRI, a CT scan or another costly test, ask if the test is absolutely necessary. Sometimes these tests lead to nothing more than hefty medical bills.
Don’t fall for the drug hype: Every time you turn on the TV there’s a flashy new ad for the latest “miracle” drug. Don’t get caught up in the hype. While some of these newly released drugs may have a few advantages over their older counterparts, the new meds are often much more expensive. Talk to your primary care physician about whether it’s worth it to make the switch—more often than not, it’s not worth the price you’ll pay.
Don’t go crazy with screening tests: Some screening tests are important because they can catch a disease in the earliest stages. However, you can easily get carried away with screening tests. Oftentimes, these tests lead to false alarms and unnecessary treatments. Try to stick with just the screening tests your doctor recommends based on your medical history.
Give it some time: Obviously some medical problems require immediate treatment. For example, if you think you’re suffering from a stroke or heart attack, get medical attention immediately. On the other hand, if you’re just feeling a little under the weather or having minor aches or pains in your joints, you probably shouldn’t rush to the doctor. Oftentimes, if you give yourself a week or so, the discomfort will go away. If you have a cold or a stomach virus, your body will fight it off naturally. Give yourself some time and see if your body can handle it without the help of medication. However, if these symptoms persist for a week or longer, you may want to see your doctor.

Rwanda Basket Co.

Before I leave this earth I want to do something to make a difference in the world. By being a Rwanda Basket Company Sales Consultant I am not only changing the lives of Rwanda's poor with every basket I sell, but I am showing the world that I care about women and children in need.With every basket I sell I am putting life-changing income into the hands of impoverished women and their children in Rwanda. I am truly making a difference! Our children learn by what they see -- As a sales consultant I am teaching my family and friends to care for those less fortunate than themselves as they watch me work to benefit Rwanda's impoverished women and children. I am joining a caring community of consultants that are growing and learning together about making a difference in the world.