COBRA Health Insurance Coverage

Is COBRA Health Insurance something that you should be considering? A friend's brother lost his job and decided to go without health insurance until he found another job with health benefits. The main reason was that it was too expensive, and he hadn't been to the doctor in about 2 years anyway. He figured he could go for some time without it and maybe he is right. But it could also end up being a very costly mistake. I have read horror stories of people who developed serious illnesses only to be denied certain coverages with their current insurance plans. So I can just imagine how difficult it would be to get new coverage with a pre-existing condition. To prevent any break in coverage, one should really consider transitional coverage known as COBRA.

COBRA gives workers and their families who lose their health benefits due to certain qualifying events the right to chose to continue group health benefits for a limited period of time, generally 18 months. Some of the events that could cause the loss of benefits and entitle you to COBRA coverage are voluntary or involuntary job loss (for reasons other than gross misconduct), reduction in work hours, death or divorce. You must have been enrolled in the employer's health plan at the time of the event that caused loss of benefits.

When you are no longer entitled to benefits, your employer is required to notify you of your right to elect COBRA coverage. They must also notify the plan administrator and you should receive notice from them informing you of your options. You must respond to them by a specified period of time, or you will lose your rights to COBRA benefits. You must be offered the same type of coverage that is available to eligible employees and generally the same coverage you had prior to the event that caused loss of health benefits.

You will most likely be required to pay the entire cost of the plan (up to 102%, 2% for administrative costs). This can be costly as you will now be paying the portion that your employer had paid for you. However, you are still paying group rates which in many cases is cheaper than buying an individual policy. There is always the possibility of unexpected illnesses, hospitalization or surgeries that would undoubtedly be more expensive than the premium you would pay for COBRA coverage. You should definitely shop for a policy that fits your particular situation, because it is possible that you would find something cheaper. But it's good to know that you have the Cobra option and can insure that there is no lapse in your coverage.

For more information regarding COBRA and some FAQ's visit www.dol.gov/dol/topic/health-plans/cobra.htm.

Is Santa Claus (the rally) Coming to Town?

The Santa Claus Rally which actually refers to the the week between Christmas and New Year's has broadened its definition in recent years. It now is referred to much more often in the weeks leading up to Christmas. Will we get the rally this year or has Santa come early?

In the past 8 years or so, November and December have been extremely bullish and about 65% of the time stocks advance the week following Christmas. There are several factors that contribute to the Santa Claus rally including year end tax considerations, the tendency of people to fund their IRAs and 401K's for the start of the new year, financial institutions looking to be fully invested for the new year, and the anticipated January effect which is the tendency of stocks to rise in January. However, the "January effect" has become so anticipated that in recent years it has not really materialized.

With the Dow Jones making new highs on an almost daily basis and the other indexes following behind, I can only wonder if a correction is not in order. Last week it was a bit concerning with good news coming out, strong futures in the morning and then a drop in the stock market. This is usually a sign of a pullback. I really don't expect a large pullback, since the market has also been shrugging off seemingly bad news, usually recovers from early drops and has consistently been closing off of the lows However, I am personally hoping to add to my positions at lower prices.

I guess we will have to wait and see if the market continues it's strong year end advance, or if Santa Claus (the rally) has come early this year.

Grocery Savings

I just recently discovered the website for the grocery game, www.grocerygame.com. I am ready to try it out. What it does is reveal rock bottom prices on hundreds of products each week and matches them up with manufacturer's coupons for best possible savings at local supermarkets. There is a 4-week trial for $1 and afterwards it goes to $10 for 1 store and $5 for each additional store. I've tried to do this myself for years, but I am ready to accept any help I can get. The savings seems outstanding, but I am curious as to whether it actually pays to use. There is another site, www.couponmom.com that I am going to check out also.
There seems to be a lot of savings opportunities out there and I am ready to save.

Teaching Kids About Saving Money

It is a good idea to teach kids about money at an early age. I've found that the whole concept of saving to them is overwhelming. So I believe that the earlier they learn the better. Nip those spending urges in the early years and everyone will be better off.
One of the first things that I attempted to teach my girls was the difference between a penny, nickel, dime etc... They were all very smart and learned a lot of things at an early age, their memories sometimes amazed me, but try to teach them the different coins and you would have thought it was trigonometry. They all seemed to have trouble with remembering what was what. My husband said it was because they were girls and would never grasp the concept of money or savings. One dirty look from me and he said he was just kidding...??? Anyway, we stuck with it and they eventually learned. I think the most important thing is to make it fun to learn and save. Here are some of the things that I've tried with my girls even before they were 5.

• Made flash cards with the coins attached. It was a good way to teach them to spell the words too. ( I think they learned how to spell the words before they remembered what each coin was). If they remembered the name of the coin, I would give them one for their bank. Which brings us to the next step, a piggy bank.
• The bank they use should be something fun. They've had all different kinds, from see-through, to electronic, to an actual "piggy" bank. One of their favorites is a simple plastic Clifford about 6 inches long where they put the money on top of his head and it rolls down his back and into his body. Whatever they choose, make it something that they will want to use. If they get bored with it and want a new one, make them save up for it.
• When they want to buy something, I let them bring their money to the store, pick out what they want and pay for it themselves at the counter. Sometimes it's a good idea to do this when it's not so busy, as they have all paid in coins for things upwards of 5 dollars. The clerks are not always so thrilled, but they are usually helpful and understanding.

Now that my two older girls are 8 and 10 they are of course asking for more high priced items that "everyone" has. Here are some of the things I have tried with them.

• They make a list of their "financial goals". Either how much they would like to save by a certain date, or items that they would like to buy. Then they begin to save with these items in mind. If they want a pair of shoes that cost $20 more than I would normally spend, then they need to save the $20 and I will chip in the rest. Knowing what they want and how much it costs will either cause them to save better, not spend their money just because they have it or they may realize that it's too much money and that they don't really need it because there is something that they want even more.
• Explain to them the concept of bank interest. They like the fact that if they put their money in the bank rather than keeping it at home, they will get more money from the bank. I know it's not much, but to them it's like getting something for nothing. When they receive money as a gift, I try to have them put part of it in their savings account. I don't force them to do this, but most of the time they are receptive to the idea knowing that they will earn even more.
• I've let them sit with me while paying bills so that they can see where our money goes every month. Then they realize that the money that comes in needs to go out so that they can live in their house and have lights and tv and heat or air conditioning, etc...
• Let them earn money at home by giving them extra chores, like raking leaves, helping with yard work, washing the car.

These are just some of the ways I have gotten my girls interested in saving. I've found the most important thing is to make it fun and interesting. I am always looking for new ways, so if anyone has any ideas, let me know.