Open enrollment for those covered by a Medicare health plan and prescription drug plan begins on Nov 15 and ends on Dec. 31. This is Medicare’s annual enrollment period that allows you to make changes to an existing plan that you are enrolled in or to choose a different plan. While you have until Dec. 31 to make any changes, you should do them sooner rather than later so you can ensure that everything is in place before your coverage starts on Jan. 1, 2010.

Choosing a Medicare health plan can seem daunting so focus on the following factors when evaluating your options: cost, benefits, doctor and hospital choice, convenience, prescription drugs, pharmacy choice and quality and performance.

It’s a good idea to review your plan even if you are happy with your existing coverage. Changes in premiums, alone, warrant a fresh look at your current plan. Health care costs seem to increase every year and Medicare premiums are no exception. The average premiums for Part D and the Advantage plans have gone up by about 7% and 22%, respectively.

Keep in mind that premiums are only one of the cost factors to consider when evaluating a Medicare plan. Other important cost factors include changes in deductibles and co-payments. As with premiums, these costs are increasing in many plans as well.

To learn more visit the Centers for Medicare and Medicaid Services on the web at www.medicare.gov for more information and tools you can use to evaluate and compare your existing plan with the other options available to you. You can also get Medicare information by calling 1-800-MEDICARE (1-800-633-4227).

Have you been thinking about starting your own business, but don't know where to start? Or have you already started your own business, but need some advice on how to take it to the next level?

Accountant and Managing Your Money blogger Jamie Downey, who specializes in the area of small businesses, will be here on Tuesday, Oct. 13, at 1 p.m. to take all of your questions about the world of small business.

During the past week, we’ve received a couple of questions about qualifying for the COBRA subsidy that was enacted as part of the American Recovery and Reinvestment Act of 2009 (ARRA). Before I answer those questions, here’s an overview of the subsidy and how it works.

Under the ARRA, individuals who are eligible for COBRA coverage because of involuntarily termination from their job may be eligible for a reduction in their COBRA premiums. The reduction would allow the individual to reduce their COBRA premiums by 65% for up to 9 months.

To be eligible for the reduced premiums you must satisfy the following:

* You must be eligible for COBRA coverage between September 1, 2008 and December 31, 2009;

* Your eligibility for COBRA coverage must be because you were involuntary termination from your job at sometime between September 1, 2008 and December 31, 2009. Keep in mind that you would not generally be eligible for COBRA coverage or the reduction in COBRA premiums if you were terminated because of gross misconduct;

* You must elect COBRA coverage when first offered or during the additional election period provided under the ARRA. The additional election period applies to those who were involuntarily terminated from their job between September 1, 2008 and February 17, 2009 and failed to initially elect COBRA coverage. Those individuals will have an additional 60 days to elect COBRA coverage and receive the subsidy.

The subsidy does have a phase-out. In The subsidy is reduced for those individuals whose modified adjusted gross income (MAGI) exceeds $125,000 dollars ($250,000 dollars for those filing joint returns) and is completely phased-out for those individuals whose MAGI exceeds $145,000 dollars ($290,000 dollars for those filing joint returns).

On October 9, 2009, Michelle’s Law (H.R. 2851) goes into effect. Passed on October 8, 2008 by President Bush, Michelle’s Law allows full-time college students to take a medical leave of absence without losing the health insurance coverage they receive as a dependent under their parent’s health insurance plan. Prior to the passage of this law, students between ages 19 and 24 could receive coverage under their parent’s health insurance policy, as a dependent, as long as they remained a full-time student. Students who lost their full-time status due to illness or injury were left with the choice of going without coverage under their parent’s plan (because they no longer qualified as a full-time student) or to continue coverage under COBRA, which could be prohibitively expensive for many families. This law prevents the loss of coverage under those situations.

Michelle’s Law was created based on the predicament faced by Michelle Morse. Michelle was a full-time college student who was diagnosed with cancer while attending college in New Hampshire. As Michelle went through chemotherapy treatments, her physician recommended that she reduce her full-time course work at school to deal with the debilitating treatments. However, doing so would cause her to lose her health insurance coverage because her family could not afford the premiums under COBRA. Faced with this no-win situation, Michelle decided to maintain her full-time status. Michelle passed away as result of her battle with cancer. To ensure that other students would not have to go through what Michelle did, Michelle’s family took the issue to their state’s legislature, who passed a law protecting students like Michelle. Other states followed and in 2008 President Bush signed it into federal law.

Here are the details about Michelle’s Law:
- The law applies to full-time students who are covered as dependents by their parent’s health insurance.

- Students are allowed to take up to 12 months off for a “medically necessary” leave of absence without losing their coverage. This also applies to students who reduce their course work to a less than full-time status because of medical necessity.

- In order for this law to apply, the leave of absence, reduction in course work, or change in full-time status must:
* Be medically necessary as determined by the student’s physician;
* Commence while the student is suffering from the illness or injury; and
* Cause the student to lose their dependent health insurance coverage.

For more information about Michelle’s Law visit http://www.michelleslaw.com/.

I was laid off last week and want to elect COBRA coverage for health insurance at the reduced premium. However, I am eligible to apply for coverage through my husband’s employer plan. Can I still sign up for COBRA at the reduced rate?

Unfortunately, you do not qualify for COBRA coverage at the reduce premiums because you are eligible to receive insurance coverage through your husband’s plan. Under the American Recovery and Reinvestment Act (ARRA) passed earlier this year, individuals who are eligible for insurance coverage through another group plan such as a spouse’s employer’s plan or Medicare, are not eligible for the reduced premium coverage under COBRA.

Those who are eligible for the reduction of COBRA premiums under the ARRA are known as “assistance eligible individuals” (AEI). According to the Department of Labor, an AEI is defined as an individual who:

* Is eligible for COBRA continuation coverage at any time during the period from September 1, 2008 through December 31, 2009 because of an involuntary termination of employment (that occurred at some time from September 1, 2008 through December 31, 2009);

* Elects COBRA coverage when first offered or during the additional election period provided by ARRA; and

* Is not eligible for other group health coverage (including a new employer’s plan, a spouse’s plan or Medicare).

Also, if your annual income is more than $125,000 dollars (or $250,000 dollars for couples filing jointly on your federal return) you may need to repay some or all of the premium reduction.

For more information about this COBRA subsidy please click on the links below to read our other blog postings on this topic and to visit the Department of Labor’s web site.

http://www.boston.com/business/personalfinance/managingyourmoney/archives/2009/03/just_laid_off_g_1.html

http://www.boston.com/business/personalfinance/managingyourmoney/archives/2009/03/more_cobra_subs_1.html

http://edlabor.house.gov/blog/2009/02/health-coverage-for-the-unempl.shtml

Yesterday the Wall Street Journal reported that term life insurance rates, after years of falling, are now reversing course and starting to go up. It may be time to re-evaluate your life insurance need and lock in the proper amount.

Consumers have benefited over the last 20 years as term life rates have been falling. This was largely due to improved mortality tables and more competition in the industry from the introduction of web-based insurance sales. But that trend changed earlier this year as many companies announced premium increases, largely thanks to the recent credit crisis. With tighter credit lending, insurance companies have had to pay more to borrow money to maintain their required cash reserves. In addition insurers are receiving lower returns on their investments just like the rest of investors, which makes it harder for them to maintain reserves and cover their expenses.

Now is a good time to take a look at your life insurance coverage. If your policy doesn't provide enough coverage, is annually renewable or has a level term that ends too early, you should think about adding to or replacing your policy. Applications can take weeks to get approved and your rate is not locked in until you receive approval so don't delay. In addition your health and age affect your rating, more good reasons to get the coverage you need as early as possible. However it is very important not to cancel your current insurance until a new policy is in place.

Open enrollment for those covered by Medicare health and prescription drug plans begins on Nov. 15 and ends on Dec. 31. This is Medicare’s annual enrollment period that allows you to make changes to an existing plan that you are enrolled in or to choose a different plan.

While you have until Dec. 31 to make any changes, you should address them sooner rather than later so you can ensure that everything is in place before your coverage starts on Jan. 1, 2009.

Choosing a Medicare health plan can seem daunting so focus on the following factors when evaluating your options: cost, benefits, doctor and hospital choice, convenience, prescription drug coverage, and pharmacy choice.

A recent study by the Employee Benefit Research Institute (EBRI) found that the average 65 year old man would need to have $122,000 in current savings available to have a 90% chance of being able to cover his health care costs in retirement. And, if that figure isn't high enough for you, that amount is required for people who are fortunate to have a previous employer subsidizing the premiums. If that same man does not have any coverage from a previous employer, he must set aside $196,000 to cover his health care costs in retirement.

And the news is even worse for women. A 65 year old woman with some employer subsidized assistance would need to set aside $140,000. Without employer subsidized premiums, that amount jumps to $224,000. Nearly a quarter of a million dollars just to cover health care expenses.

Dare you ask about the expenses for a married couple? I hope you are sitting down. The figures are $235,000 for a couple with some employer provided assistance and $376,000 for those paying their own way.

And these projections could actually turn out to be on the low side because these figures do not include the savings necessary to cover long term care expenses. Also, if you retire before age 65, as many people do, you can expect to pay even more.

EBRI is a private, non-profit research institute based in Washington DC that focuses on health, savings, retirement and economic security issues. I have found a lot of great information on their website: www.ebri.org

Insurance to protect against the loss of a piece of jewelry valued at $5,000 can cost as little as $50 per year. Most people would agree that that is pretty inexpensive given how frequently people seem to lose things such as rings and earrings.

However, the Allstate Insurance Company reports that only 7 to 8 percent of the company's 7.4 million home insurance policyholders buy the additional insurance to cover expensive jewelry (or art, or silverware, etc). Allstate thinks that most people simply assume that coverage is provided under a regular homeowner's policy. However, many policies have a $1,000 limit on stolen items, no matter how expensive the item was. Also, some people probably intend to get the coverage but forget to compile a list of the jewelry they want to insure and then getting appraisals is something they never get around to doing.

If you own some expensive jewelry that you probably couldn't afford to replace if it were lost or stolen, you should talk to your agent about adding a rider to cover the items. For more information on this topic, check out this recent NY Times article.

Many people buy hybrid cars hoping to save money in the long run by spending less on gas. But did you know that hybrids can be very expensive to insure?

According to Insure.com, a 2009 Camry hybrid would cost an average 40-year-old driver $1,957 to insure while a similar conventional 2009 Camry would cost just $1,302 per year. That's an extra cost of more than $600 per year.

Why the extra cost? A study by the Highway Loss Data Institute found that repair costs were higher for 11 out of 12 hybrid cars and SUVs than for their gas-only counterparts. The study further points out that hybrid cars can't usually use after market parts, the labor charges per hour are higher and they take longer to repair.

And owners of some of the newest "microcars" have reported difficulty getting any kind of insurance. A recent article in the Wall Street Journal detailed how some owners of the new Smart Cars had to buy commercial insurance policies because traditional carriers didn't offer policies for those types of cars. The article stated that small cars often cost more to insure than larger ones because they are involved in more accidents and incur bigger claims -- especially for injuries. Small cars are also reported to have higher theft rates and be used more often in street racing.

The Federal Deposit Insurance Corporation (FDIC) is hoping to receive permission from Congress to insure greater amounts of deposits. Currently, individual deposits up to $100,000 and retirement accounts up to $250,000 are fully covered by the FDIC.

Even before this proposal was drafted, savers were been able to obtain additional coverage by titling their accounts in certain ways. However, savers were often confused by the different types of accounts and bank employees weren't always very clear in explaining the rules.

Under the new proposal, up to $250,000 in deposits could be insured and the cost of the increased coverage would be incurred by the member banks in the form of higher premiums. This would be good news for investors who have previously distributed their money across many banks in order to obtain full insurance protection. Mutual fund companies, however, are generally not in favor of this proposal because they think it might give banks an unfair operating advantage. To read more about this proposal, check out this recent NY Times article. Also, to learn more about how FDIC deposit insurance works and to estimate the amount of coverage available for your deposits, visit the FDIC website.

If my husband becomes eligible for Medicare, do I have 18 or 36 months of coverage from COBRA? Is this time a state by state variable or is it a federal guideline under the Department of Labor. The Department of Labor seems to say it is a 36 month option.

An employee becoming eligible for Medicare is a COBRA Qualifying Event and the spouse and dependent child(ren) of the employee are entitled to COBRA coverage for 36 months. However, it is important to note that not every employer is required to provide COBRA coverage. Exemptions exist for certain church-related organizations, firms with less than 20 employees and other categories of employers.

I suggest talking with your husband's benefits department and asking if COBRA coverage is available and for what period of time. Also, it probably wouldn't hurt to get the response in writing. It might seem obvious, but even if the employer has more than 20 employees, you can only get COBRA coverage if the employer offers health care coverage. Also, if your husband's employer only offered health coverage to certain groups of employees, and your husband was not a part of that group, you and your dependents would not be entitled to coverage.

If your husband worked for a large employer and was a full time employee with health care benefits, you should be all set but you should definitely double check because getting and keeping this coverage is very important. Remember that your coverage under COBRA will end if:

you fail to pay your premiums when due,
you reach the 36 month limit,
your husband's employer decides to discontinue its group coverage, or
your husband's employer ceases operations.

My husband wants me to resign and relocate so we can be together, but I'm not sure how I can retain the same security my employer provides. How can I began to assess this difficult decision?

There are certainly a lot of factors to consider in this situation. Here are my thoughts from the "financial front":

Does your employer provide the health insurance for the family?

If yes, you need to confirm that your husband can get coverage for you and any other family members at a reasonable cost or plan to arrange for COBRA coverage (which will likely cost more than what you are currently paying.)

Does your employer provide you with life insurance benefits?

You don't want to find yourself without life insurance because you have left your job. If you rely on employer-provided coverage, get a private policy instead. But apply now so you won't be without coverage for any period of time.

Does your employer provide you with disability insurance?

If you leave your job, you would lose this very important coverage and the odds of suffering a disability are much higher than most people think. Most people would never think about going without life insurance but disability insurance is actually more important because you are much more likely to be disabled than to die. In fact the average person has a one in five chance of being disabled for a period of time before age 65.

Does your employer offer a retirement plan with a company match or, even better, a pension?

If your employer offers a great retirement plan which would be difficult to find elsewhere, you might want to think hard about leaving this benefit behind.

Have you prepared a realistic budget?

This is essential. If you don't have a firm grasp on your expenses, how do you know that you can afford to live on just one income even for a couple of weeks? It could take several months for you to find a suitable job in your new location. Do you have a sufficient "supplemental income" fund available to tide you over?

Do you have an adequate emergency fund and income reserve?

Assuming that you don't have a job waiting for you somewhere else, do you have an emergency fund equal to three to six months of your typical expenses? If your finances are shaky now, leaving a job voluntarily is probably not a smart move.

How does your credit look?

If your credit isn't in the best of shape, it might be wise to postpone a move and work on improving your credit. A poor credit history can impact your ability to get a new job.

Obviously, money and finances shouldn't be the only factors considered, but they certainly are important. Good luck.

Did you know that according to a recent study, 2 out of every 3 homes are underinsured? That is a pretty striking number and, as high as it is, I am actually just a little surprised that it is not higher.

Not too long along ago, I was talking with a neighbor about a massive home renovation that they had completed nearly a year ago. This person had almost doubled the size of their home but she had not contacted her insurance agent to notify him about the changes to her home. If she had suffered a fire, she definitely would not have received enough money from her insurer to rebuild her home. She could have been on the hook to pay hundreds of thousands of dollars to rebuild and all because she didn't think to call the agent and notify him of the work she had done. And I am sure that this is a very common occurrence. Living through a large scale renovation can be very stressful, and checking in with your insurance agent on a regular basis is probably not at the top of anyone's to-do list.

It is important to note that this problem is not unique to people who have taken on huge remodeling projects. Even people who have not made drastic improvements to their home can find themselves underinsured.

This is because homeowners insurance has changed quite a bit over the years. Guaranteed replacement cost coverage used to be fairly common. When you had this coverage, the odds were good that you would be able to rebuild your house exactly as it was with very little cost to you.

Now, it is very hard to find guaranteed replacement cost coverage. Instead, insurers offer replacement cost coverage. It sounds like the same thing, but it isn't. With replacement cost coverage, your insurer will cap the amount they are willing to pay to rebuild at 120 or 125 percent of the policy's coverage amount. That means that it is your job to ensure that the coverage amount is adequate.

How do you do that? Start by contacting your agent and asking them to recompute your coverage limit. This will probably involve anwering a detailed questionnaire. Expect the agent to ask about square footage, number of bedrooms and baths and any "upgrades" like hardwood floors, granite countertops, etc. And don't stop with the inside of your home, if you have extensive landscaping or a pool, be sure to tell the agent about that as well.

If you have a top-of-the-line custom built home, you shouldn't rely on an over-the-phone conversation. The high end insurers are generally willing to send someone to your home to do a custom appraisal. If you still think that number is low, you can talk to builders in your area and get an estimate from them.

The important thing is to not overlook this important area. Make sure you call your insurance agent if you are taking on any kind of home improvement project. Your premiums may go up, but at least you won't find yourself unable to replace your current home in the event of a disaster.

What can you tell me about health insurance provided under COBRA? If I leave my job, am I entitled to coverage for 18 months or 36 months? Also, is COBRA a good deal?

The Consolidated Omnibus Reconciliation Act (COBRA) is a federal law that gives you (and your family) the right to continue to keep group health insurance benefits for a mandated period of time. Before COBRA was enacted, when employees left their jobs, the employee and their family lost health insurance coverage almost immediately. Oftentimes, families were without coverage for just a period of weeks or months while the primary wage earner was between jobs but that was often when disaster would strike. COBRA was created to address this situation and it gives employees (and their families) the chance to buy health insurance through the employer even after the employee no longer works for the company.

A qualifying event is the event that renders an employee (or their dependents) eligible for COBRA benefits. Generally speaking, there are 4 "categories" of qualifying events:

1) An employee dies.

In this situation, the employee's spouse and dependent children would qualify for coverage for 36 months.

2) An employee is terminated, laid off, takes a leave of absence, or has their working hours reduced.

In this situation, the employee, the employee's spouse and the employee's dependent children are eligible for coverage for 18 months.

3) An employee divorces or legally separates from their spouse.

In this situation, the employee's spouse and dependent children are eligible for coverage for 36 months.

4) An employee's dependent child is no longer considered a dependent under the group health plan.

In this situation, the employee's child is eligible for coverage for 36 month.

If you lose your job, it is very important that you sign up for COBRA coverage because it is generally the least expensive and most comprehensive coverage you will find. The premium for COBRA coverage is just 102% of the cost of the group health coverage -- usually much less than you would pay for individual health coverage.

If you are terminated by your employer, you will receive a letter notifying you of your COBRA rights and then you will have 60 days to elect coverage. No matter when you enroll, your coverage is retroactive to the date you lost your employer provided coverage. Remember, you must elect the coverage in writing and you must be diligent about paying the premiums. Don't miss even one payment because you could end up losing your coverage.