Emergency Fund

[wdwfan16]

Considering I just went back to work in May after being unemployed for 15 months -- I would say a minimum of a year.

Thankfully, unemployment carried me through me 15 months and I didn't have to spend any of my emergency funds.

How did you pay for your health insurance on just unemployment? Our health insurance would be almost an unemployment check after we paid taxes on the check.

If only one of us lost our job, then we would not have to touch the emergency fund.

 

[golfgal]

How did you pay for your health insurance on just unemployment? Our health insurance would be almost an unemployment check after we paid taxes on the check.

If only one of us lost our job, then we would not have to touch the emergency fund.

We have individual health plans right now since our employer sponsored plan is no longer available. We pay $577/month for the 5 of us and that covers 3 office visits/year paid at 100%, meds are a $5/copay, preventative care is covered at 100%. If we go over these we then have a $5000 deductible and after that everything is covered at 100%.

 

[JessicaR]

We have individual health plans right now since our employer sponsored plan is no longer available. We pay $577/month for the 5 of us and that covers 3 office visits/year paid at 100%, meds are a $5/copay, preventative care is covered at 100%. If we go over these we then have a $5000 deductible and after that everything is covered at 100%.

That includes hospitalization? If you need to see a doctor outside the 3 visits does that start the deductible? Is the deductible for all or each of you individually? Just asking because I haven't seen anything around here structured like that. We pay our own also and its more than triple that. Are you limited to doctors/hospitals?

 

[golfgal]

That includes hospitalization? If you need to see a doctor outside the 3 visits does that start the deductible? Is the deductible for all or each of you individually? Just asking because I haven't seen anything around here structured like that. We pay our own also and its more than triple that. Are you limited to doctors/hospitals?

Yes, it covers hospitalizations. There is a $75 co=pay for an ER visit-you get 2/year and if you are hospitalized you do start paying on your deductible. We are in an open network and it is with Health Partners, which is a pretty large provider here. I haven't run into any of our Dr. that are not in the plan.

 

[bettymae1121]

I used to think 6-8 months living expenses was enough, I'm leaning towards 12 now. 12 months living expenses combined with unemployment and/or severence can keep a family afloat for a pretty long time.

Of course, saving up that much money can be tough! But I'd say that's what the goal should be.

DH and I would do okay with a job loss though. We can live off of just one income even without resorting to savings and not counting any unemployment payments. It would be tight, but we could do it if we had to. Still, I'm working on increasing our savings account.

 

[wdwfan16]

We have individual health plans right now since our employer sponsored plan is no longer available. We pay $577/month for the 5 of us and that covers 3 office visits/year paid at 100%, meds are a $5/copay, preventative care is covered at 100%. If we go over these we then have a $5000 deductible and after that everything is covered at 100%.

That includes hospitalization? If you need to see a doctor outside the 3 visits does that start the deductible? Is the deductible for all or each of you individually? Just asking because I haven't seen anything around here structured like that. We pay our own also and its more than triple that. Are you limited to doctors/hospitals?

Same questions as Jessica. Ours is way more than $577/month.

 

[golfgal]

Same questions as Jessica. Ours is way more than $577/month.

Yes, it covers hospitalizations. There is a $75 co=pay for an ER visit-you get 2/year and if you are hospitalized you do start paying on your deductible. We are in an open network and it is with Health Partners, which is a pretty large provider here. I haven't run into any of our Dr. that are not in the plan.

MN state law makes insurance companies not for profit so that helps. We also has some pretty favorable laws on the books regarding health insurance, many of which are being adopted with the health care reform bill (the good ones anyway). I do know that when the changes take place our health insurance is going to skyrocket so I am NOT looking forward to that. Also, how old are you, how many people do you have on your plan, what is your coverage, deductibles, etc. Our health history is very good too. All of these things play into your premiums.

 

[tvguy]

We have individual health plans right now since our employer sponsored plan is no longer available. We pay $577/month for the 5 of us and that covers 3 office visits/year paid at 100%, meds are a $5/copay, preventative care is covered at 100%. If we go over these we then have a $5000 deductible and after that everything is covered at 100%.

I just showed this to a co-worker with 3 kids and a wife. He about fainted. We HAVE an employer sponsored plan and HIS month premium is $1,100. I have no idea how much the company adds to this, but you have a tremendous bargain. That's only $7,000 a year, about half the national average of $13,375.
http://www.usatoday.com/money/industries/health/2009-09-15-insurance-costs_N.htm
And far less than the $13,202 that the average Minnesota family paid per year in 2009.
http://www.statehealthfacts.org/profileind.jsp?cat=5&rgn=25&sub=67

 

[tvguy]

How much do you think is a reasonable amount of money to have in an emergency fund? Has your opinion changed as a result of the recent economic difficulties?

Before we had kids, I was comfortable with 3 months expenses. When we had kids, I upped it to 6 months expenses. Now, after hearing so many stories of protracted unemployment, I don't think 6 months is a comfortable cushion. I think I'd feel a lot better with 12 months.

The 3 different financial experts we used on air at the last 3 TV stations I worked at were pretty much in agreement on the following.

> 6 months net pay in cash in the bank.

> Anything above 6 months net pay should be in other investments

> 15% of your gross pay out of every check into retirement (any company match is on top of this)

> If you have a retirement plan, never ever take money out of it. There are apparently some protections in bankruptcy that can protect some or all of your retirement money.

> Do not withdraw cash value from life insurance.

> Pay off the debt costing you the most interest first (usually credit cards).

I'm close on the savings, and 401k contributions. But with 2 kids on college DW and I have both had to scale back to 10% in the 401k.
We've been in conservative mutual funds in our retirement savings for 31 years, and only lost money 1 year, and even then it was a single digit drop. And other than that year, and 2 others, our gain has always been above 10% a year despite the rocky markets.

 

[golfgal]

I just showed this to a co-worker with 3 kids and a wife. He about fainted. We HAVE an employer sponsored plan and HIS month premium is $1,100. I have no idea how much the company adds to this, but you have a tremendous bargain. That's only $7,000 a year, about half the national average of $13,375.
http://www.usatoday.com/money/industries/health/2009-09-15-insurance-costs_N.htm
And far less than the $13,202 that the average Minnesota family paid per year in 2009.
http://www.statehealthfacts.org/profileind.jsp?cat=5&rgn=25&sub=67

These are showing group plans though and like I said earlier, with a national health plan we will ALL see bills like this or more reason being is that with an individual plan we are being rated on OUR health alone and since we are basically healthy, our rates are low. If you are in a group plan and you have a few people with major health issues, those costs get spread out over everyone, even those without any medical claims at all. Your group plan is solely rated on what is called a table rating and those can vary by about 70%. Two groups can have identical plans, identical numbers of participants yet one group pays $1200/month and another group pays $2000/month because of claims history.

Now, coverage on a group plans is generally more comprehensive so that is the trade-off.

 

[disney1990]

Just curious how unemployment works in your state. Here you can't really live on unemployment, it is a percentage of your salary but with an overall cap. I think it is something like 25% but the cap is $588/week. I know in our house that wouldn't begin to cover bills, house payment, etc.

I am very fortunate. My DH is retired and our health insurance is covered as part of his retirement agreement (union benefits). DH collects Social Security and we have absolutely no outstanding bills, no car payments, no house payments. Between his SS and my unemployment, I did not touch my savings. As a matter of fact, I had more in savings when I went back to work than I did when I was laid off. I have one year of salary in my emergency fund.

 

[disneyofcourse]

I think I have at least a year of expenses saved up just in case. BUT I think 9 months was the magic number!

 

[gina2000]

18 months or more. People aren't finding jobs quickly.