Open Season

‘Tis the season for federal employees and retirees to think about their health insurance needs under the Federal Employees Health Benefits Program (FEHBP). I’m actually enjoying a huge slice of pumpkin pie as I’m writing this article. I probably should take a moment to consider my health insurance needs, especially if I go back for seconds!

The FEHBP open season this year has already begun and is scheduled to end on December 12, 2011. If you are happy with your current FEHBP coverage and you want it to continue through 2012, then there would be no need to take any action. You officially have more time to do some last minute shopping for holiday gifts.

Unless you are under one of the few plans that will no longer be available next year, your current coverage would continue accordingly. The same holds true for any dental or vision coverage that you might have under the federal program. Please refer to the following link for details regarding the plans that are changing or leaving the FEHBP next year:

However, if you are an employee who wants to take advantage of a Federal Health Care or Dependent Care Flexible Spending Account (HCFSA or DCFSA) in 2012, your current opportunity to enroll for a new FSA (outside of a Qualifying Life Event) will end on December 12, 2011.

FSA’s do not automatically continue from year to year like health insurance. Unfortunately, federal retirees are not eligible to participate in HCFSA’s or DCFSA’s. This article is primarily focused on health insurance, but for more information about FSA’s, please refer to the following link:

The open season allows eligible employees and certain retirees to enroll in the FEHBP, if they were not previously enrolled. Later, we will address some of the unique circumstances and situations for retirees.

If you wanted to change your federal health insurance, the open season also allows you to do so. For most employees (and all retirees), the effective date for your open season election will be January 1, 2012. You should verify this effective date with your servicing agency.

For more details regarding the current open season, please refer to the following link:

Affordable Care Act

Due to the recent Affordable Care Act, children are allowed coverage under their parent’s FEHBP up to age 26. Under the previous rules, folks had to remove their children from their plans when they reached the age of 22.

Please refer to the following link for more details regarding the changes to federal benefits programs under the Affordable Care Act:

Married to a federal employee or retiree?

If you are a federal employee or a federal retiree who is eligible for your own FEHB coverage AND you are married to a federal employee or retiree who has their own entitlement to FEHBP coverage, it tends to be cost effective to maintain one Self and Family plan for the entire family when there is at least one eligible child under the plan.

The premium for the Self and Family plan will be the same, whether there is 1 child on the plan or 5 children on the plan. That is because the size of the family has no impact on the premiums for Self and Family plans.

But in most cases, with a few exceptions, it is usually cost effective to convert to separate individual Self Only plans once the last child is no longer eligible to remain under your FEHBP coverage.

The premiums for two Self Only plans tend to be cheaper than one Self and Family plan. You would want to research this for yourself. The first link below refers you to detailed information regarding all the plans available under the FEHBP, and the second link refers you to the premiums for each of the plans.

Easy on the retirement income

The FEHBP is a valuable benefit for federal employees, but it can also prove to be a valuable part of your federal retirement package. It may not represent a source of income, but it can certainly save a federal retiree (or a surviving family member) a lot of money compared to what most everyone else in America currently has to pay for once they leave their private sector companies.

Most private sector companies don’t allow their employees to keep their employer health insurance coverage once the employee leaves the company. If the person is younger than 65 when they leave their company, unless they are going to work elsewhere (or obtain coverage through a working spouse), they usually have to find their own health insurance and pay for the full cost of the coverage until they reach the age of 65 (when they become eligible for Medicare). And when they sign up for Medicare, they usually need to sign up and pay for more Medicare coverage than what the typical federal retiree would need from Medicare.

The FEHBP coverage for federal retirees is essentially the same coverage that is available for covered full-time federal employees, with just a few differences. Currently, the government continues to pay the lesser of 75% of the carrier’s total premium or 72% of the average premium (FEHB Program wide) for retirees just like they do for covered full-time federal employees.

Some agencies, such as the Postal Service, contribute additional money towards these premiums for their employees, but once you belong to OPM as a retiree, those agencies stop paying that additional money.

If you are a part-time employee when you retire, your FEHBP premiums are usually cheaper in retirement because part-time employees usually pay a higher share of their premiums than full-time employees and retirees.

When you retire, you receive your pension from OPM once a month. Since you only get paid once a month in retirement, you pay monthly premiums instead of biweekly premiums. But the annual cost for your FEHBP coverage in retirement is essentially the same as it is for covered full-time employees (unless you were a part-time employee or working with an agency that paid more money towards your premiums while you were employed). You can refer to the following web-link to review the monthly FEHBP premiums for federal retirees.