Tag: FEHB

FEHB

FEHB or the Federal Employee Health Benefits is a program that covers the health insurance and benefits of the federal employees.

Avoid Thrift Savings Plan Withdrawal Penalties

Federal Employees can be subject to a 10 percent Thrift Savings Plan withdrawal penalties if they wish to access their funds prior to 59 1/2 years old can be subject to a 10 percent penalty. To avoid TSP withdrawal penalties you can exercise various thrift savings plan withdrawal provisions.  The date of implementation of the removal of penalty is December 31, 2015 and it was decided post the passage of H.R. 2146.

tsp

Feds Can Avoid Paying Thrift Savings Plan Withdrawal Penalties

There are eight key positions that can be used by feds to save themselves from paying a 10 percent penalty on their thrift savings plan withdrawals. The first one includes all the law enforcement officers. Second on the list includes firefighters and the third include border protection officers as well as customs officers. The fourth category includes the air traffic controllers, the fifth includes nuclear materials couriers while the sixth are U.S. Capitol Police. The seventh category includes all the members of supreme court police and finally the DSS Agents of the Department of State. No single person who is not in the aforementioned categories is eligible for the exemption. Even the special category employees who are not serving among the aforementioned positions do not benefit from the H.R. 2146.

The Surprise

When the TSP issued Forms 1099 for the year 2016 tax year, numerous retirees in the aforementioned eight positions got a surprise on the TSP Form 1099 as the 1999s display a distribution code of “1” in the seventh box which indicates early withdrawal with no exception.

This code signifies to the IRS that the withdrawal that was made is subject to 10 percent penalty and the correct distribution codes for the aforementioned eight positions is code “2” which is an early withdrawal – exception applies and indicates that 10 percent penalty is not applicable.

This issue has arisen because the TSP does not possess information in its files regarding whether the participants qualify for one of the eight positions. TSP is now directing the agencies to mark the participants who fall under the eight categories to a designator code “P” while transmitting the employee information to the thrift savings plan.

The Responsibility

As thrift savings plan didn’t ask the agencies to designate the code P sooner, it’s the responsibility of a person to ensure that the issue is fixed for the 2016 tax year. It can be done by following any of the two methods listed below.

The Agency Route

In the first option, a person will need to connect with his or her agency to correct the underlying records. The person must request your agency to transmit the “P” code on the thrift savings plan. When it’s done, the person needs to request a new form 1099 that is corrected from the TSP. This method might not be expedient as the tax deadline is April 18th, 2017 and a person might not complete the process via an agency that quickly.

Use Form 5329

The other option and the best one is to file a form 5329 along with the federal tax return. Let us explain this with an example to make things easier. Let’s assume that a person received a Form 1099 from the thrift savings plan for USD 12,000 with the distribution code “1” and the person is serving under one of the eight positions listed above. The person will need to complete Form 5329 by listing the USD 12,000 on line 1 of the form and enter reason code “01” and USD 12,000 on line 2 of the form 5329.

The Form 5329 has different codes that are not similar to the Form 1099 codes. Hence, one should not assume that distribution code “01” on the Form 5329 is same as code”1” on the Form 1099. Form 5239 will tell the IRS that a person’s thrift savings plan contribution was a qualified plan distribution post a separation in service in or after the year that a person turned 50 and was a qualified public safety officer.

As a PSO annuitant, a person’s federal tax return would already contain a statement that a person is a PSO and the letters PSO would already appear on the line 16b of Form 1040 if a person is paying the FEHB premiums via OPM because there is an exclusion of up to USD 3,000 for the premiums paid for FEHB.

In case a person is using TurboTax to prepare the tax return and has provided all the proper information to the software during the interview, TurboTax will prepare a Form 5329 for the person’s return automatically.

Conclusion:

It is quite clear that federal employees can save themselves from paying a 10 percent penalty on their thrift savings plan withdrawals by choosing option 2 mentioned in this article. If a person wants to save the penalty on all thrift savings plan withdrawal options, the Form 5329 will be handy as compared to approaching the TSP via one’s agency.

Retired Federal Employees to get only a bit of COLA

The cost of living adjustment is a vital thing for the retired federal employees and the recipients of social security benefits because they need the money to maintain a decent standard of living when their income is minimal. The rate of COLA didn’t change the last year which was a huge disappointment for the eligible people. This year it’s set to increase by only the slightest bit and employee unions are already criticizing it.

Increase in COLA for Retired Federal Employees

federal employees

It has been reported that retired federal employees and social security benefits recipients who were deprived of any increase in COLA in 2016 have something to cheer about. They will have a 0.3 percent increase in COLA in 2017. Unfortunately, the overall income of the federal retirees would still go down.

It is vital to mention here that this would be the smallest increase in COLA on record as the COLA increase was never less than 1.5 percent. It was 1.5 percent in the year 2014, 1.7 percent in 2015 and 2013 respectively. There was no COLA in the years 2010, 2011 and 2016.

The Rising Premiums

One of the biggest challenges faced by the retirees is the constantly increasing costs of health care insurance. There has been a recent increase of 6.2 percent in the premiums that come under the Federal Employees Health Insurance Program (FEHB). So a slightly better COLA would not be able to pull their income levels up. It is pertinent to add that a significant increase in the long term care insurance costs averaging around 83% has also been announced. It will also be a big blow for a number of retired people.

Union’s Opinion

The National Active and Retired Federal Employees Association (NARFE) has stated that the COLA increase for retired federal employees and social security recipients is unrealistically low as does not reflect the expenses faced by seniors.

The American Federation of Government Employees (AFGE) also shared its opinion when it stated that the prices of items needed by seniors are increasing at a rapid pace as compared to the overall inflation rate. So they must not be expected to be content with the huge cost burden. This burden will most likely have a devastating impact on the modest living standards of the retired federal employees. It is clear that both the unions are not satisfied with the menial increase in COLA.

Federal Employee Health Benefits and FEGLI at Retirement – Robb Fenton

health benefits Robb Fenton

If you’re a federal employee who is considering retirement and you are covered by both the FEHB (Federal Employee Health Benefits) program for health insurance and the FEGLI (Federal Employee Group Life Insurance) plan for life insurance coverage, then you may need to factor in what your options are in terms of taking these benefits with you when you go. This is because, while there are ways of maintaining this protection, there are distinct criteria that you will need to meet in order to continue the coverage after you become a retiree.

How to Continue FEHB Coverage After Retirement

In order to be eligible for continuation of your FEHB coverage after retirement from service, there are two primary criteria that you must meet. First, you will need to have retired on an immediate annuity. This means that you will have to have a retirement annuity that starts accruing no later than one month following the date of your final separation from service.

In addition, you will also have to have been either continuously enrolled as an employee or as an eligible covered family member in any of the FEHB plans during the five years of service that immediately preceded your retirement. (It is important to note that it is not required that you be enrolled in the same plan for each of these five years).

If, however, you have less than five total years of service leading up to your retirement, then you will need to have been enrolled in a FEHB plan during all of your time of service since the first opportunity that you had to enroll.

Continuing Your FEGLI Benefits

fegli Robb Fenton

In order to keep your basic FEGLI coverage in retirement, you will also need to have five years of service. If so, you will have three options in how you may retain these benefits. These include the following:

  • 75% Reduction – With this option, a reduction in coverage will begin the second month following your 65th birthday, or the second month following your retirement, whichever occurs later. Then, the coverage will decrease by 2% every month until it reaches 25% of its original amount, where it will then level out.
  • 50% Reduction – With this option, you can retain 50% of your original amount of coverage. The reduction also starts during the second month after your 65th birthday, or the second month after retiring – whichever occurs later. With this option, the coverage will decrease by 1% every month until it gets to 50% of its original amount.
  • No Reduction – With the no reduction option, you may retain the full amount of your FEGLI benefit.

Options for Those Not Eligible to Keep Their Benefits

If you are not eligible to continue your FEHB or FEGLI benefits, then you may still have various options. For example, with the FEHB plan, you will have an extension of 31 days of coverage at no cost to you. Following that time, you can either drop the plan altogether, or convert it over to an individual contract. You may also request a Temporary Continuation of Coverage. This will allow you to continue the FEHB benefits for up to 18 months at a premium cost of 102%.

For the FEGLI plan, you will also have a no-cost 31-day coverage extension. However, after that time period has elapsed, you will only be able to either drop the coverage completely, or to convert some or all of the benefit over to an individual policy and likewise pay the premium out-of-pocket.

More from Robb Fenton

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When Are FEDS Eligible for Retirement  by Robb Fenton 

Robb Fenton Author Page 

Robert H Fenton

Getting Started Early for a Successful Retirement by Kevin Wirth

Kevin Wirth Explains How to Get Started Early for a Successful Retirement

Nearly everyone dreams about the day they can retire. Regardless of whether you plan to hike in the mountains, relax on the beach, or volunteer in a faraway place, one thing is for certain, and that is in order to have a successful retirement, a good plan should ideally be in place.

Unfortunately, though, not everyone has the opportunity to do an ample amount of long-term planning. That may be due to an unexpected health situation, an offer of early retirement, or some other event that has moved up the clock on your leaving the world of employment.

In any case, the good news is that you still have some options on your side for making the most of your finances, as well as your insurance benefits, for your retirement years. The best way that you can ensure success beforehand, then, is to start by taking a good inventory of what you’ve got.

Getting All of Your Retirement Ducks in a Row

As you plan for this next phase of your life, the most important aspects from a planning standpoint will include the following:

  • Insurance – Because health care can be a retiree’s biggest expense, you will want to make sure that you have good coverage here. If you won’t be eligible for Medicare yet, and if being added to a spouse or partner’s employer-sponsored health plan also isn’t an option, then there are ways that you can take your FEHB (Federal Employees’ Health Benefits) with you – provided that you meet certain criteria. You will also want to ensure that you don’t leave your loved ones vulnerable to financial hardship when it comes to life insurance. So, be sure that you check into either an individual plan of coverage, or consider taking your FEGLI (Federal Employees’ Group Life Insurance) coverage with you in retirement.
  • Financial – A good, solid financial plan is also an essential aspect of a successful retirement. This is because in order to live the lifestyle that you desire, you will need a way to replace your current income. Therefore, you should start by obtaining an approximation of how much you will be receiving from your retirement annuity when that time comes. If you’re covered by FERS, inquire as to how much income you’ll get from Social Security benefits, too. Because this income won’t likely be enough to completely replace your employer’s salary, you will also want to give yourself a boost by maxing your contributions while you still can to the TSP (Thrift Savings Plan). This will help you to obtain a larger amount of payout when the time comes to convert your savings into income down the road.

Once you have actually decided when the big day will be, you will want to get your retirement paperwork filled out in plenty of time. Typically, you should do so approximately two months prior to your actual date of retiring. This will help to ensure that all goes well – and just in case there are any glitches, you will have some time to get things straightened out and back on track.

More from the Author: Kevin Wirth

Kevin Wirth Author Page

Kevin D. Wirth and Associates – Federal Retirement Experts

Federal Employees Eligible Retirement by Kevin Wirth

Higher FEGLI Rates in 2016 by Kevin Wirth

Federal Government Sued by Sioux Tribe

The federal government is being sued by the Sioux tribe because it has failed to provide emergency health care to the local residents. There was an emergency room that was shut down by claiming that it put the lives of people at risk. The only other emergency room is 50 miles away which is causing problems for the residents.

How Federal Government Was Involved?

The Rosebud Sioux Tribe of South Dakota has decided to sue the federal government because it failed to maintain The Rosebud Hospital’s ER. The ER was closed in December 2015 as a genuine inspection done by federal inspectors pointed out that the ER posed a risk to people’s life.

The responsibility of managing the ER was with a division of the US Department of Health and Human Services, named as Indian Health Service (IHS).

The Reason Behind the Closure

Though IHS claims that the closure was done because of limited resources and staffing changes, it is clear that the closure was done because IHS failed to maintain the ER properly.

The Plans

IHS also plans to privatize the entire hospital along with several other reservation hospitals situated at South Dakota and Nebraska.

Lawsuit Details

The lawsuit filed by the tribe states that IHS failed to comply with the Indian Health Care Improvement Act by not evaluating the impact of the closure of the ER. The impact needs to be evaluated at least one year before closing off the facility and it was not done.

Evaluation Requirements

The evaluation should have included the fact that there is barely accessibility to an alternative health care resources for the local residents. The evaluation should also include the cost effectiveness of closing such a service, the feelings of the local community about the closure as well as the quality of care provided after the closure.

The need of the Sioux tribe for the ER facility can be judged by the fact that about 35,000 people visited the 35-bed facility in the last fiscal year only.

The Current Scenario

Now, the patients need to travel 50 miles to Winner, South Dakota to get emergency medical service. In some cases, they need to visit an out-of-state hospital in Valentine, Nebraska too.

The lawsuit mentions that five patients died due to the current scenario and two babies were born in the ambulances that were on the way to the hospital just after a few weeks since the ER was closed. These facts certainly give the Sioux tribe an edge over the federal government.

The University of Missouri Cuts Back Retirement Benefits

The University of Missouri has been facing a shortage of funds for a long time now. The University is trying everything in its power to reduce the expenses. It has begun with cutting off the retirement benefits of some current and future employees. The impact of this decision on recruitment and retention is yet to be seen.

The Decision on Retirement Benefits

The decision taken by The University of Missouri Board of Curators is that all the employees who will be joining after January 1, 2018, will not be eligible for some retirement benefits. The employees who have gotten the job 5 years before the said date would also not be eligible for a few well-deserved benefits. The benefits that have been done away with are the health insurance and life insurance benefits. The decision to do away with the benefits was taken unanimously by the board members.

The Process

The process that led to this decision began a few years back because the university leadership had been seeking a solution to the increasing health benefits of retirees since a long time. The university leadership even created a task force to look into the matter and come up with a viable solution. The task force studied the matter for about 3 years before coming up with the solution that has been implemented.

The Necessity

The decision was imperative for University of Missouri because if this decision hadn’t been taken, the university may have to shell out $1 billion for retirement benefits by 2020. This number would have further increased to about $4.5 billion in 30 years time.

The Tough Decision

John Fougere, a university spokesperson recently admitted that the decision to cut back the benefits was not easy as they value their employees too much. He also added that the decision was unsustainable as the financial stability of the university is also vital.

The decision is called a compromise by Fougere. This compromise would ensure that most of the current employees and the current retirees keep getting the benefits.  It is worthy to add here that the University of Missouri is not the only one to cut back on benefits. Many colleges in California, Georgia, and Maryland have also cut the benefits or reduced them.

The Impact

It is being speculated that the impact of these retirement benefit cuts would be seen on the recruitment and retention of employees on the system’s four campuses in Columbia, Kansas City, Tolla, and St. Louis.

OPM Sets New Standards for FEHB Carriers

The FEHB carriers would now have to give a better proof of their performance. OPM is planning to add in several new evaluation measures. This was announced by Beth Cobert, who is the acting OPM Director. The agency also wants to ensure that the FEHB is available to all employees, its costs are kept minimal and the FEHB carriers ensure adequate cyber security.

Why is OPM increasing the Evaluation Measures?

OPM is will start using 19 new measures to evaluate the performance of carriers that are related to the Federal Employee Health Benefits Program. The agency is boosting up the evaluation metrics as a vital part of its Performance Assessment Plan for FEHBP carriers. It is worthy to mention that this new plan will be implemented for the first time. The Announcement was made by Cobert when she was addressing the annual FEHB Carrier Conference in Arlington, Virginia on Thursday.

The Interrelated Success

Cobert also pointed out that the performance of the carrier would be judged by how they perform on the measures and their margins would also be directly affected by it. The agency also aims to judge its own performance on the basis of the success achieved by the carriers. The report regarding these new steps would be submitted to the Office of Management and Budget and the results of the report would be made available on Performance.gov.

The Key Metrics

The key metrics that measures the performance of a carrier are the optimum utilization of resources by a carrier, quality of the clinics and the customer service. OPM focuses on three other measures, blood pressure control, prenatal care and reduction in hospital re-admissions.

The Targets

The key targets that need to be focused upon by the OPM are to ensure that FEHB is made inclusive, the carriers have enough cyber security and the carriers keep the costs low. The first target is vital for the agency as it helps in attracting more people to federal jobs and retaining them. A 2015 Federal Employee Viewpoint Survey has revealed that nearly 78 percent of employees think that the FEHB availability impacts their decision to keep their federal job.

The second target will help OPM to get away from the bad publicity earned by two cyber breaches that occurred last year and made that data of millions of people vulnerable. The third target would assist the OPM to attain short term and long term savings for the FEHB Program.

FEHB and the 5-Year Requirement by Dan Hartenstein

Federal Employee Health Benefits information from Dan Hartenstein

Dan Hartenstein

If you’re a federal employee who is covered under the FEHB (Federal Employees Health Benefits) program and you are considering retirement in the near future, there are some things you may need to think about if you want to take your benefits with you after you leave your employer.

When you retire, you are allowed to continue your FEHB benefits – provided that you meet all of the following criteria:

  • Immediate Annuity – First, you are entitled to retire on an immediate annuity under a retirement system for civilian employees. This includes a Federal Employees Retirement System (FERS) minimum retirement age requirement. What this means is that if you have at least ten years of service and you retire at the minimum retirement age, or MRA, then your annuity will be reduced for each month in which you are under the age of 62;

 

  • 5 Years of Service – There is also a 5-years of service requirement. This means that you must have been enrolled continuously – or you have been covered as a family member – in any of the FEHB plans, for the five years of services that immediately precede the date that your retirement annuity begins, or for the full period (or periods) of service since your initial opportunity to enroll.1

When considering the five years of service requirement, “service” can refer to the time that you were in a position where you were eligible to be enrolled. In this case, you would not have had to be enrolled on a continuous basis. However, you would have had to be covered continuously by FEHB enrollment.

If you did happen to have a break in your service, the break would not be counted as an interruption in your five years of service, provided that you re-enrolled within 60 days after you returned to Federal service.

Surviving spouses may also be eligible to continue FEHB coverage following either an employee’s or a retired employee’s death. In order to be eligible for this continuation of coverage, the spouse must either be entitled to receive a survivor annuity, or they must be enrolled on a self and family plan as of the date of the employee or retiree’s passing.2

 

More about Dan Hartenstein

Dan Hartenstein Author Page

Government Employee Benefit Institute – Dan Hartenstein

Dan Hartenstein – Financial Advisors Credio

Limited Federal Employees Health Benefits Opportunities by Dan Hartenstein

FEHB Opportunities to consider from Dan Hartenstein

Dan Hartenstein

If you obtain your health insurance coverage through the Federal Employees Health Benefits Program (FEHB), then you may have some considering to do regarding how you move forward with your coverage.

This is because back in 2013, the Bipartisan Budget Act established a new enrollment type in the FEHB called the “Self Plus One” that became available in January 2016, with the opportunity to enroll that started in November of 2015.

If you missed the chance to go with the Self Plus One at that time, and it may have been a viable option for you, then there’s good news, because throughout the month of February, members of the FEHB program have the chance to adjust their plan via a limited enrollment period.

Items to Consider for Enrollment

If you’re still are considering going with the Self Plus One, but aren’t completely sure if it’s the right move for you, there are some questions that you can ask in order to help you narrow down your options.

First, as compared to your current plan, will the Self Plus One premium be lower? If so, then this could be a good alternative to the family plan. This is because the Self Plus One will cover the employee, along with one eligible family member. If, however, the premium is the same or higher on the Self Plus One plan, then it likely makes sense to remain in your current plan.

Also, are you a just an FEHB plan member or an annuitant? It you are an annuitant, then you won’t have to make your decision about enrollment right away. Annuitants are actually allowed to decrease enrollment at any time throughout the year, so if you need more time to decide, you won’t need to do so prior to February 29.

It is important to note, though, that if you have just a self-only enrollment, then you will need to have experienced what is regarded as a “qualifying life event” in order for you to switch over to the Self Plus One plan outside of the Open Enrollment season. Common qualifying life events include a change in family status (such as marriage or divorce, or the birth of a child), as well as a change in your employment status, and / or a loss in your health insurance coverage.

More about Dan Hartenstein

Government Employee Benefit Institute – Dan Hartenstein

Dan Hartenstein – Financial Advisors Credio

The Federal Employees Health Benefits (FEHB) and Self + 1 by Paul Kalra

Federal Employee Health Benefits (FEHB) Advice from Paul Kalra

Paul Kalra

If you missed the chance to enroll in the new FEHB (Federal Employees Health Benefits) Self Plus One plan that was available in the fall of 2015, you have another chance in February 2016 to obtain these benefits if you choose to do so.

Back in 2013, as a part of the Bipartisan Budget Act, the Self Plus One plan was established. This plan covers one employee / enrollee, plus one eligible family member that the enrollee designates to be covered.

This differs from other current plans. For example, with the Self Only plan, only the enrollee is covered by the benefits, whereas with the current Self and Family plan, the enrollment will provide coverage for the enrollee along with all of his or her eligible family members.

Considering a Self + 1 Plan

In most cases, changing plans is only allowed outside of enrollment Open Season if a participant has what is considered to be a “qualifying event” in their life. This can include events such as a:

  • Marriage or divorce
  • Birth of a child
  • Change in employment status

However, because the new Self Plus One option because available as a new plan option, FEHB enrollees will essentially have what is a second chance to enroll in this coverage throughout the month of February 2016.

The February time frame does not apply to those who are federal employee annuitants, as well as certain others such as TCC (Temporary Continuation of Coverage) enrollees and those who do not participate in premium conversion. This is because these participants are allowed to decrease their plan enrollment at any time throughout the year.1

More about Paul Kalra, CFP, ChFC, CLU:

Paul Kalra has been providing financial services for over 25 years to doctors, business owners and others nearing or in retirement. After a successful career with John Hancock Financial Services,in 2002, Mr. Kalra founded his own firm, Signature America Financial Planning Services, Inc. in Lake Forest, CA.

In his practice as a financial planner, Paul Kalra has found that when people are nearing their retirement years, they are faced with confounding decisions about their retirement plans, 401(k)’s, IRA’s, Social Security, Medicare, life insurance, wealth-preservation and estate planning. What motivated him to focus his practice on helping people in their 50’s and 60’s was when Mr. Kalra began facing such decisions himself and realized that the answers would have been very tough if he were not a financial planner.

Federal Employees Benefits Premiums Increasing? by Dan Hartenstein

FEHB Advice from Dan Hartenstein

Dan Hartenstein

Dan Hartenstein is a financial advisor in Oahu, HI specializing in retirement planning and federal retirement benefits

Last fall, when the 7.4% (on average) increase in FEHB (Federal Employees Health Benefits) premiums was announced by the government to employees and retirees, it was the largest premium increase since 2011.

But, rather than simply being stuck with higher payments for these benefits, enrollees do have other options in terms of changing health plans so as to get out from under these higher dollar coverage obligations.

Should You Stay or Should You Go?

Depending on the specific plan that you are enrolled in, the actual amount of your premium increase could be more or less than the average. For example, the average rise in premium for those in a self-only plan was roughly 6.5%, while those in a family plan, on average, saw a whopping 10.7% increase.

You may or may not be paying all of these premiums out of your own paycheck, though. For instance, the government pays, on average, about 70% of the total FEHB enrollees’ premiums. But, if you work for the U.S. Postal Service, your employer may pay even more for you.

Things to Consider

Even with the employer’s help, though, the steep rise in premium, on top of other increasing costs across the board, can make this recent move with FEHB benefits enough for many employees to consider other coverage options.

This is because in addition to these rising benefit premiums, many federal employees have also had to deal with several years of either no cost-of-living adjustments, or extremely small pay increases, while at the same time, many federal retirees aren’t seeing much in the way of retirement income increases either. This can make it doubly hard to justify remaining in a plan that has increased the premium in excess of 5%.

With that in mind, it is important to weigh out all potential options, as well as the various costs, prior to moving forward with any decision. Keep in mind that all health plans are not created equal, so be sure to compare apples-to-apples when evaluating any other coverage.

More about Dan Hartenstein

Government Employee Benefit Institute – Dan Hartenstein

Dan Hartenstein – Financial Advisors Credio

PSRetirement.com – Dan Hartenstein Author Page

FEDERAL EMPLOYEES – ARE YOU READY FOR OPEN SEASON

open season

There are two Open Seasons going on almost simultaneously – Medicare and Federal Employees Health Benefits.  Don’t get refused – Medicare Open Season runs from October 15 – December 7, 2015.  Federal Health Benefits Open Season run from November 9 – December 14, 2015.  Many Federal employees will participate in both Open Seasons.   They will need to know what their plans offer and what they are looking for to satisfy their health care needs.

While a Federal employee is still working the FEHB plan will generally be their primary coverage until they retire.  If there is spousal coverage on a job, then the spousal plan will generally be the primary until both spouses are retired.  In essence, Medicare generally becomes the primary after retirement.  If you miss applying for Medicare at the first opportunity for eligibility and you are not still employed you might suffer a 10 percent penalty when you do apply.

There are many types of Medicare plans available.  However, many Federal employees will automatically be enrolled in Medicare if they were Federal employees in 1983.  All other applicants will generally have to apply for Medicare.  Medicare Part A is available at no cost if you or your spouse have worked under a Medicare covered employment.  If you don’t qualify for what is termed ‘Free Medicare – Part A’ you can still contact Medicare to see what the cost might be to you and how to apply.

Medicare Part B carries a premium and the premium varies based on income with an adjustment being made to the premium annually.  It is recommended to Federal employees when enrolling in Medicare to keep their Federal Employees Health Benefits (FEHB) plans because the coverage, including prescription drug coverage, is basically equal to or better than any other coverage available.  If you suspend your FEHB to enroll in a Medicare Advantage Plan (Part C), you can always go back and pick up your FEHB.  Whether you are participating in Medicare Open Season or Open Season for Federal health plans, be sure to review your plans and examine what your plan covers and what it does not.  Chances are if you are covered under a FEHB plan you are satisfied with, there might be little reason for you to make any changes.  Know what coverage your plan offers and know what your health priorities are and make a decision that best fits the needs of you and your family.

P. S. Always Remember to Share What You Know.

Dianna Tafazoli

It’s Almost Federal Benefits Open Season For Federal Employees

The Federal Benefits Open Season is just round the corner (Nov 9-Dec 14) and is your one and only annual opportunity to enroll or make changes to your health, dental, vision, and tax-saving needs.

There are three federal benefits programs that participate in the annual Open Season event. They are the Federal Employees Health Benefits (FEHB) Program, Federal Employees Dental and Vision Insurance Program (FEDVIP), and the Federal Flexible Spending Account Program (FSAFEDS).

This is your chance to make elections for these programs that you aren’t allowed to do during the rest of the year, unless you can come up with a qualifying life event (QLE).

For the record, your FEHB and FEDVIP enrollments will continue automatically even if you ignore the Open Season event and make no changes. Existing FSAFEDS accounts, however, do not continue automatically, so you are required to re-enroll.

What Changes Can you Do To Your Federal Benefits During Open Season?

The changes to federal benefits you can make vary based on the program. For FSAFEDS, you can choose from three accounts – a dependent care account, a health care account, and a limited expense health care account. Participating in this program reduces your taxable income. To make an FSAFEDS election, call 1-877-372-3337 or TTY 1-800-952-0450, or do it online at www.FSAFEDS.com.

You can enroll into FEDVIP to fill the gaps in your existing dental and/or vision coverage. For those already enrolled, Open Season is the only time you can cancel FEDVIP enrollment. To make a FEDVIP election, call 1-877-888-3337, TTY 1-877-889-5680, or do it online at www.BENEFEDS.com.

As for FEHB, eligible employees can enroll, change from one health plan to another, and cancel their health benefits enrollment. You can also change participation in premium conversion. One important change this year is the new “Self plus one” enrollment type. Those enrolled in “Self and Family” with only one covered family member can elect to switch to the Self plus one plan.

For making FEHB elections during Open Season, federal employees should use the Health Benefits Election Form (SF 2809) or use an online self-service system. Federal retirees can call Open Season Express at 1-800-332-9798, TTY 1-855-887-4957, or do it online on the OPM Retirement website at retireefehb.opm.gov.

Unions Seek to Prevent Fed Employees Health Benefits Premium Hike

OPM

A few days ago, the U.S. Office of Personnel Management (OPM) today announced premiums for the 2016 Federal Employees Health Benefits (FEHB) Program will rise by an average of 6.4 percent.

OPM is offering a new Self Plus One enrollment type in the FEHB Program that will provide coverage for an enrollee and one designated eligible family member. All FEHB plans will offer a Self Only, Self Plus One, and Self and Family enrollment type beginning in 2016.

On average, enrollees with Self Only coverage will pay $5.50 more each pay period; enrollees with Self and Family coverage will pay $19.61 more per pay period. Those who opt for Self Plus One coverage will pay $8.92 more per pay period than they previously paid for Self and Family coverage. The Government contributes approximately 70 percent of the total cost of a plan’s premium.

“I am pleased that OPM has implemented the new Self Plus One choice for the 2016 plan year. This will give enrollees an opportunity to select coverage just for themselves and their spouse or child,” said OPM Acting Director Beth Cobert.

Federal employee unions including NARFE and NTEU were obviously not as pleased as Director Cobert at the hike in premiums for the health benefits program.

NTEU Seeks Congressional Action to Prevent FEHB Premium Hike

The National Treasury Employees Union (NTEU) issued a statement noting that this 6.4 percent increase in premiums further underscores the need for Congress to act on cost-saving prescription drug contracting and benefit management reforms for FEHB.

OPM attributed the higher rate of increase in large part to increased prescription drug utilization.

“NTEU views prescription drug reforms as an essential way to better control drug spending in FEHBP, which would reduce costs for federal employees and retirees,” NTEU National President Tony Reardon said. “FEHBP enrollees are paying more than they should.”

Specifically, what the NTEU is asking for is support for Rep. Stephen Lynch’s (D-Mass.) legislation—H.R. 2175. The bill would provide OPM with enhanced oversight and contracting authority to ensure that FEHB participants are receiving the best possible drug prices.

The bill also requires that Pharmacy Benefit Managers (PBMs) operate as middlemen to negotiate prescription drug prices with drug companies and pharmacies on behalf of individual FEHB plans, and return any rebates, incentives, and other price discounts obtained from drug manufacturers to FEHB.

OPM Final Rule on Federal Employees Health Benefits (FEHB) Self Plus One Enrollment

OPM Final Rule on Federal Employees Health Benefits (FEHB) Self Plus One Enrollment

opmThe U.S. Office of Personnel Management (OPM) has issued a final rule in the Federal Register that officially amends the Federal Employees Health Benefits (FEHB) program to include the new Self Plus One Enrollment type.

The addition of the Self Plus One enrollment type is expected to cause family coverage premiums for federal employees and retirees to increase by 7%. On the other hand, the cost for current family plan enrollees who convert to the new Self Plus One type will end up paying about 6% less.

The simple way to look at it is that current enrollees with self and family coverage who only have one dependent and choose to decrease enrollment to self plus one, will likely benefit from lower premiums.

Those with more than one dependent covered under a self and family enrollment will likely incur higher premiums.

Impact of Federal Employees Health Benefits (FEHB) Self Plus One Enrollment

This is based on OPM’s Fiscal Year 2014 Congressional Budget Justification that included a projection that the addition of the self plus one enrollment would have a net neutral impact on the Federal budget.

According to that analysis:

– The average premium for self plus one coverage will be approximately 94% of the cost of existing self and family coverage;

– The average premium for self and family coverage will be approximately 107% of the cost of existing self and family coverage.

The analysis also estimates that 33% of active employees with existing self and family will shift to self plus one coverage. Only 20% of annuitants with existing self and family coverage will retain that coverage, which means 80% will switch to self plus one.

Will Insurance Premiums Rise For Federal Employees?

Health Insurance Premiums and Federal Employees

Premiums RiseThere has been plenty of talk about health insurance premiums being on the rise with more of the financial responsibility being placed on the employee.  The premiums on health insurance for Federal and Postal employees will slightly increase but with no real impact on the average employee because of the size of the Federal workforce.  Some other employees outside of the Federal government might not fair as well.  Much depends on the size of the organization and the strength of the company’s revenue stream.

Many Federal employees have spouses who work in jobs outside of the Federal service and have chosen to use the non-Federal benefits to cover health care costs for their families.  As Open Season approaches, it is good time to evaluate the Federal health care benefits (FEHB) available to you and your family.  If you are in the position of deciding between Federal benefits and non-Federal benefits just line up the offerings side-by-side and carefully assess what is offered for each and what  your family is more likely to need.

Except for what is termed -Golden Handcuff- benefits, it will be hard to find benefits that out rival those offered by the Federal government because of shear numbers.  Federal benefits cover over 10 million active and retired employees and their families.  Therefore, before waiving your rights to Federal health benefits coverage make sure you are sitting down with your family and your benefits specialist to make certain you are not making a decision that will cause anxiety in the future.

Another thing to remember, don’t be embarrassed by asking a benefits specialist or some other professional with an in-depth knowledge of benefits to help you sort out your situation.  I think it would be too presumptuous to say that no other benefits package can compare to what is offered to Federal employees.  However, it  is relatively safe to say that it will be hard to find a benefits package more comprehensive than what is offered to Federal employees at a highly affordable cost.

P. S.  Always Remember to Share What You Know.

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Enrollment For Federal Employee Benefits

The Thrift Savings Plan (TSP) no longer has an Open Season.  Employees may start, stop or change their TSP contributions or participation in the TSP at any time.

The Fe Federal Employee Benefitsderal Long Term Care Insurance Program (FLTCIP) also does not conduct an annual Open Season.  Employees can apply anytime for FLTCIP.  There is a full-underwriting whenever you make the decision to participate in FLTCIP.  Remember, the cost of long-term care insurance rises with age.  The best time to enroll in a plan is prior to turning 50.

The Federal Employees Group Life Insurance (FEGLI) also does not have an Open Season.  I can only remember two Open Seasons conducted by FEGLI (MetLife).  However, employees may make changes in FEGLI at any time. Coverage can be decreased or waived by completing SF-2817 and forwarding it to your agency Benefits Office.

P. S.  Always Remember to Share What You Know.

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tense time for federal employees

Open Season can be a very tense time for federal employees because of the many decisions to be made.  Circumstances and conditions in families change and employees need to be ready to address those changes.  Having information available prior to the beginning of the Open Season assists employees with making critical decisions.  Personnel charged with facilitating the Open Season and who work with Federal Benefits are responsible for providing the employees within their agency with certain materials both in hard copy and on the agency’s internal mechanism for agency-wide communication.

It is recommended that a Check List be provided so that employees will have the benefit of checking off what they need in order to get prepared for the changes that might take place for them individually in Open Season.

A list of resources is also recommended to be available for employees and the specific benefits they are interested in or are seeking relevant and additional information.

An easy to understand explanation of how the benefits offered to Federal employees work in tandem to cover the entire health care needs of employees and their families – FEHB, FEDVIP and FSAFEDS is also recommended.

It is very important that employees take advantage of this pre-preparation time and talk to the benefits office to make certain they have all the information needed to make critical and sound decisions about their health care needs.  Making changes involving health care needs are simplest during Open Season.  However, if an employee needs to make changes after the Open Season period ends, there are circumstances by which this can happen so classified as a Life Event.

Work with your Benefits Office so that you understand what your options are for you and your family.  Write down a list of questions and check them against your Open Season Checklist to make certain you are ready to protect the most important asset you and your family will ever own – Your Good Health.

P. S.  Always Remember to Share What You Know.

 

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What Specialists Are Available To Help Federal Employees With Benefit Selections

Benefit SelectionsIndividuals charged with overseeing benefits and helping to organize benefits and health-care fairs receive information needed each year from OPM in order to make Open Season happen in their individual agencies.  These personnel receive from the Office of Health Care and Insurance:
Guides on Rider Information
Information booklets and materials- how to order the materials and distribute them during Open Season.
Information and directions on how to conduct the Open Season both in general and agency specific.
Significant event information is also distributed to agency personnel tasked with conducting the Open Season and
Information impacting specific plans in FEDVIP and FEHB.

Often times employees not tasked with Open Season responsibilities do not appreciate the tremendous amount of time and preparation that goes into making the Open Season happen.  The personnel under the guidance of the Office of Health Care and Insurance must be able to answer a series of questions and inquiries to include contact information about participating carriers.

The Office of Health Care and Insurance provides FastFacts on Federal Benefits and so many other factors relevant to helping Federal employees make wise and cost conscious decisions about what is best for them and their families.

P. S.  Always Remember to Share What You Know.

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What You Can Do In Open Season

Federal employeesOpen Season is an annual event for Federal employees.  During Open Season, employees may do the following:

Enroll in a flexible spending account program (FSAFEDS) which is a health care and/or dependent care account.  Participation in the program requires enrollment each year.  The program does not continue like FEHB and FEGLI without re-enrollment.  The maximum annual election for the Health Care Flexible Spencing Account and the Limited Expense Health Care Flexible Spending Account is $2,500 for 2015.

The maximum annual election for 2015 is $5,000 for a Dependent Care Flexible Spending Account.  Also the minimum election for the flexible spending account has changed from $250 to $100 for 2015.

Employees can also enroll, change, of cancel an existing enrollment in their dental and/or vision plans under FEDVIP.   The same holds true for the health plans under FEHB.  There is no Open Season for life insurance under FEGLI.

P. S.  Always Remember to Share What You Know.

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