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FEHB Is Catching Up – Self Plus One
FEHB – Self Plus One
For a number of years as the Director of Human Capital for a private concern, I was constantly working with my Benefits Manager to save our employees money while designing a highly competitive benefits package. One year we decided to overhaul most of the FEHB benefits program because it was not answering the call and concerns of a majority of our workforce.
Many insurance carriers were invited to showcase their menu of insurance services and the best fee offer for the organization. We had a relatively young, highly educated workforce. Many were thinking about beginning families and of course, another population already had growing families. The one item I was looking for that would seal the deal was a carrier who could offer something other than a ‘self’ and ‘family’ option. I wanted a plan that could cover self and spouse, but most importantly, parent and child or parent and X number of children that did not necessarily rise to the high cost of covering a family.
Household structures have been changing for a long time and most of the insurance industry has not made the adjustment to accommodate the change, most notably in the federal government.
Good news is here. The Office of Personnel Management (OPM) announced that beginning in 2016 federal employees and retirees will have the option of self-plus one coverage through the FEHB. Bringing this additional option choice to the federal workforce will save money for employees and the government. The move also underscores how OPM continues to seek out the best benefits for the largest workforce in the world.
P. S. Always Remember to Share What You Know.
An Economically Changing World
The world is changing. As Federal and Postal employees we face more economic challenges today than the majority of the current workforce has ever witnessed. The hardships of the Great Depression, we either read about in textbooks or heard stories from parents and grandparents, but hardly a reality for baby boomers and beyond.
Over the past several years, the reality of our finances and the turbulence of a global economy is a constant conversation at the average Federal and Postal employee’s families dinner tables. Yet, our responsibility, regardless if we are CSRS or FERS, to do what is necessary to face a retirement future with readiness, still remains. I remember parents saying, “Save for a rainy day.” The economic uncertainty of our times requires that we save for a tsunami. The cost of maintaining our standard of living is much higher today than it was for our parents.
In addition, economically, conditions have created differing and varying levels of responsibility for Federal and Postal retirees. Retirement incomes are increasingly being shared to support other family members, including adult children who are either unemployed or under-employed. Providing support to family members is what we do as Americans until they can get on their feet.
Because our plates are fuller than ever before in recent times, planning for a long life after retirement must be approached with care and a deliberate commitment to live well below our means. We can no longer economically live at our means and certainly not above our means, but below them in order to have a cushion of economic longevity. Remember, economically, the goal is to have your resources outlast you.
The technical aspects of the federal and postal employees’ retirement system from FEHB, Medicare, to FEGLI and your TSP are difficult to understand and much more difficult to master. There are such a vast number of technical pieces of the federal retirement system it seems to justify the use and consultation of both your HR office or a qualified retirement benefit expert.
Use PSRetirement.com’s easy access for more information on your TSP Account and Login information.
P. S. Always Remember to Share What You Know.
FEGLI – Some Basic Facts
Basic FEGLI facts
Federal Employees Group Life Insurance (FEGLI) can be transported into retirement. As with your Federal Employee Health Benefis (FEHB) each employee must meet the five year or earliest opportunity to enroll requirement to continue coverage into retirement.
If you fail to meet the time requir
ement prior to retirement, coverage will continue for 31 days at no cost to you with the option to convert to an individual policy. Employees eligible to continue coverage into retirement must elect to do so, it is not an automatic conversion.
The cost of your life insurance depends on a number of factors: your age, the amount of coverage selected, and health risk factors. If you decide to convert some or all of your policy, the good news is you will not be subject to a medical examination to qualify for conversion.
It should also be noted that there is generally no open season for FEGLI. However, in the rare instance where there is an open season, it is generally not open to retirees.
It should be further noted that accidental death and dismemberment coverage available to you as an active employee is not available to you in retirement as part of the government’s insurance program.
Know the facts about FEGLI as life insurance is a very important part of the planning process to RETIRE WELL.
P. S. Always Remember to Share What You Know.
Federal and Postal Retirement Planning
Suspending My FEHB
What Happens If I drop of suspend my FEHB – Can I Ever Get it Back?
That’s a good question and one that is extremely valuable in planning for a comfortable and secure retirement. When you get the information needed to make informed decisions you can ensure that you will retire well.
If you drop or suspend your FEHB under certain circumstances you can re-enroll? It is always a good idea to talk to your human resources office before you consider taking action to drop or suspend your FEHB.
It should be noted that you cannot enroll in FEHB after you retire if you were not enrolled in the plan at retirement and met the FEHB qualifying criteria. A situation when suspending or dropping your FEHB may be appropriate, is when an employee marries or is married to another federal employee with FEHB coverage. Both spouses having FEHB does not constitute double coverage, as you cannot be covered under two FEHB plans simultaneously. However, each person can decide to carry self only or a family plan can be considered. Whatever the choice, it is always a good idea to weigh the financial burden of the choice made and talking with your chosen financial planner may help with your analysis.
Regardless of your CSRS or FERS eligibility, if you are considering dropping or suspending your FEHB coverage you need to give a very good amount of time and energy to understanding what the impacts may be to you and your family. Although the cost of the FEHB premium changes annually, unlike FEGLI which gets terribly expensive as a person ages, FEHB remains cost competitive in the market with the average employee paying only about 25% of the cost. Having information and discussing options with a professional who is an expert in your benefits and your human resources office will help you make the best decision to retire well.
P. S. Always Remember to Share What You Know.
FEHB and Medicare
What do FEHB and Medicare have to do with the other?
Americans are living longer and that means going forward we will have an unprecedented number of seniors making up the American population. Unfortunately, as the population ages, we will have a greater need for medical treatment and services – more visits to the doctor and more hospitalizations associated with aging.
The significant aging population also speaks to a decrease in income and earning capacity among that group due to retirement. As income declines, a balance will only be achieved by realizing a decline in expenses.
One of the greatest increases we face as an aging population is medical costs. One way of keeping your money in your pocket is by making sure your health care needs are covered. It is undeniable that health care will become one of the largest outlays of financial resources as we age.
FEHB will not pay for all our health care needs and neither will Medicare, but having them both should place us in a safe spot. For instance, one of the luxuries of retiring is traveling to other countries for many retirees. If you become ill and need emergency treatment while on travel, your FEHB will cover you, but not Medicare. It is very important to find out exactly what services are covered under your plan, be it FEHB, Medicare or a Medicare Advantage Plan.
Being a federal employee puts you in a very good position as you evaluate your future health care needs. Having the benefit of your FEHB and Medicare just might be one of the safest ways to protect your physical and financial health so that you can retire well.
P. S. Always Remember to Share What You Know.
FEHB – The Decision is Yours
What You Decide to do With Your FEHB at Retirement is Your Decision…..
The best gift one human being can give to another is the gift of knowledge and information. As you get closer and closer to retirement, you may come across a myriad of discussions about whether you should keep your FEHB when you become eligible for Medicare or whether you should suspend your FEHB or wave goodbye to it. Give your friends, your colleagues, and even give yourself, the knowledge you need to make the best FEHB and Medicare decisions.
I am sure every report you read will have some pretty good sounding reasons as to what you should do with FEHB at retirement. Their arguments might be so convincing that you find it hard to resist their opinion about the very important business of your life and your Medicare or FEHB coverage.
Don’t shy away from reading and listening because you can always pick up some good tips, but remember to educate yourself on the facts – a very key ingredient to ensuring that you retire well. Get a good handle on what your health care goals are for retirement and beyond and whether FEHB fits within those plans. Speak to a professional who is an expert in your benefits and determine how you want to reach those goals and what is the best fit for what you and your family need. As you analyze the business of your life – it becomes urgently important to distinguish between what is required for you to survive and what is simply a matter of what is pleasing.
There is a vast difference between need and want the decision will boil down to what you can afford. That difference will become more and more vivid as you paint a picture, as only you can, of what you want that picture to represent for you and retiring well and your health should be something that you don’t skimp on. Gather, analyze, evaluate all the information on FEHB that you can, along with all of the resources available to you so that you can make an informed decision that has the flexibility to land you in the place that fits your retirement needs to retire well..
P. S. Always Remember to Share What You Know.
FEHB who is a dependent
Who is considered a family member eligible as a dependent for coverage under my FEHB benefits?
That is a million dollar question that requires a million dollar answer. The definition of family member is rather broad for federal employees eligible to participate in the Federal Employees Health Benefits program. Below are a list of who is considered a family member for eligibility coverage provisions as a dependent under individual and family enrollment:
• Children Under Age 26
• Legally Adopted Childreny
• Spouse
• Spouse (Valid Common Law Marriage)
• Recognized natural children( Those born out of wedlock)
• Stepchildren
• Foster Children (Living in a Parent-Child Relationship)
• Children Age 26 and over ((Mental or physical disability before age 26)
and incapable of self-support.
The above list provides the information needed for you to determine who qualifies as a family member dependent and what benefits are available to them as a result of your federal employment. If you are unclear about the determination of a relationship between you and a dependent, your human resources office can work with you to establish who meets the relationship criteria to qualify for coverage as a family member.
P. S. Always Remember to Share What You Know.
Medicare eligibility and participation is important when you are considering your FEHB
Postal FEHB – www.LiteBlue.usps.gov
FEHB and Surviving Spouses
If I pass away, will my spouse be able to retain FEHB coverage?
Surviving spouses are able to keep FEHB coverage and pay the same competitive costs as active employees as long as eligibility criteria is met. Meeting the 5 year requirement can be achieved in a number of ways: the time you are covered as a family member under another’s enrollment (in this case, under the federal spouses enrollment) and the time you are covered under Tricare for Uniformed Services personnel covered under FEHB at the time of retirement.
Your spouse, including former spouses under certain conditions, may be eligible to participate in a benefits plan under FEHB. It is good planning to understand eligibility requirements to continue FEHB coverage for you, your spouse or former spouse, and available benefits to your survivors in the event of death.
Take the opportunity to discuss your package of benefits and how they work with your family members so together you can organize questions you need an answer to and present them to your human resources office. Planning now eliminates the stress of not knowing in the future. Retiring well means gettting your questions answered so both you and your family members will be well informed and protected.
Additional Information on FEHB
Strong Consideration Should be Given to Holding On to your FEHB in retirement.
Many Federal and Postal retirees will have a critical decision to make about their Health Benefits moving into retirement and whether or not they should transport their FEHB coverage. If your spouse has a health care plan outside of government and you have FEHB, in conjunction with you potential Medicare elections, you should careful analysis should be exercised to determine what fits best into your plan to retire well.
There will never be a plan or plans that pay 200% coverage, but having your FEHB and Medicare upon reaching the qualifying age of 65 could guarantee your health care security. Medicare will only pay about 80% of your health care expenses and FEHB will cover the rest. However, once you become qualified for Medicare, and you are retired, Medicare will become the primary coverage with FEHB being secondary in most instances.
If you are still working when you reach age 65 and qualify for Medicare, your FEHB will remain the primary. It should also be noted that there are many services that standard Medicare does not cover and some, even, that FEHB does not cover. A careful examination of what services are covered under both FEHB and Medicare is critical to determine the best health benefit fit for you and your family.
When you become eligible for Medicare, it is very wise to look at the important benefits your FEHB offers, particularly when compared to Medicare’s prescription drug coverage. The drug prescription coverage offered via FEHB is second to none. Therefore, even when you become eligible for Medicare, don’t forget to consider holding on to your FEHB so that retiring well will be a part of your plan to live well in retirement.
P. S. Always Remember to Share What You Know.
Special Provisions and Open Season
Special Provisions & Open Season for Federal and Postal Retirees
FERS and CSRS eligible employees have the opportunity to enroll or make special provisions to their FEHB, Dental and Vision coverage (FEDVIP) along with making the Flexible Spending Account elections (FSAFEDS) that best their families. However, during open season retirees may change their enrollment via phone or in writing.
Although changes to your health plan are made during Open Season, whether you are FERS or CSRS, certain qualifying events such as change in family status, change in employment or loss of your FEHB coverage, allow changes to be made at the time the event happens.
Open season runs from the Monday of the second full work week in November through the Monday of the second full work week in December. Employees have a menu of plans to choose from that are also available to retirees. Retirees should always take the opportunity to explore what benefit options are available to them in retirement.
If you’re interested in more information on your Federal and Postal Retirement please read this.
P.S. Always Remember to Share What You Know.
Transporting FEHB
Transporting FEHB
What Could Prevent You From Carrying your FEHB coverage into Retirement?
There might be some other conditions that prevent you from carrying your FEHB into retirement. If something happens that prevents you from carrying your FEHB into retirement, your coverage will still be active for 31 days at no cost to you. When that time expires, you either must drop the FEHB coverage, continue for a period of time or convert to an individual policy.
There is also a Temporary Continuation of Coverage (TCC), known as COBRA, which allows you to carry your coverage for 18 months. You must, however, pay your cost, the agency cost and the 2% administrative fee, totaling 102%.
There are so many changes that have taken place around Federal Employee Health Benefits (FEHB) that individuals who find there are circumstances that might prevent them from transporting FEHB into retirement, now have a number of choices to secure health coverage.
Military or Uniformed Services retirees may elect to cancel their FEHB during open season and opt for ChampVA Tricare or Tricare-For-Life These plans cover Medicare’s coinsurance, deductible and prescription drugs very much like the FEHB plan.
Be sure to check to see what your plan covers and if it allows transporting FEHB, opting always to choose the plan that offers the best benefit to you and your family.
P. S. Always Remember to Share What You Know.
You can always learn more about how FEHB and Medicare work together
Five-Year Rule Flexibility – When Can It Be Waived?
Flexibility of the Five-Year Rule
The five-year rule for transporting your FEHB into retirement is not necessarily a hard and fast rule. There are circumstances under which OPM will grant a pre-approved waiver of the FEHB five-year rule to federal employees. Some of the circumstances are outlined below:
- When a federal employee has been under the FEHB program continuously since the initial date of the agency’s most recent statutory buyout authority or an OPM approved buyout or early retirement authorization and the employee retires during the buyout or OPM-authorized buyout or early out period.
- When an employee receives a buyout or takes an early optional retirement or discontinued service retirement based on an involuntary separation because of a Reduction in Force (RIF) a directed reassignment, a reclassification to a lower grade or when a position is abolished.
OPM will also consider other waivers (in addition to the five-year rule) on an individual or limited basis.
Postal employess can access their FEHB benefits through PostalEase and LiteBlue
P. S. Always Remember to Share What You Know.
Military – Tricare and FEHB
Tricare and FEHB
Federal and Postal employees must meet the 5 year enrollment requirement in order to take my FEHB into retirement. However, if you don’t have the required time, you may use your Military Tricare time to qualify for FEHB.
Military personnel enrolled in Tricare (regulated by the Department of Defense (DOD) is a health care program that serves Uniformed Service members, retirees and their families around the world) are able to count that Tricare time towards the required five year provision for FEHB as long as they are enrolled in an FEHB covered health plan at retirement.
As a federal employee you do not have to worry about filling out an application to keep your health benefits when your retire. When your retirement becomes effective, your coverage will automatically transfer to the Office of Personnel Management (OPM) where they will process your retirement papers and take care of you as a retiree. Your agency will no longer be responsible for you.
If, however, you decide that you don’t want to take your FEHB into retirement, you will need to include in your retirement package a fully completed SF 2809 (Benefits Registration Form) cancelling your coverage.
FEHB access for Postal employees HERE
P. S. Always Remember to Share What You Know.
About FEHB (Transporting your FEHB)
Can I Take My FEHB into Retirement?
Federal employees represent the largest workforce in the world. They also have some of the best benefits on the market with very competitive rates. The federal workforce is so large making it easy for the federal government, acting as representative agent, to negotiate rates that work in the best interest of the federal workforce and their families. Buying in large quantities can drive down costs making the rate for premiums paid by employees for health insurance some of the most competitive you will find.
The Federal Employees Health Benefit program (FEHB) is open to all employees who wish to participate. Employees can choose from a number of different health plans that fit their personal and family needs. As federal employees you get to take your health insurance into retirement if you have met the requirement of being enrolled in FEHB five years or from the earliest opportunity to enroll prior to retirement.
Although, as a retiree you get to enjoy the same low premium benefits in retirement, instead of paying those premiums bi-weekly, they will be deducted once per month from your Annuity. You also have the same opportunity to participate in open season just as you did while working.
It does not matter how often you change plans, as long as you meet the five year or first opportunity to enroll requirement, you can transport your FEHB into retirement.
Social Security is also a key component for eligible Federal and Postal employees
Postal employees can access their FEHB accounts HERE
How do your Medicare elections fit with your FEHB elections?
P.S. Always Remember to Share What You Know.
Enrollment for Medicare – Part B
Enrollment for Medicare Part B is based on numerous factors.
You have the option to delay enrollment in Medicare Part B. One instance would be if you did not take Medicare Part B at the point of eligibility, for instance, because you or your spouse were still working and covered under an employee sponsored group health plan.
The Medicare enrollment period generally runs annually from January 1 – March 31. Coverage begins on July 1 of the year of enrollment. Remember you may have to pay a premium surcharge for late enrollment unless you are covered by a group health plan like the Federal Employees Health Benefits Plan (FEHB) based on current enrollment when you are first able to receive Medicare.
If you are disabled, your coverage can be as a result of your own or a family member’s current employment.
P. S. Always Remember to Share What You Know.
Medicare and FEHB can be confusing. You may wish to continue your reading here.
For Postal Employees access your LiteBlue account here
Qualifying for Medicare
Qualifying for Medicare requires more than just reaching Age 65
Age 65 does not automatically qualify you to receive Medicare. Age 65 is one of the eligibility criteria, but does not automatically qualify you to receive the benefit. Qualifying for Medicare is not as simple as many people believe. You must not only meet the age requirement, but either you or your spouse must have worked at least 10 years in a Medicare-covered employment in order to receive what is commonly referred to as free-Medicare-Part A (Hospital Insurance).
Working for 10 years under a Medicare covered employment provides you with the 40 credits, previously called quarters, needed to qualify. On average, an employee earns 4 credits per year of employment, accumulating 40 credits in 10 years.
As of January 1, 1983, if you were a federal employee, you automatically qualify for Medicare. Even if you do not qualify for Part A (premium free), the Social Security Administration might be able to direct you as to how you can obtain Part A of Medicare. Make sure to explore every option to ensure you will be qualifying for Medicare.
P. S. Always Remember To Share What You Know.
For information on FEHB and Medicare please see the attached
Retire Well – FEHB
Federal Employees Health Benefits (FEHB)
We will talk more about FEHB in future posts as it is a very important feature in preparing to live well in retirement. Emphasis here is placed on eligibility to transport your FEHB into retirement.
Because you are a federal employee does not automatically qualify you to transport your FEHB into retirement. Make sure to check the qualifications and determine if you are eligible. You must meet the five year coverage provision in order to realize the benefit of your FEHB in retirement.
It always pays to never accept any provision without asking questions. Doing a bit of research and seeking additional information or the help of an expert is always a good idea. If a federal employee becomes ill before achieving the 5 year qualification to transport FEHB into retirement is he or she a most unfortunate employee?
Perhaps, not. Under exceptional circumstances the Office of Personnel Management (OPM) has the leverage through an Act of Congress to waive the 5-year requirement. It always pays to ask questions and seek additional information. Great resources for further information are the links included in this article.
P. S. Always Remember to Share What You Know.
