Healthy ideas

By Brian Friel

November 8, 2001

The Federal Employees Health Benefits Program open season begins Monday, Nov. 12. Through Dec. 10, you'll be able to change your health insurance carrier or your type of coverage. With health premiums for federal employees and retirees rising an average of 13.3 percent, many people may want to shop around. One Pay and Benefits Watch reader from Oregon, for example, reports that her biweekly premium is going up from $40.13 to $69.05, a 72 percent increase. (Her health plan is PacifiCare Health Plans.) "As far as I'm concerned that is robbery!!!" the reader wrote. While they're shopping around for health insurance, the woman from Oregon and many other federal workers are grumbling about the hikes in premiums that are hitting them wear it hurts-in their wallets. Premiums have risen nearly 50 percent over the past four years, reflecting the rising costs of prescription drugs, medical technology, increased use of health services and the aging of the federal workforce. Two weeks ago, Pay and Benefits Watch reviewed some experts' suggestions for controlling federal employees' health insurance costs ("Reining in the FEHBP"). The column also asked for ideas from readers. Here are some of your suggestions. TSP: Shares or Units? The Oct. 11 Pay and Benefits Watch (Beating the TSP Blues), included this information: "…TSP investors who stick out market drops wind up with more shares or units…" The phrase shares or units unleashed an avalanche of e-mails from people who challenged the notion that TSP accounts have shares the way direct stockholders or private sector 401(k) accounts have shares. The e-mails pointed out that TSP account statements show dollar amounts, not shares. Here's how the TSP board's "Guide to TSP Investments" explains it: "Although TSP participants' accounts are not stated or held in shares but in dollar balances, consistent contributions have the same 'averaging' effect as if shares were being acquired." The averaging effect that the TSP guide refers to is called "dollar cost averaging," an investment strategy that allows the TSP to buy more shares when market prices are low. For an explanation of dollar cost averaging, download the guide and refer to the section on "dollar cost averaging" on pages 14 and 15. The guide is in PDF format at www.tsp.gov/forms/tspbk03.pdf.

By Brian Friel

November 8, 2001

http://www.govexec.com/pay-benefits/pay-benefits-watch/2001/11/healthy-ideas/10419/