You can start by navigating through the Office of Personnel Management's online tools. As you do that and begin to weigh your options, remember that there are three main areas to find savings: health insurance, dental and vision plans and flexible spending accounts. Let's look at each of them in a little more detail. Choosing a Health Plan
It's important to choose your health plan carefully. Consider these important factors:
- Premiums: The best plan may not have the lowest premiums, but premiums are a known cost. So make them the last thing rather than the first thing you consider. Some premiums are increasing by 8 percent or more next year. Others are actually going down or staying the same as this year.
- Type of Plan: Understand the differences among health plans, from fee-for-service and preferred provider options to consumer-driven or high-deductible plans and health maintenance organizations. (Next week, I'll provide more detail on these differences.)
- Catastrophic Coverage: Most likely, the main reason you buy health insurance is to have catastrophic expenses covered in the event of an unforeseen illness or accident. Look at the out-of-pocket limits on your plan, and at the co-payments for in-patient care, which are often a major expense. Some plans have no deductible for in-patient care, while others charge hundreds in deductibles and demand co-pays of 30 percent or more. Such factors are important if you are approaching middle age, when your body begins (I'm sorry to say) its decline. And they're extremely important if you are over 65. At that point, Medicare also can play a role in managing your expenses.
- Prescriptions: If you have a chronic illness and use expensive medications, then a priority in choosing your health plan should be drug benefits. Using OPM's software, you can compare up to four different health plans on prescription coverage and other factors. Some require a 50 percent co-payment on name-brand drugs, while others have only a $5 or $10 co-pay. Most plans offer a mail-order drug benefit, which can be helpful in controlling the cost of recurring refills.
Dental and Vision
Once you've nailed down your health plan choice, you should consider coverage under the Federal Employees Dental and Vision Insurance Program.
Before signing up, look at your health plan and see what is already covered. Some health plans offer a dental or vision supplement with their premiums or for an extra fee. In general, HMOs seem to cover more dental and vision benefits.
All FEDVIP dental and vision plans provide preventative coverage for routine checkups, and most offer coverage or discounts for expensive treatments. Compare FEDVIP plans and enroll for 2008 coverage at www.benefeds.com. If you are currently enrolled, your coverage will continue into 2008 without any further action. Both active employees as well as retirees who are eligible for Federal Employees Health Benefits Program coverage may enroll in a dental or vision plan through FEDVIP.
Flexible Spending Accounts
Finally, if you are a current employee, consider contributing to a flexible spending account. Retirees are not eligible for such accounts.
FSAs allow you to pay for eligible out-of-pocket health and dependent care expenses with pre-tax dollars. That means you get an immediate discount on these expenses that equals the taxes you would otherwise pay on that income. To sign up for next year, go to www.fsafeds.com. Remember that even if you already are signed up for this year, you must register again for 2008.
For further information on FEHBP open season options, tune in to "For Your Benefit," presented by the National Institute of Transition Planning, on Saturdays at 10 a.m. EST on Federal News Radio. In the Washington area, you can tune in to the show at 1050 on the AM dial. Or you can listen to live or archived shows online at FederalNewsRadio.com.
Upcoming shows include:
- Dec. 1: Open Season Talk with Kaiser Permanente
- Dec. 8: VSP FEDVIP Vision Plan
Archived shows are:
- Nov. 24: Making Sense of Alphabet Soup...HSA...FSA... HCFSA...
- Nov. 17: Dental Insurance from a Dentist's Perspective, and Health Care Solutions from Asparity (Plan Smartchoice)
- Nov. 10: What's New with AETNA for 2008
- Nov. 3: FEHBP: What You Should Know Before You Choose (Walton Francis, Checkbook's Guide to Federal Health Plans)
- Oct. 20: Open Talk During Open Season (GEHA Health Plan)
Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.