December 11, 2009While some of you might be thinking about wrapping presents this weekend, you also mightwant to leave a few minutes to do your last-minute health insurance shopping. Here are several questions to consider if you're still weighing your options.
Are you planning to retire within the next five years and currently covered under a nonfederal health plan?
Some federal employees are covered under a spouse's private sector health plan providing excellent coverage. But you need to consider whether that same coverage will be available when your spouse retires. In many cases the price goes up, and sometimes the company plan will no longer provide family coverage. One of the requirements to continue Federal Employees Health Benefits Program coverage in retirement is you must be covered for the five years immediately preceding your retirement. This means you can't wait until the open season before you retire to join up.
If you are within five years of retirement and are not covered by an FEHBP plan, this might be the time to consider enrolling. One option that's not too expensive is the Mail Handlers Value Option, costing $27.56 biweekly for self-only coverage. You can always enroll in self-and-family coverage later, or switch to a different plan entirely.
If you are currently covered by your spouse's FEHBP plan, this coverage counts toward your five-year test. This allows you to have your own insurance if you later lose coverage under your federal spouse's plan. Here's a link to more information from the Office of Personnel Management about continuing FEHBP coverage into retirement.
Are you a military retiree or family member of a retiree who is covered by TRICARE?
TRICARE is a health care program for military personnel, military retirees and their dependents. Federal employees can use their coverage under TRICARE toward meeting the five years of coverage requirement to carry FEHBP into retirement. If you are planning to retire next year and you want to have the option of using FEHBP afterwards, you will have to enroll in an FEHBP plan this open season so you will have the option to suspend your coverage in retirement and maintain the option of re-enrolling later. Here's more info from OPM on FEHBP and TRICARE.
Does your spouse depend on you for FEHBP coverage?
If you die before your spouse, he or she will be able to continue coverage in the plan as long as you were in self-and-family coverage at the time of your death and as long as any family member is entitled to a survivor annuity. If you are completing your retirement application, be sure to choose a survivor annuity for your spouse if he or she is depending on you for FEHBP. Even a partial survivor annuity will ensure this continued coverage for your spouse.
Do you need supplemental dental or vision coverage?
Don't forget to choose coverage under the Federal Employee Dental and Vision Insurance Program if your FEHBP plan does not cover preventive care for your eyes and teeth. Last week on the "For Your Benefit" show on Federal News Radio, we interviewed Al Schubert, vice president of managed care and health policy at VSP Vision. He provided some insight about supplemental coverage. (Click here to listen.)
Did you know that premium conversion benefits end when you leave federal service?
If you are funding a health care flexible spending account or a limited expense HCFSA for 2010 and also are planning to retire next year, keep in mind that any money left in the account after you leave will be forfeited. You can continue to use the remaining balance in your dependent care flexible spending account until the end of the benefit period or until your account balance is used up, whichever comes first. Here's more information.
Do you have a child covered under your FEHBP plan who is turning 22?
We reviewed this last week, but I got some additional expert advice on the subject from Walton Francis, author of the Consumer's Checkbook Guide to Health Plans for Federal Employees and Annuitants. He noted that another simple way to get coverage for your child is simply to call your insurance agent, or go online at ehealthinsurance.com. If the child has no pre-existing conditions, there are many policies that provide excellent catastrophic protection (albeit with a high deductible) at relatively low cost.
He also noted that high-deductible health plans are a great option for children using the temporary continuation of coverage option under FEHBP. If the child is well, using no more than the free annual physical, his or her health savings account remains intact, rolling over from year to year and growing tax-free. Taking into account the HSA, some of these plans cost about the same as Mail Handlers Value option.
Are you still looking for a tool to help you with your coverage decisions?
Here's one: PlanSmartChoice, which already has been used by more than 40,000 federal employees. The medical cost calculator is the most popular tool, which makes sense, given employees' concerns about premium increases, family budgets and financial security.
Finally, here's one last question that came in after last week's column: "Under what circumstances would a federal employee want to leave FEHBP upon retiring?"
Here's the short answer: I can't think of any. For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on federalnewsradio.com or on WFED AM 1500 in the Washington metro area.
December 11, 2009