Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

So Many Choices

With the 2011 Federal Employees Health Benefits Program open season (from Nov. 14 to Dec. 12) fast approaching and information available at the Office of Personnel Management's website, it's time to begin pondering the choices that lay ahead.

The good news is there are a lot of choices. But that's also the bad news. (Alina Tugend wrote a very interesting piece about the potentially paralyzing problem of having a multitude of choices in The New York Times last year.)

All told, FEHBP offers more than 200 health plan options. But in any given area, there may be as few as 10 plans available to all, another four or so available only to specific groups and some options involving health maintenance organizations, high-deductible health plans and consumer-driven health plans.

It is not uncommon for people simply to remain in their current plan because it worked last year and maintaining coverage doesn't require any action. But here are some situations in which you might want to consider changing your health coverage:

  • If your family size has changed -- for example, if you got married, had a child (or are expecting one), no longer have children covered under FEHBP, or have been widowed or divorced.
  • If you have become eligible for Medicare.
  • If you've had health changes such as a chronic illness or a need for durable medical equipment, physical therapy, prescription coverage, surgery or therapy.
  • If a new health plan is being offered that has unique features not previously available.
  • If your plan's coverage has changed. The most important part of the FEHBP brochures distributed during open season is the section called "How We Change for 2012." Links to plan brochures are on OPM's website.

If any of these situations applies to you, it's a good time to reevaluate your coverage.

Narrowing Down

You can you narrow your choice of options by considering both value and the cost of coverage.

If you merely chose the least expensive plan, you could end up having more out-of-pocket expenses when you actually begin to use its health care and claim benefits. For example, if you choose Blue Cross Basic instead of Blue Cross Standard Option, you would pay more out of pocket for choosing providers who are outside Blue Cross' network of preferred providers (with basic coverage you must use preferred providers). Premiums for Basic are much less expensive, but the plan may not be a better value if you're not careful in choosing your providers.

On the other hand, if you stay with preferred providers, Blue Cross Basic coverage does not have an annual deductible, whereas the Standard option has a $350 deductible per person. Basic also provides more preventive care coverage than Standard.

So how should you go about assessing both cost and value in choosing between plans like these? Here are some tips:

  • Come up with a list of features that are important to you and your family. Do you need maternity care? Do you fill a lot of prescriptions? Does a family member have a chronic illness? Is everyone in good health? Is it important to keep your current providers? Do you qualify for Medicare? What about your spouse?
  • Review the medical expenses you incurred last year. How many of these will you have this year? Perhaps you will save money by adding supplemental dental and vision coverage. You may want to consider the tax savings of setting up a health care flexible spending account or enrolling in a high-deductible health plan with a health savings account.
  • Set aside time to do some research. OPM has a variety of online tools that can help you compare plans and make the best choice for you and your family.
  • Don't think too much about what others are doing or what they think about your choices. Someone may rave about the benefits of their health plan, but their needs could be altogether different from yours.
  • Attend an open season health fair if your agency holds one. There you can speak to the representatives of the various plans and ask questions.
  • Don't be afraid to make a change. If you're really not happy with your choice, you can switch back at next year's open season.

Medicare Premiums

Finally, here's some good news for those who have Medicare Part B coverage: The Part B premium is being reduced in 2012 from $115.40 per month to $99.90. (Higher income consumers may pay more.)

Since 2009, the Part B premium has held steady at $96.40 a month because there was no cost-of-living adjustment in federal benefits programs in 2010 or 2011. For people who have been covered since 2009, the premium will increase slightly, but not as much as it could have if the 2012 premium was not reduced from the 2011 rate. For example, the typical retiree will see a $39 per month increase in his or her Social Security check because of the 3.6 percent cost-of-living adjustment that will be included in January's payment. This more than offsets the modest $3.50 change in Medicare premiums. In addition, the Medicare Part B deductible actually will fall from $161 to $140.

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.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Mondays at 10 a.m. EDT on, or on WFED AM 1500 in the Washington-metro area.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.