Five Open Season Tips

• By Tammy Flanagan
• November 30, 2012
• comments

If you’re currently employed, you surely know by now that you’re not getting a salary adjustment in January -- and if you’re retired, the cost-of-living allowance on your retirement benefit will be only 1.7 percent. You actually might be losing a little money if your health plan premiums are increasing, although most plans are not going up significantly this year.

Would you like to see more money in your paycheck? It’s possible to find some savings during Federal Employee Health Benefits Program open season (which runs through Dec. 10) if you use a strategy of comparing premiums, deductibles, co-insurance, catastrophic limits and co-payments along with considering supplemental dental coverage and flexible spending account plans.

Take some time to consider your needs for 2013. Will you be better off under a nationwide fee-for-service plan open to all eligible individuals, a fee-for-service plan open to specific groups, a consumer-driven health plan, a high-deductible health plan, or a health maintenance organization?

Here are five tips for answering these questions.

Read Section 2 of your plan brochure to see the changes in your current plan for 2013.

You can download your plan’s brochure here. You will notice additional coverage ...

Why Don’t You Have a Flexible Spending Account?

• By Tammy Flanagan
• November 16, 2012
• comments

One big issue in retirement planning is health insurance benefits. During the federal benefits open season that runs from Nov. 12 to Dec. 10, I’ll be addressing some insurance-related issues.

This week, I’ll focus on the flexible spending account program. FSAs offer employees (but not retirees) a way to set aside tax-free dollars to pay for a variety of eligible health care and dependent care expenses. But only about a third of eligible federal employees use it. Those who do can save an average of $30 for every $100 they spend for necessities such as medicines, eyeglasses, doctor or dental visits, day care and adult care expenses. If you are retiring sometime in 2013 or later, it makes sense to consider using this tax-saving program prior to your retirement.

Consider this:

• If you have $2,500 in eligible out-of-pocket health expenses, you could get a tax savings of $750 a year, or more than $60 a month. If your spouse also is eligible for the Federal Employees Health Benefits Program and establishes a health care FSA, this could double the savings if your family has $5,000 in out-of-pocket health care expenses throughout the benefit period.
• If you ...

What's New: Pension Hikes, Tepid TSP and More

• By
• November 9, 2012
• comments

Things have been pretty busy lately on the retirement front. Here are links to some important recent news  headlines, in case you missed them.

When it comes to pensions, what's "fully funded"?

The Obama administration and lawmakers from both parties generally favor increasing the amount government workers contribute to their pensions. But federal employee unions say that's unfair and unnecessary, because “federal employee retirement is fully funded.”

Retirement backlog is down 39 percent since January

OPM received 8,138 new claims last month -- 3,814 less than it received in September -- and managed to complete 12,228 applications. The backlog now stands at 37,086 retirement claims, down from 61,108 claims in January.

Lawmakers get lavish pensions

One in six federal lawmakers currently receive at least $100,000 annually in retirement.

Thrift Savings Plan funds have a tepid October

Three of the basic funds posted barely perceptible gains and two ended the month in the red.

Employees can contribute more to TSP in 2013

The dollar limit on TSP investments will rise to $17,500 a year from $17,000 allowed this year, marking the second straight year of a $500 increase.

More than 50,000 choose ...

Are You Ready to Apply?

• By Tammy Flanagan
• November 1, 2012
• comments

Based on the 2012 numbers so far, many of you will be retiring soon. The Office of Personnel Management projected it would receive 8,000 retirement claims in August. The agency actually received 8,973. OPM projected 7,000 claims would be filed in September, but the final count was 11,952. The October numbers will be out soon. OPM projected 7,000, but . . . we’ll see. (If you’re interested, OPM’s monthly reports are filed here.)

So, if you’re one of the thousands of federal employees who are planning to retire at the end of 2012 -- OPM projects 21,000 claims will be filed in January 2013 -- then it’s time to start the application process.

Retirement Application

You’ll have to complete Civil Service Retirement System Form SF 2801 or Federal Employees Retirement System Form SF 3107. (Both are available here.)

Here are some things to keep in mind as you complete the application:

• Agencies would like you to turn in these forms to a retirement specialist in your human resources office at least 30 days before your planned retirement date. Larger organizations prefer a 60-90 day time frame. This is in your best interest so ...

FEHBP and Medicare

• By Tammy Flanagan
• October 25, 2012
• comments

As federal employees and retirees approach age 65 and eligibility for Medicare, questions about coverage begin to surface. Federal employees and most retirees already have excellent health insurance through the Federal Employees Health Benefit Program. So why would you need more health insurance just because you’re turning 65? That’s just the first question -- many more usually follow.

For example, I recently received the following email from a reader about Medicare:

My wife and I are both past age 65 and I am planning to retire next year in June. My wife depends on my FEHBP coverage for her health insurance.

From what I've read in your columns and elsewhere, I conclude the following:

• We should both add Medicare Part B after I retire.
• We should continue FEHBP insurance, even though it does not have a low-cost "Medigap" policy. Thus, we will be overinsured.
• We should switch to a lower cost FEHBP plan.
• To get my wife covered, we need family coverage.
• We have eight months after I retire to pick up Part B without penalty.
• If we miss Part B enrollment deadlines, we have a 10 percent per year penalty for signing up late and may have ...