Flickr user jasleen_kaur

Open Season Q&A

Answers to questions that may help you make your health insurance choices.

Throughout the Federal Employees Health Benefits Program open season, my email inbox has been filled with questions about insurance choices. This week, I thought I’d share some of them in the hopes they might help you consider your open season options. You have a little more than a week to make your choices before open season ends on Dec. 12.

Both my husband and I are federal employees. I will retire at the end of February 2017, while my husband plans to retire in early 2018. Last year, after many years of family coverage, we had planned to move to the self plus one option, but research revealed that for the Blue Cross standard option plan, we could save around $800 in premium costs if each of us took a self only policy instead. For 2017, we did the same comparisons and once again discovered a savings in premium costs if each of us has a self only policy for the Blue Cross standard coverage. However, is there is a tax savings enjoyed by the federal employee who holds the policy instead of the retiree who pays with after-tax dollars?

It can be a close call, but depending on your tax bracket, there can be a difference. You would only end up paying around 60 percent of the premium if you didn't have to pay an estimated 28 percent federal tax, 4 percent or 5 percent state tax, 6.2 percent Social Security tax and 1.45 percent Medicare tax on the Blue Cross/Blue Shield standard option premium as an employee. Here’s a comparison:

  • Option 1: Spouse who retires first carries self only coverage into retirement and spouse who is still working carries self only (pre-tax) as an employee. Self only premiums: $229.64 per month or  $2,755.68 a year x $.60 (tax savings) = $1,653.40 (pre-tax) + $2,755.68 (no tax savings for retiree) = $4,409.08.
  • Option 2: Spouse who is still working carries self plus one until he retires: Self plus one: $521.67 per month x 12 = $6,260.04 a year x $.60 (tax savings) = $3,756.02 a year.

The savings under Option 2 total $653.06 a year.

Remember, if you carry self only coverage, each of you must meet your deductible individually before the plan begins paying benefits. With self plus one, one family member can meet the deductible for both of you. Also, catastrophic protection has a lower limit for self only enrollments. If one of you has a serious illness, then the cap is met after $5,000 rather than $10,000.

Is the decision revocable; that is, can we go back to a family option in the future?

Yes. You can change plan options once you are both retired. The key is to not have any gap in coverage. It doesn't matter who is paying the premiums. Coverage under a spouse's self plus one enrollment counts towards your five years of coverage requirement to carry the insurance into retirement.

If one of us should die and the other remarry, could the policy be changed back to a family policy?

Yes. You always can cover eligible family members if you continue your FEHBP coverage into retirement. Retirees can make changes resulting from qualifying life events, just like employees. Retirees generally make changes using OPM Form 2809 instead of SF 2809.

I am 64 years old and kept my federal health insurance when I retired three years ago. For the past few years I have been covered under the insurance of my wife, who doesn’t work for the federal government. We have been paying for both premiums. She will be retiring in March 2017. We have been been to a number of her retirement classes and she can keep me on her insurance for life and I can stay on even if she dies before me. The overall costs of her plan are cheaper and she wants me to drop my federal benefits during this open season. If I do this it goes away forever. What should I do?

Please do not drop your FEHBP coverage until you’re sure what the post-retirement coverage with your wife’s insurance will cost and until you explore the coverage and coordination with Medicare. Based on other information you provided to me, your wife has two HMO choices and one PPO option to choose from. In your area, you have more than 20 different FEHBP plans to choose from and you may change plans during the annual open seasons. Be sure to pay special attention to out-of-pocket costs for inpatient care, prescription drug coverage, durable medical equipment and other expenses that can come up in your retirement years. I’m always hesitant to recommend cancellation of FEHBP coverage since, as you note, retirees are not eligible to reenroll.

At a retirement seminar, I was told that federal retirees are entitled to a one-time suspension of health insurance. Suspending rather than canceling gives the retiree the option to pick up FEHBP again at a later date.

The option to suspend rather than cancel FEHBP is only available to those with Tricare, ChampVA, Medicaid, Medicare Advantage and Peace Corps health plans. The form that is used to suspend coverage is the same as the one used to cancel, so be sure to read it carefully.

How can I be sure that my new health plan will be accepted by my doctor and will cover my prescription drug costs in the same way my current plan does?

You need to do some research to discover how potential plans will cover your prescriptions and to find out if your doctors and other health care providers are included in the plans’ networks. You can use OPM’s plan information to find plans’ websites and view plan brochures. Section 1 of the brochure provides information about the plan network for health care and pharmacy benefits. Section 5(f) covers prescription drug benefits. Most of the FEHBP plan websites have a prescription drug cost calculator.

If you visit your doctor or health care provider’s website, you also may find a list of insurance plans in which your doctor participates. (Or you can call their office.)

Additional Open Season Resources

Photo: Flickr user jasleen_kaur

NEXT STORY: TSP Funds Improve in November

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.