You Get a Lot More Than a Retirement Benefit

Federal employees and retirees have a variety of insurance options to choose from, too.

In addition to generous retirement benefits, federal employees and retirees have a wide variety of insurance benefits to choose from. That wasn’t always the case. 

Until the year 2000, there were two main insurance benefits. The first was Federal Employees Group Life Insurance, introduced in 1954. Then in 1960 came the Federal Employees Health Benefits Program. Both of these benefits had provisions that allowed employees to carry coverage into their retirement years. 

In 2000, the concept of premium conversion entered the federal arena, providing for health benefit premiums to be paid with pre-tax dollars. This benefit—available only to employees, not retirees—was later expanded to include supplemental dental and vision insurance premiums under the Federal Employees Dental and Vision Program

Two years after premium conversion was introduced, the next benefit made available to federal employees, retirees and eligible family members was the Federal Long Term Care Insurance Program. It’s designed to help protect your savings and assets in the event you or your loved ones ever need long term care.This is the only federal benefit plan that is also open to domestic partners. FLTCIP 3.0 is the current FLTCIP plan, available to new applicants as of October 2019. It offers comprehensive coverage, including a stay-at-home benefit and informal care provided by friends and family, with added premium stability.

Although long term care insurance premiums cannot be deducted pre-tax from salaries or retirement benefits, health savings accounts can be used to pay such premiums.

In 2003, a flexible spending account program for government employees launched. Executive branch workers and those in other agencies that have adopted the Federal Flexible Benefits Plan (known as FedFlex), can choose to participate in the Federal Flexible Spending Account Program, or FSAFEDS.

FSAFEDS allows you to save money for health care expenses with a Health Care or Limited Expense Health Care flexible spending account (LEX HCFSA). Think of it as a savings account that helps you pay for items that typically aren’t covered by your health plan or supplemental dental or vision plans. In general, flexible spending accounts are subject to a “use it or lose it” rule: Balances must be used for eligible expenses incurred during the plan year and unused balances are subject to forfeiture.

The maximum amount that HCFSA and LEX HCFSA participants can carry over from the plan year beginning in 2020 to the 2021 plan year is $550.

This year, the Office of Personnel Management permitted FSAFEDS participants a 60-day period during which certain changes could be made to their existing elections due to the effects of COVID-19. That period ended Aug. 29. 

FSAFEDS also offers a dependent care FSA for families with young children or elder care expenses.

Health care FSA funds can be used for everything from acupuncture and adoption fees to vasectomies, wheelchairs and x-rays. Dependent care FSA funds can be used for such expenses as after-school programs, work-related babysitting, nursery school and senior day care programs. The LEXFSA allows those with a high deductible health plan and health savings accounts to pay for a variety of dental and vision care products and services. The FSA website offers more detail on eligible expenses for FSA dollars. 

Starting this month, we’ll begin to learn more about the upcoming health benefits open season, which runs from Nov. 9 to Dec. 14. We already know there will be two new dental options and one new vision option for 2021 available in the Federal Employees Dental and Vision Insurance Program. The new dental plans are UnitedHealthcare PPO and HealthPartners (a regional plan). This year’s open season may be more challenging, since many federal employees are continuing to telework and open season health fairs may be canceled or scaled down due to the pandemic.

You can register now for a virtual health fair that will be held during open season and hosted by FedPoint (formerly Long Term Care Partners).