Tips for assessing your insurance options.
This Thanksgiving may not have been like those of years past, with large gatherings of friends and family coming from near and far. But I hope you were able to find some things to be thankful for despite all the bad news this year. The truth is that some of the things we were complaining about before the COVID-19 pandemic are what we long for today.
For example, I used to complain about airports and travel delays, but I have to admit it would be nice to conduct a live seminar in front of a smiling group of federal employees rather than “meet” from my chair in my home office on one of the many virtual platforms I’ve learned to use.
Despite everything happening in our country and the world, life goes on. For federal employees, that means it’s open season until Dec. 14 for the Federal Employees Health Benefits Program, FSAFEDS, and the Federal Employees Dental and Vision Program.
Most FEHBP plans will see benefits and rate changes for the upcoming year. Some are dropping out of the program and others are changing their service areas or coverage options. For details on plan changes, see this Office of Personnel Management benefits administration letter and check your plan’s brochure.
Does your plan meet your needs for next year? For example, will you have a specific requirement for a certain type of health coverage (upcoming pregnancy, qualifying for Medicare, or a planned medical procedure) in 2021? Do you need to enroll in FEHBP so you will meet the five year test for your future retirement?
One attractive FEHBP option is a high deductible health plan with a health savings account. These plans have among the lowest premiums and most inclusive catastrophic out of pocket limits. Many have nationwide coverage and all include excellent inpatient, outpatient and prescription drug benefits.
An HSA has a “triple” tax benefit of saving with tax-free dollars which grow tax-free in your HSA, and are spent tax-free when used for eligible expenses. Before you get too excited, remember that by law, HSAs are only available to people who are not enrolled in Medicare, cannot be claimed as a dependent on someone else’s tax return, have not received Veterans Affairs (except for veterans with a service-connected disability) or Indian Health Service benefits within the last three months, and do not have other health insurance coverage other than another HDHP.
Federal HDHP plans provide a premium pass-through contribution to your HSA in addition to the option for you to make additional tax-free contributions, as long as total contributions do not exceed the limit established by law. For 2021, that ceiling is $3,600 for an individual and $7,200 for self plus one or self and family (plus an additional $1,000 catch-up contribution if you are age 55 or older). If you change plans or employment, your HSA funds go with you.
Flexible Spending Accounts
The health care FSA allows employees (but not retirees) to carry over up to $550 of unused funds into the following year and the dependent care FSA gives you an extra two and a half months to spend your balance. There are a variety of reimbursement options, including automatic reimbursement with your FEHBP or FEDVIP plan or “pick and process,” which allows you to select which expenses you want to submit for reimbursement and when to process them.
If you're enrolled in a high-deductible health plan and have an HSA, you can increase your savings with a limited expense health care FSA (known as a LEX HCFSA). This pre-tax account helps you save on eligible out-of-pocket dental and vision care expenses while taking advantage of the long-term savings power of an HSA. Plus, if you re-enroll in FSAFEDS during open season, you can carry over up to $550 remaining in your account from one plan year to the next.
Dental and Vision Insurance
Use the plan comparison tool on Benefeds to compare features of the dental and vision plans available to you this open season. Before buying supplemental dental or vision coverage, consider your answers to the following questions:
- Does your FEHBP plan provide basic dental or vision coverage that is adequate?
- Do you need dental coverage for checkups, x-rays and an occasional filling or did your dentist recommend that you plan a payment schedule for 2021 procedures? Knowing this will help you determine if you need an unlimited annual maximum benefit or if a $2,000 or $3,000 limit will be adequate.
- Have you talked with your vision specialist or dental office to find out if they participate in the plan you are considering?
- Have you considered your allotment for your flexible spending account when planning to enroll in a FEDVIP plan? If an annual eye exam and two dental cleanings and x-rays are most likely all you’ll need, you might want to consider putting the cost of your exams in your FSA to get the tax savings and forego enrolling in a supplemental FEDVIP plan. Remember you pay premiums for FEDVIP coverage whether you are just getting a checkup or having a more expensive procedure.