imagedepotpro/Getty

Keep an Eye on These Potential Benefits Changes

Some adjustments are already on the way, and others are on the drawing board.

It should not come as a surprise that when federal employees are surveyed, they say retirement and health benefits had a strong influence on their decision to work in government—and an even greater effect on their interest in staying. It’s important to understand not only how these programs work, but how changes to them could affect you and your family. Here are some modifications and possible future changes that could have an impact on your retirement and insurance benefits.

Cost of Living Adjustments

The Equal COLA Act, which was recently reintroduced in Congress, aims to provide the same annual adjustments for retirees under the Federal Employees Retirement System and the Civil Service Retirement System.

Currently, COLAs for those under FERS are computed less generously than for CSRS retirees. The COLA for CSRS is based on the rate of change of the Consumer Price Index for urban wage earners and clerical workers from the third quarter average of the previous year to the third quarter average for the current year. For FERS benefits, if the increase in the CPI is 2% or less, the COLA is equal to the CPI increase. If the CPI increase is more than 2% but not more than 3% the adjustment is 2% If the CPI increase is more than 3%, the FERS adjustment is 1% less than the increase.

Also, with some exceptions, FERS retirees don’t get any COLAs until they turn 62, if they retire before that age.

Why is there a discrepancy between the two COLAs? According to this history of the creation of FERS in 1986, at that time “certain arguments were used by those trying to reduce the cost of federal employee pensions—that the retirement ages were too low, the cost-of-living adjustments too generous, and the plan greatly underfunded. Articles published for the general public told anecdotes of long-retired employees getting paid more than the active employees who replaced them.”

As a result, the “diet COLA” for FERS emerged as a compromise. Will that change? The idea has wide support from federal employee groups, but this isn’t the first time a proposal like this has been made. And it hasn’t happened yet.

Postal Changes

There’s a new Postal Service Health Benefits program on the horizon, separate from the Federal Employees Health Benefits program. Like FEHB, PSHB is administered by the Office of Personnel Management. It will provide health insurance to eligible Postal Service employees, annuitants, and their eligible family members starting in 2025. Postal Service annuitants and their eligible family members who are entitled to Medicare Part A will need to enroll in Medicare Part B during a six-month special enrollment period. Those who qualify for the special enrollment will be notified by April 1, 2024.

According to a National Active and Retired Federal Employees Association analysis, the only exceptions to the Part B requirement are for the following groups:

  • Current postal annuitants as of Jan. 1, 2025, along with any of their family members.
  • Postal employees who are at least age 64 as of Jan. 1, 2025, and their family members.
  • Postal annuitants or family members who can demonstrate they live outside the United States.
  • Annuitants or family members enrolled in health benefits provided by the Department of Veterans Affairs or eligible for health services from the Indian Health Service.

The first opportunity to select a PSHB plan will take place during open season in late 2024. OPM will provide more information as it becomes available.

New Prescription Drug Plans

OPM is encouraging FEHB carriers to offer Medicare Advantage Prescription Drug Employer Group Waiver Plans, which are designed to maximize value to enrolled individuals under FEHB and Medicare. These are special plans more generous than standard Medicare Advantage plans.

In recent years, a growing number of FEHB carriers have offered such plans. They must provide benefits that are at least the same as those offered by other Medicare plans. FEHB participants will learn more about the new option during the 2023 annual FEHB open season, which will run from Nov. 13 through Dec. 11.

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.