I can hear the groans now. In only three weeks comes the start of another health benefits open season. For many federal employees and retirees, this is not a cause for celebration, but a time of frustration and confusion. As I’ve written before, open season can cause paralysis from analysis or inaction due to so many choices.
But what if I told you that you can narrow your choices and might be able to save over $1,000 next year by choosing carefully?
Choosing the best health plan is like putting together the pieces of a puzzle. You need to fit the premiums with likely out-of-pocket expenses and potential tax-saving features to come up with the complete picture of your 2018 health insurance needs. The health plan you chose 25 years ago, or even five years ago, may not be the best for next year. You owe it to yourself and your family to spend a few hours between now and mid-December to learn more about your options. After all, you most likely have more than 20 health insurance plans to choose from, up to 10 different dental supplemental plans and four vision plans. Tax-saving features include flexible spending accounts, health savings accounts and premium conversion benefits.
Federal employees and retirees can make changes to their Federal Employees Health Benefits Program coverage as well as to their Federal Employees Dental and Vision Insurance Plan from Nov. 13 to Dec. 11. Employees also can enroll in a flexible spending account for 2018 health care or dependent care expenses as well. (FSA plans are not available for retirees or survivor annuitants.) For federal employees, changes will be effective on the first pay period of 2018 (for most employees this will be Jan. 7, 2018). For retirees and survivor annuitants, the changes will take effect on Jan. 1, 2018.
A month sounds like a long time to review your insurance coverage. But it’s very common for people to delay this dreaded task until the last day and then realize the decision requires more time than they have left. If you want to make sure you have enough time to fully consider your options, then start now.
Here are the top five things that everyone who has FEHBP coverage should do to prepare for open season:
Compare your current plan to other available plans. Many of the FEHBP plans already have their 2018 plan brochure available. Click here to get a list of available plans in your area. Then review:
- Rates for 2018 (on the back cover of the plan brochure)
- Changes for 2018 (on the front cover of the plan brochure)
- Summary of plan benefits (in the last few pages of plan brochure)
Review 2017 from a health benefits perspective. Look at the benefit statements from your current health plan. How much did you pay out of pocket (above the cost of your plan premiums)? Were you or a family member diagnosed with any new illnesses in 2017? Will you be filling a new prescription in 2018? Will you need ongoing therapy or care from a medical specialist?
Consider other health plans that may cover your prescriptions with lower out-of-pocket expenses and find out if another plan might cover your illness more comprehensively.
Will you or a family member need expensive dental procedures in 2018? Does your current plan provide coverage for preventative as well as corrective procedures? Do you or a family member need vision care? Does your current health plan provide adequate coverage for exams and eyeglasses or contact lenses?
Consider your out of pocket costs. These include premiums, deductibles, coinsurance and copayments. Do you use a flexible spending account to pay your deductibles, copayments and coinsurance for your medical expenses to save money on federal, state, FICA, and Medicare taxes? Have you considered using a high deductible health plan that allows contributions to a health savings account ? The HSA contribution limit is higher than the FSA contribution limit and if the money isn’t spent, it stays in the account for use in future years. HSA contributions are tax-free going into the account and tax-free coming out when used for qualified healthcare expenses.
Do you understand your plan’s catastrophic protection limits for out-of-pocket maximum expenses? The 2018 limit on out-of-pocket expenses (including items such as deductibles, copayments and coinsurance, but not premiums) for self-only HDHP coverage will be $6,650 (a $100 increase from 2017), and the 2018 out-of-pocket limit for family HDHP coverage will be $13,300 (a $200 increase from 2017). Non HDHP plans may have higher catastrophic caps and may not include such items as prescription drug copays or expenses outside of the plan’s network of providers.
Have you determined if your health care providers are within your plan’s network of providers? You’ll save money on health care costs by using in-network providers as much as possible.
If both you and your spouse are or were federal employees, consider which of you should carry health insurance. If one spouse is retired and the other is still employed, consider having the current employee pay the premiums so they can do so with pre-tax dollars under the premium conversion rules. If one or both spouses are 65 or over, the federally employed spouse can pay the FEHBP premiums so that the couple can delay Medicare Part B enrollment without incurring a late enrollment penalty.
If you don’t have to cover dependent children, consider a self-plus-one plan or two self-only plans to save money or to allow each spouse to choose their preferred FEHBP plan.
Remember, if you’re part of a federal couple, you are both covered under FEHBP, regardless of which spouse is paying the premiums. Coverage as a family member counts as part of the five-year test to continue coverage as an annuitant.
Get educated about health plan changes and options available to you. You can do this by:
- Attending a health fair at your agency,
- Attending the virtual health fair sponsored by Long Term Care Partners.
- Reviewing FEHBP information on the Office of Personnel Management’s website.
- Reading the Guide to Health Plans for Federal Employees and Annuitants, which will be available on the first day of open season.
- Watching videos and webinars produced by plan providers, such as Blue Cross Blue Shield, GEHA, Aetna and United HealthCare.
- Speaking of webinars, I'll be hosting one for the National Active and Retired Federal Employees association on Oct. 26 on the subject of FEHB and Medicare: What's Best for You?
By doing your homework in advance, you might just save yourself some money.
Photo: Flickr user heipei