The Federal Employees Health Benefits (FEHB) program remains one of the most significant government benefits. Solicit the opinion of a non-insured private sector employee or a retired private sector employee who had insurance but lost it when they left their job.
With no limitations or waiting periods to join, and the same government contribution to premiums for retirees and active workers, FEHB has long been held up as a model program for employer-sponsored insurance. Most federal workers like their program.
A 2019 survey rated the FEHB as the second most valuable federal employee benefit behind retirement. Many said it was essential to them & three-quarters thought it was a good to exceptional value.
70% of individuals said having health insurance affected their choice to work for the government, and after being in the FEHB, they liked it more. 80% indicated it influenced their choice to stay. Almost all eligible individuals who are not registered revealed they have health insurance from another source, such as a spouse’s job or the military Tricare program.
That doesn’t mean it’s flawless. However, some private sector companies pay more than 70% of the entire premium cost, at least for some enrollees. Also, FEHB has coverage gaps in certain places, and rates rise each year. To get the most out of the FEHB, you must educate yourself and make wise decisions. The steps explained below help you achieve that.
The Step-by-Step Procedure
The first step is to learn FEHB. While it may seem redundant, especially if you’ve been in the software for a long time, there may be essential aspects you’ve overlooked. Many FEHB members have been with the same plan for years, if not decades, and pay little attention to open season except to compare new premium costs and coverage modifications. Even though all are entitled to change during yearly open seasons, just 5% do so.
Due to new legislation and OPM rulings, it’s also critical to understand how FEHB develops over time. Don’t make the mistake of assuming your coverage will be the same next year. Don’t assume your current plan will be available next year; some do, as did some HMO plans for 2021. Enrollees must re-choose a plan or risk losing coverage if they do not. Meanwhile, new plans join or current plans increase their offers, providing new options for the 2021 plan year.
The average FEHB enrollee premium increased 4.9% in 2021 over 2020, somewhat equal to prior increases (except for a modest 1.5% rise in 2019), compared to the experience of big private-sector employers in their programs. Benefits for retirees qualified for Medicare to join the program, even if it requires paying a separate fee, and benefits for insured individuals to engage in wellness programs and improve their healthcare quality.
Inflationary pressures such as rising usage rates, providers adopting newer and more costly equipment, and other factors such as medical inflation continue to drive prices up. Aside from premium and coverage terms, consider your enrollment type. A family member must be qualified for coverage under the program to be eligible for self only coverage. Although self plus one is less costly than family coverage inside a plan, there are still thousands of family coverage enrollments covering just two individuals years after self plus one was introduced. Then it would help if you had to know what options you can make and when. Outside of open seasons, adjustments are permitted for life events like marriage or childbirth, when you may want to review your health coverage.
Keeping what you have is also a choice, and it may be the best. Whatever you decide, be sure you make an informed choice based on all the facts.
Understanding FEHB Options
The flexibility of FEHB allows eligible individuals to make informed judgments about how to utilize the program in their circumstances effectively. Only ten carriers provide nationwide plans for 2021 (or 18 if you add certain of their high-deductible and consumer-driven choices, explained below), and even those have restrictions on who may enroll. Most of the remainder are LHMO plans, with one in every state.
In practice, enrollees have about 15 options depending on where they reside, with more options in cities and fewer in rural regions. Some plans provide two tiers of coverage, a large deductible or a consumer-driven design.
FEHB insures 8.2 million individuals. Almost all federal workers and retirees are eligible, as long as FEHB covers them for five years before retiring on an immediate annuity (there are limited exceptions to that requirement). Retirees pay the same premiums as current workers, but monthly rather than biweekly, and the employer contribution remains the same.
Postal retirees and non-postal federal workers pay around 70% of the premium; the employer contribution is somewhat greater for current postal employees but not for retirees. Activists may pay premiums using pre-tax paychecks. Retirees cannot use this “premium conversion” option, making their insurance costlier even if their premiums are the same as current workers.
Contact Information:
Email: [email protected]
Phone: 9143022300
Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial [email protected] 914-302-2300
