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Discussion: Open Season tips and traps
Tuesday - 11/30/2010, 11:00am EST
By Suzanne Kubota
Senior Internet Editor
Feds have just two weeks before the Federal Employees Health Benefits Program Open Season ends on December 13th.
Federal News Radio has been bringing you information on your options for the past few weeks, and we'll continue in this Federal News Radio Discussion. Joining us are Colleen Murphy, the CEO of PlanSmartChoice, a free online tool to help feds choose best coverage; and Walton Francis, editor of the Checkbook's Guide to Health Plans for Federal Employees.
Here are some of the topics, questions and excerpts from the responses of the panel:
Part 1: The Silver Lining to a Pay or COLA Freeze
Murphy: "The good news about the...potential pay freeze is that federal employees know about it now so they can actually take this opportunity with open season to manage cost their expectations accordingly. That's the good thing about it." So, said Murphy, if you're making $50,000 a year, you would have anticipated about $83 a month that you may not be getting now. With open season you can take a look at premiums and out of pocket expenses, "look at our costs" and maybe save some money now.
Causey: "And I think psychologically this is good for retirees because they didn't get a cost of living adjustment this year in 2010, and they won't get a...COLA in 2011 because of deflation." Like feds, said Causey, it's not like they'll be blindsided. The proposed pay freeze and lack of COLA for retirees could almost be a blessing in disguise, said Causey. Many feds may shop around for a better plan "whereas before they would not have done it." Six out of 100 feds change their plans in a year and that's way too low, said Causey.
Murphy: Many plans, said Murphy, have tried to control costs this year, but reduced coverage, dropped products or reduced service areas. "It really is a good idea just to make sure you know what's going on with your own plan, and you don't want to be surprised."
Causey: One of the major changes, said Causey is the ability to include children up to age 26 in your coverage. "this is a sea change for the federal government."
Murphy: "This is the one question," said Murphy, "the singlemost important question" being asked at health fairs: "what do I do about this new" provision? How do I go about it... "It's a great benefit as a result of health reform" but there's been a lot of confusion around it. Causey and Murphy said to be sure to check the changes section of your plan's brochure for details and to see the FastFacts section of OPM's website for more information.
Also discussed in this part of the show were the best way to find out if your doctor will participate in your plan next year, how to save up to $2,500 by picking the right plan, and how many feds participate in the Flexible Spending Account program.
Part 2: FSAtastic
Murphy: When it comes to the FSA, Murphy said if you're confused by how the plan works, you're not alone. "It is confusing. The Flexible Spending Account is offered to all federal employees through FSAfeds, and it's an opportunity to set aside money for health care and or dependent care that you can use on a pre-tax basis to pay for your out of pocket medical or dependent care costs." The reason it's confusing, said Murphy, is the rule that if you don't use the money you set aside, you lose it. People aren't sure how much to set aside, she said. The solution for that is to use one of the medical cost calculators available online. It will estimate what your out of pocket expenses will be over the course of the next year. The average federal employee participating in the program, said Murphy, puts about $2,000 away, which reduces costs about 15%. "It's really about being comfortable with the amount of money that you're going to spend out of pocket and knowing that you're actually going to use it, but it is one of the best ways to reduce your total health care spend."
Francis: Probably 90% of feds should have an FSA, said Francis, but only about 15% do.
Causey: When the panel was asked who shouldn't have an FSA, Causey answered, "if you're in perfect health, live in a germ free bubble and never leave the house, you don't need an FSA."