Common mistakes during Open Season

Wednesday - 12/7/2011, 3:58pm EST

Walt Francis, benefits expert

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By Jolie Lee
Web Editor
Federal News Radio

Federal employees have until Dec. 12 to decide on a health plan during this year's Open Season.

Walt Francis, editor of the Checkbook Guide to Health Plans for Federal Employees, said some common mistakes during Open Season include only considering the premium when making a choice and overlooking the inclusion of your spouse in the health coverage.

Another mistake, particularly for young feds, is they don't buy any health coverage at all.

"That's nuts," Francis said in an interview with Your Turn with Mike Causey.

Many plans in the Federal Employees Health Benefits program have annual premiums of about $2,400. "And you may get a savings account, which with the tax savings on the premium, could leave you better off at the end of the year, if you're healthy, than if you'd had no insurance at all," Francis said. "so it's kind of a no-brainer. It's kind of like free insurance."

Feds also forget to consider flexible spending accounts, Francis said. FSAs are pre-tax dollars set aside to pay for health expenses. Francis said only about 20 percents of feds sign up for FSA's but, "probably 90 percent should." With the tax advantage, FSAs are like a "one-third discount" but is also "use or lose" money that cannot carry over to the next year.

With feds' pay frozen — and threats of extending the freeze — combined with rising premiums, feds can save money by making the right help plan choice.

"Give yourself a pay raise by going to a less costly plan choice. Give yourself another pay raise by using a flexible spending account," Francis said. "People who don't make those decisions by Dec. 12, which is less than a week away, are throwing money away."

In the second half of Your Turn, Mike talked to Sean Reilly and Steve Losey of The Federal Times.

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