Higher health premiums on the way!

Friday - 8/15/2014, 2:00am EDT

Regardless of how you feel about summer, fall or winter, one of the least favorite times — the health insurance hunting season — is fast-approaching.

The FEHBP open enrollment period for the nearly 9 million feds, retirees and survivors will be Nov. 10 to Dec. 8.

Whether you do something or nothing, you will pick the plan that will cover you and yours for 2015. Even if you sleepwalk during hunting season when doing nothing is definitely something!

The same open season dates apply to the federal dental and vision insurance programs FEDVIP, and flexible spending account FSAFEDS, which allows you to earmark up to $2,500 in pre-tax dollars to pay medical bills in 2015.

We don't know how much premiums will be going up. Except that for many (most) plans they will cost you more next year. Which is too bad considering the stagnation of federal pay over the last 5 years.

White collar feds got a 1 percent pay raise last January. That was after a three-year pay freeze. Chances are they will get another 1 percent next January. So paying for health coverage is a bigger issue, with more people, than at any time since the federal program started.

Good News: The government will continue to pay the lion's share of health premiums (about 72 percent for white collar feds, more than that for postal employees).

Bad News: But that could change. Members of Congress and many congressional staffers were moved out of the Federal Employee Health Benefits Program this year. So, if somebody suggests federal (and postal) workers pay a bigger share of future premiums, Congress — now that it no longer benefits — is more likely to say it's a great idea. Or to propose a voucher system to pay premiums.

The open season also covers dental and vision plans offered to feds and retirees. But most of the time and attention will go to the health plans available in 2015.

During the FEHBP open season, the government will spend millions of dollars getting out the word about premium and benefit changes. Many federal agencies will subscribe to the online Consumers Checkbook Guide to Health Plans so employees can shop, for free, at work or from home.

There are hundreds of national and regional plans in the Federal Employee Health Benefits Program. Many of them will spend big bucks advertising their plans. HMOs will stress convenience to customers, lower premiums and small out-of-pocket fees. Traditional fee for service plans will point out that odds are your favorite doctor or doctors are part of their network, reducing costs to you. Consumer-driven and High-deductible health plans will point out how, in some cases, you can make money enrolling in them.

Despite all the time, money and media attention given to the open season, many employees and most retirees will do the same thing: Nothing!

Many will stay in the same health plan they've been with for the last 5, 10 or 15 years. That's despite the fact that its premiums may have skyrocketed (especially if it covers lots of retirees) past comparable plans with a lower price tag.

Whatever you do, or don't do, make sure you:

  • Know about the five-year rule. That means that in order to have FEHBP coverage in retirement for you (and a spouse) you must be enrolled in ANY one of the FEHBP plans five years prior to retirement. Walton Francis, editor of the Checkbook Guide, recommends feds who are covered by a spouse's private sector plan enroll in one of the lowest-premium FEHBP plans to guarantee coverage after you retire.

  • Provide a survivor annuity for your spouse. Otherwise if you die first she, or he, will lose eligibility for continued FEHBP coverage.

  • Be aware that retirees with Medicare A and B coverage can suspend (not drop or cancel) their FEHBP enrollment and sign up for a Medicare Advantage Plan.


NEARLY USELESS FACTOID:

By Michael O'Connell

The cartoon character Bugs Bunny was born in Brooklyn, New York.

Source: Fun Trivia.


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