Benefits Guide Helps Decode Alphabet Soup

By Stephen Barr
Monday, October 22, 2007

The annual open-enrollment season for federal employees is on its way, loaded with insurance industry argot and acronym-laden programs.

For the first time, the open season is no longer just about health insurance, but also about how to mix and match dental and vision coverage and flexible spending accounts. It's the world of FFS, CDHP, FEDVIP and HCFSA, to name a few.

To help federal employees navigate the jargon, the Office of Personnel Management, which oversees the government's major benefits programs, will publish a "Guide to Federal Benefits" before the enrollment season, which is Nov. 12 through Dec. 10.

Many federal employees and retirees will probably need a bureaucratic decoder to help them wade through health insurance brochures and other benefit information.

They can choose from fee-for-service plans (FFS) with preferred-provider networks, consumer-driven health plans (CDHP), high-deductible health plans (HDHP) with health savings accounts and health maintenance organizations (HMOs).

They can pick from seven dental plans, three vision plans (in the FEDVIP program) and set up flexible spending accounts for health care (HCFSA) and dependent care (DCFSA), which includes coverage for children and parents.

The key, of course, is to avoid MEGO (my eyes glaze over) during open season, because it pays to do your benefits homework.

Some programs and plans offer tax breaks, some have slightly more-generous benefits, and some have restrictions that can financially penalize patients who go outside their health-care provider network.

The OPM guide may be the best starting place. It will explain the relationship among the programs, provide information on making enrollment decisions and remind employees of what they need to do during the open season, officials said.

The guide also will include information on two programs that are not part of the annual enrollment process -- the life insurance and long-term care insurance programs.

The benefit programs try to use the government's size, and clout, to hold down premiums and other costs paid by employees.

The Federal Employees Health Benefits Program, which began operating in 1960, is the world's largest single employer sponsored plan, covering about 8 million Americans. The dental-vision benefits program, in its second year, has 750,000 enrollees, making it the nation's largest employer-sponsored dental-vision program.

About 250,000 federal employees signed up for flexible spending accounts last year, and officials hope that the four-year-old program will grow as employees become comfortable with the "use it or lose it" rule governing pretax payroll deductions to cover out-of-pocket medical and other expenses.

While the OPM hopes to use this year's open season to stress the broad scope of benefits available to federal employees, the health insurance program will likely continue to draw the most attention, in large part because the insurance premiums are a major expense for federal employees and retirees.

The overwhelming majority of federal employees and retirees stick with their health insurance choices from year to year, but many employees may be more willing to consider switching plans to get lower premiums or lower co-payments and deductibles, or to improve their coverage, especially for prescription drugs.

Here's a snapshot of a few of the changes for 2008:

The most popular federal plan, Blue Cross and Blue Shield standard option, with about 2 million members, will increase premiums by 8.5 percent for an individual and by 8.1 percent for a family next year.

The Mail Handlers Benefit Plan, another large carrier, is discontinuing its high-option coverage, which had grown expensive for enrollees. The plan will continue to offer a standard option, where premiums will rise by 7.3 percent for an individual and 4.5 percent for a family. The plan's "consumer option" will not increase premiums.

Mail Handlers also is introducing a "value option" featuring low premiums -- $20.50 biweekly for individuals and $48.89 biweekly for families. For most services, enrollees must meet a deductible of $500 for individuals and $1,000 for families.

The Government Employees Health Association, known as GEHA, will be reducing premiums for its high-option coverage and making no change in premiums for its standard option and high-deductible health plans.

Plans sponsored by the National Association of Letter Carriers and the American Postal Workers Union will reduce their premiums.

A popular HMO plan, M.D. IPA, will be raising premiums by about 3 percent for individuals and families.

A plan that has been attracting new enrollees, the Aetna HealthFund consumer-driven option, will be increasing premiums by about 15 percent. Aetna has increased the plan's benefits, though, including a 25 percent increase in the fund provided to cover medical expenses.

Federal Diary Live will focus on the federal benefits open season with a series of discussions over the next five weeks. At noon Wednesday, Kathy McGettigan, deputy associate director for the OPM's Center for Retirement and Insurance Services, will kick off the series, taking questions and comments onhttp://washingtonpost.com.