The holiday season also means Open Season for federal workers, retirees and their families.
This “open season” does not refer to the potshots that critics often aim at the workforce. It is the period when federal employees can choose their health insurance coverage.
They have until Dec. 8 to change their health, dental and vision insurance companies and flexible spending accounts. Next year, average premium rates for the 8.2 million people covered by the Federal Employees Health Benefits (FEHB) Program will increase about 3.8 percent. Dental coverage premium rates will go up an average of 1.7 percent and vision benefits an average of 1.5 percent. FEHB is the nation’s largest employer-sponsored health benefits program, according to the Office of Personnel Management (OPM).
Feds and their families always have lots of questions during Open Season, so we asked FEHB guru Walton Francis for help in sorting through some of them. Francis is chief author of Checkbook’s annual “Guide to Health Plans for Federal Employees & Annuitants.”
“There is no best plan” for everyone, he said, because individual circumstances differ. “There are lots of good plans.”
Many people would rather not think about their health insurance, but they can miss an opportunity to save money if they don’t. They all “have a stake in whether or not they are in the right health plan next year,” Francis said.
Choice is a good thing, but sometimes too much can be paralyzing. In the Washington area, Francis said, there are at least 28 health plans available to employees. He doesn’t expect anyone except himself to go through all them, but even a little study can pay off.
Many people think their current plan is okay and stay in it “without even thinking about whether there is a better deal,” he added. If you are in that group, you could be “wasting a lot of money on higher premiums than you need to pay.”
Checkbook estimates about half the people in FEHB could save about $2,000 a year in lower premiums and out-of-pocket costs.
Francis suggested that employees and retirees check the benefit summaries, which can be found online, for different plans. Also, they should find out what plans their doctors accept. They also can ask coworkers about other plans. OPM and Checkbook provide valuable online information about all the health insurance coverage options.
“There are things people can do,” Francis said, “without doing a whole lot of work.”
If they do examine FEHB plans, they will find some important changes.
“Almost everybody is going to benefit this year, almost no matter what plan they’re in, from continued improvements by OPM in the catastrophic benefits of these plans,” he said. He also cited improvements in prescription drug coverage, out-of-pocket spending limits, preventive care and Medicare coordination.
“The big story,” he added for those who choose Aetna Direct, is “it’s possible to more than cover the cost of [Medicare’s] Part B premium. You can actually come out money ahead.”
While there are understandable complaints about FEHB premiums increasing faster than federal employee pay, Francis said federal employee health insurance coverage is “outperforming the Fortune 500 companies in keeping premiums down, and it’s not doing so with benefit cutbacks. I’ve seen very few benefit reductions or substantial cost-sharing increases in these plans this year.” He added, however, that there are more pre-approvals required for some expensive medical tests and prescription drugs.
“There are some tighter limitations,” Francis said, “but overall I would say the benefits on average, if anything, are better this year than last.”
On possible changes a Republican controlled Congress might make to federal health insurance plans, Francis said, “my crystal ball is cracked.” But he did say there are ways to improve FEHB to benefit taxpayers and employees.
Under FEHB’s current design, if an employee chooses a less-expensive plan, the government keeps 75 percent of the savings. The government’s contribution toward total premiums is capped at 75 percent.
Said Francis: “A whole lot of people say ‘why would I want to choose a less expensive plan when it hardly saves me any money? The government gets most of it; the taxpayer gets most of it. Not me.’”
A 50-50 savings split, or even allowing employees and retirees to keep 75 percent of the savings, would encourage more of them to choose less expensive plans, Francis said, adding, “there are win-win reforms.”
Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.
Francis will join Washington Post journalists during an online chat noon Monday at http://live.washingtonpost.com/fehb-open-season-2014.html.