The OPM-sponsored annual benefits open season will occur this year from Nov. 11 through Dec. 9, 2019.
During the benefits open season, federal employees and annuitants can make changes to their Federal Employees Health Benefits (FEHB) program, and enroll, change, or disenroll from their dental and vision insurance offered through the Federal Employees Dental and Vision Insurance Program (FEDVIP).
Employees can also enroll and re-enroll in the health care flexible spending accounts (HCFSA) or limited expense flexible spending accounts (LEXFSA) and/or the dependent care flexible spending account (DCFSA) offered through the FSAFEDS program. This is the first of five columns discussing what employees and annuitants should be considering and asking in making their choices during the 2019 benefits open season.
This column discusses the types of enrollment available under the FEHB program and what employees and annuitants should consider in selecting a particular FEHB enrollment type.
Types of FEHB Enrollment
There are three types of enrollment available under the FEHB program, namely: (1) self only; (2) self plus one; and (3) self and family. These different types of enrollments are discussed below.
A self only enrollment provides benefits only for an employee or for an annuitant (who met the requirements to carry the FEHB program benefits into retirement). An employee or annuitant is permitted to have self only FEHB coverage even though the employee/annuitant has family members (spouse, children under the age of 26) who are eligible to be included as part of FEHB program coverage. Upon the death or disability of the employee/annuitant, FEHB program coverage ceases, with no FEHB program coverage for eligible surviving family members. This is because they were not enrolled in the FEHB program at the time of the employee’s or annuitant’s death or disability.
Self Plus One
A self plus one enrollment provides benefits for the employee/annuitant and one eligible family member (spouse or child under the age of 26). Self plus one enrollment is permitted even though the employee/annuitant has more than one eligible family member to be included as part of FEHB program coverage. For example, more than one child under age of 26. Family members who are not covered under the self plus one enrollment option will not be eligible for FEHB program coverage upon the death or disability of the employee/annuitant. Note that some interesting questions arise regarding self plus one enrollment if both spouses of a married couple are federal employees. This will be discussed in more detail below.
Self and Family
A self and family enrollment provides benefits for the employee/annuitant and more than one eligible family member. Eligible family members include a spouse and children under the age of 26, or a disabled child of any age if the child was disabled before age 18. All eligible family members are automatically covered, even if an employee/annuitant does not list them on the Health Benefits Election Form (SF 2809).
An employee/annuitant may enroll for self and family coverage before the employee/annuitant has any eligible family members. In that case, upon a new eligible family member – for example, a newborn child or a new spouse – will be automatically covered by the family enrollment from the date he/she becomes a family member. The following example illustrates:
William, a federal employee and currently single, intends to enroll in self and family enrollment during the upcoming FEHB open season (Nov. 11 – Dec. 9, 2019). William will be marrying Cathy on Mar. 17, 2020. Cathy is the single parent of a child, age 10, who will live with William and Cathy once they marry on Mar. 17, 2020. William’s self and family FEHB enrollment becomes effective Mar. 17, 2020. Note that William does not have to complete a new SF 2809 upon Cathy’s and her child’s enrollment. However, William’s FEHB health insurance company may ask William for some specific information (like dates of birth) about Cathy and her child.
Married Couple in Which Both Spouses Are Employees or Annuitants and Eligible to Enroll in the FEHB Program
In the case of a married couple in which both spouses are federal employees or annuitants and are therefore eligible to enroll in the FEHB program, one spouse may enroll in self and family coverage in order to cover the entire family. If there are no eligible children, then one spouse may enroll in “self plus one” or each spouse may enroll in self only in the same or different FEHB plans. Generally, a married couple will pay lower premiums for two self only enrollments as the following table illustrates: (OPM reference: OPM Web site: here and here.)
As can be seen from the table, two “self only” enrollments total on average $20 to $60 less in premiums compared to one “self plus one” enrollment. But there are other considerations besides total premium cost for a married couple to consider in choosing which type of enrollment is better. These considerations are:
Consideration 1. If a couple prefers one enrollment and elects self plus one enrollment, does the FEHB plan selected meet the health care needs of each spouse? For example, one spouse may have a need for frequent physical therapy while the other spouse needs podiatry treatment on a regular basis. Some FEHB plans will pay for more physical therapy treatments while other plans will pay for multiple podiatry treatments. In that case, two self only enrollments may be in order.
Consideration 2. Deductibles. With self plus one enrollment only, one family deductible (e.g. $1,000) will have to be met. With two self only enrollments, two deductibles (e.g. $750) will have to be met.
Consideration 3. Employees have their FEHB premiums deducted from their gross salary (“premium conversion”) whereas annuitants have their FEHB premiums deducted from their after-taxed annuity. If one spouse retires and the other spouse continues in federal service, the overall premium cost may be less if one “self plus one” enrollment in the name of the spouse who continues in federal service rather than two self only enrollments in which the spouse who continues in federal service has FEHB premiums deducted pre-taxed from his or her gross salary and the annuitant has FEHB premiums deducted post-taxed from his or her annuity check.
Consideration 4. One spouse’s eligibility for Medicare. If one spouse is retired and will be age 65 or older in 2020 while the other spouse continues working in federal service, then it may make sense for the couple to elect “self plus one” FEHB coverage under the spouse who continues working in federal service.
Medicare and FEHB
In general, a federal annuitant once he or she reaches age 65 is encouraged to enroll in Medicare Parts A and B. Note that the word is “encouraged” and not “required”. While Medicare Part A (Hospital Insurance) has no monthly premium, there is a monthly premium for Part B (Medical Insurance). The amount that an individual pays each year for Medicare Part B depends on the individual’s modified adjusted gross income (MAGI).
The higher one’s MAGI, the more the monthly premium for Medicare Part B. However, if the retired spouse is over age 65 and is insured under the working spouse’s group health insurance plan (like FEHB) (as part of self plus one coverage) while the working spouse continues in federal service, then the retired spouse will not be required to enroll in Part B.
Once the working spouse retires from federal service, the retired spouse can enroll in Part B within eight months of the spouse’s retirement and not pay a late enrollment penalty. In other words, the couple could save hundreds if not thousands of dollars of Medicare Part B monthly premiums by electing self plus one FEHB coverage, in which the retired spouse would not be required to enroll in Part B, rather than two self only enrollments (in which the retired spouse would have to enroll in Part B at age 65 after retiring from federal service to avoid a late enrollment penalty).