2022 FEHB Choices for Federal Employees & Retirees

November 8 was the start of the Office of Personnel Management (OPM)-sponsored federal benefits open season in which federal employees and retirees make decisions regarding which health insurance, dental insurance and vision insurance plans they want to enroll in during the upcoming 2022 plan year. The open season continues through the close of business on Dec. 13, 2021.

This column discusses choices that federal employees and annuitants can make regarding their health insurance benefits offered through the Federal Employees Health Benefits program (FEHB). These choices include joining the FEHB, adding eligible family members to the employee’s FEHB enrollment, and changing FEHB health plans.

Also presented is a checklist for employees retiring during 2022 for keeping their FEHB benefit for themselves and eligible family members during their retirement.

The FEHB and Who is Eligible to Enroll

The FEHB is the largest employer-sponsored group health insurance program in the world, covering eight million federal employees and federal retirees, eligible family members of federal employees and retirees, and surviving spousal annuitants. Permanent federal employees (full-time and part-time) can join the FEHB when they are first hired into federal service with no waiting period.

Three types of enrollments are available in the FEHB. These enrollments are:

(1) self only;

(2) self plus one (eligible family member), and

(3) self and family (more than one eligible family member).

Eligible family members include a current spouse and children under the age of 26. A child includes a biological child, a stepchild, a married child (but not the child’s spouse or children), an adopted child and a foster child (provided there is a parent-child relationship, and the employee or annuitant is the child’s primary source of financial support and lives with the child).

In terms of costs, each FEHB health plan has its own premium costs. The federal government pays on average 72 to 75 percent of a full-time employee’s, an annuitant’s or a survivor annuitant’s FEHB  premium with the employee, annuitant or spousal survivor annuitant paying the other 25 to 28 percent of the premiums.

Federal employees have their premiums deducted by-weekly from their bi-weekly before-taxed gross salary, while annuitants have their premiums deducted monthly from their after-taxed monthly annuities. It makes no difference which type of FEHB plan (fee-for-service, PPO, HMO high deductible health plan, consumer driven health plan) an employee, annuitant or spousal annuitant is enrolled in, or the type of coverage (self, self plus one, or self and family) – the percentages of the premium that the employee/annuitant/survivor annuitant and the federal government pays is set by law.

For 2022, there are about 275 health insurance plan choices offered under the FEHB. These include fee-for-service (FFS) plans available to all employees, while other FFS plans are available to specific categories of employee. There are preferred provider organizations (PPO) and health maintenance organizations (HMOs) plans available in most areas of the U.S. An employee or annuitant must live or work within a defined area to be eligible to enroll in a particular HMO. There are HMO plans that combine the features of a PPO and HMO called Point-of-Service (POS) plans.

There are also high deductible health plans (HDHP) that are associated with a health savings account (HSA). HDHPs allow employees to save in order to pay for current and future out-of-pocket medical expenses.

Another type of health insurance plan offered through the FEHB is a consumer driven health plan or CDHP. A CDHP provides an enrollee with the freedom of spending health care dollars the way the enrollee chooses. The typical plan has common features including enrollee responsibility for certain up-front medical costs, a federal government-funded account that the enrollee may use to pay these up-front costs and catastrophic coverage with a high deductible. The enrollee and covered family members receive full coverage for in-network preventive care.

Employees and annuitants can obtain FEHB plan information for 2022 by going here.

In choosing a health plan for 2022, employees and retirees are encouraged to select a health plan that best meets the medical needs of themselves and, if applicable, covered family members. Looking for a health plan that has the lowest premium cost is not necessarily the best strategy.

No health plan pays 100 percent for an individual’s health care expenses. Each type of FEHB health plan has a deductible, co-payment or coinsurance associated with it. There are preferential ways to pay for these out-of-pocket costs which will be discussed in upcoming columns.

Enrollment and Making Changes in the FEHB During Current Open Season

Compare Investment Options

During this year’s open season (Nov. 8, 2021 – Dec. 13, 2021), employees who are not currently enrolled in the FEHB and who are eligible to enroll may enroll. Current FEHB enrollees – employees, annuitants and survivor annuitants – may change their FEHB plans, type of enrollment and change “premium conversion” status (employees only).

Annuitants who not enrolled in the FEHB are not permitted to enroll in the FEHB during an “open season” unless the annuitant had “suspended” their FEHB enrollment for one of three reasons:

(1) to enroll in TriCare (group health insurance program covering retired members of the Uniformed Services);

(2) to enroll in an outside Medicare Advantage (Medicare Part C) plan; or

(3) or because of eligibility under Medicaid or a similar state-sponsored program of medical assistance for the needy.

The effective dates of this year’s open season enrollments and changes in enrollment are as follows:

• A new FEHB enrollment is effective the first day of the first pay period that begins in the following year. For most federal agencies, this will be Jan.2, 2022. That follows a pay period during any part the employee was in pay status.

• A change in enrollment (for example, from self only to self plus one or from self only to be included as part of another family’s FEHB enrollment, such as a spouse who is also a federal employee) is effective the first day of the first pay period that begins in the following year. For most federal agencies, this will be Jan. 2, 2022, regardless of whether the employee is in pay status. For annuitants, a change in enrollment will be effective Jan. 1, 2022.

Open Season Checklist for Employees Who Intend to Retire During 2022

For those employees who are planning to retire from federal service anytime during 2022 and who want to retain their FEHB coverage during their retirement and for eligible family members, the following is a checklist for these employees during the current open season.

1. A retiring employee must have been continuously enrolled in the FEHB (enrolled under either himself or herself, or under an eligible family member such as a spouse who is also a federal employee) for all of the employee’s last five years of federal service, ending on the effective date of the employee’s retirement.

2. In order for a retired employee (an annuitant) make sure that eligible family members keep their FEHB enrollment when the annuitant dies, at least one family member has to receive a survivor annuity. This family member will be a spouse. The retiring employee has to designate his or her spouse as a survivor annuitant on the application form for retirement (CSRS: Form SF 2808; FERS: Form SF 3107).

Another requirement is that the surviving spouse be enrolled in the FEHB at the time of the annuitant’s death. Even if the retiring employee has elected to give a survivor annuity to his or her spouse but the spouse is not included on the annuitant’s FEHB enrollment at the time of the annuitant’s death, the surviving spouse will not be eligible to enroll in the FEHB at the time of the annuitant’s death. To avoid this from happening, the retiring employee needs to add his or her spouse to the employee’s enrollment, which should be done in the current “open season” if the employee intends to retire during 2022.