Certain individuals (who are not permanent federal employees, annuitants, or survivor annuitants) are in the Federal Employees Health Benefits (FEHB) program and, like employees, annuitants and survivor annuitants, can change their FEHB plan during the current open season which concludes on Dec. 11, 2023.
These individuals include former spouses, children of employees when they become age 26, and former employees. But they must pay 100 percent of the FEHB program health plan premium without any federal government contribution, and they may be subject to a limited period of FEHB program participation.
SEE ALSO:
Individuals who are eligible for continuing FEHB enrollment for as long as they want to be enrolled include:
(1) A former spouse divorced from a federal employee, has a qualifying court order, and meets other conditions.
They can enroll in any FEHB program plan but must pay 100 percent of the premiums with no federal government contribution; and
(2) Temporary employees who have worked for at least one full year in federal service may also enroll on the same basis as permanent employees but must pay 100 percent of the premiums with no federal government contribution.
There are other individuals who are eligible to participate in the FEHB program with the following restrictions:
(1) FEHB program participation is limited in duration; and
(2) The individuals pay 100 percent of the premiums (no federal government participation).
These individuals are:
• Employees separating from federal service may continue their FEHB program coverage for 18 months following separation. They pay 100 percent of the FEHB program health plan premiums plus a 2 percent surcharge.
• Children of federal employees or retirees who reach their 26th birthday are no longer eligible for coverage under their parent’s family FEHB program health plan. They may obtain FEHB program coverage in their own name for a maximum of 36 months and pay the full amount of the premium.
• Former spouses of federal employees and retirees without a qualifying court order may enroll in the FEHB program for a maximum 36 months, paying the full cost of the FEHB program premiums.
Individuals in these categories are encouraged to shop around for individual health insurance and compare what they are paying in premiums in the FEHB program compared to what they would pay in the individual health insurance market.
This is particularly true in the marketplace exchanges. For individuals who have enrolled in Original Medicare (Medicare Part A and Medicare Part B), private Medicare Advantage plans could be considerably less expensive.
One advantage of the FEHB program is that there is no denial of FEHB program health insurance for preexisting conditions. There is a 60-day time limit for applying after the “qualifying event” (divorce, or a child attaining age 26).
Once enrolled in the FEHB program, an individual can switch FEHB health plans during an open season, like any other employee or annuitant enrolled in the FEHB program.
Premium Savings for Married Couples in Which Both Spouses Are Federal Employees
Married couples in which both spouses are federal employees who have no children under the age of 26 can save on FEHB premium costs by enrolling separately as two “self only” enrollments, rather than one “self plus one” enrollment. Two “self only” FEHB enrollments can be advantageous in situations in which each spouse prefers a different FEHB program health plan.
A disadvantage to two “self only” enrollments rather than one “self plus one” enrollment is that each spouse will have to meet separate deductible and catastrophic limits rather than one limit that applies to self plus one enrollment.
Premium Savings for Married Couples or Single Parents with One Child Under “Self Plus One” Enrollment
Married couples with no eligible children enrolled in the FEHB program, and single parents with one child to include on their FEHB enrollment are eligible to enroll in “self plus one” rather than “self and family” FEHB enrollment. In so doing, they can save annually on average two to three hundred dollars in premium costs, perhaps more with some FEHB program health plans.
But in both cases, the employee choosing the type of enrollment and selecting a particular FEHB plan is encouraged to compare the published 2024 premiums to make sure that the plan’s self plus one premium cost is lower than the plan’s self and family premium cost.
According to Checkbook Magazine’s Guide to Health Plans for Federal Employees, there are 44 FEHB plans in 2024 in which “self and family” annual premium cost is less than “self plus “annual premium cost.
Suggestions for Part-Time Employees Enrolled in the FEHB Program
Those permanent federal employees who work part-time (less than 80 hours a pay period) pay a proportional higher share of the FEHB premium compared to full-time permanent employees. This is because government agencies do not pay the regular share of the FEHB health plan premium contributions for part-time employees which the government agencies do for full-time employees (on average, 72 to 75 percent of the FEHB premium).
For example, a part-time employee who works half-time (40 hours a pay period) pays one half of the regular government FEHB program health plan contribution in addition to the employee’s proportion of the total premiums. They therefore pay the regular employee proportion of 25 to 28 percent, plus one-half of the proportion that the federal government pays (72 to 75 percent), equaling a total of 61 to 66 percent of the total FEHB program health plan premiums.
Part-time employees are therefore encouraged to increase their work schedule hours, ideally to full-time status (80 hours per pay period) in order to benefit from the maximum government FEHB health plan premium contribution on behalf of the employee.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER®, Chartered Life Underwriter, Chartered Financial Consultant, Registered Health Underwriter and Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, located at 833 Bromley Street Suite A, Silver Spring, MD 20902-3019