Last Chance for Open Season for 2020

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Hopefully by now, you’ve done your research and narrowed your options for your 2020 Federal Employee’s Health Benefits Program plan and possibly dental and vision coverage. The end of open season is only a few days away (midnight EST on Monday, Dec. 9).

Many people will decide to stay with the same plan they have this year and keep the same allotments in their flexible spending accounts. According to the Office of Personnel Management, if you do nothing, here’s what will happen in 2020:

If you want to make a change, then the procedure depends on your agency or retirement system. Current employees can use one of various automated systems, depending on where they work. If you’re using a paper form, then submit form SF 2809 to your benefits specialist in human resources.

If you’re retired and your benefits are administered by OPM, then you can change your health benefit plan by using OPM’s Open Season Online system, calling 800-332-9798, or mailing OPM Form 2809 to: Office of Personnel Management, Open Season Processing Center, P.O. Box 5000, Lawrence, KS 66046-0500.

If You’re Retiring

Your agency needs to document your health insurance coverage to continue your coverage into retirement. If your agency is unable to provide documentation of an employee’s entire FEHBP coverage history, then OPM must have proof of coverage during the five years of service immediately prior to retirement—or if less than five years, during all service in which you were eligible for FEHBP.

Acceptable proof of coverage includes:

  • SF 2809 (Health Benefits Election Form) or other enrollment forms
  • SF 2810 (Notice of Change in Health Benefits Enrollment)
  • History reports from online enrollments that show both the old plan and new plan, and the effective dates for each change
  • Copies of screen shots or other documentation from online enrollments that show both the old plan and new plan, and the effective date for each change
  • Evidence of coverage as a family member under another’s FEHBP enrollment
  • Evidence of TRICARE/CHAMPUS enrollment (including evidence of coverage as a family member)
  • A signed memorandum from the agency detailing the continuous coverage of the employee to prove they meet the five-year requirement

Changes made by employees who are retiring before the first pay period of the new year may not take effect on Jan. 1, 2020, but OPM will process them as quickly as possible and coverage will be retroactive to Jan. 1. In the meantime, use your current coverage until the new coverage is in place. Your SF 2809 enrollment form should be included with your retirement package, not processed by your agency.

If You’re Retiring at Age 65 or Older

Now that you are retiring and are over age 65, you can go get Medicare Option B.  Here you can decide to stay with your health plan OR look at an alternative such as a Medicare Supplement.  Here is an example of Mary and her husband John:

Mary is retiring and is 66 and John her husband is 67 and both have been on her health plan, now that she is retiring and can get Medicare Part B her Health plan was going to be $392 per month plus $144.60 each (01/01/2020 Rate increased from $135.50 2019) for a total of $681.20.  But Excellent coverage with Zero out of pocket expenses, except co-pays on prescription drugs.

Now an alternative plan would be using a Medicare Supplement.  Based on Mary and John’s ages I recommended Plan G which comes similar coverage, but would have to cover the $198 deductible with Plan G.  Cost for Mary was $100.78 and John $107.22 plus Medicare Part B premiums for a total of $497.20 per month.  Now they would also have to go get Medicare Part D for Prescription Drugs, but that plan usually is somewhere between $19-$34.95 per month depending on medications being used.  So for everything bundled together with Part D with average cost of $24.95 the total would be $547.10 vs $681.20 for a first year savings of $134.10 per month or around $1600 per year.

Ask your Retirement specialist when you Contact Us today to see what rates you would have.

Should Feds Prepare for Another Government Shutdown

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We’re not even 12 months removed from the most recent government shutdown and already there are fears that another shutdown is possible later this month. The latest continuing resolution Congress passed to sustain government operations while lawmakers negotiate a budget deal runs out on Dec. 20, and while most lawmakers seem to believe an agreement is within reach, it is not certain that President Trump would approve it. That possibility should get every federal employee’s attention.

LifeCents survey data suggests that many of the 800,000 workers impacted by the previous shutdown suffered significant hardships: 22% percent of respondents claimed to have missed a significant payment, while 24% reported that the shutdown took a physical and emotional toll.

One career government employee told us: “The long shutdown was the fifth time I have experienced being shut out from my job, with the associated worries of how long it will last, when will we get back pay, and how long will my emergency fund last.” After more than 30 years of federal service, he finally decided to leave his job at the IRS as a direct result of the shutdown.

While this employee had an emergency fund that could sustain him until the government reopened, many people do not. Studies show that 78% of American citizens live paycheck to paycheck, while 40% do not have enough in savings to cover a $400 emergency. For such individuals, the prospect of missing one or more paychecks could be catastrophic.

Where to Begin

Agencies can help protect employees from potential financial hardship by encouraging workers to establish emergency savings funds, and then help them acquire the knowledge and build the habits to regularly contribute to that fund.

Many will find the prospect of building a savings account with enough money to cover three to six months of living expenses daunting, so employers should advise people to start small. A base amount of a few hundred dollars can still cover a small emergency and may even be enough to see employees through an abbreviated shutdown. Maintaining a small emergency fund can also limit the amount of debt someone takes on when they’re not receiving an income. Instead of using credit cards to cover expenses, employees can rely on their emergency funds, allowing them to avoid accruing new debt.

There are programs available to educate government employees on savings strategies. For example, the Office of Personnel Management provides retirement and financial literacy training that can help employees better manage their finances.

Inspiration From the Private Sector

Although the public sector is more limited than the private sector in its ability to incentivize employees, there are aspects of some private sector savings programs that government agencies may wish to consider emulating.

For instance, many companies have implemented “helping hands” or “hardship” funds. Employees contribute a small amount of money on a regular basis into a specialized savings account as a gesture of goodwill to their colleagues. These funds accumulate and can be disbursed in case of an emergency—such as a government shutdown.

Some companies have established community savings programs that reward or recognize participants when they achieve specific goals. For example, an organization may set a savings goal of $400 per person and reward employees with a celebratory event once everyone hits that goal. Initiatives like this show that a small incentive tied to a specific goal can help people develop long-term savings habits.

Benefits of Financial Security 

Shutdowns sow tremendous confusion and uncertainty among employees. By helping employees understand the importance of creating emergency funds, managers can proactively provide workers with the underpinnings of a financial safety net that may help soften the blow.

Investing in employees’ financial literacy and wellness can also help improve job satisfaction and reduce attrition. A 2019 PwC survey found that employees value having a financial wellness benefit and access to unbiased counselors. Organizations that provide such benefits are more likely to be seen as good places to work.

While managers cannot control shutdowns, they can help employees understand what tools, benefits, programs, and resources they have at their disposal to protect themselves during economic hardship

Getting Close to Retirement

Is your retirement date just around the corner and you have Questions?  We specialize in helping you plan, prepare and execute your retirement plan with the Full Assistance of My Federal Retirement Help.  Just contact us today

It’s that simple, you can easily schedule your Free Retirement Review with a day/time that will work for you the best, but our calendars do fill up quickly, so schedule your review today.

 

 

health premiums

Feds and Annuitants Now Have a New Long Term Care Option

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The Office of Personnel Management has officially launched, FLTCIP 3.0, a new plan and rate structure under the Federal Long Term Care Insurance Program.

FLTCIP 3.0 is a traditional long term care insurance plan with an emphasis on stay-at-home care and home care provided by health professionals as well as family and friends. The highlight of the new plan is a bonus “premium stabilization” feature.

Under the premium stabilization feature, there is an adjustable amount that is calculated as a percentage of premiums paid, which is designed to reduce the potential need for future premium increases.

“Under certain conditions, the amount may be used to offset an enrollee’s future premium payments or provide a refund of premium death benefit,” according to OPM.

The new benefit is available to federal and U.S. Postal Service employees and annuitants, active and retired members of the uniformed services, and qualified relatives who apply for coverage on or after October 21, 2019.

Learn more here.

Federal Retirees Will Get 1.6% COLA in 2020

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Retired federal workers will receive a cost of living adjustment of 1.6% to their defined benefit pensions next year, according to an announcement from the Social Security Administration.
The increase, which also applies to recipients of Social Security benefits, is a downgrade from the 2.8% increase some federal retirees received in 2019, and the 2% boost they saw in 2018.

The annual COLA is based on the percentage increase in the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year over the average CPI-W for the third quarter of the previous year in which a COLA became effective.

Unlike last year, when Civil Service Retirement System participants received the full 2.8% COLA while Federal Employees Retirement System enrollees only received a 2% increase, the 1.6% increase applies to participants in both FERS and CSRS.

That’s because FERS retirees only receive the full COLA if the difference in the CPI-W is 2% or less; if the difference is between 2% and 3%, they receive a 2% increase; and if the change is 3% or higher, FERS participants receive 1 percentage point less than the full increase.

Late last year, Rep. Gerry Connolly, D-Va., introduced the Equal COLA Act, a bill that would ensure FERS and CSRS retirees received the same cost of living adjustment each year. Connolly reintroduced the bill (H.R. 1254) last February, although it has yet to receive a hearing.

The COLAs will take effect next January.  If you are thinking about Retirement and want a Free Retirement Review or need any assistance, we can help you.  Please Contact Us to request your free consultation.

2020 Open Season Coming Soon – Time to Start Thinking About it.

By | Benefits, Federal Pay, Retirement | No Comments

Among the signs that fall is upon us is that health insurance open season looms in the not-too-distant future. The 2020 open season will run from Nov. 11 to Dec. 9, 2019. It makes sense to do some homework before the start of open season because, as usual, you’ll have a lot of options.

The 279 health plans available in the Federal Employees Health Benefits Program include:

  • 18 fee for service plans open to all
  • 4 fee for service plans with availability limited to certain groups
  • 257 HMO plans
  • 19 high deductible health plans
  • 28 consumer driven health plans

Plan brochures and plan comparison tools will be available in early November, before the start of open season. The 2020 rates for all FEHBP plans are available now.

There’s a new indemnity benefit plan called GEHA Elevate that will fill a spot that has been open for 30 years in FEHBP. Indemnity plans allow you to visit almost any doctor or hospital you like. The insurance company then pays a set portion of your total charges.

The lines between preferred provider organization plans and health maintenance organization plan continue to blur.  Today, you may find that a traditional fee for service plan such as Blue Cross/Blue Shield Basic Option requires the use of network providers (similar to an HMO) for the plan to provide coverage.

Plans such as Aetna Direct, which is classified as an HMO, work well for retirees nationwide who are enrolled in Medicare Parts A & B. It does not require a referral to see a specialist and coverage is available outside of the network providers.

Laurie Bodenheimer, acting director of health care and insurance at OPM, said this week that only 5% to 6% of federal enrollees change plans during open season, adding that she wished the percentage was higher. She admitted that switching can be a daunting task, and people enrolled in plans currently accepted by their doctors may be reluctant to change. Others are put off by the confusing jargon in the health insurance world.

Two health plans will no longer participate in FEHBP in 2020: MVP Health Care, which covers 3,200 employees and more than 4,000 retirees in New York; and Highmark Choice Co. (also known as Keystone Health Plan West), which  covers 718 employees and 323 retirees in Pennsylvania. Enrollees in these plans will have to select a new plan during open season. Otherwise, they will be automatically enrolled in the lowest-cost nationwide plan option, which for 2020 is GEHA Elevate.

Blue Cross/Blue Shield’s standard option remains the most popular FEHBP plan with retirees, with more than 930,000 retiree enrollments as of March 2018. But it’s also one of the most expensive. Blue Cross/Blue Shield’s basic option was most popular among current employees, with 807,000 enrollments.

Some plans will significantly increase premiums in most areas in 2020. They include:

  • Rural Carrier Benefit Plan
  • Aetna HealthFund Value Plan
  • Aetna HealthFund High Deductible Health Plan
  • Aetna HealthFund Consumer Driven Health Plan (in some areas)
  • Aetna Open Access High Option Plan
  • Health Net of California High and Standard Option Plans (in some areas)
  • Humana Health Plan Basic, Standard and High Option Plans
  • Humana CoverageFirst Value and Consumer Driven Health Plans
  • Humana Medical Plan High and Standard Option Plans
  • Humana Employers Health Plan of Georgia Basic, Standard, and High Option Plans
  • District of Columbia M.D. IPA
  • Hawaii Aetna HealthFund Value Plan

Some plans will be reducing premiums in 2020:

  • APWU High Option
  • GEHA High Option
  • MHBP Standard and Value Options
  • SAMBA High and Standard Options
  • Aetna HealthFund Consumer Driven Plan (in some areas)
  • United Healthcare Insurance Company High Deductible Health Plan
  • Health Net of California Basic Plan
  • Aetna Open Access Basic and High Option Plans (in some areas)

As open season nears, we’ll look in more depth at how you can assess your options. If you are close to retiring and need some assistance, we can help guide and direct you as well.

For example, when John and Liz were retiring and they saw the prices of health insurance, it was better for them to let the Federal Health plan go and they chose Medicare and Medicare Supplement which saved them about $238 per month, and still had Zero out of pocket, no more copays.  If you would like your Free Retirement Review or just have simple questions, please Contact Us now for assistance.

Thousands of IRS Employees Are Working Outside Jobs That Risk Conflicts of Interest

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The Internal Revenue Service does not sufficiently track whether its employees are taking on outside jobs such as tax preparation that could be in conflict with their government duties, according to an inspector general report.

By examining tax income data from 2016, the Treasury Inspector General for Tax Administration identified “167 employees who were potentially engaged in a prohibited employment activity and did not have an approved request” to do so, and “2,196 employees with outside employment activity who hold IRS positions that have a high risk of an actual or perceived conflict of interest as a result of the outside employment but did not have an approved outside employment request.”

The employees in question worked in accounting, bookkeeping, taxation, and legal and financial services in their outside jobs, according to the report dated Sept. 25. These jobs are potential conflicts of interest because IRS employees “have knowledge of the IRS’s internal processes and dollar value thresholds that can be used to benefit another employer,” the report stated. “Employees who have an actual or perceived conflict of interest can compromise the integrity of tax administration and erode public confidence that the IRS administers the nation’s tax laws fairly and equitably.”

The IG noted specifically that five employees earned income from the tax preparation service H&R Block and three had active Preparer Tax Identification Numbers that indicate they were paid to do returns.

The inspector general acknowledged the IRS has made some progress following a 2014 report that found more than half of IRS employees in 2011 who reported income from a non-IRS source had not received approval. However, it still “has not established processes to perform regular reviews of the [outside employment tracking system] to ensure its accuracy” and managers have not been reviewing outside employment requests in a timely manner. As of August last year, 9,063 of the 14,155 active requests in the system (64%) were not reviewed in a timely fashion.

Additionally, few employees have been disciplined for outside employment issues. From 2014 to 2018, only 40 employees were disciplined and 13 were suspended or removed from service, according to the report. There were 77,924 IRS employees in 2016, according to agency data.

The inspector general also expressed concerns that the IRS plans to migrate its outside employment tracking system, but was not sure where. “While the [outside employment system] continues to need improvement, it is still a more efficient and effective process than trying to manage the thousands of employee outside employment requests manually,” the inspector general said.

The inspector general made several recommendations on how the IRS can improve its oversight and administration of outside employment tracking. The IRS agreed in full or in part with most, but said “while non-bargaining unit employees are required to submit requests in the [outside employment system],” it disagreed that it can “unilaterally require bargaining unit employees to submit all outside employment requests through the [outside employment system] to review for conflicts of interest,” as the inspector general recommended. Also, agency officials did not agree with the recommendation to consider amending the Internal Revenue Code to allow the IRS to use tax data to identify employees in prohibited outside employment because the IRS general counsel has advised against it.

Feds Will Pay 5.6 Percent More Toward Health Care Premiums Next Year

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Federal employees will pay an average of 5.6% more for their health insurance premiums in 2020, a dramatic uptick from the historically low increase workers saw this year.
The government’s share of Federal Employees Health Benefits Program premiums will rise by 3.2%, the Office of Personnel Management announced on Wednesday, and the government will cover an average of 70% of each enrollee’s total premium costs. While the enrollee share of the rates increased just 1.5% in 2019, they jumped by 6.1% in 2018. About 8.2 million former and current federal employees, and their family members, are currently enrolled in FEHBP.
Non-postal federal workers will pay an average of $8.74 more per paycheck for their insurance in 2020. Those in “self-only” coverage will pay $4.72 more per paycheck, while those with family plans will see an average increase of $14.20.
U.S. Postal Service employees will pay an average of $10.31 more for their premiums, with exact increases dependent on their plan.
Laurie Bodenheimer, OPM’s acting director of health care and insurance, noted that the exact amount federal employees end up paying will depend on the plans for which they sign up. While the average premium was predicted to increase by 1.5% in 2019, employees ended up paying just 0.42% more on average, based on the plans they actually chose.
OPM added two new plans for employees nationwide, as well as 16 new options in local areas, as a result of its offering an indemnity benefit plan for the first time in 30 years. Those “fee-for-service” plans allow enrollees to go to virtually any health care provider and receive reimbursement for a set percentage of their costs. After a competitive bidding process, GEHA won the opportunity to provide the indemnity plans.
Bodenheimer conceded that “at this point in time” the indemnity benefit plans are not different from existing fee-for-service plans. Having an additional carrier to offer nationwide plans, she added, is itself a significant upgrade.
Officials said the sharper increase for 2020 rates was a result of Congress reinstituting the Health Insurance Provider’s Fee, which it waived last year. The fee was created as part of the Affordable Care Act to help fund state exchanges and is paid for by insurance companies. Officials also pointed to rising drug costs as contributing to the overall rate increases.
“Today’s announcement is the culmination of a yearlong effort,” OPM Director Dale Cabaniss said. “Our employees have worked tirelessly on behalf of all feds to secure them world-class healthcare and give them the knowledge to make informed decisions for their families.”
American Federation of Government Employees National President J. David Cox criticized OPM for failing to further rein in the growth of costs.
“The Trump administration has failed to do its job of providing affordable health insurance to its workforce,” Cox said. “Shifting more health-care costs onto federal workers and retirees will force growing numbers to choose between keeping their health insurance or paying for rent and other costs of daily living.”
All told, OPM will offer 279 health care options to enrollees, an increase of 14 from 2019. Individuals will not have that many options—as available plans vary by region—but every enrollee will be able to choose from 18 nationwide plans. About 5-6% of FEHBP enrollees opt to change their plan each year, a portion OPM believes is too low.
“We wish it was higher,” Bodenheimer said.
About 6,300 enrollees will be forced to sign up for a new plan after two carriers dropped out of the program. If those individuals fail to make a new selection, OPM will automatically enroll them in a GEHA plan.
New features in FEHBP next year will include more benefits for mental health and substance abuse treatment, Bodenheimer said. Plans will offer more services to help enrollees quit smoking, as well as enhanced services for individuals with chronic conditions. OPM has also improved its plan comparison tool, which enrollees will be able to access one week before the Open Season period begins.
Enrollees in the Federal Employees Dental/Vision Program will pay 5.6% more on average for their dental plans, and 1.5% more for vision. Bodenheimer applauded the growth FEDVIP has seen in recent years, including 1 million new enrollees last year driven driven largely by merging it with a previously separate program for retirees.
OPM will run open season, the annual period in which all federal employees and retirees can make changes to their health care enrollments, from Nov. 11 through Dec. 9.

If you need any assistance during this open enrollment or thinking about retirement, please feel free to Contact Us to schedule your Free Retirement Review today!