Choices You Have During Open Enrollment Season

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There are a few ways to simplify the open season chore so it doesn’t become an overwhelming task. There are tools on the Office of Personnel Management website you can use to understand your options, identify your needs and narrow your choices to the best plan at the best price for you and your family. These include both an OPM-generated plan comparison tool and a link to the Consumer’s Checkbook Guide to Health Plans for Federal Employees. Many agencies pay for employees to have access to this tool.

To make the best use of any of these tools, it helps to know the meaning of key terms in the health insurance world. Let’s look at some of the most important.

Deductible: The amount you must pay before your insurance plan will pay a claim. In most cases, when you use network providers, you will not have to pay a deductible for preventive care services.

Copayment: The amount you’ll pay for your share of health care services or prescription drugs.

Coinsurance: The percentage amount you’ll pay for covered health care services or prescription drugs.

Catastrophic Limit: The most you will pay out of pocket for covered health care services and prescription drugs. Most plans have a higher catastrophic limit when you use out of network providers or facilities. Not all expenses are included in this limit.

Preferred Provider Organization: A network made up of health care providers who have agreed to provide covered services at reduced cost. You can find a provider list on your plan’s website. PPO networks are more extensive in some areas than in others.

Participating Providers: To complicate matters, some local plans also contract with other providers that are not in their PPO network. They are referred to as participating providers or member facilities. They have agreed to accept a different negotiated amount than PPO providers as payment in full. They will also generally file your claims for you.

Fee-for-Service Plans: Also known as indemnity plans, all of these in the Federal Employees Health Benefits Program have PPO networks. When you visit a PPO you usually won’t have to file claims or paperwork. When you use non-PPO providers, you may have to file your claims with your plan. The plan will then pay the benefits to you and you must pay the provider. When you need medical attention, you visit the doctor or hospital of your choice. This approach may be more expensive for you and require extra paperwork. To choose the best FFS plan for you and your family, it is a good idea to pay attention to the PPO network providers and facilities to make sure they are located conveniently for you and your family members.

Health Maintenance Organization: Members of an HMO are required to choose a primary care physician to take care of most of their health care needs. With many HMO plans, you will need a referral to see a specialist unless the plan offers open access. There are many HMO plans in FEHBP that offer a wide range of health care services through a network of regional providers who agree to supply services to members. The drawback to most HMO plans is you have no coverage for services when you use out of network providers. HMOs have the reputation of being more restrictive than traditional fee for service plans, but don’t rule out an HMO as an option. Many have qualities that make them more flexible and operate more like fee for service plans than you might imagine.

Point-of-Service Benefits: This refers to covered services you can receive from an out-of-network provider. But beware: You might have higher out-of-pocket costs than you would from in-network providers.

Consumer Driven Health Plan: These plans offer a savings account to pay your initial health care costs before you incur out of pocket expenses. They have a higher deductible than a typical FFS or HMO plan. These plans allow you to establish separate flexible spending accounts to cover your deductibles, copayments and coinsurance costs once you have exhausted the money in your health fund. They generally have lower premiums and can be a wise choice for those in good health.

High Deductible Health Plan: This is a type of a CDHP that has a high deductible and includes either a health savings account or a health reimbursement account to help cover your out of pocket expenses. HDHPs in FEHBP provide a “premium pass through,” meaning the plan will contribute a portion of the premium to your HSA or credit your HRA account. This is similar to the health fund or medical account associated with CDHPs, but if you choose not to use the money in the account, it can stay there for use in future years.

Health Savings Account: This is a place to put away money for health care expenses under an HDHP. You can contribute tax-free dollars to your HSA in addition to receiving contributions from your health plan through a premium pass through.

Health Reimbursement Arrangement: Like an HSA, an HRA is an employer-funded tax-sheltered fund to reimburse allowable medical expenses for those enrolled in an HDHP. But you can’t contribute additional tax-free dollars to an HRA. OPM has additional information on how HRAs work.

Flexible Spending Account: A Health Care FSA is used to pay for eligible medical, dental, and vision care expenses that aren’t covered by your health plan or elsewhere. A Dependent Care FSA is used to pay for eligible dependent care services. The money you contribute to an FSA is not subject to payroll taxes. Retirees are not eligible for FSAs.

Limited Expense Flexible Spending Account: If you’re enrolled in a high-deductible health plan and have an HSA, you’re eligible for this type of account, which can be used to cover eligible out of pocket dental and vision expenses.

Dental and Vision Plans: If you think you are paying to much for your Dental and Vision plan, you probably are.  On the average most will spend anywhere from $450-$600 per month for a dental/vision plan, but did you know their are some plans out there that would cost you $185-$229 per year for some really great benefits?

To request more information about any of the topics we talked about or to help you plan for retirement, please Contact us today to schedule your free consultation.

CSRS Offset and Social Security Calculating Your Pension

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Over the last few years, I have been getting more and more questions about CSRS Offset and its relationship to certain Social Security rules, such as the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). This uptick in questions is likely because those who fall under CSRS Offset are at the cusp of retirement.

This article is written for those who fall under the CSRS Offset system. Others may find it interesting, if not applicable to their specific situation.

A person is covered under CSRS Offset if they:

  • Had five or more years of creditable civilian service as of 12/31/1986 (the day before FERS).
  • Had a break in service of over 365 days.
  • Were rehired following a break in service at any time after 12/31/1983 (the day before all newly hired federal employees must have been covered by Social Security).

Individuals under CSRS who fit the above definition should have been given a choice of electing FERS or choosing CSRS Offset upon their return to federal service. CSRS Offset employees, like FERS employees, must have Social Security taken out of their federal salary. When a CSRS Offset person retires, they get a regular CSRS pension until they reach the age of 62. At age 62, their CSRS pension is reduced (offset) by the value of the Social Security that they earned while covered under CSRS Offset. If they retire at age 62 or over, the offset takes place immediately upon their retirement.

The offset will take place even if they choose not to apply for their Social Security.

The reduction is determined in all but a few situations by dividing the number of years of CSRS Offset service by 40 and applying the resulting fraction to one’s age 62 Social Security benefit.

Debbie is a CSRS Offset retiree who, when she retired, had 20 years of CSRS Offset service. She is receiving a CSRS pension of $60,000 per year. Her Social Security benefit at age 62 will be $12,000 per year. Here is how the offset to her pension will be calculated:

  • The 20 years of CSRS Offset service is divided by 40, giving a fraction of ½ (50%).
  • The reduction to Debbie’s CSRS pension is 50% of her Social Security benefit, or $6,000 per year. This reduces her pension to $54,000 per year.
  • Assuming Debbie applies for her Social Security at age 62, she will receive the entire $12,000 per year Social Security benefit.
  • Debbie’s benefit will consist of her reduced CSRS pension ($54,000 per year) and her Social Security ($12,000 per year) for a total of $66,000 per year.
  • Debbie, like most CSRS Offset retirees will receive more money at age 62 if she applies for her Social Security

In the example above, Debbie had 20 years of CSRS Offset service where Social Security was being taken out of her federal salary. This fact may result in her Social Security being subject to a reduction from the Windfall Elimination Provision.

The Social Security System has a need-related twist in the computation formula that is designed to replace a much greater portion of a low wage earner’s income than that of the high wage earner.

CSRS employees, and others who have earned a retirement benefit based on work that was not covered by Social Security, are likely to have many years in their Social Security earnings record where they had little or no employment covered by Social Security. They would look like a low wage earner to the Social Security system, even though they had been working at a good job and earning a pension the entire time.

Debbie, in our previous example, had at least ten years of CSRS coverage where she was not having Social Security taken from her federal salary. Unless she has at least 30 years of “substantial earnings” in Social Security covered employment, her Social Security benefit will be reduced by the WEP.

Social Security benefits are based on your lifetime earnings. The following is how they are computed in 2016.

  • Your lifetime earnings are indexed for inflation.
  • The highest 35 inflation indexed years are added together.
  • The total is divided by 420 (the number of months in 35 years) to arrive at average indexed monthly earnings (AIME)
  • AIME is multiplied by:
    • 90% x the first $856
    • 32% x $857 to $5157
    • 15% of the amount over $5157

If you are affected by the WEP, the multiplication factor for the first “bend point” above will be less than 90%. How much it is reduced depends on how many years of substantial earnings you have under Social Security. If you have 20 or fewer years of substantial earnings (like Karen) your benefit will be computed using a 40% factor. For years over 20, the factor increases by 5% a year until it reaches the full 90% after 30 years. This Social Security Factsheet on the WEP has a chart on what constitutes substantial earnings.

At the time this article was written, Social Security had not updated the publication for 2016. Due to the fact that there was no COLA on Social Security benefits for 2016, there was no increase in the amount that is considered substantial earnings.

Your Social Security Statement does not take the WEP into account. There is a WEP calculator on the Social Security website that can be used to determine how (or if) the WEP affects your Social Security.

Back to Debbie and her situation. We’ll assume that the 20 years of CSRS Offset service she has are her only years of substantial earnings under Social Security and that she is fully affected by the WEP. The $12,000 per year estimated age 62 benefit from her Social Security Statement will not be what she is entitled to receive because of the effect of the WEP. The maximum reduction that the WEP can cause is $5,136 per year. As Debbie will, unfortunately, be subject to the maximum reduction, her annual Social Security benefit will be reduced to $6,864 per year. In calculating her Offset (under the CSRS Offset retirement system) the WEP is applied first and then the Offset is applied. Here’s a re-calculation of her benefits using a Social Security benefit that is reduced by the application of the WEP.

  • The 20 years of CSRS Offset service is divided by 40, giving a fraction of ½ (50%).
  • The reduction to Debbie’s CSRS pension is 50% of her Social Security benefit, or $3,432 per year. This reduces her pension to $56,568 per year.
  • Assuming Debbie applies for her Social Security at age 62, she will receive the entire $6,864 per year Social Security benefit.
  • Debbie’s benefit will consist of her reduced CSRS pension ($56,568 per year) and her Social Security ($6,864 per year) for a total of $63,432 per year.
  • She still comes out ahead.

It is unlikely that the Government Pension Offset will affect Debbie (or most CSRS Offset employees for that matter). The GPO reduces (usually eliminates) any Social Security benefits to which you would be entitled based on the earnings of another (i. e., spousal or survivor benefits). CSRS Offset retirees are exempt from the GPO once they have spent five years covered by CSRS Offset.

TSP Funds Took a Nosedive in October

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Nearly all of the funds in the federal government’s 401(k)-style retirement savings program tumbled last month, mirroring a month of volatility in the financial markets.

The Thrift Savings Plan’s G Fund, which is made up of government securities, was the only portfolio in the black in October, gaining 0.26 percent. That brings its total 2018 earnings to 2.38 percent.

The S Fund, composed of small- and mid-size businesses, lost the most value last month, falling 10.06 percent. That brought the portfolio 0.30 percent into the negative since January. The international stocks of the I Fund fell 7.94 percent in October, bringing its 2018 losses to 8.92 percent.

The common stocks of the C Fund lost 6.84 percent last month, although the fund remains 2.98 percent in the black for 2018. And the fixed income (F) Fund fell 0.78 percent in October, bringing its losses so far this year to 2.26 percent.

All of the lifecycle (L) funds, which shift investments into more stable portfolios as participants get closer to retirement, lost value last month. The L Income Fund, for those who have already started withdrawing money, lost 1.40 percent; L 2020, 2.24 percent; L 2030, 4.60 percent; L 2040, 5.54 percent; and L 2050, 6.35 percent.

Since January, the L Income Fund has grown 1.52 percent; L 2020, 1.21 percent; and L 2030, 0.12 percent. The L 2040 Fund has fallen 0.35 percent this year, and the L 2050 is down 0.74 percent.

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Federal Officers Association Asks OPM to Roll Back 2016 Annuity Change

By | Benefits, Federal Pay, Retirement | No Comments

A group representing the federal law enforcement community last week sent a letter to acting OPM Director Margaret Weichert asking her to roll back an Obama administration decision to change how payments to divorced retirees are distributed to them and their former spouses.

The Federal Law Enforcement Officers Association, which represents more than 27,000 federal law enforcement professionals across 65 agencies, blasted a 2016 OPM decision to grant a “marital share” of the Federal Employees Retirement System Retiree Annuity Supplement to a retiree’s ex-spouse if the retiree is subject to a state divorce decree. Before that decision, the agency would only grant that share based on the basic annuity.

The retiree annuity supplement is the money that is paid to retirees who are not yet eligible for Social Security, which kicks in at age 62. Many law enforcement positions force officers to retire at 57. For decades, the supplement was not subject to a court-ordered marital share because OPM considered it to be a Social Security-type benefit, and thus not part of a divorce agreement.

“This policy change constituted an unwarranted reinterpretation of a 30-year old provision of the FERS statute and, more importantly, has caused real financial harm to federal law enforcement and other retirees for the more than two years that it has been enforced by the agency,” wrote association National President Nathan Catura.

In addition, the association said that OPM has applied the policy retroactively, leading to many officers suddenly owing money to the government to send to former spouses.

“[In] the more than two years since it implemented this revised policy, OPM has applied its reinterpretation retroactively and with little to no regard for the financial harm it has inflicted on retirees,” Catura wrote. “It has created individual retiree debts due to the federal government of as much as $28,389.96 (that we are aware of)—debts for which OPM has sought repayment in the form of prospective and retrospective assessments from annuitants’ retirement benefits.”

The decision to apply marital share to the annuity supplement has drawn criticism from both Congress and an agency watchdog. Sen. James Lankford, R-Okla., wrote in May that the policy change could constitute a violation of the Administrative Procedures Act, and the OPM Inspector General issued a report in February questioning the manner in which the policy was changed outside of the traditional rule-making process.

“OPM did not provide any public notice that it now considers the annuity supplement to be allocable and that, as a result, OPM will now apply the state court-ordered marital share to the annuity supplement, even when the state court order refers to the basic annuity only,” the IG wrote. “[OPM’s] new policy has been causing immediate financial disruption to annuitants. Moreover, OPM’s new policy improperly changes previously litigated final state court orders without notice to annuitants.”

OPM did not respond to a request for comment, but it disagreed with each of the findings of the IG report and suggested the report could jeopardize pending cases before the Merit Systems Protections Board. In April, the MSPB overturned a decision in which OPM sought to collect $24,000 in debt from a retired air traffic controller related to the policy change.

“As Sen. Lankford, the OIG, and MSPB have concluded, this policy change was implemented in a clandestine fashion without any regard for the court-ordered and previously-litigated provisions of the specific divorce settlements of affected retirees,” Catura wrote. “Instead, retirees and their former spouses only learned of OPM’s actions when their annuity payments changed, in some cases years after the parties had divorced and a state court had ordered a former spouse’s marital share.”

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Federal Retirees to Receive BIGGEST COLA Boost in Years

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Federal retirees will receive a cost-of-living adjustment of 2.8 percent in their benefits next year, the largest increase in more than a decade.

The boost—which applies more broadly to recipients of Social Security benefits—comes on top of a 2 percent boost in 2018. That increase came after a couple of years of very low percentage COLAs. The 2017 increase was only 0.3 percent.

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 last year in which a COLA became effective.

The 2.8 percent increase applies to retirees under the Civil Service Retirement System. Those under the Federal Employees Retirement System will receive 2 percent. FERS employees only receive the full percentage increase if it is less than 2 percent. If the change is 2 percent to 3 percent, FERS retirees get 2 percent. And if the increase is 3 percent or higher, FERS retirees receive 1 percentage point less than the full increase.

“CSRS retirees and Social Security recipients will be pleased to see their benefits increase by 2.8 percent in 2019, the largest increase since 2012,” said Richard Thissen, president of the National Active and Retired Federal Employees Association. “Unfortunately, hundreds of thousands of FERS retirees will be wondering why they are only receiving a 2 percent COLA when the relevant measure of consumer prices increased by 2.8 percent.”

“It is past time for Congress to ensure FERS retirees receive a full COLA each year,” Thissen added.

Tony Reardon, president of the National Treasury Employees Union, said, “As retired federal employees welcome the increase in their monthly pensions in 2019, it’s a good time to remind them and all future retirees that such routine cost-of-living adjustments cannot be taken for granted. The administration has not given up its plan to eliminate COLAs for federal employees who retire through the Federal Employee Retirement System, and severely cut them for those in the Civil Service Retirement System.”

The new COLAs will take effect starting with federal retirees’ December 2018 benefits.

Now for those wanting to retire soon and take advantage of this full COLA for 2019, must be retired by October 31, 2018.  Give us a call Today, or contact us and learn more about this and how we will help you.  You may still have time.

THE USPS Announces New Changes for 2019

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The Postal Service has just announced price changes to take effect next year.

The USPS governors approved the proposed changes, which will be reviewed by the Postal Regulatory Commission (PRC) before they take effect Jan. 27. The governors believe these new rates will keep the Postal Service competitive while providing the agency with needed revenue.

The changes, if approved by the PRC, include a 5-cent increase in the price of a First-Class Mail Forever stamp from 50 cents to 55 cents.

The single-piece additional ounce price will be reduced to 15 cents, so a 2-ounce stamped letter, such as a typical wedding invitation, will cost less to mail, decreasing from 71 cents to 70 cents.

The changes include adjustments to other Mailing Services products, as well as Shipping Services products.

Here are the current and proposed prices:

  • First-Class Mail letters (1 ounce): 50 cents (current), 55 cents (proposed)
  • First-Class Mail letters (additional ounces): 21 cents (current), 15 cents (proposed)
  • First-Class Mail letters (metered 1 ounce): 47 cents (current), 50 cents (proposed)
  • First-Class Mail outbound international letters (1 ounce): $1.15 (no change from current price)
  • First-Class Mail domestic postcard stamps: 35 cents (no change from current price)
  • Priority Mail small flat-rate box: $7.20 (current), $7.90 (proposed)
  • Priority Mail medium flat-rate box: $13.65 (current), $14.35 (proposed)
  • Priority Mail large flat-rate box: $18.90 (current), $19.95 (proposed)
  • Priority Mail Army/Air Post Office and Fleet Post Office large flat-rate box: $17.40 (current), $18.45 (proposed)
  • Priority Mail regular flat-rate envelope: $6.70 (current), $7.35 (proposed)
  • Priority Mail legal flat-rate envelope: $7 (current), $7.65 (proposed)
  • Priority Mail padded flat-rate envelope: $7.25 (current), $8 (proposed)

Overall, the proposed prices would raise Mailing Services product prices by approximately 2.5 percent.

Shipping Services price increases vary by product. For example, Priority Mail Express prices will increase 3.9 percent, while Priority Mail prices will increase 5.9 percent.

Although Mailing Services price increases are based on the consumer price index, Shipping Services prices are primarily adjusted according to market conditions.

USPS filed the proposals with the PRC Oct. 10. The complete price filings are available on the PRC’s site under the Daily Listings section, and price change tables will be available on the Postal Explorer site.

The Postal Service’s news release has more information.

How Attempts at Fixing the Civil Service System Have Made It Worse Off

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Federal human resources officials on Wednesday said that congressional efforts to fix an outdated civil service system have complicated it as much as they have improved it.

Lawmakers have repeatedly taken a piecemeal approach to providing relief to laws governing the federal workforce that date back to the 19th century and were last updated on a wholesale basis in 1978, but federal officials said those agency-by-agency and job-by-job laws have created an overly layered and disparate series of special authorities. The HR professionals made their comments at a panel discussion in downtown Washington, D.C., hosted by Government Executive.

“Over the years we’ve seen special authorities, special regulations solve specific problems,” said Mary Pletcher, the Agriculture Department’s chief human capital officer. “But what it’s also done is create a very complicated system.”

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Col. Gregory Johnson, chief of the Army’s Functional Management Division, Integrated Personnel and Pay System, said the military maintains 300 different pay systems. Those have piled up over the course of several decades, he said, and are now posing problems for the Defense Department.

“How do you understand soldiers’ talent in the military, how do you manage 1.1 million people when you have that many systems that are disparate, where the data is fractured?” he asked. “How do you do that?”

Johnson said the Army is seeking to address that question by creating an Integrated Personnel and Pay System, a project he is spearheading. The goal is to centralize all the data from all the different systems into one place, clean it up and use it to evaluate the workforce. This will enable a whole new personnel management system, he explained, and allow the Army to better evaluate each soldier’s talents to better match them to the service’s needs.

The Army is unveiling the system in phases, starting with the National Guard next year. By 2020, it will fold all Reserve and active-duty personnel into the integrated system. Johnson said those initiatives will help change the overall ethos at the Army.

“We’ve been around for a long time and culture change is hard,” he said. “So as we take a look at our current personnel processes and try to drive a talent management process, the system will help us change.”

While the military is moving the ball forward on HR simplification and consolidation, Pletcher said the civil service laws and regulations applying to civilian employees have become so complicated that very few people in government actually understand all of them. Meanwhile, she explained, lengthy hiring times and career ladder climbing have remained rigid. That has all added up to agencies losing out on top talent.

“All of the special legislative authorities, the pilot authorities…the intent is to solve specific problems, but they create even more complexity because we still haven’t changed the underlying system,” Pletcher said.

Agencies do have flexibilities, she said, but they struggle to educate their managers on what they are, how they work and whether they are legally applicable in certain situations.

“The amount of knowledge that’s required to navigate all of those different flexibilities, all of the different ways to make the system work more, while they may exist, they add a lot of complexity,” Pletcher said. “And some human capital officers say they have too many authorities right now.”

That has complicated things not just for HR professionals but for hiring managers as well, some of whom only bring on a few employees each year and struggle to keep track of all the latest authorities. Pletcher estimated USDA will hire 8,000 permanent employees and 15,000 seasonal workers next year, and each job category will come with its own recruiting challenge.

Johnson explained in blunt terms the dichotomy between what soldiers currently face in their day-to-day jobs versus what they deal with when making broader career decisions.

“We ask soldiers to go in and make life and death decisions,” Johnson said, “but we don’t really tell them what their personnel actions are.”

Not The Best Day in the Markets Today

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Stocks sank today, Wednesday as a steep decline in tech shares and worries of rapidly rising rates sent Wall Street through its worst day in months.

The Dow closed 831 points lower as Intel and Microsoft fell more than 3.5 percent each. The Nasdaq plummeted more than 4 percent.

The S&P 500 dropped 3.3 percent, with the tech sector underperforming. The broad index also posted a five-day losing streak — its longest since November 2016 — and fell below its 50-day and 100-day moving averages, widely followed technical levels.

Both the Dow and S&P 500 posted their biggest one-day drops since early February, while the Nasdaq notched its largest single day sell-off since June 24, 2016.

Stocks have fallen sharply this month. For October, the S&P 500 and the Dow are down more than 4.4 percent and 3.3 percent, respectively. The Nasdaq has lost more than 7.5 percent.

Rising rate fears and a pivot out of technology stocks have made it a rough last few days. The Dow has dropped in four of the past five sessions, losing nearly 900 points over that span.

Why is this important?  Some are saying that the Bull run could be ending.  So should you keep your TSP in the Risky investments, or move it over to the G Fund.  Better yet, let us help explain

alternative to the Thrift Savings Plans.  We know it would put your mind at ease knowing you could still have safety of principal, but still with upside potential.  If that is something you would like

to learn more about, please request your Free Retirement Review today.

health premiums

OPM Announces Lowest Federal Employee Health Care Premium Increase in Two Decades

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The Office of Personnel Management announced Wednesday that federal employees will see the cost of their health insurance increase by 1.5 percent in 2019, the smallest hike in more than 20 years.

Enrollees in the Federal Employees Health Benefits Program with coverage only for themselves will on average pay an additional $1.53 each bi-weekly pay period next year. Those on full family plans will pay $2.55 more per pay period, while people in self-plus-one coverage will pay an additional $3.06.

The average increase in the government’s contribution to FEHBP premiums in 2019 will be 1.2 percent. OPM contributes roughly 72 percent toward premiums, which is based on a weighted average of the plans that enrollees choose.

The overall increase in premiums, including both employee and government contributions, will be 1.3 percent next year. That marks the slowest growth in health care costs since 1996, and the smallest increase in enrollees’ share since 1995, said Alan Spielman, director of health care and insurance at OPM.

“We still encourage enrollees to shop around for coverage and evaluate alternatives,” Spielman said in a call with reporters. “Even if you are only seeing a modest increase [in your current plan premiums] or a decrease, you might be able to find better value if you evaluate your needs and the choices available.”

Spielman said there could be a number of factors driving down price increases, including a regulatory change that allows all insurers to provide up to three plans of any type.

“There are a number of dynamics at play here,” he said. “Certainly, OPM and all of the carriers have been focused on quality improvement and achieving more affordable programs here . . . and there are a number of trends along those lines. They also include things like renegotiating provider contracts, and introducing programs like pharmacy management and chronic care management.”

Spielman said that next year, there is a moratorium on the Affordable Care Act’s health insurer provider fees.

Exact changes to premiums will vary based on the plans enrollees choose, and some will even decrease. For instance, for the Blue Cross and Blue Shield Standard Option—the most popular plan—self-only enrollees will pay $0.93 less per pay period, enrollees in family coverage will pay $3.74 less per pay period, and self-plus-one enrollees will pay $1.27 less each pay period.

For the Federal Employees Dental and Vision Insurance Program, where there is no government contribution, dental plan premiums will increase 1.2 percent on average in 2019, while vision plans will drop in price by 2.8 percent. This marks the first year that uniformed service retirees and their families can enroll in FEDVIP dental plans—the equivalent TRICARE plan will stop at the end of 2018—and the first year that active duty service members’ families can enroll in vision plans.

Open season for selecting or changing plans in the Federal Employees Health Benefits Program will run from Nov. 12 until Dec. 10.

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Best Dates To Retire in 2019

By | Benefits, Federal Pay, Retirement | 8 Comments

It’s time for our annual look ahead at the best dates to retire in the next year. As always, your retirement coverage under the Civil Service Retirement System (including CSRS Offset) or the Federal Employees Retirement System (including transfers to FERS) will be an important factor in choosing the best date.

CSRS

Some of the best dates to retire for CSRS employees occur when the end of the month (or one of the first three days of the month) coincides with the end of a leave period. This allows a final leave accrual (remember, annual leave is paid in a lump sum after you separate) and also ensures that the day after your separation is the first day you begin accruing CSRS retirement benefits.

The best dates for CSRS in 2019 that will allow a retirement at the end of the month (or within the first three days of a month) and also at or near the end of a leave period will be Jan. 3, Feb. 1, March 1, March 30, Aug. 2, and Aug. 31. Jan. 3, 2020, would also work, because it’s within the 2019 leave year.

The following dates would also work for CSRS, but would not earn a final leave accrual since they are not at the end of a pay period: May 3, May 31, June 30, July 3, Sept. 3, Oct. 3, Oct. 31, Nov. 1, Nov. 30, and Dec. 3.

FERS

All immediate, optional FERS retirement benefits start the first day following the month of retirement. This means, for example, that regardless of whether you retire on Oct. 1, 2, 15, or 31, your first FERS retirement benefit will be paid on Dec. 1 for the month of November. Your salary will cease on the last day of your federal employment. If your goal is to have your retirement benefit begin in October, then Sept. 30 would be the best date for you. FERS employees should focus on choosing a date at the end of the month, even if it is a Saturday or a Sunday, since these days can be included in the computation of service credit.

Retiring at the end of a leave period can be good, even though your salary will stop on that date and your retirement won’t start until the first day of the following month. This is because you will be paid your salary for the days that you worked during that last month, which could be more valuable than the retirement benefit you would forfeit. Because the benefit is computed very differently under FERS than CSRS, be sure to consider the tradeoff of salary for retirement benefit when you are choosing an end-of-leave-period retirement date that isn’t near the end of the month.

Also, remember that your payroll office pays your salary two weeks behind and the Office of Personnel Management may take a few months to process your retirement application. So your first retirement payment may not arrive on the first day of the month. You may receive several interim retirement payments from OPM until your claim is finalized and monthly payments begin.

Leave Considerations

Is it important to you to receive a large lump sum payout of your annual leave? If the answer is yes, the end of the leave year is the time to plan your departure. FERS employees who have a substantial amount of creditable service would benefit from a Dec. 31, 2018 or Dec. 31, 2019 departure and CSRS employees might choose Jan. 3, 2019 or Jan. 3, 2020. Although this won’t be the end of the leave year, it will allow 25 leave accruals and receipt of your first retirement benefit for the month of January (payable on Feb. 1).

If maximizing your lump sum annual leave payout is not that important to you, then remember you will be paid for your accumulated and accrued annual leave regardless of the exact date you retire.

Are you ready to explore some specific dates in 2019? Request your Free Retirement Review Today and we will also e-mail you the Best Dates To Retire Calendar.