December daze: Are you suffering deer-in-headlights anxiety?

With a possible government shutdown looming and the health insurance hunting season drawing to a close, there’s lots of pre-Christmas pressure on hundreds of thousands of federal workers, who don’t need and don’t deserve this kind of hassle produced by a political game of chicken.

If there is a shutdown, the most feds can do is hunker down until the politicians (who will keep getting paid while you aren’t) end it. And maybe, hopefully, like last time, agree to pay workers who didn’t work because they couldn’t work.

The health insurance “problem” is equally sticky in a different way. It’s about choices that are important, but not fun to make. Federal and postal workers in the Washington metro area have between 20 and 30 plans from which to choose. And the government will pay 70-plus percent of the premium. That’s good news, but it can be overwhelming too. All are good, but some are too expensive, have a weak prescription drug benefit, or a catastrophic coverage limit that, if you have a major accident or illness in 2018, could literally break your bank.

Picking the best plan for you and yours could save anywhere from $1,000 to $2,000 in premiums next year. And some of the plans set up a savings account for you that can be used for a variety of things, or banked like a CD or an IRA. In some cases, the savings account will be bigger than the premiums —i.e. free insurance!

Each year, only about six of every 100 feds and retirees change plans. Some have been in the same plan for decades, even though its premiums may have crept up because it attracts so many older workers, retirees and other heavy users. It may be a good plan, but you could get equal (in some cases better) benefits for a lower premium in another plan.

Most feds and retirees are in the Blue Cross-Blue Shield standard or basic options. Walton Francis, editor of the Consumers’ Checkbook Guide to Health Plans for Federal Employees, says that EVERYBODY should shop around. On Wednesday’s Your Turn radio show, he said everybody should check out two different plans while they are reviewing the 2018 benefits and premiums of their current plan. Among those, he suggests you consider as alternatives: Kaiser, Carefirst HD, Aetna basic, NALC CD, GEHA Standard, APWU CD, Foreign Service.

Check their premiums, check their catastrophic coverage (out-of-pocket limit to you) and be sure your doctor is in their network. He also recommends you check out HF (high-deductible) and HSA (health savings account) plans.

He got this question from reader/listener Rick J., who wrote:

“I retired earlier this year and had GEHA HD with a health savings account. I will use up most of the HAS balance this year. As a retiree, is an HDS with HAS contribution still a good idea when tax treatment is reduced? What about an FSA? My spouse continues to work.”

Francis replied:

“First and very important, you are eligible for a high-deductible plan and health savings account (HSA) contributions at any age, so long as you don’t have other insurance, whether or not retired. As a practical matter, most people sign up for Medicare Part B after they turn age 65, if they are not retired, but until then, you can keep adding to your HSA. Even after Medicare enrollment, you can keep your HSA, and stay in your high-deductible plan. But future savings contributions will go into a separate pot of money called a Health Reimbursable Arrangement. All this is explained in every high-deductible plan brochure.

Second, you retain all your tax advantages in an HSA whether or not you are retired. The money you add goes in tax-free, grows tax-free, and comes out tax-free if used for health care. But you are not allowed to use a regular flexible spending account and add money to any HSA. Since you are retired, you aren’t eligible for a flex spending account anyway, so this is not relevant to you.

Third, my copy of your message breaks off, but you seem to be concerned about income. There are no income limitations to HSAs. In fact, the higher your income, the more valuable they become, since your tax savings are greater.”

Nearly Useless Factoid

By Michael O’Connell

Sherlock Holmes first appeared in print in “A Study in Scarlet” on Dec. 1, 1887.

Source: On This Day

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