Fed Life — Eligibility changes for FEDVIP

In today’s episode of Fed Life, Drew Friedman and Tom Temin get into the details on the latest eligibility changes for the Federal Employees Dental and Vision Insurance Program (FEDVIP) with Kevin Moss, editor of Consumers’ Checkbook Guide to Health Plans for Federal Employees. Plus, the crazy weather throughout the country seems to be reflected in Congress. On recess, when Congress returns it’ll have 12 working days to workout a regular federal budget for 2024. Ain’t gonna happen. Joining Fed Life to explore the possible consequences, the vice president for policy and programs at the National Active and Retired Federal Employees Association, John Hatton.

After making initial plans back in 2021, the Office of Personnel Management just finalized a rule to expand eligibility for its vision and dental insurance program to tens of thousands more federal employees.

The newly eligible feds — some 72,000 seasonal and temporary employees — have never had access to FEDVIP before. And although another roughly 120,000 U.S. Postal Service employees were previously eligible for the program, they can now access those benefits within their first three months on the job, rather than after a full year of employment — if they work 130 hours a month.

For Kevin Moss, editor of Consumers’ Checkbook Guide to Health Plans for Federal Employees, that change is a pretty big deal.

“It’s not every day that a new federal benefit has awarded,” Moss said on Fed Life.

Some current FEDVIP enrollees may wonder how the change will impact premiums, but OPM is predicting a minimal overall impact for the program. Of course, it depends on how many of the employees actually sign up for coverage. And some of the newly eligible groups are in more high-risk categories on the job, especially when it comes to vision. Still, given the numbers, it’s likely not going to move the needle all that much, Moss said.

“Firefighters and other emergency personnel, they are two of the groups that are getting this benefit for the first time —they have not been previously eligible for FEDVIP,” Moss said. “We don’t know yet what the uptake will be, but overall, OPM thinks that this isn’t going to have a big impact to the rest of federal employees.”

And FEDVIP may not make sense for everyone who is becoming eligible, either. For example, non-career Postal employees have access to the USPS health plan, which offers 100% coverage for preventative dental care for in-network providers — in many cases, that will still be cheaper than switching over to FEDVIP.

“If you’re happy with that coverage, you’re happy with that set of providers and you’re generally a low-cost dental user, you may not get value in signing up for a FEDVIP plan, where you have to pay 100% of that premium — the government is not paying a share of that premium for FEDVIP enrollment,” Moss said.

Additionally, new enrollees should think about coupling FEDVIP with some other ways to mitigate high health care costs.

“Many families will still have out-of-pocket dental costs, and should think about complementing their FEDVIP plan with a flexible spending account,” Moss said. “You can get about a 30% tax break on out-of-pocket dental expenses and other health care expenses.”

Along with the eligibility change, part of OPM’s final rule also clarifies that those who become eligible for benefits through the Department of Veterans Affairs can use that as a qualifying life event — and cancel FEDVIP coverage outside of Open Season. It also expands the FEDVIP enrollment window for retiring active-duty service members.

“The big thing with that is whether those retired active-duty service members have access to VA benefits,” Moss said. “It takes a while for those benefits to be processed.”

The newly eligible feds now have a special 60-day window to sign up for FEDVIP — but if they miss it, Open Season is still right around the corner.

“The only delay, possibly, is the communication from the benefits office to employees that they now have this coverage,” Moss said. “It’s possible that people find out about this too late. You may miss this window and not have coverage for the rest of 2023. But you can hop in, in the fall, and make sure you have coverage in 2024.”

For 2023, Open Season — the annual window of time during which all Federal Employees Health Benefits Program participants can make changes to their health care options for next year — begins Nov. 13 and runs for about a month.