Discussion: Open Season tips and traps

By Suzanne Kubota
Senior Internet Editor

Feds have just two weeks before the Federal Employees Health Benefits Program Open Season ends on December 13th.

Federal News Radio has been bringing you information on your options for the past few weeks, and we’ll continue in this Federal News Radio Discussion. Joining us are Colleen Murphy, the CEO of PlanSmartChoice, a free online tool to help feds choose best coverage; and Walton Francis, editor of the Checkbook’s Guide to Health Plans for Federal Employees.

Here are some of the topics, questions and excerpts from the responses of the panel:

Part 1: The Silver Lining to a Pay or COLA Freeze

    Murphy: “The good news about the…potential pay freeze is that federal employees know about it now so they can actually take this opportunity with open season to manage cost their expectations accordingly. That’s the good thing about it.” So, said Murphy, if you’re making $50,000 a year, you would have anticipated about $83 a month that you may not be getting now. With open season you can take a look at premiums and out of pocket expenses, “look at our costs” and maybe save some money now.

    Causey: “And I think psychologically this is good for retirees because they didn’t get a cost of living adjustment this year in 2010, and they won’t get a…COLA in 2011 because of deflation.” Like feds, said Causey, it’s not like they’ll be blindsided. The proposed pay freeze and lack of COLA for retirees could almost be a blessing in disguise, said Causey. Many feds may shop around for a better plan “whereas before they would not have done it.” Six out of 100 feds change their plans in a year and that’s way too low, said Causey.

    Murphy: Many plans, said Murphy, have tried to control costs this year, but reduced coverage, dropped products or reduced service areas. “It really is a good idea just to make sure you know what’s going on with your own plan, and you don’t want to be surprised.”

    Causey: One of the major changes, said Causey is the ability to include children up to age 26 in your coverage. “this is a sea change for the federal government.”

    Murphy: “This is the one question,” said Murphy, “the singlemost important question” being asked at health fairs: “what do I do about this new” provision? How do I go about it… “It’s a great benefit as a result of health reform” but there’s been a lot of confusion around it. Causey and Murphy said to be sure to check the changes section of your plan’s brochure for details and to see the FastFacts section of OPM’s website for more information.

    Also discussed in this part of the show were the best way to find out if your doctor will participate in your plan next year, how to save up to $2,500 by picking the right plan, and how many feds participate in the Flexible Spending Account program.

Part 2: FSAtastic

    Murphy: When it comes to the FSA, Murphy said if you’re confused by how the plan works, you’re not alone. “It is confusing. The Flexible Spending Account is offered to all federal employees through FSAfeds, and it’s an opportunity to set aside money for health care and or dependent care that you can use on a pre-tax basis to pay for your out of pocket medical or dependent care costs.” The reason it’s confusing, said Murphy, is the rule that if you don’t use the money you set aside, you lose it. People aren’t sure how much to set aside, she said. The solution for that is to use one of the medical cost calculators available online. It will estimate what your out of pocket expenses will be over the course of the next year. The average federal employee participating in the program, said Murphy, puts about $2,000 away, which reduces costs about 15%. “It’s really about being comfortable with the amount of money that you’re going to spend out of pocket and knowing that you’re actually going to use it, but it is one of the best ways to reduce your total health care spend.”

    Francis: Probably 90% of feds should have an FSA, said Francis, but only about 15% do.

    Causey: When the panel was asked who shouldn’t have an FSA, Causey answered, “if you’re in perfect health, live in a germ free bubble and never leave the house, you don’t need an FSA.”

Part 3: Planning Doesn’t Have to be Hard

    Francis: There are two kinds of federal employees, said Francis, “the worried well, sometimes the worried sick, and there’s the couch potato set, and there’s just a ton of people who don’t pay any attention. They just don’t want to think about it.” Using a web based tool, said Francis, “you can be in and out in 10 minutes.”

    Causey: “It’s hard to stress the importance of it,” said Causey, but at least make sure your doctor is in the network. You may even be surprised to find they participate in more than one, and you could switch plans, save money, and change nothing about your medical provider.

    Murphy: Or, added Murphy, you might be very happy with one plan, but find the costs have gone up. The provider group might offer another product that’s cheaper. “Many of us buy a particular car brand every few years and we stay within the same sort of family of cars,” said Murphy. It’s like that.

    Francis: “When you go online on to Checkbook’s Guide,” said Francis, you take a couple of seconds to answer a few questions like how old are you and how big is your family, “WHAM! You get a plan comparison chart” broken down into three groups: HMO’s, consumer driven and high deductible, and traditional PPO fee for service plans. In each of those groups, there are 6 or 10 plans ranked in terms of likely cost. You’ve gone from 24 to 25 plans available in the DC area to one.

    Murphy: PlanSmartChoice takes a slightly different approach, said Murphy. The average federal employee in DC, for example, is eligible for about 20 medical plan options. “Our tools ranks plans in the order that best meets your personal your needs.”

Part 4: Changes

    Francis: While Causey said this may be the first year he hasn’t “heard from a single person complaining about benefits,” Francis notes there have been fewer big changes than in previous years, but that there are, “big changes across the board.” Coverage of adult children (see above) is a huge change, and there are some real advantages, noted Francis, including that the child doesn’t have to be in the same plan. All had good preventative benefits before, but now it’s superb, and mental health coverage which was good before, is even better now, all due to changes in healthcare law.

    Murphy: Additional benefits from healthcare reform, noted Murphy, include “preventive care for free for all federal employees,” and there’s no longer a lifetime maximum on benefits.

    Francis: There’s been one cutback, noted Francis, “over the counter drugs and your Flexible Spending Account. A minor cutback.”

    Causey: An additional new benefit, noted Causey: adult children do not have to be dependents to be covered.

Part 5: Dental and Vision and Last Advice

    Francis: Dental and vision plans, noted Francis, are stand alone plans. Because they aren’t part of the FEHBP, “you pay the entire premium but it is tax advantaged if you’re still an active employee”. Vision coverage runs about $100 a year for self only, “but it’s not medical.” Generally it’s for glasses and lenses and the like, only. The key to picking dental coverage, said Francis, is to “make sure you pick a plan that has the network your dentist is in, because the real saving comes from the discount network rates.” Francis noted many of the health plans have dental benefits too. Dental plans aren’t for everyone he said, but they’re popular.

    Murphy: Check your medical plan for what level of dental and vision coverage they already have built in, said Murphy. “Secondly, then do the side by side comparisons of the dental and vision plans”. And third, even if you decide not to participate in you medical coverage and purchase additional coverage, sock some money into an FSA to pay for the coverage on a pre-tax basis.

One Last Thing

    Murphy: “Spend five to ten minutes time on PlanSmartChoice.com and really make sure you understand your medical options and make an informed choice.”

    Francis: “I have to say the same, but it’s www.GuideToHealthPlans.org.” And “the big thing people miss is not being willing to look at the consumer driven and high deductible plans…. They are spectacular buys particularly in a year when you have no cost of living increase, take a look.”

    Causey: “Consider setting up a Flexible Spending Account or a Health Saving Account, as Walton says. They’re very important for a lot of people.”

For complete coverage of Open Season on FederalNewsRadio.com, click here.