fbpx

Consider Lower Cost FEHB Plans When Signing up for Medicare

Posted on Friday, 25th October 2024 by

Print This Post Print This Post
Share

It makes sense to look for a lower cost Federal Employee Health Benefit (FEHB) plan, especially when signing up for Medicare. This is particularly true if you will be paying Part B premiums and possibly an Income Required Monthly Adjusted Amount (IRMAA).

Get started with a complimentary retirement planning session
and a FREE retirement planning report

When you are eligible for Medicare, you have the option to change your health benefits enrollment to a less expensive plan. You may make this change 30 days before you are 65 or at any time thereafter.

Today there are more low-cost FEHB Medicare Advantage plans, often with some Part B reimbursements, or plans are including a Federal Employee Plan (FEP) Medicare Prescription Drug Program (MPDP). The MPDP is also subject to Part D IRMAA premiums, another aspect to weigh carefully when deciding what plan is best for you and yours.

Advantages

After traditional Medicare (Parts A & B) becomes your primary payer FEHB plans generally waive the deductible, coinsurance, and copayments and you can use any provider that accepts Medicare. In other words, using preferred providers of your FEHB plan will be irrelevant since plans like BCBS and GEHA waive the coinsurance regardless of whether or not the provider is in their network or not. It is still going to provide 100% coverage if Medicare pays first.

Your prescription drug coverage will remain with the FEHB plan enrolled in unless they offer a MPDP option.

Explore all plans to find lower prescription drug costs, Medicare B reimbursements, and possibly expanded or improved benefits above what you are currently receiving. You won’t know until you research what plans are offered in your area.

Making the Change

Bill Morelli, a retired Navy Engineer, cautions federal employees and annuitants to “be very careful during open season choosing any healthcare insurance company. Carefully look at not just premiums, but check the copays, deductibles, coinsurance, Medicare Part B reimbursements, pharmacy Prescription copays, what they will pay for and not pay for, and most importantly if your providers such as hospitals, doctors, and other medical facilities in your local town will accept your carrier.”

Bill also suggests, “Most people look at only the premium costs which in my opinion is a huge mistake.” I wholeheartedly agree, there is a lot more to consider over and above premiums.

Before changing plans evaluate your current costs, call other FEHB providers for clarifications after reviewing their brochures, and make the decision based on the facts and your family’s needs.  Section 9 of all plan brochures covers the effect it has on subscribers.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

Observations

Many retirees subscribe to Blue Cross and Blue Shield (BSBC) plans because they have preferred providers in most locations and their coverage is international. They offer a Standard and Basic Plan and have a Federal Employee Plan (FEP) (MPDP), a Part D component that often times provides lower prescription drug costs.

The lower cost Self + One Basic 2024 monthly premium is $517.03 and it acts more like an HMO and your out-of-pocket expenses are minimal. Their Standard Self + One premium is $729.82.

I and my wife switched from BCBS Basic to the GEHA Standard Option after signing up with Medicare. The lower cost Self + One Standard 2024 monthly premium is $326.79, and their High Option Self + One premium is $540.95. We haven’t paid any out-of-pocket expenses to date, even after several major surgeries, except for prescription drugs. A considerable savings over the past 10 years.

Many FEHB plans including GEHA now offer Medicare Advantage (MA) plans that may provide even lower costs. The issue I’ve had with them in the past is the need for referrals and only being able to use their preferred network providers. That may change this open season, you never know until the new 2025 pamphlets are available for review.

Medicare Advantage Plans

Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. Medicare pays these companies to cover your Medicare benefits. Most importantly, MA plans provide catastrophic expense protection, unlike traditional Medicare and some offer partial Part B reimbursements. They at first glance appear to provide extensive coverage at considerable savings.

In return for their additional benefits, most of these plans require referrals and you must use their preferred provider networks.

To convert to one of the MA plans offered within the FEHB program you must be enrolled in Medicare Part A and B and a FEHB Plan that offers a Medicare Advantage option. There is no additional fee for the MA option.

Keep your original Medicare card handy encase you switch back to Traditional Medicare at an upcoming open season or if you trigger a Qualifying Life Event that warrants a plan change. During open season you can move back to a FEHB plan or possibly elect to enroll in another more cost effective FEHB sponsored MA plan.




Comparing Plans Made Simple

Explore each plan carefully to ensure they cover what you need at a cost you can afford. Use OPM’s Online Comparison Tool and Checkbook’s Guide to Healthcare Plans offers a comprehensive online comparison tool and/or a paperback book version.

Pre-Order Checkbook’s 2025 Guide to Healthcare Plans for Federal Employees and save 20% by entering promo code FEDRETIRE at checkout. When you pre-order you will immediately have access to their current 2024 Checkbook Healthcare Guide, the new 2025 Guide and OPM’s comparison tool will be available the first day of open season.

For retirees, Checkbook’s Guide provides a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate with Medicare parts A and B. This allows users to see which plans coordinate best with Medicare, the cost reduction of adding Medicare Part B, and whether the FEHB plan offers Medicare Part B premium rebates. They also review FEHB Medicare Advantage plan options which can be less expensive for many retirees.

Caution

I mentioned this in one of the articles I wrote last year and it is worth repeating here. “Don’t confuse the new FEHB MA options with private sector Medicare Supplement and MA plans being sold on TV ads and through the mail. If you decide to enroll in a private sector MA plan, one outside of our FEHB program, you should suspend your FEHB plan. If you cancel your FEHB plan, you can’t return to the FEHB program.

With the FEHB MA offerings you MUST KEEP your FEHB plan; during the next open season, you can change to any of the FEHB plans available in your area if desired. If you sign up for a private sector Medicare Supplement plan you can’t suspend your FEHB plan, you can only cancel your coverage! Read the following article on this subject if you are considering a Medicare Supplement plan:

Summary

There are savings to be had within the traditional FEHB providers including expanded MA and the Medicare Prescription Drug Program (MPDP) offerings.

The new FEHB MA plans seem to offer a lot for the price with increased benefits and more. There are pitfalls you need to be aware of.  Here is a link to an article that included feedback from federal annuitants and employes enrolled in FEHB MA plans:

Tammy Flanagan, a former federal employee and federal benefits specialist, suggests that, “too many folks don’t pay attention to their options during open season and many people pay too much for their health insurance by staying with the same plan year after year.”  

Before making a major change proceed with caution and get the answers you need from the prospective plan brochures and customer service representatives.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

Comments (0)| Print This Post Print This Post

2025 COLAs and the Medicare & You Handbook

Posted on Friday, 11th October 2024 by

Print This Post Print This Post
Share

More than 71 million Americans will see a Cost-of-Living Adjustment (COLA) of 2.5% in their Social Security benefits and Supplemental Security Income (SSI) payments in 2025. Social Security retirement benefits will increase on average $49 per month starting in January.

Federal retiree annuities under the Civil Service Retirement System (CSRS) receive the full 2.5% increase while those under the Federal Employees Retirement System (FERS) receive 2.0%, often referred to as the diet COLA.

The 2025 COLA doesn’t account for the 13.5% rise in the Federal Employee’s Health Benefit (FEHB) premiums next year. The health care premium increases will impact next year’s COLA, not the current COLA determination.

Federal retiree annuities and Social Security benefits increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W).

View the table for all COLAs from 1999 to the present to see how it has changed over the years.

Medicare & You Handbook

Medicare’s 2025 guide is worth the time and effort to review and learn about your exceptional Medicare benefits. It provides sign up guidance, Medicare coverage, the various plan options and how to get help paying your health care drug costs, and finally your rights and protections.

Get started with a complimentary retirement planning session
and a FREE retirement planning report

Every year Medicare sends out their “Medicare & You” pamphlet to anyone on Medicare or approaching age 65. However, many simply throw out the previous year’s edition and replace it with the new one. Actually, there is much to discover with each edition, especially as we age and require more services.

This booklet is tailored to your state or territory, in my case Pennsylvania. Coverage changes and enhancements are covered on page 2 with a Table of Contents on page 3 followed by an extensive Index of Topics on pages 4 through 8.

2025 Changes

Part D prescription drug plans cap yearly out-of-pocket costs at $2,000. Once this limit is reached, Medicare pays all drug copayments and coinsurance for the remainder of the year. Additionally, enrollees will be allowed to spread their drug costs across monthly payments throughout the year if needed.

Expanded mental health care including outpatient services from professional therapists, and more resources for caregivers will be available.  Caregivers are now eligible for additional training that includes how to give medications, personalized care and more as part of a tailored treatment plan.

Stating next year, telehealth visits must be in an office or medical facility located in a rural area for most telehealth services. There are exceptions for mental and behavioral health.

Postal Service employees, retirees and their families will be covered by the new PSHB program. Twenty percent of the current FEHB enrollees will transition to this new system this open season. Postal employees that retire on or after January 1, 2025, and are under 64, will be required to enroll in Medicare Part B when they become entitled to Medicare Part A (typically at age 65) to remain enrolled in a PSHB plan.

The Long & Short of It

This guide is a wealth of information, easy to read, and follow, something government isn’t exactly well known for. Prior to signing up for Medicare, most don’t know the difference between Original Medicare, Medicare Advantage (MA), and Medicare Supplement Insurance (Medigap).

It isn’t only for those just signing up for coverage, many change from Original Medicare to Medicare Advantage plans to reduce costs and/or improve coverage. Others, after making a change, end up moving back to Original Medicare if the coverage and cost savings they thought they were getting don’t materialize. It’s a two-way street fraught with anxiety if not prepared.

The “At a Glance” section starting on page 11 compares Original Medicare (Parts A & B) to Medicare Advantage (Part C) side-by-side. It’s to the point and highlights the significant differences between the two. If you’re considering moving to a MA plan this is definitely a must read. Medicare Supplement plans are covered in Section 5.

Section 11 compares non-FEHB health and drug plans in your area, it starts on page 119 and includes over 50 pages and this doesn’t include Medigap offerings in your state! They remind everyone at the beginning of this section that you can’t buy a Medigap policy while you’re in a MA plan.

Federal employees and annuitants desiring to stay in the FEHB or PSHB program must review the FEHB or PSHB plan brochures for available MA and MPDP plans associated with the carriers.


Twists and Turns

There are differences for those enrolled in one of the Federal Employee’s Health Benefits (FEHB) plans. For example, Section 6 in the guide covers Medicare drug coverage (Part D) and states “you’ll likely pay a late enrollment penalty for Part D coverage if you join a plan later.”

This penalty is waived for MA plans offered by your FEHB carrier; this also applies when you opt for a Medicare Prescription Drug Plan (MPDP) option. Furthermore, you will be required to pay a Part D premium if your income exceeds a certain amount as determined by the Income Required Monthly Adjusted Amount (IRMAA). Equally important, this also impacts Part B premiums; they too are income adjusted.

Look at drug plans that include your prescription drugs on their formulary (a list of prescription drugs covered by a drug plan). Then, compare costs.

Signing up for MA Plans

When you sign up for a FEHB MA plan you MUST stay enrolled in your FEHB plan. Most if not all of the FEHB MA plans have a zero premium, you are only responsible for the FEHB plan premium. These plans often offer a partial Part B premium reimbursement for you and your spouse.  Compare FEHB plans to their partnered MA options to better understand these differences.

If you select a non-FEHB MA plan you can suspend your FEHB coverage to retain the option to return during the next open season. If you don’t suspend your coverage when moving to a private sector MA option, you can’t go back.

Caution

Don’t risk losing your FEHB coverage. If you are considering a Medicare Supplement plan you can’t suspend your FEHB coverage, and you won’t be able to return to the FEHB program next open season. Medicare Supplement plans (Medigap) are only offered by private insurance companies.




Helpful Retirement Planning Tools

 

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: , , ,
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

Comments (0)| Print This Post Print This Post

Fixed Income – Yields Decrease as Feds Reduce Rates

Posted on Friday, 4th October 2024 by

Print This Post Print This Post
Share

The Federal Reserve lowered its benchmark interest rate September 18th by .5 percent (50 basis points), the first rate cut in four years! This rate cut lowers the Fed’s benchmark short-term rate to 4.75% to 5% from a 23-year high of 5.25% to 5.5%. The cut slightly eased borrowing costs for consumers across the board.

Click on this banner to sign up for a complimentary retirement planning
session and a FREE retirement planning report

Even with this rate cut, fixed income continues to hold its attraction for retirees and those who want to earn a fair rate of return on their cash and savings. While the stock market does offer the potential for higher gains, it doesn’t come without risks for those approaching retirement and retirees alike.

Treasury Bill and Note Rates Still Attractive

The national average savings account yield is 0.61 percent APY, according to Bankrate’s survey of institutions as of September 16, 2024. Higher rates are available from many online banks if you look around or negotiate a better rate with your bank. The average savings account yield would earn you a measly $61 per $10,000 of savings for the entire year!

The 26-week Treasury Bills are currently earning 4.25 percent. You can select auto reinvestments for up to two years and they can be canceled at any time if the funds are needed. The rates change for each new issue. However, the shorter-term (4, 8, and 13-week) Treasury Bill yields have averaged just above 5 percent over the past year.

Although the Federal Reserve intends to further reduce rates over the next 18 months, Treasury Bills continue to earn attractive yields. Treasury interest payments aren’t subject to State taxes, another tax savings for all.

Treasury Bill Investment Rates

Treasury Notes are currently offering anywhere from 3.3 to 4.3%. With these notes there is also the potential for capital gains if interest rates continue to decline and you decide to sell them on the secondary market before maturity.

Treasury Note Interest Rates

Purchasing Treasury Bills, Notes, and Bonds

Visit TreasuryDirect.gov to register, explore the options, and start purchasing Treasury bills, notes, and bonds, TIPS, and savings bonds. You are buying direct from the government and eliminating the middle man; there aren’t any fees charged for purchases.

Most brokerage accounts offer clients access to Treasury auctions and will purchase them for your account; they can be sold on the secondary market if needed. Here is more information on the Treasury’s programs:

CDs and Savings Bonds

Many online banks, credit unions, and some regional banks are offering competitive rates for savings accounts and CDs from 3.5 percent and higher in many cases. With rates falling I’m looking for longer term CDs or 2, 3, 5, 7, or 10-year Treasury Notes to lock in higher rates.

I purchased 15-month CDs at two local credit unions last December for 5.75% and my primary credit union matched their offer!

CDs have no market risk if you stay under their insured FDIC limits. I moved some of the funds I was cycling through the Treasury to this attractive yielding investment. In hindsight, I could have moved more.

I-Savings Bond Rates 

I Bonds issued May 1, 2024, to October 31, 2024, are earning 4.28%. This includes a 1.3% fixed rate. Still a great rate for one of the safest investments available. You can’t cash them in for one year. Plus, if you redeem them within the first five years you lose three months’ interest.

If the I Bonds you purchased previously didn’t have a fixed rate, you will only earn the inflation rate when the new rates are announced for the next six months. I Bonds with a high fixed rate are a great buy, some of my early I Bonds have a 3% fixed rate.

If you purchase an I-Bond by no later than October 31, 2024, you’ll receive the 4.28% for six months from the date of purchase. The rate will change after that to the new inflation rate announced this coming October plus any fixed rate your previously purchased bonds may have.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

Market Observations

The stock market continues to soar and 401K balances have risen dramatically for the most part. Election years are typically a positive indicator for the broader market. Nineteen of the past 23 presidential election years (83%) resulted in positive S&P 500 gains.

This election year one candidate has proposed taxing unrealized gains that could upend the market. Yet, there are so many variables to factor in with both candidates: tariff impacts, raising or lowering corporate taxes and capital gains, the border crisis, law and order issues, numerous overseas conflicts that are overflowing into America, and so much more.

The fact of the matter is that both candidate’s proposals must pass through Congress. Consequently, much of what is proposed will either be modified or go by the wayside as reality sets in. Who knows what will end up driving the market one way or the other after the election.

Neither candidate is addressing the excessive national debt or insisting that any new spending must be offset with cuts elsewhere. The current administration is borrowing a trillion dollars every 3 months! All of these excesses add further instability to our fragile free market system.



Summary

As a retiree, I still prefer to invest in the safety of Treasuries, CDs, and conservative stocks, mutual funds, and market leaders that have been around for many decades, pay dividends, and have sound fundamentals. Many retirees set aside a small portion of their investments for the more aggressive growth stocks, mutual funds and ETFs of the day.

Now that the Federal Reserve is starting to cut rates, it may be time to add longer term CDs and Treasury Notes to your fixed income investment portfolio. CD rates are dropping as the Fed continues to lower rates for the foreseeable future.

(NEW)  Sign Up for a FREE Retirement Report and Consultation

If you can lock up your discretionary savings and investments for 12 months or longer, CDs are a viable option. They can be cashed in before maturity, however the penalties can be significant. Treasury Bill rates are moderating down a bit as noted on the first chart in this article.

Short term T-Bills continue to provide impressive yields considering many banks still low ball their savings rates for established accounts. These banks are betting on the reluctance of many to move funds from their savings and checking accounts elsewhere.

Correction

In my last article titled “2025 Health Care Premiums Announced, Hold on to Your Hat!” I misquoted the BCBS Self-Plus-One (113) plan premium increase incorrectly at 8.7%, it was actually a 12.95% increase. Here is  how the comparison should have been written:

Premiums for the Self-Plus-One BCBS basic (113) plan and Government Employee’s Health Association (GEHA) Standard (316) plan follow: BCBS’s monthly premium increased $76.94 to $593.97, a 12.95% increase, while GEHA’s premium increased $47.39 to $374.18, a 12.7% increase. The annual increases are $923.28 for BCBS Basic and $568.68 for GEHA Standard!

Chris, one of our subscribers brought this to my attention and the input was greatly appreciated. This was corrected on the blog posting. We simultaneously publish the articles we send out to our newsletter subscribers on our blog.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

 

Tags: , , , ,
Posted in ANNUITIES / ELIGIBILITY, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

Comments (0)| Print This Post Print This Post

2025 Health Care Premiums, Hold on to Your Hat!

Posted on Friday, 27th September 2024 by

Print This Post Print This Post
Share

Federal employees and annuitants enrolled in the Federal Employee Health Benefit’s (FEHB) program will pay 13.5% more, on average, for their health care premiums.

 

Get started with a complimentary retirement planning session
and a FREE retirement planning report.

Adding this huge increase to the 7.7% premium rise for 2024, and 2023’s 8.7% increase we are all paying substantially more for our health care insurance. OPM said the increase reflects changes in the market over the last year, and generally aligns with other programs in the commercial market. Over the past three years our average FEHB costs have increased 29.9%!

FEDVIP’s premium increases are quite modest in comparison. Average premiums for dental plans are increasing by 2.97%, and the overall average premium for vision plans will increase by 0.87 percent.

In March, Medicare Trustees forecasted monthly Part B premiums would increase to $185.00 in 2025 from $174.80 this year, a 5.6% increase. The finalized rates will be announced early October.

FEHB Blue Cross Blue Shield (BCBS) to GEHA Plan Cost Comparisons

Premiums for the Self-Plus-One BCBS basic (113) plan and Government Employee’s Health Association (GEHA) Standard (316) plan follow: BCBS’s monthly premium increased $76.94 to $593.97, a 12.95% increase, while GEHA’s premium increased $47.39 to $374.18, a 12.7% increase. The annual increases are $923.28 for BCBS Basic and $568.68 for GEHA Standard!

BCBS Standard Self-Plus-Family option (105) monthly premiums increased $116.93 to $920.07. GEHA’s High Self-Plus-Family option (312) monthly premium increased 151.80 $ to $815.36. The annual increases are $1,403.16 for BCBS Standard and $1,821.60 for GEHA High option! Both High option plans include a partial Part B reimbursement for those enrolled in Medicare.

Check all plan’s 2025 premiums to confirm what you will be paying next year.

Medicare Advantage Plans (Heads Up for the Upcoming Open Season)

Postal Service Health Benefits (PSHB) Plan Cost Comparisons

The monthly 2025 premiums for the Self-Plus-One BCBS basic (33C) plan will be $608.81 next year. Government Employee’s Health Association (GEHA) Standard (37F) plan will cost $346.41. Year-to-year comparisons aren’t available since 2025 is the first year of operation for the PSHB program.

The Standard BCBS Self-Plus-Family option (33E) monthly premium will be $943.43. GEHA’s High Self-Plus-Family option (37C) monthly premium will be $791.31.

Check all plan’s 2025 premiums to confirm what you will be paying next year.

OPM published a resource page for Postal employees, annuitants, and family members to help them transition to their new PSHB health coverage. These resources provide extensive program information and will be updated with additional guidance as Open Season approaches.


Increased Cost Factors

Carriers are providing more options for gender affirming care and services, maternal health, fertility, obesity management, mental health and substance use disorder treatment, and telehealth benefits. They also expect a continued focus on managing pharmacy costs.

These costs are added to the increased general operational costs that all companies are experiencing such as rising salaries, supplies, and contracted services. Another significant cost factor comes into play when OPM waives the neutrality cost clause to cover options listed in the previous paragraph.

Cost Neutrality

According to OPM’s cost neutrality clause, “When proposing an increase in benefits, Carriers must propose corresponding benefit reductions to offset any potential increase in premium, with limited exceptions directed by OPM.”

They provide an example in the clause, “If a Carrier were to propose decreasing a cost sharing in one benefit and this increase in benefits would have an additional cost impact, the Carrier would have to propose benefit decreases in other areas with an equal or greater reduction in cost than the benefit increase in the same plan option”

Carriers can reduce and offset higher costs elsewhere by increasing the catastrophic cap, change prescription drug formulary options, add or increase copays, deductibles or coinsurance; decrease the number of covered visits for therapy, chiropractors, and others. There are ways to creatively reduce costs without sacrificing the excellent health care benefits we receive under the FEHB program.

OPM may issue waivers to the cost neutrality requirement where needed for proposals of coverage enhancements outlined in their current and previous year’s program carrier letters.

Summary

With premiums rising at a feverish pace, this open season is a good time to explore lower cost FEHB plans to offset high costs elsewhere. This is especially true for those with Medicare as their primary provider because FEHB plans will cover your copayments, coinsurance, and deductibles as the secondary provider.

Explore each plan carefully to ensure they cover what you need at a cost you can afford. Use OPM’s Online Comparison Tool and Checkbook’s Guide to Healthcare Plans offers a comprehensive online comparison tool and/or a paperback book version.

Pre-Order Checkbook’s 2025 Guide to Healthcare Plans for Federal Employees and save 20% by entering promo code FEDRETIRE at checkout. When you pre-order you will immediately have access to their current 2024 Checkbook Healthcare Guide, the new 2025 Guide and OPM’s comparison tool will be available the first day of open season.

For retirees, Checkbook’s Guide provides a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate with Medicare parts A and B. This allows users to see which plans coordinate best with Medicare, the cost reduction of adding Medicare Part B, and whether the FEHB plan offers Medicare Part B premium rebates. They also review FEHB Medicare Advantage plan options which can be less expensive for many retirees.

Helpful Retirement Planning Tools




 

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: , , ,
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

Comments (0)| Print This Post Print This Post

2025 FEHB & Medicare Plans – Changes on the Way

Posted on Friday, 6th September 2024 by

Print This Post Print This Post
Share

The 2025 Federal Employee’s Health Benefit (FEHB) Open Season will run from November 11 through December 9, 2024. Open Season starts every year on the Monday of the second full work week in November and ends on the Monday of the second full work week in December.

 

Get started with a complimentary retirement planning session
and a FREE retirement planning report.

A FEHB Program Carrier Letter was sent to all FEHB providers earlier this year that outlines the policy goals and initiatives for the 2025 FEHB Program. A follow-up letter provided technical guidance and instructions.

OPM expects Carriers to provide quality care options with a continued focus on managing pharmacy costs.

PSHB Launch

Effective January 1, 2025, OPM is launching the new Postal Service Health Benefit’s (PSHB) Program. It will provide health benefits coverage for Postal Service employees, annuitants, and their family members and cover roughly 20 percent of the total current FEHB population.

Under this plan, postal employees that retire on or after January 1, 2025, and you are under 64, WILL BE required to enroll in Medicare Part B when they become entitled to Medicare Part A (typically at age 65) to remain enrolled in a PSHB plan.

Download our FREE Excel 2025 Federal Employee’s Leave Record – Tracks Annual, Sick, Comp, and Credit Hours

FEP Medicare Prescription Drug Program (MPDP)

There are 17 FEHB plans currently offering a Medicare Prescription Drug Program (MPDP) for Federal Employee Program (FEP) members with Medicare. OPM continues to encourage FEHB plans to offer more Part D prescription drug coverage options.

The FEP Medicare Prescription Drug Program (MPDP) is a prescription drug program with a Medicare contract. When you move to the MPDP you will retain the same Federal Employee Plan (FEP) health benefits you always had. There are additional drugs available, often times at lower costs, with a cap on the maximum out-of-pocket expenses that your current plan does not have.

Those with household incomes over a certain limit will pay an Income Required Monthly Adjusted Amount (IRMAA) Part D premium of $12.90 to $81 a month in 2024 for their Part D coverage. If you file jointly, both will have this amount automatically deducted from their Social Security check each month. Review the 2025 Medicare Part B and D premiums when they are released later this year to determine what your additional payment would be.

Blue Cross and Blue Shield automatically enrolls participants eligible for Medicare in their FEP MPDP program. You have to send in a request to cancel it and retain your current FEHB prescription drug plan if you are satisfied with your coverage and subject to an IRMAA.

 

 

Premium Impact

The average increase for our FEHB plans in 2024 was 7.3% while Medicare premiums increased 6% after the previous year’s 3% degrease. The Medicare trustees project that the monthly premium for Medicare Part B will increase to $185 in 2025, up from $174.70 in 2024 and $164.90 in 2023. The 2025 Part B premium will be finalized in the fall.

Medicare’s Income Required Monthly Adjusted Amount (IRMAA) charge will be determined in the 4th quarter of 2024. The 2025 IRMAA determination is based on your 2023 Modified Adjusted Gross Income.

The high cost of health care coverage overall will potentially increase premiums across the board.

Evaluating Your Current FEHB Plan

It’s a good time to review your current plan’s coverage and ask yourself if they met your needs and expectations this year. Ask these questions:

  • Did I have coverage issues?
  • What additional coverage will I need next year?
  • Was I able to get the medications / prescriptions needed at a reasonable cost?
  • Did I have to pay high prescription copayments?
  • Where my deductibles, copayments and coinsurance excessive this year?
  • Are the labs, doctor’s offices, hospitals, and outpatient facilities available in my immediate area and covered by my current FEHB plan?
  • Did I have to travel out of my area to see a provider or have procedures performed?
  • Was customer service helpful and easily accessible?
  • Did I encounter unanticipated expenses that I thought were covered in my current plan.
  • Are you signing up for Medicare this or next year? if so, you may want to consider moving to a lower cost FEHB plan.
  • Explore Medicare signup options

Answering these and other questions will help you prepare for the upcoming open season. If you had problems this year, look for plans that will better suit your needs in 2024

Comparing 2024 and the Upcoming 2025 Plans

Explore each plan carefully to ensure they cover what you need at a cost you can afford. Use OPM’s Online Comparison Tool and Checkbook’s Guide to Healthcare Plans offers a comprehensive online comparison tool and/or a paperback book version.

Pre-Order Checkbook’s 2025 Guide to Healthcare Plans for Federal Employees and save 20% by entering promo code FEDRETIRE at checkout. When you pre-order you will immediately have access to their current 2024 Checkbook Healthcare Guide, the new 2025 Guide and OPM’s comparison tool will be available the first day of open season.

For retirees, Checkbook’s Guide provides a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate with Medicare parts A and B. This allows users to see which plans coordinate best with Medicare, the cost reduction of adding Medicare Part B, and whether the FEHB plan offers Medicare Part B premium rebates. They also review FEHB Medicare Advantage plan options which can be less expensive for many retirees.

Conclusion

The vast majority of federal employees remain with the same FEHB plan year after year. There are many plans available during open season to choose from that could save costs and/or improve coverage. This is a good time to evaluate your current plan and determine what is best for you and yours next year.

Many factors contribute to higher health care costs including an aging population that uses more health care services overall. According to Health.gov, People age 65 years and older made-up 17 percent of the population in 2020. By 2040, that number is expected to grow to 22 percent.

The FEHB providers won’t publish the new 2024 premium rates until late September or early October. It seems inevitable that increases are coming our way.

Hopefully, premiums won’t increase as much as I and others anticipate, only time will tell.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

Comments (0)| Print This Post Print This Post

Enhancing Your Retirement Experience – One Day at a Time

Posted on Friday, 23rd August 2024 by

Print This Post Print This Post
Share

At Federal Retirement Planning, we understand the importance of preparing for retirement holistically: financially, emotionally, and physically. One without the other could derail your retirement.

One crucial aspect often overlooked is the incorporation of an exercise routine long before retiring in preparation for an active life after retirement. Many, defer this to post retirement.

After retiring, I treated everyday like the weekends when working, running here and there, taking on multiple projects, and started an aggressive mall walking routine. Much to my dismay, I discovered the reality of the situation. Too much too soon and had to slow down the pace considerably to recover after several months of non-stop activity.

Exercise, Essential for All

Establishing a consistent exercise regimen can significantly benefit your physical and mental well-being in retirement. From boosting energy levels and enhancing your mood and cognitive function, to improved sleep, regular exercise can pave the way for a fulfilling retirement lifestyle.

By taking proactive steps towards your health now, you are investing in a vibrant and active future post-retirement. Let Federal Retirement Planning help you thrive in retirement by providing comprehensive resources for all aspects of your retirement journey.

Download our FREE Excel 2025 Federal Employee’s Leave Record – Tracks Annual, Sick, Comp, and Credit Hours

Personal Commitment

It takes commitment to achieve your goals, whatever they may be: a realistic exercise routine, financial independence, eating right and diet, or one of a thousand other challenges we encounter throughout life.

It’s easy today to get distracted and put off planned activities. The longer you wait to restart your program, the harder it is to get back up and running. How many times have we made New Year’s resolutions that were soon abandoned.

It’s best to incorporate healthful activities and exercise programs long before retiring. Walk around the office for 5 minutes every hour or at lunch time to relax and start a daily routine. Extend this to your home life.

When I mention walking to family and friends, many say they can’t get out and about to walk, or the sidewalks in their area are trip hazards. Most ignore the fact that they can walk in the home as Mary, and I do.

We have a trip free all hard wood path on the first floor of our home that we’ve walked for over a decade. I walk for 30 minutes twice a day, starting at 7 am each morning, seven days a week. Mary does two 1-hour sessions! That’s not counting all of the additional walking we do during the day for work and other activities.

Areas To Focus On?

One area I should have paid more attention to is my core. During my early years, I serviced our cars, remodel homes, landscaped, and general construction work including finishing game rooms, installing bathrooms, electrical wiring, plumbing, patios, porches, building retaining walls, installing fences, and decks. All of this heavy physical activity at home and work early in life created health challenges down the road.

Unfortunately, I ended up with knee surgeries and three lower abdominal hernias that now restrict what I can do physically. Had I exercised my core I could have possibly avoided some of this, who knows, life has it way of catching up with us all. I advised my 52-year-old son not to abandon his exercise routine and to focus on his core, so he doesn’t end up with issues like I have today.

Last But Not Least

Our Federal Employee’s Retirement Checklist focuses on the key issues that must be addressed to retire and exit on a positive note. It starts off with a link to our FREE PDF report titled “How to be Emotionally and Physically Prepared When You Retire.” It discusses how to be up for the challenge and outlines what I did to prepare for retirement at age 55, 20 years ago!

Follow the checklist to ensure you don’t miss out on the benefits you worked a lifetime to secure and maximize your annuity through prudent sick and annual leave management.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: , , , ,
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

Comments (0)| Print This Post Print This Post

2025 Federal Employee’s Leave Record Now Available

Posted on Thursday, 8th August 2024 by

Print This Post Print This Post
Share

Share this Excell Leave Record Chart with everyone in your organization.

Each year we publish a comprehensive leave record that federal employees can use to track their annual and sick leave, comp, and credit hours used. Our updated 2025 Excel Leave Chart is designed for active federal employees that are planning their retirement and need to establish realistic target retirement dates. This spreadsheet also helps federal employees maximize their annuity through prudent management of their leave balances.

This chart tracks all leave balances, and you are able to annotate your work schedule on the chart as well. Simply download the spreadsheet to your desktop for easy access.

2025 Leave Excel Leave Record

Retire With More

Most approaching retirement plan to increase their annuity and lump sum payments by maximizing their annual leave buy-back and sick leave balances. Convert your unused sick leave to increase your annuity for the rest of your life! Well worth the effort. I sold back a full year of sick leave, 2087 hours, that added an additional year of service for my annuity calculation.

A federal employee who separates from the Federal service is entitled to payment, in a lump sum, for all unused annual leave accrued through the last full pay period before separation.

Federal employers are allowed to carry over up to 240 hours of annual leave each year. Many, the last year of work, apply their carryover balance to most if not all of the annual leave they accrue before retiring.

I sold back the full 240 hours of carry over leave plus 208 hours I accrued my last year of employment. This amounted to almost three months of pay less taxes owed that I received in a lump sum payment 6 weeks after retiring.  Review my retirement timeline to get an idea of what to expect the first three months after retiring.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

The 2025 Leave Record Chart

Download the 2025 Leave Record Chart

If your spreadsheet opens in protected view click the “enable editing” button in the yellow bar at the top of the form. However, if you don’t see the enable editing button you may have an older version of Excel, or your IT department may have to allow the form to pass without restrictions. We also included a newer slsx workbook version that you can use if you have problems with the earlier version.

According to a Microsoft Office consulting firm, if the spreadsheet only opens in protected view status and the newer slsx version doesn’t correct the problem talk with your IT staff. Some agencies increase their security settings to lock out certain documents based on set parameters. We include several hyperlinks in our spreadsheet to link users to additional supporting information such as our sick leave conversion chart and that may be the cause.

2025 Holidays

*This holiday is designated as “Inauguration Day.” Federal employees in the Washington, DC, area are entitled to a holiday on the day a President is inaugurated on January 20th for each fourth year after 1965.

**This holiday is designated as “Washington’s Birthday.”

Summary

The earlier you start preparing for retirement the better. Set several retirement target dates, request annuity estimates from your HR department for selected dates, and review you annual and sick leave balances to maximize your annuity and leave buy-back amount.

Use our FREE online Retirement Planning Guide to help you through the process. One of our site visitors said, “I spent 3 hours on the web looking for answers to questions concerning federal retirement. After a Google search yielded your address, it took only 20 minutes to find all of my answers! Thank you!!!”

Take advantage of this free service to explore your benefits, estimate pre and post-retirement income, expenses and costs, and determine whether or not you are financially, physically, and emotionally prepared for retirement.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: , , ,
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS

Comments (0)| Print This Post Print This Post

Too Much too Soon & Cable TV Subscription Costs

Posted on Friday, 26th July 2024 by

Print This Post Print This Post
Share

I visited a recently listed custom-built ranch home in our neighborhood and couldn’t find the controls to operate the kitchen appliances including the electric stove top. Everything was monitored and remotely controlled; as we moved one room to another, music emanated from recessed ceiling speakers.

This home has an EV charging station in the three-car garage, is professionally landscaped, has automated Hunter Douglass custom hardwired blinds, custom high-end whole house pre-wired remote camera access, Savant Security Systems, and is beautifully furnished and decorated! Yet, Mary and I couldn’t imagine living in such a home even though it was gorgeous inside and mostly one floor living.

Automation Gone Wild

The price was outrageous, $450 a square foot! I can’t see the current owner getting anywhere near their asking price but who knows in today’s market. Plus, it didn’t have a basement and the average home value in this area is typically less than half their asking price.

They placed a six-foot tall standard electronic equipment rack loaded with control and computer modules in the attic above the garage. Several dozen control, audio / video, and sensor cables are routed from the rack to every room in the home. They didn’t heat or cool the area! The ambient operating temperature for this equipment could easily be exceeded in either direction causing the equipment to fail. Then who do you call? Ghost busters I suppose.

A buyer would require a comprehensive operations manual and training on how to operate, maintain, and control everything! Not something I want to do even though I have an extensive electronics and computer background, no thanks. It would drive me and my wife crazy. In the sales perspective, they list the audio / visual initial installation cost at $161,000!

Cable Subscription Costs

Our cable bill is considerably higher than most of our monthly bills and I’ve tried to negotiate a lower price or change from Xfinity to Verizon without success on numerous occasions over the past year. Every time I talked with Xfinity, they would say I can go to a lower-level plan with less channels, but the price is close to what my current legacy plan costs, $306 monthly including Netflix!

Phone numbers can easily move from one provider to the next. However, if you use your cable company’s email address, many hesitate to change carriers. Email addresses are frequently used for online account user IDs and listed as contact information for every service we use from health care, banking, utilities, and so much more. Fortunately, I use my AOL and Gmail account email addresses but that is only half of the battle.

Last Wednesday I called again to reduce my internet speed of 1 Mpbs and 200+ channel count by half. The savings amounted to around $20 after they removed Netflix from the package! No savings at all considering I’ll be left with half what I had originally and now I would have to pay $14 separately for my Netflix streaming account. They informed me that any change to my legacy account requires a move to one of their updated new and apparently more expensive options.

Verizon is roughly the same costs with additional problems, they have to route their fiber optics cable under our driveway and through our lawn sprinkler lines to set up the service.




Cable Channel Confusion

We only use a handful of the 200+ channels we currently have, and seldom watch NBC, CBS and ABC, except for local news. The commercials are too distracting.

Most of the time we use Amazon Prime, Netflix, HULU, and Masterpiece streaming services, and watch: cable news channels, Discovery, HGTV, History, Lifetime, TLC, Bravo, Hallmark, Science Channel, and National Geographic.

Xfinity bundles their news offerings with sports channels which we don’t want or need and that increases the package fee dramatically. The way they bundle plans allows these companies to extract more from us all. It’s like going to the market and they only offer mayonnaise packaged with ketchup, mustard, and relish, and you only want mayonnaise. Great for the companies, but a rip off for their customers.

Alternate Route

There are ways to cut the cord using either paid and/or free TV streaming services. To get around the prospect of losing your email address, retain your current Internet provider and cancel TV services. Internet service averages about $80 per month, plus WIFI modem costs another $15.

After another frustrating round with Xfinity this week they quoted me a monthly price of $136.87 including all fees and taxes for 500 Mbps Internet, their modem with WIFY and one land line home phone. No TV service. They made no attempt to entice me to keep my TV services with them, none at all.

Indoor Antennas & Paid TV Streaming Services

An indoor digital antenna hooked up to your TV’s coaxial antenna connector tunes in local TV channels in most major metropolitan areas or you can subscribe to streaming services such as Sling TV, Hulu + Live TV, YouTube TV , and others for a fee.

YouTube TV offers 100+ live channels, Unlimited DVR space, Special features like Key Plays View, and 6 household accounts and 3 streams for $72.99 per month. This service carries most of what we want, and we would keep Amazon Prime and Netflix. Our total cost would be $209.86, not counting our other streaming services and just under a hundred dollars a month less than what we are now paying.

I have one of our TVs set up with a digital antenna; we receive about two dozen stations including ABC, CBS, NBC and Fox, many in high quality digital format. Because we are located in Southwestern PA, we also pick up a number of the West Virginia and Ohio stations.

The paid TV streaming service you select depends on what you watch, match up the channels you desire to the streaming plans offered. These paid plans can run anywhere from $25 to $100 a month or more.  As you can see, the costs can increase substantially based on what you pick.

Free Streaming Services

There are free streaming services: Freevee, the Ruku Channel, Hoopla, Pluto TV, and Tubi to name a few. These no-cost options include ads. Ruko Channel includes thousands of free TV shows and hit movies, Roku® Originals, 400+ live TV channels, kids’ entertainment, Premium Subscriptions, and more.

None of the free services I checked out include local TV, you would have to use an antenna for that. Change the input on your remote to Antenna to tune in local stations if available in your area. Digital TV antennas are inexpensive; even if you don’t need one now, they’re good to have in a pinch when your cable or internet is offline.

Many TVs now come with their own unique free streaming services, including Samsung’s TV Plus. It takes time to adapt to each streaming service and changing channels isn’t as easy as it is with a cable box remote.  An advantage the cable companies have, I and many others are questioning whether cable’s advantages outweigh their outrageous costs today.

Summary

Automation and higher costs go hand-in-hand today, from new homes, cars especially EVs, robotics, and so much more. I use extender wall outlets to accommodate all that needs charging: hearing aids, iPhone, iPad, Apple watches, tools, shavers, etc. Some of my wall outlets look like a spider’s web with wires everywhere.

The cost of everything is rising faster than most realize, and retirees are often first to feel the pinch. I’ve been looking at ways to economize anyway possible including changing electricity suppliers this year, saving us over 20 percent a month for the next 12 months.

Cable companies literally have a monopoly today similar to the railroad and oil barons of bygone days. They have a product that every single home in America needs except in the Amish communities! The charges keep rising at an alarming rate and I can’t believe I’m saying this, but government needs to regulate these behemoths.

Customers should be able to pick and choose the channels and packages they need instead of being forced to take a cornucopia of channels most don’t watch but are paying for.

TV Streaming services are a viable option for many, but they do require a reliable and fast internet connection. Otherwise, you may experience low resolution issues, lag, buffering, and/or interruptions due to high demand or technical problems. Something to think about, do a test drive to check out how they perform at your location before changing anything. There is also a learning curve and it takes time to set up the service and use the app.

I’m signing up for a free 7-day trial YouTube TV subscription this week before deciding on what path to take. It’s easy to sign up on your current system and give it a spin. The trial runs for 7 days and if you sign up afterwards, they charge you $64.99 for their TV Base plan for the first four months, an $8 monthly savings. After that the monthly charge increases to $72.99. You can cancel at any time.

It includes 100+ live channels, Unlimited DVR space, Special features like Key Plays View, and 6 household accounts and 3 streams. There is a good mix of local TV channels, news, entertainment, sports and much more. Plus, they have many add-on networks to suit most of what you will be looking for.

Another benefit of streaming TV is that you don’t pay the high broadcast and regional sports fees that cable charges, in my case those two items alone cost $38.90 a month. Plus, no equipment charges, another big savings for many.

I’ll let everyone know how my test drive goes and if I make the jump to streaming TV, it’s a learning curve but it’s long past due on my part.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: , , , , , ,
Posted in ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS

Comments (0)| Print This Post Print This Post

Terms Of Use