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Posted on Friday, 27th November 2020 by

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There were a lot of questions concerning the new Medicare Advantage (MA) plans that we reviewed in my previous article. I recently ran a comparison of the Aetna MA (Z26) Plan to GEHA’s Standard (316) Plan and Blue Cross & Blue Shield’s (BCBS) Basic (113) Plans using OPM’s FEHB Plan Comparison Tool and Checkbook’s Guide to Health Care Plans. You can order Checkbook’s online access and guide at Guidetohealthplans.org  and save 20% by entering promo code FEDRETIRE at checkout.

Request a Federal Retirement Report™ to review projected annuity payments,
income verses expenses, FEGLI, and TSP projections.

The new MA plans mentioned in the last article require that the employee or annuitant retain their FEHB plan coverage within that group. For example, if you sign up for the Aetna Z26 Self Plus One plan you are automatically enrolled in their Medicare Advantage component at no additional charge if you are enrolled in Medicare. The MA portion for these new plans is often free to subscribers. You only pay the FEHB plan premium. Check each plan for specifics. Basically, I believe these new MA plans simply provide the cost sharing that many other providers automatically offer once you sign up for Medicare.

Introduction

The OPM guide provides a comparison of all plans within a group, you can’t select just Self Plus One for example. Their tool compares up to three plans simultaneously. It is easy to use and lists plan premiums, enrollment codes, links to brochures, provider directories, RX pricing tools, phone numbers, and general plan information for both in and out of network providers. You must then calculate all of the other costs that you may incur such as Medicare Part B premiums subtracting any Part B reimbursements and then estimate other potential costs. Their tool also lists savings incurred when the member is enrolled in Medicare: waivers of deductibles, copayments, coinsurance and out-of-pocket maximums for each plan.

The Checkbook comparison is targeted to an individual’s personal situation: enrollment category, whether or not you have Medicare, your age, and you select either of three health care categories: expected average, low, or high health care expenses. They identify all plans that you are eligible to enroll in after entering your zip code and they provide links to plan brochures, benefit summaries, and formulary and provider directories.

The Checkbook comparison tool user selects whether or not they have Medicare and which parts they are enrolled in. After entering their estimated annual adjusted gross income (AGI), the program determines if your Medicare premium will be income adjusted.  Medicare Part B premiums in 2021 range from a low of $148.50 to as high as $504 a month depending on your annual income.

The program compares up to four individual plans at a time. It is very comprehensive and provides an estimated total cost per plan, a benefits summary, and ratings for each service.

Plan Comparisons

I compared the three plans using the following parameters:

  • Retired
  • Self Plus One plans with both having Medicare Part A and B
  • Plans available for zip code 15108 (Pittsburgh Area)
  • An AGI of $176,000 and less for a couple – Part B Premium of $148.50/person
  • Age 71 with low and average healthcare expenses

There is considerably more detail in the Checkbook analysis. The two reports list monthly plan costs as follows:

  • OPM – GEHA Standard $291.92 / Checkbook $589 (Includes Part B Premiums)
  • OPM – Aetna Advantage (MA) $275 / Checkbook $572 (Includes Part B Premiums)
  • OPM – BCBS Basic $409.87 / Checkbook $707 (Includes Part B Premiums)

The figures reported by checkbook include the Medicare premiums paid by the couple. You would have to add your Medicare premiums to the OPM listed plan premiums. Then for the final cost you must subtract the $800 annual per plan member credit BCBS provides for Part B enrollees. The Aetna plan offers a $900 annual Part B reimbursement per member. GEHA Standard doesn’t offer a Part B partial reimbursement.

Checkbook goes further by listing annual health care costs for those who use no services during the year to those who anticipate low, average or high expenses. These costs include expenses not covered by your plan for doctors, hospital, prescriptions, and other services. This figure includes your FEHB premium, Part B premiums if applicable, minus any Part B reimbursements. Here are the Checkbook figures for low and average yearly costs:

  • GEHA Standard $7,920 (Low)  / $10,670 (Average)
  • Aetna Advantage MA $5,650 (Low) / $6,650 (Average)
  • BCBS Basic $7,320 (Low) / $8,330 (Average)

The report also lists yearly costs for those with only Medicare Part A, extra cost for Part B, and any Part B rebate if applicable. Plus, you will find a chart listing important information on cost sharing. They all have wrap around benefits for those on Medicare and cover most of your deductibles, copayments and coinsurance.

Regular services are available nationwide for GEHA and BCBS, Aetna has service available in many areas. Some of the other differences are that Aetna doesn’t provide dental benefits. GEHA and BCBS provide partial reimbursement for specified dental procedures.

Hearing aids are covered by all three providers however BCBS has a 5-year replacement policy and the other two offer new aids every three years.  Aetna covers 100 days in a skilled nursing facility while GEHA covers 21 and BCBS covers the first 21 days and then charges $176 per day for day 21–100: and members pay all costs from day 101 and up.

The yearly maximum out-of-pocket expenses are also a consideration. Here are the limits for each of the three Self Plus One plans: (See the explanation in the following paragraph that describes why the figures differ between the two comparison programs.)

Out of Pocket Expenses

  • OPM – Aetna MA $15,000 / Checkbook $18,160
  • OPM – GEHA $13,000 / Checkbook $20,070
  • OPM – BCBS $11,000 / Checkbook $17,880

Insurance plans have a stated limit that you might have to pay including all costs as listed in the OPM column above. But some plans have loopholes that may leave you paying copays and deductible amounts above their limits. The Checkbook “Most you can pay in a year” figure under their column in the above table includes an estimate of the potential cost of significant gaps or loopholes, etc. It doesn’t include dental costs because there are no plan limits on these.

It’s important to review the report and provider benefit guides to ensure they cover the level of services needed. We travel, and require access to in and out of network healthcare services. BCBS Basic doesn’t offer out-of-network coverage. Aetna MA provides services in many areas and is listed as a state specific HMO. Enrollment in the Aetna MA Plan is limited: You must live or work in one of their geographic service area to enroll. With GEHA Standard members that are enrolled in Medicare A & B pay $0 for deductibles, copays and coinsurance whether your provider is in- or out-of-network, $0 for inpatient and outpatient hospital services, surgeries and office visits, and if you travel overseas you pay $0 for deductibles and copays outside the United States. BCBS also offers overseas coverage.

GEHA and Aetna both provides 90-day supply of covered drugs by mail. According to the 2021 BCBS brochure their Basic mail service prescription drug program is limited to Medicare Part B members only. If you use a specific formulary drug and decide to change plans contact the new plan to find out if your prescription is covered and what your copayments will be.

All three plans have their good points and any one of them provide acceptable coverage. When accessing plans, I look for the plan that best fits our needs and Its affordability.

I mentioned this in the previous article but it is worth repeating here. If you are considering other Medicare Advantage Part C plans that don’t require FEHB participation, and desire to discontinue your FEHB component, you may wish to suspend your FEHB Plan instead of canceling it. This way, if the MA coverage incurs more costs than anticipated or benefits are insufficient, you have a path back to a viable FEHB Plan provider during the next open season.

Another precaution, be careful when considering Medicare Supplement Plans. They are totally different from Medicare Advantage Plans and you can’t suspend your FEHB coverage and will not be allowed to return to the FEHB program if the Medicare Supplement Plan proves too costly and has insufficient coverage. Many Supplement Plan sales representatives are unfamiliar with the FEHB program and its many advantages.

Helpful Retirement Planning Tools

Schedule A Retirement Benefits Seminar in Your Area

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, UNCATEGORIZED

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Posted on Thursday, 19th November 2020 by

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This Open Season, federal retirees have new Medicare Advantage Part C (MA) plans to consider joining. Our analysis shows these offerings are an outstanding value. Let’s spend some time discussing how they work, how much you could save by joining one, and how to enroll.

Aetna, Kaiser, and UnitedHealthcare now offer MA plans designed only for federal retirees that are available for enrollment with most of their plan offerings. These MA plans pair a Part B reimbursement—in some cases the full amount—with greatly reduced or no cost sharing for health-care expenses.

Cost-Sharing Reduction for Health-Care Expenses

Checkbook found that these new MA plans have better benefits than virtually all existing FEHB and MA plans. For example, the UnitedHealthcare and Aetna MA plans charge $0 for any inpatient or outpatient benefit and have no out-of-pocket maximum for health-care expenses other than drugs. They promise that you will pay nothing (subject, of course, to the usual restrictions on paying only for medically necessary care). Moreover, they also charge nothing for using non-network providers, so long as they participate with Medicare. The Kaiser MA plans do not let you go out-of-network and the cost sharing benefits are not as generous as you would find with UnitedHealthcare and Aetna. For example, with Kaiser High MA in the D.C. area, you’ll pay a $5 copay to see your primary care doctor or $15 to see a specialist.

Part B Rebate Reimbursement

Most of the MA plan options provide some form of reimbursement for the Medicare Part B premium, and some even provide a full reimbursement. UnitedHealthcare Choice plans, and some Kaiser High and Standard plans offer full reimbursement of the Part B premium. The Aetna Advantage plan provides a $900 per person rebate, and the United Advantage plan provides a $600 per person rebate.

Not all MA plan options provide a Part B reimbursement; Kaiser Basic, some Kaiser Standard plans, and Kaiser Prosper plans have none. For any retirees that are subject to higher Part B premiums as a result of income above $88,000 for an individual or $176,000 for a couple, some of the Kaiser plans cover a portion of the higher premium, but not all of it. Overall, the MA plan options aren’t as good of a deal for retirees that pay the income tested Part B premiums.

How Much Money Can You Save?

Checkbook’s Guide to Health Plans provides yearly cost estimates (premium plus expected out-of-pocket expenses for someone like you) for every FEHB plan, taking into consideration the impact of adding Medicare Part B and reviewing any Medicare Advantage options offered by the plans. Their analysis shows that many of the new MA plans provide tremendous savings for federal retirees. Order your Checkbook Guide today to compair plans of interest. Federal Retirement readers can save 20% by entering promo code FEDRETIRE at checkout.

Here’s a snapshot of some of the new MA plan options and other popular FEHB plans available in the D.C. area for an age 70 retiree with self plus enrollment.

Where are these plans available?

The Aetna Advantage and United Advantage plans are available nationwide. Kaiser plans are available in the Washington D.C. area, Atlanta GA area, Denver CO area, Northern CA, Southern CA, Fresno CA area, and in the states of Washington, Hawaii, and parts of Oregon and Idaho. United Choice plans are available in almost half of the states.

How do I enroll?

In order to join one of the new MA plans, retirees must sign up for the regular version of the FEHB plan, be signed up for both Medicare Parts A and B, and then sign up for the MA plan with their carrier.

For more information about these plan offerings, consult Checkbook’s Guide to Health Plans for Federal Employees or contact these carriers.

Checkbook’s Guide to Health Plans for Federal Employees can be purchased at GuidetoHealthPlans.org. Save 20% by entering promo code FEDRETIRE at checkout.

Annuitants generally have the ability to sign up for traditional Medicare, Parts A and B along with their FEHB coverage or opt for Medicare Parts A, B, and C. In the past, most suspended their FEHB coverage when they signed up for an MA Part C option to reduce their insurance costs. The MA plans listed in this article require enrollment in Medicare Parts A, B, and C along with their respective FEHB plan and manage to provide significant cost savings.

If you are considering other Medicare Advantage Part C plans that don’t require FEHB participation, and desire to discontinue your FEHB component, you may wish to suspend your FEHB Plan instead of canceling it. This way, if the MA coverage incurs more costs than anticipated or benefits are insufficient, you have a path back to a viable FEHB Plan provider during the next open season.

Another precaution, be careful when considering Medicare Supplement Plans. They are totally different from Medicare Advantage Plans and you can’t suspend your FEHB coverage and will not be allowed to return to the FEHB program if the Medicare Supplement Plan proves too costly and has insufficient coverage. Many Supplement Plan sales representatives are unfamiliar with the FEHB program and its many advantages.

This article is a collaboration between Kevin Moss of Checkbook.org and Dennis Damp, host of www.federalretirement.net.

Helpful Retirement Planning Tools

Request Your Personalized Federal Retirement Report™ Today

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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

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Posted on Thursday, 12th November 2020 by

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The 2021 FEHB Open Season runs from Monday, November 9th through December 14th and now is a good time to look at the changes facing retirees this year and to share some important advice to help you select the plan that’s right for you, which could possibly save you thousands of dollars.

Request Your Personalized Federal Retirement Report™ Today

  • Premium Increase – The enrollee share for premiums will increase on average 4.9% in 2021. Some plans will be below the average and some above, make sure to check to see how your plan has changed.
  • New FEHB Plans – There is one new national plan in 2021, UnitedHealthcare Advantage Plan, and five new regional plans, Kaiser Permanente Northwest (Washington/Oregon) Basic, Kaiser Permanente Northwest (Washington/Idaho) Basic, Geisinger Health Plan (Pennsylvania) Basic, Dean Health Plan (Wisconsin) Basic, and Group Health Cooperative (Wisconsin) Standard.
  • New FEDVIP Plans –UnitedHealthCare Dental and HealthPartners Dental (Upper Midwest) are two of a half-dozen new FEDVIP dental plans and MetLife Federal Vision is a new FEDVIP vision plan.
  • Benefit Changes – Section 2 of the official plan brochure will tell you how your plan has changed for the upcoming year. If you do nothing else this Open Season, you should at least check this part of the plan brochure to make sure the benefits of your existing plan are still a good fit for you. Here’s a small sample of some of the benefit changes for 2021:

Catastrophic Out-of-Pocket Maximum – Blue Cross FEP Blue Focus increased self only limits on what you might have to spend from $6,500 to $7,500 and increased self plus one and family limits from $13,000 to $15,000. SAMBA High lowered self only limits from $6000 to $5000 and self plus one and family from $12,000 to $10,000.

Deductible – HIP HMO (New York) Standard increased the self only deductible from $2,500 to $3,000 and the self plus one and family deductible from $5,000 to $6,000. Kaiser Permanente Northwest (Washington) decreased the self only deductible from $250 to $150 and the self plus one and family deductible from $500 to $300.

  • Telemedicine – The COVID crisis has brought about major changes in FEHB, Medicare, and other health insurance to provide Telehealth services to enrollees. There are two broad categories: telehealth appointments with your own doctors in place of physical appointments, and advice from a panel of doctors chosen to deal with many circumstances online. Quite apart from protecting against the virus, these consultations offer major conveniences in many circumstances, such as when physical travel to your physician is inconvenient or impossible. The online version of Checkbook’s Guide to Health Plans will show the type of telehealth coverage available by plan and the cost sharing, if any, for the service.

Other changes can be subtle yet end up costing you considerably more than you originally contemplated if you don’t review each plan’s brochure carefully. For example, in 2021 Blue Cross Blue Shield Basic changed their hearing aid replacement cycle to 5 years from three, while GEHA Standard retained a three-year replacement cycle. My hearing continues to worsen with age and hearing aid technology improves each year, the three-year cycle works great for me. Both plans offer up to a $2,500 reimbursement.  I’m due a new pair this January and by staying with the GEHA I won’t have a problem.

It’s important every Open Season to see if there might be a plan that’s a better buy and covers your specific health care needs. The best, and only, way to do this is to consider the total cost of the plan to you. Total cost is the for sure expense you’ll pay, premium, plus the expected out-of-pocket expenses you’ll face for copays, coinsurance, and the plan deductible. For retirees, the job is even more complicated as there is an additional question of whether the potential advantages of joining Medicare Part B outweigh the expense of the additional premium expense ($1,840 per person in 2021, and more for high-income people).

To simplify the decision-making process and help consumers understand how plans cover the combinations of predicted and unpredicted expenses, Checkbook’s Guide offers an estimated yearly cost for each FEHB plan. These estimates cover good, average and bad health care years, and include premium plus out-of-pocket costs for households similar to yours in age, family size, and expected health care usage. For retirees, their Guide provides yearly cost estimates for all FEHB plans with either Medicare Part A only, or with Medicare Parts A and B. They show the cost reduction size and the extra cost of adding Part B and whether the plan offers any Part B reimbursement.

The results of their analysis show big plan-to-plan differences. Consider the following five popular national plans.

As you can see, making the right plan choice can save or cost you thousands of dollars. There are over 20 national plans that you’re eligible to join in 2021 and, depending on where you live, many additional HMO options. Make sure you’re comparing the total cost of your existing plan with other options.

Checkbook’s Guide to Health Plans for Federal Employees can be purchased at GuidetoHealthPlans.org. Federal Retirement readers can save 20% by entering the promo code FEDRETIRE at checkout.

Medicare Part A covers hospitals stays for plans that charge coinsurance (a percentage of charges) and pays for the cost of stays in a skilled nursing facility. Part A is automatic for retirees at age 65 and is premium free.

Whether or not it makes sense to take Medicare Part B depends in large part on the plan that you’re considering. Some plans waive their hospital and medical deductibles, copays, and coinsurance for members enrolled in both Medicare Parts A and B. In effect, they “wrap around” Medicare. There is also a small but growing list of FEHB plans that offer partial Part B premium reimbursements. Some feel that Medicare Part B won’t save you nearly as much as you spend on the Part B premium because the cost-sharing for physician visits and tests in almost all FEHB plans is already so low. However, there are many variables and depending on your health, Part B does offer considerable benefits especially when the FEHB plan waives all copayments, coinsurance and deductibles. Medicare Part B also allows you to use doctors who are not in the plan network but do participate in Medicare. When using these doctors, savings can be hundreds of dollars a visit if you have Part B.

My wife’s recent surgeries cost over $50,000. With Part B we paid no additional out-of-pocket costs.

Review the following articles before deciding on Part B enrollment:

This article is a collaboration between Kenvin Moss of Checkbook.org and Dennis Damp, host of www.federalretirement.net.

Helpful Retirement Planning Tools

Schedule A Retirement Benefits Seminar in Your Area

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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

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Posted on Thursday, 5th November 2020 by

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Open season runs from November 9th through December 14th.  There are tools available to evaluate provider options, select your 2021 plan, and submit changes to OPM. Use the following resources to make an informed decision for you and your family’s health care needs.

Request a Federal Retirement Report

If you decide not to change plans in 2021 you don’t have to do anything, your plan will automatically renew as long as it hasn’t been discontinued for some reason. I’ve been enrolled in GEHA Standard Plus One for 7 years; each year it simply renews without any action on my part. Typically, you will be notified if your plan is discontinued. You can also call to confirm availability if you have any doubts.

Obtain Copies of Plan Guides

Active Employees

  • Request hard copies of desired plan brochures through your benefits coordinator. If you don’t know who that is talk with your supervisor.
  • Download plan brochures from the OPM website.
  • Request copies direct from plan providers. I typically request and receive brochures direct from GEHA and Blue Cross Blue Shield weeks before they are available on the OPM site.

Annuitants (Retirees)

  • Sign up for FEHB Open Season Online – This site is devoted to federal annuitants. Request plan brochures to be mailed to your home address or you can download brochures to your computer. You must register to use this site and annuitants can change enrollments online.
  • Download plan brochures from the OPM website.
  • Request copies direct from plan providers.

Determine Plan Costs – 2020 FEHB Plan Rates (All rates are now posted online).

Compare Plans – Use OPM’s FEHB Plan Comparison Tool and Consumers’ Checkbook 2021 Guide to Health Plans to find the best FEHB plan for your needs. The Consumers’ Checkbook Guide is available in print and online formats. Federal Retirement readers can pre-ordered their guide at Guidetohealthplans.org and save 20% by entering promo code FEDRETIRE at checkout. The Guide will be released online no later than the first day of Open Season November 9th. Print books will be mailed the week prior to the start of Open Season.

Use these two excellent tools to drill down to and find the best plan for your personal situation. Compare costs and benefits of up to 4 plans side-by-side. These comparison tools are easy to use and will show you the differences between plans with only a few keystrokes. Before making your final enrollment decision, always refer to the individual FEHB brochures. Each plan’s FEHB brochure is the official statement of benefits.

Changing Enrollment

Annuitants (Retirees)

  • Annuitants can change plans online at FEHB Open Season Online. The online service is easy to use and you can track your change submissions.
  • Call Open Season Express 1-800-332-9798.
  • Send regular mail (Postmarked no later than final date of Open Season) to:

Office of Personnel Management
Open Season Processing Center
P.O. Box 5000
Lawrence, KS 66046-0500

When sending requests by mail clearly state your Open Season request. If you are making an enrollment change, be sure to tell OPM the plan you want, the type of coverage (Self Only, Self Plus One or Family), and the enrollment code. You must include your annuity claim number and social security number on your request. If you are choosing Self Plus One or Family coverage, OPM will also need your dependent and other insurance information.

Federal Employees

Federal Employees Dental and Vision Insurance Program (FEDVIP)

Dental and vision benefits are available to eligible Federal and Postal employees, retirees, and their eligible family members on an enrollee-pay-all basis. Several new providers were added for the 2021 open season. Enrollment takes place during the annual Federal Benefits Open Season in November and December. New and newly eligible employees can enroll within the 60 days after they become eligible.

Register online at www.BENEFEDS.com to review and download plan brochures, use their plan comparison tool, and to initiate a change or cancel enrollment. If you aren’t a registered user sign up now. You will be able to review your Dental, Vision, Long Term Care and Flexible Spending accounts. Enrollees can initiate changes during open season, when there is a life event change, or to cancel coverage at any time.

For enrollment/premium questions regarding dental and vision insurance, contact BENEFEDS at 1(877) 888-3337.

Medicare Impact on FEHB Plans

Review the following articles that describe the impact Medicare has on your FEHB provider payments.

FREE Retirement Planning Seminars
Hefren-Tillotson is offering federal employees Free Introductory Seminars including a breakdown of benefits and making the transition to a successful retirement on November 18th for those living in the tri-state area (southwestern Pennsylvania). They have two sessions at their North Hills office, one at noon and 6 pm. Contact Brent Ulrich, Brent.Ulreich@hefren.com, for additional information.

Helpful Retirement Planning Tools

Schedule A Retirement Benefits Seminar in Your Area

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 23rd October 2020 by

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Many annuitants change to a lower cost FEHB plan because most plans waive the majority of the deductibles, copayments, and coinsurance payments when you sign up for Medicare Part A & B. These low cost FEHB plans are often considered when enrolling in Medicare.

Request Your Personalized Federal Retirement Report™ Today

The Advantage of Signing Up for Medicare

When you sign up for Medicare, they become your primary provider while your FEHB plan becomes the secondary. Medicare pays first and then your FEHB plan pays a portion if not all of the remaining bill for you. Most FEHB plans pass on those cost savings to their members by waving many of your deductibles, copayments and coinsurance requirements.

This time of the year those 65 or older receive many offers in the mail and on TV and social media for Medicare Supplement Plans. When you sign up for a Medicare Supplement Plan your only option is to cancel your FEHB plan, you can’t suspend coverage. I wrote two articles,  CAUTION – Don’t Lose Your FEHB Coverage and FEHB Suspensions that discuss the severe consequences a number of our readers suffered by doing so. The suspension article provides a detailed list of things you must know before making this move. Many Medicare Supplement Plan brokers often don’t understand the FEHB program and end up selling you a product that doesn’t provide the comprehensive coverage you now have. If you know of anyone considering leaving the FEHB program forward this article to them.

Each plan published a 2021 guide for Medicare enrollees and they are very helpful. Here are links to two provider’s Medicare Brochures:

Plan Comparison

This summary compares the 2021 premiums, significant changes, and discusses what to expect when you sign up for Medicare A & B. There are many other plans to consider. I used these two nationwide providers because BCBS has the most subscribers and GEHA has one of the lowest premiums for their standard plan.

OPM’s Plan Comparison Tool and the Consumers’ Checkbook 2021 Guide to Health Plans can be used to find the best FEHB plan for your needs. OPM’s guide will be available for 2021 plans beginning the first full week of November. The Consumers’ Checkbook Guide is available in print and online formats. Federal Retirement readers can pre-ordered their guide at Guidetohealthplans.org  and save 20% by entering promo code FEDRETIRE at checkout. The Guide will be released online no later than the first day of Open Season November 9th. Print books will be mailed the week prior to the start of Open Season.

The Checkbook guide does all of these complex costing calculations for you on line and provides side-by-side evaluations with ratings for each plan! It calculates total healthcare cost including your income adjusted Medicare premium, any Part B reimbursements available, and FEDVIP costs.

Costs

If you have the Basic Blue Cross Blue Shield Option, you can apply for a $800 Medicare Reimbursement for each member on your contract with Medicare Part A and B. “That’s $1600 a year for a Self Plus One enrollment when both have Medicare! To obtain the reimbursement you must provide proof that you paid Medicare premiums in 2021 by submitting a Medicare Reimbursement claim. Claims are submitted online by registering for a Medicare Reimbursement Account at fepblue.org/mra or through the EZ Receipts app. You can also mail or fax in a claim form. GEHA provides a $600 per member reimbursement only for their high option plan.

There are other costs to consider. For example, you will find that BCBS Basic limits deductibles, copayment, and coinsurance waivers for Medicare enrollees to in network providers while GEHA Standard includes waivers for both in and out of network providers according to their brochure plus they pay doctor visit copayments. According to the BCBS 2021 Pamphlet, page 17, You must use Preferred Providers in order to receive benefits” for the Basic plan and on page 146 it states, “Under basic option we will waive copayments and coinsurance for care received from covered professional and facility providers.” Here is where it does get complicated. When you are enrolled in Medicare you can go to any provider. Just be aware that some plans, like BCBS Standard plans, may not waive deductibles, copayments, and coinsurance fees for out of network providers and that can be expensive. Check Section 9 of your FEHB plan brochure to verify coverage.

Medicare Part B Premiums add to your monthly healthcare costs which for 2020 was as low as $144.60 to as high as $491.60 due to Medicare’s Part B income adjusted premiums. To qualify for the lowest Part B premium those filing an individual tax return must have a Modified Adjusted Gross Income (MAGI) of $87,000 or less and married couples $174,000 or less.  Gross Income (GI) is calculated before MAGI. Gross Income (GI) is total income earned through wages, dividends, interests, royalty and rental, business income, capital gains, and others. MAGI is calculated by adding back certain deductions such as tax-free municipal bond and student loan interest, tuition, rental loss and IRA contributions to name a few.

Total monthly health care premiums for those on Medicare and enrolled in the Self Plus One plans featured in this article are listed below:

  • BCBS Basic ($409.87) GEHA Standard ($291.22)
  • FEDVIP – Vision & Dental Coverage (Varies depending on plan)
  • Medicare Part B ($144.60 per person for those without an income adjustment)
  • FLTCIP – Long Term Care (Varies considerably depending on plan)

For a Self Plus One enrollment the total cost for coverage would be $409.87 for BCBS, $144.60 times 2 or $289.20 for Medicare, plus the cost of your FEDVIP and FLTCIP. I pay $50 a month for FEDVIP plus $194.80 for FLTCIP for my wife and I. Here is what you would pay monthly using my cost for FEDVIP and FLTCIP assuming both signed up for Medicare B and the couple is earning less than $174,000 a year:

  • BCBS – ($409.87 + $289 + $50 + $194 = $942.87 monthly, $11,314 / year)
  • GEHA – ($291.22 + $289 + $50 + $194 = $824.22 monthly, $9,890.64 / year)

If BCBS Basic members apply for and each receive a $800 Medicare Reimbursement for a Self Plus One enrollment, their adjusted monthly costs would be reduced to $809 in the above example.

2021 Plan Changes

For a complete list of changes for both plans review section 2 of each brochure.

Observation

Many federal annuitants are hesitant to sign up for Medicare Part B due to the additional cost and what appears to be duplicate coverage. I personally know a number of retirees that are now paying large copayments and coinsurance fees because they didn’t sign up for Medicare Part B at age 65. In one instance, Pat the wife of a man I worked with for many years, is now in her late 70s. At age 65 her husband decided not to sign them up for part B. Pat called to ask me if it was too late to sign up for Part B. She required full body scans that she was paying a $1700 copayment each time she had the scan done. She was also paying other high coinsurance fees.

Pat could still sign up however for each year she delayed signing up, Medicare charges a 10% penalty, and it would have cost her 140% more for Part B coverage, over twice what a person that signs up for Part B at age 65.

If you review coinsurance and copayment costs within your current FEHB plan you can see where the costs could be prohibitive for major medical problems. For example, in the GEHA Standard Plan those who don’t have Part B would have to pay a $15 copayment for a PPO primary care physician visit; a $30 copayment to see a specialist for covered office visits and 15% of other covered professional services including X-ray and lab.  If the service is provided by a Non-PPO the member has to pay 35% of covered professional services.  If your procedure is at a Non-PPO and costs $5,000 you would be required to pay the first $350 deductable and then an additional $1,750, your 35% share of the costs. With Part B these fees are waived.

Summary

My wife and I enrolled in GEHA basic before I turned 65 to reduce cost. Plus, we travel, and require coverage for in and out-of-network providers. I use hearing aids and the GEHA Basic plan offers $2,500 towards the purchase of hearing aids every three years, BCBS Standards has the same reimbursement for hearing aids but limits them to once every five years. One of the advantages of the GEHA Standard Plan when compared to the BCBS Basic Plan is that with Medicare A & B, GEHA benefits are the same whether or not your provider is in their network.

There are many other considerations to take into account when signing up for any plan. Those who use a large number of prescription drugs must review reimbursements to see which plan will cover the most and if you need special procedures. Ensure the provider you select offers the services you need.  If you use expensive drugs, check with providers to ensure your medication is on their formulary list. I had a problem getting an asthma drug I’ve used for the past 5 years after GEHA removed it from their recommended formulary list. There is more to your selection than meets the eye. Take your time this open season to thoroughly review your options and costs.

Helpful Retirement Planning Tools

Schedule A Retirement Benefits Seminar in Your Area

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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

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Posted on Monday, 19th October 2020 by

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Our government reports that inflation is low, yet every time we turn around prices are increasing.  I often ponder why our COLAs, 1.3% for 2021, are so low most years when costs for essentials are increasing.

We are used to paying more for everything these days so it shouldn’t be a surprise to everyone that our Federal Employee’s Health Benefits (FEHB) premiums are going to rise again this year. (OPM) announced this week that for plan year 2021, the average total premiums for current non-Postal employees and retirees enrolled in plans under the FEHB Program will increase by 3.6%, last year’s increase was 4% percent.

OPM negotiated a new, seven-year contract for the Federal Employees Dental and Vision Insurance Program (FEDVIP). While the majority of current FEDVIP enrollees should not experience a significant increase in premiums, enrollees are encouraged by OPM to research the various FEDVIP plans and choose the dental and vision coverage that best fits their needs.

The new rates are now posted online. My wife and I are enrolled in the Nationwide GEHA Standard Self Plus One Plan. Their premium is increasing 3.4% from $282.05 a month to $291.92. Brochures won’t be out for a while through OPM. Brochures won’t be available for a while through OPM. However, the providers such as GEHA and Blue Cross often have the brochures available now. Here are links to their 2021 brochures:

The Nationwide Blue Cross and Blue Shield Basic Self Plus One premium increased 5.6% to $409.87 per month. Last year the monthly premium was $386.99. HMO plans have similar price changes with some reductions, for example the Pennsylvania UPMC HMO Health Plan Self Plus One UW6 enrollment code premium decreased from $421.91 per month to $412.58.

OPM’s Plan Comparison Tool and the Consumers’ Checkbook 2021 Guide to Health Plans can be used to find the best FEHB plan for your needs. OPM’s guide will be available for 2021 plans beginning the first full week of November. The Consumers’ Checkbook Guide is available in print and online formats. Federal Retirement readers can pre-ordered their guide at Guidetohealthplans.org  and save 20% by entering promo code FEDRETIRE at checkout. The Guide will be released online no later than the first day of Open Season November 9th. Print books will be mailed the week prior to the start of Open Season.

To reduce costs many signing up for Medicare Part B consider converting their FEHB coverage to a lower cost option. The article I wrote titled A Marriage of Convenience – Medicare & FEHB will help those approaching 65 determine what FEHB coverage will be most cost effective and provide the best coverage.

Request a Federal Retirement Report

Retirement planning specialists provide a comprehensive Federal Retirement Report™ including annuity projections, expenditures verses income, with a complete benefits analysis. This comprehensive 27-page benefits summary will help you plan your retirement.

Request Your Personalized Federal Retirement Report™ Today

Find answers to your questions: The best time to retire, retirement income vs expenditures, FEGLI options and costs, TSP risks and withdrawal strategies, and other relevant topics. Determine what benefits to carry into retirement and their advantages. You will also have the opportunity to set up a personal one-on-one meeting with a CERTIFIED FINANCIAL PLANNER.

Helpful Retirement Planning Tools

Schedule A Retirement Benefits Seminar in Your Area

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Tuesday, 13th October 2020 by

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I reported in mid-September that the 2021 COLA was projected to be anywhere from .44% to as high as 1.2% according to Kiplinger’s. The Social Security Administration announced a 1.3% COLA increase on October 13th for 2020. CSRS and FERS annuitants will receive the full 1.3% this year. View the table of all COLAs from 1999 to the present to see how it has changed over the years.

Request Your Personalized Federal Retirement Report™ Today

 

Leave Chart Correction
We released our new 2021 Excel Leave Chart last week. However, we left off the New Years day holiday on Friday December 31, 2021. I would like to thank Lynne at GSA for letting us know about this error. We corrected the spreadsheets and the new revised forms are available for download.

Annuity Projection Calculator

Everyone planning their retirement needs to know how much they will have to live on in retirement and how much their annuity and the surviving spouse’s benefit will grow over time. Unlike many private sector retirement plans, our annuities are adjusted annually – most years – with a COLA. The 45-year average COLA, from 1975 to through 2020, was 3.68%! Not bad considering many private-company plans don’t provide annual cost of living increases.

Frank Cullen, a retired FAA manager and friend, developed this Calculator to estimate annual annuity increases over time. He used it when he was retiring to project his annuity and survivor’s benefit for a period of 40 years from the date he retired. Frank updated the Annuity Calculator last October and with a few minor adjustments you can adapt this to FERS as well.

I entered a 2020 annuity of $52,000 as an example on the chart and selected an average 2% growth rate. After 10 years the projected annuity with survivor’s benefits grew to $63,387, $5,282 monthly. The survivor’s benefit for CSRS would be $38,571 or $3,214 monthly in this example.  A 2% growth rate increased the annual annuity amount by $11,387 over ten years from 2020 through 2030! Not bad. You can run different scenarios on this spreadsheet with or without a survivor’s benefit.

This calculator projects your annual and monthly annuity payment with survivor benefit, without survivor benefit, and the projected survivor annuity. The projections are based on your annuity at the time you retire and a selected growth rate (COLA). All COLAs for the past 45 years, back to 1975, are listed on the spreadsheet with the average 2, 3, 5, 10 – and 42-year COLA factors that you can consider for your personal calculation.

With CSRS a full survivor’s annuity is 55% of the full annuity not 55% of what you were collecting as a couple.  A CSRS full survivor’s annuity costs you just under 10% of your monthly payment however the survivor’s annuity is calculated from the full annuity prior to the survivor’s reduction. Therefore, a CSRS surviving spouse can expect to receive about 61% of what the couple was receiving prior to the annuitant’s death. Also, if an annuitant’s spouse dies, the annuitant would notify OPM and their annuity would be restored to the full amount that is listed on the spreadsheet. OPM does not refund any prior survivor annuity deductions when an annuitant’s spouse dies.

For FERS employees the projected annuity without a survivor’s benefit will be the same; just enter your annuity estimate, enter your age, year of retirement, what you consider to be a realistic growth rate, and the spreadsheet will calculate your annuity for the next 40 years! The column reserved for your projected annuity with survivor benefits will be slightly lower since the maximum spousal benefit is 50% for FERS, not the 55% for CSRS. Also, the full FERS annuity will cost the retiree a little more because FERS employees pay 10% of their annuity for a full survivor’s benefit where CSRS pay just under 10%. FERS COLAs are adjusted down when the COLA exceeds 2%.

To determine what your initial retirement annuity will be request estimates from Human Resources for several target retirement dates. I requested at least a half dozen estimates two years before I retired. You can also calculate your estimated FERS annuity or CSRS annuity using the formulas we have available on our site.

All you need to do is enter the appropriate values in the four highlighted cells. The spreadsheet will do the rest for you. The spreadsheet is locked except for the 4 highlighted entry cells. This is to ensure that formulas are not inadvertently altered. The form’s password is provided on the spreadsheet so those familiar with Excel can modify the spreadsheet as desired.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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 ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, UNCATEGORIZED

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Posted on Friday, 9th October 2020 by

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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 2021 Excel Leave Chart is designed for active federal employees that are planning their retirement and need to establish realistic target retirement dates. The new Excel 2021 Leave Record Spreadsheet also helps federal employees maximize their annuity through prudent management of their leave balances.

Please share our 2021 leave chart with everyone in your organization. The 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 desk top for easy availability.

Download the 2021 Leave Record Chart

A few leave chart users reported a problem with opening the leave spreadsheet last year, the Excel chart was opening in protected mode and they were not able to enter data. 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.

A Microsoft Office consulting firm advised us that If the spreadsheet only opens in the 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.

Request a Federal Retirement Report

Retirement planning specialists provide a comprehensive Federal Retirement Report™ including annuity projections, expenditures verses income, with a complete benefits analysis. This comprehensive 27-page benefits summary will help you plan your retirement.

Request Your Personalized Federal Retirement Report™ Today

Find answers to your questions: The best time to retire, retirement income vs expenditures, FEGLI options and costs, TSP risks and withdrawal strategies, and other relevant topics. Determine what benefits to carry into retirement and their advantages. You will also have the opportunity to set up a personal one-on-one meeting with a CERTIFIED FINANCIAL PLANNER.

Helpful Retirement Planning Tools

Schedule A Retirement Benefits Seminar in Your Area

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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 ANNUITIES / ELIGIBILITY, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS

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