Posted on Friday, 6th September 2024 by

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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.

 

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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.

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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.

Last 5 posts by Dennis Damp

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION | Comments (0)


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