Posted on Friday, 29th October 2021 by Dennis Damp

 Print This Post

There are many things to consider when reviewing your FEHB health care plans during open season.  Plan premiums and benefits change year to year. Without a thorough review and comparison between plans you could unintentionally pass up a better deal.  I know this firsthand, as a federal employee for 36 years and a retiree these past 17 years, it is much easier to simply do nothing and continue on with a plan that may not fully meet your family’s needs.

The only way to avoid this is to review plans of interest to determine if you are receiving the maximum benefit for the lowest cost. It’s easy to become overwhelmed with all of the selections you have at hand and the sheer volume of reading material available. Don’t let this stop you. There are tools available to streamline your search and do comparisons with a few computer keystrokes.

Please forward this to others that may benefit from this information.

Another consideration today that should spur those over 65 to compare plans is that many now reimburse some of your Part B premiums. This could save annuitants a considerable amount each year. Consumer’s Checkbook “Guide to Health Plans for Federal Employees” online format actually does this comparison for you. By answering a few questions, you’ll see a personalized total cost estimate for each plan, which is the premium plus expected out-of-pocket for someone like you, and you’ll understand which plans save you the most money or provide the most coverage.

For retirees, the Guide shows a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate for the FEHB plans 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.

The Consumer’s Checkbook Guide to Health Plans for Federal Employees is available in print and online formats. Federal Retirement readers can pre-order the 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 8^th. Print books will be mailed shortly after the start of Open Season.

Pre-Order Checkbook’s “Guide to Health Plans”

Here are some important tips to consider as Open Season approaches:

• Don’t assume your plan is unchanged. The premiums and benefits almost certainly will change. Your doctors may have left the plan. An expensive drug may no longer be on formulary. I ran into this with an asthma drug I take. My plan removed it from their formulary list and I now pay $325 for a prescription that cost just $60 when it was covered. I had negative reactions to the alternative drugs they recommended. Even if you don’t anticipate switching plans, it makes sense to see how your plan has changed every Open Season.
• Check if there are newer plan choices that might be better buys. There are high deductible plans (HDHP) with health reimbursement arrangements that have good catastrophic coverage and can provide big savings. Remember: Higher premium plans do not always have better benefits. They may simply reflect the expensive enrollees they attract.
• Retirees need to consider Medicare Advantage (MA). Aetna, Kaiser, and UnitedHealthcare offer special Medicare Advantage plans for retirees. Some of these plans reimburse almost the entire Medicare Part B premium and waive all doctor and hospital expenses. By doing so, some of these plans have the lowest estimated yearly cost for retirees. 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.
• Read the plan brochure. They are long and not fun to go through, but they offer the clearest view of what life is like in a plan. Start by review the section titled “How We Have Changed,” then section 7 “General Exclusions – Things We Don’t Cover.” Retirees should go to Section 9 to see if there are any Medicare coordination changes in their current plan.
• Review important benefits. If there is a benefit that’s important to you, look up that benefit in the plan brochures to see which one gives you the best deal. Checkbook’s guide does this for you. Make sure to check the plan brochure for that benefit for additional information. Everyone enrolled in a plan should request a brochure each year because it outlines the entire plan and can be consulted throughout the year when a benefit question arises.
• Consider your dental and vision needs. The standalone FEDVIP plans are good buys for many, but not all. Remember that some FEHB plans offer modest dental and vision benefits that don’t require you to pay a separate premium. Also, some FEHB plans offer dental and vision discount programs as part of their “non-FEHB” benefits. The Checkbook Guide will show you how all your available choices stack up under low, average, or high dental expense years. Hint: If you have low dental expenses, you might be better off in an FEHB plan that offers some dental benefits vs paying a FEDVIP premium. Also, consider that your needs may change year to year. For example, my wife had cataract surgery last year and I knew it was scheduled but neglected to add vison care for her last year to cover the eyeglasses she now requires. I’ll add it this open season.
• Wellness benefits. Did you know certain FEHB plans reimburse gym membership or pay you to complete an annual health assessment? Some plans have tobacco cessation and weight management programs at no additional cost to the member. There is even a Medicare Advantage plan that has a meal delivery program of up to 84 home-delivered meals following an inpatient hospital stay. These benefits can be found at the back of the FEHB brochure and are often overlooked. The most important of these wellness benefits are now displayed in the online Guide to Health Plans for Federal Employees for every FEHB plan. Consider these benefits before enrolling in a plan, especially if you’re having a hard time deciding between two plans.

Helpful Retirement Planning Tools

• Retirement Planning For Federal Employees & Annuitant
• The Ultimate Retirement Planning Guide – Start Now
• Medicare Guide
• A Marriage of Convenience – Medicare & FEHB
• Medicare and FEHB Options – What Will You Do When You Turn 65?
• What to Consider Before Enrolling in Medicare B
• Caution – Don’t Lose Your FEHB Coverage
• How to Delay Part B Premiums
• Budget Work Sheet
• Social Security Guide

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

Comments (2)|  Print This Post

Posted on Friday, 22nd October 2021 by Dennis Damp

 Print This Post

First, let me start off with a correction for the COLA article sent out last week. Here is the correct link to the table of all COLAs from 1999 to the present. I generally release timely articles the day they are announced; in the rush I neglected to check the original link.

There are many opportunities for retirees to work today and earn additional income and benefits. What makes federal retirees unique in many respects are their broad base skill sets and their ability to retire early, often in their 50s and younger. Those working in law enforcement, fire fighters, air traffic control, nuclear weapons couriers and others are able to retire with just 20 years of service. Early retirement programs also include mandatory retirement at a designated age or years of service. Plus, may feds have extensive work histories that bode well for future employers looking for a stable and knowledgeable workforce.

Today, almost every establishment you enter is hiring, many offering sign on bonus, flexible hours, and benefits. This hiring frenzy is across all occupational groups and it isn’t uncommon to negotiate starting salaries and work hours. Full and part time positions are available and many positions offer telecommuting. Millions have not returned to work for various reasons: child care, generous unemployment benefits, COVID vaccine and mask mandates, insufficient wages, and early retirements, to name a few. I was at a gas station today and half of the pumps were out of service, the attendant said they can’t get the parts and the company that repairs them can’t find employees, even though they pay $35 an hour to start.

There are many hidden benefits when returning to work after retiring. Your savings will last longer, it provides an outlet to get out and about at least part time during the week, many seek work to maintain a social outlet or to learn new skills.

Another primary reason to work in retirement is to increase your Social Security payments, over and above the annual COLA increase. As long as you continue to work, even if you are receiving benefits, you will be paying Social Security taxes on earnings. Social Security will check your record every year to see whether the additional earnings you had will increase your monthly benefit. If there is an increase, they will send you a letter telling you of your new benefit amount.

It’s important to note that your federal retirement annuity will not be reduced no matter how much you make while working in the private sector. That isn’t the case if you return to federal service as a rehired annuitant, your annuity will remain the same, however in most cases your federal salary will be offset by the amount you are paid in your annuity each month.

A Social Security beneficiary between age 62 and their full retirement age can earn up to $19,500 a year in 2022 without losing any of their Social Security benefit by working. This earnings limit is set each year and differ by age group. This limit is for beneficiaries under full retirement age. If you reach your full retirement age in 2022 the limit is $51,960/yr. After reaching full retirement age there is no limit to the amount of earnings and no loss of benefits.

If under full retirement age and earning more than the limit, $1 of benefits will be lost for each $2 of earnings over the limit. In the year you reach full retirement age and earning more than the limit, $1 of benefits will be lost for each $3 of earnings over the limit.

Wages received as an employee, and net earnings from self-employment, bonuses, commissions, fees, vacation pay, cash tips of $20 or more a month, severance pay, and earnings from all types of work count for the earnings test. Income from investments and rental property are not included and will not impact your Social Security payments at any age.

FERS retirees are eligible for Social Security benefits, unlike their Civil Service Retirement System (CSRS) counterparts. You must work 40 quarters, 10 years, in a job that pays social security taxes to qualify for a minimum benefit. CSRS employees did not pay social security taxes while working for the federal government, they contributed to their CSRS retirement system instead.

The only work that withheld Social Security contributions for me was my active-duty Air Force time, one year as a draftsman, and part time work as a teenager. Maybe 6 years, 24 quarters total. I accrued 28 years of substantial earning years when I applied for Social Security two years ago, mostly from my business that I started part time in 1985. I describe my early life including work experience in “The Early Years, A Road Less Traveled,” a memoir that was released last year.

This year my wife and I both received Social Security increases retroactive to the first of the year, and my benefit is no longer reduced by the Windfall Elimination Provision (WEP) because I reached 30 years of substantial earnings covered by Social Security taxes. Social Security doesn’t receive the previous year’s income data from the IRS until midway through the new year. They increase your monthly checks going forward and send a check to make up for the increase for the previous months.

Typically, long term CSRS employees only have a handful of substantial earning years that contribute to the minimum 40 quarters required to collect a monthly social Security check.  Many CSRS retirees can earn enough in retirement to qualify for benefits. Just be aware that WEP will reduce your monthly check by as much as $498 in 2021.

Today, you can apply just about anywhere due to severe worker shortages nationwide. Federal workers with security clearances and recent retirees who had active security clearances can search thousands of high paying private sector clearance jobs with defense employers and government contractors. Applicants will have the opportunity to support and secure complex government, defense, and intelligence projects worldwide.

Visit our jobs board for featured private sector job listings. Because so many have dropped out of the workforce, retirees have ample opportunities to showcase the knowledge, skills, and abilities they learned while working for Uncle Sam.

Helpful Retirement Planning Tools

• The Ultimate Retirement Planning Guide
• TSP Guidance
• Medicare Guide
• Social Security Guide
• Master Retiree Contact List (Important contact numbers and information)
• Annuity Calculator (FREE Excel chart estimates annuity growth)

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, EMPLOYMENT OPTIONS, FINANCE / TIP, RETIREMENT CONCERNS

Comments (0)|  Print This Post

Posted on Wednesday, 13th October 2021 by Dennis Damp

 Print This Post

I reported in mid-September that the 2022 COLA was projected to be close to 6% or more. The Social Security Administration announced a 5.9% COLA increase on October 13th for 2022. CSRS annuitants will receive the full 5.9% this year while FERS annuitants will receive 4.9%, still a hefty increase from last year’s 1.3%. View the table of all COLAs from 1999 to the present to see how it has changed over the years.

For the Federal Employees’ Retirement System (FERS) or FERS Special benefits, if the increase in the CPI is 2 percent or less, the Cost-of-Living Adjustment is equal to the CPI increase. If the CPI increase is more than 2 percent but no more than 3 percent, the Cost-of-Living Adjustment is 2 percent. If the CPI increase is more than 3 percent, the adjustment is 1 percent less than the CPI increase. The new amount is rounded down to the next whole dollar.

At first glance this seems like a windfall for retirees until you look around and realize that everything we buy today is going up in price, most of the time faster that the average inflation rate. Are we really better off? I would say yes, many private sector annuities aren’t adjusted annually for inflation. My Uncle Harold warned me when I was about to retire of just how much his annuity’s buying power had shrunk over the past 20 years. Had it not been for their Social Security annual adjustment, they would have been struggling.

Each year, I calculate how much my base annuity has increased since I retired on December 31, 2004. My annuity has increased 45% over the past 17 years! I’m grateful that our retirement is adjusted each year, even though there were three years, 2010, 2011 and 2016, where no increase was provided.

Please forward this email to other interested parties.

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 2021, 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 year and with a few minor adjustments you can adapt this to FERS as well. If the spreadsheet opens in protected mode click on enable editing. Also, some browsers are now opening the file, if this happens click on the download file button at the top of the form and use the download version, the version that opens in the browser may not let you enter data.

I entered a 2021 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 full 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 2021 through 2031! 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%.

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

Request a 27 page Federal Retirement Report™ today.
A one hour session with a Certified Financial Planner is included.

• Retirement Planning For Federal Employees & Annuitant
• Medicare Guide
• Social Security Guide
• Master Retiree Contact List (Important contact numbers and information)
• 2022 Leave and Schedule Chart (Use this chart to set target retirement dates.)
• Annuity Calculator (FREE Excel chart estimates annuity growth)

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

Comments (2)|  Print This Post

Posted on Friday, 8th October 2021 by Dennis Damp

 Print This Post

We are used to paying more for everything these days so it shouldn’t be a surprise again this year that the majority of our Federal Employee’s Health Benefits (FEHB) premiums are going up. The average total premiums for current non-Postal employees and annuitants enrolled in plans under the FEHB Program will increase 2.4 percent for 2022, the second lowest premium increase in the last 24 years. Under FEDVIP, the overall average premium for dental plans will increase by 0.81 percent, and the overall average premium for vision plans will increase by 0.95 percent.

I reviewed the 66 nationwide Plan premiums this week; 13 plans had no premium change year to year, while 44 increased and 9 decreased their premiums. Four of the national plan groups, Blue Cross and Blue Shield (BCBS), GEHA, NACL, and APWU had several plans each with no change from the prior year. Of the 44 plans that increased their premiums the largest was $66.42 monthly for the MHBP Standard Option Self + One. The two plans with the largest premium reduction of $25.74 per month are the GEHA High Self Plus one and the SAMBA High Self & Family. There are also many regional HMO plans to consider.

In some cases, the enrollee share of premiums for the Self Plus One enrollment type will be higher than for the Self and Family enrollment type. Enrollees who wish to cover one eligible family member are free to elect either the Self and Family or Self Plus One enrollment type. For example, the MHBP Standard Self & Family premium of $394.05 is $30.44 less that their Self Plus One plan!

OPM worked with FEHB carriers to provide COVID-19 testing and vaccines, telehealth, and mental health benefits to federal enrollees. To date, over 85% of those enrolled in the FEHB Program have access to incentives of $25 up to $100 for receiving a COVID-19 vaccination.

The 2022 FEHB rates are now posted online. My wife and I are enrolled in the Nationwide GEHA Standard Self Plus One Plan. Their premium of $291.92 remained the same.  The Nationwide Blue Cross and Blue Shield Basic Self Plus One premium increased $15.08 to $424.95 per month. HMO plans have similar price changes with some reductions, for example the Pennsylvania UPMC HMO Standard Health Plan Self Plus One UW6 enrollment code increased $76.91 to $489.49 per month!

Some brochures have already been released by providers such as Blue Cross Blue Shield. Most brochures will be released by OPM late October or early November. The providers often have the brochures available earlier, call them to request a copy.

OPM’s Plan Comparison Tool and the Consumers’ Checkbook 2022 Guide to Health Plans can be used to find the best FEHB plan for your needs. OPM’s guide will be available for 2022 plans beginning the first full week of November. Checkbook’s Guide to FEHB Health Plans helps active and retired federal employees find the best FEHB plan for themselves and their families. By answering a few questions, you’ll see a personalized total cost estimate for each plan, which is the premium plus expected out-of-pocket costs for someone like you, and you’ll understand which plans save you the most money or provide the most coverage.

For retirees, the Checkbook 2022 Guide shows a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate for the FEHB plans 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.

The Consumers’ Checkbook Guide is available in print and online formats. Federal Retirement readers can pre-order 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.

Helpful Retirement Planning Tools

• Retirement Planning For Federal Employees & Annuitant
• The Ultimate Retirement Planning Guide – Start Now
• Medicare Guide
• A Marriage of Convenience – Medicare & FEHB
• Caution – Don’t Lose Your FEHB Coverage
• How to Delay Part B Premiums
• Budget Work Sheet
• Social Security Guide
• Security Clearance Jobs for Retired Federal Employees

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, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

Comments (2)|  Print This Post

Posted on Friday, 1st October 2021 by Dennis Damp

 Print This Post

The Federal Employees Health Benefits open season is just around the corner, running from November 8^th through December 13^th of this year. It will not be delayed due to COVID. Federal employees and annuitants can enroll in the program, change enrollments, change to another FEHB plan or plan option or cancel an existing enrollment.

New protections will help to minimize surprise billing that has caught many off guard over the years.

One of the biggest “gotchas” in health insurance is what can happen to the unwary consumer who uses a provider that isn’t in the “preferred provider” network of the consumer’s health plan. Some plans cover out-of-network care at an increased enrollee share, but some don’t cover that care at all. And the sky can be the limit for the charges that the enrollee may face when going out of network. Even the conscientious enrollee can get trapped in this morass. For example, you may be unconscious after an accident and taken to the emergency room where either the emergency physician or the anesthesiologist may not be in your network. Or you may be taken while unconscious to the nearest hospital by ambulance (or even worse, by air ambulance), and pay an exorbitant fee for that trip. Even an astute buyer can be caught in a surprise billing trap.

Recently, one of the coauthors of this article underwent an outpatient surgical procedure. The facility was a network provider in a good FEHB health plan. It never occurred to him to check that the anesthesiologist was in network, since previous experience had been that outpatient rates covered all costs, including anesthesia, when getting outpatient medical care. He is starting negotiations over the thousand-dollar surprise anesthesia bill he received a month later.

In the FEHB program, this problem is reduced for federal annuitants, since under a 1990 law the most that any Medicare provider can charge federal annuitants is 15% more than the regular Medicare rate (this is called the “limiting charge”), and the Medicare rate is tightly controlled. This protection is available to all annuitants of any age, whether enrolled in Medicare or not. But not all providers participate in Medicare, so even this protection is not foolproof. Most Americans, however, aren’t so lucky as to have such a protection. And most FEHB enrollees aren’t retired. So, the big “surprise billing” loophole in health insurance protections has been a perennial problem for most Americans.

But lo and behold, sometimes the political system works to fix things that are broken. And surprise billing is a prime example. Last year Congress acted on a bipartisan basis to pass the “No Surprises Act”. This summer the Departments of HHS, Treasury, and Labor published a 400-page rule to implement the new law. The length of the rule was needed to deal with some of the intricacies of the law, which had to deal with many contingencies. For example, the law and rule had to deal with the amount that the out-of-network provider would be paid by the health plan, defining what counted as a medical emergency, establishing appeals procedures, and more. The law and rule take effect on January 1, 2022.

Under the new law, which applies to all group health plans, the basic model is that surprise billing is banned for emergency services, with the patient required to pay no more than what he or she would pay in coinsurance and deductibles for in-network care. The law also bans prior authorization requirements for emergency services, whether the provider is in-network or not. The law also covers the situation where for a non-emergency service the patient sees a network provider but gets care from both that provider and a non-network provider such as an anesthesiologist. The law does have a few loopholes, the biggest of which is that it doesn’t cover regular ambulance services (air ambulances are covered). Otherwise, it covers medical care delivered by a physician, hospital, or outpatient provider such as an ambulatory surgical service.

But there are still important “buyer beware” angles. If you choose a non-network provider, and are not a federal annuitant, the only sure way to protect yourself against any surprise is to agree on a price before any expensive service. For example, Medicare pays for basic cataract lens implants, but not for other kinds of lens implants that have more features and cost more. And despite the 1990 law’s legal protection, a federal annuitant should take care to make sure that he or she uses a physician who has not opted out completely from Medicare. Moreover, even the Medicare payment limit on a particular procedure may be in the thousands of dollars, a whole lot higher than that $20 or $40 copay (or no copay) that you pay now when using a network provider.

For those annuitants with Medicare, enrolling in an FEHB plan adds a layer of safety when your plan covers out-of-network providers at the same enrollee cost sharing as for in-network providers, but there is still risk if you use a provider who has completely opted out of Medicare or get a procedure that Medicare does not cover. Moreover, most plans that provide this benefit charge more than most plans that do not. Many plans offer in and out-of-network coverage. However, the out-of-network reimbursement is generally less than what in network coverage provides. So even though the law now protects health plan enrollees in both the public and private sectors against the worst kinds of true surprises, it does not eliminate the need to check carefully before undergoing any expensive procedure.

Article by Walton Francis and Dennis Damp. Walton Francis and Kevin Moss are the experts who prepare Checkbook’s Guide to Health Plans for Federal Employees for the nonprofit Center for the Study of Services. The 2022 Guide will be available on November 8 at the beginning of Open Season, and is available now for pre-ordering the Checkbook Guide online or by calling 888-596-0729. Federal Retirement readers receive a 20% discount by entering promo code FEDRETIRE at checkout.

Helpful Retirement Planning Tools

• The Ultimate Retirement Planning Guide
• Evaluate Your Insurance Needs
• TSP Guidance
• Medicare Guide
• Social Security Guide
• Master Retiree Contact List (Important contact numbers and information)
• Annuity Calculator (FREE Excel chart estimates annuity growth)

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, WELLNESS / HEALTH

Comments (0)|  Print This Post

Posted on Saturday, 18th September 2021 by Dennis Damp

 Print This Post

The older generations, including retirees and those still working and planning their exit, have a vast collective voice that is often ignored or relegated to background noise by the news media, big tech, political parties, and others. The older generations have ways to effect change to a greater degree than most realize.

Only a small percentage of the population garners media and social platform attention through radical means, yet this group receives the vast majority of the press coverage and social media banter. You would think our world is about to disintegrate when you listen to the events of the day and the constant fighting between the extremes. Cable News Networks fan the flames of discontent with aggressive show hosts unwilling to moderate their views or listen to anything other than what they want to hear. Instead of seeking compromise and understanding, many agitate viewers to further divide the country, increase their viewer share and most importantly to them, advertising revenue.

No matter what news program or commentary show you watch, they lead with a story to keep you hanging on to the end; we keep listening, and as Paul Harvey would say, “stay tuned for the Rest of the Story.”

Retirees and the older generations have many things to be concerned about and can voice their support or dissatisfaction with their participation when necessary, and most importantly with their wallets and feet. Most, busy with life, can’t run the streets as those who spew discontent in our cities and elsewhere. Yet, we can’t fight every injustice and must focus on areas of interest; hopefully others will pick up the gauntlet and work to make their voices heard.

Seeds of change go both ways, some good and others downright dangerous. Let me preface this discussion by saying this is meant for everyone, conservatives to liberals and everything in between. This isn’t expedient for just one group.

What can we do to effect change and make a difference? We can’t expect someone else to save the day, all must play a part in the grand scheme of things to express their dissatisfaction with whatever they perceive to be unfair or could cause us all harm down the road. Many feel compelled to speak out about perceived injustices, policy matters, especially with the political divide we suffer through on a daily basis, yet so many stay silent and expect others to save the day.  Some express the sentiment, “What can I really do to make a difference, I’m a small fish in a large pond.”

I realized a long time ago that I may be a small fry when compared to CEOs, high flying politicians, the uber rich, and so many others; collectively (the small fries) have a RESOUNDING VOICE that will be heard.  We all must become activists in our own way.

Those who followed me for decades know I’m getting on in years  ̶  thought I’d never say that  ̶   and have to use more subtle ways to get my point across. I express my point of view, dissatisfaction with a course of events, corporate CEOs, politicians, and others by either telling them what I intend to do or already have emphatically done about it or suggest how they strayed from what I expect of them.

For example, when Twitter and Facebook began censoring free speech and banned certain individuals from using their services, I immediately closed my Twitter accounts. Initially we kept our Facebook account open to keep in touch with close family and friends. However, I refuse to click on any ads placed on Facebook and if you have the same concern about any web site you visit refuse to click on their ads. That is how they generate income and the more people that click the more they get paid. If enough people stop clicking, the advertisers move elsewhere. Recently, they shut down a gold star mother’s account because she criticized the President for the death of her son during the Afghanistan fiasco. She has every right to express her opinion, she lost her son!

Recently, I discovered that a national bank that I use instituted discriminatory un-American, and politically motivated practices that I highly disagreed with. I wrote the CEO to advise him that I was moving all of our investments to another brokerage house, cancelling our credit cards and advising him that he should expect many others to withdraw their funds as the wasteful spending and these practices are exposed. Many companies are becoming political activists instead of corporate fiduciaries as they should be. Yes, it took time and patience to change to a new broker but for me it was worth it.

When I find a company that is more concerned about political activism instead of their products/services, employees, and shareholders, I go elsewhere. Yes, it’s a small step but collectively it can and will make a difference over time.  This goes for restaurant chains, big box stores, and many others. We have to speak with our feet and wallets to get attention and we have the power to do it.

If I own stocks in a questionable company and decide to maintain the stock position for whatever reason, I vote against the CEO and officers that support the issues in the proxies they send out before their annal meeting.

There are many ways to make our voices heard.

• Pick you battles and approach them based on what you can handle, baby steps at first to get your feet wet and then expand from there. If you try to take on the world, burnout and frustration will soon follow.
• Join and support associations and groups that will fight for all of us. I contribute regularly to certain groups that I know are fighting the good fight.
• Withdraw support by boycotting corporations, big tech, and the media that are going in what you believe is the wrong direction or misleading their customers.
• Participate in local school board meetings to check that the curriculum being taught meets with your values as a parent or grandparent. Many parents discovered during the COVID epidemic that the schools were moving from education to indoctrination and worse in some cases.
• Make your representatives aware of your feelings about the way things are going in your community and nationally. Even though they may not support your positions they represent us and if enough come forward to complain it will get their attention. If that doesn’t work, help to vote them out of office next election.

VOTE – if you can’t get to the polls, apply for an absentee ballet. Some states are sending out mass ballets. Take advantage of them; send them in if you have any doubts about getting there on election day or vote early if that is possible in your state. Many states don’t require an ID or proof of residency when sending in ballots so shred or tear up the ones laying around the house so they won’t be used illegally.

Participate with your local party to get the vote out, obtain voter registration lists and go door to door in your immediate vicinity to help anyone vote that may need it; let them know just how much their vote counts. Most getting out the vote initiates are left to huge phone banks that repeatedly call the same number over and over again. They should devote those dollars to support volunteer visits to as many residences as possible in their district to provide voter guides and to get out the vote.

Many may feel detached from the problems. For example, you may not be in one of the border states that local residents claim are being inundated with illegal immigrants, many infected with COVID, or far from the cities rampant with crime. Complacency isn’t the answer.

Helpful Retirement Planning Tools

• The Ultimate Retirement Planning Guide
• TSP Guidance
• Medicare Guide
• Social Security Guide
• Master Retiree Contact List (Important contact numbers and information)
• Annuity Calculator (FREE Excel chart estimates annuity growth)

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, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

Comments (0)|  Print This Post

Posted on Sunday, 12th September 2021 by Dennis Damp

 Print This Post

The Office of Personnel Management (OPM) announced changes in FEGLI premium rates effective the first pay period beginning on or after October 1, 2021. These include changes to premium rates for Employee Basic Insurance, Option A (most age bands), Option B (most age bands), Option C (most age bands), and Post-Retirement Basic Insurance. The Basic Rate increased slightly. However, The good news is that many rates actually decreased! This is a great time to reevaluate your insurance needs; an open enrollment period often follows a rate increase.

Basic Changes (Annual basic pay, rounded up to the next even $1,000, plus $2,000)

The basic option premiums per thousand dollars of coverage increased slightly from $0.15 to $0.16 bi-weekly. An annuitants Basic Insurance costs are determined by the option you select when you turn 65 and take either a 75% reduction, a 50% reduction or decide to keep full coverage in retirement. If you elect no reduction when you retire the rate is $2.5967 before age 65 and $2.25 after age 65. The 75% reduction before age 65 is $0.3467 and reduces to no cost after 65. The 50% reduction will now cost $1.0967 before and $0.75 after age 65.

Option A Changes ($10,000 of Insurance)

Option A Standard Insurance is a fixed $10,000 amount. When you retire it reduces 2% a month, $200, starting at age 65 until it reduces to $2,500. It is free starting at age 65. The rate for <35 and 60+ stayed the same, all of the rates from age 35 to 59 decreased substantially. The bi-weekly rate for those 45-49 decreased from $0.70 to $0.60 and for those 60+ it remained $13.00 monthly.  At age 45 you would only pay $0.60 a pay for $10,000 in coverage starting this October.

Option B Changes (Salary Multiples) Up to 5 times your salary

The amount of coverage is determined by multiplying your final annual basic pay rate rounded to the next higher thousand by the number of Option B multiples that were in effect for the five years of service immediately before your retirement or the entire periods of service during which these multiples were available to you, if less than five years

The only age group that increased for Option B was the 80+ group. The old rate was $5.72 monthly per $1,000 of coverage; the new rate is $6.240 per thousand.  All of the other age group rates dropped as much as 10 percent or more. Even with these decreased premiums under age 80, the cost for Option B multiples more than doubles from $0.18 bi-weekly per thousand dollars of coverage at 55-59 to $0.40 bi-weekly per thousand at age 60-64. In retirement it will cost an annuitant $3.90 per $1,000 of coverage monthly from age 75-79 and that increases to $6.24 monthly per $1,000 in coverage 80 and over!

For example, if your base pay was $60,000 when you retired and had 5 multiples, your total coverage would be $300,000, 5 x $60,000. Premiums continue after age 65 and the current premiums are $1.04 per thousand dollars of coverage at age 65. In this example the annuitant would be paying $315 per month to retain this coverage. From age 70 to 74 the premiums increase to $1.863 and the monthly premium would increase to $558.90 per month. Premiums increase again to $3.90 per thousand from age 75 to 79, and top out at $6.24 from age 80 on. At age 80 the annuitant would be paying $1872 a month at current premium levels! It should be noted that premiums are subject to change. View our FEGLI rate charts for the new rates.

FederalRetireReport.com provides a 27-page federal employees retirement planning report that does help those who purchase their report find lower cost private insurance for Option B multiples if desired.

Option C Changes (Up to 5 multiples) $5,000 per spouse and $2,500 for each child under 22

When you retire you elect either a full reduction benefit or no reduction. If you elect full reduction your multiple coverage will stay in force until you reach age 65. At age 65 the premiums stop and your coverage reduces 2% a month for 50 months when coverage ends. All of the C Family Option premiums decreased except for those in the 75-79 and the 80+ groups. The maximum you would pay for each multiple increased to $16.90 at 80+.  This coverage would cost a worker $2.43 bi-weekly for each multiple. If you carried three multiples ($15,000 of insurance for a spouse) into retirement it would cost $6.13 per multiple or $18.39 per month at age 65-69.

Review our updated rate tables to see how much your premiums will change.

• Employee FEGLI Premiums
• Annuitant FEGLI Premiums

Helpful Retirement Planning Tools

• The Ultimate Retirement Planning Guide
• Evaluate Your Insurance Needs
• TSP Guidance
• Medicare Guide
• Social Security Guide
• Master Retiree Contact List (Important contact numbers and information)
• Annuity Calculator (FREE Excel chart estimates annuity growth)

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 UNCATEGORIZED

Comments (0)|  Print This Post

Posted on Friday, 3rd September 2021 by Dennis Damp

 Print This Post

Updated 12/15/2024

When can I retire? A question asked often by those approaching retirement age and by those early in their career who have the foresight to think ahead. It isn’t as simple a decision as reaching your eligibility date, especially if you haven’t prepared early in your career to have the assets necessary to make this transition. These 7-steps will help you determine when you can realistically retire.

1) Retirement Eligibility

For FERS employees, those hired starting January 1 of 1987 to the present, FERS eligibility is determined by your age and number of years of creditable service. In some cases, you must reach a prescribed Minimum Retirement Age (MRA) to receive civil service retirement benefits. If you leave federal service before you reach full retirement age and have a minimum of 5 years FERS service you can elect to take a deferred retirement. Basically, those with 30 years of service and reach their MRA, anyone who has 20 years at age 60, or as little as 5 years of federal service at age 62 can retire immediately.

CSRS eligibility is based on your age and the number of years of creditable service. Those with 30 years of service at age 55 and anyone who has 20 years at age 60, or as little as 5 years of federal service at age 62 can retire immediately. If you are CSRS Offset, the regular CSRS rules described in the CSRS Eligibility Section apply to you.

A special 20-year retirement system is available for certain designated positions under both retirement systems. This system allows employees to retire sooner, with just 20 years of service. This early retirement system is offered for those who work in air traffic control, law enforcement, fire fighters, and nuclear weapons couriers.

There are special eligibility requirements for certain conditions under both systems for early optional, discontinued service, and disability.

Download our FREE Excel 2025 Federal Employee’s Leave Record
Set Target Retirement Dates & Track Annual, Sick, Comp, and Credit Hours

2) Annuity / THRIFT Income

The annuity calculation is different for CSRS and FERS. The FERS retirement annuity is based on your length of service (which includes unused sick leave if you retire on an immediate annuity) and “high-3” average pay. The high-3 average pay includes locality pay and annual premiums for standby duty and availability if applicable. Other pay such as differentials, overtime, allowances and others are not included. The annuity is 1% of your high-3 average pay times years of creditable service.  If you retire at age 62 or later with at least 20 years of service, a factor of 1.1% is used rather than 1%.

The CSRS annuity is based on your length of civil service (which includes unused sick leave if you retire on an immediate annuity) and “high-3” average pay. The high-3 average pay includes locality pay and annual premiums for standby duty and availability if applicable. Other pay such as differentials, overtime, allowances and others are not included. Your yearly basic annuity is computed by adding:

• 1 1/2 percent of your “high-3” average pay times service up to 5 years;
• 1 3/4 percent of your “high-3” pay times years of service over 5 and up to 10; and
• 2 percent of your “high-3” pay times years of service over 10.

Once you establish several tentative retirement dates, request annuity estimates from your HR department.

The TSP 401K savings plan is another lucrative benefit that most take advantage of, especially when you consider that FERS employees receive a 5% match. I only know of one person that I worked with that didn’t participate in the TSP plan. Your contributions while working are tax deferred and the maximum TSP contribution for 2025 is $23,500. If you are over age 50 an additional $7,500 catch up contributions are allowed.

There are a number of withdrawal options and you can annuitize your savings for a guaranteed monthly payment if desired. Your annual TSP annual statement provides an annuity estimate plus a summary of the plan’s previous year’s performance.  Many federal employees that retire with 25 to 30 years of service can retire with a million in their accounts and more if they maximize their contributions early in their career.

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

3) Social Security

There is much to consider before signing up for Social Security. By waiting until full retirement age or to age 70 your monthly check will increase dramatically, often times doubling from what you would have collected at age 62.  For married couples, it’s important to plan who takes Social Security first to maximize benefits long term and for estate planning purposes.  FERS employees that retire before age 62 may be eligible for a Social Security Supplement check. I wrote a series of articles on this subject that you will find helpful:

• When Will You Sign Up for Social Security?
• Should I Defer Social Security Until Age 70?
• FERS Social Security Eligibility and Supplement

4) Pre & Post Retirement Living Expenses

Just because you are eligible and wish to retire doesn’t mean you will have the income/resources needed to live comfortably or to maintain a desired retirement lifestyle. Some have medical conditions and/or other expenses that prevent them from retiring until they get on a more solid foundation.

Use our budget work sheet to evaluate your family’s pre and post retirement total income and expenses. This work sheet identifies common expenses that can be shared when both partners have assets and/or are working to equitably support the household. It will also help younger married couples or those living together determine their total combined income and expenses.

We also have an extensive Retirement Cost Analysis section on our website with a free downloadable spreadsheet, specifically designed for federal retirement. It evaluates pre and post retirement expenses and income including a column for the survivor. A sample completed spreadsheet is posted on the site for your review. I developed this spreadsheet when I retired.

5) Other Consideration

Planning together makes sense and if one takes charge of the planning process it’s important to review the plan and obtain suggestions and recommended changes from your significant other.  There are many factors to consider such as which benefits to carry into retirement, when to sign up for Social Security and Medicare, the impact of Medicare Part B premiums if you elect to sign up for Part B, and so much more. Medicare Part B premiums are income adjusted and can impact your planning. Here are links to several Medicare articles that you will find informative:

• Medicare and FEHB Options – What Will You Do When You Turn 65? (Part 1)
• A Marriage of Convenience – Medicare & FEHB
• What to Consider Before Enrolling in Medicare B (Part 2)
• Changing to a Lower Cost FEHB Plan When Signing Up for Medicare (Part 3)
• How to Delay Part B Premiums

6) Best Date to retire

The end of the month works best for FERS employees in many cases. Under the FERS system your retirement begins on the first day of the following month. This is also allowed for non-voluntary CSRS retirements.

For the most part, voluntary CSRS retirements are best the first three days of the month and your annuity will start on the next day. If you retire on the 3rd of the month, you will get paid through the 3rd and your annuity will start on the following day. Your first annuity check will be for a partial month, less the three days you worked. However, if you choose to leave on the 4th or later your annuity won’t start until the first of the following month.

There are other considerations such as adding accumulated sick leave and annual leave buy back. Use the following links for more detailed guidance on this subject. One of the links is to Tammy Flanagan’s annual “Best Date to Retire” article. I consider her article the ultimate resource for this subject.

• Best Date to Retire

7) Making the Numbers Work

After the first review you may need to fine tune your analysis before taking the leap and sending in your retirement paperwork.  This isn’t unusual; a detailed review will uncover assets and benefits you simply overlooked. There are options to consider that can make the transition from workplace to retirement feasible such as: deferring retirement to a later date, possibly working part time, review and eliminate unnecessary expenses, or moving to a lower cost of living area.

It’s never too early to start your planning. When I left military service, I chose working for the FAA rather than in the same job I had in the military with the airline industry. The private sector job initially paid more. I mentioned to my wife that if I stayed in government, I could retire with 35 years of service at age 55 and my military time would count towards retirement. That was a major deciding factor for me at a very young age.

Take your time and evaluate your personal situation to make the best decision for you and your loved ones.

Helpful Retirement Planning Tools

• The Ultimate Retirement Planning Guide
• TSP Guidance
• Medicare Guide
• Social Security Guide
• Master Retiree Contact List (Important contact numbers and information)
• Annuity Calculator (FREE Excel chart estimates annuity growth)

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, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

Comments (0)|  Print This Post