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Notice of Annuity Adjustment, and 1099 R Tax Forms

Posted on Thursday, 7th January 2021 by

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Corrections:  I misquoted the 2021 COLA in last week’s article titled “1% Pay Raise Approved for 2021 – GS Pay Charts Available;” it is 1.3% not 1.6%  The blog article was corrected.

Generally, in late December federal retirees receive a Notice of Annuity Adjustment that provides abundant information for annuitants and their survivors. The mailed statements were apparently delayed this year and I still haven’t received a copy. However, I signed on to OPM Services Online and printed out my January 2021 Annuity Statement, and reviewed my Annual Summary of Payments report. Whenever your annuity payment is modified, for whatever reasons, OPM sends out a Notice of Annuity Adjustment outlining the changes to your monthly payment. This year’s statement includes a 1.3% COLA, and they will send out another statement to show the health care premium changes for 2021.


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This document provides annuity and benefit information for you and your family. It includes the annuitant’s Claim number, the amount withheld for each item deducted from your annuity payment, and your gross and net payment. This document specifies the monthly survivor annuity currently payable in the event of the annuitant’s death and includes an annual Notice of Survivor Annuity Election Rights. You will also find OPM contact information and they include a recommendation to register and log on to their online services. The online Annuity Statement also lists the survivor’s monthly annuity payment.

This form provides instructions on how to make benefit elections such as how to apply for a survivor election for a spouse you marry after retirement, survivor annuity elections for a former spouse, and others.

I elected a full survivor’s annuity for my wife when I retired as a CSRS employee. My wife will receive 55% of my full annuity when I die. The full FERS survivor’s annuity is 50%. I divided the surviving spousal monthly annuity listed on this document by my gross monthly benefit; my wife will receive 60% of what I was receiving while alive. When I elected a full annuity, my annuity was reduced by 10%. What many don’t realize is that the surviving spouse of a CSRS retiree receives 55% of the unreduced annuity amount or in my case 60% of what I was receiving monthly while alive. Many believe the surviving spouse receives 55% of what the federal annuitant was receiving prior to death. This is good information to have when finalizing your estate plans.

I keep the Notice of Annuity Adjustments that I receive in my retirement folder and include a copy in our estate binder along with OPM’s annuity and FEGLI insurance verification forms that OPM sends out upon request or you can download then online. This is an important document and needs to be readily available if you or your survivor need to contact OPM or require benefit clarifications.

I receive many questions each year from retirees and survivors that misplaced their CSA retirement Claim Number and need to contact OPM. If you file this form in your retirement planning or estate file this information will be readily available when needed.

1099 Tax Forms Coming Soon

Federal annuitants typically don’t receive their 1099R Tax Forms until the end of January or the beginning of February by regular mail. If you are registered to use OPM’s Retirement Services Website your 1099 R is often available earlier for download. I generally download a copy of my 1099 R to start my tax return early.

To get a head start on your taxes visit OPM’s Online Services later this month and download a copy. You must be registered to use the site. If you aren’t registered read the article titled “Connect to OPM’s Online Services” to understand the registration process and sign up. It doesn’t take long however you may have to wait for your password to be sent via regular US mail and that can take several weeks. If you haven’t signed up yet do it now. The site offers retired federal employees many helpful options such as changing your direct deposit information, address changes, 1099 R copies, download annuity and insurance verification documents, and much more.

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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 Planning Tools

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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, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

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1% Pay Raise Approved for 2021 – GS Pay Charts Available

Posted on Friday, 1st January 2021 by

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Those planning to retire soon will benefit somewhat from the small 1% federal employee’s pay raise this year. Primarily, your annual leave buy back will be at the new pay rate starting the first pay period of 2021. If you plan on staying another year or longer the raise will increase your high three average earnings that is used to determine your monthly annuity. Retirees ended up with a 1.3% COLA this year, a bit more than the federal employees increase, still not enough considering inflation and especially higher health care costs.

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

The President signed an Executive Order in December.  The 1% pay raise 2021 charts are now available along with all special rates and wage grade salaries.

The pay raise will take effect with the first full pay period of 2021. We published the new pay table on January 1, including the locality pay area definitions outlining the pay rates for all regions nationwide.

The rates of basic pay or salaries of the statutory pay systems are included. The general categories are listed below:

  • The General Schedule
  • The Foreign Service Schedule
  • schedules for the Veterans Health Administration of the Department of Veterans Affairs
  • Senior Executive Service
  • Certain Executive, Legislative, and Judicial Salaries
  • The Executive Schedule

OPM was fast to react to the Presidential Order and released the new tables in late December.

Following are links to the new 2021 locality pay tables:

Click here for: Special Rates Tables

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, SURVIVOR INFORMATION

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2020 Reflections – Life Goes On

Posted on Saturday, 19th December 2020 by

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The year started off with a bang: market up, unemployment the lowest it had been in decades, and hopes were high for the new year.  That changed course abruptly when COVID overtook life as we knew it, yet we persevered and are on the road to recovery at years end thanks to the Warp Speed initiative. We suffered through a brutal election and still survived; there is much to be thankful for.

 

Retirees were caught in the middle due to our higher risk factors and many nursing homes were decimated by this disease.  Over 42 percent of all COVID deaths were at nursing homes and assisted living facilities! In some states like New York, the death rate at these facilities were even higher.  I can’t understand how the politicians and so-called experts running the show thought it would be appropriate to send COVID patients back to their nursing home or assisted living facility. I wonder if their mothers, fathers, and grandparents resided there if they would have pushed this narrative. Oh, I forgot, they can afford private nursing care for their loved ones! These same Politicians implore us to forgo family and friends during the holidays, and are caught violating their own edicts. OK, I know what you are thinking, I should know they expect us to do what they say, not what they do! They are special, truly privileged and unaccountable for their own behavior. I understand!!! 

Now that vaccines are available, we expect that our most vulnerable: the elderly, health care and frontline workers will be the first in line for vaccination.  If they do otherwise, God help them. Our most vulnerable MUST be protected first.

Our small businesses, restaurants, and even churches are on the brink of destruction, many won’t survive. These small businesses are the mom-and-pop enterprises that have sustained their families and the surrounding communities for years.  They know how to do things right but aren’t given a chance to earn a living.

When my wife and I go to the big box stores they are functioning, social distancing isn’t followed as one might expect in crowded isles, etc. Sure, all are wearing masks, many with it below their nose to breath. Yet, a small business and their employees are robbed of their livelihood even when so called science says the risks are minimal. I marvel at the hypocrisy when I hear the mayor of New York shut down restaurants that account for around 2 percent of infections knowing full well that over 40% of the infections are from indoor social activity.  No one knows just how many of those infections are coming from the big box stores!

I started writing this article with something entirely different in mind to close out the year, just can’t help myself these days.

I sincerely want to thank my site visitors, newsletter subscribers, and blog followers. Over the past three years we’ve had over 7 million visit our web sites and view just under 9 million pages and our blog received over 621,000 visits. I sincerely appreciate all of you for your patronage, you are truly appreciated and thank you so much for following me all of these years, some for as many as two decades.

My best to you and yours this holiday season, may you have a healthy, safe and prosperous New Year.

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 BENEFITS / INSURANCE, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, WELLNESS / HEALTH

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Out-Of-Pocket (OOP) Costs – FEHB with Medicare

Posted on Wednesday, 9th December 2020 by

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John read my article titled “Changes for the 2021 FEHB Open Season – Save Some Serious Money” and asked what my wife’s OPP costs were for the surgeries I mentioned. Many want to know if what our FEHB plans pay is enough to offset and warrant paying Part B premiums?

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

This is a great question and one I could easily answer. I keep all of the GEHA Explanation of Benefits and Medicare’s Summary Notices. My wife and I are enrolled in GEHA Self Plus One standard plan. A summary of the total costs and what we paid for her two eye surgeries and treatment in 2020 follows:

  • Service Provider Charges = $57.440
  • Medicare Allowed & Paid = $40,516
  • GEHA Payments = $2,202
  • Member Responsibility = $0

That was just for my wife this past year, I too had my share of medical care and paid $0 except for prescription copayments.

If you don’t have secondary health insurance the costs under Medicare A and B are significant. In 2020 the deductible was $198 ($202 in 2021) for Part B medical services. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment (dme).

When hospitalized under Part A you must pay $1,408 for each benefit period and then coinsurance for extended days in the hospital. For example, days 61-90: $352 ($371 in 2021) coinsurance per day of each benefit period.

Without secondary coverage either through the FEHB program, Medicare Advantage or others, costs would be prohibitive to say the least.  In my wife’s case our costs would have been around $8,000 and more when adding in the deductible and other costs.

Another key factor is how well your plan responds when things go wrong. My wife’s first surgery failed and we were fortunate to have GEHA and medical providers we trusted to do whatever was necessary to get things turned around.

There is much to consider when deciding on what plans are best for you and your family. Out of Pocket costs are a major consideration.

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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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End of 2021 FEHB Open Season Advice

Posted on Monday, 7th December 2020 by

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As the 2021 FEHB Open Season draws to a close Monday, December 14th, there’s still time to look for a new plan or confirm your existing plan is the right choice. Here are a few things to consider.

  • Enrollment status – 90% of the time self-plus-one enrollment is cheaper than self-family enrollment, but not always. Check your plan’s premiums to confirm you’re enrolled in the less costly enrollment option. For example, if you happen to be in NALC High, you can save $726 switching from self-plus-one to self-family enrollment
  • Plan changes – The enrollee share of the premium increased 4.9% in 2021. Many plans had no benefit changes, but some did. Will your doctors still be in your plan next year? Will your prescription drugs still be on the formulary? Even if you’re not considering switching plans, there’s still homework to be done this Open Season to make sure there won’t be any significant changes to your existing plan.
  • Medicare Advantage – Several Medicare Advantage plans have the lowest estimated yearly costs in Checkbook’s Guide to Health Plans for Federal Employees for all available FEHB plans in low, average, and high health care expense years. United Advantage Retiree Advantage and Aetna Advantage Medicare Advantage are both available in the lower 48 states. Both have partial Medicare Part B premium reimbursement and have $0 cost sharing for most health-care expenses, except prescription drugs. Both allow you to see out-of-network doctors if the provider participates with Medicare. A couple in Charleston, SC, with average health-care expenses could save $1780 in estimated yearly costs with United Advantage Retiree Advantage compared to Blue Cross Basic. If you live in one of the 15 states with a United Choice plan, the savings can be even more dramatic. The United Choice plans have the same $0 cost sharing except for prescription drugs, but they reimburse almost the entire Medicare Part B premium. A couple in the Washington, D.C. area could save $3000 with United Choice Primary Retiree Advantage compared to Blue Cross Basic. To enroll in any of these Medicare Advantage plans you must first enroll in the regular FEHB plan version, have Medicare Parts A and B, and then sign up with either UnitedHealthcare (844-481-8821) or Aetna (866-241-0262).
  • Medicare Part B – Whether to sign up for Medicare Part B depends on a few things. First, if you fall into one of the high-income categories (more than $88,000 individual or $176,000 couple), Medicare Part B is of limited value due to the increase in the Part B premium. Second, some plans have better Medicare coordination benefits than others, including some plans that have partial Part B premium reimbursement. If you’re with a plan that doesn’t coordinate well with Medicare, you might reconsider whether having Part B is the right choice for you.

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

Several of our previous articles compared the new FEHB MA plans to GEHA Standard and Blue Cross Blue Shield Basic Self-Plus-One plans and another provides a comprehensive guide to this years Open Sesason. Review these for additional assistance with making your choices:

Medicare Impact on FEHB Plans

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

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

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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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Plan Comparisons – Aetna MA to GEHA Standard and BCBS Basic

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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New Medicare Advantage Options Available to Federal Retirees

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.

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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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Changes for the 2021 FEHB Open Season and How to Save Some Serious Money

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.

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  • 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.

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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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