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FEHB Open Season Prep + Qualifying Life Events

Posted on Sunday, 3rd September 2017 by

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The Federal Employees Health Benefits (FEHB) Open season runs from November 13 through December 11 of this year. The 2018 provider brochures should be uploaded soon and when they are released we will present a summary of the 2018 FEHB open season changes and premium increases. Hopefully, the premiums won’t skyrocket like they have and are in the private exchanges.

The vast majority of active federal employees and annuitants appreciate their FEHB coverage. It’s important to choose plans that cover your current and anticipated healthcare needs for the upcoming year. During an open season it’s easy to just let it ride as they say. It’s working for me now so why put time and energy into researching other plans!  A normal response considering how hectic life is today.

In preparation for this open season take time to contemplate you and your family’s overall health for the upcoming year. Will the kids need braces or other dental procedures like root canals and dentures that come with high coinsurance, deductable, and copayments? Are you or your spouse scheduled for a major surgical procedure that your current provider doesn’t cover sufficiently? Are hearing aids in your future? If so the coverage between providers is huge! Some pay next to nothing while others pay the entire $2,000 or more in costs. My GEHA FEHB provider increased their hearing aid payments from $500 every 3 years to $2,000 last year.

Each plan brochure provides a Summary of Benefits behind the Index in the back of the guide for a quick comparison. Then turn to Section 5 (Benefits). Review and compare needed services between providers. For example, in the 2017 GEHA guide, hearing services are listed on page 44. They list what they will pay and the services covered. Look for plans that provide the most overall coverage in the areas needed. For those turning 65 and on Medicare, Medicare becomes your primary healthcare provider, review what your FEHB plan covers in Section 9 of each brochure. Often times if you sign up for Medicare Part A and B your FEHB plans cover the majority of your deductibles, copayments, and coinsurance. Don’t let the size of the booklets intimidate you. All provider brochures are required to use the same outline and format.

Lots of questions and if you don’t have sufficient coverage you and your family could suffer financially.  This is especially true for those turning 65 and signing up for Medicare, a few missteps here can be catastrophic as I explained in previous articles.

Now is a good time to make a cursory list of what healthcare services you anticipate needing in 2018. I know this sound simplistic; how can anyone know what illness or disease will impact their family. There are practical considerations, are your children approaching the age when braces are needed? If you are younger and anticipating starting a family you will need excellent maternity care or possibly fertility treatments that not all providers offer. if you are approaching retirement or retired, typically the older you are the more you need comprehensive medical services. I can attest to that first hand. If you or a family member have a known medical condition or your family’s medical history points in that direction it would be good to have the services needed available and affordable.

The new plan brochures will be available within the next month or so. Order copies or review them on line to compare costs and services. A little effort now could save you and your family money and aggravation next year.

Qualifying Life Events

It’s important to know that outside of open season, you can enroll in the FEHB Program, change your enrollment, change to Self Only or cancel coverage only in connection with certain qualifying life events (QLEs).  The primary QLEs that permit enrollment or change in enrollment are:

A change in family status:

  • Marriage
  • Birth or adoption of a child
  • Acquisition of a foster child
  • Legal separation
  • Divorce, and
  • Death of a spouse or dependent

If any of these events happen in your life contact OPM to initiate the appropriate changes. There are certain time limits such as annuitants have 60 days to change their FEHB coverage after a move and there are other considerations. Review the article titled Qualifying Life Events – Don’t Lose Your Benefits to learn more about making FEHB changes due to a qualifying life event.

Other events that impact your FEHB coverage include electing to go on leave without pay, being called up for active duty, OWCP status, turning age 65, etc. There are lots of things to consider, explore the impact of any changes you make to ensure you don’t lose coverage prematurely especially when you become eligible for Medicare at age 65.  Review CAUTION – Don’t Lose Your FEHB Coverage that discusses the pitfalls you must avoid when selecting Medicare plans. OPM also provides QLE details for each event on their web site.

Observations

Automation does tend to make many things easier. However, … that benefit comes with a learning curve, software updates, and constant contact and availability through iphones, email, and tons of social media in the foreground instead of the background of our lives where it belongs. Everywhere you go everyone is on their cell phones and tablets and these devices have invaded our homes as well.

Can’t be too far from our iphone, got to review Facebook every hour to see who is doing what and where!

It is disturbing when you are talking to someone and they are either reading their messages or typing like crazy on their iphone and you seem to be the distraction! Sometimes you just long for the days when you had a house phone and nothing else. When you simply turned on the TV and it came on instead of having to reboot it or wait for a smart TV software update to load. I vividly recall those peaceful times.

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

Helpful Retirement Planning Tools

Distribute these FREE tools to others that are planning their retirement

Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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

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2017 FEHB Open Season, Retiree Jobs Update, and what’s Coming Next

Posted on Saturday, 19th August 2017 by

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The 2017 FEHB open season will run from November 13 through December 11, 2017.  Each year Open Season runs from the Monday of the second full workweek in November through the Monday of the second full workweek in December. Health care services providers are required to submit benefit and rate proposals for the contract term beginning January 1, 2018 on or before May 31, 2017. OPM anticipates completing negotiations by mid August so we should have updates and new rates shortly. When they are published I will send out a message to all subscribers.

OPM encouraged all carriers to thoroughly evaluate options this year with a focus on improving affordability, reducing costs, improving the quality of care, and protecting the health of their enrolled populations. Any proposed benefit enhancements must be offset by proposed reductions so that premiums are not increased due to benefit changes.

OPM asked all providers this year to focus on the themes of:

  • Managing Prescription Drugs;
  • Ensuring Access to Care;
  • Population Health;
  • Alternative Payment Models; and
  • Plan Performance Assessment.

From my perspective I can’t imagine that premiums won’t increase; I can only hope that they won’t be excessive. At least we can look forward to a small COLA increase this year that may be enough to offset any healthcare premium increases.

Retiree Jobs Update

Employers continue to aggressively recruit federal retirees and those soon to retire. A number of companies recently posted job vacancies on our Jobs Board and you will find new listings for part and full time listings at locations across the country. One company is looking for part time and full time electricians in Palm Desert, California, warehouse jobs in Columbia, MD,  customer service staff at Hilton Inns, sales and administrative positions at various locations. Other positions are posted for jobs including several work from home options. Visit our Jobs Board for complete listings with contact information.

Private companies, contractors, and state government departments use our Jobs Board to hire skilled federal retirees for part and full time positions nationwide. Many opportunities exist for those looking to supplement their retirement income or to start a second career. We provide this free job listing service to companies that are seeking to hire experienced retired federal workers.

What’s Coming Next

I recently purchased two Ancestry DNA kits for my wife and I. I’ve been curious for years about my heritage especially since my father died when I was one and really never knew any of his side of the family. My wife’s mother told her frequently that she had Cherokee Indian ancestors and we wanted to know more about that as well. We should find out soon. We received notification that our DNA samples had arrived and will be processed in 6 to 8 week. When we get the results I’ll discuss the findings and describe just how easy it was to collect the DNA samples and follow the process. I couldn’t pass up the 20% off sale and in some cases they are offering free shipping.

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

Helpful Retirement Planning Tools

Distribute these FREE tools to others that are planning their retirement

Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

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Veterans… Sign Up NOW to Shop at Military Exchanges!

Posted on Friday, 11th August 2017 by

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Less than half of our newsletter subscribers are veterans. If this article isn’t of interest to you personally please forward to a veteran that you know or to a family member that served.

Starting November 11, 2017, Veterans Day, all honorably discharged veterans will be able to shop online at all military exchanges. I’ve already shopped online at the exchanges because I was selected for the Beta test program and am impressed with how efficient and useful this service is.

To qualify for participation in the Veteran’s online shopping benefit, you must be an honorably discharged Veteran of the United States Armed Forces. This includes the United States Air Force, Army, Navy, Marines and Coast Guard as well as the Air Force Reserve, Army Reserve, Navy Reserve, Marine Corps Reserve, Coast Guard Reserve and National Guard.

This is quite a benefit considering that you will receive exclusive military pricing on name brand products, all purchases are tax free, with free shipping options. Veterans will also be able to apply for a STAR credit card and all purchases made with the card receive free shipping! The STAR card also earns reward points that can be applied to future purchases. You can also use any other major credit card however only purchases over $49 receive free shipping. Still a great deal.  Purchases from the exchanges can save veterans a lot of money when you consider there are no taxes and in most cases free shipping. They also match competitor prices.

Your first step is to verify your military service at https://vetverify.org. They ask you for your date of birth, name, and the last four digits of your Social Security number. I received my verification confirmation immediately. According to the VetVerify site, “Only authorized customers can shop online exchanges. To validate eligibility, VetVerify needs the last four digits of your social security number, date of birth and last name to compare against the Defense Manpower Data Center (DMDC) database. If a match is not found with this information, then a full social security number will be requested to conduct a more detailed search.” Your military  records may not have been digitized yet so they recommend you begin the verification process now.

This benefit does not provide access to on-base exchanges, you will only be able to shop online at the following sites:

I was able to register and log into the Army and Air Force Exchange site after receiving my verification from VetVerify.org. I called their customer service and they said that all who register and are verified will be able to shop on their site starting November 11th.  When I tried to register for the Navy Exchange access they currently require a DOD ID number to register. This requirement should be removed by November.

There are some limitations; you can’t purchase certain items such as cigarettes or alcohol, military uniforms, guns or ammunition.

During my registration process I was randomly selected for their Beta program and was able to make my first purchase on shopmyexchange.com today. I didn’t apply for their STAR credit card yet so I did have to pay a small shipping fee of $4.95 because the order was less than $49. I ordered three men’s tee shirts, two Levi and one that says USAF Grandpa on it. They were only $8.00 each and I paid NO state 7% sales tax. The site is easy to navigate, well designed, has many bargains listed, and the order was a snap to enter and process using one of my personal credit cards. I look forward to buying more from the exchanges especially around the holidays.

If you are a veteran sign up now, they made the veteran verification and exchange site registration process easy and I can attest first hand as to how nice it is to actually buy from the exchanges again. It’s been 44 years since I was discharged from active duty and last visited the BX.

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

Helpful Retirement Planning Tools

Distribute these FREE tools to others that are planning their retirement

Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS

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Then and Now Plus CD Rates on the Rise

Posted on Thursday, 27th July 2017 by

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I vividly recall visiting my house parents room in 1959. My brother and I were in a home for boys and our house parents had just purchased a console color TV, the first any of us had seen, and it had a remote control! Each time she changed the channel you could hear the motor activate, quit an invention for its time.

Times and circumstances have changed considerably since then. I’ve always been a history buff and I believe I missed my calling; I would have enjoyed digging up the past and exploring historic sites around the world had I had the opportunity. In one of my favorite books, John Adams by  David McCullough, a passage on page 32 states, “Adams’ father and mother lived no differently than had their fathers and mothers, or those who preceded them.” How reassuring that must have been to know that what lay ahead essentially is what came before you, little change and certainly far less stress and worry.

Today, each new invention or automation improvement keeps us on our toes and we certainly can’t predict the future based on what transpired in the past like in John Adams time. Can you imagine telling our parents about a smart phone… Hey mom, I have a portable phone in my pocket, it’s also a TV… YES mom I can watch TV shows on my phone. Oh by the way it’s also a camera, movie camera, audio recorder, radio, calculator, watch, timer, GPS, and heart monitor. I can also pay our bills with it, deposit checks, and can use it to buy things at the store!!! Do you want one mom?

That’s only a fraction of what the iphone can and does for hundreds of millions of us today. What can we expect tomorrow? How about autonomous – self driving – cars and trucks, space travel, solar panels powering homes, 3-D printing, and factories filled with robots… not filled with working people like in the past! WOW, our parents and grandparents would be amazed. We experience never ending changes in a constantly revolving world. It’s no wonder why we often want to step off the train and just appreciate our surroundings, marvel at the simpler things in life like our beautiful grandchildren, and reflect on just how hard it was for our parents that had little and yet did everything to nurture those who have spurred this evolution.

Today life, in America, is so much better for everyone that works to make the things they desire happen. Circumstances won’t change overnight, like so many insist on today, it takes time, motivation, and a never ending desire to get to where you want to be. It is basically up to the individual and no one can make it happen for you, you have to be the catalyst in the equation… If you aren’t willing to put in the time and effort don’t expect miracles. They only happen in the movies.  It’s your choice and you will have to live with and accept the consequences either way.

My father died in 1951 leaving my mother at age 37 with four small children, me being the youngest at a year and a half. My mother had a 6th grade education and struggled to make ends meet. I recently found a letter from Social Security in the early 1950s showing that she received a $30 monthly benefit for each child after my father died. We survived on that along with whatever work my mother could find which included working in a diaper laundry, envelop factory, housekeeping, and operating the old fashioned elevators you see in the 1930s movies to selling cosmetics door to door. I was, by necessity, a latchkey kid long before that term came in fashion.

Many would consider my early life a disadvantage, for me it was motivating, rewarding, and well worth the sacrifices that we encountered. Starting out with less builds character and the desire to succeed at whatever you do. My mother, even with meager means did without everything to support her four children. She would save for months to buy things that we needed for school and I don’t recall us ever eating out, going to a movie theater, or taking vacations. We had what we needed, the love of a selfless mother and the necessities of life. Could many survive on that today?  I say, who could ask for more.

I’m getting a little off track, yet I love to wander and muse about life in general. I started out marveling about a TV remote! What brought this bout of nostalgia on was a recent Comcast Xfinity cable upgrade.  We were losing service for brief periods each week and our TV picture wasn’t what it should be with HD service. Plus our bill was too high. I called Comcast about my concerns and they reduced our monthly bill, upgraded us to their new higher speed service, and changed out our main box and remote.

The new remote is voice activated and with a verbal command you can change  channels, record a program, search for movies, etc. Now all we have to do is hold the talk button and say the channel or service we want. It works great and the new HD box provides a true HD picture, a huge improvement over the old CRT screens we grew up with.  Another HUGE advantage is that if you find a movie that you like that has already started you can press info and then select “Play From Beginning.” What an advantage. In the past you would have to wait for the next airing that could be months away. They also included STARS, HBO, and Showtime with our new 2 year contract! Call your cable provider and ask them to reduce your monthly bill and you too may be pleasantly surprised.

For over two years now my wife and I have abandoned prime TV – CBS, NBC, and ABC – to streaming services such as Netflix, Amazon Movies (Prime), on demand, and premium channels. We became tired of the never ending stream of commercials, sometimes as many as 9 or more before returning to the program. After the endless stream of commercials ran you forgot the plot or what you were even watching. The main advantage is NO COMMERCIALS for the most part plus you have the availability of an almost unlimited amount of content. We typically watch an entire uninterrupted series. For example we watched “Party of Five,” a 1990s 7 season series and it took us six weeks or so to view the 140 episodes and again without any commercials. We watched the excellent series Midwifes on Netflix and we are now finishing the Game of Thrones from HBO. The Game of Thrones has a lot of nudity in it so be aware.  I and my wife would be embarrassed to watch this series with our adult children!

CD Rates Rising

Slowly but surely CD rates are rising selectively. You have to watch for special rates. The Clearview Federal Credit Union in Pittsburgh, PA is offering a 2% APY yield on 20-month certificates of deposit with a minimum investment of $1,000. It still seems low but by today’s standards 2% is better than you will get from almost any other financial institution. Some online banks are offering rates between 1 and 2% but they are few and far between. Check with your local credit union and if you are in Pennsylvania call the Clearview Federal Credit Union at 1-800-926-0003 to find an office in your area.

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

Helpful Retirement Planning Tools

Distribute these FREE tools to others that are planning their retirement

Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

Posted in FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

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2018 COLA, FEHB Suspension, and Jobs Updates

Posted on Wednesday, 19th July 2017 by

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The 2018 COLA increase is projected to be approximately 2.1%.  The Senior Citizen’s League’s June 2017 report, “Based on consumer price index (CPI) data through April of 2017, TSCL estimates that the COLA for 2018 may be 2.1 percent — significantly higher than in recent years, which has averaged only 1% since 2012. This estimate could still change, however, as there are several months to go before all the data is in.” The 2018 projected increase for the average Social Security monthly benefit of $1,320 would amount to $27.72 per month, the CSRS average monthly benefit would increase to $3,661 up $75.30, while the FERS average benefit would increase to $1,576, up $33.

Federal Employees Health Benefits (FEHB) Suspension Considerations

My last article titled Caution – Don’t Lose Your FEHB Coverage talked about the difficulties some have encountered when they tried to suspend their FEHB coverage. It also outlined what options are permitted for OPM to approve a suspension. An untimely move out of the FEHB program could be financially catastrophic for your family and considerable research is needed before making this move. Here are some things to consider before leaving the FEHB program:




  1. The first thing to determine – before opting out of the FEHB program – is whether OPM allows you to suspend your FEHB coverage for the new insurance plan you intend to enroll in. Call OPM first before enrolling in a new plan to confirm they will allow you to suspend your FEHB coverage if desired. You are able to suspend coverage if you enroll in an Medicare Advantage Plan (Part C).
  2. It’s important to know the difference between the Medicare Advantage (Part C) insurance option and private sector Medicare Supplemental Insurance policies.
  3. Once you leave the FEHB program, if you are married, instead of having just one plan, such as Self Plus One in the FEHB program, you will need individual plans for both partners. Medicare is based on an individual’s eligibility and each person on Medicare has their own policy for Parts A, B, C and D; whatever combination of plans they desire.
  4. If you decide to sign up for a Medicare Supplement Insurance (MEDIGAP) plan, sold by private insurance companies, you can’t suspend your FEHB, your only option is to cancel it. Once you cancel FEHB you aren’t permitted to return to the FEHB plan.
    1. The only way you can apply for a Medigap policy is if you have Medicare A & B coverage.
    2. Medigap polices sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join the Medicare Prescription Drug Plan (Part D).
    3. According to ehealthinsurance.com, “the timing of your enrollment may affect your coverage choices and costs. In general, the best time to enroll in a Medicare Supplement plan is during your Medigap Open Enrollment Period. This is the six-month period that starts on the first day of the month that you are both 65 or older and enrolled in Medicare Part B. Throughout this period, you can enroll in any Medigap plan offered in your service area with guaranteed issue. This means that insurance companies aren’t allowed to use your medical history or pre-existing conditions as the basis for charging you more for coverage or denying you altogether.“
  5. Individuals that sign up for a Medicare Advantage (MA) Plan will be able to suspend their FEHB plan however there are a number of issues to be aware of. First, if you now have a FEHB Self + One or a Family Plan and your spouse isn’t age 65 and on Medicare your spouse will lose their FEHB coverage.
    1. Timing is critical. Open season periods overlap but are different for the FEHB and Medicare Advantage (MA) Plans. For example, the 2016 FEHB open season ran from November 14th through December 12th whereas the MA plan open season always runs from October 15 through December 7th of every year.

Another major issue that needs your attention is prescription drug coverage. FEHB prescription coverage is generous in most cases compared to Part D Medicare coverage. The only way to get prescription drug coverage if you purchase a Medicare Supplement (Medigap) plan is through Medicare Part D. Many Medicare Advantage (MA) plans (Part C) include prescription drugs.  If you are thinking of joining an MA plan talk to the provider to ensure they include this coverage. The rules on what options you have to pick up drug coverage varies depending on what type MA plan you join.

One of our readers who transferred to a Medigap policy and left FEHB was blindsided by the difference in coverage. Her husband requires two injections montly for a serious illness and their FEHB plan covered the majority of the $1500 needed for each treatment. Under Medicare Part D she was advised that Medicare would only cover three shots and  then she would have to pick up the entire cost for the remainder of the year! Because she had enrolled in a Medigap policy and canceled her FEHB coverage she wasn’t able to return to the FEHB program during the next open season. With a Medigap policy OPM will not permit you to suspend your FEHB coverage, your only option is to cancel it. I know I’ve mentioned this several times however it is so important to understand this critical fact.

Fortunately for our reader she was able to enter a program with the company that produces the drugs and received a significant discount.

Another factor to consider is that once you decide to sign up for either the MA (Medicare Part C) or a Medigap Supplement plan each party carries their own policy based on Medicare eligibility. Therefore, unlike the FEHB plans that allow Self + One and Family enrollments you will now have individual policies (coverage) for each election you make. For example, a couple under any of the FEHB plans is covered under one policy and that covers everything from hospital and doctor care to basic dental and prescription drugs. That same couple would have to enroll in numerous Medicare plans between them for the same coverage under the MA and Medigap programs. Each party in the MA program would require Medicare part A, B, C, and possibly D.  Many MA programs do provide prescription drug Coverage. Those in the Medigap program would require Medicare part A, B, and Part D Prescription Coverage plus pay the premiums for their private supplemental insurance.

Once you turn 65 and sign up for Medicare, it becomes your primary insurer. You will need to know exactly what your current FEHB provider pays once you sign up for Medicare Part A and B. Most pay coinsurance, deductibles and copayments once they become the secondary insurer except for prescription drug copayments. Since turning 65 and signing up for Medicare A and B I’ve paid no coinsurance, deductibles and copayments, my GEHA plan picks this up except for prescription drugs. This isn’t always the case, some FEHB plans DO NOT pay more of your out-of-pocket expenses when you sign up for Medicare. This is why the reader that first contacted me about this issue decided to change to anther plan.  She assumed that her plan, after signing up for Medicare A & B, would automatically pick up these costs, they didn’t and she was stuck with several large and recurring copayments and deductible costs. Review section 9 of your FEHB benefit brochure carefully, it describes what they will pick up once you sign up for Medicare. Call your FEHB provider if you have any questions about what they will cover after they become the secondary provider.

Many private insurance companies sell Medicare Supplemental (Medigap) polices including AARP and others. Their salesmen often push hard to get you to sign up. I would guess that most know little to nothing about the Federal Employees Health Benefits (FEHB) program and its advantages. There primary goal is the sale and commissions that they earn for signing you up. Ask them specific questions about how their plan is different and more advantageous than the FEHB plans you have to choose from. Take nothing for granted and do your own research using FEHB plan brochures to confirm what you were told.

Proceed with caution when changing plans and especially if you are thinking about leaving the FEHB program. Many that sign up for Medicare change to a lower cost FEHB plan since they now must pay Part B Medicare premiums and many if not most of the FEHB plans cover coinsurance, copayments, and deductibles once you are on Medicare.  Other articles about what to do when you become eligible for medicare are listed under Helpful Retirement Planning Tools below. I changed to the lower cost Standard GEHA Self + One plan when I turned 65 and they pay for the majority of coinsurance, copayments and deductibles that I’ve encountered since. There are many FEHB plans available, check them out to see if they meet your needs before leaving the program to ensure you aren’t going to regret it later.

Retiree Jobs Update

Employers recruiting federal retirees and those soon to retire post job vacancies on our Jobs Board. A good number of new part and full time listings were posted recently. One company is looking for part time sales representatives in Palm Beach Florida and another is recruiting federal benefits educators to conduct seminars throughout the U.S.  Flash Technology Group is hiring Hardware Support or Maintenance Technicians for their offices in Tampa Florida and Colorado Springs. Other positions are posted for various jobs including several work from home options.

Private companies, contractors, and state government departments use our Jobs Board to hire skilled federal retirees for part and full time positions nationwide. Many opportunities exist for those looking to supplement their retirement income or to start a second career. We provide this free job listing service to companies that are seeking to hire experienced retired federal workers.

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

Helpful Retirement Planning Tools

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Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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

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CAUTION – Don’t Lose Your FEHB Coverage

Posted on Saturday, 15th July 2017 by

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Kathleen, one of our retirement planning newsletter subscribers wasn’t able to suspend her FEHB coverage after signing up for a Medicare Supplement Plan earlier this year. There are specific requirements for suspending FEHB coverage. Basically, you can only suspend your FEHB coverage if you sign up for a Medicare Advantage Plan (Part C), TRICARE, TRICARE for Life, Peace Corps, Medicaid or CHAMPVA plans. You can cancel your coverage anytime if desired.

In my article titled Medicare & FEHB Options I discuss the difference between Original Medicare (Part A & B) and the Medicare Advantage (Part C) programs. The article states, “if you are considering a Medicare Advantage Plan, Part C, instead of the Original Plan, DON’T drop your FEHB; instead suspend with proof of signing up for the Medicare Advantage Plan so you can get your FEHB back the next open season if the coverage doesn’t work out.”   

If you elect a Medicare Supplement Plan, which is totally different from the Part C Medicare Advantage Program, your only option is to cancel your FEHB, they won’t let you suspend coverage. I believe many assume that FEHB coverage could be suspended regardless of the plan you choose and that misconception can cause you considerable grief and additional healthcare costs.

Medicare Supplement Policies are sold by private companies to pay some of the copayments, coinsurance, and deductibles that Original Medicare (A & B) doesn’t pay. According to Medicare, “Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare. You’ll get your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage Plan and not Original Medicare.”




OPM states, “If you provide documentation to your retirement system that you are suspending your FEHB coverage to enroll in a Medicare Advantage plan, you may reenroll in FEHB if you later lose or cancel your Medicare Advantage plan coverage. However, you must wait until the next Open Season to reenroll in FEHB, unless you involuntarily lose your coverage under the Medicare Advantage plan (including because the plan is discontinued or because you move outside its service area). In this case, you may reenroll from 31 days before to 60 days after you lose the Medicare Advantage plan coverage, and your reenrollment in FEHB will be effective the day after the Medicare Advantage plan coverage ends (or ended).”

In Kathleen’s situation she and her husband originally declined Medicare Part B several years ago and earlier this year decided to apply for Medicare Part B. They felt compelled to sign up for Part B to avoid any additional penalties; each year you delay enrollment, your monthly premium increases 10%! After signing up for Part B they applied for Part D prescription coverage and enrolled in a Medicare Supplement Plan that met their needs. When she submitted the Health Benefits Election Form to OPM it was denied because they didn’t sign up for a Medicare Advantage Program. OPM typically sends out a Health Benefits Cancelation/Suspension Confirmation form so that you fully understand the impact of your decision.

Now they are considering canceling their FEHB coverage since OPM refused to suspend their coverage. If they don’t cancel they will be paying excessive monthly premiums to include FEHB, Medicare Supplement plans, Part B and Part D for both husband and wife! There health care premiums will exceed a $1,000 a month if they keep their FEHB plan.

If you are considering leaving the FEHB network contact OPM first to confirm that you will be able to suspend your FEHB coverage and reapply at a later date if desired. The advantages of the FEHB program are significant and there are many providers available to meet most of your needs. Typically you don’t need to sign up for Medicare prescription drug coverage (Part D) since most FEHB plans have generous prescription drug coverage. Weigh your options carefully before making a decision to change.

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

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Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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

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Ready for Retirement?

Posted on Tuesday, 11th July 2017 by

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How to determine if you are ready for retirement …there are many areas to consider and explore. First and foremost, can you afford it? Also, what about healthcare and what do you plan to do with your time? These are a few questions along with a host of others that will be discussed within this article and are addressed in detail on Federal Retirement Planning, a comprehensive and free online federal employee’s retirement planning guide.  In addition, opportunities on how to ‘get ready’ for retirement will be explained; income, healthcare and opportunities for turning hobbies into part-time work.

First, you will want to jot down several goals and expectations on what your ‘retirement living’ will consist of…whether it is closer to tackling a bucket list, visiting old friends around the globe, taking up a new hobby, or working part-time, you will want to have maybe 5 or so reference points that will serve as your retirement aspirations.  Next, you will certainly want to examine your assets, current and future, so as to see how those top ~5 goals will be achieved or met. Take into consideration any additional funding for hobbies or skills you will need to acquire during retirement and how they will be funded.

Health is next on the list; really take a good look at how your health is; now is the time for any preventative trips to the doctors, dentists, etc. that you may have been putting off. You want to ensure you are as healthy as possible moving into this new chapter of your life. Establishing a support group should  be another task on your checklist since it is an important part of easing your transition. Be sure to include friends and family in your retirement and engage and interact with them during this time. Finally, be prepared for the unexpected; things will happen, and if you have followed many of these suggestions and followed the guidance on the Federal Employees Retirement Guide, you will be better equipped to handle them.

Finances

Your FERS or CSRS annuity will be the center of your planning initiatives and are often sufficient to provide a substantial percentage, if not all, of your needs factoring in Social Security and your TSP savings account. This assumption is based on your total net worth which include assets minus liabilities. The fewer liabilities – debts – that you have going into retirement the better. Those working in the private sector often have a greater challenge because most don’t retire with a fixed cost of living adjusted life time annuity like federal employees enjoy. Most retirees require assets between 10-16 times their annual salary to retire comfortably and maintain their current standard of living. If you expect to continue to work part-time, for example, you can get by with less. Librarians, medical assistants, bookkeepers, teachers, etc. can earn a comfortable wage in retirement. Perhaps a hobby can be turned into a profit; research these opportunities beforehand to determine what works best for you and your family.

Use CNN Money’s helpful retirement calculators to determine how much you will need in retirement to live comfortably, whether or not you can afford to retire early and much more. There are 9 calculators for various aspects of retirement.  These calculators use your current savings and projected retirement plan contributions, savings and investments and then lets you know where you will stand financially on your target retirement date. Look at your debt and really determine what you have, what you can work to payoff (soon), and what you are willing to live on as a budget. Determine how your medical insurance will be paid and what additional expenses you will incur (kids college, weddings, etc.) so that you can include them as part of your budget.

With a good support system, great planning and realistic expectations, retirement can be a fantastic new chapter in your life; it’s never too late (or too early) to start planning for a comfortable future.

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

References:

Helpful Retirement Planning Tools

Distribute these FREE tools to others that are planning their retirement

Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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FERS & CSRS Retirements – Looking in the Rear View Mirror

Posted on Thursday, 6th July 2017 by

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It’s hard to believe that only 2% of the active workforce is CSRS retirement eligible! When I was hired in the early 1970s all were CSRS eligible. A sea change from those days. Now FERS will soon be the only game in town and we don’t know what changes will come down the road for new hires. There is talk of eliminated the fixed annuity FERS option for new hires and if that comes to pass FERS will sunset 30 to 40 years down the road as well.

The July edition of the NARFE magazine published the latest annuity statistics. There are a total of 2,625,261 annuitants for the federal and postal systems of which 533,884 are survivor annuitants.  Add to this active federal and postal workers and you have a total annuitant and employee count of 5,361,427!  The average monthly employee annuity was $3,586 ($31,032 per year) for CSRS and $1,392 ($16,704 per year) for FERS in 2016, a survivor’s average monthly annuity was $1,575 ($18,900 per year) for CSRS and $557 ($6,684 per year) for FERS for that same period. Fortunately many also have the TSP plan and Social Security to add to their monthly income in retirement plus personal savings and investments to draw from. Many CSRS annuitants aren’t eligible for Social Security because they didn’t work 40 quarters in the private sector and pay into the Social Security System.

According to the Social Security website, “The average monthly Social Security retirement benefit for January 2016 was $1,341. The amount changes monthly.”  For FERS annuitants adding this to their annuity takes them up to an average of $2,733 a month, closer to what CSRS annuitants take home. Adding the more generous FERS Thrift savings accounts, CSRS employees were limited to a 5% contribution with no government match if memory serves me, FERS employees total take home in retirement could easily exceed that of the CSRS retiree. FERS employees were permitted to sock away the maximum each year and they received a 5%  match if they contributed at least 5% to the TSP.

Financial planners often recommend that FERS employees contribute as much as possible to their TSP plan for a number of reasons. First, you get an immediate tax break because TSP contributions are tax deferred until withdrawal years later. Secondly, the compounded interest earned will grow your balance significantly over time and your retirement nest egg can and will be substantial at the time of retirement if you manage it properly.

The key phrase is “manage it properly.” Too few know little about finances in general and that can dramatically reduce your retirement savings when you really need it. If you are unfamiliar with finances or not interested in learning about investing a target date fund will manage the mix of funds for you.

My daughter is a federal employee and she asked me to help with her fund selection. I suggested the L-2040 target date fund. Each year she adds half of her annual pay increase to her TSP contributions and intends to continue with this approach until she reaches the maximum amount allowed.  I advised her to ignore the stock market’s erratic behavior and let the target date fund balance her account every quarter to a more conservative mix until she retires around 2040. By the time Sabrina retires approximately 85 percent of her entire account will be in the G Fund and high quality private sector bond fund.  Currently the G Fund is the only fund that I’m aware of that is guaranteed never to decrease in value! Can’t ask for more than that.

Both retirement systems have their advantages and no matter what plan you are in a federal retirement far exceeds what most in the private sector can expect. If FERS employees pay attention to their THRIFT account and opt to fund it to the maximum many will potentially have hundreds of thousands available for them when they need it.  Even as a CSRS annuitant I can attest to the advantages of the TSP. My account balance, even though I was only able to contribute 5% of my annual earnings, has increased to over three times my total contributions. I elected to keep my TSP active for a number of reasons that I discussed in an earlier article titled, The TSP Advantage (Show I Stay or Go).

Now that we are midway through another year it’s a good time to review your retirement options, possibly request annuity estimates from HR for several target dates, and perform a comprehensive retirement cost analysis. Take a breather from your hectic schedule and sit down with your significant others and talk about retirement and your expectations.

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

Helpful Retirement Planning Tools

Distribute these FREE tools to others that are planning their retirement

Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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