fbpx

FEHB Open Season Plan Change Issues & Updates

Posted on Wednesday, 18th November 2015 by

Print This Post Print This Post
Share

I received a number of messages from active federal employees that were not able to get into Employee Express to make FEHB plan changes. Retirees using OPM’s FEHB Open Season Online are getting through and able to request hard copies of brochures and make plan changes.

Employee Express is managed by OPM and employees are able to review their payroll information and make necessary changes including to their health care enrollment. Unfortunately new cyber security patches and upgrades have slowed down the system especially during this open season where many are changing to the new Self Plus One option. Their new log-on interface has changed and they added security questions and many have not been able to get through to the help line. Some have reported wait times in excess of an hour. I understand that OPM has sent out emails to employees about these problems and they are working on the issue and have extended help desk hours.

Fortunately, FEHB Open Season Online has worked well for me personally. Yesterday I signed in and changed my plan from Blue Cross Blue Shield Basic (BCBS) Self plus Family to the GEHA Standard Self Plus One option. This saves me $107 a month in premiums.  I received an immediate online confirmation that I printed for my records and when I signed back into the website the main page shows the pending change. My daughter works for the VA and didn’t have a problem processing her FEHB plan changes through their employee payroll system last week.

I have one correction for my last article titled FEHB Self Plus One Clarification and Plan Comparison Tool where I compared BCBS to the GEHA program. Connie, one of our newsletter subscribers, wrote that GEHA does offer a prescription mail order program. If you look at page 116 of the GEHA booklet it does offer mail order for member (PPO) providers. I meant to say that a mail order program is available for GEHA member providers only. The plan comparison tool was a little confusing on this subject. It shows that a mail order program is available for PPO member pharmacies and not available for non-PPO member pharmacies. I believe in most cases enrollees will be able to find a member pharmacy in their area. Their mail order program is a good value and with their high option you pay less for your prescriptions. They also offer a three month prescription supply at local member pharmacies where others may only offer a 90 day supply through mail order.

One of the other reasons that I changed to BCBS several years ago was that GEHA only provided $250 towards the purchase of hearing aids where BCBS allowed $2,000 or more. Today GEHA provides $1,000 for hearing aids every 5 years for their standard option and up to $2,000 for their high option. When I need hearing aids down the road I’ll switch to their high option for a year.

There are many additional benefits when you are also enrolled in Medicare A and B. The GEHA plans waive all copayments, coinsurance, and deductibles except for pharmacy prescriptions. You are able to choose your own physicians, hospitals, and other health care providers as long as they accept Medicare, and you don’t need precertification for hospital stays or for certain procedures and tests such as MRIs and CT scans.

Medicare announced the new 2016 premiums recently. Next year, the standard Part B premium will be $121.80 (or higher depending on your income). Most people who get Social Security benefits will continue to pay a Part B premium of $104.90 each month. You will pay a different premium amount in 2016 if:

  • You enroll in Part B for the first time in 2016.
  • You don’t get Social Security benefits.
  • You have Medicare and Medicaid, and Medicaid pays your premiums.
  • Your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount.

If you are in 1 of these 4 groups your premiums will range from a low of $121.80 to as high as $389.80 a month based on your income. Medicare provides the new payment schedule on their web site.

Request a Retirement Benefits Summary & Analysis. Includes 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

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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

Comments (0)| Print This Post Print This Post

FEHB Self Plus One Clarification, Plan Comparison Tool, & TRICARE Update

Posted on Tuesday, 10th November 2015 by

Print This Post Print This Post
Share

This open season has created confusion for many especially issues concerning the new FEHB Self Plus One option.  OPM’s Open Season Health Benefits Guide has left many questioning whether or not they will leave their spouse without coverage when they die if they change to the Self Plus One option.  When I first discovered the discrepancy I called OPM and talked with Donna Douglas, an OPM customer service representative. She confirmed that your spouse will be covered if you are enrolled in a family plan or the self plus one option when the annuitant dies if the spouse is eligible for a survivor’s annuity. I received many email messages asking for the chapter and verse where this is stated so they will have it in writing.

Since then I found OPM’s Benefit Administration Letter 15-209 issued on October 20 that states as follows, “For surviving family members to continue FEHB coverage after an employee’s or annuitant’s death, the enrollee must have been enrolled in Self Plus One or Self and Family at the time of death. If the enrollee was enrolled in Self and Family, at least one family member must be eligible for a survivor annuity. If the enrollee was enrolled in Self Plus One, the designated family member under the Self Plus One enrollment must be eligible for a survivor annuity. If the family member designated under Self Plus One is not eligible for a survivor annuity, the enrollment cannot continue and terminates on the last day of the pay period in which the enrollee dies.”

This should clear this up for all. When an annuitant dies, his/her spouse will retain their FEHB coverage as long as the survivor is eligible for a survivor annuity.

FEHB Plan Comparison Tool

There is an easy and convenient way to compare FEHB plans including how each plan treats your enrollment if you sign up for Medicare Parts A and B. I used the FEHB Plan Comparison Tool available on OPM’s web site and found it to be very helpful. I discovered a few unique features using the comparison tool that I didn’t realize existed. Now that my wife and I are both enrolled in Medicare I wanted to know how each plan handled Medicare enrollees and the cost savings afforded by each.  I was pleasantly surprised to find this very information at the bottom of the comparison report that I ran.

I compared four plans; Blue Cross Blue Shield (BCBS) Basic, GEHA Standard, MHBP Value Basic, and the APWU High Option plans. I currently have Blue Cross and Blue Shield Self & Family Basic.  The cost will be $348.29 for the Self Plus One Basic enrollment next year while the GEHA Standard premium is $241.25, a $107.04 monthly savings. The MHBP plan costs $303.65 and the APWU is $335.98. Cost alone is not the deciding factor. We have to evaluate each plan based on the desired health care coverage at the most affordable price.

Prior to turning 65, I was enrolled in the GEHA Standard plan and changed because of the deductibles, coinsurance, and copayments. GEHA waives these fees for Medicare A and B enrollees. This information is provided in the comparison and you can confirm what each plan covers in detail for Medicare enrollees in Section 9, Coordinating benefits with Medicare, that’s published in each plan booklet.

I called the GEHA plan help line and asked them specifically what my wife and I would not have to pay now that we are enrolled in Medicare. The agent confirmed that all coinsurance, copayments and deductibles were waived except for prescriptions. The other major GEHA plan feature is that unlike the BCBS Basic plan GEHA Standard covers both PPO and Non-PPO providers.  Of course there are other differences. The Standard GEHA plan limits the prescription mail order program to member only pharmacies similar to BCBS and others however there are  different payment limits as described in their brochures. Review each plan’s brochure thoroughly to determine what best meets your needs.

The comparison tool is an excellent first step to selecting your 2016 coverage. It includes 60 rows of data for the plans compared and it highlights the key areas. After I selected two plans of interest I reviewed each plan brochure to reveal other differences. For example with the GEHA plan you have to get pre approval for some admissions to the hospital and for certain diagnostic tests.  The doctors and hospitals typically take care of the pre approval but GEHA recommends you follow up with the hospital and/or testing facility to ensure the approval was obtained.

One of the major benefits of Medicare enrollment is that many FEHB plans waive all or some coinsurance, copayments, and deductibles since they become the secondary provider. It makes sense for Medicare enrollees to search for lower cost FEHB plans that do waive the most coinsurance, copayments, and deductibles to offset the cost of their Part B premiums. In my 4 plan comparison the only plan that waived ALL of these fees and out-of-pocket expenses was the GEHA plan. BCBS waived some.

Selecting the right plan for you and yours is a very important personal choice that deserves your undivided attention this open season. The comparison I provided is only an example to show how the tool works.  Use the comparison tool and plan brochures to make the best decision for you and your family this year.

2016 TRICARE Premium Increases

TRICARE premiums for retires and military personnel that have adult children are scheduled to increase in 2016. The Department of Defense announced new TRICARE premiums for Young Adult Prime and Standard option for children ages 23-26. Premiums will increase to $228 per month for the Standard option and $306 for the Young Adult Prime option.

Request a Retirement Benefits Summary & Analysis. Includes 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

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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

Comments (9)| Print This Post Print This Post

FEHB Open Season Clarifications

Posted on Thursday, 5th November 2015 by

Print This Post Print This Post
Share

The 2016 plan brochures are now available online at OPM.  I ordered 6 plan brochures through OPM’s FEHB Open Season Online service on Monday. I requested hard copies so I can sit down and review them offline. You can also view them online. This year has generated many more questions due to the new Self Plus One option and the fact that health care costs are generally increasing while our annuities are decreasing due to inflation and no 2016 COLA. Even with escalating costs our FEHB Health Care Program is still an excellent benefit.

A number of plans are dropping out of the program in 2016. You will have to select another plan if your plan is withdrawing from the FEHB program. Some Restricted Fee for Service plans, only open only to specific individuals, are not included in the 2016 guide. If you are enrolled in a restricted plan review the plan brochures for benefit and premium information.

It was brought to my attention that on page two of this year’s Open Season Benefits Guide it states that your spouse can continue coverage after the annuitant dies only if you have self and family coverage. The brochure states “While you can cover your spouse on a family enrollment during your lifetime, in the event of your death, your spouse may continue enrollment in the FEHB Program as your survivor only if you are enrolled in self and family coverage at the time of death, and you elected to provide a survivor benefit for your spouse.”

I called OPM and talked with Donna Douglas, an OPM customer service representative. She stated that the brochure needs to be updated and your spouse will be covered if you are enrolled in either a family plan or in the self plus one option when the annuitant dies and the spouse will automatically be switched to the self only option under your current plan.

Nicholas, another newsletter reader stated that he couldn’t find where he could pay his FEHB plan premiums directly because next year his annuity will not be enough to continue premium deductions. He didn’t want to switch to a lower cost plan. According to OPM, “if your monthly annuity payment is less than the monthly premium for the plan you want, you may pay your premium directly. You can request information on electing this payment option through Open Season Online or Open Season Express”.

Couples now enrolled in a family option are not automatically changed to the Self Plus One option. You must elect this new option if desired and make the change during open season. My previous articles titled FEHB Self Plus One – A Major Disappointment, and FEHB Cost Savings and our New 2016 Leave Chart provide additional information for the new Self Plus One option.

Many of your questions will be answered in this year’s Open Season Health Benefit Guide that you will receive shortly or you can download a copy at https://retireefehb.opm.gov/Annuitant/ after you register. I downloaded my copy earlier this week.

Request a Retirement Benefits Summary & Analysis. Includes 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

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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

Comments (10)| Print This Post Print This Post

FEHB Cost Savings and our New 2016 Leave Chart

Posted on Saturday, 24th October 2015 by

Print This Post Print This Post
Share

Now that we officially aren’t receiving a COLA in 2016 and our health care costs are increasing next year, for some substantially, it’s time to cut our expenses wherever possible. Over the past few months I saved a substantial amount by reviewing our monthly bills and pairing costs. I believe I’ve saved enough to offset the higher FEHB and Medicare health insurance cost increases next year. I also posted our updated 2016 Leave Chart for active federal employees that are planning their exit and need to establish realistic target retirement dates. The new 2016 spreadsheet will also help you maximize your annuity through prudent management of your annual and sick leave balances.

My last article titled FEHB Self Plus One – A Major Disappointment  described how little overall the Self Plus One option will save us and in some cases costs more. Since publishing the article I received a number of emails about the new option.  One of our readers wondered how Blue Cross and Blue Shield (BCBS) could justify charging more than twice the cost of the Standard Self option for the Standard Self Plus One option.  The BCBS Standard Self option will cost $217.06 per month in 2016 while the Standard Self Plus One option will cost $501.17 monthly, $67.05 over the cost of two Standard Self enrollments!

Frank, a friend and former associate of mine, was talking with another retiree that has the Nationwide APWU Health Plan. He has been with them since he entered the FAA and right now he is paying $316.83 a month for the High Self and Family option plus a $35.00 a year fee to cover APWU union associate dues. In 2016 their High Self & Family option is increasing substantially to $467.13 per month. However, the Self Plus One option will only cost $335.98 per month, a $131.15 savings per month for those who convert from the APWU Family to the Self Plus One option. The APWU High Self Plus One option is $12.31 less than the BCBS Standard Self Plus One option costs, something worth exploring. The BCBS Basic coverage is limited to their in-service providers and if you go out of their network they don’t cover any of the costs.

I’m currently enrolled in the BCBS Basic Self & Family option that is increasing next year to $355.76 per month. Their Basic Self Plus One option costs $348.29 for a savings of only $7.47, still more than I was paying for the Basic Family option in 2015. Several years ago, before I signed up for Medicare at age 65, I was enrolled in the GEHA Standard Self & Family Benefit Plan. The major reasons why I changed plans was due to their higher deductible, coinsurance and copayments that I had to pay each year plus they covered less for hearing aids which I need every three to five years. Now that I’m on Medicare all of the deductibles, coinsurance, and copayments are covered by the GEHA plan as an incentive to sign up for Medicare. I’ll be ordering the GEHA, BCBS, and the APWU and other health plan brochures this year to compare coverage and benefits.

I also reviewed the HMO plan costs for my area and found the same issues, little to no cost savings for the Self Plus One option. The PA Aetna Open Access plan charges $42 more for their High Self Plus One enrollment than they do for their Family option.

If you haven’t signed up to order health plan brochures and change enrollments on OPM’s FEHB Open Season Online site, sign up this year. It’s easy to register during open season and I order plan brochures and change enrollments online. You get an immediate confirmation for plan changes plus you can view all plan information either online or they will send out hard copies via regular mail. I always order hard copies of the top three plans I’m considering so that I have a copy of the plan I select for my file.

I mentioned in the first paragraph of this article that I was able to reduce our monthly bills substantially this year in preparation for the health care cost increases and lack of COLA in 2016. You too can do the same. Here is a list of the savings I was able to achieve:

  • $62 monthly Cell phone charge decrease – My contract was up and I elected to keep my iPhone 5 and my monthly bill decreased from $120 a month to $62. I went from 700 anytime minutes and 500 text messages to unlimited for both and am paying half the price!
  • Dropped my natural gas bill by about 3% by calling the gas delivery provider and asking them to drop my rate to the new lower rate that included a 24 month lock with no penalty for canceling the agreement. I did the same with my electric company provider.
  • $50 monthly reduction in my cable TV bill. I called and advised them I was considering switching to DISH and they dropped my bill by $50 a month.
  • $12.50 monthly for AOL membership. I called AOL and reviewed plans. They decreased my payment from $25 a month to $12.50 and discovered they include free Life Lock Identity Protection and free phone technical support for any computer or tablet problems that I have. With all of the OPM and other security breaches the Life Lock membership will be welcomed.
  • $50 per month. I canceled a number of memberships and subscriptions that I used infrequently and decided I could do without the services.
  • I appealed our property taxes and this month I won the appeal and our real estate taxes dropped by about 9%, a significant monthly savings.
  • My wife and I order many products online through Amazon.com and signed up for their Prime membership. They had a one day special several months ago for only $68, normally $99. The membership includes free two day shipping for one year on all orders plus access to Amazon Video, a live streaming service similar to Netflix. We watch Amazon Video and Netflix most of the time these days. The TV commercials drive us crazy and you can’t stay focused on the programs. With Amazon Video and Netflix you get most of the major TV series commercial free and we watch entire TV series over a period of a week or so. We have saved a lot on shipping and enjoy the many other services that come with Prime membership.
  • I discovered this year while doing home improvements that Home depot offers a 10% discount for all sales at their stores for military personnel and veterans. I was wearing my USAF Veteran hat and they mentioned the discount. All I had to do was show them my driver’s license that lists my “Veteran” status. In Pennsylvania, when you go in for your driver’s license renewal, take a copy of your DD 214 discharge record with you and they will add “Veteran” to your Drivers License card under a small American flag log. The Boscov’s department stores also offer vets a 15% discount. You have to go to their customer service department and ask for a Veterans discount coupon for that day.

Request a Retirement Benefits Summary & Analysis. Includes 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

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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

Comments (0)| Print This Post Print This Post

FEHB Self Plus One – A Major Disappointment

Posted on Thursday, 1st October 2015 by

Print This Post Print This Post
Share

OPM announced that the 2016 FEHB premiums will increase an average of 6.4 percent. Enrollees, on average, will pay $5.50 more each pay period for Self Only coverage and those with Self and Family coverage will pay $19.61 more per pay period. OPM also states in their latest press release that, “for over 95% of enrollees, the enrollee share for Self Plus One will be lower than the enrollee share for Self and Family in their current plan. However, it is possible that some plans will have higher enrollee shares for Self Plus One enrollments than for Self and Family enrollments. Therefore, enrollees are encouraged to carefully review their choices before making a change; switching to Self Plus One is voluntary.”

I can understand why the costs for the Self Plus One would be higher than the Self Only option but it is difficult to understand why any plan would charge more for a Self Plus One option over a family enrollment. Look over the plans and costs carefully before making a change.

The new premium rates were released this week and I was personally very disappointed with the Self Plus One rates. There is little difference, a few dollars, from the Family rates for many plans and some plans actually charge more for the Self Plus One! Unbelievable….

The majority of retirees have Blue Cross and Blue Shield plans. My wife and I are enrolled in the nationwide Blue Cross and Blue Shield Basic Service Benefit Plan. In 2016 the Basic Self and Family rates are listed at $355.76 per month compared to $348.29 for the Self Plus One. A total savings of $7.47 cents! The new Self Plus One Blue Cross and Blue Shield Basic rate is $26.62 more than we paid last year monthly for our family plan. The Nationwide NALC Value Option plan offers the Family and Self Plus one options for the exact same price and the nationwide MHBP – Standard plan charges $30.62 more for the Self Plus One plan over their Family Plan.

With little to no COLA coming our way in 2016 and significant Medicare Part B premium increases next year for many, retirees suffer again for another year. Add to this the Federal reserve that has kept interest rates low for 9 years transferring the interest retirees would have made on their savings to the federal government so they can continue to borrow 40% of every dollar they spend! I wrote an article several years ago about the National Debt Crisis that you may find interesting. The Medicare 2016 premium increases coming will be limited under a hold harmless clause to retires that aren’t signed up for Social Security or pay an income adjusted Medicare premium. They will bear the burden of the Obama care fiasco.

With the increased costs and little if any COLA this year it is a good time to review your current health care plans to ensure they cover the services you need at a cost you can afford. The FEHB Open Season runs from November 9 through December 14, just a month or so away.  There are many things to consider including the new Self Plus One option that does offer a little relief starting in 2016 for some plans. For those turning 65 soon, and will be paying a Part B Medicare premium, you may want to consider a lower cost FEHB plan. Another consideration is the services you will need in 2016, evaluate each plan carefully to ensure they cover any special services that you may require.

Even with these disappointments we still have excellent coverage. I’ll be personally reviewing a number of plans with the prospect of changing to a lower cost provider since my wife and I both pay Medicare Part B premiums.

Request a Retirement Benefits Summary & Analysis. Includes 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

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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

Comments (9)| Print This Post Print This Post

Retirement Benefits Update

Posted on Thursday, 24th September 2015 by

Print This Post Print This Post
Share

Retirement Benefits Update

OPM recently added new helpful features to their Retirement Information and Services web site. The site continues to add new features to help annuitants and survivors with benefit and retirement issues. The latest additions provide registered users the ability to view and print 1099-R Tax Forms and a Year-to-Date Summary of Annuity Payments. Here is a list of available features that you can use to manage your retirement:

  • Change your Federal and State Income Tax Withholding
  • Change your Mailing Address
  • Change your Password
  • Establish an Allotment to an Organization
  • Request Duplicate Annuity Booklet
  • Set up a Checking or Savings Allotment
  • Sign up for Direct Deposit of your Payment
  • Update your Email Address/Opt-in to Receive Information Electronically
  • View/Print Annuity Statement/Verification of Income
  • NEW! View/Print 1099-R Tax Forms . View/Print Retirement Services Reference Card (ID Card)
  • NEW! View/Print a Year-to-Date Summary Of Payments
  • View/Print Verification of Life Insurance (FEGLI)
  • View the Status of your Case while in Interim Pay

Herbert Casey wrote an excellent article for our blog titled Connecting to OPM Retirement Services Online that walks you through the registration process. I use this service frequently. Recently I updated our estate plans and downloaded a verification of my retirement income and printed a copy of my FEGLI Life Insurance Verification for my estate binder. You can also download a copy of the annual 1099-R tax form before your mailed copy is received or to replace a lost copy.

Do Not Call National Registry

We were receiving many telemarketing calls this past year and they are annoying. I decided to add all three of our phone lines, including my cell phone number, to the National Do-Not-Call List.

There has been a lot of talk about the pending wireless 411 phone directory, similar to the traditional phone directory. According to the FCC. “Placing telemarketing calls to wireless phones is – and always has been – illegal in most cases.” They go on to say that, “it is unlawful for any person to make any call (other than a call made for emergency purposes or made with express prior consent) using any automatic telephone dialing system or any artificial or prerecorded voice message to wireless numbers. This law applies regardless of whether the number is listed on the national Do-Not-Call list.”

You can add your phone numbers to the Do-Not-Call list either by calling 1-888-382-1222 from the phone number you want to register or go online to the Federal Trade Commission’s Do-Not-Call site to register up to three lines for this service. I used the online service to register our three lines and it only took a few minutes and I received an immediate confirmation. The do-not-call rules require callers that are not exempt from the rules to stop telemarketing calls 30 days after you register a number.

If you are being bothered by telemarketers you can file a complaint online with the FCC or call them at 1-888-225-5322. You can also file complaints about unwanted telemarketing calls to your wireless phone with the FTC at http://www.ftccomplaintassistant.gov, call the FTC toll-free at 1-877-382-4357; TTY: 1-866-653-4261, or write to:

Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580

FEHB Open Season

The 2015 Open Season runs from November 10th through December 8th of this year. You will be able to select for the first time a Self Plus One election that is expected to reduce retiree’s monthly premiums. The rumor on the street is that the premium decrease may not be as much as we had originally hoped. Rates and plan brochures should be available in late October to early November.

Request a FREE Retirement Benefits Summary & Analysis. A sample analysis is available for your review. Includes 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

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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, RETIREMENT CONCERNS, SURVIVOR INFORMATION

Comments (0)| Print This Post Print This Post

TSP – Safeguarding Your Heirs Inheritance – Inherited IRAs (Part 2)

Posted on Saturday, 5th September 2015 by

Print This Post Print This Post
Share

In TSP – Ways to Safeguard Your TSP, part 1 of this series, I discussed a significant reason why a spouse that inherits a TSP account would want to transfer their TSP account to an IRA.  According to the TSP, “If a TSP beneficiary participant (Annuitant’s spouse) dies, the new beneficiary(ies) cannot continue to maintain the account in the TSP. Also, the death benefit cannot be transferred or rolled over into any type of IRA or plan.” If you are the surviving spouse and inherit your husband or wife’s TSP account, when you die your beneficiaries must claim the full amount as income the year that you die.

I previously discussed what a surviving spouse needs to consider before moving their TSP to an IRA in Survivors Beware – The TSP Trap and in a follow up article I talked about The TSP Advantages (Should I Stay or Go).

If the annuitant or the surviving spouse transfers his/her TSP account to an IRA the heirs can convert their share of the IRA to an “Inherited IRA” which has many benefits. According to Vanguard, “A nonspouse beneficiary has four options when receiving an IRA inheritance: inheriting the IRA, taking a lump-sum distribution, disclaiming the IRA, or electing Vanguard’s pass-through service. Each option has its own tax consequences and some options are irrevocable.”

Most either elect the Inherited IRA or take a lump sum if they need the cash now. An Inherited IRA allows heirs to grow the assets tax-deferred. Vanguard explains that, “When you inherit an IRA, you take the IRA account as a beneficiary (for your benefit) and withdraw from it over a fixed period of time without a tax penalty, regardless of age. Even if you’re under age 59½, you will not be subject to an “early withdrawal” penalty from the IRS.”

Inherited IRAs if not handled properly can trigger large tax bills and you could lose your tax-deferred status. This is especially true for nonspouse heirs and you must take the following actions to maintain your tax deferred status.

  • Properly title your inherited IRA account
  • Take the required minimum distributions
  • Divide the IRA when there are multiple beneficiaries
  • Don’t Ignore charity or non-person beneficiaries

Properly Title Your Inherited IRA account

Titling of an inherited IRA varies between IRA custodians. It is essential that the deceased IRA owner’s name remains on the inherited IRA account and the account title must indicate that it is an inherited IRA by either using the word “beneficiary” or variation there of indicating it is an inherited IRA. Here are three samples of inherited IRA titles:

  • Jane Doe (deceased August 1, 2015) IRA for the benefit of John Doe
  • David Smith, deceased, for the benefit of Jennifer Smith
  • David Smith, beneficiary Jennifer Smith

As long as the deceased IRA owner’s name stays on the account there is no set format. However, it must be clear that the IRA is inherited. It’s important for the beneficiary of the inherited IRA to name successor beneficiaries for their account.

Take the required minimum distributions

Traditional IRAs require the owners of the account to take required minimum distributions at the age of 70 . Non spousal beneficiaries are able to spread out their inherited IRA payouts over their life time and must take their first RMD the year following the year the owner died regardless of the beneficiary’s age. You will pay tax on the distributions from deductible contributions and earnings for traditional IRAs. Non spousal beneficiaries must also take RMDs from inherited ROTH accounts however withdrawals are tax free.

There is a significant penalty for not taking an RMD, a 50% excise tax on the amount that should have been distributed that year. According to the IRS, ” Beneficiaries of retirement accounts and IRAs calculate RMDs using the Single Life Table (Table I, Appendix B, Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)). The table shows a life expectancy based on the beneficiary’s age. The account balance is divided by this life expectancy to determine the first RMD. The life expectancy is reduced by one for each subsequent year.” There are ways to avoid the excise tax if you miss a RMD however you should look at all options before deciding on how to proceed.

Properly divide the IRA

Each non spousal beneficiary should establish their own unique inherited IRA account and titled appropriately as noted above in most cases. For example, we have two children and they are 6 years apart. If they set up a joint account for both beneficiaries they would have to use my son’s age, our oldest child, to calculate the RMD. Another more dramatic example would be if you left your IRA to an older sibling, that for this example is age 70, and to your only child, a daughter age 25. If the account remains intact and isn’t divided the daughter in this example would have to withdraw far more because of the siblings age.

Assuming that you left $200,000 to your heirs, each getting $100,000 you would determine the RMD of each heir by dividing the account balance at the end of 2016 by the appropriate life expectancy from Table I (Single Life Expectancy) in Appendix B. The daughter’s division factor would be 58.2 and your siblings 17! In this example the RMD for your sibling would be $5,882 per year and your daughter’s would only be $1,718. Your daughter would be able to accumulate more tax deferred income and investment growth over her life time and still receive an annual cash benefit. Essentially, the younger the beneficiary the less the account is drawn down and the longer it has to accumulate wealth.

Don’t Ignore charity or non-person beneficiaries

If the IRA you are inheriting has multiple beneficiaries that include charities or other entities other than a person there are strict payout procedures and time lines to follow. These types of beneficiaries must be paid their inheritance by no later than September 30, of year after the owner’s death according to the IRS. The penalty for not complying with the payout is that all of the beneficiaries are excluded from taking withdrawals over their life time in accordance with Table 1 mentioned above. The account must be liquidated (emptied) within 5 years if the original owner of the account died before taking RMDs. If he died after taking his first RMD beneficiaries must take RMDs based on the deceased’s life expectancy tables.

There are also rules to follow if a trust is a beneficiary. You should talk with your attorney, financial planner, or IRA custodian to ensure you follow all of the rules. A copy of the trust must be sent to the custodian of the IRA by October 31 of the following year after the owner died. If the owner died March 1, 2015 the trust document must be sent to the IRA custodian by October 30 of 2016. The penalty for not doing this is the same as mentioned above for charities.

Disclaiming Your Interest

For tax planning and other purposes some choose to disclaim their inherited interest. According to Fidelity Investments, “If you decline to accept all or part of the IRA assets you are entitled to, they will pass to the other eligible beneficiaries. If no other beneficiaries exist, the assets will pass in accordance with the IRA provider’s contractual defaults. For example, with a Fidelity IRA the assets will pass to the original IRA owner’s surviving spouse and, if none, to the estate. A decision to disclaim IRA assets must be made within nine months of the original IRA owner’s death and before you take possession of the assets. This is an irrevocable decision. Therefore, as with any tax-related matter, it’s critical that you consult a tax adviser or attorney before disclaiming IRA assets.”

Custodians

Most custodians of inherited IRAs offer counseling and will help you set up your inherited IRA account. You can elect to establish your IRA at any custodian that you choose. Don’t hesitate to contact them for guidance when setting up your inherited IRA. Most large brokerage houses also will set up an account for you and they provide guidance on these matters, talk with their specialists if you have any questions about your inheritance. Here are two of the largest IRA Custodians that can provide guidance.

Conclusion

The problem with converting your easily managed TSP fund to an IRA is finding suitable fund replacements that will replicate the TSP funds that we now have available. The final article in this series, part 3, will discuss indexed mutual fund and ETF alternatives to the various TSP funds.

Another consideration is can you do it on your own or do you need a financial adviser to help you along the way. Read my article titled Have You Considered Hiring a Financial Adviser to help you decide what road to take.

Retiree Job Center Update

Check out our Job Center if you are interested in finding employment in retirement. Employers looking to recruit federal retirees and those soon to retire post job vacancies on our site. Recently Sterling Bank Services in Texas is looking for part time Alarm Inspectors and ATM Technicians If you are approaching retirement or a recent retiree with a security clearance visit the Security Clearance jobs board to find lucrative employment opportunities.

Request a Retirement Benefits Summary & Analysis. Includes 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

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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, SURVIVOR INFORMATION

Comments (0)| Print This Post Print This Post

2016 FEGLI Open Season – Take Advantage of this Opportunity

Posted on Thursday, 13th August 2015 by

Print This Post Print This Post
Share

Even if you think, like I did in 2004 when the last open season was offered, that you have sufficient coverage you may be surprised at what you discover. I wish I knew then what I know now about these attractive low cost options.

OPM recently announced that a 2016 Federal Employees Group Life Insurance (FEGLI) Open Season will be available to change your coverage starting September 1, 2016 through September 30, 2016. If you are approaching retirement this is an excellent time to take advantage of low cost insurance options that you may not have thought of when you first signed up. FEGLI rate changes will also take effect the first pay period beginning on or after January 1, 2016. Employees’ basic insurance premiums won’t change and most rates for Option A, B, and C will decrease. Rates will increase for older Option A, B and C age bands and the 50% reduction and the no reduction rates will increase for retirees.

Active federal employees can increase their coverage at any time however they must take a physical to qualify. They can also add coverage for Qualifying Life Events. The benefit of increasing coverage during an open season is that you aren’t required to take a physical. Unfortunately, retirees can’t increase their coverage even during an open season, they only have the option, at any time, to reduce their coverage.

The Federal Register announcement states , “Open Seasons are one method by which healthy individuals can be attracted to join and reduce the risk profile of the program. Some less healthy individuals may elect coverage during Open Seasons. To mitigate this risk, the effective date for employees in active pay status who make an Open Season election would be delayed one full year to October 1, 2017, subject to FEGLI law and regulation, including applicable pay and duty status requirements.”

Now is a good time for all participants to evaluate their insurance needs and to take advantage of low cost insurance FEGLI options for you and your family. Basic and Options A, and C are reasonable. Option B, multiples, can get very expensive as you age and many seek to replace B with lower cost private insurance providers. If you do this be sure to check out the insurance provider’s rating first.

CAUTION: Prior to my retirement, in my mid forties, I was approached by an insurance company that offered to beat the FEGLI rates. Their projections showed considerable cost savings as I aged and I decided to drop Option A, and the Family Part C Option. The insurance company, due to lower than projected interest rates, reduced the insurance coverage unless we agreed to more than double our premiums! Fortunately I kept Basic coverage which at age 65 is free if you elect the 75% reduction. Option A and C have similar features. You can add or increase Part C family coverage and the inexpensive Option A this open season if desired. Family coverage can be kept for as long as you need it. For more information on Basic, Part A, B, and C coverage read the article titled FEGLI Insurance Options (Part 2) – Options A, B & C.

In the above mentioned article I state,” After retirement you can’t increase coverage, you can only reduce your coverage. If you remotely think you or your spouse will need insurance it’s best to elect that coverage now and if you run into a bind down the road you can always reduce multiples or certain options altogether if desired. If you do decided to obtain quotes from private insurance companies for Part B alternatives consider keeping your Basic, Part A and C options. They may try to talk you into dropping all of your FEGLI coverage and they can be convincing. From my perspective the FEGLI insurance costs for Basic, A, and C are reasonable and depending on what you elect in retirement two of the three are FREE when you reach age 65.”

The last FEGLI Open Season was in 2004 and prior to that 1999. Open seasons are few and far between. Take the time NOW to evaluate your insurance needs and take advantage of this opportunity.

Request a Retirement Benefits Summary & Analysis. Includes 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

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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, SURVIVOR INFORMATION

Comments (1)| Print This Post Print This Post

Terms Of Use