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Is it Time to Update Your Designated Beneficiary Forms?

Posted on Wednesday, 27th November 2013 by

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OPM recently added a new feature to their Retiree Service Online site at https://www.servicesonline.opm.gov/. You can now download and print out a current copy of your FEGLI Verification of Life Insurance (VOLI) Coverage.  You can also print out duplicate 1099s for 2013 on this site when they are released.  Previously you had to request a copy by phone.  If you haven’t registered to use this site yet contact OPM at 1-888-767-6738 and they will send your initial temporary password in the mail. You will need your retirement claim number and the password provided by OPM to register for this service.

Unfortunately FEGLI Beneficiary  designations are not available online and if you are not sure who you designated call OPM or fill out a new SF 2823 Designation of Beneficiary form.  If you wish to change beneficiaries or if any of your beneficiaries moved since you originally completed this form send in an updated form. This is also important for the TSP, CSRS, and FERS Civil Service Retirement System designated beneficiaries.

I retired 9 years ago this December and OPM’s announcement reminded me to review copies of the designated beneficiary forms that I retained with my retirement application and for other insurance policies and financial accounts . All had to be updated because of designated beneficiary address and name changes over the years.  You should also update beneficiary forms for your bank accounts, insurance policies, and investment accounts of all types including savings bonds that you may have.

The SF 2808 and SF-3102 forms are needed if balances remain from your retirement when an annuitant dies before all of their contributions were paid out. These two Designation of Beneficiary forms are used to designate who is to receive a lump-sum payment which may become payable after an annuitant’s death. They do not affect the right of any person who is eligible for survivor annuity benefits.

Click Designation of Beneficiary Forms to obtain copies and detailed instructions for completing the  following form

  • SF-2808 (CSRS lump sum payment that may become payable after death)
  • SF-2823 (FEGLI Designation of Beneficiary)
  • SF-3102  (FERS lump sum payment that may become payable after death)
  • TSP-3 (Designation of Beneficiary)

You do not need to make a designation if you are satisfied with the order of precedence the law provides and you do not have a certified designation on file.  That order of precedence follows:

  1. To the widow or widower. 
  2. If your widow(er) is deceased, to your child or children, with the share of any deceased child distributed equally among the descendants of that child.
  3. If none of the above, to your parents in equal shares or the entire amount to the surviving parent.
  4. If none of the above, to the executor or administrator of your estate.
  5. If none of the above, to the next of kin under the laws of the State in which you live at the time of your death.

Payment of a lump sum will be made to the first person or persons listed above who are alive on the day you die.

Review your beneficiary elections with your annual estate plan review to keep things up-to-date. Estate plan contacts, insurance policy information, and investments must be updated to keep your plan current. Estate planning guidance, including how to compile a comprehensive estate plan binder, is available on our site.

Request a Retirement Benefits Summary & Analysis from a local adviser.  Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator 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 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.

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

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FEHB Open Season Online Update

Posted on Monday, 18th November 2013 by

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Another year is almost over! The older I get the faster the days go by and at an alarming rate. Christmas is around the corner and It seems like I just completed our 2012 taxes and sure enough I’m starting to compile information and purchasing Turbo Tax for 2013.

Each year I register for OPM’s FEHB Open Season Online at https://retireefehb.opm.gov and review the open season changes. This service is reserved for annuitants and you can either review the plan brochures online or have them send copies in the mail. This year I requested 9 brochures and may end up changing plans since I’ll turn 65 next year and will be eligible for Medicare. Active federal workers that are retiring soon can print out a copy of this article so they will have this information available when they leave. The two websites listed in this article help annuitants manage their retirement.

Many private sector insurers are canceling coverage or health insurance premiums are increasing dramatically because of the Affordable Care Act.  All FEHB plans qualify as minimum essential coverage (MEC) and meet the Patient Protection and Affordable Care Act’s individual shared responsibility requirement for each individual covered under the FEHB plan.  Costs are increasing an average of 4% this year; not bad considering the horror stories we hear about plan costs increasing 30 to 100 percent or more in the private sector.

Open Season Online allows you to chat with a customer service representative using Live Help, send a webmail message which will be answered by a customer service representative, and review and have hard copies of health plan brochures sent to you via regular mail.

In order to access Open Season Online, you must register every year. To create a user ID and password you will need your annuity claim number (CSA or CSF), and your social security number or email address that is on file with OPM. Once you register or sign in you can perform many functions including enrollment changes, review all of the information you will need to evaluate plans, review dependent information,  change your address, view transaction history, and use OPM’s health care plan comparison tool.  You can access the site 24/7 except for scheduled maintenance on Sundays from 12:00 a.m. to 9:00 a.m. Central Time. If you experience difficulties using Open Season Online you can call Open Season Express at their toll-free number, 1-800-332-9798, to complete your transaction.

I also go to https://www.servicesonline.opm.gov during open season to update my password and this year you can receive your IRS 1099R, annual mailer, and other informational alerts electronically. This site also allows you to print out Annuity statements, set up allotments, and much more.

Request a FREE Retirement Benefits Summary & Analysis from a local adviser. 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, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator 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 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.

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

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2014 Leave Record & Scheduling Spreadsheet Plus FEHB Same-Sex Coverage

Posted on Friday, 8th November 2013 by

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Our 2014 Leave Record & Scheduling Spreadsheet is now available for download to your desktop. Use it to automatically track your leave balances in all categories, annotate your schedule, and to establish realistic retirement target dates to maximize your benefits when you leave. This FREE spreadsheet automatically calculates your accrued annual and sick leave balances, comp time, and credit hours. Forward the spreadsheet to others in your organization and feel free to post it or to place a link to the spreadsheet on your agency’s web site.

FEHB Same-Sex Coverage

Married domestic partners need to be aware of their new options under the FEHB Program family member eligibility rules. These rules extend to annuitants as well.

In accordance with OPM’s Benefits Administration Letter # 13-203, dated July  17, 2013 and as a result of the Supreme Court’s decision, legally married same-sex spouses will now be eligible family members under a Self and Family enrollment. Coverage is available to a legally married same-sex spouse of a Federal employee or annuitant, regardless of his or her state of residency.

This decision does not extend coverage to registered domestic partners or individuals in civil unions. In addition, the children of same-sex marriages will be treated in the same manner as those of opposite-sex marriages and will be eligible family members according to the same eligibility guidelines. This includes coverage for children of same-sex spouses as stepchildren.

OPM Example:

Tonya is an FEHB enrollee. She and her same-sex spouse, Sally, have two children together but Tonya is not biologically related to the children nor has she adopted them. Based on the eligibility changes, Tonya can cover Sally and their children under her Self and Family enrollment. If Tonya already has a Self and Family enrollment, she may contact her carrier directly to notify it of her newly eligible family members. If Tonya has a Self Only enrollment, she will need to complete an SF 2809 to change her enrollment to Self and Family.

From this point forward, the word “spouse” in any OPM documentation pertaining to the programs discussed in the subject Benefits Administration Letter refers to both same and opposite-sex spouses, the word “marriage” refers to both same and opposite-sex marriages, and the word “child” refers to children of both same and opposite-sex marriages. If there is a need to differentiate between same and opposite-sex spouses, their marriages or child(ren), OPM will do so explicitly.

Request a FREE Retirement Benefits Summary & Analysis from a local adviser. 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, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator 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 or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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2014 COLA & Military Deposit Rule Changes

Posted on Friday, 1st November 2013 by

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Federal retirees, social security recipients, and military retirees will receive a 1.5% COLA next year!  This is the lowest COLA since 1985 not counting the two years we did without one. Based on the average retiree’s annuity the 2014 COLA will add approximately $48 monthly for CSRS retirees and $18 for FERS retirees age 62 or older.  It’s hard to believe inflation was only 1.5% considering all of the increases my wife and I have experienced first hand in just about everything we purchased this year plus our FEHB health insurance premiums are scheduled to increase an average of 4.4% for 2014. About the only thing that I see going down is our standard of living these days however that is another story of and in itself.

The rules for federal employees who wish to apply their military time towards retirement have changed.  OPM issued a Benefits Administration Letter this year that discontinued the practice of allowing employees to complete payment of their Post-1956 Military Service Deposits after separation. They did allow one exception for administrative error that would have prevented the employee from completing their deposit prior to separation.

Previously you could submit military deposit paperwork with your retirement forms and make payment to your agency prior to adjudication of your retirement claim. however now you must initiate the paperwork and complete payment to your agency prior to separating.  It can take months to receive pay estimates from military finance centers, make payment to the agency, and receive confirmation of payment. Start the process long before you retire if you decide a military deposit makes sense to you.

The Benefits Administrative Letter states that “The retirement applications for CSRS and FERS, SF 2801 and SF 3107 respectively have since been revised and the OPM form 1515 has been discontinued. Both applications now clearly state the deposit must be completed before separation.”   These forms are available for download with revision dates of June 2007 and May 2012 respectively.  It appears that instead of issuing new revised forms OPM simply added the statement (You must make this deposit to your agency. You cannot pay OPM after you retire) to the existing forms under Schedule A – Military Service Information, item number 2. 

Because the applications clearly state the fact that deposits must be completed before separation, OPM will not grant an exception for employees who were counseled but have not yet separated. These employees must be informed of the correct procedures regarding the payment of military deposits.

Many who served in the military have questions about the impact, if any, that a deposit will have on their military benefits. If you make a military deposit, there is no effect on your other military benefits such as medical benefits, base access, commissary, or VA benefits, including any disability payments from the VA. It only affects (active duty) retired military pay; you cannot receive 2 separate retirements (military and civilian) for the exact same period of service. Reserve or National Guard members under Title 32 can collect both a federal civil service retirement and a Reserve or National Guard retirement.

Other Military Deposit Resources:

 

Request a FREE Retirement Benefits Summary & Analysis from a local adviser. 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, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator 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 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

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Borrowing to Pay the Mortgage

Posted on Thursday, 17th October 2013 by

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I would say that anyone who has to borrow to pay their mortgage is in trouble, wouldn’t you! Can you imagine having to borrow not only to pay the mortgage but to just make the interest payments on your credit cards and other debt? Fortunately the government shutdown is over and everyone should be back to work shortly. However, the bad news is that with all of the hype over passing a clean continuing resolution (CR) and allowing government to continue to borrow 40 cents of every dollar it spends can’t be good for any of us long term. If a typical family tried to do this they would be bankrupt within the year and lenders would toss them out of their office. I wrote an article titled “Is This Coming Your Way & The National Debt Crisis” last year that describes the debt crisis by comparing it to a typical family’s income and expenses that you may find revealing.

Government should be setting an example of sound fiscal policy not of reckless abandonment and the sad fact of the matter is that most just don’t realize just how dire this situation is. If government doesn’t get spending under control and focus on putting people back to work the negative impacts will ripple through all of society.  The glimmer of hope that came out of this past several weeks is that the President stated many times that if congress passed a clean CR and extended the borrowing limit he would be willing to sit down and negotiate on any subject. I hope that he and congress follow through prior to early next year when this all could happen again.

The 16 day shutdown is like a shot across the bow of a ship; a near miss never less a shock to the system. I read several stories about federal employees that were furloughed struggling without their biweekly pay coming in on time. I went through a number of shutdowns while in federal service and was sent home as non essential twice.

One story focused on a family of four where the federal worker was in his 50s with kids in College and bills coming in that he couldn’t pay on time. The family was living pay check to pay check and struggling to get by during this 2 week period. I can certainly understand the stress this family was going through. Fortunately, furloughed federal workers will eventually receive back pay and in effect received extra paid days off. Not bad considering that many in the private sector simply were laid off without any hope of back pay.

What these stories highlight is that many simply aren’t prepared for the unexpected and have little to no savings set aside for a rainy day. Sure we have secure jobs in the federal sector but that doesn’t mean we shouldn’t be fugal, live within our means, and save for that rainy day that will eventually come our way. All workers, especially those in their 50s and close to retirement, should have savings set aside for emergencies and retirement, other than their THRIFT plan, even with kids in school. That is why retirement and financial planning is so critical and should be addressed early in ones career. If you were in the same boat as the story line relayed above it’s time to get serious about financial planning strategies and retirement planning.

A fellow worker once said to me that he didn’t have to put anything aside for retirement because of his CSRS annuity and his THRIFT Plan savings. Not so, sure the CSRS annuity can be generous however you never know what is coming your way and the costs of everything is increasing. I mentioned in a recent column that in the past few months our home owners and car insurance premiums increased over 30% and our real estate taxes were just raised 30% as well. That was unexpected and a huge hit especially for someone on a fixed annuity and/or Social Security considering that retirees are expecting up to a 1.5% COLA next year!  They just announced that federal employees will receive a 1% pay increase in January.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator 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 or human resource professional where appropriate. Neither the publishe

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

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Making Retirement Work For YOU

Posted on Saturday, 5th October 2013 by

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I retired in 2005 at age 55, almost 9 years ago! Honestly, I wouldn’t have retired if I didn’t have 35+ years of service at the time and an avocation, my business to fall back on.  Had I stayed I would be retiring with 45 years and a maxed out annuity.

What I enjoy about hosting my federal employees retirement planning site is talking with so many retirees that are truly making retirement work for them and their families. Take Frank for instance, he retired around the time I did and since then has traveled extensively recently returning from a three week tour of Europe staying two weeks in Italy at a friend’s villa and then took a one week bus tour of Rome, Pisa, Verona, and Venice. His next adventure will take him to Portugal! Frank and his family truly enjoy traveling and he spends a lot of time with family and friends .

Nancy, our Travel Forum host, loves cruises and frequently visits the west coast, Hawaii, and Europe plus she is planning an African safari.  Another recent retiree, Janet, a friend from my old job in Pittsburgh, traveled to London with her husband to attend the Pittsburgh Steelers’ game. What a way to start off retirement.    

On the flip side there are those who retire to grow a small business or non-profit. Randy Baldwin did just that, his business Just Write Laser Engraving specializes in unusual and unique gifts for retirees, fund raisers, corporate, military, and others. He devotes full time to his business. He also had a side business while still in government that made ink pens out of about any material. He made three pen sets from a wood hammer handle that was the only thing that I had from my father who died in 1951 when I was a year and a half. I display the pen set in my office along with a FAA retiree logo coffee mug from his current company.  

Another excellent example of a federal retiree’s entrepreneurial spirit is Ann Ozuna a former federal personnel specialist and our HR and Divorce Forum host. Ann took an early retirement in 1996 and founded Personnel Solutions Federal Benefits Counseling located online at www.TheFederalRetirementLady.com. She assists individuals in understanding all their federal retirement options as well as individuals and attorneys with interpreting the OPM divorce rules.

Many retirees devote time to their church and charities while others pursue every hobby imaginable including gardening, cooking, coin collecting, sports, watch and clock collecting, you name it and a retiree is enjoying their time and they consider it time well spent.  Anything other than work for this group and I can understand that. I’ve been working non-stop since my early teens, over 50 years of continuous non-interrupted work. Why do I do it? Basically I still enjoy the challenge of getting up each morning and coming to work and today that means going downstairs to my home office after I make a pot of coffee for my wife and take out the dog.  However, that being said there is a time to slow down and simplify one’s life and turning 65 is a major milestone that is fast approaching for me. 

One of my co-workers, many years ago, planned to retire early and devote his time to outdoor activities from fishing to farming. Unfortunately health issues got in the way and he was never able to fulfill his dreams.  The key to a successful retirement is planning and knowing upfront before leaving what you intend to do and are able to do, and if you are financially, emotionally, and physically prepared for your new adventure. Take time to plan your exit and use our retirement planning site to help you through the process.

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, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator 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 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 FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SURVIVOR INFORMATION, Travel

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FEHB and the Unexpected Consequences of the Affordable Health Care Act

Posted on Thursday, 12th September 2013 by

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This is a follow-up to my last article which talked about the potential impact the new health care legislation may have on our FEHB plans. I was going to title this article “The Unintended Consequences of the Affordable Health Care Act” however that really isn’t the case. Those who drafted this plan knew full well the consequences even though few if any of our representatives read the plan including Nancy Pelosi who famously stated in a press conference that “we have to pass the law to find out what is in it.”  It is the workers and retirees that find this unexpected and not sure which direction this will take, the impact on our health care services, and how much it is going to cost all of us.

Unfortunately new laws are often drafted through second and third parties that have vested interest and agenda and receive little scrutiny.  I personally down loaded the law and the language was confusing to say the least and open ended leaving the details for new agencies to develop. Now thousands of pages of regulations have been written as the plans are being implemented and modified as problems and issues arise.  

There is much uncertainty among all groups concerning the impact going forward as evidenced by delays, granted exceptions, and objections that arise. Three major unions that supported implementation stated in July that “the Affordable Health Care Act will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”  The administration is considering offering subsidies to union members and if that does happen the costs for the Affordable Care Act will increase dramatically. Subsidies are reserved for low income families in the new law.   

I understand that many in the Congress that must join public exchanges this year and are eligible for retirement are considering retiring now so they can retain their FEHB coverage after they leave. It’s too soon to tell how many will take advantage of that option.  The downside that I discussed in “The FEHB Program and the Affordable Care Act” is that as employees leave the FEHB program the pool of ensured drops and costs go up. Even if all federal employees are moved to local public exchanges federal retirees could still remain in the FEHB program. However, the FEHB program would lose over half of their participants, more than 2 million workers.  Remaining retirees could conceivably see their FEHB costs double or triple in a few short years.  

Recently over 300 companies including IBM, Dupont, and Caterpillar announced that they are moving Medicare eligible retirees to privately run local exchanges to cut costs. The companies are providing fixed payments through health retirement accounts that retirees can use to buy coverage. The privately run exchanges such as Extend Health offer polices from various insures similar to the FEHB program with a broad range of options, deductibles, and features. The privately run exchanges are not affiliated with the public exchanges that start in October and are administered by the government.  Company’s health care costs are skyrocketing and this move eliminates their cost to administer the program for retirees.

The Wall Street Journal reports that “only 28% of large companies that offer health benefits to employees offered retiree coverage in 2013, down from 34% in 2006 and 66% in 1988.”

I mentioned in my last article that many companies were eliminating coverage for spouses if they are employed. This can cause significantly higher costs for couples with children because one spouse would have to retain family coverage even though the spouse isn’t covered. The uncovered spouse would have to purchase single coverage though their employer or a local exchange.  In this case couples with children would be paying a penalty!  So far I’ve heard nothing about this spreading to the federal sector, at least not yet.

It is just too early to tell how this will all shake out but I must say I’m apprehensive and fear that the excellent medical care and services we now receive may be compromised.  My preference is to stay in the FEHB program. Maybe it’s just because the FEHB has worked well for my family for over 4o years now. The old saying “If it isn’t broke don’t fix it” may apply here.  

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator 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 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.

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Posted in BENEFITS / INSURANCE, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SURVIVOR INFORMATION, WELLNESS / HEALTH

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FEHB Program Affordable Care Act Impact

Posted on Friday, 30th August 2013 by

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Many federal employees and retirees alike are concerned about being forced out of the FEHB program and into local health care exchanges that are mandated by President Obama’s Affordable Care Act. I’m not sure why it was called the Affordable Care Act when in reality insurance costs have already increased considerably across all sectors since the law was first passed. How can you insure 30 million more Americans, allow adult children to stay on their parent’s coverage until age 26, dramatically expand Medicaid coverage, and force insurers to accept anyone for coverage regardless of pre-existing conditions and not expect costs to skyrocket. Plus they took over 500 million dollars from Medicare that many seniors rely on to fund the new Affordable Health Care Act. It takes a huge amount of money to do that and it has to come from somewhere. Whether private insurers or government eventually places all coverage under a single government payer system costs will by necessity increase dramatically and there would be rationing of care as many predicted.

Many suggest that even after full implementation of the Affordable Care Act there will still be 30 million American’s without health care coverage, although a different group than the 30 million that were not covered prior to this new program. The new law is forcing many companies to not cover spouses who work elsewhere and to convert employees to part time because they can’t afford the costs and penalties.  This may, in part, be the reason why the majority of all new jobs created over the past 5 years are part time or lower paying service jobs!

The Legislative branch will be forced out of the FEHB program and into local exchanges this year. Many are asking why the federal sector’s Executive Branch shouldn’t follow suit and enter local exchanges like the rest of the county.  The FEHB program has served both active federal employees and retirees for generations and I personally would prefer retaining our existing coverage. I’m sure most reading this column would agree.  

Now that the Legislative Branch (Congress) is forced to enter local exchanges outside of the FEHB program there will be over 34,000 less participants in our FEHB program sharing the cost of our insurance coverage. Less participants in any plan result in higher overall costs for participating members.  They are chipping away at our benefits and possibly targeting us for inclusion down the road, only time will tell.

The good news is that organizations like NARFE and others are lobbying Congress to continue FEHB coverage. Also, the 34,000 less participants is a very small percentage of the total covered under the FEHB so the bite won’t initially be much if anything at first. Also, there is still talk of adding Plus 1 coverage which would lower costs for many if not most retirees and employed empty nesters.

Insurance costs in general have been skyrocketing this past year. Our home owners insurance increased 20%, auto insurance 35%, and our local school taxes may be increased by as much s 33%. I’m not sure what the new FEHB premiums will be but my guess is that they aren’t going down!   I looked at my insurance policies to determine where the increases came from and discovered that our auto insurance bodily injury coverage increased 37% alone and that too may be a function of the new Affordable care Act. New FEHB rates will be announced soon and only time will tell if we will be forced to abandon the FEHB program. Thankfully NARFE is fighting the good fight and if you aren’t a member consider joining. They need all the funds they can get to lobby Congress and protect our benefits.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator 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 or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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

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