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Retirement Updates, Retiree Job Options and Home Remodeling Tips

Posted on Thursday, 6th February 2014 by

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The last series of articles focused on signing up for Medicare at age 65 and FEHB plan impact. Here is another update before moving on to other areas. I use Turbo Tax to complete our income taxes each year. When I was entering data from my wife’s Social Security SSA-1099 Form I discovered that Part B, C and D premiums are deductable from your Social Security earnings which can reduce your federal income taxes. This is another fact to consider down the road when you sign up, there is at least for now, a tax break for your Medicare premiums.  Also the link I included in the last article for Medicare and Blue – Medicare, Blue and You was for the 2013 brochure. They just removed that link and posted the new 2014 brochure this week. Click on the highlighted link above to download the 2014 brochure.

Investment Option (Series EE Savings Bonds)

If you go to www.treasurydirect.gov  and look up EE bonds you will find that the current fixed interest rate is a meager .1%! At first glance anyone in their right mind, from my perspective, would simply say NO to EE savings bonds. Most don’t realize that Uncle Sam guarantees that the original paper bonds or original purchase amount through the new Treasury Direct online program will double if held for 20 years and they continue to earn interest for 30 years from their issue date.  Essentially, if you cash in an EE Savings Bond after 20 years your effective yield is about 3.5%! I wish I could get that on a 1 year CD but of course I’m dreaming. The Federal Reserve continues to keep interest rates artificially low so the government can continue to borrow at discount rates.  The long and the short of it is that you must hold EE bonds for at least 20 years to earn the higher rate, if you cash out even a day earlier you are held to the much lower .1% rate.  

If you are 10 or more years from retirement, purchasing EE bonds may be worthwhile for a place to park at least some of your cash if you know you can live without it for that long. Otherwise, retirees might want to consider buying them for their children or grandchildren since they have time on their side and in most cases can wait for the cash. I liked the paper bonds that were discontinued several years ago. Today you must purchase them online through Treasury Direct. Additional Ways to Save are provided on our retirement planning site.  

Jobs update

Companies continue to submit job vacancies to our Jobs Board to attract federal retirees. You will find jobs ranging from Retirement Benefits and HR Specialists to part time job opportunities in hundreds of occupations across the country.  Many opportunities exist for those looking to supplement their retirement income or to start a second career.  We provide this free job listing service to companies that are seeking to hire experienced retired federal workers.

Home Remodeling with Retirement in Mind

Over the years I’ve remodeled many homes and only when I entered my 60s did I consider the impact of aging on my remodeling projects. I built a new home when I was 50 for what I thought retirement would be but until you get there you never know what to expect.  If you are in your 40s or older and considering staying in place, consider all of the following when you plan your next remodeling project:

  • Install bathroom vanities and kitchen cabinets at a higher height so you won’t have to bend down as far. Most bath vanities today are higher than they were 10 or 15 years ago however some contractors will use the lower profile cabinets to cut costs. Always have them specify the cabinet heights before signing on the dotted line.
  • For new homes consider a lot that will have an entrance with as few steps as possible, preferably none, including steps from the garage.
  • When remodeling your bath install bath tub grab bars and a bench in the walk in shower.  Also consider higher profile commodes located in an area where grab bars can be easily installed if and when needed.
  • Use easier to grasp handles on cabinets and doors that are made for the elderly.
  • Are your steps to the second floor and/or basement wide enough to accommodate a stair lift? Without an elevator your only option will be a stair lift and there are clearances that need to be maintained for proper and safe use.
  • If you plan to complete a major remodeling project; knocking down walls, etc., replace existing doors with 36 inch wide doors and widen hallways to accommodate a wheelchair down the road.  Also, consider finding a location to stack 5 feet square closets on each floor that can be used for an elevator installation if needed.  Check with a local elevator company for installation specifications.  For new 2 story homes have the contracor stack closets one above the other from the basement to the second floor. It’s easy to do before you build and much more difficult and costly adding an elevator shaft to an existing dwelling.
  • Larger 2 story homes often have two furnaces, one in the basement and a second one in the attic. Attic access can be a challenge for anyone with arthritis or joint problems.  If you are considering purchasing a new or used home with this configuration consider if you will be able to get to the attic to change filters, etc.
  • In northern climates, many 2 story homes have high efficiency furnaces installed in the attic that expel a considerable amount of condensate (water). This water can easily freeze during the winter months and shut your furnace down.  I don’t understand why building codes permit installation of high efficiency furnaces in unheated attics that are subjected to freezing.  Some builders are enclosing attic furnaces in heated space or installing lower efficiency furnaces that use a regular flue and that doesn’t expel condensate.  Check on this with your builder.
  • Add additional storage to reduce clutter if possible to reduce trip hazards.

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

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

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Medicare Part B and FEHB Update (Feedback – Part 4)

Posted on Thursday, 30th January 2014 by

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The Medicare and FEHB impact series has generated a lot of interest, comments, and questions that deserve additional attention. 

One reader commented that the following quote is true for Blue Cross & Blue Shield (BCBS) Standard but not true for BCBS basic. The last article stated that “once Medicare is the primary payer, you can use any provider as long as they accept Medicare. In other words, using preferred providers of your FEHB plan will be irrelevant since plans like BCBS will waive the coinsurance regardless of whether or not the provider is in the BCBS network or not.  It is still going to provide 100% coverage if Medicare pays first.”  

The above statement is true for BCBS Standard. The Medicare and Blue – Medicare, Blue and You pamphlet states the following for the Basic option: “If Medicare Part B is primary, you don’t pay coinsurance and copayment amounts if you use Service Benefit Plan Preferred network providers. Prescription drug coinsurance and copayments are not waived.”  To further clarify this for Basic subscribers, if you do go to a doctor that accepts Medicare and who isn’t a preferred provider, Medicare will pay their customary payment and you will be responsible for any Medicare deductables, and coinsurance. In this situation you would not be responsible for Basic BCBS copayments since they will not be paying for any of the services.

This brought up another question.  What would you do if you were enrolled in Medicare Part B and a BCBS Basic preferred provider refuses to accept Medicare?  Blue Cross and Blue Shield state in their Medicare, Blue and You pamphlet that, “if you have both Medicare Part B and Blue Cross and Blue Shield Service Benefit plan coverage, always ask your physician if he or she accepts Medicare assignment. If your physician does not accept Medicare assignment, he or she may charge 15 percent more than Medicare’s allowance. This is called the limiting charge. BCBS will pay for such services up to Medicare’s limiting charge. Under the Basic Option, the physician must also be a preferred network provider.”  If a BCBS preferred provider submits a Medicare opt-out notice to them you will still be able to use that doctor with full benefits and your Part B copayments will be waived according to their customer service department.

Rosemary, who has BCBS Basic, talked with her local “SHINE” specialist concerning whether or not they should enroll in Medicare Part B. The SHINE Program (Serving Health Information Needs of Elders) is a state health insurance assistance program that provides free health insurance information, counseling and assistance to Massachusetts residents with Medicare and their caregivers.  Rosemary decided not to enroll in Part B and to stay with their BCBS Basic plan after discussions with her SHINE specialist. Their Medicare Part B premiums would generally cost them more than any copayments and coinsurance they would have to pay each year. Rosemary and her husband didn’t sign up for part B when they were 65 and after adding the delayed sign-up penalty their health insurance premiums would more than double.  




There are several organizations that provide assistance with Medicare and health insurance issues in your State including SHINE and State Health Insurance Assistance (SHIP) programs.  In general, if you have a good employer based health care program it is best to stay with that plan and before signing up for Part B you need to consider whether it is worth the cost.  

If you decide not to enroll in Medicare Part B, Part A covers hospital care only, not physician care, and if you are hospitalized and don’t have Part B you would have to pay any coinsurance, copayments, and deductable for any medical physician services that you receive during your hospital stay.  Your hospital coinsurance and copayments would be waived under Medicare Part A, not so for medical services without enrolling in Part B. 

Finally, a reader wanted to know if a Medicare Part B enrollee can drop their coverage if they decide it is too expensive or not appropriate for their circumstances.  You can withdraw from Medicare Part B at any time if desired. Once you withdraw from Medicare B you would have to notify your FEHB provider immediately because they would revert back to primary provider for medical services. To cancel Medicare Part B coverage use form CMS-1763. This form isn’t available online and you must contact your Social Security Administration office to complete the form. They will discuss the consequences of canceling your coverage, including how penalties are accessed, and process the form for you over the phone. The Social Security FAQ titled How do I terminate my enrollment with Medicare Part B when I have other health insurance explains the process in more detail.  

Final Thoughts on Part B or Not!

This decision depends on your personal circumstances.  Following is a list of issues that can help you make this decision:

  • When you enroll in Part A & B, while still maintaining your FEHB enrollment, your hospital and medical deductable, coinsurance and copayments are waived by most plans and your FEHB plan acts much like a Medicare Supplemental plan. Medicare will be your primary care provider.
  • Compare potential future deductable, coinsurance and copayments to the additional cost of Part B. If Part B premiums are less, Part B enrollment makes sense.  The Medicare and Blue – Medicare, Blue and You pamphlet can help you with the comparisons although they only provide them for the Standard plan. Use your BCBS benefits booklet to determine your Basic copayments and coinsurance amounts for the comparison.
  • You can always withdraw from Medicare Part B if the costs get prohibitive and before you complete the CMS-1763 withdrawal from the Social Security counselor will discuss the consequences.
  • Whether or not you enroll in Part B, medical providers are required by law to only charge the Medicare rate for anyone 65 or older, a benefit and savings for FEHB plan insurers.  If the provider doesn’t accept Medicare assignments they can charge 15% more, the Medicare limiting charge, for their services.  BCBS will cover up to the limiting charge and it’s important to note that Basic plan subscribers must use preferred providers.
  • Part B premiums could cost you much more than you planned if you convert an IRA or the TSP to a ROTH, take TSP or IRA withdrawals, have capital gains from the sale of stocks or assets, work in retirement,  and you have to consider your spouse’s income and IRA withdrawals as well.  Your Modified Adjusted Gross Income (MAGI) determines your Part B premiums each year.  They range from $104.90 to as high as 335.70 per month per person. A couple, both over 65, would pay from $209.80 to $671.40 depending on your (MAGI).
  • Are you concerned about the penalty for not enrolling in Part B at age 65? I talked with a Medicare counselor that related the following story to me.  One of her clients worked for a local municipality that recently required all retirees to enroll in Part B to retain their health care coverage. This person was over 65 and subject to the penalty however the municipality made up the difference for this individual after announcing the benefit change.  One of my reasons for considering Part B is due to the uncertainty around our FEHB plan and future Affordable Care Act impact. What if we were required in the future to either enter an exchange or have to purchase Part B to retain our FEHB plan? Hopefully, we would be treated in a similar fashion or possibly grandfathered in like they have done in the past with other retirement changes.
  • Finally, if you are still uncertain contract your local SHIP representative to discuss your options and concerns.

I have my decision to make this year and am evaluating all options and doing cost comparisons to see how things shake out. I have until August to enroll in Part B without a penalty so I still have time to make an informed decision.  

Use the following links to learn more about your options and to review Parts 1 and 2 of this series:

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

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

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Change to a Lower Cost FEHB Plan When Signing Up For Medicare

Posted on Thursday, 16th January 2014 by

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My last article titled What to Consider Before Enrolling in Medicare B, part 2 of this 3 part series, helped you understand Part B and how it impacts your FEHB benefits and costs. This final article of the series discusses whether a lower cost plan would provide you acceptable coverage at a lower overall cost.

Because most of your deductables, copayments, and coinsurance are waived when you sign up for Medicare under many health plans, it makes sense to look for a lower cost FEHB plan if you will be paying Part B premiums.  A married couple over 65 would pay $209.80 minimum monthly, $104.90 per person in 2013 for one national plan. If you can find a suitable plan that includes your health care providers at a lower cost it makes sense to switch however you have to evaluate plans carefully to ensure you will be receiving the services you need.




Many if not most retirees subscribe to Blue Cross and Blue Shield (BC/BS) because they are international and you can find preferred providers in most locations. They offer a Standard and Basic Plan. The lower cost Basic Plan acts more like an HMO without an annual deductable and your out-of-pocket expenses are minimal. The downside is that prior to enrolling in Medicare you must use their Preferred Providers, except for emergency care, and they don’t have a mail service pharmacy option. You can obtain a 90 day supply of prescription drugs if you pay additional copayments.

Tammy Flanagan, Senior Benefits Director for the National Institute of Transition Planning, Inc stated that “once Medicare is the primary payer, you can use any provider as long as they accept Medicare.  In other words, using preferred providers of your FEHBP plan will be irrelevant since plans like BC/BS will waive the coinsurance regardless of whether or not the provider is in the BC/BS network or not.  It is still going to provide 100% coverage if Medicare pays first.”

My wife and I had the Basic Blue Cross and Shield Plan for about 10 years until 2011 when we switched to the GEHA Standard Plan. My wife’s Doctors are employed by UPMC and they were threatening to discontinue participating as preferred providers for Blue Cross and Blue Shield. The advantage of the GEHA plan is their low cost, $236.91 monthly for the Standard Family Plan, and it covers out-of-network providers similar to the higher cost Standard Blue Cross and Blue Shield coverage. There are benefit differences and you have to read each plan’s brochure carefully to determine what plan is right for you.

When we were with Blue Cross and Blue Shield we didn’t have a problem finding preferred providers since so many doctors accept Blue Cross and Blue Shield nationally and the Basic Plan covers medical emergencies through any provider.

This Open Season we changed back to Blue Cross and Blue Shield’s Basic Family Plan for $309.30 monthly.  After two years with GEHA we found that our out-of-pocket expenses were higher than we anticipated. GEHA charges an annual per person $350 deductable and other coinsurance and copayments that we didn’t have under Blue Cross and Blue Shield Basic.  After enrolling in Medicare Part A and B most  FEHB plans waive these costs. One of the primary considerations for changing back to BC/BS was that the GEHA Plan only pays $250 for hearing aids where Blue Cross and Blue Shield covers up to $2,500 for hearing aids every three years.

The issue we had about UPMC doctors still isn’t resolved however they will remain preferred providers through 2014. If they do decide to leave the network in 2015 we won’t have a problem because Medicare will be our primary health care provider. If one of us wasn’t enrolled in Medicare we could either change doctors, transfer back to GEHA or consider the Standard Blue Cross and Blue Shield option next Open Season.

I probably would have stayed with GEHA because they would have waived all of the deductable, coinsurance, and copayments under Medicare when I turn 65 next year. The hearing aid issue was a major factor for me and the fact that we use very few prescription drugs and the ones we do use are inexpensive so either plan’s prescription coverage was adequate for us.

It does makes sense to look for lower costs since Medicare will be your primary health care provider and FEHB plans in most cases waive the deductable, coinsurance, and copayments.  With the cost of everything these days going through the roof why pay more than necessary.  Before changing evaluate your current costs, call other FEHB providers for clarifications after reviewing their brochures, and make the decision based on the facts and your family’s needs.

All of the plan brochures cover Medicare and the effect it has on subscribers in Section 9.  Read that section carefully for all plans of interest and then look at the benefits they provide to determine what plan is best for you and your family regardless of cost.

Use the following links to learn more about your options and to review Parts 1 and 2 of this series:

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

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 BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

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What to Consider Before Enrolling in Medicare B (Part 2) – Updated 1/12/2021

Posted on Thursday, 2nd January 2014 by

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(Article updated 1/12/2021 with updated Medicare Part B Premiums)

My last article titled Medicare and FEHB Options – What Will You Do When You Turn 65?, part 1 of this 3 part series, introduced Medicare Part A and general information you need to know to apply.  This article will help you understand Part B and how it impacts your FEHB benefits and costs. The final article of this series discusses ways to evaluate lower cost FEHB plans that you may wish to consider after signing up for Medicare.

Medicare B

Medicare B (Medical Insurance) that covers physician and outpatient care requires more thought because all must pay an income adjusted monthly premium for coverage. If you don’t take Part B at first eligibility (at 65 if retired and not covered under a working spouse or new employer plan; or within 8 months of post 65 retirement or loss of coverage under a working spouse after 65) there is a 10% penalty on the current year premium addedfor each year you delay enrollment.

If you are 65 or over and still employed by the federal government or are a 65 year old retiree that has health care coverage through your new employer or you are covered under a working spouse exemption, you can delay applying for Part B without penalty and that makes sense for many.  You can delay taking Part B without penalty if you switch FEHB coverage to a federally employed spouse to keep the benefit premiums non-taxable and delay without penalty for the 65 year old retiree’s Part B enrollment. Unfortunately retiree’s FEHB premiums are considered taxable income unlike active federal employees.

Many retirees work at another job or start businesses after they leave federal service. Federal retirees can also delay taking Part B without penalty if they are covered under a working spouse exemption or while working for other employers that provide primary healthcare coverage where the FEHB becomes secondary.You have to evaluate the costs to see if accepting insurance from your new employer would reduce your costs. If you start your own business or work for another company that doesn’t provide primary health insurance you will be assessed a penalty if you don’t take Medicare B at age 65.

TriCare For Life

Ann Ozuna, a retired Personnel Management Specialist, our HR Forum Host, and founder of www.TheFederalRetirementLady.com states “If you are retired military or a military spouse and have TriCare you must sign up for Medicare Part B in the 3 months before turning 65 in order to continue with TriCare for life. TriCare participants are able to suspend their FEHB enrollment if they wish after retiring from federal service; federal  employees can’t suspend FEHB coverage while still working.

The time you had with TriCare counts towards the 5 years of FEHB coverage that participants must have to carry FEHB coverage into retirement and you must be enrolled in a FEHB plan at retirement to be able to suspend it. If you choose to stay with TriCare and suspend FEHB participation as a civilian retiree, you can sign back up for FEHB during any subsequent open season should you need private insurance coverage. This would be desirable if health care providers are not taking new Medicare/TriCare patients when you move to a new location or otherwise lose your doctor.”




Part B Premiums & Modified Adjusted Gross Income (MAGI) Impact (Updated for 2021 Medicare Premiums)

The cost for part B is determined by your Modified Adjusted Gross Income (MAGI). The modification adds any tax free income that you earned to your standard adjusted gross income tax that is listed on line 37 of your IRS 1040 form.  Part B monthly premiums are divided into six income threshold levels and for 2021 start at $148.50 for individuals with a MAGI of $88,000 or less or for married couples with a MAGI of $176,000 or less and go to as high as $504 per month for individuals with a MAGI of $500,000 and above or married couples filing jointly with a MAGI of $750,000 and above. You can view 2021 Medicare costs online  for all Part B income threshold levels.  The cost sheet also includes what a person would have to pay for Part A if they weren’t eligible for free coverage and the costs for Part D prescription drug coverage if elected.

CAUTION: Your Part B premiums are determined annually from income statistics that the IRS provides to Medicare. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount as indicated above, you will pay a higher Part B premium.  Review tax returns back two years to determine what your adjusted gross income was and then add in any tax free interest you earned to determine your MAGI and what your monthly premium will be. If for example you converted all or part of your TSP or another retirement account to a ROTH two years ago your adjusted gross income will increase by that amount and this could push you into a higher Part B premium for the first year.

Modified Adjusted Gross Income includes capital gains, taxable interest, tax-exempt interest, dividends, annuity income, wages, business income, and IRA distributions.  When you start drawing from your THRIFT account, take a one-time lump sum withdrawal, cash in stocks or bonds that have appreciated in value, or convert to a ROTH you may end up with a higher part B premium payment the following year.

The question remains; why pay for Medicare B if your FEHB providers must still cover you under their plan without penalty? Most apply for Medicare Part B because the majority of plans waive all of the deductable, coinsurance and copayments except for prescription drugs for those who sign up for both A and B coverage.  Even if you and your spouse are generally in good health you never know what the future holds.

Another factor to consider is that if you wait say 3 years and then apply you will pay a 30% monthly premium penalty for life that adds up fast. Plus you can only sign up after age 65 during Medicare open season, January 1 – March 31, and your coverage doesn’t start until the first day of July! When you sign up 3 months before your 65th birthday your coverage begins the month you turn 65. The uncertainty that surrounds the Affordable Health Care Act and the impact that will have on our FEHB benefits is another consideration. The Legislative branch of government has already been forced out of the FEHB program and into local exchanges.

Most retirees sign up for the original Medicare plans Part A and B that allow members to see any doctor, specialist, or hospital that accepts Medicare. Even if you have the Blue Cross Blue Shield Basic plan that doesn’t pay for services if performed out-of-network Medicare would still pay their share.  Another consideration is that many plans catastrophic maximum expenses and payments for certain services are capped and Medicare can fill the gap. Check out your plan’s out-of-pocket catastrophic protection to assess the potential costs that you might incur if you don’t sign up for Part B.

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

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 BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Medicare and FEHB Options – What Will You Do When You Turn 65? (Part 1)

Posted on Thursday, 12th December 2013 by

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Updated 10/20/2023

We receive many questions each year about how Medicare interacts with the FEHB program. This is the first of a three part series that introduces the Medicare program including Part A and how to apply. Part 2 discusses what to consider before enrolling in Medicare Part B and Part 3 talks about whether you should consider changing to a lower cost FEHB plan after signing up for Medicare.

Most federal employees and retirees question what they should do when they turn 65 with Medicare and the impact those decisions will have on their FEHB benefits.  There are different rules for active federal employees, retirees, retired but covered under a working federal employee or non fed spouse, or retired military with TriCare.

Medicare Basics

Medicare Parts A & B are included in what is called the Original Medicare Plan with “A” covering  hospitalization and “B” paying for your doctor and outpatient care. Part C is the Medicare Advantage Plan and you can choose between either the Original or Medicare Advantage plans when you sign up.  Part D covers prescription drugs.

Part C plans are available from either a private carrier outside of the FEHB program, or from major FEHB carriers that now offer Part C plans, many with Part B partial to full premium reimbursement, that required you to maintain your FEHB coverage.

The first choice we must make is whether or not to sign up for Medicare at all. Yes, we do have that option if we are not covered under TriCare (the military retirees health care program). OPM along with the FEHB health care providers encourage you to apply for Medicare benefits 3 months before you turn 65. OPM states, “if you are entitled to Part A without paying the premiums, you should take it, even if you are still working. This may help cover some of the costs that your FEHB plan may not cover, such as deductibles, coinsurance, and charges that exceed the plan’s allowable charges.”

Original Medicare (Part A & B) or Medicare Advantage Part C?

Secondly, you must decide on whether to sign up for the Original Medicare plan (Part A and B) or Medicare Advantage Part C that offers private sector Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs) coverage.  Part D, Medicare’s prescription drug benefit,  requires an additional monthly premium and is unnecessary in most cases because our FEHB plans include a comprehensive prescription drug benefit. Also, the new FEHB MA plans now available, include Part D coverage.

Many federal retirees with FEHB coverage typically opted for the Original Medicare Plan because it is available nationwide and you can go to any doctor, specialist, or hospital that accepts Medicare. Medicare Advantage (MA) Plans are often less expensive than our FEHB plans. However, there are significant differences in coverage between plans and you will need to read the plan brochures carefully to compare coverage in all areas including prescription drugs, dental, deductable, copayments, and coinsurance.

When you sign up for original Medicare Parts A and B, and are retired, your FEHB insurance becomes your supplemental coverage and Medicare is your primary health care provider and they pay first. Your FEHB plan picks up the difference to the extent outlined in your plan’s benefit brochure, review Section 9 thoroughly.

If you only pick up Part A your FEHB plan will remain your primary coverage for your medical Insurance including doctor’s visits while Medicare A will be primary for your hospital coverage.  When your spouse is under age 65 their primary provider will be your FEHB plan until they reach age 65.  When electing Part C coverage, either through a private provider or through your FEHB MA plan, that carrier becomes your primary provider.

When signing up for Medicare Advantage Part C, FEHB coverage isn’t necessary if you opt for one of the private insurer’s plans.  If you are considering a pirvate carrier Medicare Advantage Plan instead of the Original Medicare Plan, DON’T drop your FEHB, instead suspend with proof of signing up for the Medicare Advantage Plan so you can get your FEHB back the next open season if the coverage doesn’t work out. Annuitants can call OPM’s Retirement Information Office at 1-888-767-6738 to obtain a suspension form. Callers within the local Washington, DC calling area must call 202-606-0500. Before going with a private MA plan provider, review and consider the exceptional FEHB MA offerings, they provide exceptional benefits.

Those who opt for the newer FEHB sponsored MA plans must keep their FEHB coverage. Typically there is no additional charge for Part C (MA) coverage and they often offer partial to full reimbursement for Part B premiums.

Section 9 of your FEHB plan covers the different Medicare options and what costs they will waive and pay when you sign up.  Your health plan may also offer a booklet on this subject that will help you understand the impact.




Signing Up For Medicare

If you are retired and receiving Social Security you will automatically be enrolled in Part A and B and should receive your Medicare card three months before your 65th birthday. If you decide not to take Part B follow the instructions that you receive with your enrollment package. If you aren’t receiving Social Security you have a 7 month Medicare enrollment window that starts 3 months before your birthday.

You can sign up online at http://socialsecurity.gov/pgm/medicare.htm or you can visit your local Social Security Office to apply. Call 1-800-772-1213 for additional information and assistance. You can also sign up for Medicare at http://www.medicare.gov . It takes about 15 minutes to register and sign up online.

If you are retired but covered under a working spouse’s medical plan or you are still working, sign up for Part A and then advise them that you do not want part B because you are covered by your employer or under a working spouse plan as the case may be.  All current federal employees and those retirees with new employer health care coverage or are covered under their spouse should elect this when they turn 65 to delay Part B without penalty until their working spouse retires, or they leave federal service, or their new employer.

Medicare Part A

Federal employees are eligible to receive part A coverage without a premium because we paid Medicare tax on our earnings while employed. Essentially, if you or your spouse worked for 10 years or more in Medicare-covered employment, you are eligible for free Part A hospital insurance.  Applying for Part A is a cost effective option for most because with the majority of FEHB plans your hospital copayments and coinsurance are waived. They don’t waive prescription copayments or coinsurance.

It’s important to know that when Medicare A coverage limits are reached most plans require the patient to pay any difference between the FEHB provider allowance and the billed amount or pay the inpatient hospital per-day copayments depending on the plan you are enrolled in.

If you decide not to apply for Medicare at age 65 the FEHB brochures state,  “Under the FEHB law, we must limit our payments for inpatient hospital care and physician care to those payments you would be entitled to if you had Medicare. Your physician and hospital must follow Medicare rules and cannot bill you for more than they could bill you if you had Medicare. You and the FEHB benefit from these payment limits. Outpatient hospital and non-physician based care are not covered by this law; regular Plan benefits apply.”  Essentially your doctors aren’t going to receive more than the Medicare payment schedule whether or not you elect Medicare coverage.

Cautionary Note

First and foremost, if you elect to go with a private Medicare Advantage plan, one not affilated with your FEHB coverage, you must suspend your FEHB coverage as noted above. Otherwise, you won’t be able to come back to the FEHB program if the MA plan you enrolled in doesn’t meet with your expectations the following open season. I highly suggest exploring the FEHB MA plans first before moving to the private sector MA options. You will be impressed with the generous benefit  offerings.

Some medical providers opt out of Medicare and refuse to take new Medicare patients. One percent of all non-pediatric physicians have formally opted-out of the Medicare program in 2023, with the share varying somewhat by specialty type, and highest for psychiatrists (7.7%). Psychiatrists account for the largest share (40.2%) of all non-pediatric physicians who have opted out of Medicare in 2023.

If you are subject to income adjusted Medicare Part B and D premiums, review carfully whether or not it makes sense to move to a FEHB MA plan or the private sector plans. You will have to pay Part B and D increased premiums as your income moves above the limits as established by Medicare each year.  Even though you will receive a partial Part B reimbursement, the increased Part D premiums offset the benefit.  Even those plans that reimburse the full Part B premium, this is limited to the base amount, not the income adjusted amount you may have to pay. Part B premiums for 2024 range from a low of $174.70 to a high of $594! Part D premiums can go as high as your plan premuim plus $76.40 a month.

Confirm that your doctors accept Medicare.

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Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change.

The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, SOCIAL SECURITY / MEDICARE

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Is a Timeshare right for you?

Posted on Saturday, 7th December 2013 by

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As a Federal Employee I traveled a lot of miles and earned points at Hilton and Marriott hotels. One evening, while minding my own business, I received a call from Hilton Honors with a great deal, three free nights at a Hilton Grand Vacations Club (HGVC) Resort in Las Vegas.  All I had to do was attend a one hour presentation for their new Resort on the Strip in Las Vegas.  Well, I hadn’t been to Las Vegas in twelve years and I had been planning to go just to see Celine Dionne at Caesar’s Palace.  I took advantage of their generous offer and planned a cool January visit. In addition to Celine we saw O at the Bellagio as well. The HGVC property was beautiful, off the strip so it was quiet and it felt like home.  The kitchen was fully equipped with beautiful cabinets, granite counters and included free Wi-Fi and a Jacuzzi tub to relax in after a long day.  It had a beautiful living room complete with a balcony and large flat screen TVs in the living and bedroom. We used the tram to travel around the strip.

The presentation at the Hilton club resort on the Strip certainly took more than one hour but it did entice me to consider buying into their club.  While I wasn’t ready to commit during that visit they offered an Introduction Package which consisted of a one week stay at any of their club properties. After attending a presentation at the club property, if you decided to buy, the cost of the Introduction Program Package would be applied to your club purchase.  The Intro Program Package made sense and I was getting something for my money. I used the Intro Program deal to visit their Club at the Hilton Hawaiian Village. That sold me!

I’ve been a Hilton Grand Vacations Club member for nearly 7 years now.  If you asked me how I like it; my answer would be that I wouldn’t buy it if I could go back in time.  However, I’m also not willing to sell or give it up. It would have been more cost effective had I purchased the time share from a club member on the resale market.  I’ll explain that later.

I earn 6300 points every 12 months that equals a one week stay in my home property, Kingsland on the Big Island. I do have flexibility to carry points over to the next year and then use my points for a two week vacation or more depending on the property I chose to vacation at. I can borrow from the next year to enjoy a longer stay or I can convert my HGVC points to RCI points.  RCI, a worldwide time share organization, will then give me a two year window in which to use those converted points.  When I call HGVC to book a RCI vacation club stay they are very good about letting you know the condition of the property, such as it’s in need of updating or HGVC members weren’t satisfied with the location or had problems at that property.  They will also tell you about the best RCI properties for the area where you are planning to vacation.

But here’s the best part of that decision to buy. The purchase of the Club membership does exactly what I was hoping it would do when I made the purchase.  It pushes me to go someplace special for a couple of weeks at least once every year or two.  It also allows me to invite friends to join me.  They save the cost of a hotel and we all stay in a Resort that I would never pay to stay at if I weren’t a member.

How the Club Point System Works

The Marriott Resort Club, from talking to members, operates similar to the Hilton Grand Vacation Club.  The following information may help you in considering either HGVC or a Marriott Club membership, or at the very least provide information that will help you ask questions prior to making a purchase decision.

The clubs operate on a point system that is determined by the property you are purchasing a week of time at. My one week on the big island of Hawaii is valued at 6300 points each year. It’s not a beach property, its near golf courses, but you have shuttle service and access to the Waikoloa HGVC resort and the beach at that resort.  Kingsland is one of their premier properties so my annual point allowance is higher than other HGVC resort properties.  That means I can spend one week at Kingsland or I can stay for nearly 2 weeks at many of their other Club properties in Florida or Las Vegas, if I plan ahead.

The other benefit of the Club Point plans at Hilton and Marriott is their agreement with RCI.  You exchange your club points for RCI points for a fee, so that you can vacation at any RCI resort property.  This was an option that I liked and had a lot to do with my decision to buy.  But it’s not as easy to stay where you want, when you want with RCI.  It’s best to look in advance at availability before exchanging club points for RCI points. Make sure they have lots of vacancies where and when you want to go before completing that exchange.

About the fees:

  1. There are reservation fees except for your home property week. 
  2. It’s cheaper to book yourself online. Currently Hilton charges $49.
  3. There are also exchange fees to turn your Hilton club points to RCI points, $169.  In addition, you will be charged a fee to book a stay at an RCI property, another $169.  But, having that option is worth it for a nice property.
  4. You can change your HGVC points into Hilton Honors points but this isn’t a good deal. Use it only if you have small balance left.

Initial Cost and Annual Fees

The initial cost for club properties can be quite high, often $20,000 or more for one week ownership and there are annual fees.  You will pay club fees, real estate tax, maintenance costs, etc.  The initial annual fees may sound reasonable but they can go up annually and my experience has been that it’s rare that they don’t increase.  HGVC properties in Florida and Las Vegas have lower purchase prices and lower annual fees than their Hawaiian properties. HGVC has enough flexibility to allow you to plan ahead on how to use your points in a way that makes sense for you.

Do some cost comparisons before making a purchase.  For example, a room at one of the HGVC resorts costs between $329 and $349 per night plus tax it adds up to between $2600 and $2800.  You can save around $40 a night by paying for your entire stay in advance when booking.  The weekly rate is approximately twice the annual maintenance fee. Basically your upfront cost of $20,000 plus the annual fees would result in breaking even over approximately a 15 year period.  At this time the only club property that requires room tax and parking fees from your weekly stay is in Hawaii.  The tax is around $5 a day and parking around $25.

If You have your favorite place to vacation and go there every year, then a time share may be a good choice for you.

Here’s what I would do differently.  I would have opted out during my one week to change my mind, which is required when buying in Hawaii by state law.  Then I would have shopped for a HGVC property being sold by a current owner. While the property points for Hilton and Marriott resort club properties can be sold, like any other time share, they do hold more value better than most time shares. Your ownership period with Hilton is permanent and is transferable at a cost similar to home buying, meaning lots of paperwork and transfer fees, taxes etc. 

Buying someone else’s Club Membership will save you money on the initial cost, likely 50% of the original purchase price or less.  On the downside, you may not understand how it works unless you attended a presentation at a Club Resort in advance or find a chat room to discuss these timeshare options and the fees involved for reservations, saving points from one year to the next, or converting points you can’t use within their expiration time frame. Ask the seller if they have a recent Club Membership book that you can look at before making a purchase.  The book will explain all your options for using your annual Club points.

Before finalizing your purchase read the contract carefully to make sure you won’t be charged additional fees by the timeshare company to change property ownership. In some cases the owner is required to sell the property back to the company if selling within a specific time frame after making your initial purchase.

Request a FREE Retirement Benefits Summary Analysis from a local adviser. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections. A sample analysis is available for your review. This service is not affiliated with www.federalretirement.net

Learn more about your benefits,  employment, travel, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

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The information provided may not cover all aspect of unique or special circumstances. Travel policies and packages are subject to change without notice. To ensure the accuracy of this information, contact travel providers and hotels at the time of your bookings to confirm pricing, itinerary, and all costs. The comments and observations are limited to the author’s personal experience and your results may vary significantly. This article and replies to comments are not intended to substitute for professional travel services. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

Posted in LIFESTYLE / TRAVEL, Travel

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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.

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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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