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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.

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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, 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.

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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