The FEHB Program – What is it, Who is Eligible to Join It, and Making Changes in the Program
Each year, starting on the second Monday of November and continuing through the second Monday of December, the Office of Personnel Management (OPM) sponsors a benefits “open season” in which federal employees and annuitants make decisions regarding which health insurance, dental insurance and vision insurance plans they want to be enrolled in during the upcoming plan year. This year’s benefits “open season” runs from Nov. 11, 2019 through Dec. 9, 2019. This column, the first of eight Federal Employee News Digest, Inc. e-newsletter columns, discusses choices that employees and annuitants have to make regarding their health insurance that is part of the Federal Employee Health Benefits (FEHB) program. The discussion includes what is the FEHB program, who is eligible to join it, and making changes to one’s coverage in the FEHB program.
The FEHB program is the largest employer-sponsored group health insurance program in the world, covering 8 million federal employees, annuitants, former employees, family members and former spouses. Federal employees are entitled to enroll in the FEHB program and to include in their enrollment eligible family members including spouses and children under the age of 26.
There are three types of enrollment in the FEHB program, namely: (1) Self only; (2) Self plus one; and (3) Self and family. A “self plus one” enrollment covers the employee or annuitant and only one eligible family member. A self and family enrollment covers the employee or annuitant and multiple family members including a spouse and children under age 26.
In terms of premium costs, each FEHB program health insurance plan charges a different premium. The Federal government pays on average 72 to 75 percent of an employee’s or annuitant’s FEHB premium with the employee or annuitant paying the other 25 to 28 percent of the premiums. It makes no difference which FEHB program health insurance plan or type of coverage (self only, self plus one, or self and family). These percentages of who pays (the employee, annuitant, or the federal government) what portion of the FEHB premiums are always the same and is set by law.
Over 200 health insurance plan choices are offered under the FEHB program. There are several fee-for-service plans available to all enrollees, while other health plans are available to specific categories of employees. There are preferred provider organization (PPO) plans. In addition, health maintenance organizations (HMO’s) are available in most areas of the US. An employee or annuitant must live or work within a defined area to be eligible to enroll in a particular HMO. There are are HMO plans with a Point-of-Service (POS) products.
Enrollment and Making Changes to Coverage During an “Open Season”
During this year’s “open season” (Nov. 11, 2019 – Dec. 9, 2019), employees who are not in the FEHB program who are eligible to participate in the FEHB program may enroll in the program, while current FEHB program enrollees may change plans, options, types of enrollment, or (employees only) change “premium conversion” status. Premium conversion will be discussed in another e-newsletter column.
Enrolled annuitants in the FEHB program may also change their plans, options and type of enrollment. Non-enrolled annuitants are not permitted to enroll in the FEHB program during an “open season” unless an annuitant suspended FEHB enrollment to enroll in TriCare, to join a Medicare managed care plan, or because of eligibility under Medicaid or a similar state-sponsored program of medical assistance for the needy.
The effective dates of this year’s “open season” enrollments and changes in enrollment are as follows:
· A new enrollment is effective the first day of the first pay period that begins in the following year. For most federal agencies, this will be Jan. 5, 2020. That follows a period during any part the employee was in pay status. For annuitants, the effective date of the new enrollment will be Jan. 1, 2020.
· A change in enrollment is effective the first day of the first pay period that begins in the following year. This year it will be Jan. 5, 2020 at most federal agencies, regardless of whether the employee is in pay status. For annuitants, a charge in enrollment made during this year’s “open season” will be effective Jan. 1, 2020.
· When an employing office accepts a late “open season” enrollment or change in enrollment, it is effective retroactive to the same date that it would have been effective if it had been received on time.
“Open season” is also the time that an employee can elect to drop out of the FEHB program. If an employee drops out and subsequently wants to reenroll the FEHB program, then reenrollment would have to occur during a future FEHB program “open season”. But annuitants who drop out of the FEHB program are not permitted to reenroll, even if there is a life event such as loss of their non-FEHB health insurance plan, enrolling in Medicare, or a life event such as getting divorced and losing health insurance coverage through the ex-spouse.
Edward A. Zurndorfer is a Certified Financial Planner, Chartered Life Underwriter, Chartered Financial Consultant, Certified Employee Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, located at 833 Bromley Street Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652.