In 2022, there’s a major change coming to health coverage, in particular for the Federal Employees Health Benefits program (FEHB), that might positively impact almost every beneficiary. On January 1st, the No Surprises Act will take effect, which is a law that was passed by Congress last year. Under this new law, the major takeaway is that surprise billing is banned for emergency services. This translates to patients having to pay no more for emergency care than what they would have paid to receive care in-network. The law additionally prohibits prior authorization requirements for emergency services, regardless if the provider is in-network or not.
With that being said, the Federal Employee Health Benefits program (FEHB) has quite a few nuances and common misconceptions surrounding how it works for the federal retiree.
One recurring notion is that once retirement hits, somehow health benefits disappear entirely. On the other side, another falsehood is that an individual is solely accountable for their premium in retirement. Neither are exactly true, and with open enrollment season coming November 9th, it is time to shed light on some major myths about the FEHB program.
Before covering any more specific misconceptions, let‘s start with what makes an employee eligible to remain in the FEHB program once they retire..
In order for federal employees to be eligible to keep FEHB in retirement, they must:
- Have a minimum of 5 years covered under FEHB immediately after their retirement.
- Must be enrolled in the program on the day that they retire.
While the 5 year rule is widely known amongst federal employees, it is important to clarify that participants are allowed to change all sorts of things while maintaining this standard, such as carriers, plans, and even coverage type as long as it is inside that 5 year time frame..
Now, let’s get to explaining some FEHB myths.
Myth #1: The Government Won’t Pay a Portion of Your FEHB Premium Once You Enter Retirement
As mentioned earlier, an extremely common fear that employees have is that the government will no longer pay a portion of the FEHB premium after retirement. On the contrary, the government will typically continue to pay around 72% of the overall premium, thereby keeping the retiree’s contribution (roughly 28%) the same as they were paying while working..
One exception here is for postal workers, who already pay less for their FEHB coverage while they‘re working, however their premiums will mirror regular federal employees or retirees once they retire. So, they have an increase upon initial retirement only because the postal service is not helping to offset their cost anymore.
Myth #2: FEHB Open Seasons Only Occur While You‘re Employed
Federal employees and retirees alike tend to believe that the FEHB open seasons only happen during active employment, and that‘s simply not true. In actuality, FEHB open seasons take place for federal retirees also. The enrollment periods are held at the same time and everybody can go and benefit from those changes.
However, there is an important distinction for open seasons for retirees, being that a retiree cannot join FEHB once they have already retired. They had to have been covered under FEHB for 5 years immediately following their retirement and they had to be enrolled in it on the day that they retired, but as stated above, they can make every other change during open season that is allowed while still employed.
Myth #3: One Cannot Add or Drop Family Members to a FEHB Plan Once Retire
During open seasons, which run in November and December every year, Retirees are allowed to add family members to their coverage. They can also add family at other times of the year if they experience a qualifying life event such as marriage, divorce, the birth or adoption of a child or the death of a spouse..
Importantly, the retiree must be alive in order for family members to be added to FEHB. Retiree’s are absolutely permitted to drop or cancel the FEHB coverage as there is no requirement that FEHB must be maintained. However, it is worth noting that once the FEHB coverage is cancelled, that decision is final. There is no option of reopening coverage at a later date.
With these 3 major myths out of the way, it is important to note that next year there are three nationwide Medicare Advantage options open to all employees: Aetna Advantage, APWU-High, and MHBP Standard.
Enrollment for the Medicare Advantage plans is a three-step process.
- Enroll in Medicare Part B. Medicare Open Season ends one week before FEHB Open Season on December 7th so you’ll need to act quickly in order to join a Medicare Advantage plan.
- Enroll in the FEHB plan that corresponds to the Medicare Advantage plan you want to join.
- Call the carrier to enroll in the Medicare Advantage plan. Remember there is a requirement to be on the FEHB plan roster before you can do this, so be ready to wait a couple of days after enrollment with OPM.
FEHB is one of the best parts of federal benefits offered to employees and retirees. Knowing the facts and annual updates can make all the difference when it comes to retirement. To learn more about your federal benefits, subscribe to Federal Benefits Service today.