Ed Zurndorfer explains the Dental and Vision Insurance Plan Choices to Federal Employees
The Federal Employee Dental and Vision Benefits Enhancement Act of 2004 provided OPM the opportunity to establish arrangements under which supplemental dental and vision benefits are made available to federal employees, retirees, and their dependents. Dependents include spouses and children under the age of 22.
Dental and vision benefits are available to eligible federal and postal service employees, annuitants, and to their eligible family members on an enrollee-pay-all basis through the Federal Employees Dental and Vision Insurance Program (FEDVIP). The FEDVIP allows dental insurance and vision insurance to be purchased on a group basis which means competitive premiums and no pre-existing condition limitations. Premiums paid by enrolled federal and postal employees in the FEDVIP are always withheld from an employee’s gross salary.
Enrollment in FEDVIP takes place during the annual federal benefits “open season” held each year from the second Monday of November and through the second Monday of December. New and rehired employees can enroll within the 60 days after they are hired. This year’s FEDVIP open season will occur between November 9 and December 14, 2020. For those employees who enroll in a FEDVIP dental or vision insurance plan or change their 2020 FEDVIP dental and/or vision plan for 2021, coverage becomes effective Jan. 1, 2021 with FEDVIP insurance premiums deducted from employee paychecks starting with their first pay date in January 2021. Annuitants have 2021 FEDVIP insurance premiums deducted from their CSRS or FERS annuity checks starting Jan. 1, 2021.
Employees and annuitants who wish to dis-enroll from their current (2020) dental and/or vision insurance plan offered through FEDVIP must do so during the FEDVIP open season. They do so by going here.
Dental plan and vision plan information may be viewed here. For 2021, there are 7 national/international dental plans and 5 regional dental plans. For 2021, there are 5 national/international vision plans. There is a FEDVIP comparison tool that compares FEDVIP dental and vision plans. The comparison tool is available to employees ands annuitants and may be downloaded here.
FEDVIP is available to eligible federal and postal service employees, annuitants, survivor annuitants, and compensationers. FEDVIP eligibility has also expanded to include certain retired uniformed service members, active duty family members, and survivors.
You can only enroll as part of one eligibility group. If you are eligible to enroll in FEDVIP both as a federal civilian and as a uniformed service member, review the differences based on laws and regulations between the two groups, as described below.
Federal Civilians
- Employees are eligible for dental and vision coverage if they are eligible for the Federal Employees Health Benefits (FEHB) Program (they do not have to be enrolled in the FEHB program in order to enroll in FEDVIP).
- Annuitants are eligible for dental and vision coverage.
- Premiums are paid before-taxed by employees while federal annuitants pay their premiums after-taxed.
- Dependent children are covered until age 22.
Uniformed Services Members
- Most retirees are eligible for dental coverage.
- Most retirees and active duty family members are eligible for vision coverage, if enrolled in a TRICARE health plan.
- Active duty uniformed service members are not eligible for dental and vision coverage.
- Premiums are paid with after-taxed dollars.
- Dependent children are covered until age 21 (non-students) or until age 23 (if full-time students).
Employees can enroll in a dental and/or vision plan. They may enroll as self only, self plus one eligible family member, or self and family coverage. Eligible family members include an employee’s spouse and unmarried dependent children under age 22 (not age 26 as is true with the FEHB program). Dependent children include legally adopted children and recognized natural children who meet certain dependency requirements. This also includes stepchildren and foster children who live with the employee in a regular parent-child relationship. Under certain circumstances, coverage may be continued for a disabled child 22 years of age or older who is incapable of self-support.
FEDVIP and FEHB rules for family member eligibility are NOT the same. For example, changes in dependent eligibility under the Patient Protection and Affordable Care Act (PPACA) of 2010 affects eligibility for eligibility under the FEHB program but does not affect eligibility for children under FEDVIP. It should also be noted that many FEHB program plans provide some dental and vision coverage.
Employees must be eligible to enroll in the FEHB program in order to be eligible to enroll in the Federal Employees Dental/Vision Program (FEDVIP). It does not matter if they are actually enrolled in FEHB – eligibility to enroll in the FEHB program is the key. The “last five years of employment” FEHB program participation rule for eligibility to carry FEHB coverage into retirement does not apply to the FEDVIP. Annuitants do not have to be enrolled in the FEHB program in order to participate in the FEDVIP.
Information including enrollment information about the separate dental and vision plans may be obtained by going here. For 2021, there are 7 international/national dental plans and 5 regional dental plans, and 5 international/national vision plans.
Individuals accessing the BENEFEDS Website are guided through the process of verifying their eligibility for federal dental and vision insurance benefits and then creating an account before enrolling in a dental and or vision insurance plan offered through FEDVIP. Also explained on the Web site are what type of life events allow changes to FEDVIP-sponsored insurance plans outside of an open season. Qualifying life events include marriage, the loss of non-FEDVIP dental or vision insurance, the acquisition of new family members through birth or adoption, death of a family member included on a FEDVIP plan, and divorce. Also, a qualifying life event includes returns to or from active military duty.
The question that employees and annuitants should ask themselves: Should they enroll in a FEDVIP plan? In order to answer this question, employees have to ask themselves the following questions:
- Do they or a member of their family expect to incur significant dental and/or vision expenses during 2021?
- Assuming that the employee or a member of the employee’s family is expected to incur significant dental or vision expenses during 2021, is the employee better off “self-insuring”? That is, would the employee do better financially by setting aside money to pay the expected expenses? For example, does “self-insuring” using a health care flexible spending account (HCFSA), a limited expense flexible spending account (LEXFSA) or a health savings account (HSA) and using those accounts to pay dental and/or vision expenses make more financial sense than enrolling in separate dental insurance and vision insurance?
- Since employees pay the full cost of the FEDVIP premiums with no agency contributions, does it make sense for the employee to look into purchasing an individual dental and/or vision insurance plan from a private insurance company and comparing the premium rates? When all costs (that is, premiums, deductibles, coinsurance or copayments, maximum insurance company payouts), an employee or annuitant may be able to save more money by purchasing individual dental and/or vision insurance from a private insurance company or brokerage versus enrolling in the FEDVIP.
- For annuitants who also pay the full cost of the FEDVIP premiums with no federal government contributions, it perhaps makes more sense for annuitants to shop around for individual dental and/or vision insurance for themselves and eligible family members. This is because annuitants – unlike employees – pay their FEDVIP premiums with after-taxed dollars like they will if they were to buy an individual dental or vision insurance plan.
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Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees 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, and EZ Federal Benefits Seminars, located at 833 Bromley Street – Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
