Information about FEDVIP plans – including eligibility, taxation of premiums, and most importantly – do you need one?
The Federal Employee Dental and Insurance Program (FEDVIP) is available to two groups of federal employees, retirees, and family members. Whether you are (or were) military or a civilian employee determines which group you’d fall in, but it is important to note that if you have both military service and civilian service, you can only claim eligibility for FEDVIP as a member of one of the groups – not both. In this article, we’ll go over the two eligibility categories of FEDVIP participants, how premiums are subject to taxes, and then whether getting an FEDVIP plan is worth it or not.
Learn about FEHB, FEDVIP, and Medicare at our No-Cost webinar, featuring Ed Zurndorfer!
You can change your FEDVIP plan, or enroll for the first time, during the FEHB open season, which is going on now and ends Monday, December 12th. (Newly hired employees are able to enroll within 60 days of their hire date as well.) The two categories that determine eligibility also are subject to different rules. Here is a breakdown of the main differences between them:
Civilian Federal Workers and Retirees
Civilian federal and postal employees, retirees receiving either a CSRS or FERS pension, and those receiving survivor benefits are all eligible for a FEDVIP plan. For active civilian feds, you must be eligible to enroll in FEHB (but you are not required to actually be enrolled). If meet this requirement, you can explore FEDVIP plans. The premiums are then paid pre-tax from your paycheck.
For annuitants under CSRS or FERS, participation is not contingent on FEHB enrollment eligibility. To get a healthcare plan from FEHB in retirement, you must’ve been enrolled in an FEHB plan for the last years of employment. There is no such requirement for FEDVIP. However, premiums are paid post-tax for retirees.
For those who are eligible for FEDVIP in this first group, their dependents can be covered by FEDVIP until reaching age 22 (regardless of their student status). For FEHB plans, dependents can stay covered until age 26.
Military Family Members and Retirees
If you are unable to get a plan from FEDVIP through group 1, you might eligible under the second category, which includes:
- (Most) Retired Uniformed Service Members
-
(Most) Active-duty family members
- Those receiving military survivor benefits
Active duty servicemember are not eligible for FEDVIP plans, however their family members are eligible for dental coverage. If active-duty family members are enrolled in a TRICARE health plan, they are also eligible for vision insurance.
Retired military members are also eligible for FEDVIP plans, but since they weren’t prior to retiring, their family members are no longer eligible to be the primary enrollee, and have to be listed as dependents under the recently retired individual’s new vision and dental coverage.
If you enroll as part of this group, all premiums are paid with post-tax dollars.
Should I Get a FEDVIP Plan?
Are you expecting to incur a lot of dental and/or vision expenses? Then you might want to look into it. FEDVIP plans offer competitive premiums and there are no pre-existing condition requirements. Like FEGLI, the premium rates for FEDVIP are based off the large pool of participating federal employees, family members, and retirees, and this keeps the price down. However, if you (and your family) have relatively good teeth and eyesight, the dental and vision coverage provided by your healthcare insurance plan (from FEHB or otherwise) is probably sufficient for your needs, or you might be able to find a better deal from private insurance providers. It should also be noted that, unlike FEHB plans, FEDVIP is paid completely by the enrollee with no portion paid for by the employer.
--
Until Next Time,
**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
