Edward A. Zurndorfer –
Every 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 for plan (calendar) year 2021 regarding their health, dental and vision insurance coverage, and employees make decisions with respect to their participation in flexible spending accounts also during the 2021 plan (calendar) year. This year’s benefits “open season” runs from Nov. 9, 2020 through Dec. 14, 2020. This is the first of eight FEDZONE columns discussing choices that employees and annuitants have to make during the benefits “open season”. This column discusses choices regarding group health insurance coverage for employees and annuitants offered through health insurance plans participating in the Federal Employees Health Benefits (FEHB) program.
COVID-19 Impact on the 2020 benefits “open season”
The 2020 Federal employee benefits “open season” will take place as scheduled. The effective dates of the “open season” enrollment will not be delayed due to the COVID-19 pandemic. Employee Human Resource and Personnel offices are responsible for making sure that employees are aware of the dates of the “open season”, how to make changes, and which changes they can make.
Human Resources and Personnel offices are encouraged to find other ways besides in-person benefit ‘open season” fairs in order to provide information to employees, including webcasts and webinars.
The FEHB program – what is it, and who is eligible to join it?
The FEHB program is the largest employer-sponsored group health insurance program in the world, covering approximately 8 million federal employees, annuitants, former employees, eligible family members and former spouses. Permanent full-time and part-time federal employees are entitled to enroll in the FEHB program. They can include in their enrollment eligible family members which include 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 (eligible family member including a spouse or a child under the age of 26); and (3) self and family (multiple eligible family members including a spouse and children under the age of 26). A child who was disabled before age 26 is eligible to stay on the parent’s FEHB insurance past age 26.
In terms of premium costs, each FEHB program health insurance plans charges a different premium. The federal government pays on average 72 to 75 percent of the employee’s or annuitant’s total FEHB premium with the employee or annuitant paying the other 25 to 28 percent. It makes no difference which FEHB program health insurance plan or type of enrollment (self only, self plus one, self and family). These percentages of who pays (the employee, the annuitant, or the federal government) what percentage portion of the FEHB premiums are always the same and are set by law.
Over 200 health insurance plan choices are offered under the FEHB program. These plans include fee-for-service plans, preferred provider organization (PPO) plans, health maintenance organization (HMO) plans, point-of-service (POS) plans, which are a combination of PPO’s and HMO’s. There are also health plans available to specific categories of employees.
Enrollment and making changes to coverage during an “open season”
During the 2020 benefits ‘open season” being held from Nov. 9, 2020 through Dec. 14, 2020, employees and annuitants can take the following actions with respect to their FEHB program health insurance coverage for plan year 2021:
- Employees who are not currently enrolled in the FEHB program but who are eligible to enroll may do so.
- Employees who are currently in the FEHB program may change FEHB plans, type of enrollment, adding a family member to coverage for reasons other than a life event, and change “premium conversion” status that affects the way FEHB premiums are deducted from their salaries; namely, before-tax or after tax. Premium conversion will be discussed in the next FEDZONE column.
- Annuitants who are enrolled in the FEHB program may change their FEHB plans and type of enrollment.
- Annuitants who are not enrolled in the FEHB program are not permitted to enroll in the FEHB program during an “open season” unless an annuitant previously suspended FEHB enrollment in order 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 the 2020 FEHB “open season” enrollments and changes in enrollment are as follows:
- A new enrollment in the FEHB program is effective on the first day of the first pay period that begins the next leave year. For most Federal agencies, the first day of the 2021 leave year will be Jan. 3, 2021. That follows a pay period during any part of which the employee was in pay status.
- A change in enrollment is effective the first day of the first pay period that begins in the next leave year. This year that date will be Jan. 3, 2021 at most Federal agencies, regardless whether the employee is in pay status. For annuitants, a change in enrollment made during the 2020 “open season” will be effective Jan. 1, 2021.
“Open season” is also the time that an employee or an annuitant can elect to drop out of the FEHB program. If an employee drops out of the FEHB program and subsequently wants to reenroll in 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 coverage through a non-FEHB health insurance plan, enrolling in Medicare, or 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, 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 the employees of Serving Those Who Serve 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.