Ask The Experts: Retirement

By Reg Jones

FEHB and spousal coverage in retirement

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Q. I am enrolled in FEHB, but my wife has her insurance under her own employer. When I retire, can my wife switch her insurance to FEHB if she retires three year later and keeps her insurance with her employer until she retires? Does she need to be part of FEHB for five years before I retire?

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Adding spouse to insurance

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Q. I am a postal employee with self-only coverage. My wife works in private industry and has her own self coverage. Do I need to convert to family coverage and add my wife five years before I retire to keep her on my health insurance? Also, where can I find answers to questions like this?

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Self versus family health insurance

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Q. I have a couple of questions about insurance plan comparisons for single and family options in retirement.

For health insurance in retirement, when or should we change to two self-only plans or stay with the self and family plan in retirement? Are there any major considerations in selecting two single plans or the family plan? My wife and I, no other dependents, are CSRS retirees. We are covered by my self and family BCBS Standard 105 plan.

I have been reading the plan brochure but cannot create a logical comparison of when, or if, to go with two single plans versus the family plan option.

I know each single plan would have its own deductible per year for that persons plan.

Do you know of any way to compare and determine if the choice of two single plans would be better than staying with the family option? The annual difference in premiums is $710.40 for two singles versus the family plan under the BCBS Standard 105 Plan.

For several years after retirement, I worked at a company that offered three BCBS plan options: “Single” “1 Plus” and “Family” plans. The “1 Plus” premium fell between the “Single” and the “Family” premiums, but the government has not negotiated that option yet for retirees benefit.

A. Your question has no single answer. As the saying goes, “It all depends.” You’ve done a good job of identifying the differences between self and family coverage and two single enrollments.

Now you and your spouse have to make the decision.

As for OPM not having negotiated an option for retiree benefits, it can’t. Only a change in the law would allow it to do that, and no one on the Hill or in any administration has shown an interest in doing that.

Whether making such a change would reduce or increase the cost of retiree coverage is unclear. What is clear is that fragmenting the risk pool is rarely a good idea.

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Self-only vs. self and family

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Q. I am a FERS retiree with premium deductions from my annuity for Federal Employees Health Benefits family coverage. My wife is not a federal retiree.

1. If I change to single during open season, can I change back to family coverage the next year?

2. When I die, I assume FEHB coverage will halt for her, correct?

A. Yes, you can change from self-and-family coverage to self-only during any open season and change back during any open season. If you provided a survivor annuity for your wife, and you are covered by the self-and-family option when you die, she will be able to continue that coverage; if you were enrolled in self-only, she wouldn’t.

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Changing self-only to self and family

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Q. I know one has to have Federal Employees Health Benefits for five years before one quits or retires to get this benefit. Does it have to be family coverage for five years, or can I change my self-only coverage to family in the last year before retirement? Can I change it after retirement?

A. You can change from self-only to self and family and from self and family to self-only during any open season. The only requirement to carry your FEHB coverage into retirement is that you be covered continuously for the five years before you retire.

Note: I need to correct a misunderstanding on your part. If you were to quit, you would only be able to continue your coverage  for 18 months under the temporary continuation of coverage provision, for which you’d pay 100 percent of the premiums, plus a 2 percent administrative fee.

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Postal Service and health insurance

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Q. My husband and I are postal employees. He is getting ready to retire after 32 years with the Postal Service, and he is 59. I am 51 and will be continuing my employment probably (God willing) for another eight years or so. We both carry self-only health insurance plans, and I was wondering if I can take him on my insurance plan before he retires and change my enrollment to self and family. If this is a possibility, he can drop his plan. I think this would save us money, as I think his insurance will go up in his retirement. First, is this an option for us? How would I change my plan to self and family?

A. You could change from self only to self and family coverage during the FEHB open season.

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Dual coverage

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Q. My husband is a retired FERS employee and I am a current CSRS employee. I am covered as a family member under my husband’s self-and-family coverage. My husband did not elect a survivor annuity. I plan to retire the end of this year. What happens to my Federal Employees Health Benefits coverage if he dies before me? Will I be able to continue the coverage based on my own eligibility, even though he did not elect a survivor annuity? If I elect self-only coverage during the next open season, the change is not effective until Jan. 13, while any changes to my husband’s coverage would be effective Jan. 1.

A. If your husband were to die before you, you could continue that coverage. If you were still employed, the premiums would be deducted from your pay; if retired, from your annuity. There wouldn’t be any break in coverage, and you could, if he died, switch to self-only at that time.

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Marriage and health insurance changes

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Q. I’m getting married, and my husband is already 65. Can I still put him under my health insurance, or does he have to stay with Medicare?

A. Yes, you can change your coverage from self only to self and family. If you are an employee, you can do that within 60 days after your change in family status under code 1C in the Table of Permissible Changes. If you are a retiree, you can do it from 31 days before through 60 days after the change under code 2B.

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Self-only vs. self and family

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Q. I am currently retired (CSRS) and have single coverage under the Federal Employees Health Benefits plan. My spouse is still employed by the federal government (FERS) and has single coverage under FEHB. We were both under my family plan until our youngest child became ineligible. We then went to self-only plans because the premiums were less together than the family plan. She will be eligible for retirement in three years. She is also considering simply quitting before then and taking a deferred retirement when she is eligible.

I am not covering her for spousal annuity, nor will she be covering me. We plan to put her on a family plan with me when she retires. If she retires (or quits) before she has established five consecutive years as self-only under FEHB, will she eligible to gain self-only under FEHB in case of my death? If not, can she continue self-only into retirement (or deferred) and then join me later under the family plan?

A. She doesn’t have to have been enrolled in a self-only option for five years to take that coverage into retirement; she only needs to have been covered by or enrolled in the FEHB program for that long. If she were to leave the government before being eligible to retire, she would receive a 30-day extension of her coverage at no cost to herself and, if she chose, enroll in her current plan or another for up to 18 months under the temporary-continuation-of-coverage provision. If she did so, she’d be required to pay 100 percent of the premiums plus 2 percent for administrative costs. Alternatively, and a much more sensible choice, during a health benefits open season before she resigns from the government, you could switch to a self-and-family option of your plan. During the next open season after she began receiving her deferred annuity, the two of you could switch back to self-only options.

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Health insurance coverage

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Q. I am retiring in two months from the Bureau of Prisons with 20 years. I have always carried the health insurance for me and my wife, along with a grandchild who qualifies. My wife also works for the BOP and I am wondering if I die while carrying the insurance, will she still be able to get her own self-only insurance since she has been on mine for 20 years?

A. Yes, as long as she was covered under your self-and-family option when you died and is receiving a survivor annuity.

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FEHB continued coverage pay period question

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Q. I retired in 2009 with 25 years’ service in USPS. One year before my early retirement, my husband (a current Department of Defense employee) and I changed FEHB from a self-only plan in Blue Cross to a family plan, with him carrying the insurance. We were told by Blue Cross that I had to drop my self-only plan so he could pick me upon his family plan, which we each did during open season.

Unknown to me, his pay period did not begin Saturday in federal service like mine did in USPS. The bank always credited his account on Fridays , same as me.

Therefore, my coverage ended on a Friday, and his picked me up the following Monday.

As you can see, I was therefore without insurance for two days, hence a break in service, and the USPS said I did not meet the five-years-before-retirement rule.

Do I have any recourse, or am I out of luck? I was covered on my self-only Blue Cross plan with USPS for at least 15 years before we made this change and feel that we followed the rules but I got unjust treatment. We are still covered on FEHB Blue Cross.

A. Fortunately, you’re not out of luck. Because you are covered by your husband’s self and family enrollment, if he died, you could continue that coverage and change to self only. Or, you could both switch to self-only coverage.

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Health insurance for new spouse after retirement

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Q. I retired last year after 30 years in CSRS. I was single, so I had self-only health insurance coverage. If I get married, could I include my wife in my health coverage plan?

A. Under Code 2B of OPM’s Table of Permissible Changes, you could switch from self only to self and family coverage from 31 days before through 60 days after you married.

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Medical coverage for surviving spouse

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Q. I am a federal retiree, and my wife and I have Blue Cross/Blue Shield coverage under the Federal Employees Health Benefits plan. Should I predecease her, is she still covered under the plan? If so, does the rate drop to single, or would she need to continue paying the family rate? I ask this because a recent response states, “The only way she can continue to be covered by your FEHB plan is for you to continue being enrolled in the self-and-family option.”

A. What I wrote is correct. However, were you to die while she was covered under the self and family option of your FEHB plan, she could convert that coverage to self-only.

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Health insurance coverage for my wife

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Q. I am a retired FERS employee. I elected to continue my federal health insurance (family plan) as the supplemental insurance for Medicare. I did not take the supplemental (Part B) insurance that Medicare offered. If I die, can my wife continue the federal health insurance? For how long? Can she keep the federal health insurance for the rest of her life? Can she have the “single” rate on the insurance?

P.S. Do you foresee any change that the health insurance carriers would drop the coverages for retirees?

A. As long as she is entitled to a survivor annuity and she is covered by the self-and-family option of your Federal Employees Health Benefits plan when you die, she can continue that coverage for the rest of her life. She can also change to the self-only option.

P.S. There are no plans, nor have there ever been, to exclude federal retirees and survivors from the FEHB program.

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FEHB refund?

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Q. I have always been a single person without any dependents, but for several years I was enrolled in the Kaiser Permanente family health plan instead of the Kaiser self-only plan. After realizing this, I changed to the Kaiser self-only plan in early 2011.

Since there is nobody past or present who could legally use my health benefits other than me, can I get a refund for the difference in premiums paid over the past years?

A. According to the Office of Personnel Management, “It is up to the employing agency whether or not to make a retroactive correction from self-and-family to self only and refund any excess premiums.

“FEHB regulations at 5 CFR 890.301(e)(2) provide that at the request of the employee, and a satisfactory showing to the agency that there was no family member eligible for coverage under the self and family enrollment, an agency may make a change to self only retroactive to the first day of the pay period following the one in which there was no family member.

“So it is up to the agency, and if it is their policy not to make these adjustments, OPM cannot require them to do so. If the employee is having difficulty with his/her HR office in explaining his situation, he should contact the agency HQ Benefits officer who can contact us if they have concerns. Here is the link: http://apps.opm.gov/abo.”

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Adding spouse to FEHB coverage

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Q. I’m employed under FERS and plan to retire soon unmarried. After I am retired, I will still be covered with the FEHB single plan. If I should decide to get married later, is it possible to add my spouse to my FEHB plan and change to a family plan to bring her under my coverage? Are there any prerequisites or approval steps for her in order to add her to give her coverage, as well?

A. Yes, you could change from self-only coverage to self and family under code 2B in the Office of Personnel Management’s Table of Permissible Changes in FEHB Enrollment. You could do that from 31 days before through 60 days after you got married. One thing to keep in mind: If you die and haven’t elected a survivor annuity for your new spouse, she wouldn’t be able to continue that coverage.

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FEHB and Medicare

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Q. I am a federal employee under CSRS in the Federal Employees Health Benefits program. I signed up for Medicare Part B when I turned 65 so as to avoid the 10 percent annual penalty. But after paying for seven months, I dropped out of Part B because I was told I didn’t need to buy it if I had group coverage. I called Medicare and this was confirmed, though I may not have said I was retired but just that I was in FEHB. My wife is two years younger than I, so I had to retain the FEHB coverage until April 2012, when she turns 65. I recently read in the Medicare booklet that “one need not sign up for Part B if they are in a group plan sponsored by an employer.” Did I screw up and cost myself 20 percent when I sign up for Part B again, in April? I fear leaving the FEHB for Part B and supplemental coverage because who knows which premiums will increase faster. Can I switch in April to a self-only policy, with my wife going to Part B plus a supplemental? If I do so, may I never thereafter switch to “self and family” in the FEHB open seasons to follow?

A. While I don’t think you’ll be penalized when you re-enroll in Part B, you’ll have to confirm that with Medicare. As for the FEHB program, you can switch to self-only coverage during any open season, and you can also switch to self and family during any open season. However, you cannot switch in April.

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FEHB vs. Medicare supplement

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Q. My spouse turns 65 this year and will be eligible for Medicare. She currently is listed as my dependent in the Federal Employees Health Benefits plan. Because the federal government does not offer a husband/wife option in FEHB plans, could I drop her from my current FEHB and use her Medicare as primary and purchase a supplement on my own and change my FEHB status to single until I retire? I believe the overall cost would be less and most likely be to our advantage, with no more networks to deal with.

A. You are making assumptions that may not be valid. While it’s conceivable that you could save money by shifting your coverage to self only and your wife’s to Medicare and a supplemental, you need to check out the real costs to be sure. While Medicare Part A is free, Part B isn’t. Also, supplemental plans are tricky rascals whose costs and coverage are all over the lot. More importantly, you need to make sure that the resulting benefits will at least match what she would have under your FEHB plan plus Medicare. Because I doubt that they will, I urge you be very careful before you put your wife at risk to save a few bucks.

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Self to family coverage

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Q. The Office of Personnel Management website is unclear to a couple of us potential Civil Service Retirement System retirees as to whether a nonfederal spouse, not covered by a Federal Employees Health Benefits policy, can receive coverage by the federal annuitant changing from single coverage to a family plan during an open season after the federal spouse retires.

For example, assume a federal employee currently covered by an FEHB Kaiser Permanente plan has a nonfederally employed wife (currently covered by a Kaiser Permanente single-only health plan though her employer). The federal employee retires Sept. 3, 2011. After he retires, can he convert from a single health policy to an FEHB family plan to add coverage for his spouse (who would then drop her separate, single coverage) during the November 2011 open season or during the November 2012 open season?

A. Yes, a retiree can move from self-only coverage to self and family during any open season. See Code 2A in OPM’s Table of Permissible Changes in FEHB Enrollment for Annuitants and Compensationers.

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Health care in retirement for dual-fed couples

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Q: My spouse and I are both under the Federal Employees Retirement System and our service computation dates are within weeks of each other. We would both like to retire under the minimum retirement age plus-10 provision. My spouse wants to retire in 2011 at age 58, with 26 1/2 years of continuous service, the entire time enrolled in a Federal Employees Health Benefits individual plan. The earliest I would retire is 2012 at age 57, with 27 1/2 years of continuous service, all in an FEHB individual plan.

Here is our plan: During this open season, I should enroll my spouse and myself in an FEHB family plan. She could then retire in 2011 and elect a postponed annuity. She would have health benefits under my family plan, while her annuity entitlement increases 5 percent for each year she postpones receipt of her annuity. When she elects to receive her annuity at age 59 or 60, she can then re-enroll in an FEHB family plan.  At that time, I could retire (also with a postponed annuity) and receive health benefits under my wife’s plan. Again, when I start receiving my postponed annuity several years later, I can re-enroll in an individual FEHB plan, and she could change her family coverage to an individual plan during open season. This way, we have two individual FEHB plans and we won’t have to worry about electing FERS survivor benefits that would otherwise reduce our annuities. Is this a reasonable plan?

A: Sounds like a reasonable plan. However, because you cannot have dual coverage (i.e., self and family plus self only for one family member, or self and family for both members), you’ll have to time the switch from one covered member to the other. As a rule, this would be easiest to do during the annual open season.

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