Inertia + FEHBP = Financial Problems

Half of the people covered by the federal health program (4 million current spouses, ex-spouses, dependent children and some grandchildren) probably don’t know anything about the plan they are in. Including the name of the plan, how much the premiums are, and what it does and doesn’t cover.

For that matter only a relatively small number of people switch plans each year despite premium hikes — generally moderate for 2012 — or benefit changes. Some people are surprised to learn that their favorite doctor may have left their plan. Or that he or she may be in the network of a plan with much lower premiums.

The good news is that all of the plans are good. The not-so-good news is that some of them simply cost too much (in premiums) or make you pay staggering amounts of money out of pocket in the event of a major medical disaster.

Inertia can be expensive.


Yet if any of those dependents — like the primary policy-holder — are hit with a major illness or have a serious accident next year, the health plan chosen for them may be critical. In fact, picking your FEHBP plan (the Open Season ends next Monday) could be the most important financial decision you will ever make. At least until this time next year.

Dependents aren’t alone in lack of knowledge about their health plans. Many federal workers and retirees also don’t know much about them. Some haven’t checked out their plan in years. Many are surprised to learn that the government pays the lion’s share of the premium (about 73 percent), that they have 20-25 choices, that they can’t be turned down for any reason and that to continue health coverage into retirement, they must have health insurance (any of the FEHBP plans) for the five years prior to retirement. Many also don’t know that if they die and have a self-only plan, their surviving spouse will NOT be able to apply for FEHBP coverage.

Over the past couple of weeks we’ve had a series of columns about the FEHBP, your options and the importance of catastrophic coverage.

Walton Francis, author of the Checkbook’s Guide to Federal Health Plans, and David Snell, from the National Active and Retired Federal Employees, helped and continue to help us help you. Francis will be on our radio show, Your Turn, tomorrow to answer questions. Call in if you like (that’s Wednesday, 10 a.m. EST) at 202.465.3080. Or you can e-mail questions to me at

Meantime, here’s about 20 minutes worth of reading that could save you a lot of grief and a lot of money. In fact you could wind up with a healthy savings account thanks to your HD health plan. Check it out:


By Jack Moore

A psychiatrist has called for the Irish government to add lithium — often prescribed as a mood stabilizer — to the public water supply to lower the rates of depression and suicide, according to an Irish Times report. The doctor said the population wouldn’t become “hooked” on the drug because the doses would be so small.


Analysis: Agency/vendor friction increases
The gulf between agencies and contractors may be growing, according to some new evidence. A new report from GAO shows vendors filed the largest number of bid protests in 2011 since 1995. Another report this summer showed the increased use of suspension and debarment.

Top 10 things every fed should know before retiring
The first year of retirement means a lot of changes to health insurance, life insurance and a slew of other benefits. Tammy Flanagan, the senior benefits director at the National Institute of Transition Planning, created a list of the top 10 things federal employees should know as they make the transition from active-duty fed to retiree.

GSA gives $1,000 to citizens for how-to videos
Gazillions of ears and eyeballs listen to and view YouTube videos every day. For the General Services Administration, that’s a good reason to have government information posted on the popular video website. For the second year, GSA has sponsored a contest in which both professional and amateur film-makers create short videos about government services.

Senate rejects bill with pay freeze extension, workforce cuts
The Senate voted 78-20 last week to reject a proposal that extended the federal pay freeze through 2015 and cut the federal workforce by 10 percent. The bill — The Temporary Tax Holiday and Government Reduction Act, introduced by Sen. Dean Heller (R-Nev.) — would have used the freeze and cuts to pay for a one-year extension to the payroll tax holiday.