#90: Medicare and FEHB

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Listen to the Full Episode:

What coverage do you have, and what coverage do you actually need?
Join Micah and Tammy in this episode, where they explain everything you need to know about Medicare and Federal Employees Health Benefits, providing you with the answers you need to make informed decisions about your health coverage.

Understand the importance of healthcare planning and find out the critical changes in healthcare plans, shedding light on the latest updates that directly impact you. Discover the inclusion of infertility benefits across all plans, enhanced maternal health coverage, and a focus on mental health and obesity. Explore the nuances of Medicare Parts A, B, C, and D, and determine whether you need both Medicare and FEHB. 

Knowledge is power, and we’re here to empower you on your healthcare journey.

What We Cover:

  • Open Season and what has changed
    • Infertility benefits
    • Maternal health
    • Mental health
    • Obesity
    • GEHA
    • AETNA
    • Foreign Services
  • Open Season and what has changed
  • Health Savings Account (HSA)
    • When to Start it, when to stop it
    • HSA contribution
  • Federal Employees Health Benefits (FEHB) 
  • Medicare Changes
  • Medicare Part D
  • How do Medicare Parts A, B, C, and D differ, and how do they relate to your FEHB coverage
  • Can you use Health Savings Account (HSA) or Flexible Spending Account (FSA) funds for Medicare premiums or expenses?
  • Does Medicare cover long-term care, home health, or rehabilitation services?
    • How does that compare to FEHB?

Action Items:

  1. Review HSA / High Deductible plans
  2. If you are over 65, look at Medicare Part D.

Resources for this Episode:

 

Ideas Worth Sharing:

And I've been getting a lot of pushback from retirees saying I don't want to be automatically enrolled in some federal benefit that I may or may not want. So they're they're calling up their plan saying, how do I get out of this? Well, before… Click To Tweet

And one of the things, too, no matter if it's something I say, something Tammy says, or somebody else says, feel free to question it. We don't get offended with questions. – Micah Shilanski Click To Tweet

And if you don't do anything else, nothing else this open season, you have no interest in open season, but you got to do one thing, and that is look at the front of your FEHB plan brochure up here and right here you can see there's a box on the… Click To Tweet

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Micah: Welcome to the Plan Your Federal Retirement podcast. I’m your host, Micah Shilanski, and with me is the legendary Tammy Flanagan. Tammy, how’s it going? 

 

Tammy: You built that one up? Micah, I’m doing great. 

 

Micah: You are my, like Ace in the Hole, by the way. Whenever I’m like, someone’s pushing back on me if I’m speaking and whatnot says it like, Micah, that’s not all. I tell you what, I’ll text Tammy and we’ll get Tammy’s opinion on this one real fast. 

 

Tammy: Well, I don’t know. Sometimes I have the imposter feeling because it’s like everybody thinks I’m this big expert, which I am. I do. I do have a lot of experience. I’ve done this for 35 years. But there are people out there, believe it or not, who know as much as I do. They just aren’t well known. And if you’re looking for someone within your agency, they may or may not be that person. But there are some people out there that can help you with this besides me and Micah. But I’m glad we’re here. And I think the synergy between you and I from the finance and tanks mixed in with the benefits, I think it really does help people get a different perspective on some of these things we cover.

 

Micah: I love it. And one of the things, too, no matter if it’s something I say, something Tammy says, or somebody else says, feel free to question it. We don’t get offended with questions. By the way, if it’s like, Hey, I’m getting a little conflicting information, and this happens a lot while I know it’s an either-or topic today, but, you know, military reserve time buying that back to count it for your creditable service for civilian time. There’s a lot of complexity in that one. And you can hear a lot of things from H.R. agencies back and forth. So, question those things. This is your benefit; it’s your money. We want to give you the most information you can so that you can make the best decisions for your retirement.

 

Tammy: And the other thing I tell people is make sure I don’t take anybody’s word for anything, even ors. You know, if you need something documented, we can provide you with a reference. If you’re looking for something when you’re moving into retirement, keep your documentation. Don’t just say, I think I know I started on this date. I ended on that date. We need the documentation. Yeah, I worked for the FBI way back in the 80s, and we always based everything on evidence. Right. You got to have that hard evidence. So that’s always going to help you in the long run. If you have it documented, if you have a record of it, that’s going to be anything because I’ve even seen it. I hate to admit it, but I’ve even seen OPM and Social Security make mistakes. And if I can prove it by showing them the law, the rule, the document, I can win it every time.

 

Micah: They get a case like that earlier this year with a client. And that was exactly it is OPM gave them the wrong information. They’re actually applying for a postponed retirement. So they were at 60 or 20 years of service. They’d postponed that MRA. They’re waiting till 60 to apply. And when OPM personnel got the postponed retirement application Tammy, they turned around and said, no, we’re going to process this as an immediate retirement because that’s what you should have done. But I can’t back pay for that, And like, whoa, whoa, this is not an immediate retirement. This is a postponed retirement. And they’re like, no, no, no. I read it right here. And the guy was really nice, but he was brand new to this. So we had a great guy, e-discovery, and it was like, yeah, I can totally understand here reading this. However, let’s look at some other rules here. And then he was able to process that as a postpone, but he was about to process it as an immediate retirement with a penalty, which that’s even a different discussion. But anyway, so it’s really important to know how these rules work. 

 

Tammy: Yes. Yes. And that’s  a good example of something that sounds so simple but that is one of the most complicated retirements to process. Yeah. Especially when you’re choosing that date you want it to start on. It’s very particular, and it’s not really that well explained when you read the application. So, where are we going to get into today? That’s not that well explained. 

 

Micah: It is like that is a great transition. Too complicated? Not really well understood. Let’s jump into it Tammy. Open season. I want to talk about open season with you because it is open season, and we can go through that. So not only with just talk about open season, let’s jump into Medicare as well. But there’s been a lot of changes during this open season with the FEHB, the Federal Employee Health Benefits Program. So, touching on some of those and really touching on Medicare is a lot of questions that can come up about that. And yeah, it was I, I think we’re going to go through that some good to you?

 

Tammy: Sounds good to me. You and I and are in open season. It officially doesn’t start till next Monday, November 13th, and it’s going to run through Monday, December 11th. So you have a full month. It’s not a calendar month, but it’s four weeks of time to figure out what to do. And this is good if you’re listening to us now because you’ve got the full four weeks to really figure this out and make some decisions. And if you don’t do anything else, nothing else this open season, you have no interest in open season, but you got to do one thing, and that is look at the front of your FEHB plan brochure up here and right here you can see there’s a box on the front cover. It says important information, and it really is. It’s showing you the rates for next year. And I’ve seen some plan, some of the HMOs, these are going up $175 a month. Wow. So if you don’t think your plan is going up, look again and make sure there’s some that are actually going down. A few dollars, not too many, but there is a couple a couple are staying the same. So when we say the average increase is, whatever, 7.8%, that is irrelevant to you because if you’re in a plan that’s going up 100%, you know, who cares if the average is seven? So look at those rates. Look at the changes for 2024. So even if your rates aren’t going up, maybe the deductible went up, or maybe the catastrophic cap changed. So look at that as well. And then, finally, there’s a summary of benefits in your plan brochure. Maybe you don’t even know what the plan covers you. And we were talking about a pretty interesting benefit of one of those plans before he came on the air. And I bet a lot of people don’t know that some of your federal health plans cover massage therapy, and some of them don’t even require a doctor’s referral, like the Foreign Service benefit plan. So you might have benefits you don’t even know you have with the plan you’ve been in. 

 

Micah: And Tammy, don’t just cover massage therapy; cover 58 massages a year. Right? Almost every week, that is fantastic. And you got to take Christmas off and Easter. There’s your two weeks. You got to take off. Right. But other than that, yeah, that is fantastic inside of the benefits. So, it’s not just about being blessed with a great FHB program. I know I get to say that as the person on the outside looking in at how great your benefits are, so you really do have fantastic, but you got a whole laundry list of benefits to choose from inside of that FEHB. And I think a really big missed opportunity, Tammy, is people don’t really understand what coverage they need and what coverage they should have. They get comfortable with X company and it says, You know what, I’ve got X company, It’s going to pay the bills. I know how it works. I don’t want to rock the boat. I’m going to keep this until I die or until they cancel the plan. And that’s what they stick with, and that’s an option. But we might want to encourage you to look a little bit past that.

 

Tammy: That’s right. Is we change the plans, change,  life changes. So we do have to take a look at this every year, even if you like that plan family; for instance, I’d say you’re a really big fan is a lot of people are of the Blue Cross Blue Shield plans. Well, you’ve got three options. You’ve got standard option, a basic option, and Blue Cross focus. Maybe Blue Cross focus is great for your son who just came to work for the government, but maybe you who’s preparing to retire and you got to be in Blue Cross Basic because that’s going to give you more comprehensive coverage, less out of pocket, maybe you’ve been a law enforcement officer and have hearing loss. So now you need hearing aids that give you a great hearing aid benefit.

So you really got to look at the plan that’s suited for your stage of life and your situation. You know, what are your health issues? What prescriptions are you filling? It really does pay you literally pay you to pay attention to this because one difference between this plan to the next one can save you literally thousands of dollars per year. And that’s not a little bit of chump change. I think that’s quite a bit of savings. 

 

Micah: So, Tammy, let’s run through real quick. Just what are some of the big changes? Not per plan. We can get to that in a little bit, but what are some of the big changes that we saw come out of OPM open season this year? And then let’s kind of pivot into some plan information, maybe some planning opportunities with that, maybe HSAs, etc., then get into Medicare. 

 

Tammy: Well, there’s quite a few changes, as is every year. Believe it or not, OPM does send out notices to all the health plans at the beginning of the year. It’s called a call letter and it tells them what they want them to emphasize for the coming year, what they might want to consider offering. That’s a really valuable benefit to the feds. One of the things they’ve been noticing is that federal employees, especially in the earlier stages of their career, want coverage for things like maternal health and in vitro fertilization, which has really never been covered before. And so all plans now give you something in terms of that; some are giving you more than others. For instance, Blue Cross standard option is going to give a $25,000 allowance for treatment. Other plans might just have discounted coverage. So you really got to look at those plans if that’s something you need for next year because there is some big changes there. Another thing is OPM wants to focus on obesity, not just in US adults, but also our children. And so they’re trying to offer some extra benefits to help prevent and encourage people to find fitness and nutrition. So there’s a lot of things in your health plan, brochures that may help you battle that obesity challenge. And I know I’ve been battling it ever since I turned 40, so I know there’s others in that same boat. And we are also seeing a lot of changes with Medicare. Many of your federal health plans, even ones who weren’t doing it last year, are now offering a medicare Advantage add-on or enhancement of the FEHB plan. Those are interesting. They’re going to save you some money. But there’s some little hidden factors there that we can talk about. So I want to make sure everybody’s aware that there’s pros and cons to adding a Medicare Advantage plan. But there’s another benefit that anybody who’s over 65 who has Medicare Part A and or Medicare Part B you don’t have to have both. You’re going to be automatically enrolled in a medicare drug benefit plan. They call it a PDP, a prescription drug plan, and that’s a part D, Das an David D is a dog. It’s a Part D medicare plan for covering prescriptions. And that’s automatically for everybody who’s in that category. And I’ve been getting a lot of pushback from retirees saying I don’t want to be automatically enrolled in some federal benefit that I may or may not want. So they’re they’re calling up their plan saying, how do I get out of this? Well, before you get out of it and before you say it’s not good, really, look at what it’s doing. The reason why OPM made this automatic was because they felt everybody would benefit from it. It covers a larger class of drugs. It lowers the out-of-pocket expense you pay, and it sets a limit on how much you have to pay out of pocket. By law, there’s now a limit if you’re in a part D plan OPM, wanted our retirees and even active employees to benefit from that. The only downside to it would be those of us who might be in a higher income bracket. And you’ve got to pay those aren’t Irma, as you call them, and Irma surcharges, which on the part D plans can run anywhere from about $12, almost 13 a month up to as much as $81 a month, and that’s per person. So if you’re not filling a lot of medications, you might want to take a look at that and opt out if it’s costing you more than you’re getting out of it. But on the other hand, many nice benefits under that. So something to take a look at. So those are some of the things you’re going to see in your health plans for 2024 that you might want to take a look at. You might want to look at other plans and do a comparison.

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Micah: Sure. And Tammy, to add that right, your Irma, that doesn’t just affect the Medicare Part D is in Delta drugs. It’s Part B is in Bravo. That’s the bigger dollar amount they right that you really got to be watching out for.

 

Tammy: And that’s always the big question, isn’t it? To be or not to be.

 

Micah:  Why is that? So much of our tax planning right now is Roth conversions with clients, capital gains, harvesting, all these things. But that’s a big thing is saying underneath that Irma bracket because, yeah, it can get painful when you start breaking down.

 

Tammy: And you’re stuck with it. Then, for a whole year until you can lower your income.

 

Micah: So Tammy, let’s say somebody was in a plan, they automatically signed them up for Medicare Part D as in Delta. There’s no late enrollment period. Right. Because the prescription plan you’re in is a qualified plan or credible plan. I forget their language use. And so it’s allowed, but they don’t want it. And so what are the options that they have?

 

Tammy: Yeah, they’re getting kind of a little bit of a scary letter in the mail, at least. I know Blue Cross sent out letters telling there was a deadline to opt-out, which was actually the date before the open season even starts. So wait a minute. I’m getting ready to go out of town or something’s happening. I can’t do it yet. Get on hold. They’re holding for an hour on the phone. Yeah, but keep in mind, if you missed that deadline, it’s not the end of the world. You can still opt-out. In fact, Blue Cross has in their brochure about the prescription drug plan. They have in there saying that you can even call Medicare and drop out. You can call centers for Medicare and Medicaid services. So I would suggest checking your plan’s website, or if you have a plan brochure, you can see the plan brochure online. Look in there. It’s going to tell you what you can do. It’s going to give you some details about that plan. I found more information on the websites than in the plan brochures on these new part D plans, but they’re in both. Also, you always have an 800 number to call. So if you’re in a particular plan that’s offering this or enrolling you in this benefit, give them a call. If you have questions about it, they’ll be happy to answer them. This is new. You know, we’ve never had this before. This is something that retirees are like, What do you mean? They’ve always told us we don’t need Medicare drug benefits. Now you’re telling us we’re automatically getting enrolled in it? Well, there was a law, the name of that law passed a couple of years ago. I can’t think of the name of it. But anyway, as a result of that law, that’s why OPM is doing this, because that new law is setting these limits on seniors. You know, seniors like me, how much we have to spend on our medications, because they’re finding statistically, a lot of people are filling their medications because they can’t afford to. So they’re trying to find ways to stop that from happening, to allow people to retain their health and get better if they’re sick and not forego taking these important medications that could really help them.

 

Micah: Well, Tammy, before we do a little bit more of a dive into Medicare, I know one of the things that is kind of big is Humana is no longer inside of the FEHB program, correct? 

 

Tammy: Yeah. So up until this year, last year, there was 174 different plans and plan options within FHB, which is, in my opinion, far too many anyway, way too many to choose from. But now I think we’re down to 157, 58 because Humana was active in a lot of different states. It’s an HMO. It only had a total of 10,000 enrollments in all of their options. So, losing it is not a major blow to the federal health plan. But if you’re an Humana participant, you got to find a new plan for next year because if you don’t, you’re going to be automatically enrolled in the Elevate plan, which may or may not be the plan that you want. So right now it’s going to pay you to do a plan comparison for next year to figure out what the plan is. Really, this could be an opportunity. I look at it as an opportunity to find a plan that’s really going to work best for you. So I would take a look at that. Humana, there’s also Aetna Open Access. If you’re in Kansas or Missouri that’s leaving those areas that the open access is not leaving FEHB, just that particular region. Now, NALC, used to be I think it was one of the least, if not the least expensive federal health plans, their value plan option, well, you’re not going to have that next year. So if you’re in now NALC value, they’ll find another plan. You might want to look at Blue Cross focus. You might want to look at the Elevate plan. These are all the lower cost value-type plan options that you can choose from but no longer in NALC. And I see one other big thing. I don’t know how many postal employees or postal retirees are listening, but because they’re most likely aware of this, but they may not be aware of the details, you know, the Postal Service Health Benefits program, which is going to be a kind of a subsidiary of FEHB that’s going to start up in January of 2025.

So we have another year before that goes into effect. So postal employees postal retirees don’t have to do anything different for the 2024 plan year and can stay in the same plan. You can move around just like you did before. Your prices stay the same as far as postal employees go. But next year, in 2024, starting in April, if you’re a retiree who said, I don’t need Medicare Part B, and now here you are at age 85, say, Man, I wish I had Medicare Part B, postal retiree are having a unique special enrollment period. It’s going to run from April 1st to September 30th of next year. So you have to do the open season. But starting April 1st, you can jump in the Medicare Part B with no penalty. It’s like the greatest gift ever. If you’re somebody who waited 20 years now you have this once-in-a-lifetime opportunity to jump into Part B with no late enrollment penalty. Because typically, if you waited 20 years, you couldn’t afford it because it’s a 10% per year on the standard premium late enrollment. And the standard assumes $174 a month. So every year that you’ve delayed, that’s a tax on another 1740, 1740. So no late enrollment penalty for those postal retirees. Now, again, some of them, many of them, don’t have part B and don’t want it and they don’t have to take it. But hey, if it means you pay nothing out of pocket when you go to the doctors or the hospital or lab work or physical therapy, I would look into it. 

 

Micah: Tammy I was just talking with a client and it was kind of that scenario right there is they weren’t excited about getting into Medicare Part B to say it lightly, right? They are like, This is ridiculous. I’m paying so much more. All the understandable arguments and concerns. And one of the things I tell my clients is that I don’t have a stat or somewhere in the book that I can find that says this is the number, but it’s all my clients. This is like, if you don’t wish to enroll in Medicare Part B, there’s going to be a time where you have larger medical expenses that may not be covered and it’s going be 10 to 20000 bucks out of pocket. And if you have that money and you don’t wish to enroll in Medicare Part B, okay, well, then that’s kind of that risk that you’re taking. But the benefit to your point about signing up for it is, yes, you have the premium. There’s the downside. However, your out-of-pocket go to almost zero and a lot of things. And so now all of these things are covered. So instead of paying for it randomly, as you see the doctor now, you’re paying for it on a monthly basis, pro at a con; I totally get that. Butbe, really hesitant before you don’t enroll in Medicare, Part B is in Bravo. 

 

Tammy: Exactly. I totally agree with that. I think it’s a little shortsighted, but I don’t blame the participants because they don’t really see the long picture on this. You know, when you’re 65, hopefully you’re still in good health. Hopefully, you’re still taking those cruises and trips across the ocean and doing all the things you want to do. You’re still very active. You know, maybe you’re running the New York marathon, who knows? But ten years from now, that may not be the case. 20 years from now, that’s probably not going to be the case. You may have another 40 years of life left after you turn 65. And the fact that you have no out-of-pocket medical expenses when you combine Medicare parts A and Part B with most of not most, but many of your federal health plans, that’s a truly wonderful benefit that you’re getting for very little extra cost because like you said, Micah, you are paying for part B, which next year is $174.60 a month per person. Yeah. Yes, that’s an additional premium. But now you don’t have to be in that same health plan you were in this year because now you’re going to combine that with a plan that really caters to retirees who have Medicare Part B you’re look at Aetna Direct, you’re going to look at g, a, h high or standard option. You’re going to Blue Cross Basic rather than Blue Cross standard. So every plan family has one plan within that family that really caters to retirees who have Medicare, which means they’re going to give you money back. Some plans will give you $100 a month back on your Part B premiums. So now, 174, it’s only $74 a month. Most plans that have that benefit will waive their own deductible co-pay and coinsurance. So Medicare’s primary is that once you’re retired, the federal plan picks up the rest. So those things are wonderful benefits that are very hard to put a dollar value on because you don’t know what the future holds. 

 

Micah: Well, let’s take a step back real quick and talk about things before Medicare. We have a question from Maria that came in. And so I like doing the line-like question. So thank you. Is HSA available for federal employees to sign up? So, let’s talk about high deductibles. 

 

Tammy: One of our favorite topics.  This has a benefits component and a financial planning component. Let me start with what is an HSA and how do you get one. So an HSA or health savings account sounds a lot like flexible spending account and it has some similarities, but it’s very different. And HSA is a bank account, it’s FDIC insured. Your federal health plan that offers this is going to be a high-deductible health plan. So you’ll find four or five of them throughout the FEHB, including GHA, Aetna, Mail Hailer Benefit Plan, or MHBP. Those are three off the top of my head,: I think Blue, not Blue Cross.But there’s one called Blue Choice if you’re in the D.C. area, Metropolitan DC. So look for those high deductible health plans, and they’ll establish for you and HSA or a health savings account with the bank that they use like GHA uses HSA bank, Aetna uses a bank called I guess I’ll pay flex, so you’ll get that information once you sign up for the plan. Now this HSA is a really wonderful benefit, isn’t it? Micah?

 

Micah:  I think it’s fantastic. So one of the things I like about the HSA, let’s compare it to the FSA real quick, the FSA is a spending account, right? You have to spend that money; it’s user lose, There’s a little bit of a carry forward which is great 600 and change right? However, it’s user to lose money, and HSA is a savings vehicle. So we get to put money in there pretax. I get a tax deduction for any HSA contributions. You can also invest that money. So I always recommend keeping your deductible. Maybe you’re out of pocket in cash. Anything above that that you’re saving money into Tammy, In HSA Bank, or anywhere else, they have a Schwab platform now. Used to be TD TD Schwab bought TD so moved over to the other Schwab platform that now you can invest that money in a brokerage account. So that means you could start investing. And so I got a tax deduction for putting money in there. I get tax-deferred growth on any of that money. It’s going to grow over time. Then if I pull it out for any qualified medical expense, it’s 100% tax-free. Yeah, this almost turns into like this mega Roth IRA that you get to save and build for medical expenses in the future. So it’s a fantastic tool that I think not enough people look at it now, especially if you’re younger and you’re fairly healthy. By younger I mean below 65 because it’s 65; we kind of can’t do it anymore. So if you’re under 65, it could be a really good option for you to review.

 

Tammy: I have a friend of mine who’s over 65, and she’s under the old civil service system, so she doesn’t even qualify for Social Security retirement. So she can pretty much take herself out of Medicare A and Medicare B, So she’s just continuous fancy, single. She doesn’t have anybody else to worry about. So she’s in her HSA account fully funded, yet every year putting up a ton of money so that if health problems come up in the future, she’s got this tax-free account to pay for them. So she’s not really spending any of that money in this coming year in 204  for the maximum HSA contribution. Because this is an IRS rule, there is a limit of $3,850. If you’re in self-only plan, that’s how much you can throw into that HSA if you’re self plus one family. What is it, 80, 83?

 

Micah: The new new rules, I think only is 4150. And then the family rule is 8300. 

 

Tammy: That’s right. I was given the 2023 amounts. So yea.

 

Micah: Well, good, as you can still make those ones if you haven’t made those contributions this year. Right. If you’re in a high deductible plan, you can still open up an HSA account, make those contributions for this year, and get ready for next year as well. Absolutely. The other part that’s really nice about this is there’s a pass-through credit. So we have to choose a high deductible plan. If I’m not mistaken. Yeah. And that has a pass-through in the premiums. They actually give you some of your own money back to the HSA, right? 

 

Tammy: They do. They do. So if you’re in self only plan, they’re giving you what is it per your $900 a year. And if you’re in a self-plus one, her family, they give you back 1800; they divide it up monthly. So divide that by 12 months. Sure. Every month, you’ll see a contribution go into your HSA account that you didn’t make. But the health plan made it, and this is true of all of the high deductibleFEHB plan options, but GHA has a really reasonable premium for next year. I’m looking at it right now. It’s at 174 single and then 396, almost 400 for family. Well, let’s see. The high deductible is actually 154 a month, once per month for singleand for self plus one is 332 and for the family it’s 409. So that’s a deductible plan for next year. So really reasonable rate about half the cost of Blue Cross standard. Just to give you a comparison. Plus, they’re giving you back 900 or 1800 towards your HSA account. That’s tax-free grows, tax-free, going in, tax-free coming out. And we’ve had this. I don’t remember when my husband and I signed up for a high-deductible plan. This was well before I turned 65. So, I’m using that money I saved in there to pay my Part B premium. So it’s coming out every month paying for part B because I haven’t claimed Social Security yet. So I thought, what? I don’t even have to look at that Part B premium is coming right out of that HSA every month automatically. So you can use it for that. You can use it to pay for long-term care insurance or just keep saving it, letting it grow. It’s growing tax free. I probably shouldn’t be touching it, but I can’t. it’s like money burn a hole in my pocket. So I got to find a way to spend it.

 

Micah:  Yeah. There’s a really neat rules around the HSA that we’ve done other podcast on, really get in-depth in those, but it’s a fantastic savings tool, so it’s definitely something that you should be looking at. Unfortunately, when you hit 65, the contributions into that stop because you go into Medicare right now in the exemption that you don’t have to go under Medicare, then that’s a different rule. But if you’re under Medicare or under TRICARE, you’re not eligible for this because you no longer have a high deductible account. So some of my military retirees like Reserve retirement, kicks in at 60 and they get TRICARE at 60. They forget about this and they want to keep their high deductible plan. But it doesn’t work because TRICARE comes in, and TRICARE is not high deductible, you know, ineligible to contribute the cash that you still have in there. You can still use it, and you could still pull out for qualified expenses. You can still invest it. That’s still your money. You just can’t add to that pot of money anymore. 

 

Tammy: That’s right. If you change plans or go to any other plan, that’s not a high-deductible plan. That money is still in that account. So you’re not going to ever lose that. It’s your money. It belongs to you. So it’s not like FSA where, you know, if you don’t contribute next year while everything’s gone, you’ve lost it. It’s not the same way. I just can’t say enough about these plans because every time I talk about them in seminars, at first people’s eyes glaze over. I don’t want to hear about that high deductible. They really didn’t do a good job naming those plans because who in the world in their right mind would want a high-deductible health plan? But when you talk about the other benefits of having that higher deductible, it’s really a lower deductible when you consider the tax breaks, the lower premiums, and the fact that you can set aside money for the future, I think there’s a lot to like about them if you’re eligible to make those contributions. 



Micah: Yeah, that’s really important to be evaluating those. Right. And just kind of looking at those, etc.. I agree. By the way, just tell you how good your health plan is. You’re quote, high deductible health plan in the federal market doesn’t even come close to what I pay in the marketplace for my high deductible. So your high deductible is not even a low deductible in my plan now.

 

Tammy: So if anybody in the marketplace, just about me and my son, has a marketplace plan and he’s young, he’s 38 years old, but yet not that young, but he’s you shouldn’t have to pay such a high deductible. But he had a snowboarding accident last year. You’ll pay 5000 out of pocket. Yeah. So I guess you had to help that.

 

Micah: So that’s the nice part about these, you know, plans that you have inside the federal system is they work really good. Hey, Tammy, this podcast is all about action items. And so, I want to go ahead and pivot to some action items today. I’m going to say number one is let’s go ahead and take a peek at an HSA or high deductible account. Right. If you were under 65 and you’re eligible. So it’s not on Medicare, not on TRICARE, and you have an option of moving to a high deductible plan; why don’t you give that a shot, go look at it and go pull your EOBs, your explanation of benefits for the last 12 months and say, Hey, if I move to a high deductible plan, how much would it really cost me? Yes, you have the deductible, but you’re getting a lot of that premium. You’re paying back your premiums lower, number one, right? Because Tammy, you said the premium was only roughly $400 for a family plan versus in Blue Cross Blue Shield for the standard family plan. You’re paying, what, 650 and change, so more premium is less, and you’re getting 150 of that back towards your HSA account. Really look at that math. Put pen to paper and see if it makes sense for you. 

 

Tammy: Yeah, for many people, it really does. I agree. During open season, do play in comparisons. If you go to OPM’s website, click on the insurance link there at the top of the page. From there, click on health care is we’re not talking life insurance today. We’re talking the health care and then plan information. That’s where you’re going to find a map of the United States, including Alaska, and Hawaii is going to tell you what plans are available where you live. And then there’s a plan comparison that OPM has done for you. And there’s also a link to the checkbook guide to Federal Health Plans. Stack up your for top choices side by side; see which one covers massage therapy, see which one covers chiropractic care, or whatever it is that you and your family need. See how they compare not just in premiums and deductibles but other benefits. Some plans give you some dental coverage and vision coverage.

 

Micah: So sometimes, Tammy, and we get it, as you like, oh my gosh. That’s so much work. I don’t want to compare plans. I’m not like Micah and Tammy. This isn’t fun for me. I don’t do this on Saturday mornings, but look at it from a bit of an hourly rate perspective, right? How much an hour do you make? Right. Kind of jot that number down. Then. Let’s say you spent 2 hours, maybe 3 hours on the high side and reviewed this, but it saved you thousands of dollars a year.

And let’s just say for ten years, let’s say it only gives you two grand a year. But now these changes in effect for the next ten years. That’s $20,000 of savings for 3 hours of work. Well, it’s a pretty good hourly rate right there, if I’m not mistaken. So really, look at this and say it’s probably worth your time because of how much it’s going to save.

 

Tammy: Yeah. Yeah. I think we spend more money on spending money like taking a vacation. We spend hours comparing the prices, going here and going there, or I can even be on that shoe website for literally hours comparing one shoe to the next. And I’m not saving a dime. I’m spending money. So this is something that’s definitely worth your time. Everybody should really look at this as a required assignment. You got to do this during open season because you just never know. I’ve seen, like you said, I’ve seen some plans go up over $150 a month. So make sure that’s all yours. 

 

Micah: Tammy. I totally missed it. And I’m sorry you said shoe website. I was like, Wow, there’s a different website here. These benefits. no, that’s not what you were talking about in my mind. Pair of shoes. Awesome. Well, podcast is all about action items. Make sure you take this and do it. We have a goal of helping another 1 million federal employees with retirement. We can’t accomplish that without your help. We love your feedback on the live podcast. Do you like it? Do not like it so we can help and grow would be fantastic. And click the share button. Send this out to other federal employees. Get this message out. These are the benefits that you’ve earned, and we want to make sure you get every penny you can for your retirement. Until  next time, happy plannin!







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