Page 65 - The Informed Fed--Hearn (edited 10.29.20)

on your case are on that preferred list as well. The strength of HMO’s is
their case management ability. You don’t have to be concerned about
whether a specialist is on a preferred provider list because if your primary
care physician has referred them, they have to be within the system. This
is done to contain costs.
Speaking of costs, how important is cost to you? Of course, we all
want to pay as little as possible for health insurance, but is it your most
important concern? While you are working, your share of the insurance
premium is paid with pre-tax dollars—called premium conversion. Once
you retire, you no longer receive this benefit and must pay your
premiums with after-tax dollars. The federal government continues to
pay their proportionate share, approximately 72%, for both you and your
spouse even after retirement. This is one of the best benefits you get for
your years of public service. Your spouse can continue on your coverage
as long as you live, but if you want to ensure that their coverage continues
even if you pass away first, you’ll want to be sure and take a survivorship
benefit on your federal annuity for them.
This election at retirement allows you and your spouse to be covered
by federal health benefits as long as you both live, with the federal
government paying 72% of your premium and you paying 28%. Often
two federal employees will be married to each other and each take self-
only health coverage. The premiums for two self-only policies are less
than family coverage. This seems like a cost-effective plan. However,
keep in mind that each employee has to meet the plan’s maximum out-
of-pocket limit if there are two separate plans. This is of particular
interest as employees/retirees age and tend to have higher overall health
care expenses. You are eligible to continue your health benefits in
retirement as long as you retire on an immediate annuity and have been
enrolled in the FEHB for at least five years either as an employee or
family member. You do not have to be enrolled in the same health plan
the entire five years, but continuously enrolled in any FEHB plan.

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