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Insurance FAQs

Disputed Claims

  • For a small number of individuals it may make sense to waive premium conversion. There are two items to consider in making a decision to waive participation and they are: Flexibility Under IRS rules, you may reduce coverage (cancel, or change from Self and Family to Self Only) only during an Open Season or at the time of a qualifying life event. Social Security Paying your premiums with pre-tax money reduces your earnings reported to the Social Security Administration. When you begin to collect Social Security (normally this occurs at age 65), you may receive a slightly lower Social Security benefit. The extent of the impact will vary depending upon the retirement system you participate in, your salary compared with the Social Security wage base ($87,000 in 2003) and the number of years until you retire.
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  • Life insurance proceeds are not considered taxable income for the recipients for personal income tax purposes. Interest paid on FEGLI proceeds is reportable as income for Federal Income tax purposes. You may wish to consult your tax advisor for further advice.
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  • During the fall of each year, you will receive a copy of the Medicare & You handbook. It is also available by calling 1-800-MEDICARE (1-800-633-4227) or TTY 1-877-486-2048, or at www.medicare.gov/publications/pubs/pdf/10050.pdf . The Medicare & You handbook has information on Medicare Parts A & B; Medicare Advantage Plans (Part C); Medicare Prescription Drug Coverage (Part D); Help for People with Limited Income and Resources; and Joining and Switching Plans. The Medicare website (www.medicare.gov) contains the handbook and other information about Medicare. If you do not have a personal computer, your local library or senior center may be able to help you access this website. You should contact your retirement system before making any change to your coverage, especially if you are considering suspending your FEHB coverage to enroll in a Medicare Advantage Plan. If you are a CSRS or FERS annuitant, you may call OPM's Retirement Information Office at 1-88USOPMRET (1-888-767-6738) or 202-606-0500 from the metropolitan Washington area, or you may write to:
    Office of Personnel Management Retirement Operations Center P.O. Box 45 Boyers, PA 16017-0045
    Other useful publications, such as the Guide to Health Insurance for People with Medicare, are also available at the Medicare number (1-800-633-4227) or from your State Health Insurance Assistance Program (SHIP) counseling office. The SHIP counselors in your state are also available by telephone or sometimes as a walk-in resource if you would like more personalized attention. You can find SHIP counseling office telephone numbers in the Medicare & You handbook or on the Medicare website at www.medicare.gov/contacts/static/allStateContacts.asp. Your FEHB plan brochure provides specific information on how its benefits are coordinated with Medicare. Some HMOs participating in the FEHB are structured to provide more comprehensive coverage if you enroll in both their HMO and their Medicare Advantage plan.
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  • Problems arising from oral discussions are very difficult to settle later because they are impossible to prove or disprove. In contractual situations such as under the FEHB Program, oral statements can never be regarded as official and, so, we state in the brochures that oral statements made by any representative of a carrier cannot modify the benefits described in the brochure.
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  • Dental plans provide a comprehensive range of services, including the following:
    • Class A (Basic) services, which include oral examinations, prophylaxis, diagnostic evaluations, sealants and x-rays.
    • Class B (Intermediate) services, which include restorative procedures such as fillings, prefabricated stainless steel crowns, periodontal scaling, tooth extractions, and denture adjustments.
    • Class C (Major) services, which include endodontic services such as root canals, periodontal services such as gingivectomy, major restorative services such as crowns, oral surgery, bridges and prosthodontic services such as complete dentures.
    • Class D (Orthodontic) services with up to a 24-month waiting period.
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  • You can submit a court order if you are an employee, an annuitant, a former spouse, the former spouse's attorney or anyone else.
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  • There are a number of factors for you to consider if you are employed part-time. Although you will not be eligible for the full government contribution, your entire employee contribution will be pre-tax if you participate in premium conversion. That larger reduction in taxable income might offset the lower government contribution. If you are a part-time reemployed annuitant, we suggest that you consult your agency or a qualified tax advisor to review your individual situation.
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  • Yes, taxes in 49 states and most localities will be reduced; exceptions include the state of New Jersey and the Commonwealth of Puerto Rico. OPM monitors changes in state and local tax regulations, and provides guidance to your agency as needed. Regardless of where you live, FEHB premiums are not subject to Federal taxes. FICA Taxes If you are covered by the Federal Employees Retirement System (FERS) and participate in premium conversion, FEHB premium deductions will also be excluded from gross pay before Old-Age, Survivors, and Disability Insurance (OASDI) and Medicare taxes are applied. Employer FICA contributions will also be reduced in concert with the decrease in employee withholdings.
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  • No, by law there is no Government contribution to the premiums.
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  • While you may count the time you are covered under transitional TRICARE toward meeting the 5 year/initial opportunity requirement to continue your FEHB into retirement, you must be covered under FEHB on the day you retire. If you plan to retire during your transitional TRICARE period, you must reinstate your FEHB before your retirement date. Your Human Resources Office can assist you.
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  • You are eligible for Medicare if you are age 65 or over. Also, certain disabled persons and persons with permanent kidney failure (or End Stage Renal Disease) are eligible. You are entitled to Part A without having to pay premiums if you or your spouse worked for at least 10 years in Medicare-covered employment. (You automatically qualify if you were a Federal employee on January 1, 1983.) If you donï't automatically qualify for Part A, and you are age 65 or older, you may be able to buy it; contact the Social Security Administration. You must pay premiums for Part B coverage, which are withheld from your monthly Social Security payment or your annuity. You must be enrolled in both Medicare Parts A and B before you can enroll in Part C. You must be enrolled in either Part A or Part B before you can enroll in Part D. The cost of any additional premium will vary depending on the Part C or Part D plan that you select.
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  • The formulary for your health plan provides a list of medications that a team of health care specialists have approved. Your doctor will write a prescription based on your medical needs, but the formulary provides him with recommendations from the pharmacist and physician team. An effective formulary system provides a medication safety feature. When drugs and administration methods are systematically included (or deleted) in a controlled drug formulary, there are a number of benefits. For instance, each new drug added undergoes a peer review process that uncovers any safety concerns with the drug. Also, when drugs are systematically added to the formulary, there is adequate time to educate the staff before the drug is used. An organized formulary also ensures that the number and variety of drugs is kept to an effective minimum. There are approximately 13,000 prescription drugs on the market today and several drugs can often be used to treat the same condition. A formulary, based on safety and cost considerations, helps to limit the drugs recommended by your plan's health care professionals.
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  • Each year OPM releases the new health insurance rates about a month prior to the FEHB Open Season. The FEHB Open Season runs from the second Monday in November through the Second Monday in December. The new rates are generally released by mid-October at http://www.opm.gov/insure/health/rates/index.asp.
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  • Yes, if you experience one of the following Qualifying Life Events: You are enrolled in a FEHB Health Maintenance Organization (HMO) and you (or a covered family member) move or become employed outside the geographic area from which your FEHB carrier accepts enrollments; (or, if already outside this area, you move further from this area); You lose coverage due to discontinuance in whole or part of your FEHB plan; You experience a change in your family status. (Family status changes include marriage, legal separation, divorce, death of spouse or dependent, loss of coverage by your last dependent child.)
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  • Pay-As-You-Go Under the Pay-As-You-Go option, you pay your share of the FEHB premium directly to your employing agency while on LWOP. These payments will generally be made with after-tax monies, since there is no pay from which to make deductions.   Catch-Up Most employees who have a period of LWOP choose to pay their FEHB premiums via the Catch-up option. Under this option, the agency remits your share of the FEHB premium to OPM while you are on LWOP. You incur an obligation to your employing agency and are required to repay it upon your return to pay status. The repayment of the amount owed will be treated on a pre-tax basis, if it's deducted from pay and you participate in premium conversion at the time the deduction is made. If you choose to repay the amount owed to your agency directly out-of-pocket your taxable income is not reduced. Prepay Your agency may (but is not required to) offer you the option to prepay your FEHB premium from salary before you go on a period of LWOP. The amount of FEHB premiums you prepay in advance may either be deducted from your pay or paid directly "out-of-pocket" to your agency. Payments made "out-of-pocket" do not reduce taxable income. The amount of FEHB premiums that you prepay will be treated on a pre-tax basis, if it is deducted from your pay and you participate in premium conversion. IRS rules limit the amount you may prepay on a pre-tax basis. If your period of LWOP will span two tax years, the amount that you may prepay on a pre-tax basis may not exceed the amount of FEHB premiums due for the remainder of the current tax year. If you wish to prepay the amounts due for the subsequent tax year as well, the deductions must be made after-tax. You may use the "Pay-As-You-Go" or Catch-up options for amounts due in the subsequent tax year. Example Sam A. participates in premium conversion and had $100 per month in FEHB premiums deducted from his pay. He will go on LWOP for three months beginning on October 31, 2002 and opts to continue his FEHB coverage. Mr. A. uses the pre-pay option to pay from his salary the $300 in FEHB premium payments that will be due while he is on LWOP. Mr. A. will receive pre-tax treatment for only $200 of his FEHB premium prepayment- the amount he will owe for the months of November and December 2002. The remaining $100 prepaid – the amount due for January 2003 – must be given after-tax treatment.
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  • Under CSRS offset, your Social Security benefits would be slightly reduced, but your CSRS Offset benefits would be increased by almost the same amount. Participating in premium conversion is most likely a benefit to you.
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  • Most health maintenance organizations (HMO) restrict enrollment to an area where its doctors and hospitals are accessible. Although some HMOs do not have restrictions on where you live or work, please recognize that if you later find it is inconvenient to get to a plan provider, you may have to wait until the next Open Season to change plans.
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  • No. The only way to continue coverage into retirement is to meet the five year/all opportunity rule. You cannot "buy" the years you are missing.
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  • FEHB law does not permit the Program to offer a Self Plus One category.  Pursuant to section 8905 of title 5, United States Code, “An employee [or annuitant] may enroll in an approved health benefits plan under section 8903 or 8903(a) of this title either as an individual or for self and family.”  The law does not allow a Self Plus One option.  Congress would need to change the law to permit this type of enrollment plan. OPM’s Office of Actuaries has done cost and premium projections on the impact of changing from a two-tiered structure to a multi-tiered structure in the current FEHB Program.  While it might not be readily apparent, because a large number of older two-person families participate in the FEHB Program, the cost of providing health insurance for this older two person group is often nearly twice as high as it is to cover younger members with large families.  The self plus one premium would be based on the health cost of this group.  For this reason, it is not clear that adding additional enrollment options to the FEHB Program would result in any significant benefit to those who ask for the change.  In fact, they might be worse off. The objective of a group insurance policy like FEHB is to promote the beneficial aspects of risk-sharing.  The Program shares the risk among a large group of enrollees, from those who are sick and high-risk to those who are healthy and low-risk.  By spreading the risk, FEHB enrollees as a whole can get better coverage and lower premiums.  We believe that balancing charges across large demographic groups provides the best value, stability, and equity over the life of program enrollment opportunities.
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  • To qualify for Spouse Equity coverage, submit an application to your former spouse's Human Resources Office (or, if applicable, the former spouse's retirement system) within 60 days after your divorce. To be eligible, you must have been covered as a family member under your spouse's FEHB Program enrollment at least one day during the 18 months prior to divorce and you must have future entitlement to receive a portion of your spouse's retirement annuity or a survivor annuity. Also, if you remarry prior to age 55 you will lose this coverage. If you do not qualify under the Spouse Equity provisions, you may be eligible for coverage under the Temporary Continuation of Coverage provisions. You may also convert to a private policy.
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Total Count: 712, Number of Pages: 36, Page: 5
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