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The Office of Personnel Management (OPM) officially announced the dates for the 2022 Federal Benefits Open Season which will run from Monday, November 14 – Monday, December 12, 2022. This open season is for the 2023 plan year of federal benefit programs.
They need to decide whether to enroll, disenroll or change their dental insurance and/or vision insurance plan offered through the Federal Employee Dental and Vision Insurance Program (FEDVIP) for the plan year 2023.
Employees (but not retirees) need to decide whether to enroll or re-enroll in the health care flexible spending account (HCFSA) and/or dependent care flexible spending account (DCFSA) offered through the FSAFEDS program.
There is another group of individuals who need to make decisions about their health, dental, and vision insurance benefits during the current benefits open season (which started November 14, 2022, and will conclude December 12, 2022). These individuals are spousal survivor annuitants. Spousal survivor annuitants are the spouses of deceased federal employees or federal retirees who are entitled to receive either a CSRS or a FERS spousal survivor annuity.
This column discusses the decisions that spousal survivor annuitants can make with respect to their health, dental and vision insurance, and flexible spending accounts during the federal benefits open season.
Requirements for Continued FEHB Program Enrollment
There are certain requirements for a surviving spouse to retain enrollment in the FEHB program following the death of the employee or retiree. The deceased employee or retiree must have been enrolled in the FEHB program at the time of his or her death and had elected self plus one or self and family coverage. The surviving spouse must have been included on the deceased employees/retiree’s FEHB program enrollment (as part of self plus one or self and family enrollment) at the time of the employee's death.
Another requirement for a surviving spouse to keep FEHB enrollment is that he or she must receive a survivor annuity from the deceased employee or retiree, either a CSRS or a FERS survivor annuity. A federal retiree must have elected to give a survivor annuity (full or partial survivor annuity), at the time he or she retired. A surviving spouse of a deceased employee who died while in federal service with at least 10 years of federal service at the time of death automatically receives a full survivor annuity.
Benefits and Cost
If the surviving family is eligible to stay enrolled in the FEHB program, then the surviving spouse can keep eligible family members (this includes children under the age of 26) on the enrollment with self plus one or self and family enrollment. The spousal survivor annuitant pays the same percentage of the FEHB program health plan premiums, on average 25 to 28 percent, as what federal employees and retirees pay. The premiums are deducted from the surviving spouse’s monthly annuity check. The surviving spouse can change FEHB program health plans during an open season and can enroll eligible family members during either the open season or at the time of a “life event”.
Under FERS, the surviving spouse of a FERS employee who died while in federal service with at least 18 months of service is entitled to the basic employee death benefit (BEDB). If the deceased employee had less than 10 years of federal service, then no FERS survivor annuity will be payable. However, the surviving spouse can remain enrolled in the FEHB program but must pay monthly FEHB premiums directly to the Office of Personnel Management (OPM).
If the amount of the survivor annuity is not sufficient to pay the survivor annuitant’s share of the premium for his or her current FEHB program health plan, then the survivor annuitant may either change to a lower-cost FEHB program plan or option or choose to pay the monthly premium balance directly to OPM.
Surviving Spouse and Medicare EnrollmentWhen a surviving spouse enrolled in the FEHB program becomes age 65, the surviving spouse is encouraged to enroll in Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). Once enrolled in Medicare Parts A and B (Traditional Medicare), Medicare will become the primary payer of the surviving spouse’s health care and his or her FEHB program health plan will be the secondary payer (the Medicare supplement plan).
The surviving spouse need not and should not purchase any Medicare supplemental or Medigap insurance from a private insurance company. The latter can be expensive and unnecessary. The surviving spouse should be aware that the federal government continues to pay on average 72 to 75 percent of the surviving spouse’s FEHB program health plan premiums whether the surviving spouse is enrolled in Medicare or not.
Assuming there are no longer any family members eligible to continue enrollment on the surviving spouse’s FEHB program health plan (such as children who have reached their 26th birthday), the surviving spouse who is enrolled in Traditional Medicare should consider changing the type of FEHB program health plan he or she is enrolled in. Traditional Medicare pays on average 60 to 80 percent of the spouse’s hospital, doctor, and laboratory expenses. The surviving spouse’s FEHB program health plan should pay the other 20 to 40 percent, leaving nothing for the surviving spouse to pay.
Therefore, since the FEHB program insurance will be paying less, the surviving spouse is encouraged to change to a type of FEHB program insurance that is less costly. For example, change from “low deductible” to “high deductible” insurance or from “standard” to “basic” insurance. This change can be made within 30 days of Medicare enrollment because enrolling in Medicare is considered a “life event”. The surviving spouse need not wait until an FEHB program open season to make this change. By making this change, the surviving spouse will pay less in monthly FEHB program monthly premiums.
Flexible Spending Account and Health Savings AccountFederal employees are eligible to participate in flexible spending accounts (FSAs) offered through FSAFEDS (www.fsafeds.com). There are two types of FSAs offered to federal employees:
(1) Health care FSA (HCAFSA); and
(2) Dependent care FSA (DCFSA).
Upon the death of an employee in federal service, both the HCFSA and DCFSA will cease. A surviving spouse is not permitted to use any remaining funds left in either FSA to reimburse eligible health care and dependent care expenses. Any remaining HCFSA and DCFSA funds will be lost upon the employee’s death unless these expenses were incurred before the employee’s death.
The surviving spouse of a deceased employee or retiree who met the requirements to contribute to a health savings account (HSA) will be able to continue contributing to the HSA under the following conditions:
The surviving spouse was named as the beneficiary of the deceased employee’s/retiree’s HSA;(2) The surviving spouse meets the requirements to contribute to an HSA, namely being enrolled in a high deductible health plan (HDHP) offered through the FEHB program; and(3) Not enrolled in Medicare. Once ineligible to contribute to an HSA, the surviving spouse can continue to make tax-free qualified withdrawals to pay qualified medical expenses. This includes deductibles, copayments, and coinsurance, being reimbursed for Medicare Part B monthly premiums, and paying long-term care insurance premiums.
Federal Employees Dental and Vision Insurance Program (FEDVIP)The Federal Employees Dental and Vision Insurance Program (FEDVIP) is available to eligible federal employees, annuitants, and survivor annuitants. Employees are eligible to enroll in dental and/or vision insurance if they are eligible to enroll in the Federal Employees Health Benefits (FEHB) program (but they are not required to be enrolled in the FEHB program in order to enroll in FEDVIP). Annuitants are also eligible for dental insurance and/or vision insurance offered through FEDVIP. Dependent children under the age of 22 are also eligible to be covered under the FEDVIP.
Under the FEDVIP, three types of enrollment coverage are available:
(1) Self only (employee or annuitant);
(2) Self plus one eligible family member (employee/annuitant and a spouse or one child under the age of 22);
(3) Self and family (employee/annuitant and multiple eligible family members).
There is no requirement that the deceased employee or retiree must have been enrolled in the FEDVIP at the time of his or her death in order for surviving family members to enroll in the FEDVIP. The only requirement is that a surviving spouse receives a CSRS or FERS survivor annuity. If that is the case, then the surviving spouse can enroll in the FEDVIP (dental insurance, vision insurance, or both) during a FEDVIP open season. The FEDVIP open season coincides with the FEHB program open season held annually from the second Monday of November through the second Monday of December.
A surviving spouse can include children under the age of 22 as part of the FEDVIP enrollment. FEDVIP plan changes including dis enrollment can be made by the surviving spouse during the annual FEDVIP open season.