Federal employees and retirees have until Dec. 8 to choose a new health insurance plan. While premiums only grew at about 3.2 percent for next year, feds still need to carefully weigh their options to find the plan that is right for them.

In 2015 there will be 257 plan choices, including four new plan choices offered in 12 service areas and two existing plans expanding to eight service areas, according to OPM.

Federal Times Editor Steve Watkins sat down with FEHBP expert Walt Francis and author of the annual "Checkbook's Guide to Health Plans for Federal Employees," to discuss what federal employees should look for when choosing a plan.

Can you give us a broad overview of the Federal Employees Health Benefits Program and some of the changes and trends that our audience should know about as it relates to cost, plan types and levels of care?

There's about 250 plans nationwide in this program. Most of them are local plans. In the DC area we have 20 or so national plans and another eight local plans. These are plans open to everybody and we have four restricted plans like the Foreign Service Plan and a couple others, which you have to work in a particular field. So at least 28 choices. All of them are very good plans but they vary significantly in how they structure benefits. And they are high deductible plans, they're consumer driven plans, HMO plans, there are PPO, fee for service plans, a lot of alphabet soup here, health savings accounts, health reimbursement and so on. But the main thing to understand is all these plans have networks of preferred providers and your choices are limited. In some cases you can go out of network and the plan will pay perhaps half the cost. In other cases if you go out of network you pay all the costs. We also have at the same time not just for health plans but for dental plans, provision plans and something called flexible spending accounts, which are a way that you can set aside tax preferred money. It's like getting a third off what you pay to pick up cost the plans don't cover like the co-payments or co-insurance or just pay for something going out of network for example. Like a doctor you really want to go to who isn't in your network.

You have said in the past that federal employees often pay hundreds, sometimes thousands of dollars extra in health coverage that they don't need to; why is that and what can they do about it?

It's because they don't shop. Well, some people deliberately want to be in a gold-plated plan and pay more, and that's fine if you're making a conscious choice. But it turns out that choosing a health plan is sort of like going to the dentist. It's not something people like to do, it's not fun, it's hard work or it can be hard work. That's something Checkbook tries to do, is to make it simple. To give you simple, straightforward comparisons. We do look at all those plans; you don't have to look at them all. You just need to think about a few choices, so whether it is halftime at that boring football game that your team doesn't seem to do so well (in), or just sit down for an hour or two on the weekend, there are so many online resources that there's really no good excuse. I like to call it giving yourself a pay raise. You've got an open season's four weeks to pick a plan that's going to save you money.

BONUS:

Access an archived Federal Times webcast featuring Walt Francis here

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What specifically should federal employees and retirees be mindful of as they're going through their options for the 2015 open season?

Well of course they should go through all their options, not all 28 but they should go through a number of them. Obviously you have to look at your health status and your family's health status. You for sure should look at your health plan that you're in now, it's changed. All the changes this year are favorable by and large. But nonetheless you may find for example that there's a benefit, that the plan has added that you didn't even know the plan was adding. And there's a one-page section in the plan brochure you can look at the changes for this year. OPM has a great website to make things easy for you. The individual plans have great websites, many of them. All of them have at least a good website. We think Checkbook's website is the best because we work hard at making it that way. It's easy to use, you go online and you answer a few questions and out pop a list of choices and we tell you how many dollars you're likely to save in plan A versus plan B.

What would you say are some of the more underutilized features of the Federal Employees Health Benefit Program?

Two leap to mind. First, this flexible spending account; you have to set it up again each year and only about 20 percent, if that, of federal employees set up an account and it's throwing money away. So 80 percent aren't even paying attention to set aside money for the health care costs they know they're going to have. The other underutilized feature is just people are conservative and they're not just conservative in staying in their plan long past when they should. They're conservative in that they tend to not want to be frisky, look at plans a little bit differently. I think the high-deductible consumer-driven plans are among the very best buys in the program. Those are the plans that can save, and a few of the HMO's like Kaiser can save you a ton of money. How many people are even going to know there's a new Aetna Direct Plan this year, which is a good conservative plan in its own right and spectacular plan for people who have Medicare parts A and B?

A question a lot of people are asking is the Affordable Care Act, what changes has that brought to federal employee's health benefits?

A couple that are pretty important. The big one people know about is your adult children up to age 26 are still covered, the ones who couldn't find a job after they graduated. They don't have to be living with you by the way to get that benefit; so that helped a couple hundred thousand families to be able to keep their kid on their family plan. And that was clearly the Affordable Care Act that did that. Also the Affordable Care Act emphasizes a wide range of preventive services and loophole-free catastrophic benefits. The federal employees had very good catastrophic benefits generally and had very good preventive benefits generally but they weren't perfect and they got better over the last couple years so significant improvements to the coverage and structure of the plans.

And how can federal employees and retirees find out more information about the health plan options that they have and then do side by side comparisons, review customer satisfaction scores and the like?

Well the obvious choice is go to the OPM website. OPM runs a really good website. OPM.gov/insure and there's all kinds of resources and tools there including the ability to plan benefit details side by side, advice on and information on how to even understand things like health savings accounts and how does that coordinate with Medicare and so on. The Checkbook website goes a step further than OPM and our website is guidetohealthplans.org. What we do is not just compare intricate details of the plans side by side, but we do that what is the co-payment for a doctor visit? And how is it if it's primary versus specialists and so on. OPM gives you that information; so did we. We also though actually make calculations as to how likely you are to spend how much money under each plan given your age, family size and a few other things. And that's how we're able to calculate the cost of you joining plan A instead of plan B and that's where the difference can be thousands of dollars.

Employees who have been enrolled in the postal health plans are noticing a big hike in their premium costs; what's happening with the postal plans and what should they be mindful of as they're looking at their options?

Well we all know that the Postal Service is in great financial trouble and over the years unions have negotiated very favorable terms. They got a better deal on how much premium they paid than regular federal employees, GS and other. So finally the Postal Service has gulped and the unions gulped and they negotiated higher rates. These affect only the premiums, the plan choices are unchanged. The benefits are unchanged; I mean, they change every year a little bit, but there's nothing startlingly different for postal employees except the premium hike. For the bargaining unit members, okay they still have a preferential rate, better rate than GS employees get. But the non-bargaining unit employees, the white-collared jobs and so on, they pay now the same rates for their plans as do GS and other federal employees.

Federal employees and retirees who are eligible for both Medicare and the FEHB programs are weighing those options trying to figure out whether they should enroll in both plans or one or the other, what's your advice?

My general advice (is) based on big change (that has) been below the radar. People don't even know about it for the most part. Let me tell you what change is then I'll give you my advice. The change is a new plan called Aetna Direct that offers the same Medicare wraparound as most financial plans offer. You pay zero for hospital and doctor costs. That plan has such a low premium and has a personal medical account of $750.00 per person, self only and $1,500.00 per family that you actually wind up coming out money ahead if you sign up for Medicare Part B and you're paying just the regular Part B premium. There are two other Med plans national; there are two plans in DC Metro area that are also offering exceptionally good buys because they added wraparound benefits, plans have been around a long time. The CareFirst HMO, particularly the standard option, is a very good buy and the CareFirst high deductible plan also offers wraparound. That's the first high deductible plan to do that; so we have a consumer-driven plan, a high deductible plan, and an HMO all of which let you pay zero out of pocket for your medical costs. You still have to pay for drugs. And in the case of Aetna Direct, you use the savings account to pay for most of your drug costs. You might even want to be frisky and sign up for Medicare Part D in some of those cases. But there are other really good choices for people on Medicare, including ones that have been around forever like Blue Cross Basic.

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