Health insurance plays a crucial role in a family’s financial stability. Without it, a single accident could lead to financial disaster. Thankfully, the right health coverage can prevent this kind of catastrophe. Through the FEHB program, you have access to a wide range of plans, but selecting the best option can be challenging.
First, it’s important to understand that all FEHB plans are reliable. The Office of Personnel Management (OPM) requires each plan to meet strict standards for financial stability and design. However, since these plans are designed to cover millions of people, there is no one-size-fits-all option. That’s why it’s important to carefully evaluate your individual needs to make the best choice for you and your family. Here are five steps to guide you through the process:
Step 1: Understand the Plans Available
Research the health plans offered through FEHB. Most of them include managed care features, such as Fee-for-Service (FFS), High Deductible Health (HDHP), Health Maintenance Organizations (HMO), and Point of Service (POS) Plans.
Fee-for-service (FFS) plans offer the most flexibility but come with higher premiums and out-of-pocket costs. Be sure not to confuse traditional FFS plans with HDHP’s, which allow participants to save tax-free dollars in a Health Savings Account (HSA) for future medical expenses. HMO and POS plans require you to choose a primary care physician and receive care from a network of providers. The key difference is that POS plans allow you to seek care outside the network at a higher cost.
Step 2: Check to See if your Doctor(s) Participate
Ensure your preferred doctors participate in the plans you’re considering. Over the years, many health carriers have expanded their networks, so it’s worth checking to see if your doctors, specialists, and hospitals are included. A wide selection of in-network providers is a major advantage.
Step 3: Determine Out-of-Pocket Costs
Review the co-pays co-insurance, deductibles, and premiums associated with each plan. Pay close attention to any deductibles for hospital admissions or other services. By adding up your worst-case scenario for out-of-pocket expenses you can get a better sense of the total cost of each plan.
Step 4: Evaluate What’s Important
Think about your healthcare preferences. HMOs generally have fixed pricing for covered services but limit you to in-network providers. FFS and PPO plans offer more flexibility but can result in fluctuating costs depending on who you see and whether they are in-network. If you’re generally healthy and don’t anticipate using many medical services, HDHP may be a cost-effective option. These plans are designed for individuals who only need insurance in case of a major illness and allow you to save in an HSA. However, if you expect significant healthcare expenses in the coming year, you may want a plan with higher premiums but lower out-of-pocket costs. Make a list of the services you and your family use regularly and check how each plan covers those services. Exclude any plans that impose limits or restrictions on services you need.
Step 5: Review and Compare Plans
Since premiums and benefits change annually, it’s essential to review both your current plan and any new options available in your state. Start by grouping similar plans and comparing deductibles, coinsurance, and co-payments. Generally, lower premiums mean higher deductibles and coinsurance rates. Also, assess each plan’s provider network—not only confirming your current doctors are in-network but also checking access to specialists and hospitals in your area.
One key advantage of the FEHB program is the flexibility to switch plans during the Annual Open Season without restrictions. If your current plan doesn’t meet your needs for the coming year, you have the option to change. While the future is unpredictable, careful research helps ensure you select the best plan to meet your healthcare needs each year.
Ways to Save, Reduce, or Eliminate Healthcare Costs
Health Care Flexible Spending Account (HCFSA):
A Health Care FSA (HCFSA) is a pre-tax benefit account that helps you pay for eligible medical, dental, and vision expenses not covered by your health plan. It's a simple and effective way to save money. Recent changes to HCFSA rules have made it even more beneficial for employees—now you can carry over up to $640 from one plan year to the next. By using tax-free dollars for your health care expenses, you can significantly reduce unnecessary costs.
Health Savings Account (HSA):
A tax-advantaged medical savings account available to employees who are enrolled in a High-Deductible health plan (HDHP). The funds contributed to these savings plans are tax-free when used for eligible medical, dental, and vision expenses not covered by your health plans. Unlike the Flexible Spending Accounts (FSA), HSA funds roll over and accumulate year to year.
Learn to use Telehealth Services
Many plans within the FEHB program now include Telehealth services, making it easier to access health care. You and your covered family members can connect with doctors 24/7 from anywhere, allowing you to receive care for common issues like colds, flu, sinus infections, allergies, and more, without visiting a doctor’s office. Some plans also cover mental health, nutrition, and dermatology consultations. Doctors can even prescribe medications when appropriate.
Supplemental Health Insurance Plans:
These insurance plans are designed to complement your health insurance and can offer a low-cost solution to reducing your overall costs. Benefits are paid directly to you, and you can use the money however you like:
Accident Insurance: Provides financial help for unexpected medical costs and other expenses from an accident. It’s a useful addition to your medical plan and can also cover non-medical expenses.
Hospital Indemnity Insurance: Provides cash benefits to help pay for hospital stays and other covered medical services. The benefit is typically a fixed amount based on length of stay.
Critical Illness Insurance: It provides a lump-sum payment if you're diagnosed with a serious condition, such as cancer, heart attack, or stroke. This helps cover costs that your health plan may not fully cover.
Contact us to learn more about our FEHB Open Season Advisory Services.
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