GovernmentExecutive.com

Many popular plans in the Federal Employee Health Benefits Program may no longer be the best choices for 2008, given premium and benefit changes and the introduction of new coverage options, according to the author of a guide on federal employee health plans.

In an online seminar hosted by Government Executive, Walton Francis, author of the Consumer's Checkbook Guide to Health Plans for Federal Employees and Annuitants, encouraged employees to "do their homework" prior to enrolling for the 2008 open season, which runs Nov. 12 to Dec. 10.

"Most federal employees, through lethargy [or] sloth ... leave money on the table by not checking out ways to save," Francis said.

Earlier this fall, the Office of Personnel Management announced that premiums would rise by an average of 2.1 percent overall next year. But that's only an average. Some are increasing by double digits.

To get the best deal, FEHBP participants first should determine a plan's overall cost, including both premiums and out-of-pocket expenses. They also should ask their doctor which plans he or she will be involved in next year, and then determine whether they are willing to enroll in an HMO, he said.

According to the guide, the annual costs of HMO-type plans tend to be substantially lower than in traditional insurance plans. For example, the lowest cost Washington, D.C.-area HMOs -- Kaiser Mid-Atlantic Standard option and Aetna Open Access Basic option -- will save an average family about $1,000 per year compared to the most popular plan, Blue Cross Blue Shield Standard option.

The guide also indicates that most HMOs, the Blue Cross basic plan, several consumer-driven plans and the GEHA standard option plan can save a family more than $2,000 a year, compared to the highest priced nationally available plans.

Francis also encouraged employees to enroll in flexible spending accounts, which allow them to put aside money, tax-free, to use for health costs ranging from dental care to toothbrushes. "Only about 10 percent of federal employees sign up for FSAs," Francis said. "It should be 90 percent."

Francis also encouraged federal managers to learn more about the cost savings that can result from employees enrolling in lower-cost plans. Currently, the government pays 75 percent of the premium for most plans. But agencies can save an average of about $1,500 for every employee who switches to a lower-cost plan, he said.

Some plans have been more likely than others to be involved in claims disputes with their enrollees, Francis noted. The SAMBA and Blue Cross plans, for example, have only six to seven disputed claims per every 10,000 enrollees. GEHA plans have dispute rates twice as high, and APWU plans have dispute rates three times as high, he said.

Many federal agencies have contracted with Consumer's Checkbook to provide free online access to the health plan guide for their employees during open season period. (Click here to see if your agency does.)

"If you don't even check out the possibility of even getting these kinds of savings," Francis said, "you're not doing what you should be during open season."

Click here to view Government Executive's webinar featuring Walton Francis on open season options.

COMMENTS

• I too am a proponent of the HDHP heath plans - especially Aetna. Did anybody else notice the numbers for 2008 changed significantly? The premium pass through was reduced by 50% ($125 to $66.50 per month), the annual deductible was reduced by 40% ($2500 to $1500), and the premium was reduced by 15% (948 to 804 per year). I sure am disappointed to see the premium pass through drop. That was a nice extra 1500 dollars a year. A Klein Posted November 16, 2007 3:51 PM
• The commentor who favors Aetna offers creative use of health and flex spending accounts. They are good savings tools for these expenses. However, while Aetna may be a great plan (I do not know), my point is that its NOT just about costs and premiums. BCBS Carefirst is a non-profit, other companies are in it for the profit and many can tell you that certain companies have internal quotas of 10% or more to reach for Denials of Claims. This is something to be careful of. When it comes to the bottom line for many companies and building incentives for executives, they will use Denial of Claim percentages to determine who gets paid more. To these carriers, your claim for health care provided is viewed as an expense or a loss. Again, Feds - do your research and be careful. I'm going to learn more about these SHA's as I already use an FSA to some degree. I would never consider a so-called High-deductible plan for certain reasons and calculations, but thats just me. Everyone must figure out what is best for their family - this is not always a "no-brainer" decision. Do not be rushed. Don Posted November 16, 2007 3:02 PM
• It seems this must be reiterated to Feds - especially those with families. Beware the degraded health benefits you may suffer if switching to a new plan just for a smaller premium. Another commentor thinks the math is always simple and Feds should jump on that low premium plan. The math is NOT always simple and you and your family can get burned. Calculate several different scenarios before taking a major step that might affect your life or someone in your family. Also, bear in mind that when you switch insurance companies, you start from scatch including a pre-existing condition disclosure statement. If you make one mistake on that disclosure, a crafty carrier can cancel your coverage on those grounds alone...if they find you to be a sick person (an expense). This is sad, but it happens everyday in this country. Be careful. Also, while Flexible Spending Accounts are a useful tool...remember that you lose any cash you pay in for the year that is not spent in that year. That fact must be included in any honest calculations or comparisons. I say again, think carefully before contracting out your family's healthcare to the lowest bid. Good luck. Don Posted November 16, 2007 12:18 PM