OPM offers new flexible spending option

Some federal employees will have a new avenue to pay for dental and vision care, the Office of Personnel Management announced Thursday.

Employees who enroll in high-deductible health plans -- which offer lower premiums but leave participants paying more out of pocket when medical needs arise-will be able to enroll in flexible spending accounts for dental and vision care. They will only be able to exercise this option after selecting a health plan during the open season, which runs from Nov. 14 to Dec. 12.

Flexible spending accounts already are available to cover general health care costs for enrollees in traditional plans. They allow employees to make pre-tax salary contributions to a savings account that can then be used to cover certain expenses.

In traditional health care FSAs, those can include expenses associated with dental and vision care as well the costs of pregnancy tests, psychologists, speech therapy, sunscreen and a litany of additional items. For employees in high-deductible health plans however, the FSA only can be used to cover dental and vision costs.

High-deductible plans were available to federal employees for the first time last year. About 4,000 signed up. The plans feature high annual deductibles-a minimum of $1,100 for individuals and $2,200 for family coverage-which are designed to encourage prudent medical spending and keep costs down. Employees must meet the annual deductible before the plan pays out.

Employees who enrolled in the high-deductible plan last year were not given the option of opening an FSA to cover any type of costs.

"We're pleased to offer this added benefit to federal employees who have taken advantage of [high-deductible plans] offered in the Federal Employees Health Benefits program, to stretch their money even further," OPM Director Linda Springer said.

Springer said the new option gives employees "more control over their finances and health care expenditures."

The new option was made possible by the Internal Revenue Service, Springer said. IRS policy does not allow individuals with high-deductible plans to hold general FSAs, but it does allow such accounts for dental and vision costs.

The American Federation of Government Employees, one of the largest unions representing federal workers, was not that excited about the development.

"It's irrelevant to the vast majority of our members," public policy director Jacque Simon said. "What would be relevant would be employer-paid vision and dental benefits."

OPM will offer supplemental vision and dental benefits to employees next year, but the government won't subsidize any of the costs. A spokesman for OPM said the dental and vision FSA option is unrelated to next year's added coverage.

The personnel agency said individual Federal Employees Health Benefits Program carriers will notify enrollees of this new option if it is applicable. Enrollees will then have 30 days to open an account. The effective date of enrollment will depend upon the date an enrollee signs up.