2012 Open Season: Federal Employees Health Benefits Program, Do I have The Right Health Plan?

Hello and welcome to Federal Employees Health Benefits (FEHB) Program:
Do I Have The Right Health Plan? My name is Lionell Jones and I’m a Program Analyst
with OPM’s Insurance Operations office. Today’s session will be broken up into 2
parts. In the first we will be discussing the four types of FEHB plans. Those are Fee-For-Service
Plans (FFS), Health Maintenance Organizations (HMO), High Deductible Health Plans (HDHP),
and Consumer Driven Health Plans (CDHP) In the second part we will be discussing how
to “Pick a health Plan”. This will include things to consider, and a description of our
how to compare health plans. Now let’s go into detail on the four types
of FEHB Plans. The first is: A Fee for Service plan, also known as a FFS.
It is our most of a Traditional type of Insurance plan. With this type, you go to the doctor
and you file a claim for the services you receive. These types of plans are Nationwide
and are eligible to employees nationwide and around the world. Most fee for services plans
are available to everyone eligible for FEHB. While other Fee for service plans are only
available to specific groups. Those fee plans are: Compass Rose, Foreign Service, Panama
Canal and Rural Carrier. Information about plan eligibility for these plans is in the
plan brochures. In a Fee for Service plan the Preferred Provider
Organization (PPO) providers must be used for full benefits.
This means you may choose medical providers who have contracted with the health plan to
offer discounted charges. But you may also choose medical providers who have not contracted
with the plan, but you will pay more of the costs for submitted claims.
So to sum up fee for service plans. You may incur some paperwork if a PPO provider is
not used. But you will have fewer costs if you use a PPO provider. An exception to this
rule is Blue Cross, Blue Shield Basic, which requires members to use PPO providers or no
benefits will be paid. In this illustration, we are looking at Section
5a of a FEHB fee for service plan brochure. In this section you will see a benefit description,
in this particular case, it is a surgical procedure. To the right of that you will see
what your out of pocket costs will be based on if you choice of a doctor within their
PPO network or if you selected a non-PPO doctor. So let say you have a High Option plan and
are going to an in network doctor. That means you will pay 10% of the plan allowance. However
if you went to a Non-PPO doctor or facility under the same High Option Plan you would
be responsible for 25% of the plan allowance and any difference between the allowance and
the billed amount. Let’s try this with a real world example
to see this will affect your out of pocket costs.
So let’s suppose you have an eligible biopsy procedure. The provider charges you $500 and
your plan allowance is $400. If you use a PPO provider, you pay 10% of the plan allowance,
which is $40. However, if you use a non-PPO provider, you
pay 25% of the plan allowance. I did a little math and determined 25% of
$400 dollars is $100. In addition to that $100 dollars you are responsible for the difference
between the plan allowance and the provider’s bill. In this case the provider charged $500,
and the plan allowed $400. The difference between the two is $100. When you combine
these two amounts, the 25% of the plan allowance which is 100 dollars, and the difference between
the allowance and the billed amount which is $100. You find out that your out of pocket
cost would be $200 if you had a non-PPO provider perform this procedure. But if you had the
same procedure done by a PPO doctor your out of pocket cost would have been just $40.
Please take note that sometimes a plan’s allowed amount is much less than the provider
charges, in which case using a non-PPO provider would be very expensive.
So how do you determine if your current doctor or hospital is in the PPO plan you are considering?
You can find out more information at www.opm.gov/FEHBbrochures. Should you consider a Fee-For-Service Plan?
Well think about what you may or may not want in a plan.
If using the doctor or hospital of your choice and not needing referrals to see other providers
is important to you and you don’t mind: Paying out of pocket costs such as: a deductible
and coinsurance Possibly having to file claims and
Potentially high out-of-pocket costs Then a fee-for-service plan may be for you.
Now that we have discussed little bit about Fee for Service plans let’s talk about the
second of the four types of FEHB Plans, HMOs.
In Health Maintenance Organizations, also known as HMOs. Plans are based on your geographic
location. Meaning the: Enrollee must “live” in HMO’s enrollment
area to enroll. Because of this, an enrollee can change plans
if he, she or a covered family member moves out of the service area.
There are few cases where you may be eligible for additional HMO plans based on the location
of your work. Please refer to the plan brochures to see if this is the case for any HMOs in
your area.
Points to consider when choosing an HMO are: Each HMO plan operates in a specific geographic
area, also known as their service area. Generally, you must use on HMO’s network
and get referrals from primary care doctor to see specialist
Out-of-pocket costs are usually just limited to co-pays
There is little, if any, paperwork that you have to fill out
And HMOs will manage your care. So to sum up HMO Plans.
If little, if any, paperwork and Limited out-of-pocket costs are important to you and you don’t
mind: Only using doctors and hospitals that are
part of the plan’s network, and That you will need a referral to see both
other providers and specialists Then a HMO may be just the plan you are looking
for. Since we have now discussed the HMO plans,
We will now go into one of the newer types of plans being offered. Third on our list
of the four types of FEHB Plans are High Deductible Health Plans. Both High Deductible Health
Plans and Consumer Driven Health Plans, which we will discuss a little later, were created
to offer you more say over your health options A High Deductible Health Plan provides coverage
for high-cost medical events and also allows a tax-advantaged way to build savings for
future medical expenses. They also provide greater flexibility of how you use health
care dollars. There is an annual deductible and cost sharing, which means you will incur
some out of pocket costs. A major part of High Deductible Health Plans
is a Premium contribution to Health Savings Account (also known as an HSA) or Health Reimbursement
Arrangement (known as an HRA). BOTH the HSA and the HRA allow Tax-free withdrawals from
accumulated funds to pay for qualified out-of-pocket expenses. This includes your annual deductible.
Now let’s talk about the vehicles you can use to save for eligible expenses: Health
Saving Accounts and Health Reimbursement Arrangements
In a Health Savings Account an account is created for by your High Deductible Health
Plan. Each month your plan will put money in your Health Savings Account. This is called
a premium pass through. You may also directly contribute to your Health Saving Account up
to the IRS allowed maximum. Please take note that this means both your contribution and
the plans contribution cannot go over those limits.
This account allows you to take Tax-free withdrawals for qualified medical expenses. A few examples
of qualified medical expenses are: out-of-pocket costs including deductibles, coinsurance and
co-payments, prescription drugs, eye exams, eyeglasses and contact lens and dental treatment
such as fillings, braces and extractions. The Account earns interest tax free. Any Unused
funds and interest carry over from year to year without penalty and the account has Portability.
This means the account is owned by you and is yours to keep even if you retire, leave
government service or change plans. You do not pay taxes on the money that your
plan puts in your Health Saving Account, Also known as the premium pass-through. Your own
Health Savings Account contribution is deductible on your income tax return or pre-taxed if
it was made through a payroll deduction up to the IRS limits.
Annual contributions may be made at any time during the calendar year up to April 15 of
the following year. Not everyone is eligible for a Health saving account. On the next slide
we will be reviewing some of the more important rules issued by the Treasury about eligibility.
This is not an exhaustive list, so please consult the Dept of Treasury rules in their
entirety to ensure your eligibility. Treasury rules state to be eligible for a
Health Savings Account you: must be enrolled in a High Deductible Health Plan, you cannot
be enrolled in Medicare. You cannot be covered under: any non-High Deductible Health Plan,
OR a flexible spending account ( with the exception of a: LEX-HCFSA), AND must not be claimed as a dependent on
someone’s tax return. However being married and filing jointly it is ok.
Now that we have discussed the individuals who may be eligible for a Health Savings account.
Let now talk about those individuals who are not eligible for an HSA but who are eligible
for a Health Reimbursement Arrangements. The Health Reimbursement Arrangements are
for: Individuals who are enrolled in High Deductable
Heath Plans but are not eligible for a Health Savings Account AND
Those individuals enrolled in High Deductable Health Plan but are ineligible to continue
in a Health Savings Account
Health Reimbursement Arrangements are like a Health Savings Accounts, but with a few
major differences… On this page we have outlined the differences
between the two accounts. As you can see In Health Reimbursement Arrangements enrollees
cannot make deposits directly into their account. The plan funds this account. Usually at the
beginning of the year. Whereas in Health Savings accounts enrollees
can make their own deposits, so you can plan for medical expenses by adding pretax dollars
to the account up to the IRS limits. In Health Reimbursements Arrangement enrollees
will not earn interest on their accounts, but in a Health Savings Account enrollees
will have the ability to earn interest, and lastly In a Health Reimbursement Arrangement
the account is not portable. So if you leave government service or change plans the money
you have left in your account is forfeited Whereas In Health Savings Accounts the account
is Portable. So if you retire, leave government service or change plans, the account is still
owned by you and is yours to keep. Now that we have discussed the parts of a
High Deductible Health Plan. Let’s talk about the last of the four types of health
plans, Consumer Driven Health Plans (CDHP). Like a High Deductible Plans a Consumer Driven
Health Plan is one of our newer options.
A Consumer Driven Health Plan combines a traditional health plan with separate medical and dental
funds. The Annual medical and dental funds must be used first for covered expenses (preventive
services, such as bi-annual teeth cleanings may be paid by plan at 100%). When the medical
fund is exhausted, a deductible must be met before traditional health insurance coverage
becomes effective Every year any remaining medical fund dollars left may be rolled over
to next year, helping to reduce your future out-of-pocket expenses
To summarize the High deductible health plan AND the consumer driven health plan, if features
such as: More control over the cost of your health
coverage, Rolling over remaining medical fund dollars
to next year OR Saving for future medical expenses on a pre-tax
basis, are important to you And you don’t mind a high deductible, or
higher cost-sharing when medical funds are gone. Then, a High Deductible Health Plan
or Consumer Driven Health Plan may be for you!
So how do you pick a health plan? You have a lot of factors to take into account.
When you think about choosing a health plan and which plan is best for you, ask yourself
these questions:  
Number 1. What health expenses do you and your family expect for next year?
For example:  
Are you expecting a new baby? Are your medications changing?
Does my child need braces? Does anyone in my family need glasses?
   
Number 2. Which available plan has the best coverage for these expenses?
For example:  
Are there plan limitations (such as, a number of visits or dollar maximums) which will result
in out-of-pocket expenses? Are there any services you need (such as chiropractic
care or acupuncture) that are not covered?
What is your share of the cost of prescription drugs? or
What deductibles, copays, and coinsurance must you pay?
  or Number 3. What are you priorities?
  If lowest overall cost is your priority you
may want to consider the premiums and expenses such as the deductible. That’s the amount
you must pay first before the plan begins to pay benefits. Also, look at the copays
and coinsurance. These are the amounts that you pay as your share in the cost of covered
services.  
Or maybe it’s the most freedom to see providers? With an HMO you must use their providers;
with a nationwide Fee-For- Service Preferred Provider Organization network – the network
may be larger; and you can also go to providers that are not part of the Preferred Provider
Organization network; however, you will pay more.
Maybe your priority is the least paperwork? Or possibly Greatest protection for unforeseen
medical expenses? You may want a plan that does not have a deductible
Number 4. Is there a Preferred Provider Organization (PPO) or an HMO network?
For example: Are there providers near me?
Is my doctor in the network now?  
Keep in mind provider participation in the network is voluntary, and providers may terminate
the agreement at any time.
Number 5. How much are the premiums and my out-of pocket-cost?
You share the cost of your health benefits premium with your employer. Please check our
Premiums page on our website for more information. You can also find premiums in your health
plan brochure and the Guide to Federal Benefits. In addition to the health plan's premium,
you may have to pay deductibles, copayments, or coinsurance.
  Now that you have considered these questions,
you are on your way to making a more informed decision about your FEHB benefit choices for
next year.  
For more information on these questions, go to www.opm.gov
If you having a difficult time choosing between plans FEHB offers a useful instrument to help
you decide. It is called the plan comparison tool. This tool allows you to compare up to
four plans, apples to apples. All you have to do is enter some information and you will
be able to compare plans differences, similarities, coverage’s and costs. Just go to: www.opm.gov
In addition to OPM’s compare health plans tool, there are 2 other comparison tools that
you may want to try out before making a decision.
The first tool is Plan-smart-choice. This is a:
tool you can use to assist you with choosing which plan best meets your personal needs
PlanSmartChoice is a more detailed plan comparison tool. It asks about you and your families‘
anticipated health expenses for next year, and what is important to you. Then shows which
plans would provide the best coverage for you at the lowest cost.
PlanSmartChoice assists you in deciding which health plan best meets your personal needs,
estimates your health care cost before selecting a health plan and creates a side by side comparison
of your options. Visit Plan SmartChoice at www.plansmartchoice.com
The second comparison tool is the Consumer’s Checkbook. This is also a detailed plan comparison
tool. It Ranks health plans based on your age, location, family size, and amount of
your anticipated health expenses. It helps you find plans available to you and compares
approximate yearly cost, cost sharing, coverage features and flexibility. It is available
to employees of agencies that have subscribed. To find out more information go to: www.checkbook.org/newhig2
We hope you’ve enjoyed this webcast. As a reminder, this presentation has been
recorded, and you can see it again at www.opm.gov You
can watch all of our
webcasts at www.opm.gov/insure/openseason/webcast.asp This year’s Federal Benefits Open Season
will be November 12th through December 10th, 2012, so be sure to make all of your Open
Season changes and enrollments during that window. Don’t wait ‘til it’s too late!