Calling all Federal Gov’t Employees… let’s talk benefits

[Anonymous]

My spouse is accepting a job with the Federal Govt and will be receiving a whole bevy of benefits we never knew about.

1) Federal Long Term Insurance: I was wondering what people thought about the Federal Long Term Insurance Program (http://www.ltcfeds.com/). He is 40, I am 36… should we sign up now, or is it something we wait until we are 50 or 60 to sign up for?

2) Federal Employees Health Benefits Program (FEHB) (http://www.opm.gov/insure/health/index.asp): What about FEHB? Any strong feelings? We tend to stay away from PPOs / managed care. Given this, what plans do people recommend? If it matters, we are DC residents.

3) Federal Employees' Group Life Insurance Program (http://www.opm.gov/insure/life/index.asp) : I know there has been a lot of talk re: life insurance. Unfortunately, due to financial constraints, we are currently without it. Does it make sense to get the term insurance? In your opinion, is it a good plan?

Any other thoughts re: thrift spending, retirement, and other benefits?

[Anonymous]

RE:

2) FEHB: The health benefits are great, and in our circumstance, about $1000/month cheaper than our other option. We use GEHA, which is a PPO, not HMO. We can see any specialist we want without referral, but there is a penalty for going out of network. THe network is large, however. It includes Children's hospital, incase your child ever needs a specialist in anything. Check out any other specialists you have before you decide on a plan.

I do know someone who needed IVF, however, who paid a ton because the federal plans don't cover what some of the state plans do. So you need to look carefully at your personal medical conditions.

TSP is good as a 401K type plan. Obviously, you should put as much in there as you can afford, since the tax benefits are great.

Flex accounts are the exact same here as other places (that we've looked, at least).

[Anonymous]

as far as FEHB goes, we use Aetna Open Access, which is more of a PPO than an HMO because visits to specialists do NOT require a referral from the primary care physician.

Aetna pays for almost everything (My cesarean birth with a 4 day hospital stay cost me just $600 - $625 if you count the prenatal care), My IUD cost me $50 ($25 for the device and $25 for the office visit).

There is no deductible, it includes dental at no extra cost, and is one of the cheaper plans available if you choose the standard option.

TSP -- Contribute the 5% or you'll kick yourself for giving up the matching funds, and put it in the lifecycle funds.

[Anonymous]

OP here - What about long-term insurance? Is this something that people do at our age, or do you wait?

[Anonymous]

I haven't done it -- not in my forties yet, though.

[Anonymous]

I haven't done it in the private sector and have been wondering if it makes sense. I read something recently that made me think not. I can't remember the source, but the point was that the care you buy now through these plans may not be the care that is available 50 years from now when you need it. The article made the point that 30 years ago there was not "home health care" available the way it is now. We really don't know what will be available 30 years from now. A plan you buy could specifically cover X, Y and Z and not what will be the standard of care, Q, in 30 years.

[Anonymous]

I don't even know what the Long Term Care Insurance is and I'm the go-to person for benefits in my division. People I don't even know come ask me questions because HR knows nothing.....I guess I better brush up!

FEHB - We use BCBS Federal Standard. It's a PPO but I don't know that you will find something not PPO or HMO that's any good at all. BCBS and GEHA both have good ratings and huge networks. If you go with an HMO, go with MDIPA although you will pay less with MDIPA, it is a lot more limiting, obviously and I know you said that is something you don't want.

FEGLI - I didn't even know if you could opt out of it but it's not expensive. I'm 28 and have taken some financial planning classes from the two Gov't jobs I've had (I've now been working for the Government for 6.5 years), and they recommended that you get the FEGLI at the minimum if you're younger and at the high end if you're older.....they don't do any kind of testing so they don't deny you anything. You can get as much as you want and from what I hear the rates are reasonable, but if you're young you can probably get a better rate somewhere else. I just stick with what I have that's the basic and I recommend you get that at the very least. It's apparently, and I just heard this yesterday, the only benefit that you can't change often. Sometimes it's years between open seasons for FEGLI so you want to get an amount that you need unless you're planning a QLE (Qualified Life Event.....like the birth of a baby) at which time you have 30 days to change anything but you probably won't remember if you have a baby or something.

TSP: Put in AT LEAST 5% because you want the matching. Otherwise you can choose between TSP and a Roth IRA. Put nothing in G or F funds. You can use the L fund if you don't want to think about it....it breaks your money into different accounts more aggressively the younger you are but really, it does put some money in G and F, so put the money in some combination of C, S and I (C is large companies, S is small businesses and I is International) and then never look at it because in this economy you'll lose all the money but you are still buying things so they will grow over time. You could always hold it in G or F for now or put it in L with the furthest out date of retirement if you're not someone who wants to think about it.

You can't do much with your retirement otherwise. It pays to stay until you're 62.....that's about it really.

I would recommend your husband look if his work has some sort of financial planning class he can take. The ones I took were great.

You also want to take advantage of the Flexible Spending Account as well as the Dental plans, which are new and much less than buying them on your own but not subsidized by the Government.....but since the Government is such a huge customer the rates are good. I have MetLife and think it's been fine. Vision benefits don't get you much usually, but you should look into them also.

[Anonymous]

FEHB: We use BCBS standard and are really happy with it.

FEGLI: My understanding is that, if you are healthy, you can buy life insurance for a much lower price in the private market. Signing up for FEGLI when you're hired may be convenient, but their rates are not the lowest. However, if you're not healthy, then since they can't reject any new federal employee, it's probably worth signing up. If you need life insurance, just be sure to go shopping for it now, though, while you're still healthy.

LTC insurance: we purchased this through federal benefits, but I'm not sure that we should have. At a recent retirement planning seminar (by a private contractor) we were told that you could find similar benefits through the private sector for lower premiums. I'm not sure if that's true, though.

TSP: Be sure to contribute at least 5% of your salary, if you don't then you're throwing away the free money of the government match. I contribute the maximum of $15,500 and am happy with the investment choices and low expense ratios, but not everyone can afford to do that on a government salary.

[Anonymous]

OP here - Thanks to everyone for the great information. If I may ask 15:45 poster, about how old are you? Was it suggested that people on the younger side of middle age purchase Long Term Care Insurance?

[Anonymous]

We use BCBS for medical and it's been great. We recently added GEHA-High for dental. I found NO ONE who would accept the BCBS "dental plan" that was offered along with medical. I got tired of receptionists explaining why BCBS dental was so bad they quit accepting it. We pay $50/wk for dental though, so it's pretty expensive. In January we'll be 2 yrs into their plan, and will qualify for braces for DS13. Finally.

[Anonymous]

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[Anonymous]

Anonymous wrote:OP here - Thanks to everyone for the great information. If I may ask 15:45 poster, about how old are you? Was it suggested that people on the younger side of middle age purchase Long Term Care Insurance?

15:45 here. I'm 42 now, and was about 37 when I purchased long term care insurance. My DH is 55, though, and has a kidney transplant and a few other issues, making him much harder to insure. I believe that it was a good deal to buy it for him, and just went ahead and got it for myself at the same time because I didn't want to invest the time researching alternatives.

As for other benefits, the flexible spending accounts are great. With kids in daycare we burn through the $5000 that we put away very quickly. It's nice to 'earn' that money 'tax free'. If you are in one of the lower tax brackets, however, I understand that it may not be wise to participate in an FSA, because you don't pay social security taxes on amounts that you save in the FSA, and therefore don't get credit for that income when social security benefits are calculated. As a result, fairly low-income taxpayers really need to think hard about whether or not to participate in the FSA...the tax benefit for those in low tax brackets is relatively small and the cost in terms of lost social security benefits may be relatively high for those needing to depend on social security income in their retirement years.

[Anonymous]

OP here - My DH started his job with the federal govt yesterday and I wanted to thank everyone for their input. We have decided to go with BCBS standard, but now are debating about supplemental vision and dental. Here is the story:

1) DH has glasses, I do not, DD does not.
2) DD is 5 yo
3) None of us have had any significant dental work, nor do we foresee it in the near future (at least until DD is older, should she need braces.

Dental and vision coverage seems kind of pricey. What do people think of it? Important to get? Better to just cover expenses with flex spending?

Thanks!

[Anonymous]

Anonymous wrote:OP here - My DH started his job with the federal govt yesterday and I wanted to thank everyone for their input. We have decided to go with BCBS standard, but now are debating about supplemental vision and dental. Here is the story:

1) DH has glasses, I do not, DD does not.
2) DD is 5 yo
3) None of us have had any significant dental work, nor do we foresee it in the near future (at least until DD is older, should she need braces.

Dental and vision coverage seems kind of pricey. What do people think of it? Important to get? Better to just cover expenses with flex spending?

Thanks!

Re: dental, I got MetLife Dental (the lower cost plan) for me and my older daughter last year. Our dentists were already in the plan as preferred providers, and the cost of the insurance was the same or slightly less than the cost of two cleanings per year for each of us. Plus, the insurance will cover xrays and other things if we need them, so it seemed like a good deal to me.

[Anonymous]

I could have this wrong, but I believe this is one of the few shots you will get at life insurance (without physical etc) and it is decent insurance. Yes, term is what you want. You don't need life insurance once the kids grow up.

I have been in delta dental and it was a waste. Providers go in and out, and it didn't cover anything important. I hear they've improved, so maybe it's ok now. Vision is a rip off.