Land Mines to avoid when leaving an HSA

Recently the OPM director declared that ObamaCare has made FEHB a better health plan for Feds.

Funny, I thought that the OPM Director position was a non-partisan office. Silly me.

Where do I start on this one? Let’s see.

FEHB was the role model for ObamaCare.

Um, No. Much like the fact that Al Gore did NOT, in fact, create the Internet- OPM did NOT create ObamaCare.

For Federal Employees who are already covered by Military Retirement Health Care (TriCare), or a spouse’s health plan, or something else, FEHB is an OPTION, a CHOICE for Feds. As a Federal Employee, you have a CHOICE once per year (or once per ‘life-changing event’) to elect, change, cancel, or elect not to participate in FEHB.  There is no Fine (which SCOTUS has technically declared a ‘tax penalty’) for Feds who elect not to participate in FEHB.

ObamaCare has slowed the rising costs of FEHB.

Um, No. I’ve chronicled here and here that FEHB costs continue to rise (5 percent in 2013 and 4 percent in 2014), and that the only statistic that really matters is the one most Feds (40%) choose – Blue Cross / Blue Shield.  There is no evidence that ObamaCare has slowed the acceleration of Health Care costs for FEHB consumers, or for the rest of the Health Care Consumer Market (which is now everyone in the United States, by law).

ObamaCare WILL cut the costs of FEHB in the future.

 This is a half truth. If FEHB costs continue to accelerate at their current rate, many FEHB plan offerings will be smacked with the ‘Cadillac Tax’ in 2018. OPM will either have to pay the tax on FEHB plans that break the benefit cap, or choose for Feds to pay for more of their own Health Care costs.  I’ll let the GubMints reader decide which one of these scenarios is the most likely (Hint: It’s not the one that resembles a Self-Licking Ice Cream Cone).

FEHB Consumers are paying less thanks to ObamaCare.

Wrong again, unless you’re a 26-year old college dropout with no job.

In 2013, ObamaCare slashed Medical FSA’s from $5000 per family per year in 2012 to $2500 per family per year in 2013 and onward.   For families who were using more than $2500 per year as a Medical FSA election, this was a benefit reduction, as it reduced the FEHB participant’s take-home pay.

When the Medical FSA was cut in half at the end of 2012, Some FEHB enrollee’s made the drastic move of experimenting with one of the FEHB Health Savings Account (HSA) plans like the FEHB Aetna HDHP with HSA.  As I have documented in excruciating detail here on GubMints.com, this move for the GubMints family was an unmitigated disaster.

We all fully recognize that ObamaCare is the law of the land, and that it’s here to stay- But that does not change the fact that it is fundamentally flawed.  Non-Partisan OPM officials- Who have the responsibility of  running one of the nation’s largest HR Departments- Should do a few minutes’ worth of research before parroting a presidential administration’s party line.

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2 thoughts on “Has ObamaCare made FEHB a Better Health Plan?

  1. Nice blog. Clear. Well written. Decidedly not boring. Thanks. Could you point me in the right direction on opinions concerning Fed retirees turning age 65…suspending FEHB…Medicare…Medicare Part B…Medicare Advantage?

    Thanks and have a good Monday.

    Rich

    Reply
    • Rich –

      Thanks for the kind words.

      I’m not a big follower of Medicare Rules, but as I understand them, when you are Medicare-eligible, Medicare becomes your Primary Insurance provider, and any other insurance you have (FEHB, former-employer, or Tricare) becomes secondary coverage.

      Have a look at Medicare webpage, OPM’s FEHB webpage, FedSmith.com, GovExec, and NITP (NITPinc.com). Should be plenty of info there.

      Reply

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