Federal Benefits Open Season: Must-do tips

Federal Benefits Open Season time! Are you ready? Check out these tips for making the most out of your benefit as a federal employee …

During the last couple of months of the year, a lot of federal employees have the opportunity to change their allocations for health insurance, dental insurance, vision insurance, and other types of tax-advantaged accounts during Federal Benefits Open Season.

Making changes during Open Season is important because during the other times of the year, it's much more difficult to change things. Outside of Open Season, a qualifying life event (such as a birth, death, marriage, divorce, etc.) is needed to be able to change coverage or allocations.

As a federal employee, most likely you are already aware that Open Season is happening. Those people that can participate and make elections during Open Season are those eligible to enroll in the FEHB Program and either employed by an Executive Branch agency that has elected to participate in and set up payroll deductions with BENEFEDS or another organization or agency that has adopted the FSAFEDS Plan document.

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A checklist for Open Season preparation

The 2020 Open Season is going on now through December 14th 2020.

Here are some things that will help you to get the most out of your Open Season. Get going on these things as soon as possible.

Log into your account

I know for me that this is not an account that I normally spend a lot of time in, so making sure that I still am able to log in well ahead of the deadline is a good thing.

Murphy’s Law is alive and well, especially as the deadline nears, so please, please don’t fall prey to it! I've been a buzzer-beater a couple of times. It’s very stressful and I don't recommend it.

Check any remaining allocation that you have

Once you've gotten into your account, check how much of this year's allocation is left, if any.

In the past, you could spend the current year's allocation several months into the following year, but that's no longer the case. Instead, there is a carryover amount; this year the amount is $550. Any balance at the end of the year that exceeds $550 is lost, and you can only carry over (up to) $550 if you've successfully enrolled for the following year.

Make a plan to close any carryover gap you have

Let’s say that you’ve checked your allocation and you have $800 left. If you have no other claims, you’ll lose $250 after the end of the year ($800 – $550 = $250).

If you have a difference like this to make up, then plan some qualifying purchases or make some appointments that perhaps you've been putting off. There are eligible items that you can buy in the store; a list of eligible expenses is here. And keep the proper documentation!

Estimate next year’s expenses

Next, make your best estimate of how much you and or your family will be spending next year on medical stuff.

Over the past few years I’ve been conservative in the amount that I've allocated for the flexible spending account. One year we had to do some scrambling to use things up, and we didn’t want to repeat that.

How much you allocate is a bit of risk and reward. Allocating conservatively decreases the risk of losing money at the end of the year, but you could use everything up by March and miss out on pre-tax spending. Allocating aggressively maximizes the potential tax benefit, but also increases the risk of losing money at the end of the year if you have the good fortune of being healthier than you expected.

You can get in the ballpark by seeing how this year went. Did you allocate too much or too little? If you expect next year to be much the same as this year with regard to medical expenses, then you can adjust up or down from your current allocation.

You can also look at this year's expenses and see which ones will repeat next year (like dental checkups, new prescriptions, yearly physicals and other checkups, etc.) to get a baseline. If you know that there will be big new expenses coming up, it may be worth it to get an estimate so that you can plan your allocation to consider that.

Also consider any medically necessary pill regimens that you're on. (Some of these might require a letter of medical necessity from the caregiver.) Check the allowed expenses list!

Even with all available data, this will only be a guess, because lots of things happen. Apply your risk / reward tolerance and realize that if you miss a little bit, you’re likely still ahead because the tax savings on your allocation will offset a small loss.

Make your Open Season election before the deadline

After the estimate is done, then it's just a matter of making sure that you're enrolled for the next year!

When you have your number for what you think you'll spend, also remember to consider any carryover that you expect to have.

Also verify and update your dental and vision insurance

Open Season is also the time that you can elect or change your supplemental dental and vision insurance.

Supplemental dental insurance covers a lot of dental expenses that basic health insurance will not cover. Vision insurance covers things like eye exams and prescription glasses (again, things that health insurance won’t cover).

One important thing to verify each year is whether or not your favorite dentist or optometrist is going to be continuing in the preferred provider Network covered by your insurance.

From the standpoint of the dentist or optometrist, joining a preferred provider network is a business decision. Sometimes the needs of the business change, and they have to change which networks they participate in. If you don't see this coming, then it could be an unpleasant surprise to find out that your charges are a lot higher.

Ideally, you would know this information prior to making an Open Season election so that you can change your insurance provider (or make arrangements to go to someone in network). it should be a very quick phone call or a visit to the office’s website to find this information out.