Health Insurance Issues/last year before retirement

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TresBelle65
Posts: 147
Joined: Sun Apr 12, 2015 2:44 pm

Health Insurance Issues/last year before retirement

Post by TresBelle65 » Sun Oct 14, 2018 4:50 pm

I'm a federal employee planning to retire in mid to late 2019.

Open Season for Benefits will soon be upon us.

For the past several years, I have had a High Deductible Health Plan, matched with an HSA.

Beginning in January, I plan to get all recommended final screenings, finish needed restorative dental work, and undertake an elective procedure or two - while I am still on the payroll, have sick leave, etc. (It's not relevant for me to save sick leave for pension calculations, I have not worked for the feds long enough for this to make an appreciable difference, nor with the amount of accumulated sick leave I anticipate having).

Should I consider reverting back to a traditional health plan for 2019, since this coming year I am very likely to hit the deductible ceiling and this would also allow me to go back to a traditional FSA where I can set aside reimbursable funds for things other than eyes and teeth?

Thoughts? comments?

tj
Posts: 2191
Joined: Thu Dec 24, 2009 12:10 am

Re: Health Insurance Issues/last year before retirement

Post by tj » Sun Oct 14, 2018 4:54 pm

Can't you still use your FSA for eyes and teeth?

frugalminded
Posts: 31
Joined: Sat Apr 14, 2018 12:45 pm

Re: Health Insurance Issues/last year before retirement

Post by frugalminded » Sun Oct 14, 2018 7:29 pm

If you are looking at possible surgery, I would first look t the preferred provider list and make sure that the providers you want to use are listed.
If you choose to stay with your current health plan, you can still contribute to your HSA but you must pro-rate it if you retire before the year is up. Rules regarding that are on the IRS website.
When you do the total out-of-pocket comparison (premiums vs. deductibles, etc) make sure you you look at the yearly max out of pocket because you will likely meet it with the surgeries.
The Feds contribute $150/mo to the HSA so, for our plan, my $3000/yr deductible is effectively only $1500.
The annual max out of pocket on the high deductible plans is usually the same as the annual HSA contribution maximum.
You didn't say whether you are retiring as an annuitant, but I would think you will still keep your Fed health plan, which you are entitled to do if you will have been enrolled continuously for the 5 years prior to retiring:

https://www.opm.gov/retirement-services ... ment-faqs/

When can I keep my health insurance benefits after I retire?
You may continue your health insurance coverage only if you meet the following conditions:
Your annuity must begin within 30 days or, if you are retiring under the Minimum Retirement Age (MRA) plus 10 provision of the Federal Employees Retirement System (FERS), health and life insurance coverages are suspended until your annuity begins, even if it is postponed.
You must be covered for health insurance when you retire.
You must have been continuously covered by the Federal Employees Health Benefits Program, TRICARE, or the Civilian Health and Medical Program for Uniformed Services (CHAMPUS):
for five years immediately before retiring;or,
during all of your federal employment since your first opportunity to enroll;or,
continuously for full periods of service beginning with the enrollment that started before January 1, 1965, and ending with the date on which you become an annuitant, whichever is shortest.

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