The Federal Employee Health Benefits program was enacted by Congress in 1959, the Federal Employees Dental and Vision Insurance Program started operating in 2007. While they’re both forms of health insurance, they differ in substantial ways, even beyond the scope of their coverage.
The FEHB program provides comprehensive coverage that, according to OPM “can help you and your family meet health care needs. Federal employees and retirees and their survivors enjoy the widest selection of health plans in the country. You can choose among Consumer-Driven and High Deductible plans that offer catastrophic risk protection with higher deductible, health-savings/reimbursable accounts and lower premiums, or Fee-for-Service (FFS) plans, and their Preferred provider Organizations (PPO), or Health Maintenance Organizations (HMO) if you live (or sometimes you work) with the areas serviced by the plan.”
The reimbursement of enrollee health expenses aren’t limited by any pre-existing conditions or any waiting periods for benefits to kick in. And the costs are shared by enrollees and the government, with the government typically paying 72 percent of the weighted average cost of all plans. Further, employees – but not retirees – are eligible to pay their premiums with pre-tax dollars.
During the annual Open Season, enrollees have an opportunity to change plans if they want to. And changing plans will have no affect on their right to carry that coverage into retirement, as long as they have been continuously enrolled for the five consecutive years before retirement or from their first opportunity to enroll. Further, the five-year requirement can be met by those covered by TriCare or CHAMPUS, as long as they are enrolled in the FEHB program when they retire.
Effective since 2011, the children of those enrolled in the self and family option of an FEHB plan can continue their coverage up to age 26, up from the old cutoff of 22, and even if they are married or not living at home.
On the other hand, FEDVIP is a narrowly focused program that was created as a supplement to the FEHB program. As its title shows, it only covers dental and vision expenses, areas where FEHB coverage is weakest.
Like the FEHB program:
• eligible individuals can enroll during any open season or from their first opportunity to enroll,
• there are no pre-existing condition limitations, and
• employees – but not retirees – are able to pay their premiums on a pre-tax basis; in fact, they must.
Unlike the FEHB program:
• enrollees pay the entire premium cost of the coverage,
• there isn’t any “five-year” rule,
• children are covered only to age 22 and must be unmarried and dependent on the enrollee, and
• employees who retire on an immediate annuity can enroll after they retire and can move in and out of the program in retirement if they wish.
Note: Under both FEDVIP and FEHB, there is an exception to the age cutoff for children disabled before the ages that otherwise apply.
So, the big question is this. Do you need FEDVIP? It’ll be up to you to work out the cost/benefit ratio and decide if what you have to pay in premiums would be balanced by the reimbursements it provides. Just keep in mind that not every enrollee can recover the amount he or she contributes. If they did, they’d break the FEDVIP bank. And premiums would rise the following year to cover the negative balance and return a profit to the private sector provider of these benefits.
While some enrollees do the math and conclude that they’ll be big winners by signing up for FEDVIP, most enrollees do so as a hedge against unexpected big-ticket dental and vision bills. What they may lose year-to-year in premiums, they regain through peace of mind. That’s the nature of insurance.