Self Plus One. It’s the latest FEHB option. What was once a pipe dream is now a reality and will be available to married couples or a single parent with one eligible child during the upcoming open season. That open season runs from November 9 through December 14. And, like all elections, will be effective in January—on the January 1 for retirees, and as of the start of the first pay period of the year on January 10 for active employees.
I first wrote about self plus one on May 8, 2013, when I quoted Joe Beaudoin, then president of the National Active and Retired Federal Employees Association. In testimony before the House Subcommittee on the Federal Workforce, the Postal Service & the Census, he said:
Currently, FEHBP enrollees belong to one of two categories: self and self and family. This means a family with three or more members pays the same premiums as a two-person household, The idea of creating a “self plus one” category, as is available in the federal dental and vision plans, has been circulating for years.
In the past, NARFE has been skeptical [about] establishing a self plus one enrollment category as it threatens splitting up the risk pool and potentially leading to higher premiums for plans that cover a high percentage of older participants with higher average costs.
However, while federal annuitants who are not covered by Medicare Part B are the most costly to insure, the average cost of insuring annuitants with Medicare Part B coverage is lower than the average cost of covering active employees. In other words, self plus one may provide a more affordable option for retirees, which NARFE would support.
Nevertheless, OPM should provide adequate data and assurances that premiums and other out-of-pocket costs for two person households would decline with the establishment of a self plus one category. NARFE would have serious concerns if federal retirees on fixed incomes would be forced to pay more for the same coverage if this category is established.
Mr. Beaudoin’s point was well-taken because retirees do make up a disproportionate share of those family enrollees with only one eligible family member. And they usually have greater heath care needs. To prevent the rates for a self plus one enrollment from being greater than that for self and family, OPM put in place a one-year rule requiring that a plan’s total self plus one cost cannot exceed its family cost.
That was in total, however, meaning both the enrollee and government share combined.
In actual practice, as OPM disclosed when it announced 2016 rates recently, in a few cases the enrollee share is the same or higher for self plus one than it is for self and family in a given plan, or lower by only a negligible amount. As examples: NALC Value Option is only a penny lower, NALC is the same, MNBP Standard is higher, and Foreign Service Benefit Plan is much higher.
That’s because of how the premium sharing formula works. How can that be? Here’s OPM’s explanation:
“The statutory formula that is used to calculate the government contribution is based on the average of all plan premiums and requires that OPM calculate a maximum contribution for each enrollment type. In other words, there is a limit to how much the government will contribute towards the cost of a self only, self plus one, or self and family enrollment. The government contributes the lesser of the maximum contribution or 75% of the total premium. The remaining amount is the enrollee share (how much the enrollee must pay). In some cases, such as plans with a premium cost that is above the program average, this calculation may result in a higher enrollee share for a self plus one enrollment than a self and family enrollment.”
Clear as mud?
To help you fully understand this new benefit for the upcoming FEHB open season, FEDweek is holding a live webinar on this very topic, including the new self plus one option. For more information on this upcoming live webinar go to https://www.fedweek.com/events/fehb-and-fegli-open-season-choices/.