It is one thing to understand the inner workings of your individual benefits, but what is more important is to understand how they interact together. FEHB, FEDVIP, and FSA’s can all be great tools in your financial life, but they become the most effective when you coordinate them in a way that best suits your needs.
Here are some general things to think about when it comes to deciding how to coordinate these benefits.
FEHB is an extremely valuable benefit and the vast majority of employees should take advantage of it. There are a number of types of plans within the program and you will want to pick the one that makes sense for you and your family.
When deciding on whether or not to enroll in FEDVIP, here are a few things to consider:
What things are covered under FEHB plan already? If anything is covered by your FEHB plan, that would be considered your primary insurance and your FEDVIP would be secondary. Most national FEHB plans don’t cover many dental or vision services but some high-deductible plans and FEHB HMO-type plans have comprehensive benefits for dental and vision. Comparing the coverage of your FEHB plan can make it much easier to decide if FEDVIP is right for you.
What is the likelihood of using the services that are covered by the plan? This decision may be easy if you already wear glasses and have regular expenses because of it. But for others, it may be difficult to predict how much they’ll use them. Things like emergency dental procedures are almost never planned. You will have to weigh the probability of use for your situation and see what makes sense.
Would it make more sense to simply put the amount that you would have paid in premiums into a FSA account? This way you have funds if needed while still retaining some control over where that money goes.
Both FEDVIP premiums and FSA contributions can be paid with pre-tax dollars which is important to know when deciding where to put your money.
Some employees prefer to use both FEDVIP and their FSA account. This way they are
able to pay any copayments, coinsurance, or deductibles from their FSA account.
There is not a right or wrong answer with any of these decisions. It comes down to
deciding how much risk you want to take and what seems to make sense for you. Oftentimes, what makes sense for your co-workers doesn’t make sense for you. But just by reading this article you are already better prepared to make an informed decision.