Health care reform, FEHBP and you

The Office of Personnel Management this afternoon released the latest Benefits Administration Letter detailing how health care reform is going to affect federal employees.

One of the bigger changes affecting Federal Employees Health Benefits Program enrollees is the extension of coverage for adult children of feds. Currently, only unmarried dependent children younger than 22 are eligible for coverage. But the health care changes will expand coverage to adult children up to age 26, as well as removing residency and dependency requirements for coverage. And there’s a few other firsts for adult children (younger than 26, of course):

• Married adult children of feds will be eligible for FEHBP coverage. However, their spouses or their own children will not be eligible for coverage.
• Adult children who are eligible for or have their own employer-provided health insurance will be able to switch to mom’s or dad’s FEHBP.
• Adult stepchildren of feds won’t need to live with the enrollee in a parent-child relationship to be eligible for coverage.
• Adult children are not required to be students or have prior or current insurance coverage to be placed on their parent’s plan.
• Foster children are also eligible until they turn 26.
• Children who cannot support themselves because of a mental or physical disability that began before they turned 26 will be eligible for continued coverage even after they pass that age.

For most feds, these changes will take effect Jan. 2, the first day of the first full pay period in 2011. OPM had been hoping to convince Congress to change the law allowing them to extend coverage earlier, but that hasn’t happened yet and the legislative schedule is tightening up fast.

How do you get your newly-eligible adult kid onto your health plan? Glad you asked. Hit the jump for the answer.

OPM said that if you have a self and family plan and don’t expect to switch to another plan or option, you should contact your current plan and give them information on your child. “Do not complete an SF 2809, Health Benefits Election Form or enter dependent information in your agency’s self-service enrollment system to add your child to an existing self and family enrollment,” OPM said.

If you’ve got a self-only plan, you’ve got to switch over to self and family. For that change, you can use the SF 2809 or self-service enrollment and sign your kid up while you’re at it. Same goes if you’re currently not enrolled in FEHBP at all. But you’ll probably need to declare a “change in family status” qualifying life event (using the 1C code) to add your child.

Children who lose coverage when they turn 26 are eligible for up to 36 months of temporary continuation of coverage, even if they previously had TCC. An adult child under 26 who is currently under TCC — and comes back under FEHBP next year — can drop TCC by contacting the Agriculture Department’s National Finance Center.

And as of Jan. 1, employees will be able to use their Flexible Spending Accounts for health care expenses incurred by children, stepchildren, adopted children, foster children or children placed with an employee for legal adoption. Those children don’t need to live with the employee or qualify as a dependent for tax purposes to be eligible for FSA expenses.

That’s the good news. Now here’s the bad news.

Beginning Jan. 1, over the counter medicines or drugs will no longer be eligible for reimbursement from FSAs, Health Savings Accounts or Health Reimbursement Arrangements, unless they have a prescription. Insulin is a different matter, however — anyone who needs that won’t need a prescription to get that cost reimbursed.

OPM said other over the counter items that aren’t medicines or drugs will remain eligible for reimbursement under high-deductible health plans’ HSAs or HRAs. But the 10 percent penalty for non-eligible medical expenses paid from an HSA will increase to 20 percent Jan. 1.