Key Takeaways
- Major 2024 updates to federal employee benefits affect your healthcare, retirement savings, and long-term care coverage.
- Staying informed is essential to ensure you make the most of the new options available to you as a retiree or near-retiree.
Federal Employee Benefits Changes: What You Need to Know for 2024
As we’re already in 2024, federal retirees and those nearing retirement face some crucial updates to their benefits. These changes impact your healthcare coverage, retirement savings, and other critical areas. Staying informed about what’s new will help you make the best decisions for your financial and personal well-being this year.
FEHB Premiums and Healthcare Updates
One of the biggest changes affecting retirees is the increase in premiums for the Federal Employees Health Benefits (FEHB) program. On average, premiums have risen by 7.7% in 2024. While this hike is slightly lower than last year’s increase, it still marks one of the steepest upticks in recent history. The good news? Many plans have introduced enhanced benefits, including better coverage for fertility treatments such as artificial insemination and in-vitro fertilization (IVF). If you or a family member are considering fertility treatment, it’s a great time to review what your plan offers.
Moreover, FEHB plans are increasingly offering incentives to retirees who enroll in Medicare Part B. These incentives often come in the form of reduced copays, waived deductibles, or even partial premium reimbursements for those who are dually enrolled. If you’re already on Medicare or thinking about enrolling, check your FEHB plan to see if you qualify for any of these cost-saving benefits.
Thrift Savings Plan (TSP): New Contribution Limits
For retirees and those still working, the Thrift Savings Plan (TSP) remains one of the most important tools for retirement savings. In 2024, TSP contribution limits have been increased, allowing you to save more in a tax-advantaged manner. For self-only participants, the contribution limit is now $4,150, while for those enrolled in self plus one or self and family, the limit has increased to $8,300.
With the cost of living on the rise, this higher limit provides an excellent opportunity to boost your retirement savings. If you’re not yet maxing out your contributions, it’s a good time to revisit your budget and see if you can take full advantage of this increase.
Changes to Federal Long-Term Care Insurance (FLTCIP)
In a surprising move, the Federal Long-Term Care Insurance Program (FLTCIP) has temporarily halted new enrollments as of 2024. While this won’t affect anyone who’s already enrolled, no new applications are being accepted for the time being. The government is reassessing the program’s sustainability and structure, and it’s unclear when new enrollments will resume.
If long-term care is something you were considering, you’ll need to look at alternative options outside of the federal program. The pause gives you time to review other insurance policies or savings strategies to prepare for long-term care expenses down the road.
Prescription Drug Coverage and Medicare Part D
For federal retirees with Medicare Parts A & B, several FEHB plans have introduced Medicare Part D prescription drug plans for 2024. These plans typically provide drug coverage at no additional premium and are considered as good as, if not better than, standalone Medicare Part D plans. Plans like BCBS Standard, MHBP, and others have added features like $2,000 out-of-pocket maximums for prescription drugs, which can be a major cost saver if you face high prescription expenses.
If your FEHB plan auto-enrolls you in a Medicare Part D plan, make sure you understand the benefits, especially if you’re on high-cost medications. You will have the option to opt out if you don’t think it’s a good fit for your healthcare needs.
Life Insurance Adjustments: Federal Employees’ Group Life Insurance (FEGLI)
Retirees enrolled in the Federal Employees’ Group Life Insurance (FEGLI) program will see changes to premium rates for certain age groups in 2024. If you’re in the 65+ bracket, it’s especially important to review your policy. Premiums tend to increase with age, and depending on your needs, it might make sense to adjust your coverage. Some retirees may find they no longer need the same level of life insurance as before, particularly if their children are financially independent or they’ve paid off major debts like a mortgage.
Flexible Spending Accounts (FSAs)
Finally, let’s talk about Flexible Spending Accounts (FSAs). FSAs allow you to save pre-tax dollars for healthcare-related expenses, and the 2024 contribution limit for FSAs has been increased to $3,200. You can also roll over up to $640 into the next plan year if you don’t use all your funds by the end of the year. While FSAs are underutilized by federal employees (only about 20% participate), they can provide significant savings on medical, dental, and vision care expenses.
Moving Forward: Make 2024 Work for You
The changes to federal employee benefits in 2024 are significant, but with a bit of planning, they don’t have to disrupt your financial stability. Whether it’s reviewing your healthcare plan during Open Season, maximizing your TSP contributions, or considering your long-term care options, now is the time to act. Staying on top of these changes will ensure that you continue to get the most out of your hard-earned benefits.
