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FEFP Podcast: Not All Open Seasons Are Created Equal (EP16)

As a federal employee, open season is your annual opportunity to assess your health care needs and make any necessary changes to your health insurance for the following 12 months. You have much more control over the cost and/or coverage of your benefits, so it’s essential to take advantage of that. In this episode, Michael, Tommy, and John will explain how to ensure you’re making the most of your available benefits, including special, once-in-a blue moon open seasons, as not every open season is the same - and some deserve special attention.

Listen in as they give real examples as to how this can make a massive impact on your life, as well as the benefit of looking into open season even as a single, healthy younger person. You will learn the value of having a financial planner in your life, why they should have a good understanding of your history, and how this can help you discover benefits you may not have known were available to you.

Listen to the full episode here:

What you will learn:

  • What people generally think about open seasons as federal employees. (4:40)
  • How to ensure you’re making the most of your benefits. (7:20)
  • How these benefits can change your life. (11:20)
  • The benefit of looking into open season even as a younger, healthy person. (13:05)
  • The value of having an ongoing financial planning relationship. (15:30)
  • What you need to know about federal employees' long-term care insurance. (20:05)
  • Why you shouldn't wait to take these open seasons seriously. (24:30)

Ideas worth sharing:

“The great thing about federal open season is you’re not making a lifelong decision—you’re making a 12-month decision.” - Mason & Associates, LLC

“Don’t take anything at face value.” - Mason & Associates, LLC

“You may not get another chance. Who knows what could happen within a year?” - Mason & Associates, LLC

Resources from this episode:


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Read the Transcript Below:

Congratulations for taking ownership of your financial plan by tuning into the Federal Employee Financial Planning Podcast, hosted by Mason & Associates, financial advisors with over three decades of experience serving you.

Michael Mason:  Welcome to the Federal Employee Financial Planning Podcast, hosted by Michael Mason, certified financial planner; John Mason, certified financial planner, and Tommy Blackburn, certified financial planner, certified public accountant.

Mason & Associates have over three decades of experience helping federal employees with their financial plans. Guys, how's it going?

John Mason:  Mike, this is kind of fun, we're working from home this week. And when this episode airs, probably sometime in June or July, we'll have gotten through our strategic planning meeting season where we meet with all of our clients in April and May.

So, we're all working from home this week, feels good to see you guys in person as we record the podcast. Our listeners probably don't know, but we actually really enjoy sitting around this table together, recording this podcast together and especially on weeks where we're all working from home.

Tommy Blackburn:  It's actually almost felt like a flashback to the beginning of COVID when we were all working from home almost permanently, and we would get together for radio shows and podcasts, and it was always something to look forward to.

So yeah, it did feel great coming in and just getting to be with each other and just conversing.

John Mason:  It's been so cool, Tommy. I was reflecting with Sarah the other day, my wife and we were talking about you when you joined the firm and it was like July of 2019, I think. And as we were thinking about it, we were like, “Oh my goodness, Tommy was only here for whatever that, is eight, nine months, and then COVID hit.”

And then we started the work from home and the world shut down, but we still got to see each other a couple times a week doing the radio show. But really, amazing as reflecting like how well you got versed in federal employee benefits that quickly, even in that work from home environment.

And I just love and what that kicked off and may be good for our podcast listeners to hear, is we kind of came out of COVID better off. And that now, we're delivering this virtual financial planning experience, which allows us to work from home, work from anywhere, serve clients throughout the country.

And it's just hard to believe that you came in right when all that stuff hit the fan.

Tommy Blackburn:  A lot happens. It is interesting, sometimes when I think back on our lives, which we hopefully still have a lot of life left, and maybe we haven't seen that much. But sometimes, a lot changes in the years as I look back and since then, yes, a lot has changed.

But it was a great experience, very proud of how our firm pivoted during that time and how we, to your point, came out stronger, had a great team around us to train me and help me become an expert in federal benefits. Maybe not quite the same expert as some of the people on the team, but definitely, get me up to speed.

John Mason:  And Mike, how have you been doing? I haven't seen you in a couple days. You're my dad and I haven't seen you in person in probably a week.

Michael Mason:  Well, the same answer I give to everybody: I don't know how life could get any better than it is right now, but I'm always willing to find out as we're talking about life throwing you a curve ball as a senior citizen in the group.

Every time there's a challenge, there's also an opportunity, and COVID was a challenge, and you can meet it and have a glass half full about it, or you can meet it and meet the challenge.

And many people have, many people have used virtual and here we are at the opportunity to serve federal employees, whether they're actually our clients or just listeners of the radio show or the podcast, anywhere in the world, really — and to impart the knowledge that I have have over 30 some years, John, over 10 and Tommy over 10, it's a unique opportunity.

So, today, we're going to talk about open seasons. The title is Not All Open Seasons Are Created Equal. So, John, when people hear about an open season as a federal employee, what do they default to?

John Mason:  Well, open season, whether you're a federal employee or any employee with a company who has benefits; that could be a local nonprofit, it could be Huntington Ingalls, Newport News Shipbuilding, or federal employees.

When we hear open season, the natural … I'm going to answer your question in a couple ways, Mike. I think number one, it's like not this again, I'm probably just going to go in and pick the same things I had last year.

So, we naturally as consumers or employees don't think about open season as an opportunity, we think of it as like this negative thing that we have to do every year.

And then part two, when we hear open season, we think health insurance. But these are the two things; one, we're not excited about it and two, I have to pick my health plan again.

Michael Mason: And if you do nothing at all, well, then what you just did kind of rolls over. But Tommy, there have been open seasons that don't happen every November. And these are the ones that we want to talk about that not all open seasons are created equal.

Tommy Blackburn:  It really seems like they should have a different terminology for these special open seasons that we're talking about. Like put it in gold plates and have fireworks go off or something, like this is not your normal open season. Because most people, those open seasons, where we've been going is an open enrollment, do your vision, your dental, your health insurance elections.

This is a chance to sign up for a benefit as we're thinking about these special open enrollment or open seasons, a chance to sign up with limited or no underwriting. So, it's a very special open season.

John Mason:  Well, guys, before we dive into these special, once in a lifetime type opportunities, maybe we can just spend a few minutes going around the table. Let's talk about, as financial planners, we have clients who are both federal as well as work other places.

Like what are the typical recommendations? What are we talking about with clients as we think about strategic planning meetings coming up? Huntington Ingalls open season, I think is May or June, the federal open season’s in November. So, let's make sure we get those sort of elections correct.

So, let's go around the table and talk about that a bit.

Tommy Blackburn:  Sure. A lot of times with our federal employees around here, they're on Blue Cross, FEHB, and a lot of them are on standard. So, a lot of times we're looking at well, “Hey, could we go to basic?”

So, it tiered down, it still has a very comprehensive coverage, particularly when we're at Medicare or approaching Medicare, because we can get some pretty good coverage when we layer those two together and they give you an incentive and that annual reimbursement.

And I think with Huntington Ingalls, the same thing of just kind of what are we … as we're thinking about retirement — we have people who are still employed too, and I'm sure we'll talk about that. But that health reimbursement account the HRA, making sure we're taking advantage of those benefits.

 Michael Mason: And then you'd have things like the flexible spending accounts. The neat thing about federal open season is you're not making a lifelong decision, you're making a 12-month decision.

If you did like Tommy said, and you went from Blue Cross, Blue Shield standard to basic and you didn't like it, well, you live with it 12 months and you get to fix it, guaranteed get to fix it. But maybe your child's going to get braces, so let's get some dental insurance, put more money in the flexible spending account.

Tommy Blackburn:        And what's important to folks like John and I at our age group are where our families are in their life cycle, is that dependent care, FSA. So, to help pay for childcare and so forth can be quite a tax benefit there.

John Mason:     So, we're hitting all around this health insurance, which I think is awesome. So, maybe, we have some younger folks listening to the podcast, maybe rolling back from a more standard, typical insurance plan to a high deductible health plan with an HSA.

The government's very generous with their contributions and like the premium share or subsidy that goes into the HSA. But then there's other things that we don't really talk about that often, like maybe we want to enroll in federal employee health benefits for the first time.

Well, now, we need to make sure guys, that we’re timing that correctly so that we can have FEHB for five years leading up to retirement. So, now, we actually can carry that coverage into retirement.

So, not only the plans, but like when do you enroll? Maybe you had great coverage through a spouse, so you're like trying to time it perfectly. And then if we go out into the private sector, it could be something like you need your estate planning documents done.

Maybe this year, we should enroll in a group legal health plan. That's probably not going to be our advice on how you get your estate planning documents, but-

Tommy Blackburn:        A strategy, nonetheless.

John Mason:     It's there, it's there. So, other things, as I think about just general open season, Tommy, maybe like long-term disability, short-term disability — anything else that comes to your mind as to how folks can take advantage of these annual open enrollments?

Tommy Blackburn:        Those are the ones I think that are probably coming to mind most because they don't require underwriting. I think during this time, sometimes people will add some group life insurance, but that is going to be one of those events where now, you're going to have to go through some form of underwriting since you're now putting that in place, I think we've covered most of them.

Mike, is there any other open enrollments on your mind?

Michael Mason: I think guys, we've covered the ones that our audience, the federal employee, deals with every year. And this is kind of why we wanted to do this podcast, is because when these other unique open seasons come around, sometimes we treat them like, “Oh, it'll be here next year too.” And it's a once in a lifetime opportunity.

I remember early in my career in the early to mid-nineties, and I can't pinpoint the exact year, but it was probably 93 to 95. And we were helping a NASA employee try to get life insurance. She'd just been married and they had a big mortgage, and she had type one diabetes and nobody would insure her.

And it was a year after we quit trying, there was this federal employee's group life open season and it was the first one Ken and I had seen. I was only in the business six, seven years, but that open season said you can apply for basic and five times Option B with no medical questions asked. You were going to get the coverage.

The only caveat was you apply today, let's say September, was the end of the open season. And if you are alive October 1 of next year, then the insurance kicks in. So, we made a phone call to that lady and her husband and she got effectively six times her pay.

Unfortunately, within four years of doing that, the reason people wouldn't insure her is because of the severity of that Type 1 diabetes. She passed away but her husband kept the house and was financially secure because we made a phone call, but everybody else was looking at that, “Oh, it's an open season, we're going to get another one of those next year.”

Tommy Blackburn:  So, life-changing advice for that family, life-changing event to be able to get that coverage in place. And some folks might listen and say, well, that makes more sense, because they knew they had some type of health issue, which certainly, that should provide emphasis for us to take advantage of these.

But I think we've talked about previously, if we don't know, we probably should still take advantage of these open seasons. And John, what is some of our thought process there? I'm young, John Mason, I'm completely healthy. What do I need to enroll in these benefits for?

John Mason:  Yeah, I think Mike teed it up pretty good as we think about that federal employee group life open season.

And for our listeners, if you're tuning into this one, this episode and you haven't listened to our episode on federal employees group life, you may want to go back and listen to that because that really talks about how does basic, Option A, Option C, how do all these things work? Because we won't go back into all that today.

But first open season for FEGLI, Mike, that you were aware of, was in the nineties. It looks like there was another one in 2004, and then another one in 2016. So, it’s not a unicorn necessarily like you’re never going to see it, but that's pretty rare; nineties, ‘04, 2016. If we follow that track, maybe we don't see another one until 2030, if we ever see one again.

Our strategy, Tommy, to answer your question, because you weren't with us back in 2016, was basically to call and email a hundred percent of our clients and have them enroll for maximum coverage across the board.

So, let's say you're a single man or woman, you have no people that you need to make sure that you're protecting your income for, nobody has an insurable interest in you, but still the advice was go in and enroll in basic five times B, Option A. We don't have C because we don't have any dependents, but go in and do it, it doesn't cost you anything for 12 months.

So, then 12 months later, if you're still alive and now, you're terminal, you would (I don't know if gladly is the right word) — you would pay those premiums and the event that you wake up 12 months later with bad news.

So, pretty much blanket advice back then was everybody enroll in the maximum, and then drop it before those premiums kick in a year from now.

Tommy Blackburn:  And maybe during that period of time, you've identified, I do have a life insurance need or one of these other needs. And we can go shop it on the private market where they're going to do real underwriting. Maybe we find out something we didn't know. And in the meantime, we're going to have this other coverage in place provided we've satisfied that one-year waiting period.

Michael Mason: You know the experience of going through three of these, because we didn't do that. Ken and I didn't do that back in the nineties when this open season happened. We made one phone call to one person, but we didn't think outside the box and say maybe everybody should effectively put their foot in the door.

So, when we started calling our clients and doing the radio show and special advertising, many of our clients called us back and said, “You just had me drop FEGLI Option B three years ago because of how expensive it is.” And we said, “Yes we did.”

But if everybody in the federal government sticks their foot in the door, and this is everybody that's active. It wasn't available for retired. You stick your foot in the door and all we're saying is that you reserve the right October of the next year to buy six times your paying life insurance. All you're doing is reserving the right.

If you wake up with a diagnosis, you might want to exercise that right. If you don't, you don’t pay those exorbitant premiums because if you're a client of ours, we already had you properly insured, but that didn't stop us from sticking a foot in the door.

John Mason:  Mike, I think what you just said, very powerful, all those statements. One, it really highlights I think the value of having the ongoing financial planning relationship with somebody like Mason & Associates.

There are other firms that specialize with federal employees, but that like in-depth knowledge on serving clients like we do, providing that massive value, and being able to communicate these once in a lifetime opportunities — maybe our listeners right now are thinking, why are we talking about things that happened in the past that we can't take action on today?

Well, the action and we're still going to go through the history of this because I think we all think it's beneficial. The action is going forward, we don't want to take anything at face value. We don't just want to say “I'll do that next year.” We don't want to not think about it.

The goal here is anytime you hear open season or open enrollment is to really make sure, yes, this is applicable, what's the planning opportunity? Or maybe even engage in a firm that's going to actively help you understand some of those benefits that are on the table.

Tommy Blackburn:  I was thinking too, a benefit you kind of hit on it, John is working with people that know you, that are talking to you, that understand. And our specialty is federal employees because many advisors out there probably have one or two federal employees, and this never comes on their radar because it's just not enough of what they deal with.

Whereas us, working with so many federal employees, retired, federal retired military, these things come across our radar and we know it is applicable to the vast majority of the people we serve.

John Mason:  And it just causes your mind to go to a completely different place. When you have one person with one benefit, your mind doesn't expand to, “I could really change the world. I could change the lives of a hundred thousand federal employees across the country.”

But that's where our mind goes because we can see in our client load, how many people it could impact. And then it's mind blowing how this one advice gets your foot in the door could change your life. If you only have one federal employee client, your mind never goes there.

Tommy Blackburn:  What's also cool is we've seen with our clients, they have these hero moments. They make sure we know about these things because they know their mind expands just like you just said, John, of how many other people that Mason & Associates serve that are like me, could this be applicable to?

Not only will they help me figure this out, but this could help so many other people, and by golly, I wish somebody would help these people too.

Michael Mason: And don't have the default position. I think John made a really good point. We're talking about things that have happened … this one open season, federal employees, group life, three times in my 35-year career; we don't know what's coming down the pike next year.

But sometimes federal employees have the tendency to think, what are they trying to do to me this time? What are they trying to sell to me this time? And they can't process that this may be that opportunity. So, the only open season that comes around every year is federal employees health insurance; your health, your dental and those things.

You can go apply for federal employees group life anytime. You don't have to wait for an open season, but like Tommy said earlier, you are going to go through underwriting this special open season, these three special open seasons. You didn't go through any underwriting. If you wanted it, you got it regardless of your health.

John Mason:  Well, guys, if it's okay, I think we've done a good job covering federal employees group life. I think a next good one would be tackling maybe the long-term care open season history and how that's gone. And then maybe wrap it up with arguably, I don't know if it's the most impactful, but maybe bring it home with military survivor benefits at the end.

Michael Mason: Yeah, that'd be fun. That's a great story. One of the first major impacts we had here, so we will close it with the military federal employees long-term care insurance.

I think it was created in early 2000, by the time they did all the advertising for it. In fact, Ken and I helped people get a lot of private sector, long-term care insurance in the nineties, the early two thousands. And working with federal employees, they were being inundated with advertisements and help understanding why long-term care was so important.

So, the federal government came out with it and when they first came out with it, you had a short application, the abbreviated application. And basically, if you weren't already receiving long-term care help, if you could walk by yourself and you weren't receiving help, you got the coverage. John, do you remember how many people enrolled in that first open season?

John Mason:  So, looking at the long-term care website,, in 2002, 187,000, Mike, federal employees enrolled in that initial launch, I guess, if you will, of federal long-term care. And then the second time that open season came around, again, this is on LTC Fed's website, looks like 2011 was the second open season and 45,000 enrolled in that second event.

Michael Mason: You know, what's interesting here and maybe we should have said it a little earlier, the reason that the government opens the season when they make major changes to federal employees group life, well, then they open it back up. The major change they made to long-term care was you could ensure your partner that didn't necessarily have to be your spouse.

So, that was 2011, and that was a unique opportunity for everybody that didn't get the coverage in the first open season who might have had a diagnosis to come in with the abbreviated application, which basically says you're not receiving long-term care services now, so you can get the coverage.

And so, it's kind of strange to me that 45,000, only 45,000 bought the long-term care during that open season. John, you made the point on the life insurance, we just recorded it. It's not live yet, but we just recorded an entire podcast on federal employees long-term care insurance, which we want you to listen to.

John Mason:  Yeah, that'll be live very soon. And that was cool, Mike, because we had a guest, Jill from LLIS, a private sector life insurance agency that can help federal employees, private sector acquire life insurance long-term care. So, it was great to have her on the show with us to talk about the options that our federal employee clients have.

I guess, we need to go back just a second to federal employees group life. If I'm not mistaken, you just mentioned substantial changes are the reasons for these open seasons.

I believe in 2016, the change was federal employees group life, Option B, the premiums changed. So, because that premium change, whether it was up or down, I guess it must have been down probably, that was a substantial event that now allowed everybody to re-enroll. Is that correct?

Michael Mason: That’s what I remember on both of those. All three of them is a change. Federal employees group life Option B is extremely expensive at 45 and older for healthy non-smokers. So, they definitely reduced the cost and generated the open season, is the closest we can tell.

John Mason:  Well, the long-term care open season guys, I remember that one very specifically because Sarah and I were newly dating at the time back in 2011, and this open season was going on. And I remember I was actually in visiting her and her parents and I was on the phone with a client during that time.

And I said, “Mr. Client, it would be really great … you've had a stroke, you've had Type 2 diabetes for quite some time. It would be really great if you enroll in federal long-term care” and he didn't do it. And the reason was I'll get around and I'll do it next year.

So, granted, I was only a year in the business at that time, but I'm pretty sure that I conveyed Tommy that this was a once in a lifetime event. But even after doing that, the default was, “I'll just do this next year.”

Tommy Blackburn:  You're not going to get a chance to do this next year. You may get a chance and I don't know, what are we? It was seven years between that one. Maybe in seven years, we'll get one — we don't know, that's certainly … it may not be in seven years.

I've been thinking as we've talked through this, I don't think these events really happen in the private sector, for a private sector period or employers. Like in all of my experience before coming here, I don't believe that I ever came across this.

So, it's already rare that this has happened. We cannot bank on there being another opportunity. And the scenario you just painted, I don't know how long this client, if they still are around or not … or who knows what could be happening within a year.

John Mason:  And unfortunately, the spouse is not necessarily happy with this person because it's now been 10 years that we've had to live with this decision that we weren't able to get coverage because we just missed it. We just dropped the ball, we struck out and we didn't take the event seriously.

So again, the action item here; one, for us to remember, for our clients to remember, for our audience to remember, is take them seriously. These open seasons, maybe as mundane, is that the right word? Are so rote, we have these every year, we've got to take them seriously because even the simplest thing has a planning opportunity.

And, if you have questions about that and you're a client listening, we hope you would call us during an open season. Or if you're working with a financial planner, Mike, and that person is not talking to you about how to maximize your open season and your benefits, maybe it's time for a new planner. So, I guess let's just close out long-term care and really make sure that this is known.

I'd like you to explain adverse selection and because Tommy hit on this as well, that this doesn't happen in the private sector. How in the world, and I'll caveat this with, we have no affiliation with federal long-term care or FEGLI, so we really can't prove what we're about to say, but it's a pretty logical assumption on how this adverse selection works and why federal employees even have this opportunity.

Michael Mason: And adverse selection, really the easiest way to explain it is with the federal employees group life insurance. I explained earlier that Option B, up to five times your pay is pretty inexpensive when you're 25 to 45. But then, you get 45, 50, 55, it starts ratcheting up pretty quickly.

And what people realize when they're hitting that 45 to 50, they realize that that they're paying the same premium that the 50-year-old beside them, that is the most unhealthy 50-year-old in the federal government. You could be the marathon runner, this one over here is the most unhealthy and he's paying the same premium.

So, the healthy people say, “I'm not going to do that.” They go out and get their insurance specifically underwritten for them. And when enough of those people do that, the rates for those 50 and older continue to rise. This is what's called adverse selection. Once you've had a medical situation, you're stuck. If you need the insurance, you're stuck. So, the group is made up of unhealthies.

And then you throw in an open season where you're going to toss a whole group of unhealthies that have great advisors that help them get the insurance during the open season. It just compounds the problem.

John Mason:  And do I remember correctly that federal long-term care may be administered by a private sector insurance company like John Hancock or whomever, but that insurance company isn't the one paying out the benefits.

Like the federal government is effectively self-insuring through these premiums, the benefits paid. So, therefore, they can do these things because no insurance company in their right mind would do that.

Michael Mason: Right, right. And we wanted to kind of wrap this up and if it's okay guys I'll wrap up with a story, and telling hero stories helps to drive home the facts. So, the military survivor benefits back in 2000 … when was it, John? 2000-

John Mason:     2005.

Michael Mason: 2005, you could have been retired from the military for 10 years and had turned down survivor benefits. And now, you can get back in. The caveat was you had to make up the back premiums, and they wanted you to pay those premiums over a two-year period.

And I'm going to tell this story, because this is the difference between having a financial planner or having the federal government tell you, “Hey, it's an open season.”

I sat down with an individual, encouraged him and his spouse to spend the premiums necessary to buy survivor benefits. And he looked across the table at me and he said, “Mike, if I do that, they're going to take my entire military check for two years, I just can't handle that.”

And my response right off the cuff was, “Sir, if you can't do without it for two years, how is your wife going to do without it forever?” Well, he made the decision to take survivor benefits. Literally a month after it was paid for, Parkinson’s disease was diagnosed and congestive heart failure.

Folks, these open seasons are special. If your financial planner is not helping you understand it, reach out to the government, reach out to Mason & Associates. You know how to find us. We have a radio show the first and third Tuesday of every month, we're at

John Mason:  And a special shout out. One, thank you to you guys for an awesome recording session, and excited to hop on and do our radio show right after this. But thank you to our audience. Feels cool to say that because we actually now have statistics.

So, the podcast is growing, we've expanded to 36 states now. We've seen a couple downloads outside of the United States. So, thank you to our audience. Thank you for subscribing, for sharing, for the five-star ratings.

And most importantly, as federal employees serving our country, we want to send a special shout out and thank you. Thank you to you, thank you for your service. And thank you for being a part of the Mason & Associates family.

The topics discussed on this podcast represent our best understanding of federal benefits and are for informational and educational purposes only, and should not be construed as investment, financial planning, or other professional advice.

We encourage you to consult with the office of personnel management and one or more professional advisors before taking any action based on the information presented.