For Federal Employees: Health Care & Your Financial Plan

Originally published November 28th, 2012

Veterans Day arrived this year on the 12th of November as usual and celebrations occurred across thecountry with great pride and deserved praise. For federal employees, it also marked the beginning of an important season related to their financial decision making. November 12th to December 10th is open enrollment for health insurance coverage adjustments. Why is this relevant to financial planning and retirement? Health affects everything. It factors into the cost and quantity of health care, the availability of other insurance protection, and longevity and survivorship planning. A recent study from Fidelity predicted a couple age 65 would spend approximately $240,000 on health care costs (1) and another study from the Employee Benefit Retirement Institute calculated Medicare only covers 60% of health related charges (2).

Employer provided health coverage, especially the plans offered to federal employees, has become much more comprehensive. The carriers want you to be an active participant in the health process. They are not necessarily acting out of altruistic values. They are doing so because it reduces the risk of large claims later on. CareFirst’s recent adjustments to their federal offering are an example of this movement. The website http://extras.fepblue.org/ outlines the variety of services available from health assessments, weight management plans, an educational audio library and even online coaching sessions and 24 hour access to a nurse.

A wealth advisor’s role should offer comprehensive guidance based on experience and training to maintain and grow one’s wealth. Investment-related strategies are certainly part of this process. It should also include an honest discussion of the risks that health-related scenarios can inflict on the assets of a household. Dying early leaving the survivor with a long life ahead of them, procedures and their recovery, and of course, long term care are all examples of these wealth reducing risks. It is a personal decision on the client’s part on how thoroughly to discuss these topics. Trust and patience in the relationship over time allows an open and holistic planning process.

(1) http://www.fidelity.com/inside-fidelity/individual-investing/retiree-health-care-costs-2012
(2) http://www.ebri.org/publications/notes/index.cfm?fa=notesDisp&content_id=5121

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Securities offered through Triad Advisors, Member FINRA / SIPC.  Advisory Services offered through Planning Solutions Group, LLC.  Planning Solutions Group, LLC is not affiliated with Triad Advisors.  PSG Clarity is a division of Planning Solutions Group, LLC.