You Could Be Leaving Valuable Federal Benefits on the Table Just by Skipping These Annual Updates

Key Takeaways

• Skipping annual updates to your federal benefits could result in missed opportunities for increased income, improved coverage, or better retirement preparedness.

• Reviewing and adjusting your elections each year ensures that your retirement, health, and survivor benefits align with current needs and changing federal regulations.

Why Annual Federal Benefit Updates Matter More Than Ever

If you’re a public sector employee or retiree, your benefit elections are not a one-and-done deal. Each year brings new figures, updated contribution limits, regulatory changes, and personal life developments that may affect your coverage or financial position. Missing these changes by skipping your annual review can mean lost income, higher healthcare expenses, or reduced survivor benefits.

In 2025, this matters even more as updated contribution limits, Medicare integration requirements, and retirement plan shifts are now fully in effect. You could be overlooking important changes that might otherwise protect your income or expand your benefits.

1. Federal Employees Health Benefits (FEHB) Annual Enrollment

Open Season takes place each year from November to December. This is your once-a-year opportunity to:

• Switch plans or carriers within FEHB

• Add or remove family members

• Move to a high-deductible plan if using an HSA

Even if you like your current plan, premiums and coverage change annually. In 2025, FEHB premiums increased by an average of over 11%, with retirees paying a larger share. If you don’t compare your plan options, you might end up overpaying or receiving fewer benefits.

Checklist for FEHB review:

• Compare new premiums and out-of-pocket limits

• Review co-pay changes for specialist visits, urgent care, and emergency services

• Consider coordination with Medicare Part B if you’re 65 or older

2. Postal Employees: Transition to PSHB in 2025

If you’re a current or retired USPS employee, 2025 marks a major shift from FEHB to the Postal Service Health Benefits (PSHB) Program. Failing to update your plan during Open Season could result in automatic enrollment in a plan that may not suit your needs.

You must:

• Enroll in a PSHB plan during Open Season if you want to select your coverage

• Coordinate with Medicare Part B if required based on your retirement date and age

• Review premium contribution amounts, which have changed in 2025

Not updating your PSHB plan could mean:

• Reduced pharmacy access if you opt out of Medicare Part D through the new integrated system

• Higher deductibles or less coverage depending on automatic assignment

3. Thrift Savings Plan (TSP) Elections and Contribution Limits

For active employees, 2025 contribution limits have increased:

• Elective deferral limit: $23,500

• Catch-up (age 50+): $7,500

• Super catch-up (ages 60–63): $11,250 under SECURE Act 2.0

If you don’t update your TSP contribution elections each year, you could miss out on higher retirement savings. Check if you’re maxing out contributions or using catch-up provisions available to your age group.

Additionally, review your fund allocations. Markets shift year to year, and so should your risk exposure. A 2025 target-date fund may no longer be ideal if your retirement plans have changed.

4. Survivor and Beneficiary Designations

Every year, you should double-check the beneficiaries listed for:

• FERS or CSRS pension

• TSP account

• FEGLI life insurance

• Unpaid compensation upon death

Failing to update these could result in benefits being distributed against your wishes, especially if there has been a divorce, death, or new marriage.

Even if nothing has changed in your personal life, it’s worth confirming that these designations are correctly recorded across all platforms.

5. Federal Employees Dental and Vision Insurance Program (FEDVIP)

FEDVIP also holds an Open Season at the same time as FEHB. Rates and coverage change annually. FEDVIP plans are not one-size-fits-all, and:

• Dental networks vary by provider

• Vision allowances differ across plans

If you’re now on Medicare or nearing eligibility, certain FEHB and Medicare combinations may lessen your need for specific dental or vision benefits, while others might require more robust coverage.

Annual comparison ensures you’re not overpaying for underused benefits.

6. Medicare Coordination for Annuitants

For annuitants aged 65 and older, 2025 brings increased importance to Medicare coordination:

• Medicare Part B premium is now $185 monthly

• PSHB enrollees must be enrolled in Part B unless exempt

• Many plans offer premium reimbursements or waive cost-sharing when coordinated properly

Failure to coordinate benefits can result in:

• Higher out-of-pocket healthcare costs

• Reduced access to integrated prescription drug plans (Part D EGWP)

• Missed cost-sharing reductions from PSHB plans

Use the annual review to verify Medicare enrollment, assess plan coordination benefits, and ensure you meet any Part B requirements specific to your retirement status.

7. Flexible Spending Accounts (FSAFEDS) and Reenrollment

FSAs do not carry over automatically year to year. If you want to:

• Deduct pre-tax dollars for health care or dependent care

• Use up to $660 in carryover from 2024

• Save on out-of-pocket costs during 2025

You must re-enroll each Open Season. In 2025, the healthcare FSA contribution limit increased to $3,300.

Skipping this update means you lose access to tax savings for another year.

8. Federal Employees Group Life Insurance (FEGLI)

FEGLI premiums increase significantly with age, especially after age 60. Annuitants often carry Basic and Optional coverage into retirement without re-evaluating:

• Whether they still need full coverage

• If lower options or terminating certain coverage makes more financial sense

2025 is a good time to request a FEGLI cost review. Examine whether:

• You’re still insurable through private options

• You qualify for conversion without a medical exam

• Reducing Option B multiples could save you hundreds monthly

9. Social Security Earnings Test for Early Claimants

If you’re under Full Retirement Age (FRA) and receiving Social Security, remember the 2025 earnings limit is $23,480. Going over it could reduce your benefit $1 for every $2 earned above the limit.

If your income situation changes, an annual update to:

• Your income projections

• Whether you continue benefits or temporarily suspend

• Coordination with FERS Special Retirement Supplement

…can help avoid unexpected withholdings or penalties.

10. Reviewing COLA Updates Across Your Benefits

The 2025 Cost-of-Living Adjustment (COLA) for federal retirement benefits is 2.5%. Your annuity, TSP withdrawals, and Social Security income may all adjust based on this.

But COLAs don’t apply equally across all benefits:

• CSRS annuitants receive full COLA

• FERS retirees receive partial COLA before age 62

• TSP balances are market-driven, not COLA-adjusted

An annual review ensures your retirement income strategy reflects these updates. Adjust withdrawal rates, budget targets, and long-term planning as needed.

11. Long-Term Care Coverage and Enrollment Review

Although new FLTCIP enrollments remain suspended in 2025, current enrollees can:

• Review their coverage and premium levels

• Request benefit reductions to lower costs

• Check inflation protection riders

Since new enrollments are paused, your annual update should include:

• Confirming existing benefit levels

• Exploring private alternatives if LTC needs have grown

• Evaluating caregiving costs in your area

12. Changes in Marital, Dependent, or Residency Status

Each year, check if your life status has changed:

• Did you get married, divorced, or widowed?

• Are you supporting a child under 26 or a disabled dependent?

• Have you moved out of your plan’s service area?

Such changes can affect:

• Eligibility for family coverage

• Premium tiers in FEHB and FEDVIP

• Tax considerations for FSAs

Annual updates help prevent lapses in coverage and ensure your benefits remain tailored to your circumstances.

Staying Current Puts You Ahead

By ignoring your annual benefit updates, you’re not just overlooking small details. You’re potentially leaving behind thousands of dollars in unrecovered costs, benefits, and tax savings. Whether it’s optimizing your FEHB plan, maximizing your TSP contributions, or coordinating Medicare with PSHB, each update carries weight.

Take the time between November and December each year to review your entire federal benefit package. Use OPM tools, agency HR support, and your My Federal Retirement account to assist. If you’re unsure about any changes or how they apply to you, get in touch with a licensed professional listed on this website for clear, expert advice tailored to your situation.