By Reg Jones
Q. I am a recent retiree and have to decide whether to obtain Medicare Part B coverage. I have, and intend to keep, my Blue Cross coverage. I am trying to determine whether I should opt for Medicare Part B for my wife and I, even though I have Blue Cross. The Medicare Part B monthly payments would range about $150 for each of us.
Q. I am retired military. I am 65 years old now. Do I have to pay for Medicare Part B even though no expense now?
Q. I will complete nine years of civil service as of August, as well as 22 years of military service. If I apply for Voluntary Separation Incentive Pay, what, if anything, can I expect to receive?
Q. I am a letter carrier, age 52, started in 1985 and have 28 years of creditable service.
If I understand what I’ve gleaned from the posts here and the Postal Service were to offer me a Voluntary Early Retirement Authority this year,
1. Would I begin my annuity immediately?
2. Would I have no reductions in calculations of my annuity? (average high-3 x 1 percent x 28)
3. Would I receive credit for half of my sick leave and all of my annual leave? (How are these applied?)
4. Would I receive the special retirement supplement beginning at age 56 (my minimum retirement age), and receive it until I reach age 62?
5. Would I be able to continue carrying my current health and life insurance at non-USPS rates? (I couldn’t find how long these could be carried. Until death?)
6. Could I begin receiving Social Security as early as age 62?
7. Any withdrawal from my Thrift Savings Plan prior to age 59½ would be penalized 10 percent as per Internal Revenue Service regulations? (Can I continue to contribute to TSP after retirement?)
8. As a FERS annuitant, is there no limit to what I can earn after separation from the Postal Service as it pertains to my annuity payment?
9. At age 56 (my MRA), the special retirement supplement from Social Security would begin and would be subject to yearly income limits. Would supplement payments be reduced by approximately $1 for every $2 I earned above that year’s Social Security income limit?
10. At age 65, I’d be eligible for Medicare parts A and B? (Would this affect my health insurance coverage through Federal Employees Health Benefits?)
11. Would there be cost-of-living increases at any point for my annuity?
12. Is there a date during the year that maximizes the benefits of retirement?
Did I get this right, and are there any other things I should know before considering a VERA if it is offered?
Tags: 401(k), annual leave, annuity, cost-of-living adjustment, creditable service, early withdrawal penalty, enrollment, FEHB, high-3, income, IRA, IRS, LIFE INSURANCE, lump sum, Medicare Part A, Medicare Part B, minimum retirement age, Postal Service, sick leave, SOCIAL SECURITY, special retirement supplement, TSP, VERA
Q. I am going to retire Jan. 1, 2014, and I realize that my modified adjusted gross income will cause my Medicare Part B premium to at least double. But once I retire, my income will go down. Does the Medicare Part B premium get adjusted annually? Or is it set for life as of your retirement date?
Q. I am 65 years old and am employed full time by the federal government. I will continue my federal employment for several years. I am covered under Federal Employees Health Benefits and pay for Blue Cross/Blue Shield insurance. If I decline Part B now and decide to take it later, will I be subject to the Medicare Premium penalty?
A. Yes, you can decline Part B while you are still employed without penalty. When you are no longer employed, you’ll have an eight-month window in which to enroll, penalty-free, which begins the first full month after you retire.
Q. I am trying to figure my calculations under FERS disability retirement and Social Security. I am receiving Medicare under Social Security Administration without monetary benefits because of workers’ compensation. Would you please calculate a high-3 of $54,000; and Social Security entitlement of $1,700 monthly on a 60% and a 40%. What would be the separate amounts received from both? Also, do I have to fill out both forms, SF 3112 and a SF 3107 for immediate retirement? I am requesting approval of disability retirement.
A. I can’t do your homework for you. What I can do is give you the formulas you’ll need to get the answers you want. For the first 12 months, you’d receive 60 percent of your high-3 minus 100 percent of any Social Security benefit disability benefit. For all remaining years and until age 62, you’d receive 40 percent of your high-3 minus 60 percent of your Social Security disability benefit.
You’ll need to fill out a Standard Form 3112, Documentation in Support of Disability Retirement, and, at the same time, file for Social Security disability benefits. If you don’t, the Office of Personnel Management won’t review your application for disability retirement.
Q. I will be a CSRS retiree soon enrolled on my younger wife’s FEHB family plan. Does it make sense for me to enroll in Medicare part B being on her plan? Will her premiums be affected if I do?
A. Her premiums won’t be affected one way or the other. Whether you should enroll in Medicare Part B is up to you to decide based on your current and projected health needs. Just remember this: If you don’t enroll in Part B and later decide that you want to do that, the cost of those premiums will be 10 percent higher for each full 12-month period you could have enrolled in Part B and didn’t.
Q. I am 59 years old and covered under Federal Employees Health Benefits as the spouse of a CSRS annuitant. Due to a covered disability, I have been receiving Social Security Disability Benefits for the past 18 months and was just advised that I will be eligible for Medicare Parts A and B in June. If I decline Part B and decide to take it later, will I be subject to the Medicare Premium penalty?
Q. I am retired with Blue Cross/Blue Shield and will be signing up for Medicare Part A soon to avoid penalties for Part B and Part D. Does my BC/BS meet the “creditable plan” requirement to avoid penalties? I have been told “yes and no” on the phone by Medicare. If I sign up for an HMO with a lower cost, will I meet “creditable plan” standards if I drop Federal Employees Health Benefits? Can I re-sign up for BC/BS later if I don’t like the coverage?
A. The “creditable plan” feature you’re referring to only applies to those who are currently employed or are covered by a family member who is employed. It doesn’t apply to retirees, regardless of the plan they are in.
If you drop your FEHB coverage, you can’t re-enroll in it unless you return to work for the government in a position that allows you to be covered by the FEHB program.
Q. I am an unmarried 64-year-old CSRS annuitant who will turn 65 on July 15. I’ve had Blue Cross/Blue Shield coverage for many years. What should I do about Medicare and when?
A. You can apply online at www.ssa.gov/medicareonly. Do it a few months in advance to avoid delays in being covered.
Q. On Jan. 18, there was question about which is primary between these two programs, and the answer ended with “whether you keep both [Federal Employees Health Benefits] and Tricare is something you’ll have to decide.” How do you decide? Where can I find a clear, side-by-side comparison of my FEHB (BC/BS standard in my case) and Tricare for Life — one that is not comparing apples to oranges? I have been told I don’t really need FEHB because TFL is “very comprehensive,” but how can I find out exactly what, if anything, FEHB would cover that TFL wouldn’t. P.S. I’m in excellent health and am also covered by Medicare Parts A and B.
A. Unfortunately, no one has made such a comparison, nor is it likely that anyone will. While Tricare and Medicare A and B are monolithic, with their benefits spelled out in detail, there are around 200 plans in the FEHB program. And what they cover varies, not only in the services covered but in the level of reimbursement, co-payments and deductibles. If you want to make such a comparison, you can do so by carefully reviewing what your own FEHB plan provides with what Tricare does.
In closing, you mentioned that others have told you that you don’t need the FEHB coverage because Tricare is very comprehensive. While I don’t know if that’s true, I’ve been told the same by other former members of the military who made the decision to suspend their FEHB coverage and were happy with the decision. Whether you’d be happy if you did the same is something I can’t predict.
Q. I am enrolled in Medicare Part A and B. I also have Tricare for Life and Federal Employees Health Benefits (Blue Cross/Blue Shield). My doctor has opted out of Medicare and wants $5,000 for a hip replacement. Will FEHB pay his fee?
A. The only way to find out how much of your doctor’s fee your FEHB plan will pay is to ask them.
Q. I am on a disability retirement and am 57 years old. I am blind (since age 7) and was denied Supplemental Security Income benefits because I do not have enough Social Security credits to qualify (of course I have enough for Medicare when I turn 65). I wanted SSI so I could join a Medicare HMO and receive primary care at home (I live in a group home). It seems since I paid into FERS and not SS, I fall through the cracks. Is there anything you can suggest?
A. Let me first clear up a misconception. The fact that you were a FERS employee means that you did pay into Social Security. The reason that you may not be eligible for SSI is that it is only available to people with low income and few resources. For more information about what is required to be eligible for SSI, go to www.ssa.gov/pubs/11015.html.
Q. When I turn 65, I can enroll in Medicare Parts A and B. The other parts do not interest me. At this time, I am enrolled in a Federal Employees Health Benefits plan. I am a veteran who is 60 percent disabled, and the Veterans Affairs Department covers my medical needs at 100 percent plus meds if I use its facility. At age 65, I would like to suspend my FEHB plan and use Medicare Parts A and B plus my VA. Can I suspend my FEHB under this situation?
A. No, you can’t.
Q. I’ll be 65 this month. I retired from civil service in 2008. I’m working part time as a city employee and still paying into Medicare. My wife is 60 years old, and I want to keep her with my Federal Employees Health Benefits program. Since I qualify for free Part A, do I have to enroll with Medicare for this, and will my FEHB remain primary for my wife and me?
A. Since you are still working, you don’t have to enroll in Medicare Part A. However, I can’t think of a good reason not to do so, even though it will remain secondary to your FEHB plan until you stop working.
Q. I am retired and have Blue Cross/Blue Shield Basic for my health plan. I will be 65 in May and need to make a decision on whether I should get Part B when I have my current FEHB coverage. If I decide to take Part B, there will be another monthly cost. Is there any FEHB plan that would benefit me to enroll in and also keep the costs down if I decided to take Part B? This is confusing to me.
A. It’s confusing to you because it’s confusing to everyone faced with that decision. Unfortunately, there isn’t any way to make it less confusing. You’ll have to consider your current and anticipated health care needs. Then you’ll need to review the pluses and minuses of your current plan and Medicare Part B to see if there’s anything to be gained by enrolling in Part B. Finally, you’ll need to look at some other FEHB plans with lower premium costs to see if they’ll provide you with what you need and want, while offsetting some of the cost of Part B.
Q. I am a Bureau of Prisons retiree with GEHA health insurance. Should I enroll in Medicare B? I know I don’t have to enroll in Medicare B, but would like to know the pros and cons of not enrolling. It seems the only entity that would benefit from that enrollment would be GEHA, or whichever health plan I enroll in, as it would automatically be deemed secondary with Medicare Part B as the primary, thereby avoiding paying the full cost of whatever medical procedure I might receive. If I sign up for Medicare B, won’t I be paying twice for the same services? If that is the case, why would I even consider enrolling in Medicare Part B? Am I missing something here?
A. The best place to find the pluses and minuses of enrolling in Medicare Part B will be found at www.opm.gov/health/medicare/index.asp.
In this column, I’ll describe changes to Medicare and survivors’ and children’s benefits for 2013.
At age 65, you’ll be eligible for Medicare Part A, which provides hospital insurance at no cost to you; you already paid for it through payroll |deductions.
You’ll also be eligible for Medicare Part B, which is medical insurance and isn’t free. If you decide to enroll in Medicare Part B, you’ll have to pay the monthly premiums:
- $104.90, up from $99.90 in 2012, if your last year’s individual taxable income was $85,000 or less ($170,000 or less if filing jointly).
- $146.90, up from $139.90, if your income was $85,001 to $107,000 ($170,001 to $214,000 if filing jointly).
- $209.80, up from $199.80, if your income was $107,001 to $160,000 ($214,001 to $320,000 if filing jointly).
- $272.70, up from $259.70, if your income was $160,001 to $214,000 ($320,001 to $428,000 if filing jointly).
- $335.70, up from $319.70, if your income was greater than $214,000 ($428,000 if filing jointly).
As a rule, if you don’t sign up for Part B when you are first eligible to do so, your Part B premiums will go up 10 percent for each full 12-month period that you could have been enrolled in Part B. That’s a permanent increase, not a one-time penalty.
However, there is an exception: If you are covered under a group health plan based either on your own current employment or that of your spouse, you can enroll in Part B at any time after reaching age 65 or during the eight-month period that begins the first full month after you are no longer covered under that plan.
Under the Civil Service Retirement System, there is no specific death benefit; however, if you die while still employed, your widow or widower will be entitled to a survivor annuity.
On the other hand, if you had been employed under the Federal Employees Retirement System for at least 18 months, your surviving spouse would receive:
- A lump-sum payment of $31,316.46, up from $30,792.98 in 2012.
- A lump-sum payment equal to the greater of half your annual basic pay or half of your average salary during the three consecutive years of your highest pay (your high-three).
- Any Social Security benefit to which he or she may be entitled.
If you had 10 or more years of service when you died, your surviving spouse would also receive a survivor annuity equal to half of what your basic annuity would have been based on your years of service, but without any age-based reduction if you were under age 62 when you died.
There is also a special death benefit for public safety officers. In 2013, it is $323,584, up from $323,035 in 2012. This benefit is payable to the survivors of officers who died from a traumatic injury involving external force and sustained in the line of duty.
The children’s survivor annuity rate where one parent is still alive is $492 per child, up from $487 in 2012, or $1,485 divided by the number of children, up from $1,460. If there is no surviving parent, the rates are $594 and $1,782, up from $584 and $1,752.
To be eligible for these benefits, your child must be unmarried; under age 18 (or age 22 if attending school full-time); or any age if disabled under age 18, incapable of self support. The term “children” includes both a legitimate child and an adopted child. It also includes a stepchild, if living in a normal parent-child relationship, and a child born out of wedlock, if living in a normal parent-child relationship, or if a judicial determination of child support has been made.
The dollar amount payable to the children of FERS and CSRS Offset employees is reduced by the amount of any Social Security benefit payable to the children. That reduction doesn’t apply to the children of CSRS employees.
Q. I am reading in a Blue Cross/Blue Shield brochure that you have to be a federal employee as of Jan. 1, 1983, to get free Medicare Part A. I joined in March 1983 and do not have Social Security eligibility. Will I get Part A for free or not? What is the significance of Jan. 1, 1983?
A. Here’s the scoop from the Social Security Administration: “Federal employees are required to contribute to the Medicare Trust Fund and are therefore eligible for Medicare. This provision is referred to as the Medicare Qualified Government Employees (MQGE) provision.
“All wages paid to Federal employees after Dec. 31, 1982, are taxed for health insurance, and through payment of this tax, employees earn Government Employment Quarters of Coverage (GEQCs). GEQCs can be used only for Medicare purposes. These GEQCs are counted toward Medicare coverage only and do not count toward entitlement to Social Security benefits.
“Federal employees need the same number of total QCs to qualify for Medicare as they need to qualify for Social Security insured status.
“However, under a transitional provision in the law, any Federal employee who was an employee at any time during January 1983 and was employed before Jan. 1, 1983, may be granted GEQCs for Federal service prior to January 1983.”