Ask The Experts: Retirement

By Reg Jones

Health care coverage

Bookmark and Share

Q. I am a federal employee, 66 years old, planning to retire Jan. 3. I now have full coverage under Blue Cross Blue Shield for me and my husband. I understand that when I retire, I must sign up for Medicare Part A, but I am not sure about part B. If I elect to take Medicare Part B, and have BCBS as my supplement, may I still purchase my prescriptions through CVS Care Mark after I retire? Can you tell me the monthly cost for my spouse and myself to continue with full coverage under BCBS? Read the rest of this entry »

Tags:

Retirement coverage

Bookmark and Share

Q. I plan to retire in approximately a year at age 55. I have been covered by my wife’s insurance and we thought that I could stop coverage with my wife in the next open enrollment and go on FEP, but they told me in my office that I had to have five years on FEP before I could have coverage upon retirement. Is this true? Why wasn’t this ever brought to my attention? Do I have any options? Read the rest of this entry »

Tags: ,

Health insurance

Bookmark and Share

Q. Regarding carrying health insurance into retirement at age 60 when one has had a break in service: I began full time with the federal government at age 30 in 2005 but would like to change careers in my mid-40s and become a science and math teacher.

I read that I need to have the last five years covered under FEHB to carry health insurance into retirement. Does this apply if I have fewer than 30 years of service? Can I become a teacher at 44, then return to federal service at 55 and expect to have health insurance at 60?

Read the rest of this entry »

Tags: ,

Retirement and health insurance premiums

Bookmark and Share

Q. I am 65, have worked for USDA intermittently since 1965 (recurring and temporary in the early years) and have been in my present position with USDA-ARS since 1999. I plan to retire (in FERS) in two or three years. My insurance provider for more than 10 years has been Blue Cross/Blue Shield Federal Employee Program. I am signed up for Medicare Part A. My wife, several years younger than I, is a health provider in private practice. She and my two children (elementary school age) are now covered under the federal employee plan above. My understanding is they can remain covered by the plan when I retire (although some aspects of plan coverage change because of my enrollment in Medicare Part A). After retirement, can I continue to pay premiums (covering me and my family) of the same amount as I now pay? In other words, will the U.S. government continue to pay the same portion of the premium as it does now?

Read the rest of this entry »

Tags: , , , , ,

Insurance comparison

Bookmark and Share

Q. My mother is a survivor of a retiree and has full medical coverage. She is 92 and in relatively good health, taking no medication to speak of and enjoying her daily routines. Her monthly medical insurance for Horizon Major Medical is now $451.66. Is this above or below what would be considered average for single seniors?

Read the rest of this entry »

Tags: , ,

Terminated before retirement

Bookmark and Share

Q. I was an air traffic controller. My Federal Aviation Administration hire date was Sept. 30, 1990. I was terminated March 8 — 261 days from being eligible for retirement because I lost my medical. My 50th birthday is Nov. 24. I have over 22 years of “good time” and five years of military time, which I bought back, for a total of 27 years of government service. The FAA says I can file for a disability retirement, but otherwise I am entitled to nothing. Can this be right? Even if I get the disability retirement, it will be less than what I would have received at age 50.

Read the rest of this entry »

Tags: , , , , , , , ,

Survivor annuity and insurance

Bookmark and Share

Q. I’m a 53-year-old CSRS employee with 34 years of service. I may have the option of an early-out in May. I would like to carry my Federal Employees Health Benefits into retirement. I will choose no survivor benefit, but I would like to have my wife keep my insurance after my death. Can I do this?

A. No, you can’t. To be eligible to continue her FEHB coverage, she would have to be covered by the self and family option when you die and be entitled to a survivor benefit. Note: You are required by law to provide a full survivor annuity to your spouse unless she agrees in a notarized writing to a lesser amount or none at all.

Tags: , , , , , ,

Leaving federal service early

Bookmark and Share

Q. I am 51 years old and have 16 years of 6c time in federal law enforcement. I am also a veteran and bought back 11 years of active-duty time, bringing my total federal time to 27 years. I am considering leaving the government for a position with a private company. I want to make sure I understand what I would give up before I leave, and it is my understanding that my benefits would be based on a straight 1.0 percent per year vice 1.7 percent since I will not have completed 20 years of 6c time. I am not concerned about Social Security since I would be working anyway. Also, I will need to defer my benefits until age 60, with 26 years of service. I have also retired from the reserves, so I am not concerned about health insurance. So, by my estimates, I would be giving up 45 percent for 26 percent. Do I have this correct, or am I missing something?

A. Yes, you are correct. Note: If you had 27 years of service, you’d be giving up an annuity worth 41 percent (0.17 x your high-3 x 20 years of service = 34 percent) + 0.01 x your high-3 x 7 years of service = 7 percent) for one worth 27 percent (0.01 x your high-3 x 27 years of service = 27 percent).

Tags: , , , , , ,

Retirement eligibility

Bookmark and Share

Q. I am 52 years old and have 22 years of federal employment. Can I retire? If so, how soon can I receive monthly payments, and how much would they be reduced by?  How would this affect my Social Security benefits later? Also, how would this affect my medical insurance?

A. Unless you are a special category employee, such as a law enforcement officer or a firefighter, you don’t meet the age and service requirements to retire.

For FERS employees, these are: age 62 with five years of service, 60 with 20, at your minimum retirement age (MRA) with 30, and at your MRA+10, but with a 5 percent-per-year age penalty for every year you are under age 62. Your MRA is 56.

There is an option. Because you have at least 20 years of service, you could resign and apply for a deferred annuity at age 60. After 31 days of free health benefits coverage, you’d be able to continue it for up to 18 months under the temporary continuation of coverage provision of law. However, you’d have to pay the entire premium plus 2 percent.

Tags: , , , , , , , , , , , , ,

Spousal health insurance

Bookmark and Share

Q. I am a federal retiree, and my husband is on my health insurance.

Will he be able to keep my health premium if I die before him?

A. Yes, if you elected a survivor benefit for him when you retired.

Tags: ,

After open season

Bookmark and Share

Q. I am a Postal Service employee with self-only heath insurance coverage. My 24-year-old daughter has had no health insurance during the past six months after she changed jobs. She is  now enrolled full time in college (her school does not offer health insurance). Now that the open season is over, can I still add her if I am agreeing to pay a “family” premium? Can the new Obama law that allows adding dependents ( up to 26 years of age) be applied even though the open season is over?

A. Unfortunately, no.

Tags: , , , , ,

Medicare Part B

Bookmark and Share

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.

Tags: , , , ,

Health insurance change

Bookmark and Share

Q. I am a 69-year-old female FERS retiree, covered under parts A and B of Medicare and Blue Cross/Blue Shield basic for federal employees. I also have my spouse insured on this plan. My spouse is a military retiree, so we have Tricare for Life, and he also has parts A and B of Medicare.

I would like to change to the less expensive BC/BS health insurance, but I want to keep the doctors we currently have. Is there a possibility I would have greater out-of-pocket expense with the standard BC/BS? I would like to take the difference in premiums and subscribe to a dental plan.

A. To find out if you’ll be able to keep the doctors you now have, you’d need to check with Blue Cross/Blue Shield. While there is a possibility that you would have greater out-of-pocket expenses with the lower-cost option, the only way to find out is to check with your plan and learn how that option handles claims from members who are covered by Medicare parts A and B.

Tags: , , , , , , ,

Health insurance payments in retirement

Bookmark and Share

Q. I am transitioning to part time from a full-time position. I plan to continue to work 0.6 FTE from age 53 until age 60, when I would like to retire. I will have 20 years and nine months at age 60. At what percentage will I pay the premium for my health insurance in retirement?

A. You will pay the same premiums as all other employees and retirees.

Tags: , ,

SF 52

Bookmark and Share

Q. I have been reassigned to a position in Atlanta from Albuquerque, N.M. This move is permanent. Do I need a SF 52 prepared to change my duty station and locality pay? Do I need a SF 52 to change my taxes and health insurance? This position is considered virtual.

A. All personnel actions must be documented with a Standard Form 52. It will record where you are now, your new duty station and the rate of pay at each. There is no place on the SF 52 to record changes in taxes or health insurance. When your official personnel folder is transferred to your new duty station, whatever you have already designated as your tax deductions and FEHB plan coverage will continue as is. Any change in your tax deductions will have to be made through your new payroll office. Your FEHB enrollment can be changed during the open season, if you want to do that.

Tags: , , , , , ,

Military buyback

Bookmark and Share

Q. I was active-duty Navy (1980-84), then active Coast Guard (1991-2000). I received a tentative offer for employment with Army a few weeks ago (I’ve been a contractor since 2000). All required documents are submitted. Now I wait.

How do I buy my 13 years active duty into FERS? Can I use my existing 401(k) to pay this? How much would it cost me?

I also found out that, as of Jan. 1, the deduction for retirement went up to 3.1 percent. I guess a tentative offer before Dec. 31 doesn’t count for hired, so my pay is decreased. Adding on an increase in the cost of living (D.C. area), increase of health care coverage, retirement, Thrift Savings Plan, Social Security and decrease from my current salary, there’s not much of a paycheck left. What are the benefits of government employment? Any idea why Fort Belvoir does not have a cost-of-living adjustment?

A. Yes, you will be able to make a deposit to get credit for either or both your periods of active-duty service. When you are hired, your personnel office can explain how you do that and what it would cost. While you can use any source of money to make the deposit, I don’t know what the tax consequences of using your 401(k) would be.

The fact that you were made an offer of employment before the change in retirement deductions went into affect won’t change the fact that you’ll be required to pay the higher amount.

Your question about COLAs and Fort Belvoir makes no sense. Employees don’t receive COLAs, only retirees. And whatever COLAs one retiree gets are applied to the annuities of all eligible retirees. On the other hand, if you are referring to annual pay increases, these have been frozen for all employees for the past few years.

Tags: , , , , , , , ,

VERA and returning to federal service

Bookmark and Share

Q. I retired under a VERA in 2008 from the U.S. Postal Service with 23 years and collect an annuity and have my health insurance deducted from my annuity. I pay the postal service premium for my health insurance, which is less than those of other government agencies. I am looking to be reinstated with another government agency.

1. Will my annuity end or decrease? If so, how will it be calculated?

2. Will I have to pay the higher premium for my health care through the new agency?

3. Will my annuity amount increase when I retire from my new position?

4. Will I keep my years of service in regards to my annual leave in my new position?

A. 1) There are three possibilities. One, if you retired before meeting the standard age and service requirements to retire on an immediate annuity, your annuity would stop and you’d be a regular employee, one who wouldn’t be able to retire again until you met the age and service requirements. Two, if you now meet the age and service requirements to retire, in all likelihood, the salary of your new positions would be offset by the amount of your annuity. Three, in rare cases, you would be able to keep both your annuity and the full salary of your new position.

You’ll need to check with you prospective employer to find out which arrangement would apply to you.

2) Yes, you’ll have to pay higher premiums than a Postal Service employee. In fact, as a Postal Service retiree, you should already be paying the higher premiums that apply to all non-Postal employees and retirees.

3) If you are hired into a position where your salary is offset by the amount of your annuity and you work for a full year, you’ll be entitled to a supplemental annuity. If you work at least five years, you’ll be entitled to a re-determined annuity. If you are hired into a position that allows you to keep both your annuity and the full salary of your new position, you won’t be entitled to any additional annuity benefit.

4) Your annual leave accrual rate will be based on your total years of government service. Note: Because you retired under a VERA, you would only be able to retire again if you met the age and service requirements.

Tags: , , , , ,

Deferred retirement

Bookmark and Share

Q. I am a full-time letter carrier with 25 years of service at 50 years of age. I am having health issues and have trouble completing my job. I am considering deferred retirement this month. As I understand, I’ll lose my health insurance, but I can apply for my FERS retirement at my minimum retirement age of 56 with no penalty. What is your opinion?

A. Unfortunately, you are mistaken. If you resigned and applied for a deferred retirement at age 56, your annuity would be reduced by 5 percent for every year you were under age 60 (5/12 percent per month). If you wanted to receive an unreduced deferred annuity, you’d have to wait until you were age 60. If health issues are making it difficult for you to carry out the essential elements of your job, you should apply for FERS disability retirement. If you do that, you’d also need to apply for Social Security disability benefits, otherwise the Office of Personnel Management wouldn’t review your application.

Tags: , , , , , , , , , ,

Insurance if retiring overseas

Bookmark and Share

Q. I am planning to retire overseas (probably in Panama) and will be eligible to keep my insurance (Blue Cross Blue Shield). I understand that I will continue to pay my part of the insurance and that the federal government will continue to pay the rest.

1. Will the insurance cover me while I am living overseas?

2. What will happen when I turn 65?

3. Will all medical plans from all companies work the same way?

A. If you are enrolled in an HMO, the answer in most cases is no, you won’t be covered if you are living overseas. If you are enrolled in a fee-for-service plan, the answer is yes; however, you’ll need to check your plan brochure and talk with one of its representatives to find out how your health benefits expenses will be billed and what you will be required to pay versus your plan.

At age 65, your FEHB coverage will continue, but the relationship between what you and your plan pay for health benefit expenses will change. That’s because the payments your plan makes are predicated on your being covered by Medicare. Even if you are covered by Medicare, Medicare won’t pay any bills you incur outside the U.S.

Tags: , , , ,

Survivor annuity and health coverage

Bookmark and Share

Q. I am a CSRS employee with more than 30 years’ service and plan on retiring in a few months. What is the minimal amount I need to put on Form 2801-110 in Section F (Annuity Election), Number 2, which states, “I choose a reduced annuity with a partial survivor annuity (equal to 55% of $_____________ a year) for my spouse named in Section E”? I saw in a related question someone had asked if all they need to put here was $1 of survivor benefit for their spouse to be covered by the FEHB insurance and the answer was yes. Putting $1 in that space actually ends up being less than $1 annuity … $0.55, right? I’m guess that’s what a lot of people do, though, who are not interested in the survivor benefit. Sorry for being paranoid. I just don’t want her to lose this health insurance benefit.

A. The minimum amount you need to designate as you spouse’s survivor annuity is $1. You’ll have to do the arithmetic to decide what number you should put in the box to achieve that. However, just remember this: You are required by law to provide your spouse with a full survivor annuity unless she agrees to a lesser amount in writing and that is notarized.

Tags: , , , ,