Ask The Experts: Retirement

By Reg Jones

Retirement and disability benefits with private contract

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Q. My father is receiving both a disability benefit and a monthly federal pension from CSRS. His wife is in a nursing home and has been on Medicaid since June 2011. Her Social Security is paid directly to the nursing home. She is given only a small amount and the nursing home keeps the remainder.

If my father should pass before her, will the CSRS survivor annuity amount go directly to the nursing home, as well?

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‘Death benefit’ vs. ‘life insurance’

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Q. My mother is a Postal Service retiree residing in a nursing home. She had to use up all of her own assets to pay the nursing home until she qualified for Medicaid. Now, she has nothing left. I’ve been told that as a retired postal worker, when her time comes, there is a Postal Service “death benefit” that will pay out to her beneficiaries and that Medicaid cannot take that money from her estate because it is technically a “death benefit” as opposed to “life insurance.” Is this true?

A. I’ve never heard of such a death benefit and don’t believe there is one. That leaves only two possibilities. First, your mother has a Federal Employees’ Group Life Insurance policy that, at her death, would be paid to whomever she designated on a Standard Form 2808 (CSRS) or 3102 (FERS). If she didn’t make such a designation, the money would be paid out according to the standard order of precedence. Second, if all of the money she contributed to the retirement system had not been returned to her in her annuity payments when she dies, any residual amount would be paid out according to the standard order of precedence.

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Monthly annuity receipt

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Q. I will retire early next year. For purposes of state Medicaid, I need to know, as a retired CSRS employee, whether or not I would receive a monthly annuity receipt in the mail even though I chose direct deposit. If so, would this receipt show the paid monthly health care premium (FEHB) and the amount taken out?

A. No, you won’t receive a monthly annuity receipt in the mail regardless of whether you use direct deposit or have the check mailed to your home. To find out what your monthly premiums are, you’ll have to go to www.opm.gov/healthcare-insurance/healthcare, click on Plan information, then click on Premiums.

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Survivor annuity

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Q. My husband is a retired CSRS annuitant. If he is admitted to a nursing home on Medicaid and his monthly check is given to Medicaid, will I still be eligible to receive my share of his annuity upon his death, and will I be able to continue to receive health insurance from FEHB?

A. Yes, as long as he elected a survivor benefit for you and you are covered under the self and family option of his Federal Employees Health Benefits plan.

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Soon to retire, and CSRS wife has Medicaid

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Q. I am thinking of retiring soon, with 35 years’ service at 62 years old. My wife is 72 and bedridden and has Part A Medicare and Medicaid and is still on my FEHB. I have been told I should have her apply for Part B Medicare and drop her from my FEHB. She will have parts A and B Medicare and Medicaid, and from a letter she received recently, she is covered also under Part D prescription. Is taking her off my insurance the thing to do, or will I end up with many out-of-pocket expenses? I also believe she will be in a nursing home before this year ends, which I believe is covered by Medicaid. I am hoping to be retired by this fall, and I need guidance/answers. I would of course continue my coverage under FEHB.

A. I can’t advise you on what to do. However, if you moved from self and family FEHB coverage to self-only and then died, she would be barred from re-enrolling if it became desirable for her to do so. Further, before making a decision, check the benefits available from her other coverages against what your plan provides.

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