Ask The Experts: Retirement

By Reg Jones

Living overseas and health care

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Q. I am in the GS, age 64. I hit seven years overseas and am on the Priority Placement Program to return to the U.S. Instead, I plan to stay overseas and marry a local national. My options are to retire at 13 years’ service or to resign and take a Non-Appropriated Fund job on base to continue earning FERS coverage. I understand that next year I must enroll in Medicare Part A, although I will be overseas and unable to use it. Is there any benefit to me also enrolling in Part B if I plan to retire overseas? I have the Foreign Service Benefit Plan.

It appears that I am going to be undercovered either way unless I am still able to work on base as NAF and access the U.S. hospital where Medicare coverage would be primary. Do you have any advice on how to retire overseas regarding health care benefits? It seems there is no good answer, and yet I know many people who are not military retirees making the decision to stay overseas after their tours end.

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FEHB, Medicare and Tricare for Life

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Q. Can FEHB suspension be done only in retirement? How can suspension be done working as an active federal employee with Medicare and Tricare for Life? One may want to keep working for the government but not have to pay FEHB fees and use Medicare Part A with its fees along with Medicare Part B free and TFL benefits included due to being a military retire. Why would one want to have such overkill in health care benefits and costs? Could you explain the process in a scenario such as this, and could either a continuing active employee or a retiree reclaim their FEHB in the event the Medicare or TFL benefit degrades or goes away?

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Obama health care law and FEHB changes

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Q. I am a CSRS retiree. I retired in 2005. I am a subscriber to the Federal Employee Health Benefits program, specifically Blue Cross-Blue Shield’s Standard Option with family coverage. My wife and I are also qualified for Medicare Parts A and B. That makes Medicare the primary coverage and FEHB/BC-BS the secondary coverage for any health benefits paid.

1. What (if any) changes in the plan’s coverages are anticipated for 2014 and beyond, due to the health care law? 2. Does OPM anticipate that current retirees/program members will be forced into a health care provider’s coverage offered under the law? Starting in 2014, will federal retirees be forced into that law’s coverage rather than having the option to choose our own coverages under current program?

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Minimum service time to carry insurance into retirement

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Q. I now have 2½ years of government service and am 66. When I retire in 2½ years, I’ll have five years with the government. Will I get the option to retain my Federal Blue Cross/Blue Shield of Alabama health insurance? If I would rather quit working for the government in one year, do I lose the opportunity to keep my federal BC/BS of Alabama coverage? I have total time in government employment today of only three years. I am contemplating quitting next year. What is the impact to my federal BC/BS insurance coverage? I signed up for Medicare Part A, but not Part B. I hope I can keep health insurance with BC/BS of Alabama and make that my secondary plan once I leave government employment.

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CSRS and Medicare

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Q. I retired in 2009 under CSRS. I am close to 65, and the answer to one of the questions asked states that people in CSRS are not eligible for Medicare because they didn’t pay into Social Security.

I was in CSRS before the change to FERS and stayed with CSRS. I had Medicare deductions taken from my pay from 1983-84 till I retired in 2009.

Do the Medicare funds I paid since 1983 make me eligible for Medicare or just part of it?

So which is right? I need to know so I can do what needs to be done — enroll or not. I’m currently insured under federal BCBS.

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Money for disabled son once parents die

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Q. I retired under CSRS nine years ago and took the survivor annuity.

Each year, my Notice of Annuity statement identifies the monthly survivor annuity amount payable to my wife upon my death. My wife and I are both in good health.

My only child is 34, has been identified by Social Security Administration as disabled (cerebral palsy) and receives SSDI and Medicare (based on his work history before he became completely disabled). He receives about $1,000 per month.

CSRS Brochure Retirement Facts 5 (October 1997) states that each child with no surviving parent receives $404 per month with COLA until he marries or dies.

The Social Security Administration knows my son receives hospital benefits under Medicare Part A.

OPM knows my son has a permanent disability since he receives other health benefits under my health benefit plan (GEHA).

What is my son entitled to receive when my wife and I die?

1. Does he continue to receive SSDI and Medicare?

2. Does he begin to receive a survivor annuity payment (how much?) and health benefits plan choice? I checked “disabled dependent son” on my retirement application nine years ago.

Since then, I have not been contacted by OPM, nor have I contacted OPM, about a survivor annuity for my son.

I pay the majority of my son’s living expenses/care.

Is there anything I need to do to insure my son receives his entitled benefits?

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Retirement and health insurance premiums

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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?

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Medicare Part B

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Q. I will apply for Medicare Part A when I reach 65 as a FERS retiree. My wife will not be eligible for eight years after, and I will retain my federal Blue Cross/Blue Shield family policy. She also has a state BC/BS policy in which I am included. Her policy does not carry over into retirement, so I will keep mine until she is eligible for Medicare. If I wait until she no longer has me under her policy, will I be entitled to then apply for Medicare Part B without penalty under the Substantially Equal Periodic Payment exception, or do I need to do it when I am eligible for Medicare to avoid the 10 percent-per-year penalty?

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12 questions on VERA

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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?

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Medicare Part B penalty

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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?

A. Yes.

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Retirees, Medicare and the ‘creditable plan’

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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.

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FEHB and Tricare for Life

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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.

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Health insurance

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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.

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Suspending FEHB

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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.

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Medicare Part A

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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.

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Medicare and FEHB

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Q. I am retiring from the VA when I am 62. I hold the insurance for myself and my husband, and I am able to keep family health benefits when I retire.

My husband is two years and nine months younger than I am.

When I reach 65, can I still keep GEHA insurance until my husband reaches 65 and can start drawing Medicare on his own? I do not want him not having heath insurance when he is 62. I heard someone say that at 65 I could do Medicare Part A and keep my government health insurance, and then, when he has reached 65, I could drop the GEHA in an open season and go with Part B with a supplement.

A. Yes, you need to keep enrolled in the self and family option of your FEHB plan to ensure that your husband’s health needs are covered. As for dropping your FEHB plan when you are both covered by Medicare, you had better think twice about that. If you drop it, you will never be able to re-enroll if you later change your mind. While Medicare Part A is free (you already paid for it through payroll deductions), you’ll have to pay for Part B. Whether you need to enroll in Part B is something you have to think through. Compare what your FEHB plan will cover with what Medicare Part B covers. Then review your current and anticipated health needs.

While many retirees elect to be covered by their FEHB plan and Medicare Parts A and B, many others elect not to enroll in Part B. One answer doesn’t fit all.

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Benefits/drawbacks of Medicare Part B

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Q. I will retire under CSRS and will maintain my FEHB insurance and Medicare Part A. What are the advantage and disadvantages of obtaining Medicare Part B?

A. The disadvantage is that you have to pay the premiums for Medicare Part B. The advantage is that it works with your FEHB coverage to reduce your out-of-pocket costs for medical, clinical lab service, home health care, outpatient hospital service and blood. You’ll have to review what the two plans offer and see where they overlap, reinforce each other or fill gaps.

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Health insurance change

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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.

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Medicare Part B penalty

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Q. I am retired under CSRS with survivor benefits for my spouse. I have Medicare Part A and Federal Employees Health Benefits Blue Cross/Blue Shield family plan. My spouse has just become Medicare eligible. Since there is a penalty (140 percent) for me to pick up Part B, we are contemplating continuing with the Medicare Part A and FEHB. The adviser at Social Security questioned our health insurance coverage after I die, noting the penalty in picking up Part B later. I assume that FEHB coverage will continue with the survivor benefits. Also, will the cost of the FEHB become the self-only rate?

A. If you are enrolled in the self and family option and have elected a survivor benefit for your wife, she would be able to continue that coverage and could convert to the self-only option.

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Primary vs. secondary insurance

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Q. I have been covered by my wife’s GEHA plan for the past 10 years, and I continue to be covered under her policy (as do our two kids; we are in a self and family plan). Two new variables are coming into play for my health care: 1) I will be eligible for Medicare coverage in two months; and  2) I just started receiving a federal annuity. (Note: I am eligible to receive Social Security but have not yet signed up).

I have two related questions:

1) If I continue to remain under my wife’s Federal Employees Health Benefits policy (assuming that I can), what happens if I sign up for Medicare? Which is the primary insurance, and is it more beneficial to have FEHB or Medicare as the primary insurance?

2) If I were to register for Medicare coverage (and if I am still under FEHB coverage via my wife), does it make sense to register for both Part A and Part B, or just Part A of Medicare? Insurance?

A. Because you are retired, Medicare would be primary and your FEHB coverage secondary. It doesn’t make any sense not to sign up for Medicare Part A because you’ve already paid for that benefit through payroll deductions. Whether you need to sign up for Part B is decision you’ll have to make. To get a better understanding of the relationship between the FEHB and Medicare, go to www.opm.gov/insure/health/medicare/index.asp

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