Ask The Experts: Retirement

By Reg Jones

Medicare coverage for pre-1983 federal retiree

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Q. My father retired from the federal government in 1976. For whatever reason, he does not have Medicare Part A. My mother recently suffered a stroke, and because my dad did not have Medicare Part A, rehab at a nursing facility will not be covered. Apparently federal workers did not pay into the Social Security system back then and therefore have had to pay separately for Part A. It took hours of calls to SSA, OPM and Medicare to unravel this bureaucratic mess! BCBS (federal) is his secondary insurance and would not pay because Medicare A is primary.

(BCBS was no help — we tried to get a special benefit created for her, which they could have done, but it was denied.) My dad will be 93 soon, so I do not know how many of these retirees are still alive and were in similar situations and did not know nursing rehab would not be covered.

I wonder if at some time Medicare Part A did not cover nursing rehab and since BCBS is primary for inpatient hospital care, he was advised not to sign on for Part A, which also covers inpatient hospital care.

It is a sad situation for the last of his generation of federal retirees.

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FEHB and Medicare

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Q. I am a federal retiree and have the standard BC/BS coverage for my spouse and myself, plus Medicare Parts A and B. Our only out-of-pocket expenses with these plans are co-pays for prescriptions. Other federal retirees tell me I am over-insured and should drop Medicare Part B.

If I did this, would I still have the same coverage I have now, or would I then have out-of-pocket expenses?

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Health insurance coverage in retirement

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Q. I understand that when you retire, Medicare is your primary and federal insurance is your secondary. Will federal insurance still pay for prescription drugs even if you do not have a plan under Medicare?

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‘Quitting’ FEHB and re-enrolling

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Q. Can a retired employee quit his Federal Employees Health Benefits in retirement for, say, Tricare for Life and Medicare if retired military, and later opt to switch back to FEHB?

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VSIP eligibility

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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?

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Calculations for disability retirement

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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.

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Medicare

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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.

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High-3 and deductions

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Q. You have stated that to calculate the high-3, OPM will consider only salaries from which the government has deducted retirement contributions.

For which items will they not deduct the contributions? Social Security taxes? Medicare taxes? Medical, dental and vision insurance payments? Thrift plan payments?

I think it is fraud when everywhere it is stated “average of three highest salaries” and the actual amount is way low. Nobody told me that’s how it is calculated.

I was a title 38 physician and have retired under FERS, but I also have CSRS component.

A. First, let’s clear the deck. There isn’t any fraud. A high-3 is based on an employee’s highest three consecutive years of average basic pay, not salary. Second, basic pay is the amount you receive before any deductions are taken out for Social Security, Medicare, medical, dental and vision insurance, the TSP, etc.

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FERS SSI Medicare

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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.

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Jan. 1, 1983

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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.”

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CSRS and Medicare eligibility

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Q. My father was a federal employee for many years and he retired in 1983. He passed away in 2004 at the age of 80. My mother has been receiving an annuity benefit since that time. The only insurance that my father ever had was his Blue Cross/Blue Shield Federal. Why was he (and now my mother) not eligible for Medicare Part A? Shouldn’t he have been paying into the Medicare system through payroll deductions when he was employed with the Federal Communications Commission?

A. Because he was a CSRS employee who retired before December 31, 1983, he didn’t have payroll deductions  for Medicare Part A taken from his pay. It was only after that date that employees were required to have those deductions taken out.

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CSRS Offset and taxes

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Q. I’m planning to retire under CSRS Offset in December. Is local, state and federal tax the only tax I will have to pay? No Social Security or Medicare?

A. Social Security and Medicare taxes are only deducted from earnings from wages or self-employment, not other sources of income, such as annuities.

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Annuity and taxes

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Q. Are my CSRS retirement annuities subject to Social Security and Medicare tax if I retire at age 58 with 37 years of service?

A. No. Social Security and Medicare taxes are only taken from earnings from wages or self-employment, not annuities.

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Adding family member to health paln

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Q. I have been a federal employee for five years and have covered myself and my minor child under the BCBS basic family plan. My husband is disabled and receives Medicare for his primary and his employee plan for his secondary health insurance. His employer plan’s monthly premium has become expensive, and it would be more cost-effective if he were on my plan. Can I add him to my family plan during open enrollment?

A. Yes.

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Social Security and Medicare

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Q. I am retired and on Social Security disability. I am 63 and now receiving regular pension since 62. I am covered by FERS BC/BS. I was under the impression that my coverage continued till age 65 when I retired in 2000. I will have to wait till 66 to retire under the new Social Security rules for retiring. Will the health coverage continue till age 66, or will it stop at 65, leaving me with no insurance since I can’t get Medicare till age 66 now? And how does one keep the coverage later?

A. First, a correction. The eligibility age for Medicare is still 65. Only the age at which someone becomes eligible for a Social Security benefit has changed.

Now on to your basic question. As long as you continue to have premiums deducted from your annuity, you will be able to continue your Federal Employees Health Benefits coverage for the rest of your life.

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Medicare Part D and FEHB

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Q. I am a federal retiree on Medicare with Blue Cross Blue Shield basic. I also have a third insurer through New York’s state insurance program. The program is putting all its Medicare retirees into a Part D drug program. How will this affect my BCBS drug coverage?

A. According to OPM, if you are enrolled in Part D, your FEHB plan will coordinate benefits with Medicare.

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Annuity reduction and health insurance

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Q. I am a CSRS employee and plan to retire March 29.

1. Will I be on the annuity roll for my first check on April 1 or May 1?

2. Will I incur a reduction in my annuity because of the retirement date?

3. I will turn 65 in April, so I will be eligible for Medicare. I have had Federal Employees Health Benefits for four years, and I am Tricare-eligible. I am aware that my time with Tricare will count toward my five years and that I can suspend my FEHB and go with Medicare/Tricare for Life. What type of paperwork will the Office of Personnel Management need showing my eligibility for Tricare? Should I provide this with my retirement paperwork?

A. You will be on the annuity roll in April and be entitled to your first annuity payment in May. Based on your proposed retirement date, there would be no reduction in your annuity.

Your Tricare coverage only counts if you have been, in total, covered by the FEHB program and Tricare for the five consecutive years before you retire and are enrolled in the FEHB program on the day you retire. You should visit you personnel office and ask them what confirmation they require and to be sure that you are, in fact, eligible to carry your FEHB coverage into retirement.

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Medicare

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Q. I am getting ready to enroll in Medicare. I have GEHA High Option Family Plan and was advised to change to GEHA Low Option Family Plan once I am enrolled in Medicare. I have the High Family Option because my spouse is ill and requires frequent medical attention.

A. The only way to know if that would be a good decision for you and your spouse would be to compare the benefits for each level of GEHA coverage and see how they would mesh with Medicare. If your spouse isn’t covered by Medicare, electing the low option might increase your out-of-pocket expenses.

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Medicare Part B

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Q. My husband and I are retired feds. We kept our fed insurance because I was not on Medicare yet. We figure that we will pay more than $500 a month for Part B, which is more than our federal insurance. If we do not take Part B now and our income drops later, can we sign up without penalty?

A. No.

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Insurance if retiring overseas

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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.

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