Ask The Experts: Retirement

By Reg Jones

FEHB re-enrollment

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Q. I was a federal employee for 26 years and, from 1987 onward, was under FERS. I left my last federal job in June 2009 at age 58, after having passed the minimum retirement age and having been enrolled in the Federal Employees Health Benefits plan over the entire 26 years of my federal employment. In June 2009, I said that I intended to take a postponed retirement, some time after I reached age 60. It is my understanding that my enrollment in FEHBP was suspended at the time I left my last federal employment, in June 2009.

I had health insurance coverage under temporary continuation of coverage, ending in December 2010.

I applied to the Office of Personnel Management for a postponed retirement on Dec. 28, 2011, by filing Form RI 92-19. OPM acknowledges having received my application in February 2012, and I have been in interim status since that time. I began receiving interim payments in March 2012.

In a phone conversation I had with OPM in February 2012, I was told that I would not be able to re-enroll in FEHBP until my retirement was finalized.

Another year has passed, and my retirement is still not finalized. I am still in interim status. Is it really impossible for me to re-enroll with FEHBP before my retirement is finalized? Does the word “annuity” apply to my interim pay? If so, it seems that I can re-enroll in FEHB now.

An article by Reg Jones on your website says, “…if you were enrolled in FEGLI or FEHBP for the five continuous years before you retired, you may re-enroll in them when your annuity begins.” This suggests that the statement made to me on the phone in February 2012 was incorrect. Could you please clarify this? If I am eligible to re-enroll in FEHBP, what procedure should I follow to re-enroll?

A. You could only have re-enrolled in the Federal Employees Health Benefits program if you retired and postponed the receipt of your annuity to a later date. You didn’t do that. Instead, you resigned from the government and later applied for a deferred annuity. Deferred annuitants cannot re-enroll in the FEHB program.

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FEHB and postponed retirement

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Q. I would appreciate a clarification of eligibility for Federal Employees Health Benefits under postponed retirement. I selected a postponed retirement and have recently begun receiving benefits. I may, at some point, want to sign up for FEHB as a FERS retiree. In my situation, in my last government position (as an appointee), I had continuous coverage under my wife’s FEHB as a part of a family plan. Since I left the government position, I have continued to be covered under my wife’s FEHB family plan. As I understand it, postponed retirees who were enrolled at the time they left government can re-enroll once they start benefits. In my case: Am I eligible for benefits even though I was not enrolled myself but was covered under my wife’s plan? Given that I am still covered under my wife’s plan, can I, if it makes sense, enroll myself in an FEHB plan?

A. Yes, but only if your wife switches to self-only at the same time during an open season or if she passes on before you while you are still covered by her self and family enrollment.

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FERS sick leave credit

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Q. How does the new law that provides sick leave credit for longevity operate with immediate, postponed and deferred retirement? Can you get this sick leave credit for service longevity under each of these three categories of retirement?

A. No. It only applies to immediate and postponed annuities. The latter is included because it’s actually an immediate annuity, where the receipt of the annuity is postponed to a later date.

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Postponed retirement and FEHB

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Q. I am a Veterans Affairs Department term employee with 28 years of service, 57 years old. My term appointment has only been extended to Jan. 31, 2013, with a “continuation of ongoing research funds.” If research funds are not available to pay me past this date, I understand that I can retire under the MRA +10 provision and postpone receipt of my annuity until I am 60 to avoid the age reduction penalty. And, at that time, can re-enroll for Federal Employees Health Benefits since I will have been enrolled for the previous five years. If I choose not to retire but rather am terminated due to lack of funds, will I still be able to re-enroll in FEHB? I have been told that choosing the retirement option will affect eligibility for unemployment benefits, but I certainly don’t want to lose health coverage in retirement.

A. If you have been covered by the FEHB program for five consecutive years, retire and postpone the receipt of your annuity, you’ll be able to re-enroll in it when your annuity begins. If you are terminated and later apply for a deferred annuity, you wouldn’t be able to re-enroll in the FEHB program.

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Unused sick leave and deferred or postponed retirement

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Q. I am 53 years old with 24 years of FERS service and considering either a deferred or postponed retirement option in the next year or two. How does the newly enacted benefit for FERS employees to get service longevity credit for unused accumulated sick leave operate under the postponed or deferred retirement scenarios? I know you get 50 percent credit for longevity purposes for all unused accumulated sick leave for retirements between now and Dec. 31, 2013, and full day-for-day credit for unused accumulated sick leave for longevity credit for retirements on and after Jan. 1, 2014 in the immediate retirement situation.

A. Unless your agency offered you an opportunity to retire early, you wouldn’t be able to retire on an immediate annuity until you reached age 56. Since that would be after Dec. 31, 2013, you’d get full credit for any unused sick leave. However, you’d be retiring under the MRA+10 provision. As a result, your annuity would be reduced by 5 percent for every year you were under age 62. You could reduce or eliminate the age penalty by deferring the receipt of your annuity to a later date.

If, instead, you chose to resign from the government and apply for a deferred annuity at age 60, there wouldn’t be any age-based reduction in your annuity; however, you wouldn’t get any credit for your unused sick leave.

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Postponed retirement and benefits

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Q. I am 54 and a federal employee with 14 years of service. Can I take a postponed retirement now and then at MRA, 60 or 62, apply for retirement and have my health and medical coverage reinstated? I have looked at OPM, and it is not clear. I have talked to my agency’s folks and received conflicting information.

A. No. To retire on a postponed annuity, you’d have to have at least 10 years of service (which you do) and have reached your minimum retirement age (which you haven’t). Your MRA is 56. At age 54, all you could do is resign from the government and apply for a deferred annuity at age 62. If you did, you wouldn’t be able to re-enroll in the Federal Employees Health Benefits program.

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