Ask The Experts: Retirement

By Reg Jones

Affordable Care Act

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Q. I heard on television that, under the Affordable Care Act, children can stay on your medical plan until age 26, but spouses are not considered dependents. My wife is a few years younger than me and, when I retire next year, will she still be covered under Federal Employees Health Benefits?

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Survivor annuity and insurance

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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.

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FEHB re-enrollment

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Q. Before retirement under FERS, I canceled my Federal Employees Health Benefits to be covered by my wife’s FEHB. Now my wife is resigning. She has no minimum retirement age with 25 years. She will not be allowed to continue FEHB. Am I allowed to re-enroll in self and family (code 2F) as a retiree with 35 years (33 self, two under wife) of FEHB? If I am, how soon can I re-enroll?

A. Yes. And you can do it from 31 days before the loss of coverage through 60 days after.

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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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Health benefits after retirement

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Q. I am a 51-year-old FERS employee whose minimum retirement age is 56. I will have over 30 years of service when I reach the minimum retirement age.  A couple of years ago, I went under my wife’s health plan.  We incorrectly assumed that she needed five years to become vested and that we could just stay under her plan when we retired (as with FERS). However, she is a Non-Appropriated Funds Defense Department employee and would need 15 years.

I am picking up my Federal Employees Health Benefits insurance again so that I will have five years under the plan when I reach the MRA. If I were to retire at 56, my understanding is that I can (a) begin receiving a reduced annuity immediately or (b) defer receiving my annuity until I reach 62. I was told that if I begin immediately receiving a reduced annuity, I can keep my FEHB and still benefit from the government contribution.

What happens if I defer the annuity until I am 62? Will I need to pay the whole premium, plus 2 percent, for the years between 56 and 62? My wife will likely work until I am 62, so could I go under her health insurance between 56 and 62 and then pick up my FEHB again when I begin collecting my annuity?  Under either of those scenarios, could I change my coverage from self-only to self and family to add my wife to my coverage when I am 62?

A. I think you are suffering from a misunderstanding, which I hope to clear up. If you will have 30 years of service when you reach your MRA, you could retire on an immediate unreduced annuity. And you would also be entitled to the special retirement supplement, which approximates the Social Security benefit you earned while a FERS employee. If you had five years of continuous enrollment in the FEHB, you could carry that coverage into retirement and, unless you are a Postal Service employee, the premiums you’d pay as a retiree would be the same as those you have been paying as an employee.

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After open season

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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.

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Survivor annuity

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Q. My husband has 28 years and I have 27 years under FERS as civilians with the Defense Department (Air Force). My husband has been carrying Federal Employees Health Benefits insurance for our family for the past nine years. If he decides to retire early or prior to me, will he have to select an annuity for me so I would have health insurance coverage if he was to pass? I wouldn’t want to have to continue to work and carry insurance for five years prior to retiring if this is the case.

A. He wouldn’t have to elect a survivor annuity for you. As long as you were covered under the self and family option, you could continue your coverage by having the premiums taken out of your pay if still employed, or your annuity.

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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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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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Medical coverage

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Q. My husband is a retired federal employee and has Blue Cross Standard through the federal government. If he dies before I do, can I keep the medical coverage? And should we consider going to the basic Blue Cross Blue Shield plan if we have Medicare Part B?

A. As long as he is enrolled in the self and family option and you are receiving a survivor annuity, you will be able to continue that coverage.

Whether you should change your FEHB coverage level if you have Medicare Part B is something you’ll have to figure out for yourselves. You can do that by comparing the benefits, coinsurances and deductibles.

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FEHB and Tricare

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Q. My husband and I are both military retirees and have had Tricare for over 38 years. When my husband turned 65, he had to sign up for Medicare and take Part B to retain Tricare for Life. He also dropped off of the Federal Employees Health Benefits plan and then retired from his civilian federal government job and I changed to single coverage on FEHB under me (I am still working as a civilian federal employee).

I am considering retiring this year and want to know if I need to add him to my FEHB for him to have access to FEHB in the future if we need that. Do I need to put him on my FEHB next open season to retain this benefit in the future?

A. To retain FEHB coverage, he would need to be covered under your FEHB enrollment when you died. Since you can’t predict when that will happen, it would be wise to change your coverage from self-only to self and family while you are still healthy.

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Self-only vs. self and family

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Q. I am a FERS retiree with premium deductions from my annuity for Federal Employees Health Benefits family coverage. My wife is not a federal retiree.

1. If I change to single during open season, can I change back to family coverage the next year?

2. When I die, I assume FEHB coverage will halt for her, correct?

A. Yes, you can change from self-and-family coverage to self-only during any open season and change back during any open season. If you provided a survivor annuity for your wife, and you are covered by the self-and-family option when you die, she will be able to continue that coverage; if you were enrolled in self-only, she wouldn’t.

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Temporary loss of health coverage

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Q. I am a retired foreign service officer whose spouse is still an active federal employee working for an agency other than the State Department. To save money, we decided to move from one self-and-family policy under my name to separate self-only plans. I opted for a completely different carrier, while my wife chose to stay with the one we had had for six years.

We had not counted, however, on the fact that this year, there would be a nearly two-week gap between the time frame for changes for retirees and for active employees. The end result has been that my self-and-family coverage ended Dec. 31, but my wife’s self-only coverage will only begin with the start of a new pay period Jan. 13. I confirmed with my former carrier that, despite having a record of her new enrollment, there was nothing it could do to continue her coverage without some sort of code or certification from my wife’s agency or the Office of Personnel Management. State essentially confirmed this and added that it would only have been able to modify my wife’s action had she also worked for State. My wife’s agency, meanwhile, seems to have been caught flat-footed by this problem and, after initially pronouncing her out of luck, claims to be researching her situation and that of a few others similarly affected.

This sort of Catch-22 is quite frustrating, not to mention upsetting. Neither my wife nor I saw any information during the open season warning of this potential pitfall much less guidance on how to avoid it. I advised State human resources, when I filed my change, that my wife would drop from my coverage to obtain her own through her agency. She, however, did not do so since her agency’s online enrollment procedure did not seem to allow for that.

Can you please advise as to how this should have been handled and what sort of remedial action (OPM code, certification) is possible? My wife is in good health and could probably make it to the 13th without problem, but her lack of coverage during an emergency is worrying. She has also already had to postpone seeking an elective appointment and been declined insurance coverage for a prescription she rushed to have filled on the 31st. It is hard to believe that the Federal Employees Health Benefits plan regulations would not address such a gap, greater this year than in most, given the number of mixed marriages between active and retired feds.

A. What happened is unfortunate. However, I’m not aware of any action you could take that would change that.

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Changing self-only to self and family

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Q. I know one has to have Federal Employees Health Benefits for five years before one quits or retires to get this benefit. Does it have to be family coverage for five years, or can I change my self-only coverage to family in the last year before retirement? Can I change it after retirement?

A. You can change from self-only to self and family and from self and family to self-only during any open season. The only requirement to carry your FEHB coverage into retirement is that you be covered continuously for the five years before you retire.

Note: I need to correct a misunderstanding on your part. If you were to quit, you would only be able to continue your coverage  for 18 months under the temporary continuation of coverage provision, for which you’d pay 100 percent of the premiums, plus a 2 percent administrative fee.

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Postal Service and health insurance

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Q. My husband and I are postal employees. He is getting ready to retire after 32 years with the Postal Service, and he is 59. I am 51 and will be continuing my employment probably (God willing) for another eight years or so. We both carry self-only health insurance plans, and I was wondering if I can take him on my insurance plan before he retires and change my enrollment to self and family. If this is a possibility, he can drop his plan. I think this would save us money, as I think his insurance will go up in his retirement. First, is this an option for us? How would I change my plan to self and family?

A. You could change from self only to self and family coverage during the FEHB open season.

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Dual coverage

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Q. My husband is a retired FERS employee and I am a current CSRS employee. I am covered as a family member under my husband’s self-and-family coverage. My husband did not elect a survivor annuity. I plan to retire the end of this year. What happens to my Federal Employees Health Benefits coverage if he dies before me? Will I be able to continue the coverage based on my own eligibility, even though he did not elect a survivor annuity? If I elect self-only coverage during the next open season, the change is not effective until Jan. 13, while any changes to my husband’s coverage would be effective Jan. 1.

A. If your husband were to die before you, you could continue that coverage. If you were still employed, the premiums would be deducted from your pay; if retired, from your annuity. There wouldn’t be any break in coverage, and you could, if he died, switch to self-only at that time.

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Spouse’s insurance after prospective retiree’s death

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Q. I am a FERS employee and plan to retire at age 60 with more than 20 years’ service. I will have been enrolled in FEHB for more than five years and want to know: If I elect to not have a survivor on my annuity, will my spouse, who receives a monthly military retirement from the U.S. Navy and has Tricare for Life, be able to keep the FEHB after my death?

A. No. Your spouse has to be both covered under the self and family option of your FEHB plan and receiving a survivor annuity. As a FERS employee, you have the option of electing a full survivor annuity (50 percent) or half (25 percent). You can elect the lesser amount (or none at all) only if your spouse agrees to that in writing.

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Medicare Part B

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Q. I am confused about your Oct. 22 answer to “Medicare Part B in retirement.”

I am 63, retired, receiving my Social Security benefit, have coverage with Blue Cross/Blue Shield for my wife and myself, am not employed, and have no plans to return to work. It is my understanding that BC/BS requires purchase of Part B when I become eligible in a year or so. Yet, the answer to the question seemed unequivocal in stating that B is optional. Can you clarify for me, please?

A. Don’t be confused. What I wrote is correct. To back that up, here’s what the Office of Personnel Management has to say on the subject: “You don’t have to take Part B coverage if you don’t want it, and your Federal Employees Health Benefits plan can’t require you to take it.”

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Health insurance costs after retirement

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Q. If I take the $15,000 retirement incentive being offered now, (I have 25 years under FERS, am a Postal Service employee, and am 64 years old), will my Blue Cross premiums go up? If so, by how much? I now pay $81.68 a month.

Also, if I decide to get married, my family option now would be $203.61 a month. How much would these premiums be if I take the retirement incentive? I must make the decision by Dec. 3.

Is the FERS pension amount taxed? If so, is it taxed by income and Federal Insurance Contributions Act? My gross pension amount is $1,288 a month. How much, approximately, would be left over after taxes and health care subtractions?

A. The easiest way to compare the cost of your Blue Cross/Blue Shield Standard premiums is to show you the difference between what Postal Service and non-Postal Service employees will be paying in 2013.

A Postal Service employee would pay $64.71 every two weeks for self-only coverage and $152.92 for self and family. A non-Postal Service employee would pay $85.71 for self-only and $200.14 for self and family.

When a Postal Service employee retires, his health benefits premiums are the same as those for all other non-Postal Service employees and retirees. And they are paid on a monthly, rather than a biweekly basis. In 2013, the BC/BS monthly rate for retirees will be $186.14 (self-only) and $438.63 (self and family). To find out how your annuity would be taxed, go to www.irs.gov/pub/irs-pdf/p721.pdf, and read the Internal Revenue Service’s Tax Guide to U.S. Civil Service Retirement Benefits.

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Health insurance coverage after retirement

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Q. I am a government employee, but my husband is working in the private sector. To date, we have been using my husband’s health insurance because it provides excellent coverage. However, my husband’s company does not provide health coverage after retirement. To that end, I plan to enroll in a Federal Employees Health Benefits program in December since my retirement date is five years away. (My husband is retiring in five years, as well.) Does my husband need to be covered on my program for five years, too? Or can I add him in the last year prior to my retirement?

A. No, he doesn’t have to be covered for five years, only covered by a self and family enrollment when you retire. However, you need to remember that if you were to die while covered by a self-only enrollment, he wouldn’t be eligible for coverage under FEHB.

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