Ask The Experts: Retirement

By Reg Jones

Medicare Part B

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Q. I have asked Medicare directly why I need Medicare Part B. I am a 100 percent disabled veteran and a retired federal employee. As a 100 percent disabled veteran, I receive all medical care and prescriptions directly from the Veterans Affairs Department. No one seems to know if I do or do not need Medicare Part B other than to give the government a $100-a-month premium. Why can’t anyone answer this question?

A. The reason no one can answer that question is because one size doesn’t fit all. Whether Medicare Part B is right or wrong for you is something you’ll have to figure out for yourself. You’ll have to compare the benefits Part B offers with your other medical coverage. In short, Part B helps cover medically necessary services such as doctors’ services, various kinds of therapy, outpatient care, durable medical equipment, home health services, including part-time and intermittent nursing care, and other medical services. Part B also covers some preventive services. If you find that these benefits fill gaps in your present coverage or enhance those that you can already receive, and it makes financial sense to pay the premiums, sign up for Part B. If not, don’t.

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Workers’ comp

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Q. I will be retiring under FERS at the age of 72 with 25 years of service. I draw my Social Security but not under disability. I have a case with the Office of Workers’ Compensation Programs open, but I don’t draw any money from them. I have checkups and medications under my case number. I want to retire no later than December. I don’t know if any disability I would get through Social Security would have to be offset by my civil service retirement. I have an Air Force retirement and I get so much from the Veterans Affairs Department due to a disability incurred while I was in the military.

A. If you receive workers’ compensation or other public disability benefits and Social Security disability benefits, the total amount of these benefits cannot exceed 80 percent of your average current earnings before you became disabled. For more information about the interaction of benefits, go to www.ssa.gov/pubs/10018.html.

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Changing jobs

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Q. I am 47 and receive a CSRS monthly annuity. I retired from the Postal Service after 26 years. If I accept a position at the Veterans Affairs hospital, how will that affect my annuity?

A. The salary of your new position would be offset by the amount of your annuity. For example, if your annuity is $40,000 and the annual salary of your new position was $50,000, you’d receive a salary of $10,000.

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Credit for military time

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Q. I am in the process of filing for FERS retirement. I currently have 30 years of civil service (GS-11), which includes three years and seven months of military service. I am being told by human resources that they cannot include the three years military time for Retirement Annuity Computation because I receive a check each month from the Veterans Affairs Department for a 30 percent disability rating (service-connected disability). Also, my leave and earnings statement (LES) shows that I have repaid the military time. I have sent human resources a letter from VA showing that I was removed from the temporary disability retired list and discharged from naval service for physical disability with severance pay of $7,971 in 1986. I am not always sure human resources has all the answers. Will my military time count toward my retirement annuity when the Office of Personnel Management receives my package?

A. Yes, since you made a deposit, OPM will give you full credit for that period of active-duty service.

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Is lump sum worth it?

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Q. My husband worked for the Department of Veterans Affairs for 12 years and went out on disability retirement at age 55. He recently passed away at age 60. As he did not reach the age of 62, he was never converted to a regular Federal Employees Retirement System retirement. I am told I may be eligible for a lump-sum benefit/refund of any monies paid into FERS. Is this worth applying for, or were his FERS contributions used to pay his disability retirement for the past five years?

A. Assuming that you were married to him for at least 18 months before he died, you’d be entitled to a lump-sum payment. If you were married to him for at least 10 years, you’d also be entitled to a survivor annuity. If you have not already done so, you need to contact the Office of Personnel Management at 888-767-6738 and report his death. They’ll help you make sure you receive any survivor benefits to which you are entitled.

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Will insurance pay for private care, not VA?

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Q: I am a retired federal employee and currently have health care coverage under one of the Federal Employee Health Benefits plans. I recently found out that I have multiple myeloma. I am also a Vietnam veteran, and after learning of my diagnosis, I found out that any Vietnam veteran who served on the ground in Vietnam between 1962 and 1975 and later developed certain diseases, including multiple myeloma, is presumed to have been exposed to Agent Orange herbicide and would be entitled to free health care for those diseases through the Veterans Affairs Department health care system.

However, much of the information I have gathered concerning treatment of veterans at VA hospitals for multiple myeloma has not been encouraging. I have read that veterans often do not get the treatment they need in a timely manner. My preference would be to have the option to use my FEHB and receive my treatment from my private doctors and myeloma treatment centers rather than relying on VA. The treatment can become extremely expensive: According to the information I received from one of the private myeloma treatment centers, the average cost for a bone marrow stem cell transplant would be $350,000. The average cost for one of the medications used is $10,000 per month. Would the FEHB plans pay for treatment of a service-connected disability/disease so I could use private health care providers?

A: FEHB plans don’t cover services and supplies when a local, state or federal government agency directly or indirectly pays for them. You’d need to check with your current plan (or any other plan that you are considering) to find out if you have the option of declining the coverage provided by law in favor of using private doctors and hospitals.

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Disability payments

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Q: I am an 80 percent disabled veteran right now. I have applied for a Federal Employees Retirement System disability retirement, and they I was told it would take three to six months. Is that about the right time? I thought it would go through rather quickly.

I went to apply for Social Security, but until I am not working, they can’t process my claim. Same thing with Veterans Affairs. I gave them an individual unemployment form, then they said I had to wait until I am not working. Is that right? I applied for Social Security under the Wounded Warrior Program – Desert Storm and Afghanistan in 2003 Veteran – and it is supposed to be fast tracked. I also got to meet the people I need to contact when I have to file again.

Why is disability from the federal government taxable? It is ridiculous that they do that, and can you provide me info on that as well?

A: The speed with which disability retirement applications are processed by the Office of Personnel Management depends on the volume of work they are handling and the complexity of the cases that are in line before they get to yours.

The criteria for disability retirement from the civil service are different from those for the Social Security Administration. For the former, you only need to be disabled to the point that you can’t provide useful and efficient service in your current job or one that’s open at current current grade or pay within your agency’s commuting area. To be considered disabled by the Social Security, you have to be disabled for all gainful employment. If you are still working you are considered to be gainfully employed. While the VA’s rules may be the same, I’m in no position to comment about them because they apply to the military and fall outside the scope of this forum.

As a rule, civilian disability annuities are taxable as regular income, unless you are deemed to be totally disabled, a determination that is originally made by the Social Security Administration and reviewed by the Internal Revenue Service. While you may think that taxing that income is ridiculous, it is a matter of law.

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Social Security and VA disability benefits (updated)

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Q: I am a Vietnam veteran with a disability rated at 40 percent. I will be 64 in September and plan on drawing my Social Security retirement benefits at that time. Will either one of these government plans be affected by the other? Also, do I receive any extra credit in my Social Security earnings for the 16 quarters served on active duty from 1966 to 1969?

A: You will be able to receive both your Veterans Affairs Department disability pay and your Social Security benefit. Your Social Security benefit will be based on the number of credits you earned under Social Security and will be less than the full amount because you will not have reached your full retirement age when you begin drawing it. For periods of active-duty service from 1957 through 1967, extra credits will be added to your record for Social Security benefits. From 1968 through 2000, credits will be automatically added. After 2001, no extra credits are added. For the full story, go to “Military Service and Social Security” on the official Social Security website.

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