Retiring and FEHB

1
0

I am eligible to retire at 58 with 20+ years, however, I may stay until 60 with 30 years. If left at 58 would i still be able to carry the FEHB? I could not afford a lull in insurance for 2 years.

Blocked by moderator
Posted by (Questions: 1, Answers: 0)
Asked on September 6, 2018 6:53 pm
1112 views
2
Private answer

Here are your choices based on your information. If you retire at age 58 with less than 30 years, you would retire under the MRA+10 option which would allow you to retain your FEHB coverage at the same rate as employees pay. Your retirement would be calculated at the rate 1% for every year and 1/12th of one percent for every month of creditable service x your high-3 average salary. Once the annuity is calculated, since you are retiring, in this example, on the MRA+10 option on or after your MRA with less than 30 years of service, your retirement is penalized for age. The age penalty is 5% for every full year and 5/12th of one percent for every full month you are under the age of 62 and this is a for life age penalty. So your dilemma is to take the pension now with an age penalty or postpone the retirement to avoid the age penalty but then you have to pay the full premium (both employee and employer portion plus 2% administrative charge) until you have your annuity commence at age 60. Now, if you wait until age 60 to retire, that is considered Voluntary Retirement which means in addition to collecting your FERS annuity with no age penalty, you will also be eligible to collect the FERS Retiree Annuity Supplement until you turn age 62, the age you are first eligible for Social Security. And, of course, you will be able to retain your FEHB at the employee rate as long as you had it for the last five years of work.

Blocked by moderator
Posted by (Questions: 0, Answers: 463)
Answered on September 6, 2018 7:49 pm

THanks for this answer, as I’m struggling with similar considerations. I just joined this site, so forgive me for not knowing how to navigate. Or the best places to ask questions on this site.

It seems from your response that one can actually take MRA +10 AND keep FEHB as long as one pays the full fees until age 60. I was under the impression that one can only keep FEHB if one collects immediate annuity. I assumed one should not risk losing health insurance by retiring before 60 unless there is a VERA option offered. I had assumed the deferment option means losing health insurance. Due to this perceived risk, I will probably wait until 60 or 62, but was curious to know the facts in case the job situation got worse before then. Are there *any* situations where one may lose ones insurance under the deferment or other early retirement options?

How does one calculate the “full premium”? by looking at ones current pay stub? Is the 2% fee on the Employee + Employer part total?

Dumb question: are we absolutely sure that Locality Pay is included in the basic pay high 3 calculation? At one seminar I heard it was not, or that something was not, included. Is there a box with a number on the DFAS pay stub we should use?

( at September 7, 2018 4:39 pm)
1
Private answer
MoonFidd: Welcome and this is a great forum to ask your questions. You have a several, so here goes. First, in order to retire and be eligible to take FEHB into retirement, you must a) retire on an immediate annuity and b) have been covered continuously for the last 5 years of federal service. The definition of an immediate annuity is one that commences within a month of leaving federal service. Retirement options that are considered immediate retirements include Voluntary Retirement and to qualify to retire with no age penalty, you must be your MRA with 30 or more years of service, or age 60 with 20 or more years of service, or age 62 with at least 5 years of service. The MRA+10 option, which is also considered a voluntary retirement states you must be your Minimum Retirement Age with at least 10 but less than 30 years of service. This is the only FERS retirement option that has an age penalty unless one elects to postpone receiving it to avoid or reduce the age penalty. Since this retirement option could have been taken immediately with the age penalty, even if it is postponed, it is still considered an immediate retirement and once the annuity commences, the FEHB is reinstated. During the period the retirement was postponed, in order to have FEHB, one would have to elect TCC or Temporary Conversion of Coverage, however, that is only available for 18 months. Other immediate retirements include Voluntary Early Retirement Authority, Discontinued Service Retirement, Disability, and Special Provisions and qualify for FEHB as long as the 5-year rule is met. A Deferred Retirement is one when a vested employee leaves federal service, vested meaning they had 5 or more years of federal civilian service and upon leaving federal service were not eligible to draw one of the above retirements within one month and do not elect to take a refund of their retirement contributions. When a deferred annuity commences, the annuitant will just be paid money in the future for work in the past. No credit for sick leave and no reinstatement of FEHB or FEGLI.RE TCC premiums: The full premium of FEHB includes the employee and employer portion plus 2% administrative charge. Here is a link with the TCC costs for 2018 https://www.opm.gov/healthcare-insurance/healthcare/plan-information/premiums/2018/tcc-hmo.pdfRE Locality Pay: Chapter 30, CSRS FERS Handbook, page 2, specifies what is and is not included in the high-3 average salary. Locality pay has been in effect since 1994 for the contiguous US and since 2012 for Alaska, Hawaii, Puerto Rico, Guam, Virgin and Mariana Islands.
Blocked by moderator
Posted by (Questions: 0, Answers: 463)
Answered on September 7, 2018 11:05 pm
0
Private answer

OK, Hi, my question is do I get my dental/eye ins. back as I have separated Jan/18 and applied oct/18 for disability ret. Also, life ins? I am paying no payments! Thanks, wish I knew about you sooner! Kurt.

Blocked by moderator
Posted by (Questions: 0, Answers: 12)
Answered on December 31, 2018 7:23 am
0
Private answer

If you met the minimum service requirement and your disability retirement is approved, it is made retroactive and your insurances will be reinstated. For the FEGLI you had to have had it either your last five years of service or as long as you were employed if you had less than five years of service. There is no service requirement for FEDVIP.

Blocked by moderator
Posted by (Questions: 0, Answers: 463)
Answered on December 31, 2018 3:21 pm

Well, I got a reply to email from ret/OPM They said that my app. got logged in to dis . developement last week and OPM will be in touch shortly?

( at January 3, 2019 9:02 am)
0
Private answer

At least you now know they have your application!

Blocked by moderator
Posted by (Questions: 0, Answers: 463)
Answered on January 3, 2019 2:42 pm
0
Private answer

Now I got a letter wanting 3112 B,D and E within 30 days? It does state these are agency forms. Letter suggests to give enclosed forms to agency!

Blocked by moderator
Posted by (Questions: 0, Answers: 12)
Answered on January 9, 2019 9:14 am
0
Private answer

The instructions on the SF-3112, Documentation in Support of Disability Retirement Application, states “If you have been separated from Federal service for more than 31 days, you need to give each form to the appropriate individual and ask that the completed forms be returned to you so you can assemble your disability retirement application package yourself and send it to the U.S. Office of Personnel Management Retirement Operations Center P.O. Box 45, Boyers, PA 16017-0045. OPM must receive your application not more than one year after the date you separated from your position. If you are unable to get all the information requested, do not delay submitting your Standard Form 3112A to OPM…” They are now notifying you these forms have not been received and are necessary to process your disability application.

Blocked by moderator
Posted by (Questions: 0, Answers: 463)
Answered on January 9, 2019 3:17 pm
0
Private answer

But how do I get them to fill out, I already reminded supervisor Few times? Who does accommodation letter , which I did not do due to illness.

Blocked by moderator
Posted by (Questions: 0, Answers: 12)
Answered on January 9, 2019 6:38 pm
0
Private answer

The agency is required to do their part. Fill out what you need to complete and make sure your medical documentation is complete. Submit to OPM with a letter stating you had given the agency forms to your agency and maybe even provide a copy of that letter to your agency. OPM will then contact the agency to do their part if they do not comply with your request.

Blocked by moderator
Posted by (Questions: 0, Answers: 463)
Answered on January 9, 2019 7:05 pm