Author: Robb Fenton

Federal Employee Health Benefits and FEGLI at Retirement – Robb Fenton

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If you’re a federal employee who is considering retirement and you are covered by both the FEHB (Federal Employee Health Benefits) program for health insurance and the FEGLI (Federal Employee Group Life Insurance) plan for life insurance coverage, then you may need to factor in what your options are in terms of taking these benefits with you when you go. This is because, while there are ways of maintaining this protection, there are distinct criteria that you will need to meet in order to continue the coverage after you become a retiree.

How to Continue FEHB Coverage After Retirement

In order to be eligible for continuation of your FEHB coverage after retirement from service, there are two primary criteria that you must meet. First, you will need to have retired on an immediate annuity. This means that you will have to have a retirement annuity that starts accruing no later than one month following the date of your final separation from service.

In addition, you will also have to have been either continuously enrolled as an employee or as an eligible covered family member in any of the FEHB plans during the five years of service that immediately preceded your retirement. (It is important to note that it is not required that you be enrolled in the same plan for each of these five years).

If, however, you have less than five total years of service leading up to your retirement, then you will need to have been enrolled in a FEHB plan during all of your time of service since the first opportunity that you had to enroll.

Continuing Your FEGLI Benefits

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In order to keep your basic FEGLI coverage in retirement, you will also need to have five years of service. If so, you will have three options in how you may retain these benefits. These include the following:

  • 75% Reduction – With this option, a reduction in coverage will begin the second month following your 65th birthday, or the second month following your retirement, whichever occurs later. Then, the coverage will decrease by 2% every month until it reaches 25% of its original amount, where it will then level out.
  • 50% Reduction – With this option, you can retain 50% of your original amount of coverage. The reduction also starts during the second month after your 65th birthday, or the second month after retiring – whichever occurs later. With this option, the coverage will decrease by 1% every month until it gets to 50% of its original amount.
  • No Reduction – With the no reduction option, you may retain the full amount of your FEGLI benefit.

Options for Those Not Eligible to Keep Their Benefits

If you are not eligible to continue your FEHB or FEGLI benefits, then you may still have various options. For example, with the FEHB plan, you will have an extension of 31 days of coverage at no cost to you. Following that time, you can either drop the plan altogether, or convert it over to an individual contract. You may also request a Temporary Continuation of Coverage. This will allow you to continue the FEHB benefits for up to 18 months at a premium cost of 102%.

For the FEGLI plan, you will also have a no-cost 31-day coverage extension. However, after that time period has elapsed, you will only be able to either drop the coverage completely, or to convert some or all of the benefit over to an individual policy and likewise pay the premium out-of-pocket.

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When Are FEDS Eligible for Retirement – by Robb Fenton

When Are FEDS Eligible for Retirement? Robb Fenton answers the Federal Employee question

Robb FentonFor many people, “saving for the future” means just exactly that – setting money aside for “some day.” But as the years clip by, it becomes more important to have an actual plan for retirement, and a big part of that plan includes knowing the time when you can actually separate from employment service.

If you are a federal employee, the good news is that your retirement program makes it somewhat easier to track when you can retire. For example, retirement eligibility is determined by your age, as well as the years of service that you have put in.

In many instances, employees can retire and receive an immediate retirement benefit. This refers to a benefit that begins within 30 days from the date that he or she stops working. Provided that the employee meets one of the following criteria, they would be entitled to an immediate retirement benefit:

  • Age 62 with 5 years of service
  • Age 60 with 20 years of service

In some cases, you may also be required to have reached the MRA, or Minimum Retirement Age, in order to receive an immediate retirement benefit. Upon meeting the MRA, you may be required to either have 10 or 30 years of service, depending on your circumstances.

The following chart outlines what your MRA would be, based upon your year of birth:

If you were born: Your MRA is:
Before 1948 55
In 1948 55 and 2 months
In 1949 55 and 4 months
In 1950 55 and 6 months
In 1951 55 and 8 months
In 1952 55 and 10 months
In 1953 – 1964 56
In 1965 56 and 2 months
In 1966 56 and 4 months
In 1967 56 and 6 months
In 1968 56 and 8 months
In 1969 56 and 10 months
In 1970 and after 57

Source: OPM.gov

 

A federal employee may also be eligible for early retirement. This could be the case in the situation of an involuntary separation from service, as well as in the case of a voluntary separation such as for a reduction in the workforce or during a major reorganization.

In order to be eligible for retirement in these types of situations, an employee must either be age 50 and have put in at least 20 years of service, or be any age and have put in a minimum of 25 years of service.

 

When Will Your Benefits Begin?

Are far as benefits beginning, it is important to be mindful of the actual date that you retire, as well as the date that you legally attain a certain age. For example, a person actually legally becomes a given age on the day prior to his or her date of birth.1 This can be significant when choosing the date of retirement, as it could make the difference between your annuity benefits beginning the month of separation from service, or the month following.

 

Sources

  1. FEDweek (http://www.fedweek.com/reg-jones-experts-view/the-first-day-you-can-retire/)

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