Tag: Medicare

medicare

 

Medical Marijuana is a boon for Baby Boomers in Retirement: Research

A new research has proven that the decision of many states to approve medical marijuana is beneficial for baby boomers in retirement. The productivity and the hours worked per week by the individuals increased after marijuana was legalized as the health of the people was better. This change did not prove very beneficial for the women.

The Research on Medical Marijuana’s Benefits for Baby Boomers in Retirement

The research that showed a positive impact of medical marijuana on workers was conducted by the researchers of Johns Hopkins and Temple University. It examined the key effects of the Marijuana laws. It tried to find out that what exactly happened in the states that approve the use of medical marijuana before and after the medical pot provisions were implemented. It was then compared with the trajectories in similar states who have not given a green signal to the use of medical marijuana. The data was from the Health and Retirement study which is a very long-running survey of health and economic well-being of the older Americans.

The Results

The study found that passage of the medical marijuana law benefitted those who are 50 years or older. It showed a 9.4 percent boost in the probability of employment. It also discovered about 4.6 percent to 4.9 percent increase in the hours worked by a person on a per week basis.

Core Reason

The core reason behind the increased productivity was that the overall health of the subjects improved in the states that adopted medical marijuana as compared to the states that have not done so. Older men in the marijuana approved states were more likely to admit that they were in excellent or at least very good shape in the states which adopted marijuana. The use of marijuana helped older men to attain about 10 percent drop in their pain levels which boosted their overall health.

Impact on Women

The research also found out that though medical marijuana is a boon for baby boomers in retirement, it might be restricted to men only. Women’s probability of reporting pain in the full sample increased by 1.3 percent after the marijuana was legalized. But they benefitted some too. Older women were around 5 percent more likely to report that they were in excellent or very good health after the medical marijuana was legalized in some of the US states.

Woman Pleads Guilty to Multiple Social Security Scams

A woman living in Allenstown has pleaded guilty to two Social Security Frauds along with two counts of Theft of Public Money. She received social security benefits for her child but did not disclose that her full time working husband was living with her. She also didn’t report the alimony she received from the husband when he moved out. Concealment of these facts made her eligible to receive assistance for her minor child. She would have been ineligible for the assistance if she had reported the facts.

The Beginning of the Major Social Security Scams

social security
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Kim Wheeler who lives in Allentown has pleaded guilty according to a press statement. She confessed in US District Court for the District of New Hampshire. She divulged that she had been doing the scam since February 2005 when she first began to get social security disability benefits for her minor child as a representative. Then since May 2010, she has been a recipient of Food Stamps and Qualified Medicare Beneficiary benefits.

The Scam

The scam was carried out by Wheeler because she failed to report that her husband, child’s father lived with them when she applied for social security disability benefits. This income would have made her application ineligible as he was in a full-time job and living in the same house, says Emily Gray Rice, who is a US Attorney.

In the second instance, Wheeler didn’t report his income when applying for Food Stamps and Qualified Medicare Beneficiary benefits. It is necessary to report the income of all the members of the household in the latter instance. Wheeler failed to do it because she knew that doing so would make her ineligible for these benefits also.

The Concealment

Wheeler also did not report that her husband lived with her to the New Hampshire Department of Health and Human Services and the Social Security Administration. When her husband moved out of the home and paid alimony as well as child support, Wheeler concealed these facts from the aforementioned agency and department, according to Rice.

The Punishment

Wheeler now faces a sentence of 10 years in prison and the judgment will come on August 1, 2016. She is currently released on several conditions and is now awaiting the trial. The case’ investigation was done by New Hampshire Department of Health and Human Services’ Special Investigations Unit and the Social Security Administration’s Office of the Inspector General. The prosecution was done by Special Assistant United States Attorney Karen Burzycki.

False Data on Health Insurance Forms Identified

A recent report has stated that a good number of people are lying about their smoking habits in order to attain more benefits from their health insurance. This situation is a complicated one as there is no law to force people to tell the truth. The insurer also cannot legally do anything to ensure that a smoker doesn’t lie in this regard.

Health InsuranceHow the False Health Insurance Forms Data was identified

The fact that the data on the health insurance forms regarding health insurance forms is false was uncovered by CDC data. CDC has claimed that more than half of the American smokers are lying about their smoking habits on forms. The claim was made by CDC only after it compared the number of Obamacare enrollees who have admitted that they smoke to the smoker population.

Facts Uncovered

After conducting the comparison, CDC found out that the average smoker population by a state is over 19.4 percent. This is much higher than the percentage of the smoker population by state who pay a smoker surcharge. This percentage was about 8.3 percent. The gap between the percentages, 11.1 percent, clearly states that more than half of smokers are lying about their smoking habits.

Why the smokers are lying?

A large amount of smokers lie on their health insurance forms because they don’t want to pay their smoking surcharges that are higher than a non-smoker. The surcharge is higher because a smoker is more prone to smoking related health issues such as lung diseases.

The Affect on Non-Smokers

The lies offered by the smokers impact the non-smokers badly. When the smokers don’t pay the extra surcharge that would offset the health costs, the price of health products and services increases and everyone, including non-smokers, pays the cost.

No Solution Found

The problem of lying by the smokers on the health insurance forms doesn’t have a viable solution as of now. This problem cannot be solved as per the Affordable Care Act. The insurers cannot legally check the claim made by a smoker that he is a non-smoker. Most insurance providers just rely on the honor system and hope that the person isn’t lying.

What Happens to the Offender?

If it is proved that a person lied on the health insurance forms, he or she may have to pay a big fee for it. When an insurance provider finds out that a person has lied, the insurance provider can retroactively charge that person.

Federal government and the 7 trillion pension problem

retirement benefits
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We have talked long and hard about the fact that the US government hasn’t got enough money to give to retirees. Moody which is a credit rating agency has said that the federal government and the local, state governments are approximately 7 trillion dollars short when it comes to funding regarding pension payments.

FEDERAL GOVERNMENT 7 TRILLION SHY:

A release from Moody this past week read, “The unfunded liabilities of the various federal employee pensions systems, covering civilian and military employee benefits, amount to about $3.5 trillion, or 20% of US GDP. Additionally, Moody’s estimates that unfunded state and local government pension plan liabilities are of the same magnitude, bringing the total shortfall to 40% of GDP.”
The report also expressed that this public pension problem is only one small piece of the puzzle and that the retirement problem is on a whole another level. They said that the biggest challenge is the inability of the government to fund the Medicare and Social Security programs. The funding gap in social security is estimated to be close to 13 trillion (which is 75 percent of the GDP) while the Medicare program’s deficit is around 3 trillion dollars.
This is definitely startling news and many critics including Tony James, who is the president of Blackstone has referred to this shortfall as the main reason behind the crisis that’s affecting America.
Will these factors lead to people not considering retirement at all? Will they fear not getting their hands on their pension and will that make them continue working? Only time will tell. We can’t deny how a big a problem this is for the federal government and it goes without saying that the sooner they get rid of it, the better it will be for them, the federal employees and the soon-to-be retirees.

Retirement Benefits Shortfall Can Be a Scary Reality

A release generated by Moody’s, a renowned credit agency recently revealed that the US government has fewer funds than the required amount to pay off the retirees. Apart from the retirement benefits like FEHB, other programs like Medicare program and social security are also facing a shortage of funds. This shortage of funds can be a serious crisis for the US citizens.

The Hard Facts about Retirement Benefit Shortages

Image Credits
Image Credits

The release generated by Moody’s on Wednesday claims that all governments (federal, state and local) have $7 trillion dollars less than the required amount needed to pay off the upcoming pension payments. The unfunded liabilities of the assorted federal employee pensions systems come around to $3.5 trillion, which is about 20% of US GDP.

The pension systems cover both, military employee benefits and civilian employee benefits. The rating agency also announced that the amount of unfunded state and local government pension plan liabilities is also alarmingly high as it brings the total shortfall to 40% of the US GDP.

Unfunded Social Security and Medicare Programs

The liabilities related to social security and Medicare programs are also high. The social security gap is over 13 trillion, which is 75% of the GDP. On the other hand, the unfunded amount from the Hospital Insurance component of the Medicare program is more than 3 trillion, 18% of the GDP. The overall shortfall of funds for retirees comes down to over 20.4 trillion, which is quite scary.

The Hidden Crisis

Experts like Tony James, Blackstone President, and COO have started raising their opinion on the shortfall and termed it as a “hidden crisis” facing America. He thinks that the shortfall would compel the young people to invest in 401(k) plans that unfortunately are not earning too much. This shortfall may also lead to dire consequences like people having to work until the age of 73 or not retire at all.

The Big Challenge for the Federal Government

A Senior Vice President for Moody’s, Mr. Steven Hess has pointed out that as the aging population is increasing and the sustainability of social security and Medicare programs is highly doubtful, the government would have to face sharp widening budget deficits after 2018. These deficits would not only ensure that there aren’t many funds to pay retirement benefits, it will also harm the recovering US economy.

Theranos lab is a jeopardy to patient safety, says the Government

theranosThe Centers for Medicare and Medicaid services has always been vigilant in making judgements about various medical centers across the country and recently they have ruled the Theranos Facility in Newark, California is posing an “immediate jeopardy to the safety of patients”. A letter has been sent to the company in this regard assigning them 10 days to improve the lab and ensure “acceptable evidence of correction”

Theranos lab under scrutiny:

The document lists down a lot of problems and probably the most significant one being the one with the laboratory director. Apart from him, the technical supervisor and the analytic systems of the lab have all been deemed incapable of performing standard procedures. This has all been concluded after the department made inspections in December. There has not been much explanations associated with the discoveries as presented by the department but condition level deficiencies have been the biggest culprits in this regard.

The lab could even lost its certification if it doesn’t take immediate correctional actions and that would mean that the Theranos lab would not be able to perform any tests. CMS can also decide upon fining the lab up to 10 thousand dollars per day.

Even though there are concerns regarding the lab that do need correction, we still feel that they could have been provided with a little over 10 days to make the required changes. The administration of the lab has ascertained that they realize they have made some mistakes and there are some infrastructural changes that are needed but they require some more time to make all the corrections. They have ensured CMS that their efforts are in full flow and they will try their best to meet the deadline but if they don’t, we certainly hope that they get an extension to right their wrong.

Things to know about federal retirement and taxes

phased federal retirement [Photo credit: Lending Memo]

If you are a servant of the federal government, then there is nothing you would look forward to more than achieving your federal retirement and enjoy the benefits that follow. The road towards retirement isn’t always an easy one but if you follow the right procedures and fund the right account then when the time comes, you normally have what you would hope for. Here is a list of things that we believe every federal retiree or future retiree should know:

Things to know about federal retirement:

  1. The federal income tax will purpose all of the incomes that you get out of retirement. This is inclusive of TSP, Social security and IRAs etc. So, this entails that the amount you will lose to federal income tax will be dependent upon the marginal tax bracket within which the income lies.
  2. It doesn’t matter if you are getting a CSRS or a FERS pension, it won’t be fully taxable. The reason being that you made the contributions from dollars that were already taxed. This does make sense because otherwise you would be taxed twice.
  3. The deductions because of TSP don’t affect the retirement income either. This is because retirees can’t make TSP contributions.
  4. The payroll taxes will not be deducted from your retirement income but only from your earned income. So, you won’t be parting with any money pertaining to your Social security tax or the Medicare tax.
  5. Around 85 percent of the Social security benefits are taxable. The specific amount is based on the provisional income. This is a very important keyword and to find out the figure, you can add ½ of your social security, some non-taxable income and all of your taxable income. This provisional income will then be compared with certain thresholds meant for joint and single filters.

 

Here’s What You Need to Know About Social Security in 2016

Social security changes considerably over the span of a full year. While it did see stark changes throughout most of 2015, it’s expected to do the same with the start of the New Year. Claiming options are going to get a lot different for the federal employees this year, and if you are looking to retire or are looking to set up your SS shop, then you need to know some things that you would otherwise not. Here’s a list of some of the things that you can’t miss out:

Social security to change in 2016:

  1. You can’t claim social security twice. IT will be abolished by the start of May 2016 and while some may disagree, the majority is on a consensus that this was the right thing to do.
  2. There can be higher Medicare Part B premiums in store for you. This might not be the case for each and every single one of the employees but it can happy for the lucky ones.
  3. Stricter suspended payment rules are expected.
  4. There will be a considerably larger saver’s credit threshold available.
  5. No increases in the payments are expected.
  6. The tax cap will remain the same i.e. 118 thousand and 5 hundred dollars.
  7. No changes are to be made in the earnings limit either.
  8. The administration is changing the way it operates; you can now expect longer office hours as a SS employee and the infrastructure is to be shifted online too in the coming months.
  9. The new monthly maximum amount will drop to 2,639 dollars. It was 2,663 dollars last year.

 

While these changes aren’t really what many people might have had in mind and are not ideal, they are things to know about. In order to be astutely prepared, being aware of this information is pivotal.

 

Leaders Seek Emergency Payment to Offset No COLA Increase

COLA increase 2016
(money.cnn.com)

The Internal Revenue Service and Social Security Administration confirmed that the Cost of Living (COLA) in the United States did not increase enough to justify an increase in the COLA for Medicare. There will also be no compensation for contribution limits to retirement plans or medicate compensation. Many financial experts attribute this lack of change to lower gas prices.

 

This news means that Medicare COLA will not increase for the year of 2016. This was largely expected by experts, but it does cause trouble for some individuals. In addition to no increase, many expect an increase in Medicare Part B premiums. This means that 1/3 of Medicare patients will see a significant increase in their premium payment. This year marks the third in the last five years that the COLA did not increase at the beginning of the year.

 

Lawmakers Pushing for Emergency COLA

 

While reports suggest that the COLA will not change this year, some lawmakers are pushing for an emergency COLA payment, to help offset no increase this year. More than 20 senators had joined the petition to give federal retirees a one-time payment of 3.9 percent of their annuities. On average, retirees would get around $580. The bill, which would apply to more than 70 million Americans, would offer money so that retirees could pay for necessities.

 

“The legislation will help 1.1 million seniors, veterans of Social Security age and federal retirees in Maryland so they aren’t left out in the cold when it comes to Social Security benefits they’ve earned and deserve. I will continue to fight so that seniors, veterans and federal employees have a government on their side,” Senator Barbara Mikulski, a democrat from Maryland told reporters.

 

Federal Retirement Plan Limits

 

Federal retirees will also see some adjustment to their federal retirement plans limits. The changes affect contribution limits, and will affect 401k plans, IRAs, simplified employee pensions and SIMPLE plans. While most of the limitations stay the same, the IRS says that the increase in cost-of-living index was not substantial enough to justify changes.

 

Limitation amounts will not change for 401k, 403b, Federal Thrift Savings Plan and some 457 plans. Federal employees can contribute up to $18,000 in 2016 and federal employees (over the age off 50) can contribute an extra $6,000 to catch up for missed year.

 

Limits on contributions for the IRA stays at $5,500 and employees over 50 can contribute and extra $1,000. Limits also remain the same for the annual compensation, SEP and SIMPLE retirement accounts.

 

Federal employees will notice a limitation increase in the following federal retirement programs:

 

  • IRA AGI Deduction Phase-out Range: The limitation is raised from $183,000 to $193,000 and $184,000 to $194,000 for married individuals filing jointly. This change is will affect individuals who contribute but are not covered by any workplace plan, but is married to someone who is.

 

  • Multiemployer Plans: The ceiling that decides whether this type of plan is offered raised from $1 million to $1, 012,000,000.

 

  • Retirement Savings Contribution Credit: The savers credit has increased minimally for all groups covered under the AGI Limit. Contribution increases totaled $500 for each group (married filing jointly, head of household, single etc.)

 

  • Roth IRA Phase-out Range: The same increases for the AGI Deduction phase are seen here. In addition, singles and heads of households see an increase from $116,000 to $131,000.

 

 

 

FEDERAL EMPLOYEES – ARE YOU READY FOR OPEN SEASON

open season

There are two Open Seasons going on almost simultaneously – Medicare and Federal Employees Health Benefits.  Don’t get refused – Medicare Open Season runs from October 15 – December 7, 2015.  Federal Health Benefits Open Season run from November 9 – December 14, 2015.  Many Federal employees will participate in both Open Seasons.   They will need to know what their plans offer and what they are looking for to satisfy their health care needs.

While a Federal employee is still working the FEHB plan will generally be their primary coverage until they retire.  If there is spousal coverage on a job, then the spousal plan will generally be the primary until both spouses are retired.  In essence, Medicare generally becomes the primary after retirement.  If you miss applying for Medicare at the first opportunity for eligibility and you are not still employed you might suffer a 10 percent penalty when you do apply.

There are many types of Medicare plans available.  However, many Federal employees will automatically be enrolled in Medicare if they were Federal employees in 1983.  All other applicants will generally have to apply for Medicare.  Medicare Part A is available at no cost if you or your spouse have worked under a Medicare covered employment.  If you don’t qualify for what is termed ‘Free Medicare – Part A’ you can still contact Medicare to see what the cost might be to you and how to apply.

Medicare Part B carries a premium and the premium varies based on income with an adjustment being made to the premium annually.  It is recommended to Federal employees when enrolling in Medicare to keep their Federal Employees Health Benefits (FEHB) plans because the coverage, including prescription drug coverage, is basically equal to or better than any other coverage available.  If you suspend your FEHB to enroll in a Medicare Advantage Plan (Part C), you can always go back and pick up your FEHB.  Whether you are participating in Medicare Open Season or Open Season for Federal health plans, be sure to review your plans and examine what your plan covers and what it does not.  Chances are if you are covered under a FEHB plan you are satisfied with, there might be little reason for you to make any changes.  Know what coverage your plan offers and know what your health priorities are and make a decision that best fits the needs of you and your family.

P. S. Always Remember to Share What You Know.

Dianna Tafazoli

Medicare Premiums to Rise for Some Retirees

medicare premiums

On Monday, November 1, President Obama signed legislation that averts what, for many federal retirees, would have been a very large increase in their Medicare Part B insurance premiums. Instead of facing a $50 plus increase, federal retirees who do not receive Social Security payments will see an increase of about $19 a month. This includes a $15.80 a month increase in their basic premium, plus a $3 monthly surcharge.

Retirees whose Social Security income covers their Medicare Part B premiums will see no increase. Current law limits the increases in Medicare insurance premiums that Social Security recipients must pay.

Increases in Medicare premiums may be no larger than a recipient’s increase in Social Security payments. For the 2016 calendar year, there will be no increase in Social Security payments, consequently Social Security recipients are protected from 2016 increases in Medicare Part B premiums.

However, this “hold harmless” provision only applies to retirees whose Social Security income pays their Medicare Part B insurance. Before the November 1 legislation became law, other Medicare Part B beneficiaries would have faced a premium increase from $104.90 to $159.30 per month.

No such “hold harmless” protection exists for Federal retirees who do not get Social Security. Without a change in legislation, these retirees would have had to pay the extra $50 plus in monthly Part B premiums.

To offset lower revenue for the Medicare Trust Fund, Medicare beneficiaries will pay a $3 per month surcharge, for about five years beginning in 2016. Social Security recipients will not pay the $3 surcharge in 2016. However they will pay the surcharge in any future years when their “hold harmless” provision does not apply.

The November 1 legislation reflected a broad-ranging budget and debt-limit agreement negotiated between the President and the Congress. The legislation avoids a default on U.S. Government debt payments. It also raises caps on federal defense and non-defense spending. An additional provision of this legislation caps the increases in Medicare premiums.

— by John Zottoli

Federal Employees Could Face Higher Medicare Premiums

Rising Medicare Costs

MedicareA law fluke could cause a price hike in Medicare costs for individuals receiving federal retirement benefits. This hike could affect several hundred thousand retired federal employees. The law fluke conspiring with low inflation rates could see retirees paying a significantly more per month for Medicare premiums than other retirees receiving the benefits do. Projections show that the increased premiums for retired federal employees could jump beginning in late 2016. According to a Medicare report, the premiums will not increase until October and some 70 percent of recipients will not even see a premium increase. However, the vast majority of the 30 percent of do are recipients of federal benefits, according to an article in the Washington Post.

Unqualified for “Hold Harmless”

The reason retired federal employees would see the increase is because most individuals who take part in the Civil Service Retirement System, do not qualify for the “hold harmless” provision, which helps maintain a Medicare Part B premium steady, if social security benefits do not increase to help offset the increased cost of medical coverage. This provision is designed to help keep Medicare affordable. Low inflation prices have the rate indicator (which also helps determine military retirement benefits payments) is current at negative 0.2 percent. Despite the low number, recent indications show that positive numbers may be in the future. Combined with a low projected cost of living adjustment, the indicator predicts rates increases could fall into effect later next year.

While the vast majority of Medicare recipients will not see an increase, the 30 percent who do, including retired federal employees, will likely include new Part B enrollees, individuals with no social security premium and individuals with an income-related premium. Projections for this increase are due in part to a possible low cost of living adjustment for social security recipients. If the cost of living adjustment does not provide enough to cover the additional cost of Medicare, individuals who qualify for the “hold harmless” clause will not have to foot the cost of the additional fees. However, those who do not qualify for hold harmless will have higher premium rates to offset the loss of those extra premiums.

CSRS equals no protection

Because most of the individuals who utilize the CSRS do not receive social security, they are not even eligible for any protection against rate increases. This leaves the burden of offsetting the low cost of living adjustment on their shoulders. While some retired federal employees utilizing the CSRS do receive social security via another employer, an estimated 800,000 retirees on the CSRS could have to pay higher premium rates next year. Some estimates say that there may not even be any COLA this year, which could increase the cost of premiums even more. ‘

Retired federal employees do not have to enroll in Medicare because they are covered via the Federal Employee Health Benefits Program (FEHB). However, many employees opt for Medicare at age 65 to receive better benefits. If they opt not to pay the higher premium, they could still receive coverage from FHBP.

 

Other CSRS Related Articles

Programming Error Forces DFAS to Issue CSRS Offset Program Refunds

FERS and CSRS – Phased Retirement

Records To Check Before Retirement

COLA(s) for Federal Employees

 

Older People and Work

Do older people work to survive or because they want to stay in the game?

I believe the answer is YES to both.  In our society we segment people often without giving it much thought.  There are older people in the Congress, even in the White House just moments away from the most powerful seat in the free world.

We look at individuals in seats of power differently because of their status.  But the answer to the question is just as true for positions of power as it is for an older person working at the Walmart.

Whether you are rich, currently without adequate financial resources, or somewhere in between, older people work either to survive or because they want to stay in the game.  A few things to consider about older people who work to survive.

Medicare is a program for persons who have reached the age of 65 or older and for persons of any age with certain medical conditions and or disabilities, e.g., end stage renal failure.  However, every person who reaches the age of 65 does not necessarily qualify for Medicare.  Emphasis is placed on age not being the only determining factor to qualify for Medicare – an assumption many people are suprised to learn is not true.

You or your spouse will only qualify if you have worked under a Medicare covered employment, earning 40 Social Security credits or Medicare equivalents normally acquired after working ten years.  If you don’t qualify for Medicare, you may qualify for state-sponsored Medicaid programs based on your income.

The irony and a sad commentary is that many people work for years and years on jobs that offer no retirement or pension.  In addition, they may not even qualify for Social Security benefits because they have not paid into the system, but were paid in cash.

If you know someone who works and gets paid in cash, ask if they have plans for retirement and how do they intend to survive when they are no longer able to work.  Am I My Brother’s keeper?  We should be because what affects your brother affects you whether you know it or not.

If you see or hear of high crime and poorly funded schools, homelessness, high unemployment or any other social-ills, form a coalition to at least talk about it and perhaps do something about it.  If these issues don’t exist on your side of town – they exist in the larger economy which impacts all of us either directly or indirectly.

The cost of services and goods increase in areas where crime is high because there is a greater security or insurance risk.  Taxes and higher costs to deliver a service is eventually passed on to us whether we like or not.  For example, in the city where I live, close to the nation’s capital, I never saw homeless people.  I used to say – “We don’t have homeless people in my city – until one day I saw a makeshift shelter beneath an underpath.  There it was, homelessness had taken a ride across the bridge into my city.

How many of us look at a problem and say it’s not mine.  I did until it smacked me in the face and summoned my senses to understand that all humanity is intricately and perpetually linked.  So when the question comes up again – Do Older People Work to Survive or to Stay in the Game?  Ask another question – Can I pass along anything that might help somebody survive a little easier.

The people in so-called high places whose retirement futures are secure surely work to stay in the game and survive in the way they have become accustomed to.  Others work to keep from slipping off the cliff.  As federal workers we might be privy to many services that can help our communities that the average citizen might have absolutely no knowledge of.  Passing on knowledge should be a border without walls – help where you can, it makes the world we live in better for all of us.  Using knowledge to retire well is a benefit of enormous proportions.

P. S.  Always Remember to Share What You Know.

Recommended Articles

For Postal Employees – LiteBlue and the TSP

Federal Retirement Benefit Analysis

The Thrift Savings Plan (TSP)

Is The Pension Survivor Benefit Best For You?  by Todd Carmack

A Little-Known Opportunity Can Increase Your Retirement Income.  by Mark Sprague

FEGLI …. If What You Thought To Be True.  by Marty Duggan

Health Care and Retirement

Health Care and Retirement

healthWhen we talk about all of the things that might change for us in retirement we know that health care is right up there at the top.  As we advance in years, health care is all that much more important, we might need more frequent tune-ups, our engines might need to be checked a little more often and our radiators might need to be flushed a few more times a year than before.  All in all, our visits to health care professionals might increase.

Most of us will spend perhaps another 30 years in retirement after we leave our jobs behind. What will the majority of our money be spent on?  That question will be answered differently in retirement than it is answered during our work careers.  Most of us will spend less on clothing and transportation unless we take on another job that resembles the job we left in terms of hours spent on the job and the cost of health care almost certainly going to become a larger part of our annual expenses.

We might spend more in food perhaps not in quantity but quality.  As we age we might want to buy more health conscious foods which can sometimes cost more.  But inevitably, we will spend more on health care to keep ourselves up  and running so that we can enjoy our retirement years.

There has been some talk about whether the Affordable Care Act (ACA) will cause workers to have to work longer in order to pay for their health care costs.  Remember, federal employees and postal workers are members of one of the largest workforces in the world.  Those stats alone entitle you to some great bargaining power, you’ve got leverage, you’ve got clout.  Trust me, your insurance costs are never going to rise to the level of determining whether you can retire or are forced to work to pay for your premiums.

You have perhaps the best coverage around via your Federal Employee Health Benefits (FEHB).  You don’t have to worry about purchasing gap insurance.  When you become eligible for Medicare, hold on to your FEHB because when you do your health care premium will be a worry that is way at the bottom of the list.  The extra bonus is that you will be fully covered and in most cases with not a penny coming out of your pocket.

Know what you have and the value of your health care benefits.  Know how your benefits work so that you don’t get caught up in the hype of the Affordable Care Act causing you to have to work longer to afford your health care.  When it comes to your health care and retirement, know what you have and how it works so you are not taken by slight of hand.

P. S.  Always Remember to Share What You Know.

RELATED HEALTH CARE ARTICLES

Policy Changes for FEHB

FEHB and the Affordable Care Act

Using PostalEase or LiteBlue to Manage Your FEHB Elections

FEHB is Catching Up – Self Plus One

Health: How is Yours?

How is your health?

I hope your health is good.  healthThere is one way to make sure you stay healthy in retirement – have regular visits to your health care providers.  If you are going to have those regular visits, then you will need some mechanism to pay the provider.

If you retire before reaching eligibility for Medicare (age 65) you will have your Federal Employees Health Benefit (FEHB) to take care of your health care needs.  But what happends when you qualify for Medicare?  I have been having some conversations of late with federal employees that sound like this.  “I can’t wait until I get my Medicare card so that I can drop my FEHB.”  Not a good conversation to have because in order to have the absolute best health/medical benefit possible, you need your FEHB and Medicare.

It is useful to reiterate that Medicare only pays about 80% of the coverage you will need.  In order to cover the other 20% and to avoid out-of-pocket expenses, you will need some kind of a medicare supplement.  The good news is that you don’t need to purchase a supplement, you already have one that costs you the same amount you paid as an active employee.  You get the same great rates because you remain a part of the federal and postal workers group.  Together with FEHB and Medicare, you have all the coverage you will most likely ever need.  When you become eligible for Medicare don’t drop your FEHB because you still need it.

Many indviduals who work outside of the federal sector don’t have this luxury.  For example, individuals who worked for the Railroad lose their company health benefits once they become eligible for Medicare.  Federal and postal workers get to keep their health insurance for the rest of their lives and what a bonus that is (postal employees can view their FEHB elections through LiteBlue).

Whenever in doubt about what you should do concerning any of your benefits take time to visit your Human Resources Office so that they can help you understand how your benefits work in retirement.

P. S. Always Remember to Share What You Know.

Are All Nursing Homes The Same

Are Nursing Homes All the Same?

Nursing HomesThere are nursing homes that are certified by Medicaid or Medicaid certified nursing facilities.  These facilities generally are of three types:  long-term care, skilled nursing and rehabilitation services.  Rehabilitation services provide care for persons who suffer an illness, injury or disability when it is determined that rehabilitation can help the individual gain all or part of what might have been compromised.

Skilled nursing services are defined as medical and related care whereas long-term care is a service needed on  a regular basis because of a mental or physical condition and requires more than simple room and board.  All nursing homes that are Medicaid certified take Medicaid as a form of payment.  Medicaid certified nursing facilities provide a range of services as a condition of federal requirements.  Some of the services that the resident may not be charged for are routine personal hygiene, maintaining the room and bed, nursing related services, dietary services meeting the specific needs of each resident,  pharmaceutical services and emergency dental services to name a few.

If residents request special services such as a private room and services above what is offered in the facility’s Medicaid payment structure, such as personal clothing and social activities outside of the planned facility social program, then the resident will be charged for those services.

Although Medicare does not pay for long-term care stays in a nursing home and many insurances also do not pay for nursing home. It is still prudent to keep your health insurance because it may be needed for hospital and doctor visits.

Nursing homes bill Medicaid on a monthly basis and any services not paid for by Medicaid may be billed to the resident on a monthly basis depending on the amount of their income and deductions.   Be sure to check whether a nursing home is Medicaid certified.

Many persons in nursing home facilities do pay for services out of pocket or from personal savings.  Some life insurance companies are so structured that they will pay for long-term care.  Talking to your insurance agent or a financial advisor is always a good resource.

An excellent source for gaining information about nursing homes can be found at www.medicare.gov and go to the section on Nursing Home Compare for updated state website information, a guide to choosing a nursing home, nursing home checklist and how nursing home ratings are calculated.  Nursing Home Compare is comprised of detailed information concerning every Medicare and Medicaid-certified nursing home in the country.

P. S. Always Remember to Share What You Know.

 

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Nursing Homes and Your Assets

Your Assets with Nursing Homes

Nursing HomesIt is estimated that 70% of Americans will need long-term care at some point in their lifetime.

Choosing to put a family member into a facility outside of their home carries a high emotional as well as a huge financial price tag.  Family members struggle to find resources to locate care for family members who need it.  If the decision comes down to putting a family member in a nursing home, then there is the question of what will happen to the family member’s assets.

There are some assets that are protected when individuals are placed in nursing homes and apply for Medicaid assistance.  Many individuals enter nursing homes and pay for the services initially out of pocket.  If they are on Medicare the cost of long-term stays is generally not covered.  Therefore, when the resident’s resources are exhausted they may become eligible for Medicaid assistance.

In the event the resident qualifies for Medicaid it does not means that all of the individual’s assets will necessarily be turned over to the Nursing Home in order to recoup the cost of services rendered.  If a spouse is in a nursing home and the other spouse is not, the couple’s home is not compromised or sold to pay the nursing home charges.    The family is entitled to one car or truck, a burial plot and prepaid non-refundable funeral costs.  Certain other dependents living in the home may qualify for the same protection to stay in the home as the spouse.

There is a federal law identified as the ‘spousal impoverishment’ rules that protect spouses of nursing home residents from losing all of their income and assets to pay for the care of a spouse receiving care in a nursing home.  Medicaid laws differ state-by-state.  It is therefore suggested that you visit the Medicaid Office in the state where you reside for additional information and resources or work directly with a financial advisor who understand Medicaid rules and can help you during this trying time.

It should also be noted that all nursing homes do not accept Medicaid.  If you are looking for assistance when having to use the services Medicaid then you would want to locate Medicaid Certified Nursing Homes.  There may also be nursing homes that are not necessarily Medicaid facilities but may have Medicaid beds.  So if your ability to pay for services while in such a facility is depleted, it is always a good idea to ask if the facility has any Medicaid beds which would prevent families from having to move their loved ones to another facility.

Pre-planning ahead of time allows families to make better decisions.  This is when having a well constructed financial plan can make such a huge difference.  If you’ve been working with a good financial professional then it is likely that you’ve covered this contingency.  Possibly purchased a long-term care insurance policy or maybe even established a Trust that specifically works to protect assets in the event of extremely high nursing home costs was put in place.  It is important that families know the rules and laws that govern Nursing Home facilities and assets, exemptions and non-exemptions.  Laws may vary from state-to-state making it urgently important to read carefully and collect needed information to make an informed and timely decision.

Contact the National Academy of Elder Law Attorneys to find out how the laws work in your state.

P. S. Always Remember to Share What You Know.

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Retirement Planning: Critical Ages

Retirement PlanningIt is a personal decision to decide when to retire but there are some age-based considerations that will help to guide federal and postal employees when planning and making retirement decisions. Retirement planning can never take place too far in advance.

The rule of 5 is important in the Federal Service (FEHB for instance).  Generally speaking, if you have worked for at least 5 years you may be entitled to a number of benefits.

In addition, the chart below illustrates some important age-based considerations for your retirement planning.

Age 50

• Begin age-based catch-up to defined contribution plans and individual retirement accounts (IRA).  Beginning with the year you reach age 50, federal law allows for the deferment of a certain dollar amount per year to a qualified defined retirement plan.  The catch-up amount is $5,000, indexed in $500 increments.  The age-based catch-up amount for IRA contributions is $1,000.

Age 55

• After separation from service, you may begin withdrawing from a qualified plan without paying a 10 percent penalty.

Age 59.5

• You may begin withdrawing from qualified retirement plans, if retired or from an IRA without incurring the 10 percent penalty.

Age 62

• You can begin receiving your Social Security benefits; however, the amount may be reduced by as much as 30 percent, depending on the date of your birth.

Age 63.5

• The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) law makes health insurance in most employers’ group health plans available for at least 18 months after separation; however, you bear the full cost, including the portion previously paid by your employer (plus a small administrative fee).  Upon reaching age 65 and you enroll in Medicare Part B, federal law requires access to Medigap health insurance at standard rates.  Combining COBRA and Medigap effectively ensures access to health insurance beginning at age 63.5.

Age 65 – 67

• Depending on your date of birth, you may begin receiving unreduced Social Security benefits without being impacted by earnings limits.

Age 65

• You may enroll in Medicare, if eligible, and by keeping your FEHB coverage, you will have sufficient coverage in retirement.  Medicare pays about 80% of coverage and your FEHB will make-up for any outstanding portions for services covered.   When you reach Medicare eligibility, Medicare becomes the primary in most cases, while your FEHB acts as a supplement.   Note there are some services that Medicare covers and FEHB does not, the reverse is also true.

Age 70

• You may begin maximum Social Security benefits, if the starting date was delayed to this age.  There is no advantage to delaying benefits past this age.

Age 70.5

• Required minimum distributions from qualified plans like your TSP, IRAs, and deferred compensation plans begin the year after you turn 70.5.

There have been many changes in health care laws; therefore it is always recommended that you review your policies and plans often.  You should also find a good, highly trained, financial professional to help you with your retirement plan and benefit and insurance selections.

FEGLI information

FEHB and Postal LiteBlue Access

TSP Account Access

P. S. Always Remember to Share What You Know.

An Economically Changing World

EconomicallyThe world is changing.   As Federal and Postal employees we face more economic challenges today than the majority of the current workforce has ever witnessed.  The hardships of the Great Depression, we either read about in textbooks or heard stories from parents and grandparents, but hardly a reality for baby boomers and beyond.
Over the past several years, the reality of our finances and the turbulence of a global economy is a constant conversation at the average Federal and Postal employee’s families dinner tables.  Yet, our responsibility, regardless if we are CSRS or FERS, to do what is necessary to face a retirement future with readiness, still remains.  I remember parents saying, “Save for a rainy day.”   The economic uncertainty of our times requires that we save for a tsunami. The cost of maintaining our standard of living is much higher today than it was for our parents.
In addition, economically, conditions have created differing and varying levels of responsibility for Federal and Postal retirees.  Retirement incomes are increasingly being shared to support other family members, including adult children who are either unemployed or under-employed.  Providing support to family members is what we do as Americans until they can get on their feet.

Because our plates are fuller than ever before in recent times, planning for a long life after retirement must be approached with care and a deliberate commitment to live well below our means.  We can no longer economically live at our means and certainly not above our means, but below them in order to have a cushion of economic longevity.  Remember, economically, the goal is to have your resources outlast you.
The technical aspects of the federal and postal employees’ retirement system from FEHB, Medicare, to FEGLI and your TSP are difficult to understand and much more difficult to master.  There are such a vast number of technical pieces of the federal retirement system it seems to justify the use and consultation of both your HR office or a qualified retirement benefit expert.

 

Use PSRetirement.com’s easy access for more information on your TSP Account and Login information.

PSRetirement.com

Postal LiteBlue

P. S.  Always Remember to Share What You Know.

Suspending My FEHB

What Happens If I drop of suspend my FEHB – Can I Ever Get it Back?

FEHBThat’s a good question and one that is extremely valuable in planning for a comfortable and secure retirement.  When you get the information needed to make informed decisions you can ensure that you will retire well.

If you drop or suspend your FEHB under certain circumstances you can re-enroll?  It is always a good idea to talk to your human resources office before you consider taking action to drop or suspend your FEHB.

It should be noted that you cannot enroll in FEHB after you retire if you were not enrolled in the plan at retirement and met the  FEHB qualifying criteria. A situation when suspending or dropping your FEHB may be appropriate, is when an employee marries or is married to another federal employee with FEHB coverage.  Both spouses having FEHB does not constitute double coverage, as you cannot be covered under two FEHB plans simultaneously.  However, each person can decide to carry self only or a family plan can be considered.  Whatever the choice, it is always a good idea to weigh the financial burden of the choice made and talking with your chosen financial planner may help with your analysis.

Regardless of your CSRS or FERS eligibility, if you are considering dropping or suspending your FEHB coverage you need to give a very good amount of time and energy to understanding what the impacts may be to you and your family.  Although the cost of the FEHB premium changes annually, unlike FEGLI which gets terribly expensive as a person ages, FEHB remains cost competitive in the market with the average employee paying only about 25% of the cost. Having information and discussing options with a professional who is an expert in your benefits and your human resources office will help you make the best decision to retire well.

P. S.  Always Remember to Share What You Know.

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