Authors: Various

We asked our Federal Benefits Presenters to share questions that are most frequently asked during their presentations.

Question: My spouse and I are both Federal employees and want to know whether we should leave survivor benefits to each other.

Answer: There are important reasons you may want to leave a survivor benefit:

• If one of you will have a much higher retirement benefit, the higher earner may want to provide this additional income for the spouse.
• The benefit could outlast the amount of a life insurance policy.
• The survivor benefit lasts for the life of the surviving spouse unless the spouse remarries before age 55.
• The survivor benefit is payable in addition to the surviving spouse’s own retirement annuity.
• The survivor benefit starts right away, unlike the Social Security widow(er) benefit where the survivor must be a certain age before it begins, in most cases.
• The survivor annuity receives cost-of-living adjustments for life.
• Last, the amount by which the retirement benefit is reduced to provide the survivor annuity is not taxed. 

Question: I am planning to retire from Federal Service on December 31, 2023. How does a retiree sign up for FEDVIP? I was not aware that retirees had that available to them. Open Season as an employee will be over before I retire. I have a supplemental vision plan currently and I would like to be able to carry it into retirement. Would you be able to tell me when I would have an opportunity to enroll in the supplemental vision plan? 

Answer: You may enroll in FEDVIP during this Open Season (November 13 – December 11, 2023). You will enroll as an employee (as you will be during Open Season) and when your agency transfers your information to OPM, your payroll office will notify BENEFEDS that you are retired. You will be billed until your retirement has been adjudicated and then you may have the premiums withheld from your monthly benefit. It is important that you call the Customer Service number for BENEFEDS (1-877-888-3337) so that they know that you will be in direct billing as of January 1, 2024 when your coverage takes effect. Do this after you complete the enrollment process during Open Season. Visit www.benefeds.com for more information.

Question: What can I do to ensure my retirement is processed quickly?  

Answer: There are several common reasons that cause processing delays such as the application was not properly completed, it was not signed, or documentation is missing. 

• Review your Electronic Official Personnel Folder (eOPF) to ensure it contains all your civilian and military service. Notify your Human Resources Office if any time is missing. 
• Complete the Application for Immediate Retirement. It is where you document the date of final separation, annuity election, marital status, etc. OPM wants to see only firm, clear decisions so no whiteouts or cross outs particularly on the “date of final separation” and annuity election. This means, if you change your mind and you cross it out to put a new decision, you need to print the page again and then initial or enter the date of final separation. CSRS and CSRS Offset employees complete SF 2801. FERS employees complete SF 3107. Include your marriage certificate if you are currently married. Make sure you sign your application. 
• Complete the Continuation of Life Insurance Coverage, SF 2818 if you have the Federal Employees Group Life Insurance (FEGLI), even if you do not want to continue it. Consider keeping the Basic only and elect the 75% reduction option as there is no cost for it past your 65^th birthday. Be sure to answer all the questions, even #9, 10, and 12 checking “I don’t have” if that is appropriate and sign at the bottom of the form.
• Make deposits and/or redeposits allowed for civilian service when you did not pay into FERS or CSRS if it is more than 6 months before you plan to retire.  OPM may also give you the opportunity after you retire, which will cause a delay.
• Complete your military deposit before separating. 
• Verify your Federal Employees Health Benefits (FEHB) and/or the FEGLI coverage was effective for at least five years immediately prior to retirement. Keep copies of this documentation in your eOPF. 
• Prepare to have up to 6 months of savings to cover expenses while OPM finalizes your application.
• Plan for your application to take longer if you have any of the following: part-time service, excess retirement contributions (CSRS only), and court orders against your retirement benefits. 

For more information, view NITP’s free webinar, Retirement Forms – Common Mistakes to Avoid. This webinar is also available in our webinar library at www.nitpinc.com.

Question: Why should I enroll in Medicare Part A and B when I have FEHB coverage?

Answer: Medicare coverage is tailored to the needs of individuals aged 65 and older. Once you are both at least age 65 and retired, Medicare coverage becomes primary and your FEHB coverage, secondary. You have a 6-month window starting three months before you turn 65 to three months after you turn 65 in which to enroll in Medicare Part A and/or Medicare Part B. If you miss your initial election opportunity, you have to wait to enroll until the general enrollment period, every year, January through March. If you enroll during a general enrollment period, you will incur a 10% premium increase for every 12 months you enrolled after your initial enrollment period, up to a maximum premium penalty of 90% if you were 9 years or more late in enrolling. Enrollment in Medicare is not mandatory.

Medicare Part A is premium free and you should enroll in Part A at age 65 even if you do not enroll in Part B. If you retain your FEHB coverage as well, your FEHB should cover all or most of your Part A deductibles (2023):

• First 60 days of a hospital stay: $1,600.00
• 60 – 90 days of a hospital stay: $400.00 pp/day
• 60 additional reserve days (once in a lifetime): $800.00/day
• Additional days thereafter: $0.00/day

Medicare Part B has a standard monthly premium (2023) of $164.90/month/enrollee. The income-related adjustment can increase premiums. Medicare Part B covers 80% of the “Medicare-approved amount”, your FEHB plan will pick up the other 20%. If you decline to enroll in Part B, then the Law requires your FEHB plan to base payment and applicable coinsurance on the “Medicare-approved amount,” or the actual charges if it is lower than the “Medicare-approved amount”. This can lead to out-of-pocket expenses. 

This newsletter is designed to provide information on the subjects covered. NITP, Inc. takes great care to insure the accuracy and quality of these materials which are provided without any expressed or implied warranty, including, but not limited to, their fitness for a particular purpose. They are also provided with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, financial planning or other professional service. If additional assistance is required, the services of a competent professional should be sought.