Health & life insurance premiums: Don't overpay!

Friday - 3/21/2014, 2:00am EDT

Did you ever wonder why they call something complicated "a federal case?" Try navigating Uncle Sam's complex work rules and you will find out what a real federal case can be. It can make the Fog of War seem crystal-clear.

But there are some shortcuts to clarity.

Turns out that the only thing better than actually being an expert in something is to know lots of people who are experts in lots of different things. And who are willing to help with advice to make the non-expert (that would be me) look good. Like last Wednesday.

Right after our 10 to 11 a.m. Your Turn radio program, benefits expert Tammy Flanagan and I moved to another office for an online chat (my first). A couple of hundred people signed in, sent in questions and comments and we (mostly Tammy) fielded answers. We tried to tie similar quesitons together so that one answer would fit all. We're planning to do it again.

In the meantime, we'll try to catch up to some of the questions we couldn't get to during the online chat. Starting with this complicated scenario:

Tara said she will hit her minimum retirement age at age 55 and 8 months with 21 years of service. But if she takes her pension early, there will be a hit. If she postpones her annuity until age 62 she won't take a cut, but she wonders about health insurance during that period.

Tammy Flanagan, senior benefits director for the National Institute of Transition Planning, responded:

"Whether you will be able to postpone receiving your FERS retirement benefit to avoid the reduction in your benefit will depend on whether you have access to health insurance outside of FEHBP. You will be able to have temporary continuation of FEHBP for up to 18 months following your separation, but you would be responsible for the employee and the employer share of the premium, so it would be very expensive. If you are able to find health insurance through a spouse or another employer, then you may want to postpone your retirement to age 60. Since you have more than 20 years of service, you would not take a reduction and then you could reinstate your FEHBP. Better yet, if you work 2 years and 4 months beyond age 57 and 8 months, you would be eligible for an immediate retirement at age 60 with more than 23 years of federal service and you would be entitled to the FERS retirement supplement until age 62! If it is possible to continue working, that would be the best option for insurance and value of your retirement benefit."
Overpaying life insurance premiums

Another reader, Toni, said she continued to pay her FEGLI Option C premium after her child aged out in 2006 until 2013. At a retirement seminar she learned she could recover her overpayment, but her HR office wasn't helpful. So she turned to Tammy who said — short answer — YES!

Bottom line: When your family drops to one (you) should cancel your FEGLA Option C.

Click here for more information from the Office of Personnel Management.

To read more Q&A's from Wednesday's online chat, click here

To listen to the Wednesday's Your Turn radio program featuring Tammy Flanagan, click here.


NEARLY USELESS FACTOID

Compiled by Jack Moore

Shakespeare created the name, Jessica, for his 1596 play, The Merchant of Venice. The name for Shylock's daughter was probably based on the Biblical name Iscah. Jessica remains the No. 3 most popular name for girls in the U.K. In the U.S., it is the 138th most popular girl's name.

(Source: Behind the Name)


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