There are times when you need insurance in order to get insurance. For thousands of federal workers in the Washington area, this is one of those times.
By some estimates, nearly half the people working for Uncle Sam will be eligible to retire within the next five years, and if they don’t know what the “five-year rule” is, they could wind up needing to work a lot longer than planned.
This is especially true for the tens of thousands of feds who are on their private-sector spouse’s health care plans. A lot can happen in five years, including the loss of a spouse through death or divorce, or coverage could end if a spouse is fired or retires.
The five-year rule: In order to carry your federal health insurance into retirement, you must be enrolled in one of the federal health care plans for the five years immediately before retirement.
If you aren’t, you can’t be enrolled in or join the federal health care program after you retire. Exceptions are rare.
Many feds have found out, when they were close to retirement, that they must work longer for Uncle Sam than they had planned. Others got a rude awakening when their spouse’s plan disappeared when they retired.
The solution is simple and relatively inexpensive. If you are planning to retire soon, then be sure to enroll in the Federal Employees Health Benefits Program, which is good to the grave — unlike many private-sector plans — even if you don’t want or need it.
In order to satisfy the five-year rule, join one of the low-cost federal health care plans during the open season that ends Dec. 11, and keep that plan or another low-premium plan until you are eligible to retire. Retirement is when the FEHBP really shines.
The FEHBP is insurance for life. Enrollees pay the same premiums as young, healthy workers and can never be rejected for coverage. But you’ve got to play (and pay) to win.
For less than $700 next year, feds can enroll in one of the low-premium plans ( Kaiser standard, Aetna basic, Coventry, Mail Handlers, Blue Cross basic or American Postal Workers Union) during this open season.
Insurance is something you buy and hope you won’t use. But when you need it, you can’t buy it.
Raises and furloughs
Federal white-collar workers may have to settle for a 2.2 percent pay raise next year instead of the 2.7 percent pushed in Congress.
The lower amount will go into effect if the Senate fails to approve the Treasury spending bill that contains authorization for the higher amount. It also will take effect if Congress funds agencies using a continuing resolution.
Another bit of fallout from a continuing resolution: In order to pay for the pay raise, some agencies may have to resort to furloughs and layoffs, and cancel “discretionary” pay raises such as awards and bonuses.
We may not know the final amount of the pay raise until Congress adjourns. That could be mid-December.
Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or mcausey@federalnewsradio.com.
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