Transcript Federal Benefits Review - WVU Extension Human Resources

Federal Benefits Review
January 8, 2003
Linda Hildebrand, Presenter
Today’s Outline
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Termination of Schedule A Appointments
Civil Service Retirement System
Voluntary Early Retirement Authorization
Federal Employees’ Group Life Insurance
** Break **
Federal Employees’ Health Benefits
Public Employees’ Health Insurance
Medicare Coverage
Federal Long Term Care Insurance
Leave Conversion Options at Retirement
Termination of Schedule A Appointments
• President Bush signed Farm Bill May 13, 2002
• Effective Date: January 31, 2003
• Current federal CES dual appointees notified in
October 2002
• Acknowledgement letter required – does not
endorse the termination, only receipt of the notice
Rationale for Terminations
• 1990 Civil Service Reform Act
– Merit Protection System
– Schedule A Appointments covered
– Federal partners involved in issues related to
employee and university employment
• Alternatives
– Create structured bureaucracies at each landgrant university to mirror federal system
– Terminate Schedule A Appointments
• Date chosen to allow current Schedule A
appointees to enroll in Federal Long Term Care
Insurance
Requirements for the Continuation of
Federal Benefits
• The employing CES organization
participates and continues to participate in
federal benefits,
• Employee eligible for federal benefits
May 12, 2002, and
• Administrative and financial
responsibilities continue to be fulfilled by
the college or university.
Requirements for the Continuation of
Federal Benefits (cont’d)
• Employee formally employed by the CES
organization,
• No less than 50% of time devoted to
Extension functions
• Appointed on a permanent basis/year round.
• Employee will no longer be considered a
federal employee
Impact on Federal Benefits
• Employees will continue to receive credit
for their continued employment with CES
organizations
• Eligible to participate in new features of
current federal benefits (health, life, TSP,
long term care)
• Ineligible to participate in federal
benefits not in effect as of May 12, 2002
Impact on Early Retirements
• Request for a Voluntary Early Retirement
Authorization will continue to be submitted
to CSREES for forwarding to OPM
• Request for Discontinued Service
Retirements will continue to be submitted to
the USDA HRD CES Team for approval.
Impact on Optional Federal Benefits
• Federal Employees’ Health Benefits
– continue/modify current enrollment
– participate in annual open seasons
– five year waiver request for FEHB into retirement
• Federal Employees’ Group Life Insurance
– continue/modify current enrollment
– participate in FEGLI open seasons
– request to cancel a waiver of all/part of coverage
Impact on Optional Federal Benefits
• Federal Long Term Care Insurance
– participate in July-December 2002 Open
Season
– eligible to participate in program after January
31, 2003
• Thrift Savings Plan
– continue/modify current enrollment
– participate in TSP semiannual open seasons
Civil Service Retirement System
(CSRS)
http://www.opm.gov/retire/html/faqs/faqs.htm
• Types of Retirement
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Optional
Deferred
Disability
Discontinued Service
Early Out Authorization
Major Reduction in Force
Death in Service
CSRS Retirement Eligibility Rules
• Optional
– Age 55 with at least 30 Years of Service
– Age 60 with at least 20 Years of Service
– Age 62 with at least 5 Years of Service
• Deferred
– Age 62 with at least 5 Years of Service
• Disability
– Any age with at least 5 Years of Service
CSRS Retirement Eligibility Rules
• Discontinued Service
• Voluntary Early Retirement Authorization
• Major Reduction in Force
– Age 50 with at least 20 Years of Service
– Any age with at least 25 Years of Service
CSRS Retirement General Formula
• 1.5 percent of the high-3 average pay
multiplied by service up to 5 years; plus
• 1.75 percent of the high-3 average pay
multiplied by the number of years of service
between 5 and 10; plus
• 2 percent of the high-3 average pay
multiplied by all service over 10 years.
CSRS General Formula
Short Cut Method
Assume 30 Years Total Service
(Amount of Service – 2) x 2
Example: (30 – 2) x 2 = 56%
High-3 Average Salary
Definition: The "high-3 average pay" is the
largest annual rate resulting from
averaging an employee's rates of basic
pay in effect over any period of 3
consecutive years of creditable civilian
service, with each rate weighted by the
length of time it was in effect.
Voluntary Early Retirement Authorization
(VERA)
• July 1, 2002 through March 31, 2003
• Eligibility Rules
– Age 50 with at least 20 Years of Service
– Any age with at least 25 Years of Service
• Impact if under age 55
• Impact to continued health coverage
CSRS Survivor Election Options
• Current Spouse Survivor Annuity
– Elected a reduced annuity with survivor benefits
• Self-Only Annuity
– No survivor benefits for a spouse
– Only with spousal consent (if married at retirement)
• Former Spouse Survivor Annuity
– Voluntarily elect survivor benefits for a former spouse
– Court orders providing benefits for a former spouse
CSRS Survivor Election Options
• Combination Current/Former Spouse Survivor
Annuity
– Required when court orders provide benefits to a
former spouse and retiree has remarried
• Insurable Interest Annuity
– a person who would benefit from the employee
continuing to be alive.
Reduction in CSRS Annuity
• Annuitant selects part of the annuity to be used as
the base for the survivor benefit.
• Reduction is computed using that base.
• FORMULA = 2.5% of the base up to $3,600
PLUS
10% of the base over $3,600
• Benefit - Survivor receives 55% of the base
selected by the retiree or as ordered by a
separation agreement or divorce decree.
Duration of Survivor Benefits
• Spouse - Benefits payable for life unless person
remarries prior to age 55.
• Former Spouse - Benefits payable for life unless
remarries prior to age 55. Benefits cannot be
reinstated.
• Child(ren)
– Benefits terminate upon:
• Marriage
• Age 18 (or 22 if going to school full-time)
• Recovery from disability or becoming self-supporting
CSRS Cost of Living Adjustment (COLA)
• Annual COLA increase based on the rise in the
consumer price index.
• Effective - December 1st each year, payable in the
following January 1st annuity.
• Prorated - An annuitant’s first COLA is prorated
based on the number of months person was on the
annuity roll prior to the COLA.
What happens to
my
retirement money
when I die if I don’t
provide a survivor
annuity?
Lump Sum Payment
Retirement Balance
Order of Precedence
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Designated Beneficiary
Widow or Widower
Children
Parents
Executor, Administrator of Estate
Next of Kin
Windfall Elimination Provision
If you receive a Federal pension and are also eligible for
Social Security benefits based on your own employment
record, a different formula may be used to compute your
Social Security benefit. This formula will result in a lower
benefit. The Windfall Elimination Provision affects
workers who reach age 62 or become disabled after 1985
and are first eligible after 1985 for a Federal pension.
The Windfall Elimination Provision does not apply if:
• You were eligible to retire before January 1, 1986; or,
• You were first employed by the government after
December 31, 1983;
or,
• You have 30 or more years of substantial earnings under
Social Security.
Government Pension Offset
• Some of an employee’s spousal Social Security benefit
may be offset if the employee has a government pension
from work not covered by Social Security. The offset does
not apply to the employee’s own Social Security benefit,
only the benefit that comes from a spouse’s employment. If
the Government Pension Offset applies, the spousal Social
Security benefit will be reduced by two-thirds of any
Federal pension based on employment not covered by
Social Security.
Federal Employees’ Group Life Insurance
(FEGLI)
http://www.opm.gov/insure/life/index.htm
• Basic Life
– Coverage equal to actual rate of annual basic pay
(rounded to the next $1,000 plus $2,000)
Example: Base pay = $42,600, rounded to $43,000 plus
$2,000 = $45,000 in Basic Insurance Amount (BIA)
– Extra Benefit - Double life insurance benefits at no
extra cost until age 36, decreasing at 10% per year until
age 45, at which time the extra coverage ends
– Accidental Death and Dismemberment coverage
• Extra Benefit illustrated above not applicable
FEGLI Optional Life Options
• Option A - Standard
– $10,000 additional life insurance coverage
– $10,000 additional AD&D coverage
• Option B - Additional
– Select coverage equal to one, two, three, four, or five
times actual rate of annual basic pay (rounded to next
$1,000)
• Option C - Family
– Select multiples of one, two, three, four, or five
– Each multiple for your spouse is $5,000
– Each multiple for each eligible child is $2,500
FEGLI Premiums - Who pays for what?
• Basic Life
– Employee pays two-thirds
– Employer pays one-third
– Premium based on BIA
• Option A
– Employee pays full cost
– Based on age bands
• Options B and C
– Employee pays full cost
– Based on age bands and multiples selected
FEGLI Options at Retirement
• Basic Life
– Retire on an immediate annuity
– Covered for last five years of service
– Does not convert
• Options A, B, and C
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Eligible to continue Basic Life
Covered for last five years of service
Does not convert
Annuity sufficient to cover the cost
FEGLI Basic Life Reduction Options
• 75% Reduction - Full BIA coverage and premium
until age 65, then coverage reduces 2% of original
amount per month beginning month after you
reach age 65 to 25% at no cost
• 50% Reduction - Full BIA coverage and premium
until age 65, then BIA coverage reduces to 1% of
original amount per month beginning month after
you reach age 65 to 50% with a higher premium
• 0% Reduction - Full BIA coverage and premium
until age 65, then full BIA coverage continues
with a substantially higher premium
FEGLI Optional Life Retirement Options
• Option A - $10,000
– Elect to continue with a premium until age 65, then
reduces 2% ($250) per month until coverage amount
reaches $2,500
• Option B
– Elect to continue with a premium until age 65, then
premium significantly increases depending on multiple
• Option C
– Elect to continue with a premium until age 65, then
premium will increase depending on multiple
What happens to
my
life insurance when
I die if I don’t
identify a
beneficiary?
Payment of Life Insurance Benefits
Order of Precedence for Basic Life, Options A and B
• Designated Beneficiary
• Widow or Widower
• Children
• Parents
• Executor, Administrator of Estate
• Next of Kin
Option C
• Employee or annuitant automatic beneficiary
LET’S
TAKE A TEN-MINUTE
BREAK
Federal Employees’ Health Benefits
(FEHB)
http://www.opm.gov/insure/health/index.htm
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Guaranteed Coverage
No Medical Examination
Employer contribution to cost
Continued Coverage after Retirement
Continued Coverage for Survivor Annuitants
Open Season - November 11, 2002 through
December 9, 2002
• COBRA coverage for separated employees
FEHB Options at Retirement
• Retire on an immediate annuity
• Covered for last five years of service
• Monthly premium continues, rate increases
determined by the Office of Personnel
Management
Public Employees’ Insurance Agency
(PEIA)
http://www.wvpeia.com/
• Open enrollment mid-April to mid-May
• Managed Care Plans
– PEIA Preferred Provider Benefit (PPB)
– Health Maintenance Organizations (HMO)
• Carelink B
• Health Plan A
• Health Plan B
• Basic, Optional, and Dependent Life Insurance
Public Employees’ Insurance Agency
(PEIA)
Mountaineer Flexible Benefits Plan
• Dental Insurance
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CompDent Select 25
CompDent Select 45
Delta Dental Basic Indemnity
Delta Dental Enhanced
• Vision Insurance
• Long-Term Disability Income Plans
• Short-Term Disability Income Plans
Public Employees’ Insurance Agency
(PEIA)
Mountaineer Flexible Benefits Plan
• Flexible Spending Accounts (FSAs)
– Dependent Care FSA
– Medical FSA
• Group Legal Plan
• Life Events
PEIA Options at Retirement
• Retire on an immediate annuity
– Based on WV Years of Service
• Any age with 30 Years of Service
• Age 60 with at least 5 Years of Service
• NOT required to be covered for last five years of
service
• NOTE: If enrolled in Carelink HMO, employee
will need to transfer over to the PPB Plan.
• Leave conversion option towards premiums
• Life insurance options can continue
• Mt’neer Flexible Benefits - COBRA rules for
dental and vision insurances
MEDICARE Part A – Hospital Insurance
http://www.medicare.gov/
• Helps cover your inpatient care in:
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hospitals
critical access hospitals
skilled nursing facilities
It also covers hospice care and some home
health care. (You must meet certain conditions.)
• $812 Deductible for Year 2002
• No premium – coverage is free
MEDICARE Part B – Medical Insurance
• Helps cover your:
– Doctors' services
– Outpatient hospital care
– Some other medical services that Part A does
not cover, such as some of the services of:
• Physical and occupational therapists
• Some home health care
– Part B helps pay for these covered services and
supplies when they are medically necessary
• $100 Deductible for Year 2002
• Monthly premium is $54.00 for Year 2002
Federal Long Term Care Insurance
(LTC)
http://www.opm.gov/insure/ltc/index.htm
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New federal program
Effective October 1, 2002
Active employees or retirees eligible
Open Season: July 1, 2002 – December 31, 2002
Premiums based on age of insured and level of
coverage
• Age ‘frozen’ as of July 1, 2002, during open
season
Leave Conversion Options at Retirement
• Annual Leave
– Lump Sum Payment - not subject to benefit deductions
– Remain on Payroll - subject to benefit deductions
• Sick Leave
– Additional federal service credit
– For PEIA participants, convert to premium payments
• One month family health coverage for every three days
• One month single health or basic life only coverage for
every two days
PEIA Premiums
Sick Leave Conversion Options at Retirement
Through
Dec 31
Leave
Totals
Family
YY.MM
Single or
Basic Life
YY.MM
2001
450
12.50
18.75
0.08 = 1 Month
0.58 = 7 Months
2002
468
13.00
19.50
0.17 = 2 Months
0.67 = 8 Months
2003
486
13.50
20.25
0.25 = 3 Months
0.75 = 9 Months
2004
504
14.00
21.00
0.33 = 4 Months
0.83 = 10 Months
2005
522
14.50
21.75
0.42 = 5 Months
0.92 = 11 Months
2006
540
15.00
22.50
0.50 = 6 Months
1.00 = 12 Months
Month
Conversion
What questions do you have?
• To request an retirement annuity estimate,
please email me:
[email protected]
Program Evaluation
• Please take a few minutes to complete
the evaluation form.
Thanks very much - have a safe trip home!