Last week I filled you in on what happens to your annuity if you retire and go back to work for the federal government. This time I want to explain how your FEHB, FEGLI and TSP benefits would be handled. In all three cases it will depend on whether your annuity stops when you are reemployed or it continues. As a rule, it will continue if you met the age and service requirements to retire voluntarily on an immediate, unreduced annuity. It will stop if you didn’t.
(Note: Reemployment has no impact on the FLTCIP or FEDVIP programs except that rehired annuitants go back to paying FEDVIP premiums with pre-tax money.)
If your annuity stops, so will your FEHB coverage. If you are hired into a position that allows for FEHB coverage, you can reenroll in the program. And just like a regular employee, you’ll be able to pay your premiums on a pre-tax basis. On the other hand, if your annuity continues, your retirement system coverage will be transferred to your new agency and you’ll be able to pay those premiums on a pre-tax basis. In either case, when you once again leave government, your enrollment will be transferred to the retirement system and you’ll lose the privilege of paying your premiums on a pre-tax basis.
If you weren’t enrolled in the FEHB program when you left government – or weren’t eligible to continue that coverage when you left – you’d be able to continue your coverage in retirement if you worked for the five consecutive years before you once again left government.
If your annuity stops, your FEGLI coverage will not only stop, but you won’t be able to convert to an individual policy. However, as long as you were hired into a position that permits enrollment in the FEGLI program, you’ll be able to enroll in any or all of the options, which include Basic, Standard Optional and Family Optional.
However, if your annuity continues, you’ll retain your current coverage as a retiree unless your appointment makes you eligible for FEGLI coverage as an employee. In that case, your retiree coverage will be suspended and you’ll be covered as an employee, with the premiums taken from your pay. When you once again retire, your original retiree coverage will be reinstated and the premiums you were paying as a retiree will be reinstated.
Just as true of FEHB, if you weren’t enrolled in the FEGLI program when you left government – or weren’t eligible to carry that coverage into retirement – you’d be able to continue your coverage if you worked for the five consecutive years before you once again left government.
Note: If you die while reemployed, your survivor will be entitled to the proceeds of the insurance you had as an employee or the one you had when you retired, whichever is greater.
Whether you retired under CSRS or FERS, if you continue to receive your annuity, in most cases you’ll be eligible to participate in the TSP. And if you are a FERS retiree (or elect to be covered by FERS), your agency will begin making its contributions on the effective date of your appointment. However, if you receive an intermittent appointment or are entitled to receive both your annuity and the full salary of your position, you are barred for participating in the TSP.
If your annuity stops when you are reemployed, you’ll be able to participate in the TSP in the same way as any other employee.