Expert's View

Over the last two weeks, I’ve brought you up-to-date on pay increases for employees and TSP limits, cost-of-living adjustments (COLAs) for retirees, changes in Social Security benefits and an increase in the special retirement supplement (SRS). This time I want to fill you on changes in Medicare and employee death benefits.

Medicare
Whether or not you are retired, when you reach age 65, you’ll be entitled to Medicare Part A (hospital insurance). If you are retired, that benefit won’t cost you anything. That’s because you paid for it through payroll deductions. On the other hand, if you are still working, those deductions will continue to be taken from your pay. If you are retired, Part A will be the primary payer and your health benefits coverage secondary. If you are still working, it will be the reverse.

Also at age 65, you’ll be eligible for Medicare Part B (medical insurance). I emphasize the word eligible because this coverage is optional. If you decide to enroll in it, you’ll have to pay the premiums. How much they’ll be depends on your taxable income:

• if it was $85,000 or less ($170,00, if filing jointly), the monthly premium would be $104.90;
• if between $85,001 and $107,000 ($170,001 and $214,000, if filing jointly), it would be $146.90;
• if between $107,001 and $160,000 ($214,001 and $320,000 if filing jointly), it would be $209.80;
• if between $160,001 to $214,000 ($320,001 up to $428,000 if filing jointly), it would be , $272.70; and
• if it was greater than $214,000 ($428,000 if filing jointly), it would be $335.70.

Just as is true for Part A, your Part B will be the primary payer and your health benefits coverage secondary. If you are still working, it would be the reverse.

With one exception, if you don’t sign up for Part B when you are first eligible to do that, there will be a permanent 10 percent premium increase for each full 12-month period you could have been enrolled in Part B but weren’t.

Here’s the exception. If you are covered under a group health plan (such as FEHB) based either on your own job or your spouse’s, you can delay enrolling in Part B until the eight-month period beginning the first full month after you aren’t covered under that plan based your or your spouse’s current employment.

Death Benefits
If you die while a CSRS employee, your survivor spouse won’t be entitled to a death benefit; however, he or she will be entitled to a survivor annuity. The rules are different for FERS employees. If you’ve been a FERS employee for at least 18 months when you die, your spouse would receive a lump sum payment of $32,326.58, plus a lump sum payment equal to the greater of one-half your annual basic pay or one-half of your highest three consecutive years of average salary (your high-3), plus any Social Security benefit to which he or she may be entitled. If you had 10 or more years of service when you died, your surviving spouse would also receive a survivor annuity equal to one-half of what your basic annuity would have been based on your years of service.

Note: If you are a public safety officer who dies as the direct and proximate result of a personal, traumatic injury involving external force and sustained in the line of duty, your survivors would be entitled to a cash payment of $339,310.