Expert's View

Last week we looked at the optional and mandatory uses of leave without pay (LWOP). This time let’s go over the effect LWOP will have on your health benefits and life insurance, annual and sick leave, severance pay and the Thrift Savings Plan.

Health and life insurance
If you are enrolled in the Federal Employees Health Benefits (FEHB) program, your enrollment will continue for a maximum of 365 days. The government will not only pay its part of your premiums but it will also advance money from your future earnings to pay your part of the costs, unless you prefer to pay them on a pay-as-you-go basis. With one exception, any coverage you have under the Federal Employees’ Group Life Insurance (FEGLI) program will be treated the same way. The difference is that you won’t be required to pay anything for that coverage.


Annual and sick leave
You won’t earn any annual or sick leave for a pay period in which you reach a total of 80 hours of LWOP. However, you will earn annual and sick leave during the following pay periods until you once more accumulate 80 hours of LWOP. If you are a part-time employee, the amount of leave you earn will be proportionately less.

Severance pay
Any time spent on LWOP is fully creditable for the 12-month continuous employment period needed to qualify for severance pay. However, when computing your actual severance payment, any time in a non-pay status that isn’t creditable for leave accrual will be excluded.

Thrift Savings Plan
Since investments in the Thrift Saving Plan can only be made from your salary, if you are on LWOP, you won’t be able to make your regular investments into your TSP account nor, if you are age 50 or older, will you be able to make any “catch up contributions.” If you have an existing loan, payments can be suspended for up to one year or, if you were called to active duty, until you are back on the job. In either case, interest on your loan will continue to accumulate. FYI: While on LWOP you won’t be able to take out a new loan.