Federal employee long-term disability benefits

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FedGuy
Posts: 1275
Joined: Sun Jul 25, 2010 3:36 pm

Federal employee long-term disability benefits

Post by FedGuy » Sat Nov 03, 2018 1:52 pm

I was recently contacted by a professional organization in my field, asking me to consider joining them as a member. Looking over their list of membership benefits, I found myself most curious about their long-term disability insurance. I've held on to a mediocre policy offered by a previous employer (one that will, if I'm ever totally disabled, pay me approximately 14% of my current pre-tax salary until age 65). I know someone who was recently disabled with a very serious medical issue, which has made me even more receptive to improving my disability coverage.

The benefits guy at my federal agency tells me that neither the federal government nor the agency offers long-term disability insurance, but that if that should ever happen to me I could take "disability retirement." He seemed foggy on the details of what that entails, though, and after a series of web searches I found a confusing formula involving a percentage of my current salary minus a percentage of my social security disability benefits (whatever those turn out to be). Does anyone have a better understanding of how much this would end up being? It doesn't sound like it would come close to my current salary, but it's hard to tell.

I'd really appreciate any insight into the long-term disability benefits offered by the federal government, and any thoughts on what kind of numbers I might be looking at. More to the point, does it make sense to join a professional organization simply to have access to their (more straight-forward and seemingly more generous) long-term disability benefits?

BruDude
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Joined: Thu Dec 30, 2010 12:28 am
Location: Las Vegas

Re: Federal employee long-term disability benefits

Post by BruDude » Sat Nov 03, 2018 4:59 pm

FERS is indeed a complicated calculation for what you would qualify for in the event of a disability. There is no long term disability insurance through the federal government, only the FERS disability retirement system.

Any group/association LTD policies are going to be inferior to an individual disability insurance policy. In general, you can qualify for about 40% of your W2 salary on an individual disability insurance policy, though each insurance company looks at federal employees differently. Last time I did a policy for a federal employee, Guardian was willing to give the 40% of W2 number, but it's been a little while since I've looked at it. You can also keep the individual policy if you leave the government and take a private sector job, which is another advantage versus buying a group/association policy that you may not be able to keep if you change jobs.

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pfrank
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Re: Federal employee long-term disability benefits

Post by pfrank » Mon Nov 05, 2018 3:56 pm

I speak from personal experience. I was a federal employee and a member of the Army National Guard. During my deployment to Iraq, I was wounded by an IED. Upon my eventual return home, I tried to continue my federal employment. I tried for a couple of years. It was difficult between the operations, the physical therapy, follow up appointments and just having time to heal.

I had a great boss who eventually sat me down and told me to stop worrying about work and take care of myself. She helped me with my disability retirement package. I obviously had tons of documentation from the Army and the VA. It took about 2 months for my packet to be approved by my agency. Then it took almost another 3 months for OPM to process my package and actually receive my retirement checks. This is why you have an emergency fund.

My Social Security Disability application was actually easy and fast. I applied right after I retired. The day after I applied, a person contacted me and asked me some additional questions about my military service. That day he emailed me some medical release forms for the VA and DOD. I was approved in less than two weeks. Again, I had tons of documentation about my medical conditions.

For FERS disability retirement under age 62......I was 34.

For the first year of your disability retirement, you get 60% of your high-3 average salary MINUS 100% of your Social Security Disability.

After that, you get 40% of your high-3 average salary MINUS 60% of your Social Security Disability.

When you reach age 62, they recalculate your normal retirement (your actual service, plus the credit for time as a disability annuitant).

You do receive COLAs during disability retirement.

Now you also carry your medical insurance into disability retirement too. I can't say much about that because I have TRICARE.

Hope that helps!

kaudrey
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Joined: Fri Nov 22, 2013 2:40 pm

Re: Federal employee long-term disability benefits

Post by kaudrey » Tue Nov 06, 2018 12:28 pm

pfrank wrote:
Mon Nov 05, 2018 3:56 pm
I speak from personal experience. I was a federal employee and a member of the Army National Guard. During my deployment to Iraq, I was wounded by an IED. Upon my eventual return home, I tried to continue my federal employment. I tried for a couple of years. It was difficult between the operations, the physical therapy, follow up appointments and just having time to heal.

Hope that helps!
pfrank - just wanted to say, as we are approaching Veteran's Day - thank you for your service!

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