Fed Employee Disability Ins.?

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Topic Author
tomwood
Posts: 416
Joined: Mon Dec 10, 2018 9:34 am

Fed Employee Disability Ins.?

Post by tomwood » Fri Oct 04, 2019 9:28 am

As a new federal employee under FERS it’s my understanding I will receive 30 days paid short term disability and the long term disability, if I cannot do the job I was hired for (as a PT, i might have more scenarios where a disability would keep me from doing my job than someone with a desk job), and if the disability was long term, I will receive SSI plus partial federal compensation equal to 40% of my income, for as long as I’m disabled. Also this income is taxed so that will reduce the benefits and id be more or less forced into retirement.

Can any federal employees confirm I’m understanding this information above, correctly?

If I’m forced into retirement does that mean I won’t receive a pension or will my pension begin at 59.5 for life? Will I be able to purchase health insurance through the federal government for life? Will I ever be able to hold a part time job (ie: writing a blog/book, consulting), or will that alter the SSI and Fed Compensation equaling 40% of my current income?


And now for the main question: what options are there for additional coverage and are they worth it?

I looked at the Fed advantage website and I think they pool all the employees which is a benefit to me if they don’t take a job into account when calculating my cost of the extra insurance. Because, again, my job as a slight physical demand to it and as a result, private LTDI tends to be higher for a PT than someone with a desk job.

40% of my income would clearly be a loss of significant income for my family but we could live off that money so long as we made lifestyle changes such as downsizing and tightening our spending and possible part time second job for my wife. Which brings me back to ask if the additional LTDI coverage is worth the annual cost...it wouldn’t be ideal to downsize and have a new lifestyle but that’s also a very unlikely scenario and with 40% we could do it, but it’s not as though we’d have 0% of my income.

This post is long and likely has far too many questions. If anyone can offer even one or a few of the questions I’d appreciate all the help and advice you can offer.
Last edited by tomwood on Fri Oct 04, 2019 10:17 am, edited 1 time in total.

UpperNwGuy
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Re: Fed Employee Disability Ins.?

Post by UpperNwGuy » Fri Oct 04, 2019 9:36 am

I think you run the risk of becoming over-insured.

delamer
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Joined: Tue Feb 08, 2011 6:13 pm

Re: Fed Employee Disability Ins.?

Post by delamer » Fri Oct 04, 2019 9:51 am

I don’t know if feds in medical professions like PT have different benefits than the desk jobs with which I’m familiar.

But in my desk job, the only short-term disability “insurance” was whatever sick leave and annual leave I accumulated. Long-term disability coverage was available through the pension plan. That’s it, other than Social Security disability.

I am not familiar with the Federal advantage website or any programs offered there.

Topic Author
tomwood
Posts: 416
Joined: Mon Dec 10, 2018 9:34 am

Re: Fed Employee Disability Ins.?

Post by tomwood » Fri Oct 04, 2019 10:43 am

delamer wrote:
Fri Oct 04, 2019 9:51 am
Long-term disability coverage was available through the pension plan. That’s it, other than Social Security disability.
I think we are saying the same thing. Is the disability coverage available though FERS equal to 40% of your salary?

Topic Author
tomwood
Posts: 416
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Re: Fed Employee Disability Ins.?

Post by tomwood » Fri Oct 04, 2019 10:44 am

UpperNwGuy wrote:
Fri Oct 04, 2019 9:36 am
I think you run the risk of becoming over-insured.
Does this imply I should not add extra coverage above the 40% of salary offered by the fed govt?

delamer
Posts: 9492
Joined: Tue Feb 08, 2011 6:13 pm

Re: Fed Employee Disability Ins.?

Post by delamer » Fri Oct 04, 2019 10:47 am

tomwood wrote:
Fri Oct 04, 2019 10:43 am
delamer wrote:
Fri Oct 04, 2019 9:51 am
Long-term disability coverage was available through the pension plan. That’s it, other than Social Security disability.
I think we are saying the same thing. Is the disability coverage available though FERS equal to 40% of your salary?
I don’t know the details. I’d guess, though, that years of service would be a factor. If two people with the same salary retired on disability and one had 10 years of service and the other had 20 years, I’d expect the latter to have a bigger disability pension.

peseta
Posts: 116
Joined: Mon Mar 09, 2015 11:40 pm

Re: Fed Employee Disability Ins.?

Post by peseta » Fri Oct 04, 2019 11:24 am

I posted a question related to this topic recently:

viewtopic.php?t=290177

FWIW, I think the FERS benefit is inadequate, especially if you are a GS-14 or 15 and/or the primary breadwinner in your household. Long-term, feds give you 40% of high-3 minus 60% of SSDI (which people sometimes don't qualify for) until your MRA, which is at least 57. Is that enough? And yes, your future pension calculation might not be that impacted, but you lose out on TSP contributions and matching. Therefore, I think disability coverage is worth it for many feds.

I had Federal Advantage until very recently. I just "graduated" into a older age-band (hurrah!) and my premium was set to almost double. I shopped it in the private sector and found a policy that would cost less per year, with much better benefits (additional 30% of salary (total 70% with FERS) with no FERS/SSDI reductions, full own-occupation, etc.). But, I think the Federal Advantage is an okay deal if you are younger, or not in good health, considering how hassle-free it is.

One of the benefits of the private sector policies as a fed is that you can lower your premium significantly if you have sick leave saved up. I opted for the 365-day exclusion because I have over a year of sick leave banked. This lowered the premium quite a bit . . .

peseta

Topic Author
tomwood
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Joined: Mon Dec 10, 2018 9:34 am

Re: Fed Employee Disability Ins.?

Post by tomwood » Fri Oct 04, 2019 4:37 pm

peseta wrote:
Fri Oct 04, 2019 11:24 am
I posted a question related to this topic recently:

viewtopic.php?t=290177

FWIW, I think the FERS benefit is inadequate, especially if you are a GS-14 or 15 and/or the primary breadwinner in your household. Long-term, feds give you 40% of high-3 minus 60% of SSDI (which people sometimes don't qualify for)
Your link was helpful, thank you.

I don’t fully understand the calculation of 40% of high 3 less 60% SSDI. Keeping things round, if my salary is $100k, then I will get $40k from FERS less 60% of SSDI. So if I wouldn’t receive any SSDI, then I’d still receive $40k, am I right? If a person doesn’t qualify for SSDI it might mean they can do something even if it’s not their government job, so can a person collect this disability 40% FERS and still work part time as a Walmart greeter? Or is other income prohibited?


peseta wrote:
Fri Oct 04, 2019 11:24 am
One of the benefits of the private sector policies as a fed is that you can lower your premium significantly if you have sick leave saved up. I opted for the 365-day exclusion because I have over a year of sick leave banked.
This is a good tip, thank you.

And you mentioned different age brackets, is that every 10 years? Will someone at 40 receive a significant bump from 39 but no increase from 44 to 45?

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

Re: Fed Employee Disability Ins.?

Post by FedGuy » Fri Oct 04, 2019 6:41 pm

peseta wrote:
Fri Oct 04, 2019 11:24 am
I shopped it in the private sector and found a policy that would cost less per year, with much better benefits (additional 30% of salary (total 70% with FERS) with no FERS/SSDI reductions, full own-occupation, etc.).
Hi, Peseta. Can you please tell me who offers the better policy that you found? I've been trying to find a better provider and haven't loved what I've found so far.

(Sorry for thread-jacking. I tried PM'ing Peseta but it didn't work for some reason. Peseta, feel free to PM me. Thanks!)

SteadyOne
Posts: 32
Joined: Fri Mar 22, 2019 5:26 pm

Re: Fed Employee Disability Ins.?

Post by SteadyOne » Fri Oct 04, 2019 8:26 pm

If you request, your agency HR will send you a printout with exact numbers.They have people whose jobs are to respond to this sort of questions.
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court

peseta
Posts: 116
Joined: Mon Mar 09, 2015 11:40 pm

Re: Fed Employee Disability Ins.?

Post by peseta » Fri Oct 04, 2019 8:32 pm

FedGuy wrote:
Fri Oct 04, 2019 6:41 pm
(Sorry for thread-jacking. I tried PM'ing Peseta but it didn't work for some reason. Peseta, feel free to PM me. Thanks!)
Sent you a PM. Also, I think the White Coat Investor's general guide to disability is the best I've seen out there:

https://www.whitecoatinvestor.com/what- ... insurance/
https://www.whitecoatinvestor.com/disab ... roduction/

peseta

FedGuy
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Re: Fed Employee Disability Ins.?

Post by FedGuy » Fri Oct 04, 2019 8:40 pm

Thanks, Peseta! Both for this and for your PM.

Topic Author
tomwood
Posts: 416
Joined: Mon Dec 10, 2018 9:34 am

Re: Fed Employee Disability Ins.?

Post by tomwood » Fri Oct 04, 2019 8:46 pm

FedGuy wrote:
Fri Oct 04, 2019 6:41 pm

(Sorry for thread-jacking. I tried PM'ing Peseta but it didn't work for some reason. Peseta, feel free to PM me. Thanks!)
Not a highjack, it’s a great question.
Which have you tried that have been a waste of time calling, so I avoid them ?

peseta
Posts: 116
Joined: Mon Mar 09, 2015 11:40 pm

Re: Fed Employee Disability Ins.?

Post by peseta » Fri Oct 04, 2019 8:46 pm

tomwood wrote:
Fri Oct 04, 2019 4:37 pm
Your link was helpful, thank you.

I don’t fully understand the calculation of 40% of high 3 less 60% SSDI. Keeping things round, if my salary is $100k, then I will get $40k from FERS less 60% of SSDI. So if I wouldn’t receive any SSDI, then I’d still receive $40k, am I right? If a person doesn’t qualify for SSDI it might mean they can do something even if it’s not their government job, so can a person collect this disability 40% FERS and still work part time as a Walmart greeter? Or is other income prohibited?
Yes, if no SSDI, you'd still get 40k in your example. You could in theory work in another position in the private sector so long as it is less than 80% of your former federal salary. However, in order to qualify for FERS disability, "[y]our agency must certify that it is unable to accommodate your disabling medical condition in your present position and that it has considered you for any vacant position in the same agency at the same grade or pay level, within the same commuting area, for which you are qualified for reassignment." See:

https://www.opm.gov/retirement-services ... Disability

If you are a postal carrier, that might happen with even, say, a bum knee or something, I imagine. But if you are a white-collar fed, you might need to be pretty darn disabled to not be able to do ANY vacant job at your agency in your pay grade. In other words, too disabled to work pretty much anywhere.

Also, what if your disability renders one unable to work at all? These things happen. Me, I would not want part of my gameplan to be counting on being healthy enough if disabled to still take a part-time job. I think feds need to ask themselves if they can truly make things work on 40% of their pre-disability salary. For me, that answer was no.
tomwood wrote:
Fri Oct 04, 2019 4:37 pm
And you mentioned different age brackets, is that every 10 years? Will someone at 40 receive a significant bump from 39 but no increase from 44 to 45?
Answer is here: https://www.fedadvantage.com/faq.aspx?id=74

One last point: even if the FERS benefit doesn't fill all the potential need, it's still helpful. Feds basically only need to replace another 20-30% of their income (companies usually won't sell you more insurance than will get you, with all sources, to 60-70% of pre-disability income). Thus, our premiums are cheaper than for folks with no disability "coverage," who need to insure for that full 60-70%.

Best of luck!

peseta
Last edited by peseta on Fri Oct 04, 2019 8:55 pm, edited 2 times in total.

Topic Author
tomwood
Posts: 416
Joined: Mon Dec 10, 2018 9:34 am

Re: Fed Employee Disability Ins.?

Post by tomwood » Fri Oct 04, 2019 8:49 pm

SteadyOne wrote:
Fri Oct 04, 2019 8:26 pm
If you request, your agency HR will send you a printout with exact numbers.They have people whose jobs are to respond to this sort of questions.
HR will give me exact numbers of what I’d receive with my FERS disability? Or will HR provide information about additional LTDI coverage? Thank you

FedGuy
Posts: 1265
Joined: Sun Jul 25, 2010 3:36 pm

Re: Fed Employee Disability Ins.?

Post by FedGuy » Fri Oct 04, 2019 9:06 pm

tomwood wrote:
Fri Oct 04, 2019 8:46 pm
Not a highjack, it’s a great question.
Which have you tried that have been a waste of time calling, so I avoid them ?
I've found a few that cap their payout at $2,000 per month. Which is something, but I was hoping to find one that would insure me for more.

tj
Posts: 2762
Joined: Thu Dec 24, 2009 12:10 am

Re: Fed Employee Disability Ins.?

Post by tj » Fri Oct 04, 2019 9:26 pm

peseta wrote:
Fri Oct 04, 2019 11:24 am
I posted a question related to this topic recently:

viewtopic.php?t=290177

FWIW, I think the FERS benefit is inadequate, especially if you are a GS-14 or 15 and/or the primary breadwinner in your household. Long-term, feds give you 40% of high-3 minus 60% of SSDI (which people sometimes don't qualify for) until your MRA, which is at least 57. Is that enough? And yes, your future pension calculation might not be that impacted, but you lose out on TSP contributions and matching. Therefore, I think disability coverage is worth it for many feds.

I had Federal Advantage until very recently. I just "graduated" into a older age-band (hurrah!) and my premium was set to almost double. I shopped it in the private sector and found a policy that would cost less per year, with much better benefits (additional 30% of salary (total 70% with FERS) with no FERS/SSDI reductions, full own-occupation, etc.). But, I think the Federal Advantage is an okay deal if you are younger, or not in good health, considering how hassle-free it is.

One of the benefits of the private sector policies as a fed is that you can lower your premium significantly if you have sick leave saved up. I opted for the 365-day exclusion because I have over a year of sick leave banked. This lowered the premium quite a bit . . .

peseta
Which disability insurance company do you use?

trueblueky
Posts: 1655
Joined: Tue May 27, 2014 3:50 pm

Re: Fed Employee Disability Ins.?

Post by trueblueky » Fri Oct 04, 2019 9:32 pm

Please read up on the Federal Employees Compensation Act

https://www.dol.gov/owcp/dfec/regs/statutes/feca.htm

Topic Author
tomwood
Posts: 416
Joined: Mon Dec 10, 2018 9:34 am

Re: Fed Employee Disability Ins.?

Post by tomwood » Sat Oct 05, 2019 2:31 pm

trueblueky wrote:
Fri Oct 04, 2019 9:32 pm
Please read up on the Federal Employees Compensation Act

https://www.dol.gov/owcp/dfec/regs/statutes/feca.htm
I will. Thank you

peseta
Posts: 116
Joined: Mon Mar 09, 2015 11:40 pm

Re: Fed Employee Disability Ins.?

Post by peseta » Sat Oct 05, 2019 8:17 pm

tj wrote:
Fri Oct 04, 2019 9:26 pm
Which disability insurance company do you use?
Berkshire/Guardian. In my case, the premiums offered by various companies were real close, so I went with the one with the best reputation (so I hear).

peseta

SteadyOne
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Joined: Fri Mar 22, 2019 5:26 pm

Re: Fed Employee Disability Ins.?

Post by SteadyOne » Sun Oct 06, 2019 1:06 pm

tomwood wrote:
Fri Oct 04, 2019 8:49 pm
SteadyOne wrote:
Fri Oct 04, 2019 8:26 pm
If you request, your agency HR will send you a printout with exact numbers.They have people whose jobs are to respond to this sort of questions.
HR will give me exact numbers of what I’d receive with my FERS disability? Or will HR provide information about additional LTDI coverage? Thank you
Not sure about additional one. But for the federal benefits numbers they will.
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court

Topic Author
tomwood
Posts: 416
Joined: Mon Dec 10, 2018 9:34 am

Re: Fed Employee Disability Ins.?

Post by tomwood » Sun Oct 06, 2019 5:11 pm

SteadyOne wrote:
Sun Oct 06, 2019 1:06 pm
tomwood wrote:
Fri Oct 04, 2019 8:49 pm
SteadyOne wrote:
Fri Oct 04, 2019 8:26 pm
If you request, your agency HR will send you a printout with exact numbers.They have people whose jobs are to respond to this sort of questions.
HR will give me exact numbers of what I’d receive with my FERS disability? Or will HR provide information about additional LTDI coverage? Thank you
Not sure about additional one. But for the federal benefits numbers they will.
Thank you.

Does Fed advantage offer the same rate for everyone at the same age and pay scale regardless of the type of job?

Does any other disability insurance company not account for occupation?

SteadyOne
Posts: 32
Joined: Fri Mar 22, 2019 5:26 pm

Re: Fed Employee Disability Ins.?

Post by SteadyOne » Sun Oct 06, 2019 5:22 pm

tomwood wrote:
Sun Oct 06, 2019 5:11 pm
SteadyOne wrote:
Sun Oct 06, 2019 1:06 pm
tomwood wrote:
Fri Oct 04, 2019 8:49 pm
SteadyOne wrote:
Fri Oct 04, 2019 8:26 pm
If you request, your agency HR will send you a printout with exact numbers.They have people whose jobs are to respond to this sort of questions.
HR will give me exact numbers of what I’d receive with my FERS disability? Or will HR provide information about additional LTDI coverage? Thank you
Not sure about additional one. But for the federal benefits numbers they will.
Thank you.

Does Fed advantage offer the same rate for everyone at the same age and pay scale regardless of the type of job?

Does any other disability insurance company not account for occupation?
I do not know that. I did not look beyond federal benefits. My assumption is that even if private coverage firms offer better rates now, it is not obvious that they will be around twenty years from now when you need them. With federal benefits at least you may get something.
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court

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