#10 – Double Payments, Rebates, Timeframes

Double payments, rebates and time frames on today’s Fednobabble.

Welcome to Fenobabble, where we make federal retirement benefits understandable for humans and under 20 minutes, I’m Cassie Knight and I am Kevin Jones.

And we take your questions submitted at Fenobabble or at asked at one of our workshops. And we take those and we answer them here so that you can actually understand what’s going on rather than the water cooler.

And getting confused at what how how does this really work?

Well, let’s figure out question number one, do I get retirement payment and the supplemental payment at the same time? What do you think? Cassie. Well, it depends on if you’re still receiving your interim payments or your full pension amount, right? Yeah, well, you retire then OPM is only giving you 40 to 60 percent of your pension amount for a little bit of time until they finalized your pension check. OK, so during that time when you’re getting your interim payments, you are not going to receive your special retirement supplement.

Right.

However, once OPM finalizes that paperwork and they’re giving you your full pension amount, then they will also give you your special retirement supplement and any retroactive pay.

Right. Assuming you’re eligible for it, which most federal employees will also most Fer’s employees are if they’re under 62. And if they’re not working, just go back to what?

To, I don’t know, a few episodes before about the earnings test. And you can learn more about that piece. But yeah, pretty much if if all is well, then you’ll be getting it at the same time once your pension is finalized. Yeah.

And I want to make sure that this is very clear. It’s included with your pension payment. Right. Right. Because this is a federal benefit. This is not something that’s administered by Social Security.

Although they do base it on your estimated benefit at age 62, it is not coming from Social Security, it is strictly a federal benefit. Yeah, good. And it’s not a free which they don’t get out of those all very often. I know.

How great is that? Free and automatic. I mean, they don’t have to say, yes, I want to. They just get it. Not too bad. Not too bad. OK, that’s question number one. Question number two, I understand BCBS Blue Cross Blue Shield gives you a rebate for signing up for Part B as long as you have BCBS as a secondary insurance.

Do you think this is a good idea or a good deal, so basically this is a little this is a little known thing that very, very few federal employees understand. So they so when when federal employees retire, a lot of the question comes around, should I keep FEHB or should I do Medicare or should I do both? There’s a lot of question around that.

In this instance.

What they’re saying is that there is they know about that. If you do Part B and also we’ll have to throw on their part A if you do part and B and you do FEHB, there are certain plans that can give you a rebate, which means basically you’re paying premiums for Part B, you’re paying premiums for FEHB and because you’re doing all that together.

Some some carriers in some plans will give you a rebate back, so it’s not as expensive because they are a secondary insurance, right.

And this doesn’t only apply to the employee either. This is also for the eligible spouses that are in the FEHB plan as well. And so if they are enrolled in part A and Part B, then they’re automatically well, I wouldn’t say automatically they might have to talk to the plan. In fact, I think there is a form they have to fill out to submit to the carrier if they’re enrolled in the correct plan. OK. And it has to be a carrier who does this, only a few of them do, not all of them, OK, then they can fill out that information and send it in every calendar year for them and their spouse to get this rebate.

And I’m not going to say the rebate amount because I’m not sure if that changes. I mean, it probably changes every year, just like the premiums. Right.

So that’s going to be a guaranteed amount either. I don’t suspect it will be, because this is actually a new thing that carriers are doing. But I do think that they’re trying to get people to realize that, you know, signing up for Part B probably is the right thing to do. And they don’t want to handle the penalties and everything else, because I know a lot of federal employees have this misconception that, oh, I have FEHB and I don’t need Medicare.

Right. Well, that’s not always the case.

And they really need to take a look at their health, what their plan coverage is and all of those different things. And, you know, sometimes these rebates can only be used for certain things like medical payments, but not always. And so it really depends on the plan and the carrier. But reach out to your FEHB, your provider and whoever that carrier is and see if they offer this rebate.

And you can also do research on this at FEHB.com or OPM.gov and get into the FEHB website there and figure out what what plans are going to be good for you or let us know.

Yeah, that’s right, because our advisors will also be able to help you answer that question and really dig down to find out what the other financial aspects are as well. Consequences, good or bad, on what those decisions are and if this is worth it for you.

Yeah, it’s amazing how many people come into the Fed Pilot workshops and say, I already know what I’m going to do with with this or other situations as well, with other benefits. I already know what I’m going to do. And then they learn about really what’s going on and their whole plan is blown. And so my job in the workshops is to blow people’s plans out of the water.

Not really. Not for my husband. What was that? I said, I know you do that for my husband, right? That’s right.

Because he came into one of the workshops as well, and he knew that he was pretty good about it. Right. And yeah, it didn’t matter how many times I had talked to him Kevin. I told him, no, that’s really not what we should be doing. And every time I would mention something, his eyes were just kind of glossed over, though, sir.

Right. And he would just be like, oh, yeah, you’re talking shop. And just kind of, you know, how you did with your. Oh, they’re talking shop and, you know, in one ear, right out the other. And then he came to your workshop and he we were making little notes back and forth to each other. And he was like, OMG, we need to do this.

And I was like, thank you, Joe, because he gets it. Yeah. You know, but to give you some credit here, Cassie, I know your husband loves you. He’s a good guy and he loves you. But to put to put those things in context right now, we’re we’re answering questions.

Right. And it’s not in the full context. But to be able to hear those things in the full context can make all the difference in the world. Right. And that whether they will go ahead, you break it down.

So you break it down so nicely to where people can really understand. Oh, maybe I should look into that. Right. Right. And just demystify all of that water cooler talk where they’re like, oh, well, if I’m getting advice from a CSRS employee, then I’m a first employee. Maybe that doesn’t work. Does that for me? I mean, crazy, because you guys are two separate retirement systems. But, you know, it really that’s how it works.

People are like, oh, this is what you should do because this is what was good for my situation. Well, just what’s good for the goose isn’t always good for the gander.

Yeah, right. Yep, absolutely. And so coming to this and find out if this is something that’s worth it for you or not, I don’t know. Yeah.

So coming to a workshop or getting the report, just a Fednobabble.com. You got to do one of them. You got it. You got to go learn. You’ve got to go learn the information in context of the bigger picture. These questions here as we do the show, this is great. This gets people started. But it should not be the end. It should not be. Oh, I got my answer. No, it’s just I just started.

Exactly. This is just one simple piece. Yes. Oh, the the bigger picture of the bigger puzzle that you’re trying to put together, you know, to make your financial path in retirement and really make sure that you’re meeting those. And guaranteeing financial success for yourself, do your due diligence in all of your benefits and really find out how they can benefit or or not benefit you depending on your situation.

And we’ve seen that do not benefit happens a lot hurt sometimes. Yeah.

OK, so what’s the next question? Kevin next.

How much time do I have to sign up for Medicare Part B once I retire since I did not sign up for it originally.

So this one sounds like Cassie which happens. I mean, this happens. This person came to our workshop and had already retired. And and that scares me over sixty five to right.

If they are saying that they didn’t sign up when it originally was available to them, that tells me in general at age 65. So, you know, and I see this all the time where people just keep working because you don’t know if they can financially make it or not. Right. Right. It’s sad. But to get back to this question. I want to say 60 days, but I think it might be 90 days. Either way, you definitely have a little bit of time after retirement to get enrolled in Part B, and if you’ve had employer sponsored coverage.

So even if you retired and you waited six months.

Right now or a year, and you’re past that original timeframe where you could have enrolled in Part B and then you decide to enroll in Part B because you have an employer sponsored program like FEHB. If you’re in FEHB, you have that employer sponsored program. OK, then you can still have all those Part B premium or Part B penalties excuse me when you enroll. OK. And that’s a form that you fill out through a CMS. I really suggest getting in touch with a Medicare advisor in the area or a financial planner who can maybe help you out with that, because that’s really something where it depends on the situation.

It might not always make sense to enroll right away. Maybe you maybe you decide to wait, but there can be some consequences if you’re not taking the proper action to make sure that those are avoided. Yeah.

One thing I’ll say about penalties overall, which is really, really interesting, whether it’s penalties with Social Security or penalties with TSP issues or other things like that, sometimes there are ways to get around penalties.

I was in a workshop one time. I was where was I? I was in Austin, Texas, and we had a lot of IRS people who attended that workshop. Oh, boy. Yeah.

I mean, you’ve got to be really careful right now. And that’s what think I got to say about IRS people coming sometimes, you know, when I say, OK, who works for the IRS, they don’t all raise their hands because they’re a little shy about saying that. I were you know, they say I worked for the Department of Treasury and I look at them and I think, like, yeah, I know you work for the IRS.

It’s OK. But a lot of IRS people are in this workshop and and there’s a penalty. And I won’t get into the details here because it’s off of this topic. But it has to do with penalties, with R&D that if you don’t make if you don’t do your R&D in time, there’s a 50 percent penalty. I mean, it’s a huge penalty.

And so I mentioned this and one of the IRS guys came up and he said, hey, by the way. There is an exception to that, he said, I work on that team, and any time anyone asks for an exception, we always give it. Oh, that’s good to know. No kidding. Whoa. So if if you hear that there’s a penalty and you get hit with a penalty, go see if there’s an exception. Go see if there’s something that you can do about it, because maybe but maybe not.

But if you can get an exception for that, then great. If you don’t know that you can even try to get an exception, then that possibility isn’t there. And you’ve just thrown money down the drain. And we want you to keep as much of your own money as humanly possible. So be careful is what I’m saying. Yeah.

So if you want this information to find out all the details about your benefits and really help us to to get you in a place where you’re coming from a knowledge base to make an actual decision earlier, you sound decision in your benefits, go to Fednobabble.com. We can give you that report and it lists out your pension, your special retirement supplement, FEHB, FEGLI, TSP, all of that information.

And it really is comprehensible. And also really easy to understand, though. And one of our trusted financial planners will reach out to you to get that information. So that way we can build a report for you and and you know that no cost, no obligation, no sales pitch. Right. We simply want to make sure that you’re getting the information that you need to set yourself up for success in retirement and.

Yeah. And also submit the question. Yeah, yeah, yeah.

If you want a question, if you want us to answer a question that you have about your federal benefits, go to Fednobabble.com. And there’s a form there that you can just submit it and we’ll get it.

And if we answer it on the show, we will give you a Fenobabble T-shirt, which is way cool these days. And also, if you would, please subscribe, follow, get notifications for Fenobabble overall so that when we post a new one, you’re learning and you’re right on top of things as things change because things change too often, I might say.

Yeah.

And share this with your friends because they’re retiring. They need to know this information just as much as you do. So thank you for being here. And until next time, take care.