For a growing number of middle-aged federal employees, the daily commute now includes dropping off not only their children, but also their parents, at a day care center.
If that’s you, now or soon, welcome to the “sandwich generation.” Just how you weather it depends in large part on what you do over the next couple of weeks.
Some day care centers (for children) are subsidized by federal agencies. But when Mom or Dad spends time at an adult day care center, they don’t bring home refrigerator art. They bring home bills that can run $30,000 to $60,000 a year.
The Federal Long Term Care Insurance Program covers what Medicare, and your federal health plan, don’t cover. And just as insurance companies won’t write policies when your house is aflame, or write after-the-event life insurance policies, long-term care coverage is impossible to get if you need it now.
That’s why many financial planners urge people to buy long-term care insurance when they are young and healthy enough to qualify and when premiums are lowest.
By all accounts, federal workers aren’t flocking to sign up for the government-sponsored (but privately underwritten) federal long-term care program. The open season ends Dec. 31.
If feds are getting coverage elsewhere, that’s fine. Some can get a better deal buying an individual policy from a reputable company. But if they are ignoring long-term care altogether (too busy, too cheap or because they feel immortal), that’s a shame.
Whether you buy the federal version or consider an outside source, it’s something most of you should do. Checking the group federal program is a good place to start. You can look at benefits and premiums, then compare them with the costs and kinds of coverage you could get from an outside firm. The Office of Personnel Management’s Web page is an excellent place to start: https://www.opm.gov/insure/ltc/index.htm.
If you are computer-shy, you can call this number from 8 a.m. to midnight (EST) seven days a week for information: 800/582-3337. Another information source is the National Association of Retired Federal Employees at 707/838-7760.
Remember, the open season for the Federal Long Term Care Insurance Program ends in just a few working days.
Health premium costs
Pro-fed members of Congress again are pushing to increase the federal payment to federal employee/retiree health premiums from 72 percent to 80 percent.
Although it would be nice, and would help feds and retirees with ever-increasing health premium costs, this is probably not the time to ask especially since the benefit would also benefit members of Congress who are under the same health program as rank-and-file civil servants.
Many companies including those in the supposedly recession-proof Washington area are laying off workers. Those unemployed taxpayers are learning that COBRA is not a snake, but the $400 to $600 individuals must pay each month for temporary federal health coverage.
Other companies are cutting back or dropping health coverage to cut costs. Bottom line: It’s a billion-dollar perk that isn’t going to happen anytime soon. Besides, it takes time away from things with better odds, such as:
A bigger January federal pay raise. Republican House leaders are apparently willing to go along with a bipartisan push to tack another percentage point on the raise feds will get next month. That would give them the same 4.1 percent adjustment as military personnel.
What will likely happen is that the 3.1 percent will go into effect first, followed by the add-on (and probably retroactive) amount.
Revising the formula the Windfall Elimination Provision and Government Pension Offset that reduce or eliminate Social Security benefits of feds retired under the old Civil Service Retirement System. Both the windfall and offset changes got a record number of co-sponsors this year.
Federal and postal union lobbyists, and groups representing retirees, executives and supervisors have thanks to the groundwork they laid a chance to get at least one of the formulas (probably the offset) revised next year.
Legislation to allow retired federal and postal workers to pay health premiums with pretax dollars. Now the perk is available only to active workers. The change, called premium conversion, would reduce taxable income for most retirees, resulting in annual savings of $300 to $500 each year. That’s enough to help them pay higher premiums or to buy better coverage.
In January, retirees who get cost-of-living adjustments (not pay raises) will get a tiny 1.4 percent inflation catch-up. That’s an indication of how low inflation has been, but it’s no consolation to many retirees who live on tiny annuity checks.