FERS: Going From Retirement To Disability Retirement
At DeHaan Busse, we’ve had several retired federal employees contact us about changing their retirement status to disability retirement. While this is possible, there are criteria you must meet and steps you must follow in order to receive disability benefits from the federal government.
First, remember that you have exactly one year from the time you separate from service to change your status. However, keep in mind, if upon retiring you chose the alternate form of annuity with a lump sum payment equal to your retirement contributions, you cannot collect disability retirement benefits. Therefore, read through your retirement documents carefully to understand what you can and cannot do.
Second, you must have become disabled while working for the federal government. Both you and your employer will be required to submit evidence to support this. Additionally, you both will be required to prove that your disability impaired your ability to work effectively in our position, and you must not have turned down reassignment in the same commuting area at the same pay grade, tenure or pay level.
Your employer will have to certify that he was unable to provide you with reasonable accommodation – meaning, he could not offer you a more suitable work environment for your condition. If your employer offered you light duty work and you declined, that also could prevent you from changing your retirement status. Finally, remember that if you change your retirement status to disability retirement, you lose your special requirement supplement. Therefore, before making any decision, weigh all of your financial options.
Social Security Disability, How It Affects FERS Disability
If you plan to file a FERS disability claim, you also must apply for Social Security disability benefits. However, when you begin to receive both benefits, your FERS disability will be decreased. Here’s how.
In Year-One of your disability, FERS pays 60% of your high-3 average salary, less 100% of any Social Security benefit you qualify for. There is no Cost of Living Adjustment (COLA) during Year-One. However, the FERS disability reduction will not begin until five months after qualifying for Social Security disability. So, for this period you will receive your full FERS benefits.
In Year-Two and until age 62, your FERS disability benefit will be 40% of your high-3 salary. If you also collect Social Security disability benefits, your FERS annuity will be reduced by 60% of the approximate amount of your Social Security benefit. Cost of Living Adjustments will match the inflation rate if 2% or less. If more than 3%, the COLA will be 1% less than the inflation rate.
In all, your FERS benefits and your Social Security benefits will equal at least 40% of your high-3 salary, plus 40% of your Social Security disability benefits.
When you hit age 62, your FERS disability benefits will be recalculated. Then, you can expect to receive your accrued FERS retirement benefit which will be based on the years that you worked, plus your time on disability benefits. Your “average salary” used will be based on pre-disability earnings, including all FERS COLA’s during that timeframe.
What To Look For In Your DI (Individual Disability) Policy
In our practice, we hear with regularity how many of our clients didn’t think it was necessary to purchase their own Individual Disability policies. Some of these folks are high wage earners who receive disability coverage through their employers. However, something to keep in mind: those plans are governed by ERISA, and most always the benefits pay no more than 60% of income, less Social Security disability. That usually does not include bonuses or tips or any other income boosting money. Add to that the increasingly difficult hurdles insurance carriers and employers put in the way of any legitimate disability claim, and you could be looking at financial hardship if you depend solely on disability benefits through your ERISA plan.
On the other hand, most private business owners and professionals such as doctors, lawyers, dentists and accountants do understand the necessity of buying their own individual disability policies as they usually are not covered under ERISA plans. However, simply purchasing a DI policy is not nearly enough. You have to do your homework and make sure – in order to secure yourself, your business and your family – that you purchase the right DI policy with the right terms and conditions. Here are just some things to consider when purchasing an Individual Disability (DI) policy.
1. Make sure that your DI Policy is a comprehensive “own occupation disability policy. Basically, this means that if you are disabled and cannot work in your specific occupation, you will receive your full disability benefits even if you still are able to work in another occupation. This is an important distinction. For instance, if you are a dentist whose disability prevents you from working on patients, you still may be able to work in another occupation. There are some DI policies offered by some insurance carriers that may claim to provide “own occupation disability,” but read the language of the plan very carefully. Definitions differ from one carrier to another, and some “own occupation” policies aren’t really own occupation policies.
2. Watch that “Elimination Period.” Most disability policies have an “elimination period” (waiting period) during which you must be disabled before you can begin receiving disability benefits. When purchasing a DI Policy, make certain that the elimination period (waiting period) is as short amount of time as possible. When someone becomes disabled, often their only income is suddenly cut off. If your “elimination period” (waiting period) is too long, you could use up any money you have in savings. Or, if you have no savings, you might have to go without altogether.
3. Make sure that your DI Policy is guaranteed to be renewed and non-cancellable. Also, it is very important to get a policy that will automatically be renewed – without raising your premiums – regardless of whether your health declines. Some DI policies (and some insurance carriers) will arbitrarily cancel your DI policy if you should develop an illness or health condition. Or, some will significantly increase your premiums.
The attorneys at DeHaan Busse, LLP are available to review any DI policy you are planning to purchase.
Two VA Doctors Involved In Creating American Heart Association Guidelines On Vascular Closure Devices – Source: va.gov
The American Heart Association has released its recommendations on vascular closure devices. “Vascular closure devices are used by invasive cardiologists and vascular surgeons to close the femoral artery after diagnostic and interventional cardiovascular procedures and include a wide range of instruments,” said Hani Jneid, M.D., who was on the panel and co-authored the statement of recommendations. “As we drafted these recommendations, our goal was to provide an overview of the benefits and risks of these devices and help guide the physicians as they decide which instrument is best for each procedure and patient.” Two cardiologists, Hani Jneid, M.D., MEDVAMC Interventional Cardiology assistant director and Glenn N. Levine, M.D. F.A.H.A., MEDVAMC staff cardiologist and BCM professor of medicine in cardiology from the Michaael E. DeBakey VA Mediccal Center and Baylor College of Medicine, assisted in drafting the guidelines.
The AHA Statement focuses on when to use the devices to achieve faster clotting and shorter bed rest, and compares their effectiveness with alternative approaches, such as manual compression. It also gives recommendations for the use of these instruments during clinical trials and includes information on how the use of these devices and their complications should be recorded for future reviews.
The panel also included Drs. Manesh R. Patel, Colin P. Derdeyn, Lloyd W. Klein, Robert Lookstein, Christopher J. White, Yerem Yeghiazarians, and Kenneth Rosenfield participated on behalf of the American Heart Association Diagnostic and Interventional Cardiac Catheterization Committee of the Council on Clinical CArdiology, Council of Cardiovascular Radiology and Intervention, and the Council on Peripheral Vascular Disease.