Federal Employee Disability Benefits.mp3: Audio automatically transcribed by Sonix

Federal Employee Disability Benefits.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Val Majewski:
Welcome back, everybody, to the Federal Retirement Show. I'm your host, Val Majewski, with American Benefits Exchange. And if you've noticed, through all of our episodes, we've been talking about various topics. And these are situations that come up when we talk with federal employees just like you. So when we give group presentations one on one consultations, and we're just answering general questions, either at a convention, a conference, a meeting, we want to talk about the topics that we know are important to you. Now, this is a discussion that I had recently with a federal employee going over their benefits and retirement information situations that they saw. And we came across the topic of disability benefits. Now, what do you have as a federal employee when it comes to disability benefits? We're going to go over that today and we're going to go over on a very high level, very general in nature. The disability plan, if you will, that's available for you as a federal employee. So when we dive in, it's going to be extremely high level, very general in nature. If you have additional questions, comments, concerns, your situation's very unique because I know I've come across a lot of 1% or less than 1% situations where folks just like you are dealing with a certain issue and it requires a certain level of expertise and diving in and getting into the weeds. We can help you sort through all of that and get to the bottom of everything. So at the end, if you still have questions, comments, look at the contact information, reach out to us, send us a line, send us a question.

Val Majewski:
We'll be happy to reach out and follow up with you and your specific situation. So let's dive in. Federal employee disability benefits. Well, when it comes to disability benefits, do you have them? No, you don't. That's a simple answer. You don't have true disability insurance or disability benefits like some other folks in the private sector have. When they get hired by a company or an organization, they may purchase additional or ancillary benefits when it comes to disability income. So short answer, as a federal employee, you do not have a disability income insurance policy or an insurance plan or disability specific benefits. Now. What do you have? Well, you have sick leave. We're going to go over each one of these individually, again, from a very high level. But you have sick leave, you have annual leave. And the last resort option is disability, retirement. So let's dive into sick leave. What is sick leave? Well, this is something that you accrue. As a result of being a federal employee, you accrue 4 hours every pay period. It's 104 hours per year that you accrue in sick leave time. Now, there is no limit to your sick leave balance. There's no limit to the amount that you can carry. Sick leave is something that you earn, and if you utilize it, great. If you don't, it's a huge balance that you can have at the end of your career.

Val Majewski:
Now, if you work ten years and didn't use a single hour of sick leave, you'd have about six months built up of sick leave time. So just to understand how that works, 4 hours per pay period that you accrue if you want to see what you're sick. Leave balances, take a look at your pay stub, your leave and earnings statement. You're also entitled to up to 12 weeks per year to care for a family member with a serious health condition. Now, there's certain definitions of what a family member is, and there's definitions of what a serious health condition is. If you have questions on that, please let me know. But this is a benefit that a lot of federal employees may or may not know that they do have sick leave again is something that is not going to be a use it or lose it. We'll talk about that here in a second. When it comes to annual leave, but sick leave, no matter what your balance is at the end of your working career, if you retire any leftover sick leave hours, get added to your total service time and can add to your retirement calculation that you cannot use sick leave in order to have eligibility for retirement, but you can utilize it to enhance your retirement pension, your FERS or Caesar's annuity. So when it comes to again, sick leave and disability, this is essentially your short-term disability plan.

Val Majewski:
If you are out because of injury or sickness, you're using up sick leave first before anything else. Typically you can use annual leave as well, but typically a federal employee will use sick leave and this will count towards basically their short-term disability plan, use a certain number of hours or days or weeks or months or whatever it is you have of sick leave built up. Now you still get paid because you're just using hours. You still accrue service time while you're using sick leave and you can utilize as much as you have until your balance is exhausted. And if you're still sick or injured or disabled, you can apply for advanced sick leave. In addition, it's not guaranteed that you will get it, but that's what sick leave is there for, right? It's essentially like your short-term disability plan. Now let's go into annual leave. What is annual leave? Now, this is something that is utilized more for vacations, rest, personal business emergencies, things like that. But this is different than sick leave in the way that you accrue time and the way that you have to utilize it. Now you accrue up to 8 hours for each pay period. Why do I say up to 8 hours? Because it depends on how much service time you currently have to determine how much time you accrue each pay period. Now you can earn up to again 8 hours per pay period.

Val Majewski:
As I mentioned, it's used for more of vacations or personal use and you need to request to use annual time, you need to schedule it and it needs a supervisor or managerial approval in order to be utilized. So if you're working with your supervisor, your superior. Make sure that you plan ahead. This is something that is normally utilized in advance or planned ahead when it comes to using annual leave, sick leave. Hey, you're sick. You call in, you use a sick day, you're utilizing your sick leave kind of on the go as needed. Annual leave is generally scheduled and planned ahead. Now I mentioned about user lose, right? There is a use or lose amount of annual leave every year. The most that you can carry over as a general rule of thumb is 30 days or 240 hours per year. So at the end of the year you might have use or lose time that you're going to just have fall off if you don't utilize it. So most employers will find a way to use it so that way that it doesn't go to waste. But the most carryover, as I said, is 240 hours per year, 30 days. Now, when it comes to annual leave, it works differently than sick leave. I just mentioned sick leave when you retire will get added to your service time and count towards your pension or your retirement annuity. Annual leave is sent to you in a lump sum, so any left over annual leave at the time of retirement is calculated based upon your base rate of pay.

Val Majewski:
At the time of retirement, your hourly rate. Multiply that by your annual leave hours and you'll get a lump sum payment generally by the next pay period after you retire. So sick leave goes towards service time. Annual leave goes towards a lump sum payment. Now both sick and annual leave are utilized on an as needed basis and essentially act in combination as your short-term disability. Right. There's a time at which if you're disabled or sick or out of work for too long of a time, you are going to exhaust all of your sick and annual leave. It's just something that typically would happen if you're out for an extended period of time. So what happens after that? Well, that's where disability retirement comes in. So if you are disabled, unable to perform your work and unable to perform anything relatively close within the agency of what you're capable of. You might be able to apply for disability retirement. So as I mentioned, sick leave, annual leave, that's kind of like your short-term disability plan. If you were to have a long-term disability plan, an option is disability retirement. Now disability needs to last at least 12 months or expected to last longer than 12 months. You need to have at least 18 months of credible service in order to be eligible. And there's a qualification that needs to happen here, right? There's a process.

Val Majewski:
It's not guaranteed that if you say, hey, I'm disabled, I'm going to retire on disability retirement, that you're going to get approved. There's an application process. So you would apply for immediate retirement and you'd also apply for disability retirement. You'd also have to apply for Social Security disability. At the same time, all of that is subject to approval. Now, as I mentioned before, the agency needs to exhaust all reasonable attempts to keep you on based upon your current status, your abilities, your capabilities and things that you are qualified for. If you may not be able to do your current job, they need to find a way and exhaust all options to see if you're eligible for any job or any position within the agency based on, again, what you're qualified for. If none of that holds true, if you cannot still go to work and do something in a reasonable capacity, then you might be eligible to apply for disability retirement. But again, that being said, this is like your long-term plan, but it is not a true disability insurance or disability benefit like you'd see in the private sector where people are getting disability insurance. So for those, again, if you've exhausted all sick leave, you've exhausted all annual leave and your only option you're still disabled and unable to work is disability, retirement. That could be an option. And you're going to be able to collect a portion of your salary in retirement, along with Social Security disability benefits as well.

Val Majewski:
But what if you don't want to? What if you're not in a position where you're saying, Well, I don't want to retire and I'm going to get better, I'm going to go back to work. What if I had a plan in place that was going to take care of that? What if I thought ahead and got myself a plan where I don't have to use all of my sick leave? I don't have to use all of my annual leave. I'm not forced to retire on disability. What can I do ahead of time? How can I plan? We talked about this with other types of insurance, right? But there are disability insurance policies available in some specifically, specifically designed and implemented for federal employees just like you. Each one works a little bit differently. So I'm going to speak General in Nature about disability insurance in total as a whole. But typically there can be one of two or even both benefits when it comes to short-term disability insurance, long-term disability insurance, or a combination of both. Now, what is short-term disability insurance? Well, this is a insurance policy that based on a bullet point down below, you may have to qualify health wise for some design for federal employees are guaranteed issue meaning you just have to be breathing and be able to pay the premiums in order to qualify for it. But you can get a short-term policy which will generally cover you up to one year of disability benefits.

Val Majewski:
And then long-term is usually what's happening after one year or after the short-term policy is up. Now within all these plans, there's a waiting period. So short-term benefits will typically have a maybe a 14, 30, 60, sometimes 90 day waiting period where you have to be disabled for that amount of time before the benefits will kick in. And then during that time, you might be using your sick leave option to get through what they call the waiting period. Now, beyond that, there's a benefit payout. Now, typically, again, I'm speaking in general, these disability insurance policies will pay around 60% of your pre disability income during the time that you're disabled. And a short term disability plan will usually have a maximum of a one year payout. So you will have a waiting period, you'll have a payout. And before that, obviously you'll have a premium, you have a cost that you're going to have to pay. And if it's specifically designed for federal employees or if it's something that you can pay for out of your checking account or maybe even out of direct deposit coming directly out of your checking. So your check using government allotment. So that's a short-term plan. Now there's a long-term plan. Well, a long-term plan by itself will generally start at a different waiting period. Sometimes it's 180 days, six months, sometimes it's a one-year waiting period where you have to be disabled for at least six months or a year before the benefit will start paying you, before the policy will start be paying a benefit.

Val Majewski:
Now, if you have a combination short and long-term deal, well, the short term will start after the waiting period for the short term, and then the long-term benefit will kick in at the time the short term falls off or stops being a benefit. They work in conjunction and work together. So that way the benefits will keep getting paid and there are different payment periods for long-term benefits. Sometimes it's two years, five years, sometimes they'll pay you all the way up to your normal Social Security retirement age, which could be you age 65 to 67. So it depends on the policy and the plan and how long they can pay you out, as long as you are disabled, because you have to continually show that you are still disabled in order to receive the benefit. Now, I mentioned there may be health screenings. There are some companies that will be guaranteed issue for federal employees. Some require answering questions to make sure that you can qualify for the best rate or qualify for the plan. And then also it's important to note, too, that there's a coordination of benefits involved with with these plans. So if you have an insurance plan and you get disabled or you are disabled, then there's a another benefit that you get from somewhere else.

Val Majewski:
Or maybe you've got another disability plan. You can't have so many disability plans on that. Now you're making above and beyond what you made before. They all coordinate, and the maximum that you'll get paid is the maximum that is allowed and is typically around 60% of your pre disability income. So again, looking at the disability insurance options, if you do not want to exhaust your sick leave, if you don't want to exhaust your annual leave, if you're not looking to retire on disability, but you're thinking this is something that I want to have in place in case something happens to me. Look into the options available to you as a federal employee when it comes to private insurance for disability. And if something did happen to you, if you did become disabled and you're unable to work for an extended period of time, you don't have to exhaust all of your leave. The benefits will get paid to you and they are typically tax free so that you can pay your bills, you can live your lifestyle while you're out on disability. So I appreciate you taking the time to learn about disability benefits that you as a federal employee have. If you have any questions, I know today was very general in nature. Reach out to us. Let us know how we can assist what your situation looks like, and we can determine what type of plan, if any, is right for you in your situation. And.

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