Federal Insurance and Retirement Benefits
This includes a brief description of your Federal employee insurance and retirement benefits. Each benefit title is linked to more detailed information for you to explore. If you have questions about enrollment, eligibility or your personal benefits, please contact the servicing Human Resources (HR) office for your Agency. If you do not know who to contact, please reference your offer letter or ask your supervisor for a contact number for your HR office.
Insurance Benefits
The Federal government offers an array of different insurance benefits to permanent employees. Temporary and intermittent employees may be eligible for health insurance and the health care flexible spending account.
New employees must make most insurance benefit elections with the first 60 days of employment. After the first 60 days, you may be able to elect or make changes to your insurance elections during an open season, or if you experience a qualifying life event. Visit the links below for more information about your insurance benefits:
Health Insurance (FEHB)
The Federal Employees Health Benefits (FEHB) Program is one of the most valuable benefits of Federal employment, but coverage is not automatic. You must elect the health plan coverage that best meets your needs. There are several different plans available, including local and nationwide plans. Each plan has different costs and features. Your agency pays up to 75% of the cost of your health benefits coverage, and you pay the remainder. Click here to compare the different health insurance plans available.
New employees have 60 days from the effective date hired to elect health benefits. If you do not elect health benefits coverage during the first 60 days, you must wait until open season or a qualifying life event to elect coverage. Current employees may elect, change or cancel health benefits coverage during the annual open season from November through early December. Outside of open season, you can enroll, change or cancel your FEHB enrollment only you have a specific qualifying life event (QLEs).
Eligible employees may elect Self Only, Self Plus One, or Self and Family coverage. Eligible family members include your spouse and children under age 26. Most enrollment or changes are effective on the first day of the first pay period after your HR office receives the election form, after you are in a pay status. Open season changes are effective in the first full pay period of the New Year. Your agency HR office will be able to provide you with the exact date your coverage begins. Health benefits coverage is not retroactive.
- For enrollment information, contact your agency HR Office. The Health Benefits Election Form, SF-2809 is normally used to make the initial election. Most open season changes can be made through the Employee Personal Page.
- Federal Employees Health Benefits Overview
Eligible employees may enroll in a dental plan, a vision plan or both benefits. Employees may enroll in a plan for Self Only, Self Plus One, or Self and Family coverage. Eligible family members include your spouse and unmarried dependent children under age 22.
Dental and vision insurance are based on competitive group premiums, but there is no government contribution towards this benefit. Premiums are withheld from your salary on a pre-tax basis, if you elect to enroll.
New employees have 60 days from the hiring effective date to elect dental or vision benefits. Otherwise open enrollment occurs each year during the annual open season in November and December.
- For enrollment information, visit www.benefeds.com or call BENEFEDS at 1(877)888-3337.
- Dental Insurance Overview
- Vision Insurance Overview
The Federal Flexible Spending Accounts Program (FSAFEDS) allows you to pay for certain health and dependent care expenses with pre-tax dollars. With the FSAFEDS you contribute money into a savings account specifically designated to save money for the health care expenses with a Health Care FSA, or for dependent care with a Dependent Care FSA. The contributions are deducted before taxes, allowing you to pay for eligible expenses with pre-tax money and lowering your taxable income.
Think of it as a savings account that helps you pay for items that typically are not covered by your health insurance plan, such as copays and deductibles. The Dependent Care FSA offers an account designed for families with young children or elder care expenses. This account allows you to set aside money to pay for your day care expenses. The deduction you elected must be used in the calendar year elected or the amount could be forfeited, unless the unused amount is less than the limited carryover amount. To better understand this benefit, please see the Frequently Asked Questions at www.fsafeds.com.
Eligible employees can enroll in FSAFEDS each year during the open season in the November/December timeframe. Open season enrollments are effective January 1 of the following year. Current enrollees must remember to enroll each year to continue participating in FSAFEDS. Enrollment does NOT carry forward year to year. New and newly eligible employees who wish to enroll in this program must do so within 60 days after they become eligible, but before October 1 of the calendar year.
- For enrollment information, visit www.fsafeds.com or call 1-877-372-3337. TTY 1-800-952-0450.
- Flexible Spending Account Overview
The Federal Employees' Group Life Insurance Program (FEGLI) is a term life insurance policy. Most new, non-temporary Federal employees will be automatically covered by Basic life insurance. Your payroll office deducts premiums from your paycheck, unless you specifically waive the coverage. In addition to the Basic insurance, there are three forms of Optional insurance you can elect. You must have Basic insurance in order to elect any of the options. Unlike Basic insurance, enrollment in Optional insurance is not automatic. You must take action to elect the options.
Coverage:
Basic life insurance coverage is equal to your annual basic pay, rounded to the next higher $1,000, plus $2,000
Plus three types of optional insurance:
- Option A, Standard - in the amount of $10,000.
- Option B, Additional - in an amount you elect from one to five times your annual basic pay (after rounding up to the next $1,000).
- Option C, Family - provides coverage for your spouse and eligible dependent children up until age 22. The amount of coverage depends on the election you choose (from $5,000 - $25,000 for a spouse and from $2,500 to $12,500 on children)
Choosing the right amount of life insurance is a personal decision that only you can make. Not everyone will need the same amount of life insurance. In deciding how much life insurance you need, you should consider the amount of money your survivors will need for immediate expenses such as funeral costs, plus consider long-term recurring expenses such as debts and living expenses your survivors may need. If you are uncertain on the amount of insurance you will need, you may want to seek the advice of a financial advisor to assist you with this decision.
The cost of the Basic insurance is shared between you and the government. You pay 2/3 of the total cost and your agency pays 1/3. Your age does not affect the cost of Basic insurance as an employee. However, as your salary increases, so will the amount of insurance coverage and the cost. You pay the full cost of the Optional insurance, and the cost of the optional insurance increases with age. To determine the current cost of the insurance for the different insurance options use the FEGLI Calculator.
Federal employee benefits payable at death are paid in accordance to the established Order of Precedence. This means when you die, your life insurance, unpaid compensation and retirement benefits normally pay out to the individuals listed in the precedence, rather than by the instructions provided in your will.
If you would like the benefits paid out differently than described in the Order of Precedence, you must complete a Designation of Beneficiary form and submit the form as indicated on the form's instructions. You may designate how your benefits for Federal Employees' Group Life Insurance (FEGLI), Thrift Savings Plan (TSP), retirement contributions, and unpaid compensation are paid in the event of your death.
If you complete a designation form you will need to keep the information updated with accurate beneficiary designations and contact information. Be sure to update your beneficiary forms when you experience a life event such as a marriage, divorce, birth of a child or death of a named beneficiary, or when the named beneficiaries move to a new address.
Additional Insurance Benefits Resources:
- Electronic Forms
- New Employee Federal Insurance Benefits Video - OPM
- New Employee Insurance Information - OPM
- Continuing insurance options into retirement
Retirement Benefits
Most employees hired today have three separate retirement benefits that work together for a comprehensive retirement plan: a Retirement Annuity, the Thrift Savings Plan and Social Security. Employees hired prior to 1/1/1984 under the Civil Service Retirement System do not have a Social Security component, unless earned from non-federal employment.
New employees may want to consider changing their Thrift Savings Plan contribution amounts or allocations. See the links below for additional information.
Retirement Annuity (CSRS & FERS)
The Federal retirement annuity is a defined benefit retirement plan. The defined benefit plan provides a specific retirement annuity based on the employee's length of creditable service and the highest three consecutive years of earnings. There are two distinct retirement systems in the Federal government that provides different retirement criteria and annuity computations:
- Federal Employees Retirement System (FERS)
- Civil Service Retirement System (CSRS)
Eligible employees do not need to enroll in a specific retirement system. They are assigned a retirement system based upon the employee's date of hire and service history. Employees first hired after January 1, 1987 are automatically covered under the FERS retirement system (or FERS-RAE or FERS-FRAE). Employees first hired prior to January 1, 1987 will have their service history closely evaluated by their servicing Human Resources office to determine the correct retirement system. The links above provide additional information about retirement eligibility and how your annuity is computed.
How do you know which retirement plan you are covered under? Review your Notification of Personnel Action, SF-50, block 30. If you think you should be a different retirement system, contact your Agency HR office for verification of the retirement system.
For additional information about retirement eligibility, the annuity computation and other retirement options, view these booklets:
- FERS Retirement Overview
- CSRS Retirement Overview
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees. It offers retirement savings and tax benefits similar to a 401(k) plan. The TSP is a defined contribution plan, meaning that the retirement income you eventually receive from your TSP account depends on how much you contribute to your TSP account during your working years.
Agency Contribution & Matching Funds - If you are a FERS employee, you will automatically have an agency contribution of 1% of your salary contributed to your TSP account. Plus, if you contribute to TSP, your agency also provides a matching contribution. The amount of the agency matching contribution is:
- A dollar-for-dollar match on the first 3% you contribute;
- And 50 cents on the dollar match for the next 2%
Thus when you contribute 5% of your basic pay, your agency contributes 4% in matching contributions, plus 1% in automatic agency contributions, resulting in a total combined agency + employee contribution of 10% of your basic pay!
Civil Service Retirement System (CSRS) and CSRS Offset employees do not receive matching funds or agency contributions. However, CSRS and CSRS Offset employees may still contribute to TSP. Your TSP contributions will supplement your retirement income. It is a great way to save for retirement with potential tax savings.
Contribution Limits - You may contribute a specific dollar amount or a percentage of your pay. There is no maximum percentage contribution. However, the annual maximum TSP contribution is $19,500 for 2021 for employees under the age of 50. If you are over age 50, you can contribute an additional $6,500 for a total of $26,000 in 2021, due to catch up contribution provisions. The contribution limits are established by the IRS annually.
FERS employees must be cautious not to reach the maximum contribution amount before the last payday of the year. Matching contributions are based on amount contributed in a payday. If there is no contribution that payday because you have reached the annual maximum contribution, then there is no amount to match. You will not earn matching contribution for the pay periods you are unable to contribute.
If you are a new employee or are rehired after a break in service, your agency automatically enrolled you in TSP at the rate of 5% of your basic pay. This amount is deducted from your paycheck every pay period, and deposited in your TSP account, unless you made a contribution election to stop or increase your contributions.
Contribution Types - Employees may elect Traditional (pre-tax) or Roth (after-tax) contributions or both. Traditional contributions are deducted from your pay before taxes, thus lowering your taxable income for that year. These contribution and earnings are taxed when they are withdrawn from TSP in retirement.
Roth contributions are deducted from your pay after-tax. Since the contributions under Roth are made after tax, there are no additional taxes paid on the contribution or earnings when Roth funds are withdrawn in retirement. Therefore, the Roth lowers your taxable income in retirement and avoids paying taxes on the contribution's earnings.
Agency contributions and matching contributions always go into a traditional TSP account because they are not included in your earnings. Therefore, taxes on the matching funds are due when they are withdrawn.
Investment Options - If you are a new employee all contributions received by the TSP are deposited into the Lifecycle (L) Fund targeted most closely to the year you turn 62. If you were rehired after a break in Federal service, a number of factors affect how your contributions will be invested by default. When selecting your investment funds, you should consider your risk tolerance and when you plan to withdraw the funds. The investment fund options include lifecycle funds, government securities, stocks and bonds. You can change your TSP investment allocation by logging into your account at www.tsp.gov and making changes through an interfund transfer for your current account balance, or by changing your contribution allocations for future contributions.
New Employees should:
- Look for your TSP account number, web password, and Personal Identification Number (PIN) in the mail.
- Consider contributing to at least 5% of your salary, to obtain the full agency matching contribution, if you're a FERS employee.
- Change the amount you contribute, or elect a Traditional or Roth account on the Employee Personal Page (EPP). You will likely not have access to EPP until you have been employed a couple weeks. As a new employee, you can submit a TSP-1 to your agency HR office to make the election prior to having EPP access.
- Decide how you want contributions to your account to be invested. Investment changes are made by logging into your account at www.tsp.gov when you receive your password from TSP.
- Think about whether you want to designate beneficiaries to receive your account in the event of your death.
More information and retirement planning tools are available on the TSP Website. TSP has several booklets available for employees including a Summary of the Thrift Savings Plan and Withdrawing Your TSP Account After Leaving Federal Service. TSP also has videos online including this one on How TSP fits into the FERS Retirement Plan.
For additional information, contact your agency HR office or TSP.
Social Security
Social Security is another key element of your total retirement package. Employees under the FERS and CSRS-Offset retirement systems have payroll deductions for Social Security (OASDI) and earn a Social Security annuity. CSRS employees do not have a Social Security element based on their Federal salary, but they may have a Social Security Annuity based on their non-Federal earnings. For information about computing your Social Security annuity, contact Social Security directly or visit their website at www.ssa.gov. You may also find these links helpful:
- Request Your Social Security Statement - NOTE: The Statement does not reflect any reduction for the Government Pension Offset (GPO) or the Windfall Elimination Provision (WEP) applicable to CSRS and CSRS Offset employees.
- Retirement Planner
- For CSRS or CSRS Offset employees:
- Windfall Elimination Provision (WEP)
- Government Pension Offset (GPO)
Here is information to assist you in understanding your Federal benefits and building your wealth. Make the most of your money whether you're a student, young adult, parent, or retiree.
