VSIP and health insurance


Q. I am 52 years old, 25 years in FERS, potentially being offered a Voluntary Separation Incentive Pay. If I do the VSIP, I will be employable at my current salary outside the government.

If I take the VSIP, can I carry my Federal Employees Health Benefits into retirement if I pay for it?

Can I delay collecting my retirement until age 62 and carry my FEHB through to retirement?

A. VSIPs are often accompanied by an offer of early retirement. If so, you already have the age and service needed for an immediate, unreduced annuity. If you did retire and were eligible to carry your FEHB coverage into retirement, you could postpone the receipt of your annuity to a later date and re-enroll when your annuity begins. If you simply accepted the VSIP and resigned, your FEHB coverage would continue for 31 days at no cost to yourself. You could then extend your coverage for up to 18 months under the temporary continuation of coverage provision. However, you’d have to pay the entire cost of the premiums, plus 2 percent for administrative costs.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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