In my last column I wrote about the calendar year 2015 changes in the dollar amounts or percentages affecting your pay (1 percent), cost-of-living adjustments for eligible retirees, survivors and Social Security beneficiaries (1.7 percent), and the Social Security earnings limit ($15,720). In this one, I’ll describe the calendar year 2015 changes affecting Medicare, death benefits and children’s benefits.
At age 65, you’ll be eligible for Medicare Part A (hospital insurance) at no cost to you. If you are no longer working, it’s free. That’s because you already paid for that benefit through payroll deductions. You’ll still be entitled to that coverage if you have earnings from wages or self-employment; however, deductions will continue to be taken from your pay until you retire for good.
You’ll also be eligible for Medicare Part B (medical insurance), which isn’t free. If you decide to enroll in Medicare Part B, you’ll have to pay the premiums. The Part B premiums for 2015 are unchanged from 2014,. So, if your last year’s individual taxable income was $85,000 or less ($170,000 or less if filing jointly), your monthly premium will be $104.90. With a last year taxable income of $85,001 up to $107,000 ($170,001 up to $214,000 if filing jointly), the Part B monthly premium is $146.90; from $107,001 to $160,000, $209.80 ($214,001 up to $320,000 if filing jointly); from $160,001 to $214,000, $272.70 ($320,001 up to $428,000 if filing jointly). If your taxable income last year was greater than $214,000 ($428,000 if filing jointly), it will be $335.70 per month.
If you don’t sign up for Part B when first eligible, your Part B premiums will go up by 10 percent for each full 12-month period that you could have been enrolled in Part B but weren’t. That’s a permanent increase, not a one-time penalty. However, there is an exception to that penalty. Iif you are covered under a group health plan based either on your own current employment or that of your spouse, you can enroll in Part B at any time after reaching age 65 or during the eight-month period that begins the first full month after you are no longer covered under that plan based on current employment.
Under CSRS there is no specific death benefit; however, if you die while still employed, your widow or widower will be entitled to a survivor annuity.
On the other hand, if you die while a FERS employee in 2015 and have at least 18 months of service, your surviving spouse would receive a lump sum payment of $32,326.58 (up from $31,786.21 in 2014), plus a lump sum payment equal to the greater of half your annual basic pay or half of your highest three consecutive years of average salary (your high-3), plus any Social Security benefit to which he or she may be entitled.
If you had 10 or more years of service when you died, your surviving spouse would also receive a survivor annuity equal to half of what your basic annuity would have been based on your years of service, but without any age-based reduction if you were under age 62 when you died.
There is a special death benefit payable to the survivors of public safety officers who died as the direct and proximate result of a personal, traumatic injury involving external force and sustained in the line of duty. In fiscal year 2015, it’s $339,310.
In 2015 the children’s monthly survivor annuity rate where one parent is still alive has increased from $502 per child to $511 and from $1,506 to $1,532, divided by the number of children. If there is no surviving parent, the monthly rates are $613 and $1,838.
To be eligible for these benefits, your child must be unmarried, under age 18 (or age 22 if attending school full-time) or any age if disabled under age 18, incapable of self-support, and unmarried.
The term “children” includes both a biological child and an adopted child. It also includes a stepchild, if living in a normal parent-child relationship, and a child born out of wedlock, if living in a normal parent-child relationship, or if a judicial determination of child support has been made.Note: The dollar amount of the benefit payable to the children of FERS and CSRS Offset employees is reduced by the amount of any Social Security benefit payable to the children. That reduction doesn’t apply to the children of CSRS employees.In my final column on 2015 changes, I’ll tell you about interest rates, the salary cap, military deposits, present value factors, the maximum taxable wage base, and the TSP deferral limit.
Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to firstname.lastname@example.org.