Health insurance costs after retirement


Q. If I take the $15,000 retirement incentive being offered now, (I have 25 years under FERS, am a Postal Service employee, and am 64 years old), will my Blue Cross premiums go up? If so, by how much? I now pay $81.68 a month.

Also, if I decide to get married, my family option now would be $203.61 a month. How much would these premiums be if I take the retirement incentive? I must make the decision by Dec. 3.

Is the FERS pension amount taxed? If so, is it taxed by income and Federal Insurance Contributions Act? My gross pension amount is $1,288 a month. How much, approximately, would be left over after taxes and health care subtractions?

A. The easiest way to compare the cost of your Blue Cross/Blue Shield Standard premiums is to show you the difference between what Postal Service and non-Postal Service employees will be paying in 2013.

A Postal Service employee would pay $64.71 every two weeks for self-only coverage and $152.92 for self and family. A non-Postal Service employee would pay $85.71 for self-only and $200.14 for self and family.

When a Postal Service employee retires, his health benefits premiums are the same as those for all other non-Postal Service employees and retirees. And they are paid on a monthly, rather than a biweekly basis. In 2013, the BC/BS monthly rate for retirees will be $186.14 (self-only) and $438.63 (self and family). To find out how your annuity would be taxed, go to, and read the Internal Revenue Service’s Tax Guide to U.S. Civil Service Retirement Benefits.


About Author

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

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