We earlier looked at what retirement benefits you would be entitled to if you left federal service before you were eligible to retire. This article looks at other federal benefits and what would happen to them in the same situation.
Insurance
You will get an automatic 31-day extension on your health insurance. At the end of the 31-days you can either convert to an individual policy or continue your current coverage for 18 months under temporary continuation of coverage (TCC). Costs and coverage on an individual policy will vary. The cost for TCC is your share, the share that the government had previously been contributing and a 2% administrative fee. In both situations, no physical is required and there is no ban on pre-existing conditions.
You can convert your life insurance to an individual policy without having to take a physical examination. Pre-existing conditions will not exclude you.
If you are enrolled in the federal long-term care insurance program you will be allowed to continue your enrollment.
You will not be allowed to continue enrollment in a flexible spending account and any unspent money in a health care FSA will be forfeited.
You will not be allowed to continue enrollment in the federal employees dental and vision insurance program.
Leave
Your annual leave, credit hour and comp time balance will be paid to you in a lump sum shortly after you leave.
Your sick leave will do you no good, unless you return to federal service. If you return, you can have it re-credited.
Thrift Savings Plan
You have many choices with your TSP. You are not required to withdraw your TSP contributions and have the option of leaving them in the TSP. You will still have the same ability you currently do to make interfund transfers. You could also transfer the TSP to an IRA or a subsequent employer’s tax-deferred retirement plan. If you choose the transfer option, make sure it is a direct transfer (directly from the TSP to the new plan) in order to avoid any withholding.
If you separate from federal service before the year in which you reach the age of 55 (age 50 for special category employees), any money you withdraw from the TSP before reaching the age of 59 ½, will be subject to a 10% early withdrawal penalty in addition to taxes.
