PAY AND LEAVE
[OPM Contacts: Jeanne Jacobson (pay), Jennifer Melvin (leave), 202-606-2858, unless otherwise stated]
This section provides information on basic salary levels, locality pay, aggregate pay limits, pay flexibilities available to address staffing difficulties, pay for reemployed annuitants, leave, and pay on separation from the Government.
The Consolidated Appropriations Act, 2016, contains a provision that continues the freezes on the payable pay rates for the Vice President and certain senior political appointees at 2013 levels during calendar year 2016. (See section 738 of title VII of Division E of the Act.) OPM’s guidance on the pay freeze for certain senior political officials issued in 2014 is generally applicable in applying the pay freeze in 2016. (See OPM guidance memorandum CPM 2014-03 at https://www.chcoc.gov/content/2014-pay-freeze-certain-senior-political-officials and CPM2015-14 at https://www.chcoc.gov/content/january-2016-pay-adjustments-0.) The official statutory rates of pay for the Vice President and Executive Schedule positions are used in determining the rate ranges and aggregate pay limitations for employees and pay systems unaffected by the pay freeze.
The President’s August 3, 2010, memorandum freezing discretionary awards, bonuses, and similar payments for political appointees continues in effect until further notice. Agencies should continue to apply this freeze until further notice in accordance with OPM’s guidance at https://www.chcoc.gov/content/guidance-freeze-discretionary-awards-bonuses-and-similar-payments-federal-employees-serving.
Basic Salary Levels
Executive Schedule. Sections 5311 through 5318 of title 5, United States Code, prescribe the salaries of most positions filled by Presidential appointees at levels I through V of the Executive Schedule. In 2016, Executive Schedule salaries range from $150,200 (level V) to $205,700 (level I). Executive Schedule officials do not receive locality pay. Section 2 of the Presidential Appointment Efficiency and Streamlining Act of 2011 (Public Law 112-166, August 10, 2012) removed the Senate confirmation requirement for certain Presidential appointment positions in a number of agencies. Section 2(hh) provided that removal of the Senate confirmation requirement under section 2 would not (1) result in any such position being placed in the Senior Executive Service or (2) alter compensation for any such position under the Executive Schedule or other applicable compensation provisions of law.
Senior Executive Service. Agency heads may set the salaries of members of the Senior Executive Service (SES) at a rate within a range fixed by statute. The maximum SES rate is the rate for level II or III of the Executive Schedule, with the higher level II maximum applicable only to SES positions covered by a certified SES performance appraisal system. In 2016, SES basic salaries may range from a minimum rate of $123,175 to a maximum rate of $170,400 (or $185,100 for SES positions covered by a certified SES performance appraisal system). SES members do not receive locality pay. [Note: An exception applies to certain “grandfathered” SES members stationed in a nonforeign area on January 2, 2010.] Generally, an SES member may receive a pay adjustment only once during any 12-month period. [OPM Contact: Barbara Colchao, 202-606-2720]
Senior-Level Positions. The senior-level pay system [5 U.S.C. 5376] applies to both senior-level (SL) positions established under 5 U.S.C. 5108 and scientific and professional (ST) positions established under 5 U.S.C. 3104. These include high-level positions without executive responsibilities, as well as positions that the law or the President excludes from the SES. Agency heads may set the pay of an SL or ST employee at any rate within a range fixed by statute. In 2016, basic salaries may range from a minimum rate of $123,175 to a maximum rate of $170,400 (or $185,100 for SL or ST positions covered by a certified performance appraisal system). SL and ST employees do not receive locality pay. [Note: An exception applies to certain “grandfathered” SL and ST employees stationed in a nonforeign area on January 2, 2010.]
[OPM Contact: Barbara Colchao, 202-606-2720]
General Schedule. The General Schedule (GS) pay system has 15 grade levels, with 10 salary steps at each grade. The maximum rate of basic pay in 2016 is $133,444 (GS-15, step 10), excluding locality pay. In 2016, additional locality payments for employees in the United States and its territories and possessions range from 14.16 percent to 35.15 percent. No locality-adjusted rate may exceed the rate for level IV of the Executive Schedule – $160,300 in 2016. A new GS employee generally enters at the first step of the appropriate grade. Most Schedule C employees are under the GS pay system.
Special Pay Authorities. Around 22 percent of the Federal Government’s 1.9 million white collar workers are not paid under the General Schedule but are paid under other statutory authorities. For example, the Administrator of the Federal Aviation Administration (FAA) may set pay for FAA employees. The President may set the pay of certain White House employees.
Most white collar Federal employees – including GS employees, but excluding most SES members, most SL and ST employees, and all Executive Schedule officials – are eligible for supplemental locality-based payments in addition to the rate of basic pay. These payments apply only in the United States and its territories and possessions. In 2016, the locality payments range from 14.35 to 35.75 percent. The maximum locality-adjusted rate of pay for GS employees is the rate for Executive Schedule level IV ($160,300 in 2016).
Aggregate and Premium Pay Limitations
Most Federal employees are subject to an annual aggregate pay limitation under 5 U.S.C. 5307 that restricts the total amount of pay an employee may receive in any calendar year. Pay in excess of the limitation is payable at the beginning of the next calendar year and counts toward the next year’s limit. For SES members and SL and ST employees covered by certified performance appraisal systems, the aggregate pay limit is the annual rate of pay for the Vice President ($237,700 in 2016). For all others, the aggregate pay limit is the annual rate of pay for level I of the Executive Schedule ($205,700 in 2016) [5 CFR part 530, subpart B].
Also, General Schedule (GS) employees and other covered employees may receive certain types of premium pay (including overtime pay for employees exempt from the Fair Labor Standards Act, Sunday pay, night pay, and holiday pay) for a biweekly pay period only to the extent that the sum of basic pay and premium pay for the pay period does not exceed the greater of the biweekly rate payable for (1) GS-15, step 10 (including any applicable locality payment or special rate supplement), or (2) the rate payable for level V of the Executive Schedule. [See 5 U.S.C. 5547(a) and 5 CFR 550.105.] In certain emergency or mission-critical situations, an agency may apply an annual premium pay cap instead of a biweekly premium pay cap, subject to the conditions provided in law and regulation. [5 U.S.C. 5547(b) and 5 CFR 550.106 and 550.107.] For basic guidance on overtime pay and compensatory time off for Schedule C employees, see CPM 2009-13, July 20, 2009, at https://www.chcoc.gov/content/overtime-pay-and-compensatory-time-schedule-c-employees.
Agencies may use a number of discretionary pay flexibilities to deal with well-documented staffing difficulties. Specific statutory and regulatory conditions govern the use of each of these flexibilities, including agency justification and documentation requirements. Agencies should exercise these flexibilities judiciously, especially when hiring other than career employees. These payments are subject to public scrutiny and third-party review. They should be used only when necessary to address documented staffing problems. Given the current fiscal environment, agencies should monitor the use of any compensation flexibilities so that they are also used in accordance with budgetary limitations.
An agency may provide for the advance payment of basic pay (including any locality payment) covering not more than two pay periods to any individual who is newly appointed to a position, except as an agency head [5 CFR part 550, subpart B].
Above Minimum Hiring Rates – General Schedule
Agencies may set the pay of an individual newly appointed to a General Schedule position at a step above the first step of his or her grade based on the employee’s superior qualifications or a special need of the agency for the employee’s services. An agency may use this flexibility at any appropriate GS grade. The agency may set pay at the higher step only upon initial appointment or upon reappointment after a 90-day break in service. [5 CFR 531.212]
Pre-Employment Interviews – Payment of Travel and Transportation Expenses
Agencies may pay travel and transportation expenses for travel to and from pre-employment interviews to any individual they consider for employment. Travel expenses to attend confirmation hearings are considered part of the pre-employment interview process. Agencies may also pay the travel expenses of a new appointee from his or her place of residence at the time of selection or assignment to the duty station [5 CFR part 572].
Recruitment and Relocation Incentives
Agencies have the authority to pay recruitment and relocation incentives. An agency may not pay a recruitment or relocation incentive to an employee in a position (1) to which the individual was appointed by the President; (2) in the Senior Executive Service (SES) as a noncareer appointee; (3) which has been excepted from the competitive service by reason of its confidential, policy-determining, policy-making, or policy-advocating character (Schedule C); (4) designated as the head of an agency, including an agency headed by a collegial body composed of two or more individual members; (5) in which the employee is expected to receive an appointment as the head of an agency; or (6) in the SES as a limited term appointee or limited emergency appointee when the appointment must be cleared through the White House Office of Presidential Personnel. An agency may pay an incentive to an employee newly-hired in the Federal Government (i.e., a recruitment incentive) or to an employee who must relocate (i.e., a relocation incentive) to fill a position that would otherwise be difficult to fill. In return, the employee must sign an agreement to complete a period of service with the agency (6-month minimum for recruitment incentives). The total amount of recruitment or relocation incentive payments may not exceed 25 percent of the annual rate of basic pay of the employee at the beginning of the service period, multiplied by the number of years in the service period. With OPM approval, this cap may be raised to 50 percent (based on a critical agency need), as long as the total incentive does not exceed 100 percent of the employee’s annual rate of basic pay at the beginning of the service period. An agency may pay a recruitment or relocation incentive as an initial lump-sum payment at the beginning of the service period, in equal or variable installment payments throughout the service period, as a final lump-sum payment upon completion of the service period, or in a combination of these methods. Agencies may pay recruitment and relocation incentives to employees under the General Schedule, Senior Executive Service, senior-level pay system, Executive Schedule, and certain other pay systems. Recruitment and relocation incentives are subject to the aggregate limitation on total pay that an employee may receive in a calendar year [5 CFR part 575, subparts A and B]. (See “Aggregate and Premium Pay Limitations” section above.)
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Agencies may also pay retention incentives, but the same categories of employees who are excluded from receiving recruitment and relocation incentives are also barred from receiving retention incentives. An agency may pay an incentive to a current employee if:
The agency determines that the unusually high or unique qualifications of the employee or a special agency need for the employee’s services makes it essential to retain the employee if he or she would be likely to leave the Federal Government (for any reason, including retirement) in the absence of a retention incentive; or
The agency has a special need for the employee’s services that makes it essential to retain the employee in his or her current position during a period of time before the closure or relocation of the employee’s office, facility, activity, or organization and the employee would be likely to leave for a different position in the Federal service in the absence of a retention incentive.
An agency must establish a single retention incentive rate for each individual or group of employees, expressed as a percentage of each employee’s rate of basic pay, not to exceed 25 percent (for an individual employee) or 10 percent (for a group or category of employees). With OPM approval, this cap may be increased to as much as 50 percent. An agency may pay a retention incentive in installments after the completion of specified periods of service or in a single lump sum after completion of the full period of service required by the service agreement. Agencies may pay retention incentives to employees under the General Schedule, Senior Executive Service, senior-level pay system, Executive Schedule, and certain other pay systems. Retention incentives are also subject to the aggregate limitation on total pay that an employee may receive in a calendar year. (See “Aggregate and Premium Pay Limitations” above.). [5 CFR part 575, subpart C]
OPM may establish higher rates of basic pay for a group or category of General Schedule positions in one or more geographic areas. The special rate authority is used to address significant or likely significant difficulties in recruiting or retaining well-qualified employees. OPM may establish special rates by occupational series, specialty, grade-level, and/or geographic area. Special rate supplements are applied to the base General Schedule. No special rate may be established in excess of the rate of basic pay payable for level IV of the Executive Schedule. [5 U.S.C. 5305 and 5 CFR part 530, subpart C]
Critical Position Pay
At an agency head’s request, OPM may, in consultation with the Office of Management and Budget, grant authority to fix the rate of basic pay for one or more positions at a higher rate than would otherwise be payable for the position. The position under consideration must require an extremely high level of expertise in a scientific, technical, professional, or administrative field that is critical to the successful accomplishment of an important agency mission. Up to 800 positions may be covered Governmentwide. The authority allows for setting pay up to the rate for level II of the Executive Schedule, level I of the Executive Schedule if an agency demonstrates exceptional circumstances, or greater than the rate for level I of the Executive Schedule in rare circumstances. [5 U.S.C. 5377 and 5 CFR part 535]
Student Loan Repayments
For most types of employees, agencies can establish a program under which they may repay certain types of Federally-made, insured or guaranteed student loans as an incentive to recruit or retain highly-qualified personnel. Under this authority, an agency may make loan payments to a loan holder of up to $10,000 for an employee in a calendar year up to an aggregate maximum of $60,000 for any one employee. In return, the employee must sign a service agreement to remain in the service of the paying agency for a period of at least 3 years. If the employee separates voluntarily or is separated involuntarily for cause or poor performance before fulfilling the service agreement, he or she must reimburse the paying agency for all student loan repayment benefits received. An agency may not provide student loan repayment benefits to an employee occupying a position excepted from the competitive service because of its confidential, policy-
determining, policy-making, or policy-advocating character (e.g., Schedule C appointees) [5 CFR part 537].
In most cases, when Federal retirees (covered by the Civil Service Retirement System or the Federal Employees’ Retirement System) are reemployed in the Federal service, they continue to receive their annuities and their salaries are offset by the amount of their annuities [5 U.S.C. 8344 and 8468]. The offset also applies when retirees are appointed as experts or consultants. An agency may request that OPM waive the offset requirement in limited circumstances set out in statute and OPM regulations. [5 C.F.R. part 553]. In addition, the National Defense Authorization Act (NDAA) for Fiscal Year 2015, section 1107, provides the authority for the head of an agency to grant salary offset or “dual compensation” waivers on a temporary basis, and under specified circumstances, without OPM approval, through December 31, 2019.
Federal retirees who return to work under an appointment with the Department of Defense continue to receive their annuities and receive their full salaries without offset. (Under certain circumstances, though, retirees returning to work for the Department of Defense may elect to have their salaries offset by the amount of their annuities in order to obtain higher retirement benefits after their reemployment ends.)
The CSRS annuity of certain reemployed Members of Congress and CSRS retirees who receive a Presidential appointment may be terminated at reemployment.
Employees should consult with the Human Resources Office in their employing agency for further information.
In general, officers and employees who are appointed by the President (PAS and PA) are not covered by the Federal leave system established by 5 U.S.C. chapter 63 if their rate of basic pay equals or exceeds the rate for level V of the Executive Schedule. [See 5 CFR 630.211(a)(3).] These Presidential appointees do not earn annual and sick leave and cannot be charged leave for absences from work. However, members of the SES and employees in senior-level (SL) and scientific and professional (ST) positions are covered by the Federal leave system even if they were appointed by the President. Career SES members who accept a Presidential appointment without a break in service to a position outside the SES at a rate of basic pay equivalent to or higher than level V of the Executive Schedule can elect to retain their SES leave benefits and continue to earn leave while serving in the Presidential appointment. Under 5 U.S.C. 6301(2)(xi) and 5 CFR 630.211, an agency head may exclude a Presidential appointee from coverage under the leave system under certain conditions.
Generally, employees earn 13, 20, or 26 days of annual leave a year, depending on years of service. However, SES members, SL and ST employees, and certain employees in positions deemed by OPM to be equivalent to SES or SL/ST positions accrue 8 hours of annual leave each biweekly pay period, regardless of years of service. Annual leave accrues incrementally, i.e., 4, 6, or 8 hours every pay period. SES members, as well as SL/ST employees and employees in positions designated under 10 U.S.C. 1607(a) as Intelligence Senior Level positions, may carry over up to 90 days of annual leave to the next leave year; most other employees may carry over up to 30 days of annual leave. A supervisor may grant advanced annual leave at his or her discretion, consistent with the agency’s leave policy. The amount of annual leave that may be advanced may not exceed the amount of annual leave the employee will accrue in the remainder of the leave year.
Note: Under certain conditions, an agency may give a newly-appointed employee, or an employee who is reappointed following a break in service of at least 90 calendar days, credit for qualifying non-Federal service in determining the employee’s rate of annual leave accrual. The employing agency must determine that the individual’s skills and experience are essential to the new position and were acquired through performance in a non-Federal or uniformed service position having duties directly related to the position to which he or she is being appointed and that the use of this authority is necessary to achieve an important agency mission or performance goal. The determination must be made prior to the employee’s entry on duty.
Employees earn 13 days of sick leave each year (which accumulates without limit in succeeding years). Sick leave also accrues incrementally, i.e., 4 hours each biweekly pay period. Sick leave is a paid absence from duty that an employee is entitled to use for personal medical needs, general family care purposes, care of a family member with a serious health condition, adoption-related purposes, bereavement, and for the care of a covered service member with a serious injury or illness provided the employee invokes his or her entitlement to leave under the Family and Medical Leave Act (FMLA). There is no limitation on the amount of sick leave an employee can use for his or her own personal medical needs or for adoption-related purposes. An employee may use up to 12 weeks (480 hours) of sick leave each leave year to care for a family member with a serious health condition, which includes 13 days (104) hours) of sick leave for general family care or bereavement purposes. An employee is entitled to no more than a combined total of 12 weeks of sick leave each leave year for all family care purposes. Sick leave may be advanced at the discretion of the agency and consistent with agency policy. An agency may advance up to 30 days (240 hours) of sick leave to an employee for purposes that include the employee’s or family member’s serious health condition, for adoption-related purposes, and for the care of a covered service member with a serious injury or illness provided the employee invokes his or her entitlement to FMLA leave. An agency may advance up to 13 days (104 hours) of sick leave to an employee for the employee’s or family member’s general medical needs or certain other purposes, including bereavement.
Family and Medical Leave
Under the Family and Medical Leave Act of 1993 (FMLA), an employee is entitled to a total of 12 workweeks of unpaid leave during any 12-month period for: (1) the birth of a child and care of the newborn; (2) the placement of a child with the employee for adoption or foster care; (3) the care of an employee’s spouse, son or daughter, or parent with a serious health condition; (4) an employee’s own serious health condition that makes him or her unable to perform the duties of his or her position; and (5) any qualifying exigency arising out of the fact that the spouse, son, daughter, or parent of the employee is on covered active duty (or has been notified of an impending call or order to covered active duty) in the Armed Forces. Employees who are family members of a service member with a serious injury or illness that he or she incurred in the line of duty while on active duty in the Armed Forces, and who are providing care for that service member, are entitled to up to 26 weeks of FMLA leave (military family leave) during a single 12-month period to care for the service member. During the single 12-month period, the employee is entitled to a combined total of 26 weeks of regular FMLA leave and military family leave. An employee may substitute annual leave, sick leave, advanced annual or sick leave, or donated annual leave under the leave sharing programs, consistent with current laws and OPM regulations for using such leave, for unpaid leave under the FMLA. Employees must have 12 months of service (which need not be continuous or recent months) to qualify to take FMLA leave.
Leave Transfer and Leave Bank Programs
An employee who has a personal or family medical emergency and who has exhausted his or her own available paid leave may receive donated annual leave from other Federal employees through the voluntary leave transfer program (VLTP) or voluntary leave bank program (VLBP). All agencies must have a leave transfer program. In addition, agencies are strongly encouraged to establish a leave bank program for their employees. There is no limit on the amount of donated annual leave a leave recipient may receive from leave donors. However, any unused donated leave must be returned to the leave donors when the medical emergency ends. An employee may participate concurrently in both the VLTP and VLBP, if available.
Leave Transfer for Combat-related Disability
An employee who sustains a combat-related disability while serving as a member of the Armed Forces (including a reserve component) and is undergoing medical treatment for that disability may receive donated annual leave from other Federal employees through the voluntary leave transfer program without having to exhaust his or her available paid leave. A qualified leave recipient is eligible to receive donated annual leave for up to 5 years from the start of the employee’s treatment, as long as the employee continues to undergo such medical treatment. The statutory authority for this program was enacted on January 28, 2008. For an employee who was already undergoing medical treatment on that date, the 5-year period begins on the date of enactment.
Any full-time Federal civilian employee whose appointment is not limited to less than 1 year is entitled to military leave, which is time off at full pay for certain active or inactive duty in the National Guard or a Reserve of the Armed Forces. Two types of military leave are most common. First, employees are entitled to 15 days of military leave per fiscal year for active duty, active duty training, inactive duty training, or funeral honors duty. Up to 15 days may be carried over into the next fiscal year. Second, employees are entitled to 22 workdays of military leave per calendar year for duty as ordered by the President, the Secretary of Defense, or a State Governor when the employees perform military duties in support of civil authorities in the protection of life and property, or when they perform full-time military service as a result of a call or order to active duty in support of a contingency operation as defined in section 101(a)(13) of title 10, United States Code. For the 22 days of military leave, an employee’s civilian pay is reduced by the amount of military pay for the days of military leave. None of the 22 days may be carried over into the next calendar year.
An employee is entitled to time off at full pay without charge to leave for service as a juror or witness in a judicial proceeding in which the Federal, State, or local government is a party.
Leave for Bone-Marrow or Organ Donors
An employee is entitled to 7 days of paid leave each calendar year to serve as a bone-marrow donor and 30 days each calendar year to serve as an organ donor.
Additional information about the Federal Government’s leave programs, including those described above, is available on OPM’s website at http://www.opm.gov.
Certain payments may be payable to an individual who is separated from the Federal service.
Severance pay is authorized for full-time and part-time employees who are involuntarily separated from Federal service and who meet other conditions of eligibility. To be eligible for severance pay, an employee must be serving under a qualifying appointment, have completed at least 12 months of continuous service, and be removed from Federal service involuntarily for reasons other than misconduct or unacceptable performance. A Presidential appointment, an excepted appointment under Schedule C, a noncareer appointment in the SES (as defined in 5 U.S.C. 3132(a)), and an equivalent appointment made for similar purposes, are not qualifying appointments; therefore, an individual serving under one of these appointments is not eligible for severance pay. (Career SES appointees who accept Presidential appointments may elect to retain severance pay benefits. See 5 U.S.C. 3392(c) and 5 CFR part 317, subpart H.) [5 U.S.C. 5595 and 5 CFR part 550, subpart G]
Lump-Sum Payments for Unused Annual Leave
Employees who are covered by the Federal leave system and who separate from Federal service or who enter on active duty and elect to receive a lump-sum payment are entitled to a lump-sum payment for unused annual leave. The lump-sum payment generally equals the pay the employee would have received if the employee had remained in Federal service on annual leave (as provided in OPM regulations). This payment excludes (among other things) any incentives or allowances that are paid for the sole purpose of encouraging an employee to remain in Government service, such as retention incentives and physicians comparability allowances. Most Presidential appointees (PAS and PA) are excluded from coverage under the Federal leave system and therefore do not receive lump-sum annual leave payments upon separation.
A Federal employee covered by the Federal leave system who receives a Presidential appointment to a leave-exempt position does not receive a lump-sum payment for his or her unused annual leave. The unused annual leave is held in abeyance for recredit if and when the employee is subsequently reemployed in a position covered by the Federal leave system. If the individual separates from Federal service while under such a Presidential appointment, he or she will receive a lump-sum payment for unused annual leave based on the rate of pay in effect for the position the employee held immediately before the employee accepted the Presidential appointment. [Reminder: These lump sum payments are treated as taxable income.]
When an employee who received a lump-sum payment for unused annual leave is re-employed in the Federal service before the end of the annual leave period covered by the lump-sum payment, he or she must refund a portion of the lump-sum payment. The refunded portion covers the period between the date of reemployment and the expiration of the lump-sum leave period. Upon full refund, the employing agency will recredit to the employee an amount of annual leave that is equal to the days or hours of work remaining between the date of reemployment and the expiration of the lump-sum leave period.
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RETIREMENT, HEALTH AND LIFE INSURANCE, OTHER BENEFITS
[OPM Contact: Karen McManus, 202-606-0788]
Note: Reemployed Federal annuitants’ benefits may be handled differently from that of other employees. Each agency’s Human Resources Office can provide the necessary information to these employees.
Health Insurance (FEHB)
Eligibility for participation in the Federal Employees Health Benefits (FEHB) Program depends on the type of Federal appointment. Generally, full-time and part-time Federal employees, as well as seasonal, temporary or intermittent Federal employees for whom the employing office expects the total hours in pay status (including overtime hours) plus qualifying leave without pay hours to be at least 130 hours per calendar month, are eligible to enroll in FEHB.
Members of Congress and certain “designated” Congressional staff are not eligible to purchase a health benefit plan for which OPM contracts and approves under the FEHB, but may purchase health benefit plans, as defined in 5 U.S.C. 8901(6), that are offered on a Health Insurance Marketplace (Exchange) as determined by the Director of OPM, pursuant to the Affordable Care Act. These individuals may receive a Government contribution toward that purchase just as other Federal employees receive such a contribution toward FEHB.
Individuals with temporary appointments designated as “provisional” are eligible for FEHB coverage, since this type of appointment is used to expedite placement in a position expected to be permanent while the necessary procedures required for non-temporary appointment are proceeding, such as a pending Senate confirmation or security clearance.
After the initial opportunity to enroll, the Program permits enrollment changes during a 4-week open season each November/December and upon the occurrence of certain other qualifying life events such as changes in family status.
Plans. Eligible new employees will receive materials describing available plans from the employing agency and must make an enrollment election within 60 days of becoming eligible. The Program offers each employee several Governmentwide fee-for-service plans (some of which require membership in an employee organization) and health maintenance organizations serving the geographic area in which the employee lives or works. Enrollment may be for self-only, self-plus one, or self and family.
Cost-sharing. The Government contribution equals 72 percent of the program-wide weighted average of subscription charges in effect each year, for self-only, self-plus one, and self and family enrollments, subject to the maximum of 75 percent of the charges for any particular plan or option. Employees are subject to payroll withholdings for health plan costs in excess of the Government contribution.
Premium Conversion. Eligible new employees who elect to enroll in the FEHB Program will participate automatically in premium conversion unless they waive participation. Premium conversion is a tax benefit. It allows an employee’s contribution for health insurance to be made on a pre-tax basis, which means that the money is not subject to Federal income, Medicare, or Social Security taxes.
Consumer-Driven Health Plans. High Deductible Health Plans (HDHP) are offered in the FEHB Program, with health savings accounts (HSAs) and, for those not eligible, health reimbursement arrangements (HRAs). An HDHP with a Health Savings Account (HSA) provides traditional medical coverage and a tax-free way to build savings for future medical expenses. The HDHP features higher annual deductibles (for 2016, a minimum of $1,300 for self only and $2,600 for self-plus-one or self and family coverage) than other traditional health plans. The maximum out-of-pocket limitations for HDHPs participating in the FEHB Program in 2016 are $6,550 for self only and $13,100 for self-plus-one and self and family enrollment. The HSA and HRA associated with each HDHP will be funded from premiums. The contribution or credit amount will vary from plan to plan. Monies in an employee’s HSA belong to the employee and will remain in that account until used for qualified medical expenses. Monies in an employee’s HRA belong to the employer, and not the employee, and are managed by the health plan. They do not earn interest and are not portable. The HRA may continue to be used for qualified medical expenses so long as the employee does not switch to another health plan or separate from Federal service, except to retire. More information on this option is on OPM’s website at https://www.opm.gov/healthcare-insurance/.
Life Insurance (FEGLI)
Eligibility to participate in the Federal Employees’ Group Life Insurance (FEGLI) Program depends on the type of Federal appointment. Generally, Federal employees who receive appointments limited to 1 year or less are excluded.
However, individuals with temporary appointments designated as “provisional” are eligible as explained above under Health Insurance.
If life insurance coverage is waived during a new employee’s first opportunity to enroll, which ends 60 days after the employee’s appointment date in an eligible position, subsequent open enrollment opportunities to elect coverage are very limited. Enrollment will be accepted within 60 days after a change in family circumstances (marriage or divorce, a spouse’s death, or acquisition of an eligible child) or, for any coverage except Option C, upon medical evidence of insurability.
Basic. Eligible employees automatically receive Basic life insurance coverage unless they file a written waiver. The Basic insurance amount is equal to annual basic pay, rounded to the next higher multiple of $1,000, plus $2,000. It includes additional coverage for employees under age 45, plus accidental death and dismemberment coverage (AD&D).
Optional. Basic must be in effect in order to elect any Optional coverage. The Program offers three types of Optional life insurance, which employees may elect within 60 days of becoming eligible without evidence of good health. Option A offers $10,000 life insurance and AD&D coverage; Option B offers life insurance (no AD&D) coverage in multiples of 1, 2, 3, 4, or 5 times the employee’s annual rate of basic pay (rounded to the next higher multiple of $1,000); and Option C is life insurance (no AD&D) on the employee’s eligible family members in multiples of 1, 2, 3, 4, or 5 times the amount of $5,000 on death of a spouse and $2,500 on death of an eligible child.
Cost. The cost of Basic life insurance is shared by the employee and the Government; the employee pays two-thirds, and the Government pays one-third. The employee’s biweekly premium is 15 cents per $1,000 of the Basic insurance amount. Employees pay the full cost of all Optional insurance, and premiums for Optional insurance are based on 5-year age bands beginning at age 35.
Flexible Spending Accounts (FSAFEDS)
New employees working for an executive branch agency, or an agency that has adopted the Federal Flexible Benefits Plan ("FedFlex"), can elect to participate in the Federal Flexible Spending Accounts Program (FSAFEDS). FSAFEDS offers two different flexible spending accounts (FSAs): a health care flexible spending account, and a dependent care flexible spending account. Information on this program is on the FSAFEDS website at www.fsafeds.com.
New and newly-eligible employees have 60 days after their entry on duty to enroll in this program. However, there is also an enrollment opportunity each year at the same time as the FEHB open season during which eligible employees may enroll in Flexible Spending Accounts for the following year.
Long Term Care Insurance (FLTCIP)
Most Federal and U.S. Postal Service employees and annuitants, active and retired members of the uniformed services, and their qualified relatives are eligible to apply for insurance coverage under the Federal Long Term Care Insurance Program (FLTCIP). An eligible employee is one who serves in a position that conveys eligibility for the FEHB Program, even if he or she does not enroll in FEHB. New employees can apply with abbreviated underwriting within 60 days of the hire or eligibility date. Spouses are also eligible to apply with abbreviated underwriting during those 60 days. After the 60 days, employees and spouses can apply with full underwriting. Qualifying relatives, including same-sex domestic partners, can apply at any time with full underwriting. The Program is medically underwritten, which means that applicants will have to answer questions about their health on the application. Certain medical conditions, or combinations of conditions, will prevent some people from being approved for coverage. FLTCIP does not offer a “self and family” option. Each applicant must apply on his/her own. Long Term Care Partners, the administrator of the program, evaluates each application to determine eligibility to enroll in the Program.
Members of Congress and Congressional staff who are eligible to purchase health benefit plans, as defined in 5 U.S.C. 8901(6), on the Health Insurance Marketplace (Exchange) and receive a Government contribution toward that purchase are eligible to enroll in FLTCIP.
Cost-sharing. The Federal Long Term Care Insurance Program is an employee-pay-all program. By law, there is no Government contribution.
OPM’s long term care website is at https://www.ltcfeds.com/ .
Dental and Vision Insurance (FEDVIP)
Dental and vision benefits are available to eligible Federal and U.S. Postal Service employees, retirees, and their eligible family members on an enrollee-pay-all basis through the Federal Employees Dental and Vision Insurance Program (FEDVIP). An eligible employee is a Federal or U.S. Postal Service employee who is eligible for FEHB coverage, whether or not the employee is enrolled in FEHB, except that employees with certain temporary and intermittent appointments are excluded from eligibility. An eligible employee may apply for FEDVIP coverage as a new employee within 60 days after beginning his or her Federal employment or change in employment to a covered position. A survivor annuitant not already covered may apply within 60 days of becoming a survivor annuitant. After the initial opportunity to enroll, FEDVIP permits enrollment and enrollment changes during a 4-week open season each November/December and upon the occurrence of qualifying life events such as changes in family, employment or coverage status.
Members of Congress and Congressional staff who are eligible to purchase health benefit plans, as defined in 5 U.S.C. 8901(6), on the Health Insurance Marketplace (Exchange) and receive a Government contribution toward that purchase are eligible to enroll in FEDVIP.
Plans. FEDVIP currently offers a choice of four nationwide vision plans and six nationwide dental plans. Four additional dental plans offer coverage in specific regions. Enrollment may be for self only, self plus one, or self and family. Eligible employees and annuitants may enroll in either a dental plan or a vision plan, or both.
Cost-sharing. FEDVIP is an enrollee-pay-all program. By law, there is no Government contribution.
Premiums are paid for FEDVIP coverage on a pre-tax basis (premium conversion) for active employees. Unlike the FEHB Program, employees may not opt out of premium conversion for FEDVIP.
More information can be found at https://www.opm.gov/healthcare-insurance/dental-vision/.
Eligibility for retirement coverage depends upon the type of appointment. Most types of appointments, including “provisional” appointments, will confer retirement coverage eligibility. However, temporary appointments limited to a year or less and intermittent appointments are excluded from coverage eligibility. Other less common appointments may also be excluded from coverage eligibility.
Types of Coverage. Appointees who are eligible for retirement coverage will generally be covered under either the Federal Employees’ Retirement System (FERS) or the Civil Service Retirement System (CSRS), depending upon individual circumstances. FERS and CSRS are the two principal retirement plans for Federal employees. FERS is a three-tiered system consisting of Social Security benefits, basic FERS (a defined benefits plan), and the Thrift Savings Plan (a defined contribution plan). An employee covered by FERS will be covered under either FERS, FERS-Revised Annuity Employee (FERS-RAE), or FERS-Further Revised Annuity Employee (FERS-FRAE). FERS-RAE and FERS-FRAE employees receive the same FERS retirement benefit, but pay a higher deduction for FERS. See Benefits Administration Letter (BAL) 14-107 for additional information on determining whether an employee is covered by FERS, FERS-RAE or FERS-FRAE https://www.opm.gov/retirement-services/publications-forms/benefits-administration-letters/2014/14-107.pdf. CSRS is a defined benefit plan that pre-dates Social Security and was originally established as a stand-alone staff retirement plan. Beginning in 1984, however, certain employees subject to CSRS coverage also became covered by Social Security. Coverage under both CSRS and Social Security is often referred to as CSRS-Offset. Employees covered under CSRS or CSRS-Offset may also participate in the Thrift Savings Plan.
New Appointees. In most cases, appointees eligible for retirement coverage who are new to Government service will be covered under FERS.
Appointees with Prior Government Service. If an appointee has prior Government service and is eligible for retirement coverage, the appointee may be covered under FERS, FERS-RAE, FERS-FRAE, CSRS, or CSRS- Offset, depending on their work history with the Government. The appointee’s Human Resources Office will determine the appropriate type of retirement coverage and will advise the appointee of any retirement coverage election opportunities.
See Appendix F for additional information about health benefits, life insurance, and retirement for new appointees.
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Health Insurance (FEHB)
After separation, FEHB plan coverage continues at no cost to the employee for 31 days. In addition, if the employee files an election with the separating agency and pays both the employee and the Government share of costs (plus a 2 percent administration fee), coverage in the existing plan or another plan in the Program can be continued for up to 18 months under the temporary continuation of coverage (TCC) program feature. When group insurance eligibility ends, the employee has the right to convert the coverage to an individual health insurance policy if offered by his or her health plan or to purchase a plan on or off the Health Insurance Marketplace (Exchange).
If an employee retires under a retirement system for Federal employees, group health insurance can be continued into retirement, provided the employee qualifies for an immediate annuity and was enrolled in the FEHB Program for the 5 years of service immediately preceding retirement, or – if less than 5 years – for all periods of eligibility since the first opportunity to enroll.
Eligible retirees have the same health plan choices and pay the same share of the costs for health insurance as active employees do. Annuitants are subject to withholdings from their monthly annuity to pay for health plan costs in excess of the Government contribution.
Retired Members of Congress and Congressional staff are subject to the same rules of participation in the FEHB Program in retirement as other Federal annuitants. Time covered under a health benefit plan as defined in 5 U.S.C. 8901(6) on the Exchange with a Government contribution pursuant to 5 U.S.C. chapter 89 counts toward the 5-year requirement to carry coverage into retirement under 5 U.S.C. 8905(b).
Consumer Driven Health Plan. Employees who join a high deductible health plan (HDHP) and have a Health Savings Account (HSA) have funds that are fully portable. As long as their money stays in a qualified Health Savings Account and is used for qualified medical expenses, as established by the Department of the Treasury, both the interest and any withdrawals are tax free. This is true even for employees who elect a health care option in the future that is not a Consumer Driven Health Plan or the equivalent. The money in an HSA may continue to accrue – or be used – for future medical expenses. However, employees who retire and enroll in Medicare are not eligible for health savings accounts, so if they have a High Deductible Health Plan, a new health reimbursement arrangement (HRA) will be established by their health plan. Monies in their HSA will remain in that account until used for qualified medical expenses. Monies in their HRA belong to the employer, and not the annuitant, and are managed by the health plan. They do not earn interest and are not portable. The HRA may continue to be used for qualified medical expenses so long as the annuitant does not switch to another health plan.
Life Insurance (FEGLI)
Life insurance continues for 31 days after separation at no cost. During this period, all or any part of the coverage can be converted, without medical examination, to non-group coverage, with rates based on the individual’s age and class of risk.
If an employee retires under a retirement system for Federal employees, Basic and Optional group life insurance can be continued into retirement, provided the employee qualifies for an immediate annuity and had the coverage for at least the 5 years of service immediately before retirement, or during all periods the coverage was available, if that is less than 5 years. (The employee may convert any coverage that he or she is not eligible to continue into retirement.)
Retirees pay the same premiums as active employees. The premiums for Basic insurance and Option A stop at age 65. At that time, the face value of Option A insurance in effect at retirement begins to decrease by 2 percent per month. The post-retirement reduction continues until 75 percent of the coverage is gone and 25 percent ($2,500) remains. There is a similar 75 percent reduction for Basic insurance; at the time of retirement, however, an employee eligible to continue Basic insurance can elect to pay additional premiums to prevent Basic insurance from decreasing or to have a lesser (50 percent) reduction.
If a retiring employee is eligible to continue Option B and/or Option C insurance into retirement or while receiving workers’ compensation benefits, the retiring employee can elect how many Option B/Option C multiples to carry into retirement and how those multiples will reduce after he or she reaches age 65. The employee will be able to choose from two levels of coverage: Full Reduction or No Reduction, for the respective multiples.
If a retiring employee chooses Full Reduction, premiums stop at age 65, and the coverage begins to reduce by 2 percent per month until it reduces to zero. If a retiring employee chooses No Reduction, the coverage does not reduce at age 65, and the retiree continues to pay premiums for the appropriate age group. The retiring employee can choose mixed multiples of coverage for Option B and Option C. For example, if the retiring employee has three multiples of an Optional insurance (B, C, or both), he or she can elect to have two multiples with Full Reduction and one with No Reduction. The reduction elections are irrevocable after retirement, except that the retiree can change a No Reduction election to Full Reduction at any time (unless the coverage is assigned).
Flexible Spending Accounts (FSAFEDS)
Money in an FSAFEDS flexible spending account – either the health care flexible spending account or the dependent care flexible spending account – has to be used by the date the employee separates from the Government, or he or she will lose the unused balance. However, the claims do not have to be submitted by the separation date. When an employee incurs eligible expenses before the separation date, he or she can submit bills for services up to 30 days after the end of the year.
Conversely, for the Health Care FSA only, if an employee had more eligible expenses than money deducted from payroll, he or she will not have to reimburse the difference, and the balance will not be recovered from the employee. This could happen, for example, if the employee signed up for $2,500 and used it all up by the separation date. Because this amount ($2,500) is designated to be taken out of paychecks in equal amounts spread out over the course of the year, if the employee leaves before the end of the year, the missing payments can no longer be deducted from payroll, and he or she will not be required to otherwise make them up.
Federal Long Term Care Insurance Program (FLTCIP)
Long term care insurance coverage is fully portable, which means it continues without change when insured individuals leave the Federal Government – the same product and the same price – as long as they continue to pay premiums. OPM is still the policyholder, and the coverage continues to be administered by Long Term Care Partners, LLC. If the insured individual is paying premiums through direct bill or automatic bank withdrawal, those arrangements continue unchanged. However, individuals paying through payroll deduction should contact Long Term Care Partners directly so that they can switch their payment method to direct bill or automatic bank withdrawal.
Dental and Vision Insurance (FEDVIP)
Coverage under the Federal Employee Dental and Vision Insurance Program (FEDVIP) terminates upon separation from Federal service, unless the employee is eligible for an immediate annuity.
If an employee retires under a retirement system for Federal employees, FEDVIP coverage eligibility is retained. Retirees must have retired with an immediate annuity (a FERS Minimum Retirement Age plus 10 annuity, postponed, counts as an immediate annuity). Those in receipt of a deferred annuity are not eligible to enroll in FEDVIP. However, unlike FEHB coverage and FEGLI coverage, there is no length of time one must be enrolled in FEDVIP as an active employee in order to continue coverage after retirement.
An employee under FERS may retire after reaching the minimum retirement age (MRA, currently age 56) with 30 years of service, age 60 with 20 years, or age 62 with five years. Under FERS, one can also retire on a reduced annuity at MRA with as little as 10 years of service. An employee under CSRS and CSRS-Offset may retire voluntarily after reaching age 55 with 30 years of service, age 60 with 20 years, or age 62 with 5 years.
An employee under FERS, FERS-RAE, or FERS-FRAE, may retire after reaching the minimum retirement age with 30 years of service, age 60 with 20 years, or age 62 with 5 years. Minimum retirement age depends on the year of birth of the applicant and ranges from age 55, when the year of the applicant’s birth is before 1948, to age 57, when the year of the applicant’s birth is after 1969. See 5 U.S.C. § 8412(h); 5 CFR 842.202. Under FERS, FERS-RAE, or FERS-FRAE, one can also retire on a reduced annuity at MRA with as little as 10 years of service. An employee under CSRS and CSRS-Offset may retire voluntarily after reaching age 55 with 30 years of service, age 60 with 20 years, or age 62 with 5 years.
An employee may also be eligible for early retirement (discontinued service retirement (DSR)), based on an involuntary separation. Under both FERS and CSRS, one must be age 50 and have at least 20 years of service, or have at least 25 years of service regardless of age, in order to be eligible for discontinued service retirement.
An involuntary separation is qualifying for DSR unless it is based upon misconduct or delinquency. A resignation may also qualify for DSR if the individual resigns in response to a written request from an administration representative having the authority to request such resignations or the new head of an agency. The resignation of a Presidentially-appointed policy-making officer qualifies for DSR whenever the individual’s resignation is accepted by the President (not limited to the advent of a new administration). When it is known that a Presidential appointee is leaving, the resignation of a noncareer SES appointee or Schedule C appointee who works for that person is also considered an involuntary separation for purposes of DSR.
Individuals Not Eligible For Immediate Retirement. Employees who do not meet the age and service requirements for voluntary retirement may be eligible for deferred retirement. Under both FERS and CSRS, at least 5 years of civilian service are needed to qualify for deferred retirement at age 62. Also, a FERS employee with at least 10 years of Federal service (which must include at least 5 years of civilian service) may elect to receive deferred retirement as early as the minimum retirement age. To qualify for deferred retirement, individuals must leave their retirement contributions in the retirement fund. Individuals with less than 5 years of civilian service do not qualify for deferred retirement.
Refunds of Retirement Contributions. Those not eligible for an immediate annuity (whether or not eligible for a deferred annuity) may elect to receive a refund of retirement contributions. To qualify for the refund, the individual must be separated for at least 31 days and apply for the refund at least 31 days before qualifying for an annuity. Under FERS and CSRS, the service covered by the refund may be creditable towards retirement benefits if the individual returns to Government service and is subject to retirement coverage.
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UNEMPLOYMENT COMPENSATION AND DISLOCATED WORKER SERVICES
Unemployment Compensation for Federal Employees (UCFE)
Presidential appointees, noncareer and limited SES appointees, and Schedule C employees who resign by request or are separated due to a change in agency leadership or as a result of the transition to a new Presidential administration may be eligible for Unemployment Compensation for Federal Employees (UCFE). Unemployment compensation is generally provided through the State in which the individual’s last official duty station is located. Benefit levels and eligibility requirements vary from State to State. For further information about UCFE requirements and benefits, contact a specific State Workforce Agency listed at http://www.servicelocator.org/OWSLinks.asp.
Whether an individual’s resignation is requested or not requested may affect entitlement to unemployment compensation. Resigning before receiving a request to resign is generally considered an unprompted resignation and is not usually viewed as sufficient for unemployment compensation purposes. To assure that State Workforce Agencies are aware that the separation by request is due to a change in Presidential administrations or agency leadership, it is important that this reason be clearly indicated on the SF-50. Individuals are advised to provide a copy of the request for resignation to the State Workforce Agency when filing.
Dislocated Worker Services
These employees may also be eligible for dislocated worker services, including retraining and placement assistance, which are funded through Department of Labor grants. Benefits and eligibility requirements vary from State to State. For more information about dislocated workers, visit http://www.dol.gov/general/topic/training/dislocatedworkers.
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