FERS – Disability Insurance for Federal Government Employees

Too often I hear federal government employees talk about how great their benefits are because they work for the federal government. In some ways they are right: The federal government provides high-quality benefits for its employees, and in most cases, they are very well served. However, when it comes to your group long-term disability insurance, the Federal Employees Retirement System (FERS) program does not live up to its elite reputation.

Traditionally, group disability insurance will cover 60% of a person’s salary up to a maximum monthly benefit of $ 6,000 – $ 10,000. If the employer pays the premiums, the benefits are received on a taxable basis and will be considered ordinary income. Since benefits are taxable, even someone with group coverage like this can experience a severe income shortage if they become disabled. When 60% of your salary is provided on a tax basis, it is the equivalent of having 45-50% coverage. I think it is fair to say that most people cannot survive on 45-50% of their regular income.

The FERS program takes this coverage gap even further. It works very similarly, as 60% of your annual income is covered, but only for the first 12 months of a disability claim. After the first 12 months, your benefits will be reduced to 40% of your income. Again, I think it is fair to say that most people cannot survive on 40% of their regular income.

There are many details associated with the FERS disability insurance program, and as a federal employee, you should take the time to fully understand them. If you really want to protect your income and the future of your loved ones, you need to understand the coverage you have in order to get an individual policy to fill the gap in your coverage. You can learn more about the details of the FERS disability program by visiting FERS Disability Insurance for Federal Employees.