Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Disability Decisions

You might have noticed that during the annual Federal Employees Health Benefits open season, which is under way right now, there are no disability insurance plans to choose from. Federal employees have group health benefits, dental and vision coverage, flexible spending accounts, and access to group life insurance and long-term care insurance. But they do not have formal disability insurance.

According to the Social Security Administration, studies indicate that a 20-year-old worker has a 30 percent chance of becoming disabled by retirement age. In the 2000 census, 20 percent of people older than 5 reported a disability. Most disabilities are not caused by major accidents but by conditions or illnesses, such as cancer or back injuries, according to the Council for Disability Awareness.

If you're like most people, you depend on your paychecks to meet your monthly living expenses. Disability insurance can help cover these financial responsibilities should you have an illness or injury that renders you unable to work.

In the absence of such insurance, here are the benefits federal employees have in the event of a disabling condition:

  • For the short term, accumulated sick leave.
  • For the long term, disability retirement under the Civil Service Retirement System or Federal Employees Retirement System and/or Social Security disability benefits.

These two options might not be sufficient for all employees. If you're relatively new to federal service, or have not been able to accumulate a large amount of sick leave, then an illness or accident that keeps you out of work for several weeks could force you into a leave without pay situation. Disability retirement involves separating from government. If you recover, then you would need to be formally rehired to return to work. In addition, a federal employee must have a minimum of 18 months of service (five years if covered under CSRS) before he or she can apply for disability retirement.

Sick Leave

A full-time employee accrues 104 hours of sick leave annually. So it takes 20 years of service to earn a year of sick leave. Unused sick leave accumulated by employees is used in the calculation of their CSRS or FERS annuities. At the discretion of the agency, a maximum of 30 days of sick leave may be advanced to an employee with a medical emergency for purposes related to the adoption of a child, for family care or bereavement purposes, or to care for a family member with a serious health condition.

Federal employees should consider their sick leave a form of disability insurance protection. Wouldn't it be comforting to know that you have three to six months of sick leave in the bank in the event of a major accident or illness that could keep you out of work for an extended period of time?

The Voluntary Leave Bank Program allows federal employees to donate annual leave to other employees who need leave because of a medical emergency. Under the program, employees can make a specified contribution of annual leave to their agency's leave bank in order to become leave bank members.

Disability Retirement

According to the Office of Personnel Management, "You should consider applying for disability retirement only after you have provided your employing agency with complete documentation of your medical condition and your agency has exhausted all reasonable attempts to retain you in a productive capacity, through accommodation or reassignment."

Under CSRS, employees who have 22 years of service or more will get their earned annuity without a reduction for age if approved for disability retirement.

Under FERS, the following requirements must be met to qualify for disability retirement:

  • You must have completed at least 18 months of creditable federal civilian service.
  • You must have become disabled for useful and efficient service in your current position.
  • The disability must be expected to last at least one year.
  • Your agency must certify that it is unable to accommodate your disabling medical condition in your present position and that it has considered you for any vacant position in the same agency at the same grade or pay level, within the same commuting area, for which you are qualified.
  • The application must be received by either OPM or your former employing agency within one year of the date of your separation.
  • You must apply for Social Security disability benefits.

FERS disability benefits are computed in different ways depending on the annuitant's age and amount of service at retirement. More information is available here. FERS disability retirement benefits are recomputed after the first 12 months and again at age 62, if the annuitant is younger than 62 at the time of disability retirement. Insurance Bill

In late September, Del. Eleanor Holmes Norton, D-D.C., introduced a bill (H.R. 6368) that would offer federal employees disability insurance at no cost to the government. In the absence of such insurance, "workers who become disabled and cannot work are at risk for financial ruin, even if they are only out of work for a few months," she said. Her bill, she added, "provides an important safety net for federal employees who desire this protection."

Norton said many federal employees purchase disability insurance as individuals, but they pay higher premiums than they would with the combined purchasing power of the federal government behind them. Under her legislation, employees would not be denied coverage because of pre-existing conditions. But employees would have to pay 100 percent of premiums.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on or on WFED AM 1500 in the Washington metro area.

Next week's program will complete a series of guests discussing health insurance open season:

  • Nov 22: Tom Bernatavitz, Aetna Federal Health Plan (HMO/consumer-driven plan and HDHP)

Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

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