With a possible government shutdown looming, federal employees and retirees are asking questions of how it affects their pay, leave and annuity payments.
Below are a some frequently asked questions from the Office of Personnel Management’s most recent Guidance for Shutdown Furloughs
Federal Benefits
1. What happens if agency employees responsible for processing Federal Employees Health Benefits (FEHB) or Federal Employees’ Group Life Insurance (FEGLI) transactions are furloughed?
A. Agencies will continue to process FEHB and FEGLI transactions during a lapse in appropriations. Employees responsible for processing FEHB or FEGLI transactions must be excepted to perform this work because the law designates the processing of these transactions as emergency services that must continue under the Antideficiency Act. (See 5 U.S.C. 8702(d), 8905(i); 5 CFR 870.106, 890.113.)
Federal Employees Health Benefits Program — General
2. Will an enrolled employee continue to be covered under the FEHB Program during a lapse in appropriations if the agency is unable to make its premium payments on time?
A. Yes. The employee’s FEHB coverage will continue even if an agency does not make the premium payments on time. Following the lapse, each employee who returns to pay status will automatically begin to repay their share of FEHB premium that accumulated during the lapse through payroll withholding. If FEHB premiums are not withheld from retroactive pay, one additional payment in addition to the current pay period amount will be withheld in each subsequent pay period until the employee’s accumulated share of premiums have been paid.
3. What happens if an employee wants to terminate FEHB coverage while in a non-pay status in order to avoid the expense?
A. Unlike other types of non-pay status, employees in a non-pay status due to a lapse in appropriations (shutdown furlough) will not have the opportunity to terminate or cancel FEHB coverage outside of Open Season or experiencing a qualifying life event. The employee will remain covered; the enrollee’s share of their FEHB premium will accumulate and be withheld from pay upon return to pay status.
4. Can an employee who has been furloughed enroll or make changes to their FEHB enrollment during a furlough due to a lapse in appropriations?
A. Yes. An employee who is furloughed and experiences a qualifying life event can enroll or make changes in enrollment in the FEHB Program. (See 5 CFR 890.301.) Employees can also enroll or make changes during the annual Open Season. Employees are encouraged to contact appropriate agency human resources staff to ensure they follow the proper processes.
FEHB Program—Open Season Enrollments/Changes
5. Would a lapse in appropriations alter the effective date of an FEHB Open Season enrollment change if an enrollment request was fully processed by an agency and submitted to the health plan prior to the lapse?
A. No. If an enrollment change request was submitted to the health plan and processed, the effective date of an FEHB Open Season change would still be the first day of the first full pay period in January.
6. An employee is in a non-pay status due to a shutdown furlough and is enrolled in a new FEHB plan effective at the beginning of the plan year because their current plan is terminating participation in the FEHB Program. Which carrier is responsible for providing benefits for covered services in January?
A. It depends upon the date in January that services are needed. Coverage under the new plan begins on the first day of the first pay period that begins on or after January 1. Before that coverage effective date, the terminating plan is responsible for providing benefits for covered services.
Other Federal Employee and Retiree Insurance Programs
7. What happens to an employee’s Federal Employees’ Group Life Insurance (FEGLI) Program coverage if furloughed?
A. The employee can maintain their FEGLI coverage for up to 12 months in a non-pay status. When the lapse ends, the employee will receive retroactive pay under 31 U.S.C. 1341(c)(2) and retroactive FEGLI premiums may be withheld from that pay. If FEGLI premiums are not withheld from retroactive pay, no more than one additional payment will be withheld in each subsequent pay period until all premiums have been paid.
8. What happens to an employee’s Flexible Spending Account (FSAFEDS) coverage if furloughed?
A. Payroll deductions will cease for any employee that does not receive pay. The employee remains enrolled in FSAFEDS, but claims for eligible health care expenses incurred during a non-pay status will not be reimbursed until the employee returns to a pay status following the lapse and allotments are successfully restarted. The remaining allotments are recalculated over the remaining pay periods to match the participant’s election amount. However, any claim submitted with dates of service prior to an employee entering non-pay status will be paid in accordance with existing procedures, up to the balance of the employee’s annual election.
Eligible dependent care expenses incurred during a non-pay status may be reimbursed up to whatever balance is in the employee’s dependent care account— as long as the expense incurred during the non-pay status allows the employee (or spouse if married) to work, look for work, or attend school full-time.
9. Will the effective date of my FSAFEDS enrollment be affected?
A. No.
10. What happens to an employee’s Federal Long Term Care Insurance Program (FLTCIP) coverage if furloughed?
A. FLTCIP coverage will continue for enrollees who are furloughed or excepted from furlough and working without pay during a shutdown furlough based on a lapse in appropriations. In addition, FLTCIP coverage may not be canceled as a result of non-payment of premiums or other periodic charges due to a lapse in appropriations. (See 5 CFR 875.302.) Employees paying premiums via Direct Bill or Automatic Bank Withdrawal will continue to be billed, but the insurer will not terminate for non-payment of premium during the lapse in appropriations. Regarding claims eligibility requests for FLTCIP during a shutdown furlough, claim benefits will not be reimbursed to the enrollee until all past due premiums are paid.
At the end of the shutdown, FLTCIP premiums will be paid from retroactive pay provided under 31 U.S.C. 1341(c)(2) or may be paid back from another source (i.e., automatic bank withdrawal) for FLTCIP enrollees who elected to make payments directly to the Carrier.
If missed premium payments are unable to be collected via automatic bank withdrawal or deductions from the enrollee’s payroll or annuity/pension, enrollees will be billed directly for the premium amount due. After the shutdown, if the enrollee elected to pay their premium via automatic bank withdrawal, past due premiums will be collected by withdrawing up to two months of premiums from the enrollee’s bank account each month until it is current. For enrollees who did not elect to make payment directly, FLTCIP premiums will be paid to the Carrier from enrollees’ retroactive pay made available as soon as practicable upon the end of the lapse.
11. What happens to an employee’s Federal Employees Dental and Vision Insurance Program (FEDVIP) coverage if furloughed?
A. Coverage will continue for an individual enrolled in FEDVIP who is furloughed or excepted from furlough and working without pay during a lapse in appropriations, and an enrollment may not be canceled as a result of nonpayment of premiums or other periodic charges due to a lapse. (See 5 CFR 894.405.) Payroll deductions will temporarily cease for any employee that does not receive pay.
Employees are entitled to retroactive pay under 31 U.S.C. 1341(c)(2) for excepted work performed during the lapse and for furlough periods at the standard rate of compensation. At the end of the shutdown, the accumulated FEDVIP premium for this period will be withheld from their pay. If FEDVIP premiums are not withheld from retroactive pay, no more than one additional payment will be withheld in each subsequent pay period until all premiums have been paid.
12. Will the effective date of my FEDVIP Open Season enrollment be affected?
A. No.
Federal Retirement
1. If a shutdown furlough occurs during the employee’s highest years of salary, what effect will time in a furlough status have on an employee’s high-3 average pay?
A. Once the lapse in appropriations ends, employees who would have been in pay status but for the lapse will receive retroactive pay for furlough periods pursuant to 31 U.S.C. 1341(c)(2). Thus, there will be no effect on such an employee’s high-3 average pay.
2. Are the retirement rules concerning the effect of a shutdown furlough the same for employees under the Civil Service Retirement System (CSRS) and the Federal
Employees Retirement System (FERS)?
A. Yes.
3. What will happen to employees who would have retired during a shutdown furlough?
A. For employees who, on or before the requested retirement date, submitted some notice of their desire to retire, agencies should, when the lapse in appropriations ends, make the retirement effective as of the date requested. The retirement request may be informal (such as a letter requesting retirement), and can be either mailed or personally submitted to the agency. Any additional required paper work, such as the formal retirement application form, may be completed when the agency reopens. No time spent by the retiree in such actions after the effective date of the retirement may be considered as duty time, since the individual would no longer be an employee of the agency.
4. If an employee is scheduled to retire before the end of the leave year with an annual leave balance of over the maximum leave ceiling (e.g., 240, 360, or 720 hours, as applicable) and the furlough prevents the employee’s retirement from getting processed until January, does the employee lose his or her annual leave above the maximum leave ceiling?
A. No. The employee’s retirement would be retroactively applied to a date prior to the end of the leave year, and the employee would receive the full amount of accumulated and accrued annual leave in a lump-sum payment.
Federal Retirement Services: Government Shutdown
1. I’m a Federal retiree. Will I still receive my monthly annuity payment during a Government shutdown?
A. Yes. Federal retirees under the CSRS and FERS retirement systems will still receive their scheduled annuity payments on the first business day of the month.
2. How can I make updates or changes to my retirement benefits?
A. OPM’s Retirement Services is available to assist you with your retirement benefits. As always, you can make many of these changes online through Services Online or by calling Retirement Services at (888) 767-6738. Due to the volume of calls, we recommend that you first use the online services site to make immediate updates and changes. You can also find general information online.
3. How do I report the death of a family member during a Government shutdown?
A. You can refer to our website Annuitant Death Index – RS Reporting (opm.gov) for information on reporting the death of a current retiree and applying for any benefits, or by calling us directly at (888) 767-6738. If the family member was a Federal employee at the time of death, survivors must contact the agency for which the deceased worked. If the employing agency is closed, you may need to wait until after the shutdown ends to begin the process.
4. I recently retired from Federal service. Will my retirement application be delayed by a Government shutdown?
A. If your agency or payroll center submitted your retirement application to OPM, you will begin receiving interim annuity payments while OPM Retirement Specialists process your application. Because OPM Retirement Services is funded by the trust fund it manages, OPM Retirement Services employees will still be working normal operating hours during a Government shutdown.
If your agency or payroll center has not yet submitted your retirement application or the application is incomplete, you will likely experience some delay as OPM must wait on other agencies to submit all the information needed to process your retirement. Some functions of these agencies may not be operating during a Government shutdown.
5. I applied for disability benefits. Will my application still be processed?
A. Employees in Retirement Services at OPM will continue working on your application. If the application requires additional information from other agencies, expect delays during a Government shutdown.
6. Can I submit a court order that awards a retirement benefit to OPM during a Government shutdown?
A. Yes. OPM employees will continue working to process court ordered retirement benefits.
Payments upon Separation from Federal Service
1. If there is a shutdown furlough, how does this impact a separating employee’s lump-sum payment for their unused annual leave?
A. In the event of a shutdown furlough, any payments incurred by the agency for an employee’s lump-sum payment will be delayed until funds are available.
2. How are separated employees’ entitlements to severance pay affected by a shutdown furlough?
A. Funds for severance pay are obligated on a day-to-day basis as the recipient accrues continuing entitlement to severance pay by not being reemployed by the Government of the United States. (Severance pay is suspended or terminated when the individual is reemployed by the Federal Government.) Severance pay is paid at the same pay period intervals as if the recipient were still employed. Any severance payment (on a payroll payday) is linked to the corresponding pay period during which the recipient accrued continuing entitlement to severance pay. If the recipient is reemployed by the Federal Government during a pay period, he or she is entitled to a prorated severance payment covering the days in the period prior to reemployment (e.g., 2/5 of one week’s pay if the recipient was reemployed on the third workday of the pay period).
Thus, in the case of a shutdown furlough, accrued but unpaid severance pay represents an obligation to be paid from funds available before the lapse in appropriations occurred. Just as payroll checks for work performed prior to a lapse in appropriations can be processed as part of the orderly suspension of nonexcepted activities, severance pay checks covering days before the lapse may also be processed.
No funds may be authorized for severance payments for days during the lapse until an appropriation is enacted.
To read the full Office of Personnel Management’s most recent Guidance for Shutdown Furloughs, click here.