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Do you have an adult child with a disability? Federal benefits have special rules that can protect them for life, through FEHB and a FERS survivor annuity, but only if the paperwork is right. One wrong beneficiary form can also cost them SSI or Medicaid.
Quick facts: There are two different age tests. If the disability began before 26, FEHB can continue past 26 for a child who is unmarried, incapable of self-support, and has a disability expected to last a year or more. Carry Self & Family coverage into retirement to keep your child covered, and expect OPM to review the child's status and possibly ask for updates. If the disability began before 18, an unmarried child who is incapable of self-support can receive a lifetime FERS child survivor annuity while the condition continues. For the child to keep FEHB after you die, Self & Family must be in force on the day you die, and the survivor annuity is what lets them keep coverage. The beneficiary-form trap: a lump sum from your TSP or FEGLI can knock a child off SSI and Medicaid. Tools families often use include a special needs trust named as the TSP and FEGLI beneficiary, an ABLE account (the disability-onset age limit is now 46), and a letter of intent with care instructions. Have this paperwork ready: a medical certificate and proof of onset age, the special needs trust if you use one, TSP-3 and SF 2823 beneficiary forms that match the plan, and guardianship or power of attorney documents.
Educational only, not tax, investment, or legal advice. Haws Federal Advisors | HawsFederalAdvisors.com
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