Disability Insurance Benefits for Government Physicians

Government Physicians are provided short term and long term disability insurance benefits supported by The Federal Employee Retirement System (FERS). The FERS system was implemented to provide all government employees with a broad retirement and protection plan, comprised of three main components; Social Security Benefits, a Basic Benefit Plan, and a Thrift Savings Plan. All disability benefits are associated with the Basic Benefit Plan section of FERS.

Outlined below are the important aspects of the FERS plan in order to assist physicians who work for the federal government better understand their own Disability benefits.

– you must meet all of the following conditions to be eligible for a disability benefit

• Completed a minimum of 18 months as a full-time Government Employee
• You are unable to perform useful and efficient service in your position because of disease or injury.
• 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 pay grade or pay level, within the same commuting area, for which you are qualified for reassignment.
• You must apply within one year of your separation from service to the Office of Personnel Management or employing agency.
• You must apply for social security disability benefits. If you do not apply, your FERS disability application will be dismissed.

• For the first 12 months – 60% of your high-3 average pay minus 100% of any Social Security Benefits you are entitled
• Past 12 months to age 62 – 40% of your high-3 average pay minus 60% of any Social Security Benefits you are entitled
• All FERS disability benefits received will be taxed as ordinary income based on the insured’s Federal Tax Bracket

Since most physicians will find themselves under-insured with the FERS disability benefit as their sole level of income protection, an additional layer of disability insurance coverage is recommended.

• Obtain a supplemental individual disability insurance plan for higher income protection
• Look for a carrier that will provide coverage loss for both the first year and beyond, usually to age 65 – with NO social security benefit application requirement or offset.
• A limited number of plans will even offer true own –occupation to age 65 or 67 with medical specialty language protection.

• Every individual who applies for their own disability insurance policy will first need to be medically and financially underwritten by the insurance carrier. You should expect to complete the following
• An application that provides the insurance carrier information about your current health and finances. Income verification is usually required through either the sharing of the client’s tax returns or employment agreement outlining salary.
• A paramedical examination that involves taking a blood sample, urinalysis, and answering questions about your current build and medical history. The insurance carrier usually pays for the cost of this exam.
• Anticipate a 4-6 week underwriting process to obtain approval on the policy