What happens to Federal Employee Benefits at Separation?

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As mentioned recently, I separated from Federal Service to accept a job in industry.

Not to get too topical… but it looks like I’m not alone, and more of you are about to join me next year.  Don’t say I didn’t warn you…

Enough soap box talk.  Here’s the up-to-the minute, play-by-play details about ceasing/continuation of  Federal Employee Benefits based on my recent separation experience.

Dependent Care Flexible Spending Account (DCFSA) – DCFSA ends as soon as you terminate employment.  In my  case, I received a letter indicating I had dis-enrolled on August 3rd (part way through a pay period).  If your YTD DCFSA claims exceed your YTD DCFSA withholdings, you’re done receiving DCFSA reimbursements from Uncle Sam.  You may or may not be able to start another DCFSA in the same year with your follow-on employer.

FEHB – Health Coverage under Temporary Continuing Coverage (TCC) lasts for 31 Days following the last day of the pay period in which you terminated employment.    For the uninitiated, TCC is Uncle Sugar’s version of COBRA health care continuation.  You pay no TCC premiums within 31 days of the last day of your last pay period, but you still have FEHB coverage.   The 31-day buffer allows you to hang on to your Health Coverage a bit longer, or in my case, delay the start of the new employer’s coverage until the TCC 31-day window is up.  I will cover more on TCC  in detail in a future post.

TSP – Your contributions – and TSP Matching/Agency contributions- Stop at the end of your last pay period.   If you’re an eager beaver to rollover some or all of your TSP (and here’s why you shouldn’t roll the entirety of your TSP), you have to wait a bit.  Your payroll agency notifies TSP 2-4 weeks after your last pay stub, then the TSP processes the notification, then TSP places the link on its website that lets you apply for a rollover.  Note that you only get one shot to do a partial TSP rollover, and one shot to do a full TSP rollover (more on this in a future post).

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