If you work for Uncle Sam, and if you care about your spouse, there is an easy, relatively inexpensive way to provide him or her with:

* An annuity your spouse cannot outlive and that, unlike most private-sector pensions, is designed to grow with the cost of living.

* Guaranteed lifetime health insurance coverage. Your surviving spouse will have a wide choice of health plans and premiums at group rates. And none of the plans can reject your mate because of a preexisting medical condition or charge higher premiums as the mate gets older or sicker.

Check out the first letter in today's Monday Morning Quarterback section, where readers ask about, comment on or provide answers to important work-related issues in our town's biggest industry. In the letter, the nonfederal spouse of a government worker writes:

* "My husband is a government employee. If I'm covered under his insurance when he retires, will I be able to continue my coverage under the program after he retires? Is there a given period of time that I must be covered under his insurance before I would be eligible to continue to participate after his retirement?

Carol B.

To be eligible for health insurance coverage after retirement, the federal retiree must have been enrolled in the federal health program (in any plan) for five years prior to retirement. The coverage can be single or family. There are some rare exceptions, but generally the five-year rule is ironclad.

To make the spouse eligible for coverage, the federal retiree must provide a survivor benefit (of any amount), and--this is critical--the spouse must be covered in a family plan at the time of the federal retiree's death.

Some retirees, thinking they will save a few premium dollars, keep single coverage thinking that someday--before they die--they will switch over to family coverage. That's fine--while the retiree is alive. But if he or she dies and isn't in a family coverage plan (even if a survivor annuity has been provided), the nonfederal spouse won't be eligible for the federal health program.

Pay Gap

* "In a recent column about the federal pay 'gap' with industry you quoted a letter from a reader who said if there was a pay gap, as soon as someone was eligible to retire, he would take another job and receive the higher salary, plus the pension. That is not what the pay gap is intended to measure. The pay gap is supposed to compare a federal worker's salary with the salary of someone doing the same job in the private sector . . . . "

M.J.R.

You must be reading a different column. What the letter writer said was this: If the government is underpaying workers substantially, why don't more of them quit (not retire) and go to work in the private sector? His point, whether one agrees or not, is that there is nothing to prevent anyone who could make substantially more outside of government from doing just that.

Buyouts

* "I hear rumors about a possible buyout beginning October 1. What is the latest on the possibility of a buyout (at the Interior Department) at that time. What are the chances of a buyout."

No Name Please

Everybody is hearing the same rumor about buyouts. In most agencies it is wishful thinking. The Clinton administration said earlier this year that it will ask Congress for government-wide buyout authority. But as of now it hasn't made that request. The Department of Veterans Affairs has asked Congress for permission to offer buyouts, but that is still up in the air. The safe bet is that only those agencies with currently approved buyout authority, including Defense, the IRS, NASA, Agriculture and the CIA, will be paying selected employees to leave.

The only thing "magic" about the Oct. 1 date is that it is the beginning of the fiscal year. When agencies offer buyouts, it is most cost-effective to do so early in the fiscal year (between October and February) so the buyout payment (a maximum of $25,000 before deductions) can be offset by getting the employee off the payroll. But there is no requirement that buyouts be clustered around Oct. 1.

Life Insurance

* "In all the pro and con discussions of the federal employee life insurance program no one has pointed out one of the most significant benefits of FEGLI: automatic adjustment for inflation. The addition of a rider to a private insurance policy to cover inflation is expensive. FEGLI, in effect, covers inflation automatically by being gauged to a worker's salary. When an employee gets a raise or promotion, FEGLI coverage goes up automatically."

Michael J. Meisel

Monday, June 21, 1999