U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

Option C - Family insurance first became available to active Federal employees in April 1981. This coverage was not available to anyone who retired before April 1981. If you separated for retirement before April 24, 1999, and have Option C insurance, the amount of insurance is $5,000 upon the death of a spouse and $2,500 upon the death of an eligible child.

The life insurance open enrollment period - April 24 through June 30, 1999 - was the first opportunity for most employees to elect up to five multiples of Option C insurance coverage. Employees who had a "life event," such as marriage, the birth of a child, etc., that occurred on or after October 30, 1998, were eligible to increase the amount of family coverage. The effective date of that election was the pay period that included April 24, 1999. The open enrollment period also permitted employees who had not had a life event to elect additional multiples of Option C. This increased coverage not due to a life event is effective on April 23, 2000, provided the employee was in a pay and duty status on that date. These election opportunities were not available to retirees.

The amount of insurance is determined by the number of Option C multiples that were in effect for the five years of service immediately before your retirement, or the entire periods of service during which this coverage was available to you, if less than five years.

To figure the amount of insurance on your spouse, multiply $5,000 by the number of Option C multiples you continued in retirement. For coverage on your eligible children, multiply these multiples by $2,500.

Eligible children include:

1. your unmarried dependent children (other than a stillborn child), including legally adopted children,

2. your unmarried dependent stepchildren and foster children if they live with you in a regular parent-child relationship, and

3. your unmarried recognized natural children born out of wedlock who are either living with you in a regular parent-child relationship or who are receiving regular and substantial support from you.

To be covered, a child must be under age 22 or, if 22 or over, incapable of self-support because of a mental or physical disability which existed before the child became 22 years of age. We will determine if a child age 22 or over was covered in the event a retiree files a claim for benefits after that child’s death. To ask us whether a foster child qualifies as an eligible child, call our Retirement Information Office for assistance.

If you separated on or after April 24, 1999, and were eligible to continue Option C insurance in retirement, you were asked to elect whether — at age 65 — some or all of your Option C multiples will continue at their full value or will gradually reduce to zero. We will give annuitants who reach age 65 after retirement another opportunity to make this election. If you elect Full Reduction for all multiples or if you separated for retirement before April 24, 1999, effective the first day of the second month after you reach age 65 or the first day of the second month after you retire, whichever is later, your Option C full-reduction multiples will reduce by 2% of the face value per month for 50 months, at which time this coverage will end. We will withhold premiums for this coverage from your annuity through the month in which you reach age 65.

If you elect to continue some or all of your Option C multiples with No Reduction we will adjust the withholding for your Option C coverage to reflect the number of multiples you decided to retain at no reduction. Any other multiples will start to reduce as described above. You can cancel or reduce the number of multiples at any time.

The cost of Option C insurance depends on your age, the number of multiples you have, and the reduction you elect, as shown in the following table:

When you go from one age group to the next, your premiums will increase at the beginning of the month after your birthday. The increased premium will be reflected in the next payment. For example, if you are 60 in May, your monthly premium for Option C insurance would increase from $3.14 to $5.63 effective June 1. This increased premium would be reflected in your payment dated July 1, which covers your annuity and insurance premiums for the month of June.

If you elect to let some or all Option C multiples reduce, we will stop withholding the monthly premium for these multiples the first of the month after you are 65. For example, if you reach age 65 in April, premiums for Option C insurance would stop May 1. This would first be reflected in your payment dated June 1, which covers your annuity and insurance premiums for the month of May.

You are the beneficiary under Option C insurance. After your death, Option C stops. However, covered surviving family members will have an opportunity to convert to a non-group policy.