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

Public Law 110-181, the Department of Homeland Security Appropriations Act, enacted, January 28, 2008, authorizes the continuation of FEGLI coverage for an additional 12 months for Federal employees called to active duty.

Currently, if an insured employee is in nonpay status while on active duty, FEGLI coverage continues at no cost to the employee for 12 months. The new law allows coverage for an additional 12 months. However, employees must pay both the employee and agency share of the premiums for their Basic coverage, and also pay the entire cost for any Optional insurance they may have for the additional 12 months of coverage.

No. It only applies to employees enrolled in FEGLI who are called up to active duty military service.

The law allows employees who enter on active duty or active duty for training in one of the uniformed services for more than 30 days to continue their FEGLI for up to 24 months. FEGLI coverage is free for the first 12 months. However, employees must pay both the employee and agency share of the premiums for their Basic coverage, and also pay the entire cost (there is no agency share) for any Optional insurance they may have for the additional 12 months of coverage.

Affected employees will receive a notice from their agencies giving them the opportunity to elect to continue coverage for the additional 12 months. Notices will be sent out after the agency has been notified that an employee has been called up to active duty. If employees wish to continue coverage, they must indicate their election on the notice, and return it to the employing office. Employees may make their elections at any time before the end of their first 12 months in nonpay status.

Employees who do not wish to continue coverage should submit the notice indicating their election for coverage to terminate at the end of 12 months in nonpay status. FEGLI coverage will continue at no cost to the employee for 12 months from the date the employee entered nonpay status, after which it will terminate, subject to the 31-day extension of coverage and the right to convert to an individual policy.

Whereas employees receive the first 12 months of coverage free, employees who elect to continue FEGLI coverage for the additional 12 months must agree to pay both the employee and agency shares of premiums for Basic coverage and the entire premium for any Optional coverage for the additional 12 months of coverage.

If an employee submits the notice and election form and elects to continue coverage but fails to pay the first required premium, coverage will not be continued and will terminate effective at the end of 12 months subject to the 31-day extension of coverage and the right to convert. The agency should issue the SF 2821 "Agency Certification of Insurance Status" and the SF 2819 "Notice of Conversion Privilege."

Employees who have already converted before the law was passed are not eligible for this new opportunity to continue FEGLI for an additional 12 months. The new provision applies ONLY to employees called to active military duty who currently have coverage under the FEGLI Program.

Employees whose coverage terminates at the end of the second 12 months in nonpay status will have a 31-day extension of coverage with the right to convert to an individual policy.

Employees who have continued coverage for the initial 12 months in nonpay status may make their election to extend coverage for the additional 12 months at any time before the end of the first 12 months.

Employees who elected to continue coverage during the second 12 months and then wish to stop or reduce coverage must notify their agencies in writing. Notification should not be made on the SF 2817 "Life Insurance Election," because this written request to end coverage only applies to coverage during the 24 -month nonpay period.

Termination is effective at the end of the pay period in which the agency receives the notice from the employee to cancel some or all of their coverage. For failure to make payment, coverage ends at the end of the last pay period for which payment was received. The agency should provide the SF 2821 "Agency Certification of Insurance Status" and SF 2819 "Notice of Conversion Privilege."

No. The law contains no such provision.

No. This provision applies to all employees called up to active duty.

No. The employee must elect to continue the coverage for the additional 12 months before FEGLI coverage terminates at the end of the first 12 months in nonpay status.

Employees who separate from their agency to enter into active duty service are considered to be in nonpay status for FEGLI purposes, as long as they have reemployment rights under USERRA. Therefore it is still that agency's responsibility to administer this new provision of law. Agencies must have a mechanism in place to collect premiums from separated employees.

Agencies are not required to send reminder notices to such employees since they should have already notified the employees. However, since agencies are required to notify employees of the end of their first 12 months in nonpay status, they may wish to include a reminder to those affected by the new provision of the opportunity to continue coverage for an additional 12 months if they have not already made an election to do so.

When employees return to work in a pay and duty status, FEGLI coverage will be reinstated at the same level continued into nonpay status. If the employee declines to continue coverage for the additional 12 months, reduces or cancels the coverage during the additional 12 months, or allows coverage to terminate due to non-payment during the additional 12 months, and then returns to pay and duty status, the terminated coverage will be reinstated at the same level in place when the employee first entered nonpay status or separated for military service. When the employee returns to pay and duty status, agencies should carefully review FEGLI coverage history to ensure this original coverage is reinstated correctly. The employee is not given an opportunity to elect more coverage unless he or she has been separated from service for at least 180 days.

Being sent to a combat zone does NOT cancel or affect the amount of FEGLI coverage. Civilian employees who are sent to a war zone or combat zone in a support capacity keep their FEGLI coverage, including Accidental Death & Dismemberment (AD&D) coverage.

If a Federal employee working in a war zone is killed, "regular" death benefits are payable to the employee's beneficiaries. Accidental death benefits are also payable under Basic insurance (and Option A, if the employee had that coverage) unless the employee was in actual combat (or unless nuclear weapons were being used) at the time of the injury that caused the employee's death. The Office of Federal Employees' Group Life Insurance (OFEGLI) decides whether to pay accidental death benefits only after thoroughly studying the facts and documentation surrounding an employee's death. The determination is made on a case by case basis. While we cannot say that in 100% of civilian deaths AD&D benefits will be payable, we can say that it is highly unlikely for a civilian to be in actual combat.

Accidental death benefits are in addition to regular death benefits. Even if accidental death benefits are not payable, regular death benefits ARE payable.

The amount of salary should be the enrollee’s annual rate of pay at the point of LWOP or separation.

Agencies should work with their payroll offices and follow the regular procedures in this regard. The HR office may need to ensure the employee is aware of any pay change and how that affects his/her payment for the continued FEGLI coverage. If they are sending out invoices for direct payment of premiums, the invoices should reflect the current premium due which should include any applicable changes as a result of age changes or salary changes. If an employee is paying the premiums regularly without receiving a specific invoice, the employee needs to know what to pay so you’d have to tell him/her the amount that is due.

The new law doesn’t change anything in this regard. Agencies should use the same procedures they normally use when they certify coverage at the end of 12 months of LWOP or if an employee on LWOP dies within those first 12 months. Agencies are determining the amount of coverage at those times and have to take into account any shift work and the process is no different for the second 12 months. The FEGLI Handbook at www.opm.gov/insure/life contains the rules to use for shift work.

Yes. Employees may cancel some or all of their coverage at any time. However, if an employee elects to continue coverage after the first 12 months of nonpay status, then wishes to cancel some or all of the coverage, the employee must do so by notifying the agency in writing.

Notification should not be made on the SF 2817 "Life Insurance Election," because this written request to end coverage only applies to coverage during the 24 -month nonpay period. Coverage canceled will be subject to the 31-day extension of coverage and the right to convert to an individual policy.

Letter or email or other form of written communication will suffice, as long as the agency can be reasonably sure that the request to cancel or reduce is coming from the enrollee.

FEGLI benefits will be based on whatever FEGLI coverage is effective at the time of death. Agencies must be sure to certify the correct level of coverage on the SF 2821 at time of death. Otherwise, OFEGLI has no way to know what coverage the person had during that 2nd 12 month period. Be sure to check “Other” in Part 4a of the SF 2821 and reference Public Law 110-181.

No, do not cut an SF 50 for changes made during the 2nd 12 month nonpay period because the changes only apply to that 2nd 12 months. When the employee returns to pay and duty status he/she will get back the coverage he/she had before going into non-pay status.

Agencies can use the FEGLI calculator at www.opm.gov/insure/life. Simply input the current salary for FEGLI purposes, current age and coverage elected to get the current bi-weekly employee cost. The government share of the cost for Basic is one-half of the employee share of the cost for Basic. Add the employee share(s) and government share to determine the amount the employee needs to pay. Remember, Optional insurance does not have a government share – only Basic does.

There are two groups of people affected by this BAL.

The first group includes those who are “grandfathered in”. They are on active duty and their first 12 months of LWOP ended after the enactment of the law but before the agency tells them about this new provision. In that case the BAL does specify the required timeframe for electing the continued coverage and for paying that first premium. See the first question on page 3 of BAL 08-203.

The second group includes those on active duty whose first 12 months of LWOP has not ended yet. Agencies need to notify them of this new opportunity to elect continued coverage so that they can reply before their 12 months ends. The BAL is intentionally silent on any other timeframes because we do expect agencies to use their flexibility, given the nature of work these employees are involved in. The only requirements are that premiums are paid “currently” and that the timeframe rules the agencies choose to use are reasonable. Obviously paying premiums 2 years after they are due is not current nor reasonable. But paying them 38 days after the invoice rather than 31 days is probably ok. We expect agencies to use their reasonable judgment.

Agencies can accept premiums bi-weekly or monthly or quarterly or however they’ve set up their direct payment procedures. They need to be consistent with their rules, but we are not dictating to them a payment schedule (except for the rules for the first group discussed above).

Yes.

Yes, employees in this group can elect to have the additional 12 months of coverage. They need to cancel the individual policy and request a refund of conversion coverage premiums. FEGLI coverage would be retroactive, and premiums must be paid retroactively back to the initial termination date of the FEGLI coverage.

These new rules discussed in the BAL apply to those on LWOP. They do not apply when the enrollee is in a pay status. This includes any pay— salary, annual leave, sick leave, donated leave or military leave –which the employee receives from the agency. Enrollees receiving payment for leave do not have to pay the agency portion of FEGLI premiums for that time period they’re receiving pay. Of course, premiums for any Optional coverage and the employee share of Basic must be deducted from the pay

Reductions or cancellations in coverage made during the 2nd 12 month period apply only to that 2nd 12 month period. When the employee returns to pay status he/she gets back the coverage he/she had before going into non-pay status, as reflected on the most recent SF 2817. Any cancellations or reductions made during the 2nd 12 month period will have no effect on eligibility to continue coverage into retirement.