# Federal Employees' Group Life Insurance Program

## FEGLI Handbook

### Types and Amounts of Insurance

#### KIND OF INSURANCE

Federal Employees' Group Life Insurance is group term coverage. It is not a form of life insurance with cash value. It does not build up cash or paid-up value. You cannot obtain a loan by borrowing from this insurance.

#### TYPES OF INSURANCE

There are two types of life insurance under the FEGLI Program: Basic and Optional.

There are three types of Optional insurance: Option A (standard optional insurance), Option B (additional optional insurance), and Option C (family optional insurance).

#### AMOUNT OF BASIC INSURANCE

Basic Insurance Amount

The Basic Insurance Amount is based on your actual current pay. (See "Effect of a Living Benefit Election" for its impact on your Basic Insurance Amount.)

Calculation

To determine your Basic Insurance Amount:

1. Take your annual rate of basic pay, and
2. Round up to the next higher thousand (if it's not already an even thousand dollar amount), and

Example

Janet has an annual salary of \$38,586. Round that up to \$39,000. Then add \$2,000. Her Basic Insurance Amount is \$41,000.

See the Table of Basic Insurance Amounts.

If you are eligible to continue Basic life insurance coverage as an annuitant or compensationer, your Basic Insurance Amount is the amount in effect at the time your insurance as an employee stops. This is at either your separation from service or 12 months of nonpay status, whichever is earlier.

Minimum Basic Insurance Amount

The minimum Basic Insurance Amount is \$10,000. Any employee whose annual pay is less than \$8,000 has \$10,000 in Basic insurance.

Age Multiplication Factor

Employees under age 45 covered for Basic insurance automatically have extra coverage without paying any additional premium. This extra coverage increases the amount of Basic insurance payable at the time of your death, if you die before age 45.

To determine the amount of the extra benefit, multiply your Basic Insurance Amount by the appropriate age multiplication factor as follows:

at
Death

Age
Multiplication
Factor

35 or under

2.0

36

1.9

37

1.8

38

1.7

39

1.6

40

1.5

41

1.4

42

1.3

43

1.2

44

1.1

45 and over

1.0

Example

Charles dies at age 40, with an annual salary of \$27,126. His Basic Insurance Amount is \$30,000. The age multiplication factor is 1.5. The amount of Basic life insurance payable is \$45,000.

#### ANNUAL RATES OF PAY

Determination

Your annual pay is your annual rate of basic pay as fixed by law or regulation.

Included

The following are included in annual pay:

• Interim geographic adjustments and locality-based comparability payments as provided by Pub. L. 101-509
• Premium pay for standby duty under 5 U.S.C. 5545(c)(1)
• Premium pay for overtime inspectional service forcustoms officers as provided by Pub. L. 103-66
• For a law enforcement officer as defined under 5 U.S.C. 8331(20) and 5 CFR 831.902 and 842.802, premium pay for administratively uncontrollable overtime under 5 U.S.C. 5545(c)(2)
• Night differential pay for wage employees
• Environmental differential pay for employees exposed to danger or physical hardship
• Tropical differential pay for citizen employees in Panama
• Special pay adjustments for law enforcement officers
• Availability pay for criminal investigators under 5 U.S.C. 5545a
• Bonuses for physicians and dentists of the Department of Veterans Affairs under Pub. L.96-330
• Straight-time pay for regular overtime hours for firefighters, as provided in 5 U.S.C. 5545b and 5 CFR part 550, subpart M

Not Included

The following are not included in annual pay:

• Foreign post differential for wage employees. Exception:those wage employees in Guam who were recruited from outside Guam and are paid a recruitment and retention incentive
• Night differential pay and foreign or nonforeign post differential pay of General Schedule employees
• Bonuses, allowances, overtime, holiday, and military pay not listed above as included
• Premium pay authorized certain air traffic controllers under Pub. L. 97-276
• Lump-sum payments for accrued leave
• Supervisory differentials
• Retention allowances
• Physicians' comparability allowances.

Hourly, Daily, and Similar Rates

To convert a pay rate of other than annual salary to an annual rate, multiply the pay rate by the number of the pay intervals worked in a 52-week work year.

Example

Lashawn is paid \$6.89 an hour and works 2,087 hours per year. Her annual pay is \$14,379.

If part of your basic 40-hour week is paid at an overtime rate, your basic pay is determined at your base rate for 40 hours. The overtime rate is not countedtoward your basic pay for life insurance purposes.

Example

Michael is paid \$7.50 an hour, works 2,087 hours per year, and is assigned a workweek of four 10-hour days. He is paid \$11.25 per hour for two hours of each 10-hour day. Since his overtime hours are part of the 40-hour week, they are counted at the base rate, not the overtime rate. His annual pay is \$15,653 (\$7.50 x 2,087).

Part-time Rates

If you are a part-time employee, your annual pay is your basic pay applied to your tour of duty in a 52-week work year.

Example

Pat's pay is \$31,892, and she works 24 hours per week. Her annual pay for insurance purposes is \$19,135.(\$31,892 ÷ 52 weeks ÷ 40 hours x 24 hours x 52 weeks)

Piecework Rates

If you are an employee on piecework rates, your annual pay is your total basic earnings for the previous calendar year, not counting premium pay for overtime or holidays.

Whenever the piecework rate changes, your annual pay is adjusted by applying the percentage of increase or decrease in rate.

If you had leave without pay during the year, your annual pay is determined by dividing the year's earnings (or adjusted earnings) by the number of days for which you were paid (days worked plus leave with pay); this gives the average daily rate. This average daily rate is multiplied by 260.

Example

Alan's 1998 earnings were \$19,486 and he was paid for 190 days. His average daily rate is \$102.56 (\$19,486 ÷ 190). His 1999 annual pay is \$26,665 (\$102.56 x 260).

If you are a new employee, your first year's annual pay for life insurance purposes is the average earned or adjusted annual basic pay during the previous calendar year for piecework employees doing similar work in your group, subject to any further adjustment of the average during the first year.

Multiple Rates - Regular Schedule

If you are regularly scheduled to work at different pay rates (such as day and night rates), your annual pay is the weighted average of the rates at which you are paid, projected to an annual basis. A regular schedule can exist even if your schedule varies within a year or even within a pay period.

Example

Antonio is paid \$6.89 per hour on a day shift and \$8.07 per hour on a night shift and is regularly scheduled to work 8 months on day shift and 4 months on night shift.

Multiply \$6.89 by 1,391 hours (2,087 hours ÷ 12 months x 8 months) and \$8.07 by 696 hours (2,087 hours ÷ 12 months x 4 months). His annual pay is \$15,201.

Multiple Rates - No Regular Schedule

If you work at different pay rates, but not on a regular schedule, your annual pay is the annual rate you were receiving at the end of the pay period. In the event of your death or dismemberment, it is the annual rate you were receiving at the time of your death or accident.

The employing office will determine the amount of insurance and withholdings for multiple rate employees with no regular schedule at the end of each pay period.

Example

John does not work a regular schedule. During the latest biweekly pay period, he worked fifty hours on the day shift at \$6.89 per hour and thirty hours on the night shift at \$8.07 per hour. His annual pay at the end of this pay period is \$15,252 ([\$6.89 x 50 hours x 26 pay periods] + [\$8.07 x 30 hours x 26 pay periods]).

Part-time Flexible Schedule

If you hold more than one appointment, of which at least one is a part-time flexible schedule appointment in the Postal field service, your Basic and Option B insurance amounts are based on the higher of your pay rates.

Intermittent Employment Rates

If you are a non-Postal intermittent employee (a non-full time employee with no prearranged regularly scheduled tour of duty), your annual pay is the annual rate you received at the end of the pay period. In the event of your death or dismemberment, it is the annual rate you were receiving at the time of your death or accident.

The employing office must determine the amount of insurance and withholdings for non-Postal intermittent employees at the end of each pay period.

Note: If you are an intermittent employee, you are excluded from FEGLI coverage by regulation, except when your intermittent employment follows, with a break in service of no more than three days, a position in which you were insured and to which you are expected to return.

Example

Ned is an intermittent employee and is paid \$9.14 per hour. His annual rate of pay fixed by law is therefore \$19,075 (\$9.14 x 2,087 hours). If Ned works only 2 days (16 hours) during a particular biweekly pay period, his annual rate of pay for insurance purposes for that pay period is \$3,815 (however, he would be covered for the minimum \$10,000 of Basic insurance).

Certifying the Amount of Insurance When There Is No Regularly Scheduled Tour of Duty

When you don't have a regularly scheduled tour of duty, upon your death, your employing office will base its certification of the amount of insurance upon the number of hours you worked in the last full pay period that you worked.

Example

Emily, an intermittent employee earning \$12.40 per hour, dies. During the last full pay period before her death, she worked 64 hours.

The amount of Basic insurance the employing office would certify is \$23,000 (64 hours x \$12.40 x 26 pay periods = \$20,634, rounded to the next \$1,000 = \$21,000, plus \$2,000 = \$23,000).

#### AMOUNT OF OPTIONAL INSURANCE

Option A (Standard Optional Insurance)

Option A coverage is \$10,000.

Option B coverage comes in 1, 2, 3, 4, or 5 multiples of your annual pay (after your pay has been rounded to the next higher thousand). It does not include the extra \$2,000 added for your Basic Insurance Amount.

Example

Claudio earns \$52,578. His Basic Insurance Amount is \$55,000. He chose Option B coverage of one multiple of his annual pay, or \$53,000.

Option C (Family Optional Insurance)

Option C provides coverage for your spouse and eligible dependent children. When you elect Option C, all of your eligible family members are automatically covered. You may elect either 1, 2, 3, 4 or 5 multiples of coverage. Each multiple is equal to \$5,000 for your spouse and \$2,500 for each eligible dependent child.

For example, if you elect 3 multiples and your spouse dies, you would receive \$15,000 (3 times \$5,000). If one of your eligible dependent children dies, you would receive \$7,500 (3 times \$2,500).

The number of multiples you elect applies to all of your eligible family members. You cannot elect a number of multiples for your spouse that is different from the number of multiples for your eligible dependent children.

A child's eligibility for Option C benefits ends once he/she reaches age 22, unless he/she is incapable of self-support because of a mental or physical disability that existed before the child reached age 22.

#### CHANGES IN AMOUNT OF INSURANCE

Automatic Changes

The amount of Basic insurance and Option B coverage automatically changes whenever your annual pay is increased or decreased by an amount that will raise or lower pay to a different \$1,000 bracket. Exception: If you have elected a Living Benefit, the amount of Basic insurance cannot change.

Effective Date

The effective date of your increased/decreased insurance amount is the effective date of your increased/decreased annual pay.

Correction of Errors in Annual Pay

When a retroactive change in annual pay is actually the correction of an error, any resulting change in the amount of Basic and Option B insurance becomes effective retroactively on the effective date of the pay adjustment.

#### ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS

When Are Benefits Payable?

Accidental death and dismemberment benefits are payable when you sustain bodily injuries solely through violent, external and accidental means, and as a direct result of the bodily injuries, independently of all other causes, and within one year afterwards, you lose your life, limb or eyesight.

• Loss of hand means loss by severance at or above the wrist joint, or equivalent loss, as determined by OFEGLI.
• Loss of foot means loss by severance at or above the ankle joint, or equivalent loss, as determined by OFEGLI.
• Loss of sight means total and permanent absence of any usable vision.

Exceptions

Accidental death and dismemberment benefits will not be paid if your death or loss in any way results from, is caused by, or is contributed to by:

• physical or mental illness;
• the diagnosis of or treatment of a physical or mental illness;
• ptomaine or bacterial infection. However, accidental death and dismemberment benefits will be paid if the loss is caused by an accidentally sustained external wound;
• a war (declared or undeclared), any act of war, or any armed aggression against the United States, in which nuclear weapons are actually being used;
• a war (declared or undeclared), any act of war, or any armed aggression or insurrection in which you are in actual combat at the time bodily injuries are sustained;
• suicide or attempted suicide;
• injuring yourself on purpose;
• illegal or illegally obtained drugs that you administer to yourself;
• driving a vehicle while intoxicated, as defined by the laws of the jurisdiction in which you were operating the vehicle.

Basic and any Optional insurance payment will be made regardless of these Accidental Death & Dismemberment benefit exceptions.

Automatic Coverage

Accidental Death and Dismemberment coverage is an automatic part of Basic and Option A insurance for employees. Accidental dismemberment benefits are paid to you.

There is no Accidental Death & Dismemberment coverage:

Amount of Accidental Death Benefits under Basic Insurance

Under Basic insurance, accidental death benefits are equal to your Basic Insurance Amount, but without the age multiplication factor. These benefits are payable in addition to your Basic insurance and any Optional insurance payable.

Example

At age 37, Scott dies as the result of injuries sustained in a car accident. His Basic Insurance Amount at the time of his death is \$35,000. The Basic insurance benefit payable (including the age multiplication factor) is \$63,000 and the accidental death benefit payable is \$35,000, making a total death benefit payable of \$98,000.

Amount of Accidental Dismemberment Benefits under Basic Insurance

Under Basic insurance, accidental dismemberment benefits for the loss of a hand, foot, or eye (or the sight in one eye) are equal to one-half of your Basic Insurance Amount. For the loss of two or more of these, benefits are equal to your Basic Insurance Amount.

If you have more than one type of loss in a single accident, total Accidental Death & Dismemberment benefits for that accident cannot be more than your Basic Insurance Amount.

Example

Brenda loses an arm in a climbing accident. Her Basic Insurance Amount is \$22,000. The amount of accidental dismemberment benefits payable to her is \$11,000 for the loss of her arm.

Six months later, she loses sight in both eyes due to the same accident. She is eligible for another accidental dismemberment payment of \$11,000. The total accidental dismemberment benefit payable to her from this accident is \$22,000, equaling her Basic Insurance Amount, even though she suffered three losses (one arm and sight in two eyes).

Two weeks later, she dies as the result of other injuries sustained in that accident. No accidental death benefit will be payable, since any additional payment for this accident would be more than her Basic Insurance Amount.

Amount of Accidental Death & Dismemberment Benefits under Option A

Under Option A, accidental death benefits are equal to the amount of Option A coverage (\$10,000). Accidental dismemberment benefits for the loss of a hand, foot, or eye (or the sight in one eye) are equal to one-half of your Option A coverage (\$5,000). For the loss of two of these, benefits are equal to your Option A coverage.

If you have more than one type of loss in a single accident, total Accidental Death & Dismemberment benefits for that accident cannot be more than your Option A benefits.

These benefits are payable in addition to your Basic insurance and any Optional insurance payable. Option A Accidental Death & Dismemberment benefits are payable only if you were enrolled in Option A at the time of your accident.

Example

Nick carried Basic and Option A coverage at the time of his accidental death at age 35. His Basic Insurance Amount is \$42,000. The Basic insurance benefit payable is \$84,000 (with the age multiplication factor), the Basic accidental death benefit payable is \$42,000, the Option A benefit payable is \$10,000, and the Option A accidental death benefit payable is an additional \$10,000, making a total death benefit payable of \$146,000.

#### RECOGNIZED NATURAL CHILD

A recognized natural child is your child born outside of marriage, whom you have acknowledged as your child. A recognized natural child is an eligible family member if he/she is financially dependent on you.

Considered Dependent

Your recognized natural child is considered dependent on you if he/she lives with you in a regular parent-child relationship or if he/she receives regular substantial support from you.

Examples of support include:

• Court determination of support
• Evidence of the child's eligibility as your dependent on other State or Federal programs
• Cancelled checks or receipts for periodic payments

#### FOSTER CHILD

Requirements

Your foster child is eligible to be covered under Option C when:

• the child is unmarried and under age 22 (if the child is over age 22, he/she must be incapable of self-support);
• the child lives with you;
• the parent-child relationship is with you, not the child's biological parent;
• you are the child's primary source of financial support; and
• you expect to raise the child to adulthood.

These are the same requirements for coverage as for foster children under the Federal Employees Health Benefits Program.

You don't need to be related to the child; nor do you need to legally adopt him/her. As long as the above requirements are met, you may have a foster parent-child relationship even when:

• the child's natural parents are alive;
• the child's natural parent(s) lives with you; or
• the child receives some support from sources other than you (for example, Social Security payments or support payments from a parent).

Common examples of a foster parent-child relationship are:

• You are living with and supporting a child whose parents have died.
• You are living with and supporting a grandchild. (The natural parent of the child may also be a dependent.)
• A child is living with you under a preadoption agreement.
• A child is in your legal custody.

Parent-Child Relationship

A "regular parent-child relationship" means that you are exercising parental authority, responsibility, and control over the child by caring for, supporting, disciplining, and guiding the child, including making decisions about the child's education and medical care.

When Coverage Ends

Your foster child's coverage continues until he/she:

• marries,
• reaches age 22,
• becomes capable of self-support if age 22 or over, or
• is no longer living with and financially dependent on you.

If your foster child moves out of your home to live with a biological parent, the child cannot again be covered as your foster child unless:

• the biological parent dies;
• the biological parent is imprisoned;
• the biological parent becomes unable to care for the child due to a disability; or
• you obtain a court order for custody that takes parental responsibility from the biological parent and gives it to you.

Grandchildren

Grandchildren are not eligible family members under Option C. However, your grandchild can qualify as a foster child if ALL the requirements are met.

When a Child is Not Considered a Foster Child

A child is not considered a foster child when:

• The child has been placed in your home by a welfare or social service agency under an agreement where the agency retains control of the child or pays for maintenance.
• The child is living temporarily with you for convenience. For example, a child who lives with you only while attending school normally does not qualify as a foster child because this is considered an arrangement of convenience.

How to Get a Foster Child Covered

For your foster child to be covered under Option C, you must sign a certification stating that your foster child meets all the requirements and that you will notify your employing office if the child marries, moves out of the home, or stops being financially dependent on you.

If you already have a certification on file for the FEHB Program, you do not have to complete a new certification for Option C coverage, unless you are electing Option C because of acquiring a foster child.

Sample Certification

You may use the following pattern statement to establish your foster child's eligibility for coverage under Option C. Your employing office must file the original certification in your Official Personal Folder.

CERTIFICATION FOR FOSTER CHILDREN

I have been informed of the following requirements for coverage of a foster child under the Federal Employees Health Benefits Program and/or Option C of the Federal Employees' Group Life Insurance Program:

1. The child must be unmarried and under age 22. (If the child is over age 22, he/she can only be covered if he/she is incapable of self-support because of a disabling condition that began before age 22. I must provide documentation of this to my employing office.)
2. The child must be living with me.
3. The parent-child relationship must be with me, not with the biological parent. This means that I am exercising parental authority, responsibility, and control; I am caring for, supporting, disciplining, and guiding the child; I am making the decisions about the child's education and medical care.
4. I must be the primary source of financial support for the child.
5. I must expect to raise the child into adulthood.

I understand that if the child moves out of my home to live with a biological parent, he/she loses coverage and cannot ever again be covered as a foster child unless:

1. the biological parent dies,
2. the biological parent is imprisoned,
3. the biological parent becomes incapable of caring for the child due to a disability, or
4. I obtain a court order taking parental responsibility away from the biological parent.

This is to certify that: (name of child) lives with me; I have a regular parent-child relationship with (name of child), as described above; I am the primary source of financial support for (name of child); and I intend to raise (name of child) into adulthood.

I will immediately notify both my employing office and the health benefits carrier (if applicable) if the child marries, moves out of my home, or ceases to be financially dependent on me.

_____________________________
(Print name of employee/annuitant)

______________________________
(Social security number)

______________________________
(Signature of employee/annuitant)

____________________
(Date)

#### CHILD INCAPABLE OF SELF-SUPPORT

Coverage

Your unmarried dependent child age 22 or over is eligible to be covered under Option C when he/she is incapable of self-support because of a physical or mental disability that existed before the child reached age 22.

Requirements

The criteria for your employing office's determination of the incapability of self-support are the same as those for the Federal Employees Health Benefits Program. Your child age 22 or over may be considered incapable of self-support only if his/her physical or mental disability is expected to continue for at least one year and, because of the disability, he/she isn't capable of working at a self-supporting job.

A disability such as blindness or deafness isn't qualifying in itself because it doesn't necessarily make someone incapable of self-support. The onset of a disease before age 22 that doesn't result in incapacity for self-support until age 22 or after doesn't qualify a child for continued eligibility for coverage under Option C.

Your child must also be financially dependent upon you to qualify for coverage under Option C. In addition, your stepchild or foster child incapable of self-support must live with you in a regular parent-child relationship to qualify.

Documentation of Incapacity for Self-Support

To continue your child's eligibility under Option C once he/she reaches age 22, you must submit to your employing office a doctor's certificate stating why your child is incapable of self-support and that the disability is expected to continue for more than one year. The certificate must include the name of your child, the type of disability, how long the disability has existed, and its expected future course and duration. The certificate must be signed by the doctor and show his/her office address.

You don't need to submit separate medical certificates if you are requesting continued coverage for your child under both FEGLI and the Federal Employees Health Benefits Program. Your employing office's determination will cover both (if you have coverage under both programs).

The employing office must document its determination in your Official Personnel Folder, and submit it to the Office of Federal Employees' Group Life Insurance (OFEGLI) when an Option C claim is filed.

If you don't have an employing office determination on file, your employing office will make the determination of your child's eligibility for Option C benefits upon his/her death.

Medical Conditions that would Cause Children to be Incapable of Self-Support During Adulthood

Documentation of one of the following conditions automatically makes your child age 22 or over eligible for coverage under Option C. For conditions not listed, submit your documentation to your employing office for its determination.

• AIDS - CDC classes A3, B3, C1, C2, and C3 (not seropositivity alone)
• Any malignancy with metastases or which is untreatable
• Chronic Hepatic Failure
• Chronic neurological disease, whatever the reason, with severe mental retardation or neurologic impairment, for example:
• Cerebral Palsy
• Encephalopathies
• Ectodermal Dysplasia
• Uncontrollable Seizure Disorder
• Chronic Renal Failure
• Inborn errors of Metabolism with complications
• Gaucher disease
• Glycogen storage diseases
• Homocysteinuria
• Lesch-Nyhan disease
• Mucopolysacharide disease
• Nieman-Pick Disease
• Phenylketonuria
• Primary hyperoxaluria
• Tay-Sachs disease
• Mental Retardation with IQ of 70 or less
• Severe acquired or congenital Heart Disease with decompensation which is not correctable
• Severe Autism
• Severe Juvenile Rheumatoid Arthritis
• Severe Mental Illness requiring prolonged or repeated hospitalization
• Severe Organic Mental Disorder
• Xeroderma Pigmentosa