Benefits

Life Insurance

Federal Employee Group Life Insurance (FEGLI)

FEGLI is a life insurance group plan administered by the Office of Personnel Management (OPM). The Office of Federal Employees' Group Life Insurance (OFEGLI) has been established to process and pay claims and perform other administrative functions needed to run the program. Participation is entirely voluntary. However, eligible employees are automatically covered for Basic Life unless they waive this coverage. The decision to waive or elect life insurance should be based on the employee's evaluation of his\her personal needs (including long and short term plans), family situation, and existing life insurance coverage.

For detailed information, please visit OPM's web site at http://www.opm.gov/insure/life/ or contact a member of the Retirement and Benefits Staff at (301) 504-1512.

Eligibility

All full-time and part-time employees on an appointment of more than one year are eligible to participate.

Enrollment Procedures

New employees are automatically covered for Basic Life Insurance unless they complete an SF-2817, Life Insurance Election Form, to WAIVE enrollment. Employees have 31 days from their entrance on duty (EOD) or 31 days from the effective date of their conversion to a multi-year appointment to enroll for additional coverage.

New Employees - Basic life insurance coverage is effective on the first day the employee enters a pay and duty status unless he/she waives coverage before the end of the first pay period. Optional coverage for new employees is effective the first day the employee is in a pay and duty status after the day the election form is received in the employing office.

Break in Service - An employee returning to work after a break in service of less than 180 days will automatically be covered under the life insurance they had before leaving Government, if any, and do not get an opportunity to make a new election to increase coverage. An employee may cancel or decrease coverage at any time. The Exception is if there was a qualifying change in family status (e.g., marriage, divorce, death of spouse, or acquiring an eligible child) during the separation from covered service or during the 60-day period immediately before separation. The employee will have 31 days from the date of reinstatement or 60 days from the date of the event, whichever gives more time to elect or add additional coverage.

When the employee returns to work after a break in service of 180 days or more, any previous waiver of insurance is automatically cancelled. Unless a new waiver is filed, Basic insurance becomes effective on the first day of entry on duty in a pay status in a position in which eligibility for coverage is met. An employee may elect any amount of Optional insurance within 31 days of reemployment, regardless of the coverage held previously. If failure to elect Optional insurance occurs, the Optional insurance carried (if any) immediately prior to the break in service will be reinstated.

For Current employees - Changes in enrollments are effective the beginning of the next pay period after the form is received in the employing office. Cancellations are effective the end of the pay period in which the enrollment form is received.

Coverage

The different coverage options available under the FEGLI program are outlined below:

Basic Life - Amount equal to the employee's annual salary rounded up to the next $1,000, plus $2,000.

Option A - Standard $10,000 Coverage for Employee

Option B - 1, 2, 3, 4, or 5 multiples of annual salary (after salary has been rounded to the next higher thousand, if not already an even thousand). It does not include the extra $2,000 added for Basic Insurance.

Option C - Coverage for eligible family members. The employee may elect Option C - Family Life Insurance to provide coverage for their spouse and eligible children. When an employee elects Option C, all of his/her eligible family members are automatically covered. Multiples of 1, 2, 3, 4, or 5 of coverage are available. Each multiple is equal to $5,000 for their spouse and $2,500 for each eligible dependent child.

Example: If 3 multiples are elected

If the spouse dies, the employee will receive $15,000 (3 multiples of $5,000).

If one of the eligible dependent children dies, the employee will receive $7,500 (3 multiples of $2,500).

Each multiple is a unit. For example, if two multiples are elected, that means there are two multiples on the spouse and two multiples on each dependent child. An employee cannot elect a number of multiples for the spouse that is different from the number of multiples for each dependent child.

Eligible dependent children must be unmarried and under age 22, or if age 22 or over, incapable of self-support because of a mental or physical disability that existed before the child reached age 22. Eligible dependent children include natural children, adopted children, stepchildren (if they live with the employee in a regular parent-child relationship), recognized natural children, and foster children (if they live with the employee in a regular parent-child relationship). Stillborn children are not covered.

Request for Life Insurance Changes

Evidence of insurability changes based on approval after a physical examination are effective as follows:

Basic coverage is effective the first day the employee is in a pay and duty status after the approval from OFEGLI is received in the employing office.

Option A and/or B is effective the first day the employee is in a pay and duty status after     the SF-2817 is received by the employing office. The SF-2817 must be received in the employing office within 31 days from the date the request was approved by OFEGLI.

You cannot elect Option C or increase your Option C Multiples by getting a physical exam after an initial waiver of this option. You may only elect a change to Option C based on a life event such as marriage, divorce, death of a spouse, or acquiring an eligible child.

Accidental Death & Dismemberment

Accidental Death & Dismemberment benefits are a feature of Basic Life and Option A that doubles the amount of these coverages at no additional cost to the employee.

Basic Life Extra Benefit

This benefit doubles the amount of Basic Life insurance payable if the employee's age is 35 years or younger. Beginning on his/her 36th birthday, the extra benefit decreases 10% each year until, at age 45, there is no extra benefit. This is an automatic benefit for which there is no additional cost.

Changes in Enrollment

The amount of Basic Life insurance will change automatically when the employee's annual basic pay changes to a higher or lower multiple of $1,000. The new amount of insurance will be effective on the date the pay change occurs. Employees may decrease the level of coverage or cancel coverage at any time. If the employee voluntarily cancels his/her Basic Life insurance, Optional insurance is automatically cancelled. An employee may cancel any of the Optional insurance without affecting the Basic Life or other Optional insurance. A cancellation is effective at the end of the pay period in which a properly submitted SF-2817 is received in the employing office.

Changes due to a change in marital status and/or addition of a child are permissible for Options B and C within 60 days of the event.

If at least one year has passed since an employee's waiver of FEGLI coverage, the employee may complete SF-2822, Request for Insurance, have a physical examination at his/her own expense, and submit the information to OFEGLI. If the request for insurance is approved by OFEGLI and the employee had previously waived all coverage, Basic Coverage will be effective on the date the approved SF-2822 is received by the employing office. The employee then has 31 days from the date OFEGLI approved the request to elect coverage under Option A and/or B by completing an SF-2817, FEGLI Election form, and submitting the form to the personnel office within the 31-day time limit. The employee may not add coverage under Option C-Family Coverage based on an approved SF-2822 by OFEGLI.

Employees should periodically review their life insurance coverage to ensure that they are carrying the appropriate amount of life insurance for their needs. It is suggested that employees review their forms when they have a change in marital status (marriage, divorce, death of spouse), add or lose a dependent child.

Costs

All costs are outlined in the RI 76-21, FEGLI Handbook at http://www.opm.gov/insure/life/

Part-Time Employee

The Basic Life amount is payable based on the employee's tour of duty in a 52-week work year.

Leave Without Pay (LWOP)

Employee's life insurance coverage continues automatically at no cost for the first 12 months of non-pay status. The 12 months may be continuous or broken by periods of less than 4 consecutive months of pay status. The Exception is if the employee is receiving compensation benefits during the first 12 months, his/her continued coverage will not be free - the Department of Labor will withhold premiums from his/her compensation payments. Coverage as an employee will terminate after 12 months of non-pay status or separation from the agency, if earlier. At that time, the employee will have the right to convert coverage to an individual policy or continue coverage as a compensationer, if eligible. The employee or his/her assignee(s), if applicable, will have the right to port his/her Option B, if eligible. Contact a benefits specialist for more information.

Living Benefits

A terminally ill employee who has documented medical prognosis that their life expectancy is 9 months or less, can elect to receive a lump sum partial or full payment of their Basic insurance. If a partial payment is elected, the employee cannot later elect to receive another Living Benefit to receive the remaining Basic insurance. An employee's decision to receive a Living Benefit is irrevocable. For more information concerning this benefit, employees must contact OFEGLI at (800) 633-4542.

Assignment of Life Insurance

Employees may irrevocably assign their life insurance to another person or persons, including an individual, a corporation or an irrevocable trust. Assignment means that the employee agrees to give up ownership of their Basic, Standard and Additional Optional coverage FOREVER. The employee can never change or cancel the assignment. When an employee makes an assignment, they must assign all their FEGLI coverage (except Option C). They cannot assign only a portion of their coverage. Option C - Family coverage cannot be assigned.

Separation

Transfers - If the separation is a transfer to another Federal agency, the current FEGLI election also transfers.

Retirement - The retirement system will automatically continue coverage after retirement if the employee retires on an immediate annuity and had coverage for:

1.  The 5 years of service immediately before the commencing date of their annuity (for annuitants retiring under the Federal Employees Retirement System (FERS) who postpone receiving their annuity, the 5 years immediately before their separation date for annuity purposes), or

2.  All period(s) of service during which that coverage was available to the employee, and he/she does not convert the coverage to a private policy he/she does not port the coverage (applicable to Option B only; see Portability) or the assignee(s), if applicable. See Assignment

If the employee meets the rules listed above for continuing coverage into retirement, he/she will have several choices of how much insurance to carry after age 65 and retired.

Post-65 Reduction in the Amount of Coverage

Basic Insurance Reduction: If you are eligible, and choose to continue your insurance as an annuitant or compensationer, you must complete a Continuation of Life Insurance Coverage form (SF 2818) electing the amount of Basic insurance you want after age 65 (or retirement, if later). The choices are 75% Reduction, 50% Reduction, or No Reduction. Exception: You must elect No Reduction if you previously elected partial living benefits.

How the Reduction Works:

75% Reduction: The amount of Basic life insurance in force reduces by 2% of the original amount each month until the original amount has been reduced by 75%; only 25% of the Basic Insurance. Amount is payable as a death benefit once the full reduction is reached.

50% Reduction: The amount of Basic life insurance in force reduces by 1% of the original amount each month until the original amount has been reduced by 50%; 50% of the Basic Insurance amount is payable as a death benefit once the full reduction is reached.

No Reduction: There is no reduction in the amount of life insurance after your 65th birthday; 100% of the Basic Insurance amount is payable as a death benefit.

When the Reduction Starts

The reduction starts at the beginning of the 2nd month after your 65th birthday or the beginning of the 2nd month after your retirement, whichever is later.

Default Election: If you don't make an election regarding the post-65 reduction, you will have the 75% Reduction.

Option A: The amount of Option A automatically reduces when you reach age 65 (or retire, if later). There is no election. The amount of coverage reduces by 2% of the original amount each month until the amount has been reduced by 75%. Only 25% of the original amount is payable ($2,500) as a death benefit once the full reduction has been reached.

Options B and C: Effective April 24, 1999, at the time of retirement or becoming insured as a compensationer, you will:

elect how many of your Option B and C multiples you wish to continue into retirement; and

choose whether to have all of those multiples reduce ("Full Reduction") or none of them reduce ("No Reduction") when you reach age 65 (or retire, if later).

Full Reduction: If you choose Full Reduction, each multiple of coverage reduces by 2% of the original amount each month until the amount has been reduced by 100%. The insurance stops at 12:00 noon on the day before the 50th reduction; after that no benefits are payable upon your death (for Option B) or your family member's death (for Option C). The reduction starts at the beginning of the 2nd month after your 65th birthday or the beginning of the 2nd month after your retirement, if later. Withholdings stop the month after your 65th birthday (or retirement, if later) and Options B and/or C are free.

No Reduction: If you choose No Reduction, your Options B and/or C coverage will not reduce at all. After age 65 (or retirement, if later), you will continue to pay premiums appropriate to your age.

Default Election: If you do not make an election, you will automatically continue all multiples for which you are eligible and will get Full Reduction for all multiples.

To get details on continuing coverage into retirement go to the FEGLI Handbook (RI 76-26) at http://www.opm.gov/insure/life/

All Others - Employees have temporary coverage for 31 days from date of separation. They have 31 days from separation or receipt of the Notice of Conversion Privilege to convert coverage to a non- group policy through the OFEGLI..

Payment of Benefits

On July 22,1998, Public Law 105-205 was enacted. This law changes the way benefits are paid under the FEGLI Program following the death of an employee, annuitant, or compensationer.

The law requires benefits to be paid in accordance with the terms of a court decree of divorce, annulment, or legal separation, or the terms, of a court order or court-approved property settlement agreement radiating to such a court decree, regardless of whether the insured individual actually completes a designation complying with the court order.

The court order supersedes any prior designation of beneficiary elections made by the insured
individual if such a court order is in effect. The insured individual cannot change his/her designation, unless the person(s) named in the court order agree(s) in writing or unless the court order is subsequently modified.

This law also allows a court order to direct the insured individual to make an irrevocable assignment to the person(s) named in the court order. However, until the insured properly completes an assignment form, the assignment does not occur.

The court order must be a certified copy and can be submitted by the insured, the ex-spouse, the attorney, etc. The certified copy of the court order must be received in the Personnel Office on or after July 22,1998, and before the insured individual's death.

Personnel will date stamp the court order and file it in the Official Personnel Folder. Upon an employee's death, the court order will be forwarded along with the appropriate paperwork to OFEGLI. When the employee retires, the court order will be forwarded to the Office of Personnel Management with the retirement application package.

OFEGLI will make the final determination after reviewing the court order and all designation of beneficiary forms as to how benefits should be paid upon an individual's death.

If a qualifying court order or assignment of benefits under the FEGLI Program does not exist, benefits will be paid according to the properly designated beneficiary/beneficiaries or in the absence of a designation, in the order of precedence.

For detailed information, please visit OPM's web site at http://www.opm.gov/insure/life/ or contact a member of the Retirement and Benefits Staff at (301) 504-1512.

Last Updated: 05/19/2008