Termination and Conversion
TERMINATION OF BASIC INSURANCE
Waiver/Cancellation
Your Basic insurance stops at the end of the last day
of the pay period in which your employing office receives your Life Insurance Election form (SF 2817) [159 KB] waiving or cancelling life insurance.
Separation from
Service
Your Basic insurance stops at the end of the day on
which you are separated from service for any reason. This
includes transfer (except for a mass transfer) to another
agency, although you may be eligible to get the insurance
back with no break in coverage when you enter on duty at
the new agency. Exception: See "Eligibility
for Life Insurance" for information on
continuing life insurance after your retirement or while
receiving compensation.
Exception: If you separate from service to enter the military you are considered to be in a nonpay status for FEGLI Purposes. As long as you have reemployment rights under USERRA, you can keep your FEGLI coverage for up to 12 months, or until 90 days after your military service ends, whichever date comes first. This coverage is free. At the end of 12 months (or 90 days after the military service ends), the coverage terminates. You also get the 31- day extension of coverage and the right to convert. Public Law 110-181, the Department of Homeland Security Appropriations Act, enacted January 2008, authorizes the continuation of FEGLI coverage for an additional 12 months for Federal employees called to active duty whose coverage terminated after the law's enactment.
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. See more details in Bal 08-203 [48 KB].
At the end of 12 months, or 90 days after your military service ends, whichever date comes first your former agency must complete an Agency Certification of Insurance Status (SF 2821) and a Notice of Conversion Privilege (SF 2819). If a claim needs to be filed while you are still covered under FEGLI, you or your survivors should contact your former employing agency.
Nonpay Status
Your Basic insurance stops at the end of the day on
which you complete 12 months of nonpay status, subject to
a 31-day
extension of coverage and conversion privilege. Exceptions:
See "Eligibility
for Life Insurance" for information on
continuing life insurance while receiving Workers'
Compensation and "Coverage
- Nonpay Status" for other exceptions.
Your employing office must complete an Agency
Certification of Insurance Status (SF 2821) [549 KB] and a Notice
of Conversion Privilege (SF 2819) [75 KB], the same as for any
other termination action.
Return
to Pay Status for Less than Four Months
Your entitlement to a 12 month period of continued
Basic insurance coverage while in nonpay status may be
broken by periods of less than four consecutive months in
pay status. (This includes when you are receiving donated leave.)
Example
Stephanie goes on leave without pay October 1,
1999. Through donated leave, she returns to pay status on February 1, 2000 for
three months, and then goes back on leave without pay in
May. Her insurance will terminate on December 31, 2000
(12 months = October 1999 - January 2000, and May -
December 2000).
Return
to Pay Status for Four Months or More
If you return to pay status for a period of four
consecutive months or more, you start a new 12-month
period of continued Basic insurance coverage. Four
consecutive months in pay status means any four-month
period during which you are in pay status for at least
part of each pay period. (This includes when you are receiving donated leave)
Example
Bill goes on leave without pay October 1, 1999. He
returns to pay status on February 14, 2000, and then goes
on leave without pay June 30, 2000. Since he was in pay
status for over four consecutive months, he starts a new
12-month period of continued Basic insurance coverage
while in nonpay status. If he does not return to pay
status in a nonexcluded position, his insurance will
terminate on June 29, 2001.
Return
to Pay Status After 12 Months or More in Nonpay Status
When your insurance stops after 12 months or more in nonpay status, you must return to pay and duty status to get FEGLI coverage again.
If you return to pay and duty status for less than four
consecutive months after your insurance terminates due to
12 months in nonpay status, you are not entitled to
another 12-month period of continued coverage. You have
insurance while you are again in pay and duty status, but your
Basic insurance will stop on the last day of your last
pay period in pay and duty status, subject to a 31-day
extension of coverage.
Example 1
Luz completes 12 months in nonpay status and her
insurance terminates on December 31, 1998. She returns to
duty in pay status on January 15, 1999 and again returns
to nonpay status on April 15, 1999. Her Basic insurance
terminates on April 19, 1999, the last day of the pay
period.
Example 2
Henry's FEGLI coverage terminated on July 1, 2000, because he was in nonpay status for 12 months. He receives 8 weeks of donated leave in August. He is not eligible to get his FEGLI coverage again since he did not return to pay and duty status.
Nonpay Status and Pay Status from Two Different Positions
If your FEGLI coverage is continuing without cost because you are in nonpay status, and you accept another position that conveys FEGLI coverage, your Basic and Option B coverage (if you have Option B) are based on the sum of both salaries. Your employing office from your paying position will withhold premiums based on both salaries. When your 12 months in nonpay status end, your Basic and Option B will no longer include salary from that position. Your coverage and premiums are then based only on your paying position.
Example
Tamika goes on leave without pay from Agency A on February 1, 2000. Her salary is $28,000. She is entitled to continue her FEGLI coverage for 12 months. She accepts a position with Agency B on April 1, 2000 where her salary is $30,000. Her Basic Insurance Amount is $60,000 ($28,000 + $30,000 = $58,000 + $2,000 = $60,000). Agency B will withhold premiums based on this amount through January 31, 2001. On February 1, 2001, her Basic Insurance Amount will reduce to $32,000 and premiums will reduce accordingly.
Move to an
Excluded Position
Your Basic insurance stops at the end of the day
before the day on which you move to a position in which
eligibility for life insurance is excluded.
See "Employees
Excluded from Coverage" for exceptions.
Agency
Certification of Insurance Status
Whenever your Basic insurance stops, your employing
office must complete an Agency Certification of Insurance
Status (SF 2821) [549 KB].
Exceptions:
- when your insurance stops because of your waiver or cancellation; and
- when you will get life insurance coverage again
within three calendar days after your
termination.
TERMINATION OF OPTIONAL INSURANCE
Cancellation
Your Optional insurance stops at the end of the last
day of the pay period in which your employing office
receives the Life Insurance Election form (SF 2817) [159 KB]
cancelling your Optional insurance.
Exception:
If you cancel Option C because there are no eligible family members (spouse, dependent children), the effective date is retroactive to the end of the pay period in which there stopped being any eligible family members.
Relation to
Basic Insurance
Your Optional insurance stops when Basic insurance
stops.
Retirement
If you are not eligible to continue Optional insurance as an annuitant or compensationer, your Optional insurance stops at the end of the day before Basic insurance is continued into retirement, or into OWCP compensation.
Insufficient Pay
Your Optional insurance stops at the end of the pay period in which it is determined that your periodic pay,
after all other deductions, will not be
enough to cover the full cost of the Optional insurance, unless you choose to make
direct premium payments.
Agency
Certification of Insurance Status
Whenever your Optional insurance stops, your employing
office must complete an Agency Certification of Insurance
Status (SF 2821) [549 KB].
Exceptions:
- when your insurance stops because of your waiver
or cancellation; and
- when you will get life insurance coverage again
within three calendar days after your
termination.
31-DAY EXTENSION OF COVERAGE
When your life insurance stops, except by waiver or cancellation, your coverage automatically
continues for an additional 31 days after the termination
date. No premiums or Government contributions are
required during the 31-day extension. This extension does
not include accidental
death and dismemberment coverage.
There is no extension of coverage when you waive or
cancel your insurance.
There is no extension of coverage when a family member
loses his/her eligibility
under Option C.
CONVERSION OF BASIC AND OPTIONAL INSURANCE
Conversion
Privilege
When your group life insurance terminates, you are
entitled to convert to an individual policy.
Exceptions:
- if insurance stops because you waived
or cancelled it; and
- if you return to Federal service, in a position
in which you are eligible for insurance, within
three calendar days after the date your insurance
stops.
If you have assigned
your insurance, it is the assignee(s), rather than
you, who is (are) entitled to convert your Basic, Option
A, and Option B coverage. You are still entitled to
convert your Option C coverage.
Individual Policy
Under the conversion privilege, you may convert all or
any part of your Basic and Optional insurance to an
individual policy. No medical examination is required.
The individual policy will be issued by any insurance
company you (or your assignee(s), if applicable) select
that has been accepted by OPM as eligible and that has
agreed to issue such policies under the provisions of the
FEGLI contract. When you are ready to convert your
coverage, you may request a list of eligible insurance
companies from the Office of Federal Employees' Group
Life Insurance at P. O. Box 2627, Jersey City, NJ 07303-2627 or 1-800-633-4542.
The individual policy may be for any type of life
insurance customarily issued by the insurance company you
select, except term insurance, universal life insurance
or any other type of life insurance with an indeterminate
premium. It cannot include disability or Accidental Death
& Dismemberment benefits.
For Option C, the conversion policies are for individuals only. The conversion policies do not include "family" policies similar to the FEGLI Program's Option C. For Option C- Family, you can request to have individual policy information for a family member or members (such as children). However, the individual policy is issued to the family member. In the case of a minor child, the parent can apply on the child's behalf for an individual policy. You can only obtain a conversion policy for family members who exist on the effective date of the conversion policy - 32 days after separation. A conversion policy cannot be issued for a family member added after the effective date of the policy but before the time limit for applying expires.
Any insurance policy purchased under the conversion
privilege is a private business transaction between you
and the insurance company. The cost of the individual
policy is determined by the insurance company and is
based on your age and class of risk.
Additional information on how you can convert your
insurance is found on your copy of the Notice of
Conversion Privilege (SF 2819), given to you by your
employing office.
NOTICE OF CONVERSION PRIVILEGE
Notice Required
Your employing office must give you notice of the loss
of group coverage and the right to convert whenever your
insurance terminates under conditions that allow you to
convert to an individual policy. The form used for this
purpose is the Notice of Conversion Privilege (SF 2819) [75 KB].
Please note: The address on the current SF 2819 is not current. The form should be sent to OFEGLI, P.O. Box 2627, Jersey City, NJ 07303-2627.
If you have assigned
your insurance, your employing office must give the
SF 2819 to all of your assignees.
Your employing office must record in your Official
Personnel Folder the names and addresses of everyone who
is given an SF 2819, including your assignees and family members
covered under Option C. Your employing office must
send this information to your retirement system, if your
separation is for retirement.
Your employing office must not furnish
insurance companies with the name of any employee being
separated with possible conversion rights.
Timing of Notice
Your employing office must give you (or your assignee)
the Notice of Conversion Privilege (SF 2819) either
immediately before or immediately after the event causing
your loss of coverage. Note: This form must be
given to you when you are retiring, even if you choose to
continue life insurance coverage into retirement. (See
"Procedures
for Retiring Employees.")
Your employing office must place a copy of the SF 2819
in your Official Personnel Folder as proof that the
required notice was provided.
CONVERSION FOR FAMILY MEMBERS
Upon Your Death
Upon your death, your family members covered under
Option C are eligible to convert their coverage to an
individual policy. The conversion policies do not include "family" policies similar to the FEGLI Program's Option C. The individual policy is issued to the eligible family member. In the case of a minor child, the parent can apply on the child's behalf for an individual policy.
Your employing office must send your
family members a Notice of Conversion Privilege (SF
2819). Your employing office must send the SF 2819 to your
last address on file, addressed to "The Family
Members of . . . .". The employing office doesn't
have to try to locate family members who might not have
lived with you at the time of your death.
Upon Your Separation
When you separate and don't want to convert your
Option C coverage, your family members are eligible to
convert their coverage to an individual policy.
The conversion policies do not include "family" policies similar to the FEGLI Program's Option C. The individual policy is issued to the eligible family member. In the case of a minor child, the parent can apply on the child's behalf for an individual policy.
Your
employing office must send your family members a Notice
of Conversion Privilege (SF 2819) if they
request information about converting.
Amount
Available to Convert
Your spouse and eligible children may
convert up to the amount of Option C coverage you carried (maximum
$25,000 for your spouse and $12,500 for each eligible child).
When
Conversion is not Permitted
Family members do not have the right to convert
coverage under other circumstances in which coverage
ends, such as divorce, your child's marriage, or your
child's reaching age 22.
When
Insurance Has Been Assigned
Information regarding conversion of Option C coverage
must be sent to you and your family members (if they
request it), even if the rest of your insurance has been
assigned.
TIME LIMIT ON CONVERSION
Timely Conversions
Your request for conversion information must be made
on the Notice of
Conversion Privilege (SF 2819) and submitted to the
Office of Federal Employees' Group Life Insurance
(OFEGLI) at P. O. Box 2627, Jersey City, NJ 07303-2627. It
must be postmarked within 31 days after the date of the
terminating event or within 31 days of your (or your
family member(s), in the case of Option C) receipt of the
Notice of Conversion Privilege (SF 2819), whichever is
later.
Belated Conversions
When your employing office fails to give the required
conversion notice on time or you are unable to request
conversion on time for reasons beyond your control, you
can request a belated conversion by writing to the Office
of Federal Employees' Group Life Insurance (OFEGLI) at
P. O. Box 2627, Jersey City, NJ 07303-2627.
You must mail the request to OFEGLI within six months
after the date you first became eligible to convert. The
request must show that:
- you were not notified of the loss of coverage and
the right to convert and were not otherwise aware
of it, or
- you weren't able to convert because of reasons
beyond your control.
If six months or more have passed since the date you
first became eligible to convert, OFEGLI cannot accept a
request for conversion.
Effective Date
of Conversions
Conversions are effective at the end of the 31-day
temporary extension of coverage.
Belated conversions are made retroactive to the end of the
31-day extension, and you must pay the retroactive
premiums. There are no exceptions to the requirement to
pay retroactive premiums.
If
You Return to Federal Service
If you have converted your FEGLI coverage and return to Federal
service (including as a reemployed annuitant), you do not have to cancel
your conversion policy.
RETIREMENT AND WORKERS' COMPENSATION
Eligibility for
Conversion
If you are not eligible to continue life
insurance into retirement or compensation, you are
eligible to convert, the same as any other separating
employee.
If you are eligible to continue life
insurance into retirement or compensation, you may choose
to convert your life insurance coverage - or terminate
your insurance.
See "Procedures
for Retiring Employees" or "Procedures
for Compensationers" for more information.
If you have assigned your insurance, these
rights/choices transfer to your assignee(s).
OPTION B PORTABILITY
Portability was a provision in Public Law 105-311, the Federal Employees Life Insurance Improvement Act, which was enacted October 30, 1998. It applied only to FEGLI Option B insurance, which provides coverage in multiples of 1 to 5 times an employee's annual salary. Employees that met certain requirements were eligible to continue Option B insurance following separation from Government service.
The portability provision was a three-year demonstration project. It expired April 24, 2002, and is no longer available. Your agency should not give any employees a Portability Notice or other portability information.
For more detailed information refer to Benefits Administration Letter 02-206 of April 26, 2002.