Pamphlet RI 76-12
General Information About FEGLI (Continued)
Option B - Additional Insurance
Option B - Additional insurance was first available to
active Federal employees in April 1981. This coverage was not available to
anyone who retired before April 1981. The amount of coverage is determined by
multiplying your final annual basic pay rate rounded to the next higher thousand by the number of Option B multiples
that were in effect for the five years of service immediately before your
retirement or the entire periods of service during which these multiples were
available to you, if less than five years. It is possible to have as many as 5
multiples.
For example, if the number of multiples in effect for the
five years of service before your retirement was 3 and your final basic salary
rate was $27,500, the amount of your Option B insurance at retirement is $84,000 (3 x $28,000).
If you separated for retirement on or after April 24,
1999, and were eligible to continue Option B insurance in retirement, your
agency asked you to elect how many of your Option B multiples would continue in
retirement and whether — at age 65 — your multiples will continue at their full
value or will gradually reduce to zero.
We will give all annuitants who are eligible to make an
election regarding the reduction of Option B a second opportunity to make this
election. Those who are 65 or older at retirement will hear from us when we are
processing their retirement applications. We will contact annuitants who retired
before age 65 shortly before their 65th birthday. At that time, the annuitant
may elect either Full Reduction or No Reduction for each separate multiple of
Option B. For example, a person with five multiples may elect No Reduction on
two multiples, while the three remaining multiples reduce fully.
If you elect Full Reduction, 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 B 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 B
multiples with No Reduction, when you are 65 or at retirement, whichever is later, we will adjust the
withholding for your Option B 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, unless you have assigned your insurance. The cost of Option B insurance
depends on your age, the amount of insurance in effect when you retired, and the
reduction you elect, as shown in the following table:
Age Group |
Monthly Withholding per $1,000 of Insurance |
Under age 35 |
$.065 |
Age 35 through 39 |
.087 |
Age 40 through 44 |
.130 |
Age 45 through 49 |
.195 |
Age 50 through 54 |
.303 |
Age 55 through 59 |
.607 |
Age 60 through 64 |
1.30 |
Age 65 and Over |
No cost if you elected full reduction for Option B. See the chart below if you elected No Reduction for Option B.
|
These rates were effective on the first pay period that started on or after January 1, 2003. They are subject to change. |
The following premiums are for those persons who elected No Reduction for Option B. They reflect the phase in of the new Option B age bands over a three year period.
Age Group |
Monthly Withholding per $1,000 of Insurance |
January 2003 | January 2004 | January 2005 |
Age 65 through 69 |
$1.538 |
$1.538 |
$1.56 |
Age 70 through 74 |
$1.885 |
$2.232 |
$2.60 |
Age 75 through 79 |
$2.318 |
$3.098 |
$3.90 |
Age 80 and over |
$2.752 |
$3.965 |
$5.20 |
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 and the full amount of your Option B
insurance was $84,000 at retirement, your monthly premium for this benefit would
increase from $50.99 (84 x $.607) to $109.20 (84 x $1.300) 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 have some or all Option B multiples
reduce, we will stop withholding the monthly premium for the multiples that are
to reduce the first of the month after you are 65. For example, if you reach age 65 in May, premiums for Option B - Additional
insurance multiples that reduce will stop June 1. This will be shown in your
payment dated July 1, covering your annuity and insurance premiums for the month of June.