Federal Employees Health Benefits Program
Key features of FEHB are:
• Within 60 days from the date you are hired (or become eligible, if formerly working for the government but currently ineligible), you may enroll in a health benefits plan with group-rated premiums and benefits.
• Coverage is provided without a medical examination or restrictions because of age, current health, or pre-existing conditions.
• There are no waiting periods for benefits to kick in after the effective date of enrollment.
• There is catastrophic protection against unusually large medical bills.
• You have an annual opportunity, during open seasons, to enroll in a health benefits plan if you are not already enrolled or, if you are enrolled, to change to another plan or option.
There are about 260 health plan offerings in the program, a large majority of them are health maintenance organizations (HMOs). There are several variations in plan design. Some plans are sponsored by employee organizations, and generally, to enroll in them you must be a member of the organization.
Some organization plans are open to all FEHB-eligible people as adjunct members; others are restricted to specific agencies or occupations. HMOs are open to those within the geographic area serviced by that plan. Consult the plan brochure for more information.
There are about 230 health plans in the program, a large majority of them health maintenance organizations (HMOs). There are several variations in plan design. Some plans are sponsored by employee organizations, and generally to enroll in them you must be a member of the organization. Some organization plans are open to all FEHB-eligible people as adjunct members; others are restricted to specific agencies or occupations. HMOs are open to those within the geographic area serviced by that plan. Consult the plan brochure for more information.
By enrolling in an FEHB plan, employees have an opportunity to acquire protection against the cost of health care service for themselves and their families, including individuals suffering from prolonged illnesses or involved in serious accidents. Moreover, these benefits may be retained by employees after retirement, if they retire under certain conditions and meet certain requirements. (See Coverage After Retirement, below.)
The cost of FEHB premiums is shared by the enrollees and the government, with active employees paying their share through payroll deductions and retirees through annuity deductions.
Federal and postal workers also are covered by Medicare hospital insurance (Part A) for which they pay 1.45 percent of salary each biweekly period. Medicare eligibility typically begins at age 65. See FEHB and Medicare, below, for information about how the two programs coordinate.
The FEHB law mandates that special consideration be given to enrollees of certain FEHB plans who receive covered health services in states with a critical shortage of primary care physicians. FEHB fee-for-service insurers are required to provide benefits to plan participants in medically underserved areas who use any health care provider licensed to perform the specific medical service. The following states are deemed medically underserved areas under the FEHB program: Alabama, Arizona, Idaho, Illinois, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oklahoma, South Carolina, South Dakota, and Wyoming.
• receive accurate, easily understood information to help them make informed decisions about their health plans, professionals and facilities, including: accreditation status; compliance with state or federal licensing, certification, or fiscal solvency requirements; disenrollment rates; years in existence; corporate form; and compliance with standards (state, federal, and private accreditation) that assure confidentiality of medical records and orderly transfer to caregivers.
• information about networks and providers, including: board certification status and geographic location of all contracting primary and specialty care providers; whether they are accepting new patients; language(s) spoken and availability of interpreters; and whether their facilities are accessible to the disabled.
• a choice of health care providers that is sufficient to ensure access to appropriate high-quality health care. This includes: direct access to women’s health care providers for routine and preventative health care services; direct access to a qualified specialist within the network of providers for complex or serious medical conditions that need frequent specialty care; and transitional care for those with chronic or disabling conditions or who are pregnant where the provider either drops out of the program or is terminated under the carrier’s contract.
• access to emergency health care services when and where the need arises. Health plans use a “prudent layperson” standard in determining eligibility for coverage of emergency services without prior authorization.
• full participation in all decisions related to their health care. Consumers who are unable to fully participate in treatment decisions have the right to be represented by parents, guardians, family members, or other conservators.
• considerate, respectful care from all members of the health care system at all times and under all circumstances. Consumers who are eligible for coverage under the terms and conditions of a health plan or program or as required by law must not be discriminated against in marketing and enrollment practices based on race, ethnicity, national origin, religion, sex, age, mental or physical disability, sexual orientation, genetic information, or source of payment.
• confidential communication with health care providers and assurances of confidentiality for their personal health care information. Consumers also have the right to review and copy their own medical records and request amendments to their records.
Questions, Complaints, and Appealswww.opm.gov/healthcare-insurance/healthcare
If you don’t agree with your health plan’s decision regarding a claim, review and follow the directions in the disputed claims section of the brochure. This section will tell you how to ask the plan to reconsider your claim. You must explain why (in terms of the applicable brochure coverage provisions) you feel the services should be covered.
If the plan again denies the claim, the disputed claims section of the brochure will tell you how to write to OPM to ask it to review the claim. You may call the contracts division to check on the status of your disputed claim review by dialing the telephone number provided on the acknowledgement they send you. However, the contracts division cannot give you a decision over the phone until they have completed the review and issued a written final decision.
Decisions by the contracts division are the final level of OPM review. If you are dissatisfied with the decision, you may file a complaint in the appropriate federal district court by December 31 of the third year after the year in which you received the disputed services, drugs, or supplies.
FEHB Eligibility and Enrollment Rules
Eligible persons also include presidential appointees, employees of Judicial Branch and most employees of the Legislative Branch (see below for exceptions), and persons under various special categories, including part-time and temporary employees and intermittent employees in certain circumstances. See 5 CFR 890 and www.opm.gov/healthcare-insurance/healthcare/reference-materials/reference/eligibility-for-health-benefits.
Individual agencies determine eligibility. If your agency denies you coverage and offers you no supporting documentation, look up the rule in those sources, or contact your agency’s headquarters insurance officer.
Neither employees nor their family members are required to pass a physical examination to enroll for health benefits. Similarly, neither employees nor their family members can be excluded from joining an FEHB plan because of age or employment in a hazardous job.
See FEHB Coverage After Retirement, below in this section, for policies regarding coverage after retirement. See FECA Compensation Payments in Chapter 5, Section 5 for policies regarding coverage for those on workers’ compensation.
Two types of enrollment are available:
Self-Only—A self-only enrollment provides benefits only for you as the enrollee. You may enroll for self-only even though you have family members who otherwise would be eligible, but they will not be eligible for FEHB coverage even upon your death or disability.
Self and Family—A self and family enrollment provides benefits for you and your eligible family members. All of your eligible family members are automatically covered, even if you didn’t list them on your Employee Health Benefits Registration Form (SF 2809) or an electronic equivalent. You cannot exclude any eligible family member and you cannot provide coverage for anyone who is not an eligible family member.
An “eligible family member” includes an enrollee’s spouse—including in a common law marriage recognized in the state of residence or a same-sex spouse married in a jurisdiction (including in a foreign country) that recognizes such marriages, regardless of current place of residence (note: eligibility does not apply to domestic partnerships, civil unions or other arrangements not formally recognized as a marriage). Also eligible are former spouses under certain conditions (see Chapter 7, Section 3) and children under age 26 (or any age if they are incapable of self-support because of a mental or physical disability that began before age 26), including legally adopted children, recognized children born out of wedlock, stepchildren and, in certain circumstances, foster children.
If the enrollee is in a same-sex domestic partnership meeting certain qualifications (see Domestic Partners in Chapter 8, Section 4) and living in a jurisdiction that does not recognize same-sex marriage, children of the partner are eligible as well, effective in 2014; the partner himself or herself is not eligible, however. An enrollee seeking to cover a child of a same-sex domestic partner must certify that he or she would marry the partner were that option available in their state of residence. Rules at 5 CFR 890 govern situations such as moves among jurisdictions with differing policies. In some circumstances, children of a same-sex partner eligible for coverage may not be eligible for pretax payment of premiums (see Premium Conversion, below) and the associated portion of the premium will have to be paid with after-tax money.
For a foster child to be eligible as a family member on your enrollment: the child must live with you; the parent-child relationship must be with you, not solely the child’s biological parent; you must be the primary source of financial support for the child; you must expect to raise the child to adulthood; and you must sign a certification stating that your foster child meets those requirements.
Stepchildren remain eligible after divorce from the spouse, termination of the domestic partnership or the death of the spouse or domestic partner if they continue to live with the enrollee in a regular parent-child relationship.
A federal employee under age 26 whose parent has FEHB self and family enrollment is covered under the parent’s enrollment. Children in that situation cannot have their own FEHB enrollment unless they have their own family (spouse and/or children) whom they choose to cover under their own self and family enrollment, or the parent is enrolled in an HMO plan and the child lives outside its coverage area. Turning age 26 is a qualifying life event that allows a federally employed child to enroll in the FEHB.
Eligible children may be covered under an FEHB self and family policy even if they also are eligible for employer-sponsored health insurance other than FEHB insurance of their own. If they have such coverage, that policy generally becomes the primary payer. If the primary insurer does not fully cover the illness or injury, the FEHB plan may act as a secondary payer, depending on its benefits structure. The enrollee must inform both plans that the child has other insurance coverage. Guidance is in Benefits Administration Letters 10-201 and 11-202 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters.
Eligibility for family coverage for legally married same-sex spouses and related children became effective June 26, 2013, the date of the U.S. Supreme Court decision in United States v. Windsor (133 S. Ct. 2675) ending the former definition of marriage, for federal benefits purposes, as only between a man and a woman. Guidance is in Benefits Administration Letter 13-203 at the above site.
Children who lose FEHB coverage due to reaching age 26 become eligible for 36 months of additional coverage at their own expense; see Temporary Continuation of Coverage below in this chapter.
FEHB-eligible persons subject to court or administrative orders requiring them to provide health benefits for their children must enroll for self and family coverage in a health plan that provides full benefits in the area where the children live or provide documentation to their agency that they have obtained other health benefits for the children. See Chapter 7, Section 3.
An enrollee’s parents or other relatives cannot be covered under a family policy.
Detailed family eligibility rules are at www.opm.gov/healthcare-insurance/healthcare/reference-materials/reference/family-members/#geneligcov.
(Note: A small number of FEHB plans offer “affinity products” that allow people associated with enrollees, such as dependents beyond age 26 and unmarried domestic partners, to purchase health insurance coverage. Such insurance is separate from the FEHB, operates on its own terms, and has no government contribution. Any such products are described on a plan brochure’s “Non-FEHB” page.)
When spouses are both government employees, each may enroll individually or one spouse may enroll for the family. However, the eligible children of such a couple would be covered only if one spouse enrolls under the self and family option; enrolling individually does not cover children.
If you are a new employee, you may enroll in any available plan, option, and type of enrollment within 60 days after your date of appointment, unless your position is excluded from coverage. If you were employed in a position that was excluded from coverage and then appointed to a position that conveys coverage, you may enroll within 60 days after the change. If you are a non-appropriated fund (NAF) employee who moves to appropriated fund employment, you are eligible for coverage just as any other new employee, even if you have continued coverage under the NAF retirement system. At the time an employee becomes eligible to enroll, the employing office usually provides a Guide to Federal Benefits, which explains the FEHB and other federal benefits, and a Standard Form 2809, Employee Health Benefits Registration Form (some agencies have electronic equivalents).
. Eligible employees may enroll during the annual open season or at other specified times (see the Table of Permissible Changes in Enrollment, below). The Guide also is available at www.opm.gov/healthcare-insurance/healthcare and the form from your personnel office or at www.opm.gov/forms.
Agencies must provide employees entering leave without pay status (including due to a furlough; see Furloughs in Chapter 9, Section 1), written notice of their opportunity to continue their FEHB coverage. Employees in an authorized leave without pay or other type of non-pay status generally can continue health insurance coverage for up to one year of the non-pay period. The 365 days of non-pay status may be continuous or may be interrupted by periods in a pay status that last less than four consecutive months. Agencies must give employees the opportunity either to directly pay their share of the premiums for these periods or to incur a debt to the agency to be withheld from future salary.
Part-Time Employees—Part-time employees are eligible for coverage under the same terms as full-time employees, except that the government share of the total premium is prorated according to the number of hours the employee works. The employee must pay the difference.
Temporary Employees—Individuals serving under temporary appointments generally are excluded from coverage, except that under 5 U.S.C. 8906a, temporary employees who have completed one full year of continuous employment may secure coverage at their own full expense.
Also, under rules effective in July 2012 at 5 CFR 890, temporary wildland firefighters and fire protection personnel qualify for FEHB with no continuous employment requirement. While they are employed, the government pays its standard share of premiums on their behalf; while they are not employed coverage is at their own full expense. Agencies may request that those policies be extended to employees engaged in similar emergency response services.
Affordable Care Act—The Patient Protection and Affordable Care Act, Public Law 111-148, requires each individual to maintain “minimum essential coverage” each month effective with calendar year 2014 or else be subject to a tax penalty, unless eligible for certain exceptions. This includes a responsibility to maintain such coverage for children and others who are dependents for federal income tax purposes.
All FEHB plans qualify as providing such coverage for those who are personally enrolled or who are covered under a family enrollment, spouse equity, or temporary continuation of coverage. If you are eligible for FEHB but have health insurance on yourself (and on dependents, if applicable) from another source instead—such as through a spouse’s non-federal employment—check to see if it qualifies as providing minimum essential coverage. If that plan does not qualify (and you are not eligible for an exception from the tax penalty), it may be to your advantage to enroll in FEHB instead; that can be done during the annual open season or if you experience a qualifying life event as described in Changes Outside of Open Season, below.
The ACA’s tax penalty provision also is a consideration for employees or annuitants who are not enrolled in FEHB or other qualifying coverage. Those who are eligible for FEHB but choose not to take it (or who are ineligible for FEHB) are eligible to enroll in ACA insurance exchange plans. However, there is no government contribution to the premiums for those plans and premiums must be paid on an after-tax basis.
In addition, if an employee is enrolled in an exchange plan rather than FEHB and the employee dies, family coverage under FEHB for survivors would not be available even if they are eligible for a survivor annuity. The same is true if the employee retires: FEHB coverage would not be available since an employee must be in an FEHB plan on the date of retirement to continue coverage in retirement (see FEHB Coverage After Retirement, below).
Detailed guidance is in Benefits Administration Letters 13-205 and 13-206 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters; information on what is deemed minimum essential coverage, the exceptions, and the potential tax penalty for those not enrolled in the FEHB or other qualifying plan is at www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-for-Individuals-and-Families.
Also under the ACA, effective in calendar year 2014, members of the House and Senate and their personal staffs are ineligible for FEHB. They must get their health care coverage through the Act’s insurance exchange system or through another source such as employer-sponsored health insurance of a spouse (Note: this requirement does not apply to other FEHB-eligible persons, including other Legislative Branch employees).
Each member’s office is responsible for deciding which employees are affected by this policy by each October for the following year, and the designation cannot be changed during a plan year. While members of Congress and affected staff may enroll in any plan for which they are eligible, the employer contribution continues only if they choose the D.C. Health Link Small Business Market plan based in the District of Columbia. The employer contribution for that plan is paid under the same formula applying under FEHB. At retirement they are eligible to return to the FEHB so long as they meet the rules for carrying FEHB into retirement (see FEHB Coverage After Retirement, below); for them, enrollment in the ACA plan counts toward meeting the five-year coverage requirement. See BAL 13-207 at the above OPM online address.
FEHB Plan Options
Fee-for-Service Plans—The government-wide “service health benefit plan” is a fee-for-service plan provided through Blue Cross and Blue Shield organizations that any employee may join. It is called a service benefit plan because it works on the principle of paying benefits either to the enrolled participant or directly to the doctor or hospital that provides the treatment or service. Blue Cross and Blue Shield also offers a network-only option.
Another type of FEHB fee-for-service plan is the employee organization plan. Some of these plans are exclusive to certain groups of employees, while others allow any FEHB-eligible person to join the plan as an adjunct member of the organization.
A preferred provider organization option in a fee-for-service plan gives enrollees the choice of using doctors and other providers within the plan’s network (the PPO benefit) at a lower cost, or using ones outside the plan’s network.
A fee-for-service plan may also make available a point of service option through a network of providers. There is an incentive for enrollees to use these providers because doing so usually results in a waiver of deductibles and a smaller than normal co-payment.
HMOs—The FEHB program offers employees and annuitants the chance to enroll in a number of HMOs. Types of HMO options available to FEHB enrollees include:
• Group Practice Prepayment Plans—These plans have their own medical center or centers and their own doctors who practice as a group. Employees who live in an area where there is a group practice prepayment plan that participates in the FEHB program may choose to join it instead of one of the other plans.
• Individual Practice Prepayment Plans—In these plans, doctors agree to accept payments from the plan instead of requiring the patient to pay their usual charge. Like the group practice plans, these plans operate only in certain areas. Employees residing in a locality that has such an approved plan may choose to join it.
• Mixed Model Prepayment Plans—These are a combination of group practice and individual practice plans.
Some HMOs offer a point of service option in which enrollees may use providers who are not part of the HMO network. However, there is a greater cost associated with choosing non-network providers. Enrollees usually pay deductibles and coinsurances that are substantially higher than the payments when they use a plan provider. They also need to file a claim for reimbursement.
‘Consumer-Driven’ Options—Such plans feature a pool of money available to be spent up-front, then a deductible, and then standard coverage—either HMO-based or fee-for-service. The catastrophic limit usually is higher than what is common in other plans. The plans are designed to encourage enrollees to be selective in their use of health care. Unused portions of the allowance can be rolled over to future years, subject to certain limits.
High-Deductible Health Plans—These are plans that feature a high deductible and a tax-favored account—either a health savings account or health reimbursement arrangement—whose money can be used to pay the deductible and certain other medical costs.
A health savings account is available to anyone who is not eligible for Medicare benefits (generally, meaning not 65 or older) and who does not have another potential source of paying the deductible, such as a spouse’s separate health insurance plan or a flexible spending account (thus, with the exception noted below, enrollees in HSA plans may not have health care FSAs, although they remain eligible for dependent care FSAs). Plans with a health savings account option must offer a health reimbursement arrangement, which is available for those who do not qualify for an HSA. Those with HRAs are not limited in their FSA options.
In HSA/HRA plans, the minimum deductible is set according to the tax code, plans may set higher deductibles, up to certain limits. The account is funded automatically by a portion of the premiums, typically an annual amount up to a figure somewhat below the tax code minimum. HSA account holders (but not HRA account holders) may invest additional funds with the combined total of automatic and voluntary contributions limited to annual maximum amounts established by the IRS. These investments are made by sending money directly to the plan, not by payroll deduction; investors then take a deduction from their taxes for that year. The tax code also sets limits on contributions and out-of-pocket expenses, both of which are indexed each year.
Money in the account is available to be withdrawn tax-free to pay the deductible plus certain other qualified medical expenses that do not count toward the deductible. HRA account holders must pay eligible expenses out of the account; an HSA account holder has the option of drawing down the account or paying the cost out of pocket. Money not spent in any one year can be rolled over for use in future years. HSA accounts earn interest tax-free; HRA accounts do not earn interest. There is no limit on how high the accounts can build. Money drawn out for expenses other than the allowable medical costs is taxable, plus a penalty may apply.
An HSA enrollee can keep the account even if retiring or leaving the government. Funds in an HRA are forfeited if the account holder leaves federal employment—if still employed—or switches health insurance plans.
After the deductible is paid, such plans feature coverage more or less comparable to that of the carrier’s plans that do not feature such accounts. Certain types of preventive care do not count against the deductible.
Participation in HSA/HRA plans does not affect the “premium conversion” arrangement through which active employees may pay FEHB premiums with pretax dollars (see Pretax Payment of FEHB Insurance Premiums, below).
Although the IRS generally doesn’t permit individuals to hold both an HSA and a health care flexible spending account, an exception applies for FSAs that cover only certain expenses. See the information about “limited” health care FSAs under Health Care Accounts in Chapter 1, Section 9.
Unlike flexible spending account allotments, employees who elect HSA allotments may modify their allotments at any time so long as the change is prospective and in accordance with the payroll provider’s procedures. The HSA allotment election will continue until the employee modifies or revokes that allotment election.
HSA enrollees may make pretax allotments to those accounts through payroll withholding using the same method that they would use to establish other allotments from pay.
Employees are responsible for ensuring their enrollment and contributions are in accordance with IRS rules. Neither payroll providers nor self-service system providers verify employee eligibility or check to ensure employee contributions are within annual limits. There is a 20 percent penalty for medical expenses paid from an HSA that are later found to be non-eligible. (Note: Over-the-counter drugs or medicines are eligible for reimbursement only if prescribed by a doctor, with the exception of insulin, for which no prescription is needed.)
Detailed Plan Information—Employees seeking more detailed information about the benefits provided by different plans should consult the plan brochures that can be obtained at www.opm.gov/healthcare-insurance/healthcare/plan-information.
FEHB Premium Rates
FEHB premium costs are shared by the government and the participating employee or annuitant. The maximum government contribution is set at 72 percent of the weighted average cost of all plans, not to exceed 75 percent of the cost of any specific plan. The enrollee pays the balance, which averages about 30 percent of the total premium.
The government contribution is the same for most federal employees, with the following exceptions:
• Employees appointed under the Federal Part-Time Career Act of 1978 only receive a portion of the government contribution paid to full-time employees, with the government’s share pro-rated in proportion to the percentage of full-time service regularly performed.
• Temporary employees, if eligible, typically pay both the employee and government shares; for an exception involving wildland firefighters, see FEHB Eligibility and Enrollment Rules, above.
• The U.S. Postal Service contributes an additional amount toward the cost of premiums for its employees but not its retirees.
Premium Assistance—Public Law 111-03, the Children’s Health Insurance Program (CHIP) Reauthorization Act of 2009, allows states to subsidize health insurance premium payments for certain children in low-income households who have access to qualified employer-sponsored health insurance coverage. Most FEHB plans, excluding high-deductible health plans, meet the act’s definition. Therefore, FEHB-eligible enrollees who meet the criteria for child health assistance in their state are eligible to receive state premium subsidy assistance payments to help them pay FEHB premiums.
Benefits Administration Letter 09-203 (available at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters) directed that eligible FEHB enrollees are to receive state premium assistance subsidies directly—state policies may allow for subsidies to be paid to the employer instead—and the employing agency is to continue to withhold the full employee share of the premium.
The law also allows eligible employees to enroll in the FEHB or to change enrollment from self-only to self and family if an eligible family member gains health insurance coverage or Medicaid or CHIP assistance (in addition to when such coverage is lost), within 60 days after the date the employee or family member is determined to be eligible for assistance. Employees may make these enrollment changes regardless of whether they are covered under premium conversion.
In addition, premium assistance is available in certain circumstances as described in Temporary Continuation of Coverage, below.
Pretax Payment of FEHB Insurance Premiums
This “premium conversion” arrangement results in reductions in federal income, Social Security and Medicare taxes. In many jurisdictions, state and local taxes will also be reduced. On the other hand, federal retirement, thrift savings and life insurance benefits are not affected by participation in premium conversion. For example, it does not affect base salary for the purpose of determining “high 3” salary years for retirement benefits calculation.
Participation in premium conversion is automatic unless the employee waives it using the FEHB Premium Conversion Election/Waiver form, available from agency personnel offices and at www.opm.gov/retire/pubs/bals/2000/00-215_attach3.pdf. Each year during open season, employees may decide whether to participate for the following year. Participation continues uninterrupted unless the employee opts out.
Enrollees may change participation status in premium conversion during the annual FEHB open enrollment period, or during the calendar year upon a qualifying life event (see Changes Outside of Open Season, below).
Enrollment or participation in premium conversion ends if you terminate or are terminated from federal government employment. If you are eligible and elect to participate in Temporary Continuation of Coverage (TCC), you pay those premiums directly on an after-tax basis; premiums that are paid under TCC are not eligible for premium conversion.
While annuitants generally are not eligible for premium conversion (see the exception below), re-employed annuitants employed in positions that convey FEHB eligibility may participate in premium conversion. For them to do so, their FEHB enrollment must be transferred from their retirement system to the employing agency. For considerations relating to re-employed annuitants, see Chapter 4, Section 4.
Premium conversion may result in somewhat lower Social Security benefits for those federal employees who pay Social Security taxes on their salaries, primarily those under the Federal Employees Retirement System. Therefore, in rare situations mainly involving lower-paid employees, it may be advantageous to pay full Social Security taxes rather than the lower ones resulting from premium conversion. These cases do not involve employees covered by CSRS or CSRS Offset.
An employee participating in premium conversion generally has the same flexibility as a person who chooses not to participate. Because of the tax laws, there are two exceptions that might play into a decision to take or waive premium conversion. Those who waive premium conversion can at any time drop health insurance or change from a self and family enrollment to self-only. However, those participating in premium conversion may do so only during an open season or at the time of a “qualifying life event” (see Changes Outside of Open Season, below). More information is at www.opm.gov/healthcare-insurance/healthcare/reference-materials/#url=Premium-Conversion.
Premium Conversion for Some Retirees—Section 845 of the Pension Protection Act of 2006, effective January 1, 2007, allows limited pretax payment of FEHB premiums (among certain other forms of insurance) for retired “public safety officers.”
OPM in Benefits Administration Letter 07-201 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters, determined that the Civil Service Retirement System and the Federal Employees Retirement System are eligible retirement plans under the act and that retired public safety officers are deemed to have made an FEHB premium conversion election for this purpose. To qualify, the distribution must be paid directly from the retirement system to the insurance provider.
As a result, retired public safety officers whose CSRS or FERS annuity payments include a direct premium payment to an FEHB carrier may self-identify eligibility for, and self-report, a tax exclusion to the Internal Revenue Service. Premiums of up to $3,000 for coverage of the enrollee, spouse or dependents can be excluded, but only for amounts that otherwise would be included in taxable income, and the amount excluded cannot be used to claim a medical expense deduction.
IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits, at www.irs.gov/pub/irs-pdf/p721.pdf defines public safety officers as including retired law enforcement officers and firefighters. That publication also contains additional information on this tax advantage. Consult a tax adviser for guidance.
Changes Outside of Open Seasonwww.opm.gov/formswww.opm.gov/forms
The major QLEs that permit enrollment or change in enrollment are:
• A change in family status: marriage (including a same-sex marriage meeting the standards described in Option C—(Family Optional Insurance), above); birth or adoption of a child; acquisition of a foster child; legal separation or divorce (including of same-sex marriages); and death of a spouse or dependent.
• A change in employment status: you are re-employed after a break in service of more than three days; you return to pay status after your coverage terminated during leave without pay status or because you were in leave without pay status for more than 365 days; your pay increases enough for premiums to be withheld; you are restored to a civilian position after serving in the uniformed services; you change from a temporary appointment to an appointment that entitles you to a government contribution; or you change to or from part-time career employment.
• You or a family member lose FEHB or other coverage: under another FEHB enrollment because the covering enrollment was terminated, canceled, or changed to self-only; under another federally sponsored health benefits program; under Medicaid or similar state-sponsored program for the needy; because your membership terminates in the employee organization sponsoring the FEHB plan; or under a nonfederal health plan.
• For employees not participating in premium conversion, a determination that an FEHB-eligible employee or a family member who is eligible for FEHB family coverage is eligible for premium assistance under a Medicaid or State Children's Health Insurance Program.
When one of these events occurs, you may: enroll; change your enrollment from self-only to self and family; change your enrollment to another FEHB plan or option; change your enrollment to self-only; or cancel your enrollment. A change to self-only may be made only if the QLE causes the enrollee to be the last eligible family member under the FEHB enrollment. A cancellation may be made only if the enrollee can show that as a result of the QLE, he or she and all eligible family members now have other health insurance coverage.
QLEs that permit changes in enrollment are shown in the table in this section.
Leave Without Pay—In certain circumstances, entering or returning from a period of leave without pay (LWOP) by the enrollee, spouse, or covered dependent may constitute a qualifying life event. Those entering a period of LWOP of more than 31 days have the option to terminate or continue FEHB coverage. Those who elect to continue FEHB coverage must choose one of the options to pay the enrollee share of the premium. These options are pay-as-you-go (paying the enrollee share of the FEHB premium directly to the employing agency while on LWOP), and catch-up (where the agency remits the enrollee share of the FEHB premium to OPM during the period of LWOP and the enrollee repays it on return to pay status). In addition, under the IRS rules an agency may, but is not required to, offer a prepay option.
Preadmission Certification Procedures
If you are enrolled in a managed fee-for-service plan, the preadmission certification provision makes you responsible for ensuring that the requirement is met. You or your doctor must check with your FEHB plan before you are admitted to the hospital. If that doesn’t happen, your benefits for the admission will be reduced by $500, not to exceed the cost of the admission. This means that if you do not satisfy the preadmission certification requirement before being admitted to the hospital, you will be penalized by forfeiting up to $500 in benefits your FEHB plan would otherwise pay to you.
For example, if you meet your annual deductible, then incur $1,000 in covered hospitalization charges, you will receive $800 in benefits from your FEHB plan if that plan pays 80 percent of hospitalization charges, as long as you are pre-certified to be admitted to the hospital. However, if, in that same situation, you fail to satisfy the preadmission requirement, $500 in benefits are lost as a penalty and you will receive only $300 in benefits from your FEHB plan.
Coordination of Benefits
The most common instances where OPM coordinates with other programs are the following:
• Tricare and CHAMPVA. FEHB carriers coordinate Tricare/CHAMPVA benefits according to their statutes. Tricare covers certain dependents of military persons and retirees of the military. CHAMPVA provides health coverage to disabled veterans and their eligible dependents. When Tricare or CHAMPVA and FEHB cover the enrollee, FEHB pays first. Also see FEHB, CHAMPVA and Tricare, below.
• FEDVIP. Some FEHB plans provide some dental and/or vision benefits. For enrollees of plans offering those benefits who also are enrolled in the Federal Employees Dental and Vision Insurance Program (see Section 4 of this chapter), the FEHB carrier pays first and the FEDVIP carrier pays part or all of the rest, depending on the plan’s terms.
• Medicaid. When the enrollee has Medicaid and FEHB, FEHB pays first.
• Medicare. Retirees are eligible for Medicare at age 65. FEHB carriers coordinate with Medicare and Medicare makes the final determination regarding who is primary. The most common situation is when the enrollee or spouse is age 65 or over and has Medicare. Generally, in that case, if the person is an active federal employee, FEHB pays first and if the person is retired, Medicare pays first. Medicare’s rules for coordinating benefits are described in FEHB plan brochures. To facilitate benefits coordination with Medicare, OPM and carriers work with Medicare, including through an OPM-Medicare data matching agreement whereby enrollees with Medicare are identified so that Medicare and FEHB claims payment systems will be set up to pay claims correctly. Also see FEHB and Medicare, below.
• Spouse coverage. Benefits of enrollees (whether active employees or retirees) with coverage both through FEHB and through a spouse’s private sector employer are coordinated according to the NAIC guidelines. Generally, an enrollee’s own coverage is primary to coverage through a spouse.
• Other group coverage. Benefits of enrollees who have other insurance of their own, such as coverage as a retiree from private employment, are coordinated according to the NAIC guidelines. Generally, the plan that covers a person as a current employee pays before the plan that covers the person as a retiree.
• No-fault coverage. FEHB carriers coordinate the payment of medical and hospital costs under no-fault or other automobile insurance that pays benefits without regard to fault according to the NAIC guidelines.
• Children’s coverage. Where a child covered under an FEHB self and family policy has employer-sponsored health insurance of his or her own, that policy is the primary payer and FEHB is the secondary payer.
Temporary Continuation of Coverage
Note: Under 5 U.S.C. 8905a(d)(4), Defense Department employees who are involuntarily separated by a reduction in force or who volunteer to be separated from a “surplus position” pay only the employee contribution if they elect TCC. See Defense Department RIF and Placement Benefits in Chapter 9, Section 2.
Under certain conditions, federal employees and members of their families who lose their FEHB coverage due to the occurrence of a qualifying life event are eligible for TCC.
For employees, the only qualifying event is separation from federal service. However, you are not entitled to TCC if you are involuntarily separated due to gross misconduct. If your human resources office decides that you were separated because of gross misconduct, it must notify you of that fact and explain what you can do to appeal the decision.
For children, the qualifying events are:
• losing eligibility as a family member of a current FEHB enrollee, most commonly on reaching age 26 (see FEHB Eligibility and Enrollment Rules, above);
• in the case of children whose coverage has continued beyond age 26 because of their inability to support themselves due to a disability occurring before they reached age 26, recovering from the disability or becoming self-supporting; and
• in the case of death of the sponsoring employee or annuitant, ineligibility for a survivor annuity or the end of a survivor annuity. See Survivor Benefits for Children in Chapter 3, Section 4 regarding death of an annuitant; see Benefits Upon Death in Service in Chapter 8, Section 4 regarding death of an active employee.
Your spouse is not eligible for TCC in his or her own right, even if you are separated from the government and you decide not to elect TCC or you die. However, if your marriage ends other than by death, your former spouse is eligible for TCC. The qualifying events are divorce and annulment of the marriage. (See Chapter 7, Section 3 for policies on continued FEHB enrollment for former spouses through a court order.)
For a former employee, a TCC family enrollment covers the same family members as were covered under the regular family enrollment. Family members must continue to meet the same eligibility requirements as under a regular family enrollment. A new family member, such as a new spouse or a newborn child, who is added during the TCC enrollment period is also covered as a family member.
For a child with a TCC family enrollment, his or her spouse and children are covered family members.
For former spouses, family members are limited to children of both the federal employee and the former spouse. The new husband or wife of a remarried former spouse is not covered as a family member.
Separating employees can continue TCC for up to 18 months after the date of separation. An employee’s children and former spouses can continue TCC for up to 36 months after: (1) the date of the qualifying event if it occurs while the child or former spouse is covered as a family member of an employee or annuitant under a regular FEHB enrollment, or (2) the date of the employee’s separation if the qualifying event occurs while the child or former spouse is covered under the TCC enrollment of a former employee.
If a child’s or former spouse’s qualifying event occurs while the employee is enrolled for family coverage under TCC, the child or former spouse may elect TCC in his or her own right; however, the TCC coverage may not continue beyond 36 months after the date of the worker’s separation.
Except in cases of gross misconduct, separating employees who would lose FEHB coverage because of their employment termination are eligible for TCC. It is the responsibility of the worker’s employing office to provide notice to the employee (within 61 days after regular FEHB enrollment terminates) of the right to enroll under TCC. Generally, separating employees must submit their TCC election notice to their employing agency within 60 days after the date of separation or within 65 days after the date of notice from the employing agency, whichever is later.
Employees should ask their agency to provide them with TCC information before or on the day they separate. TCC enrollments—and premiums—always begin on the 32nd day after an employee’s regular coverage ends (which happens on the last day of the pay period in which the employee separates). The earlier the TCC enrollment form is submitted, the earlier the agency can process it, and the less likely that the worker will receive a large bill for retroactive TCC coverage.
Employees who retire and are eligible to continue their regular FEHB coverage are not eligible for TCC, since their regular FEHB coverage does not stop.
To apply for TCC, separating employees (or their child or former spouse, as applicable) must complete Standard Form 2809, Employee Health Benefits Registration Form, available from your personnel office or at www.opm.gov/forms (or its electronic equivalent) and submit it to their employing office within the time limit noted above. Employing offices can accept late enrollments in very limited circumstances. Enrollees are not limited to the plan or option in which they were covered when the regular FEHB coverage ended. Employees or other eligible individuals may enroll in any plan for which otherwise qualified. (Some plans require that enrollees live or work in a certain geographic area or belong to the sponsoring employee organization.)
If an employee’s child wants TCC, it is the employee’s responsibility to notify the employing office within 60 days after the qualifying event and supply the child’s mailing address. (Since the enrollment will be in the child’s name, the child must complete the election form and the child will be billed for the coverage.)
If someone other than the employee notifies the employing office about the child’s eligibility, the employing office will notify the child of his or her TCC rights, but the child’s 60-day time limit to elect TCC begins with the qualifying event, not the date of the employing office’s notice of TCC rights.
Enrollees may elect either self-only or self and family enrollment; however, as noted above, the individuals who qualify as family members under a TCC family enrollment vary depending on whether the enrollee is a former employee, a child, or a former spouse. If individuals who are eligible for TCC cannot make an election on their own behalf due to a mental or physical disability, a court-appointed guardian may file an election for that person.
An enrollee who loses FEHB coverage other than by cancellation (including cancellation for nonpayment of premiums) has a 31-day temporary extension of coverage, at no cost, in the same enrollment category held at separation for the purpose of converting to a non-group contract with the current health benefits plan. This is true even when the enrollee also has the right to elect temporary continuation of FEHB coverage. TCC takes effect on the day that the 31-day temporary extension of coverage ends. Coverage is retroactive to that date if the enrollment processing is completed later.
Depending on the circumstances, a timely election can be made up to 126 days after the qualifying event. A person who waits that long to enroll is billed for the entire 95-day period of retroactive coverage. In cases where the employing office accepts a late election, the period of retroactive coverage for which the enrollee is billed is even longer. If the enrollee does not pay the bill for the retroactive coverage, the TCC enrollment is canceled retroactively to the beginning date and the person is not eligible to re-enroll.
FEHB and Medicare
However, Medicare covers some orthopedic and prosthetic devices, durable medical equipment, home health care, limited chiropractic services, and medical supplies, which some FEHB plans may not cover or only partially cover. For a fuller description of Medicare, see Chapter 5, Section 8.
FEHB plans are limited to paying the Medicare fee schedule amount for physician services provided to retired FEHB enrollees age 65 and over who are not enrolled in Medicare Part B. Medicare participating providers can collect no more than the Medicare fee schedule amount from these enrollees. Medicare non-participating providers can collect no more than the limiting charge amount, which is 115 percent of the fee schedule amount. This reduces both what the plan and the enrollee can be charged by doctors.
Medicare Enrollment Issues—Most Medicare-eligible persons on reaching age 65 are eligible for Part A (hospital insurance) benefits premium-free. Part A will help cover some of the costs that an FEHB plan may not cover, such as deductibles, coinsurance, and charges that exceed the plan’s allowable charges. There are other advantages to enrolling in Part A, such as being eligible to enroll in a Medicare managed care plan.
Enrollees don’t have to take Part B (primarily physicians’ services) coverage if they don’t want it, and an FEHB plan can’t require them to take it. There are some advantages to enrolling in Part B:
• An enrollee must be enrolled in Parts A and B to join a Medicare Advantage plan.
• An enrollee has the advantage of coordination of benefits between Medicare and the FEHB plan, reducing out-of-pocket costs.
• An FEHB plan may waive its co-payments, coinsurance, and deductibles for Part B services.
• Some services covered under Part B might not be covered or only be partially covered by an FEHB plan.
Anyone enrolled in an FEHB HMO may go outside of the plan’s network for Part B services and receive reimbursement by Medicare when Medicare is the primary payer.
Those who don’t enroll in Medicare as soon as they are eligible must wait for the general enrollment period (January 1-March 31 of each year) to enroll, and Part B coverage will begin the following July 1. Their Part B premiums will go up 10 percent for each 12 months that they could have had Part B but didn’t take it. However, this penalty generally does not apply to those who didn’t take Part B at age 65 because they were covered under health insurance such as FEHB as an active employee or were covered under a working spouse’s group health insurance plan. They may sign up for Part B without penalty within eight months from the time the enrollee or spouse stops working or is no longer covered. An enrollee also can sign up at any time when covered by the group plan.
Medigap Enrollment Issues—FEHB is not one of the standardized Medicare supplemental insurance policies known as Medigap (or Medicare SELECT) policies. However, many FEHB plans and options will supplement Medicare by paying for costs not covered by Medicare, such as the required deductibles and coinsurance, and by providing additional benefits not provided under Medicare.
An FEHB enrollee generally doesn’t need to purchase a Medigap policy since FEHB and Medicare will coordinate benefits to provide comprehensive coverage for a wide range of medical expenses.
Part D Enrollment Issues—Persons eligible for both FEHB and Medicare may enroll in both FEHB and the Medicare Part D prescription drug program. However, both OPM and the Centers for Medicare and Medicaid Services provide information to potential enrollees stating that FEHB prescription drug coverage is generally better than that of plans available under Medicare Part D and that duplicative coverage is unnecessary. Nevertheless, some FEHB enrollees elect to purchase Part D. In some cases, they are eligible for Medicare’s subsidies for low-income individuals that reduce or eliminate premiums, deductibles and cost-sharing under Part D. Individuals eligible for this subsidy and wishing to take it may need to maintain their FEHB coverage because prescription drug benefits are integrated into FEHB plans; beneficiaries may not terminate FEHB drug benefits without losing their medical benefits as well. Benefits for those enrolled in both are coordinated through Medicare’s automated data sharing system for secondary providers or through other arrangements.
Which Pays First—Medicare law and regulations determine whether Medicare or FEHB is primary (pays benefits first). Medicare automatically transfers claims information to the FEHB plan once a claim is processed, so the enrollee generally doesn’t need to file with both.
An FEHB plan must pay benefits first when the enrollee is an active federal employee or re-employed annuitant (even if age 65 or older) and either the enrollee or covered spouse has Medicare, unless the re-employment position is excluded from FEHB coverage or the enrollee is enrolled in Medicare Part B only. An FEHB plan must also pay benefits first for the enrollee or a covered family member during the first 30 months of eligibility or entitlement to Part A benefits because of End Stage Renal Disease (ESRD), regardless of employment status.
Medicare must pay benefits first when the enrollee is an annuitant, and either the enrollee or covered spouse has Medicare. Medicare also must pay benefits first when the enrollee is receiving workers’ compensation and the Office of Workers’ Compensation Programs has determined that the enrollee is unable to return to duty.
FEHB Enrollment Issues—An enrollee may change FEHB enrollment to any available plan or option at any time beginning on the 30th day before becoming eligible for Medicare. The enrollee may use this enrollment change opportunity only once. An enrollee may also change enrollment during the annual open season, or because of another event that permits enrollment changes (such as a change in family status).
Once Medicare becomes the primary payer, the enrollee may find that a lower cost FEHB plan is adequate. Also, some plans waive deductibles, coinsurance, and co-payments when Medicare is primary. (Note: Several FEHB plans are conducting pilot programs in which persons enrolled in both FEHB and Medicare may voluntarily participate. The FEHB plan pays part or all of the cost of the enrollee’s Medicare Part B premium and in return, the enrollee must pay the same cost sharing as enrollees in the plan who are not enrolled in Medicare.)
An FEHB fee-for-service plan won’t necessarily cover all out-of-pocket costs not covered by Medicare. A managed fee-for-service plan’s payment is typically based on reasonable and customary charges, not on billed charges. In some cases, Medicare’s payment and the plan’s payment combined will not cover the full cost.
Out-of-pocket costs for Part B services will depend on whether the doctor accepts Medicare “assignment.” When a doctor accepts assignment, the enrollee can be billed only for the difference between the Medicare-approved amount and the combined payments made by Medicare and your FEHB plan. When a doctor doesn’t accept assignment, the enrollee can be billed up to 115 percent of the Medicare-approved amount (the “limiting charge”) when the FEHB plan’s payment and Medicare’s payment don’t cover the full cost.
Although the enrollee will usually have to pay the FEHB HMO’s required co-pays and deductibles, some HMOs waive such payments when Medicare is primary. However, the enrollee must still use the HMO’s participating provider network to receive services and get required referrals for specialty care.
Medicare Managed Care Plan Issues—Those who enroll in a Medicare managed care plan may not need FEHB coverage because the Medicare managed care plan pays many of the same benefits. Review their benefits carefully before making a decision.
Those who provide documentation to their retirement system that they are suspending FEHB coverage to enroll in a Medicare managed care plan may re-enroll in FEHB if they later lose or cancel the Medicare managed care plan coverage. Those who voluntarily cancel Medicare managed care plan coverage must wait until the next open season to re-enroll in FEHB. Those who involuntarily lose coverage under the Medicare managed care plan may re-enroll from 31 days before to 60 days after losing the Medicare managed care plan coverage, and their re-enrollment in FEHB will be made effective the day after the Medicare managed care plan coverage ends. An involuntary loss of coverage includes when the Medicare managed care plan is discontinued or when the enrollee moves outside its service area.
Each FEHB plan brochure provides specific information on how that plan’s benefits are coordinated with Medicare. Some HMOs participating in FEHB will coordinate to the enrollee’s greater advantage if he or she enrolls in the company’s FEHB HMO and Medicare managed care plans.
Further information on FEHB and Medicare is at
FEHB, Tricare, and CHAMPVA
Annuitants and Former Spouses
The suspension provision also applies to those eligible to enroll in Tricare’s Uniformed Services Family Health Plan.
Annuitants or former spouses can suspend FEHB coverage to use Tricare or CHAMPVA at any time. Annuitants can call OPM’s Retirement Information Office at (888) 767-6738 or (724) 794-2005 to obtain a suspension form. Former spouses can get the form from the employing office or retirement system maintaining their enrollment.
Eligible individuals must submit a completed suspension form and provide all necessary documentation to show eligibility for Tricare or CHAMPVA during the period beginning 31 days before and ending 31 days after the date they designate as using Tricare or CHAMPVA instead of FEHB coverage. If the documentation showing your eligibility for Tricare is received within that period, the suspension becomes effective at the end of the day before the day you designated. Otherwise, the suspension becomes effective at the end of the month in which OPM receives your documentation.
An annuitant, survivor, or former spouse may not suspend his or her own FEHB coverage while allowing family members to continue coverage under the FEHB. The coverage of all family members is suspended as well. Nor can an annuitant, survivor, or former spouse suspend his or her family members’ FEHB coverage while remaining covered under the FEHB. An annuitant, survivor, or former spouse can change to self-only coverage, but this cancels all family members’ coverage and takes away their future enrollment eligibility.
If you suspend FEHB coverage to use Tricare or CHAMPVA instead, you can re-enroll in the FEHB for any reason during a future open season. If you are involuntarily disenrolled from Tricare or CHAMPVA, you are eligible to immediately re-enroll in the FEHB. Your request to re-enroll must be received within the period beginning 31 days before and ending 60 days after your Tricare or CHAMPVA coverage ends. Otherwise, you must wait until an open season.
If an annuitant dies during his or her suspended FEHB enrollment, his or her survivor will be eligible to re-enroll in the FEHB as long as the annuitant was enrolled in self and family coverage when he/she suspended FEHB coverage and made arrangements to leave a survivor annuity.
Active Employees—Actively working civil service employees may not suspend their FEHB coverage to use CHAMPVA, Tricare or Tricare for Life. However, they can cancel their coverage for that purpose. Employees who do not participate in premium conversion may cancel their enrollment at any time. For employees who participate in premium conversion, eligibility for CHAMPVA or Tricare is not a qualifying life event that would allow them to cancel their FEHB enrollment. These employees may cancel only during an annual FEHB open season.
If an employee who canceled FEHB coverage to use CHAMPVA, Tricare or Tricare for Life decides to return to FEHB coverage, the employee can do so during a future open season. If the employee loses CHAMPVA, Tricare or Tricare for Life coverage involuntarily, the employee can immediately re-enroll in the FEHB.
Before an employee cancels FEHB coverage to use Tricare or Tricare for Life, the following should be considered:
• To be eligible to continue FEHB coverage after retirement, a retiring employee must be enrolled under the FEHB program (or covered as a family member) for the five years of service immediately before retirement, or, if less than five years, for all service since the first opportunity to enroll (waivers are allowed in certain situations; see FEHB Coverage After Retirement, below). Employees can count their coverage under Tricare toward meeting this requirement. However, the employee must be enrolled in an FEHB health plan on the date of retirement to continue coverage.
• If the employee dies when the cancellation is in effect, any surviving spouse will not be eligible to continue FEHB health benefits coverage.
Information about Tricare can be obtained by calling (877) 988-9378, (877) 874-2273 (North) or (800) 444-5445 (South) or by going to www.tricare.mil. Information about CHAMPVA can be obtained by calling (800) 733-8387 or at www.va.gov/hac/forbeneficiaries/champva.
FEHB Coverage After RetirementEligibility
Note: The term continuous enrollment includes separate periods of federal employment interrupted by a break in service, as long as FEHB coverage was in effect at the time of the break and has been continuous since the break, and the combination totals five years.
Employees who separate and are eligible for a deferred annuity cannot begin health insurance coverage when their deferred annuity begins. Employees must retire on an immediate annuity to be eligible to continue their health insurance coverage. (For employees retiring under FERS, an immediate annuity includes one based on the minimum retirement age and ten years of service even though the employee may postpone receipt of that annuity to a later date.)
Under 5 CFR 630.212, employees who are retiring because of a downsizing have the right to use their accrued annual leave to qualify for continuing their health insurance into retirement under certain circumstances.
The Office of Personnel Management (OPM) will grant pre-approved waivers of the five-year requirement to employees who have been:
• covered under the FEHB program continuously since the beginning date of the agency’s latest statutory buyout authority, or OPM-approved buyout or early retirement authority;
• retire during the statutory buyout or OPM-approved buyout/early retirement period; and
• receive a buyout, take early optional retirement, or take discontinued service retirement based on an involuntary separation due to reduction in force, directed reassignment, reclassification to a lower grade, or abolishment of position.
Employees who meet these requirements do not need to write a letter requesting a waiver. Instead, agencies must attach a memorandum to the employee’s retirement application stating that the employee meets the requirements for a pre-approved waiver by OPM. That certification must include the number of the public law granting the agency’s buyout authority and the beginning and ending dates of the agency’s buyout period.
OPM also may waive the eligibility requirements when it determines that an individual’s failure to satisfy the requirements was due to exceptional circumstances and that it would be against “equity and good conscience” not to allow the individual to be enrolled in FEHB as an annuitant (see 5 U.S.C. 8905(b) and 5 CFR 890.108). Individuals seeking waivers must provide OPM with evidence that they intended to have FEHB coverage as an annuitant, that the circumstances that prevented them from meeting the eligibility requirements were beyond their control, and that they acted reasonably to protect their right to continue coverage into retirement. They must include: all health benefit enrollment forms (SF 2809’s and SF 2810’s) or electronic enrollment verification; service history SF 2801-1 for CSRS or SF 3107-1 for FERS; proof of coverage under Tricare if applicable; a copy of the agency buyout or early retirement authority letter from OPM, if applicable; the exact date the employee plans to retire; and any medical documentation the employee wants OPM to consider if an employee or a family member has a medical condition that is a factor in the decision to retire. Waiver requests should be sent to: OPM, Retirement and Benefits Branch, 1900 E St. N.W., Washington, DC 20415.
Special Eligibility Rules for Defense Department Employees—Section 9902(i) of Title 5, United States Code, as enacted by Public Law 108-136, provides authority for the Secretary of Defense to establish a permanent buyout and early retirement program within DoD. Since the DoD authority is permanent, the buyout/early retirement period is renewed each fiscal year and lasts from October 1 to September 30.
OPM will grant pre-approved waivers to DoD employees who:
• have been covered under the FEHB program continuously since October 1 for each fiscal year; and
• retire during the DoD buyout/early retirement period; and
• receive a buyout, take early optional retirement, or take discontinued service retirement based on an involuntary separation due to RIF, directed reassignment, reclassification to a lower grade, or abolishment of position.
DoD employees who meet the above requirement do not need to write a letter requesting a waiver. Instead, human resources offices must attach a memorandum that provides a statement that the employee meets the requirements for a pre-approved waiver by OPM, the beginning and ending date of the buyout/early retirement period during which the employee retired, and a statement that the employee was enrolled in the FEHB on the beginning date of the period during which he or she retired and that he or she was enrolled continuously to the date of retirement.
Employees who do not qualify for a pre-approved waiver may request a waiver on a case-by-case basis as explained above.
Premiums—After retirement, the government continues to pay the same contribution that is paid for active employees. The applicable rate of the retiree’s share of the premium will be deducted from the monthly retirement annuity check. If the annuity is not enough to cover the health insurance premiums, the premiums can be paid directly to OPM, as explained in Direct Payment of Premiums, below.
Federal employees and retirees (excluding Postal Service employees) pay the same amount for their premiums. However, when postal employees retire, they no longer receive an additional amount toward their cost of health insurance, which requires them, as retirees, to pay the same as all other federal workers and retirees.
Retirees generally are ineligible to pay premiums with pretax money, as explained in Pretax Payment of FEHB Insurance Premiums, above.
Family Coverage—Retirees who are enrolled for self and family can have family members continue coverage until such time as they become ineligible—for example, when a covered child reaches age 26.However, the widow(er) of a federal retiree who did not elect a survivor benefit cannot continue FEHB insurance after the retiree’s death (unless otherwise eligible, such as by being a federal employee himself or herself). A deceased employee must have been enrolled for self and family at the time of death. All survivors who meet the definition of “family member” continue their health benefits coverage under the enrollment as long as any one of them is entitled to a survivor annuity.
Suspending Coverage—Medicare-eligible federal retirees and former spouses can suspend their FEHB enrollment and enroll in a Medicare-sponsored prepaid health plan. If that plan stops participating for any reason, they can re-enroll in FEHB and not lose a day of coverage. However, if they voluntarily disenroll from the Medicare plan, they may not reinstate their FEHB coverage until the annual open enrollment season. Medicare-eligible retirees interested in making this choice should contact their retirement system. Former spouses who are Medicare-eligible should get in touch with the agency that maintains their enrollment. See FEHB and Medicare, above.
Also, annuitants, survivors, and former spouses who are enrolled under the spouse equity provisions of FEHB may suspend their FEHB coverage to use the Peace Corps insurance program under 5 CFR 890. These individuals may re-enroll in the FEHB program immediately if they involuntarily lose their Peace Corps coverage, or during the annual FEHB open season.
Rehired Annuitants—For special considerations for re-employed annuitants, see Chapter 4, Section 4.
Direct Payment of Premiums
For More Informationwww.opm.gov/insure/health
The “Managing My Own Health” site at www.opm.gov/insure/phr provides information that enrollees can use in planning for screenings and other health care, plus online health care record keeping.
CFR, Part 890) or the FEHB Handbook at www.opm.gov/healthcare-insurance/healthcare. The “Managing My Own Health” site at www.opm.gov/healthcare-insurance/special-initiatives/managing-my-own-health provides information that enrollees can use in planning for screenings and other health care, plus online health care record keeping.
The most commonly applicable benefits guides are:
• Federal Benefits for Federal Civilian Employees (RI 70-1)
• Federal Benefits for TCC and Former Spouse Enrollees (RI 70-5)
• Federal Benefits for Individuals Receiving Compensation from the Office of Workers’ Compensation Programs (RI 70-6)
• Federal Benefits for Certain Temporary Employees (RI 70-8)
• Federal Benefits for Federal Retirees and their Survivors (RI 70-9)
For Postal Service employees, these are:
• Guide to Federal Benefits for Non-APWU Career United States Postal Service Employees (RI 70-2)
• Guide to Federal Benefits for APWU Career United States Postal Service Employees (RI 70-2A)
• Guide to Federal Benefits for Postal Career Executive Schedule Employees (RI 70-2EX)
• Guide to Federal Benefits for United States Postal Inspectors and Office of Inspector General Employees (RI 70-2IN)
Those guides, plan contacts and other information are at www.opm.gov/healthcare-insurance/healthcare/plan-information.
Federal Employees’ Group Life Insurance Program
General Coverage Rules
The group policy coverage available to most federal employees, including part-time employees, through the Federal Employees’ Group Life Insurance (FEGLI) program is administered by Metropolitan Life Insurance Company under a contract with the Office of Personnel Management. Under FEGLI’s Basic coverage, employees are provided with two kinds of coverage: (a) group term life insurance without a medical examination (if you do not waive coverage when first eligible or if you elect it during an open enrollment period) and (b) accidental death and dismemberment insurance that provides double indemnity protection. Eligible employees are automatically covered for Basic insurance upon hiring unless they specifically state in writing by the end of their first pay period that they do not want it.
In addition to the Basic coverage, there are optional coverages available to employees who wish to augment their own life insurance program or have coverage on their family members. Although the premiums for optional coverages are paid for exclusively by employees, they are provided at group rates.
Newly hired employees have 60 days from their entry date to sign up for any optional life insurance. If they do not make an election, they are considered to have waived optional insurance. No proof of insurability is required for any optional insurance elected during the first 60 days. Proof of insurability may be required for insurance changes after that time. After the initial election period coverage may be increased only under certain circumstances as described in Adding Coverage, below.
An online FEGLI benefits calculator is at www.opm.gov/retirement-services/calculators/fegli-calculator. Active employees unsure of how much coverage they have should contact their personnel offices. They also may check their most recent Standard Form 50, Notification of Personnel Action, block 27. Retirees should call (888) 767-6738 or (724) 794-2005 or email firstname.lastname@example.org.
In general, if you drop your FEGLI coverage as a retiree, you may never again be covered (see Chapter 4, Section 4 for special rules that apply to rehired annuitants). However, under certain circumstances, if you drop your FEGLI coverage while an employee, you may pick it up at a later date, provided you are found to be medically insurable, if an open enrollment period is held, or because of a qualifying life event. See Adding Coverage, below.
Special Coverage Rules—Employees who are assigned in their civilian capacity in support of a contingency operation—as well as Defense Department employees designated as “emergency essential”—who had previously waived FEGLI Basic coverage may elect it within 60 days of the notification of that assignment or designation, under 5 U.S.C. 8714a(b) and 5 CFR 870.503. During that same period, such persons also may elect Option A or elect or increase Option B insurance up to the maximum; those choices do not apply to Option C coverage. No open season, qualifying life event or medical information is necessary. To make those changes, affected employees should file a new life insurance election in either paper or electronic form and mark “Election Due to NDAA” in the Remarks section. (Note: Contingency operations in Iraq were declared to be ended as of December 31, 2011. Therefore, these policies no longer apply to new assignments there. Guidance on various special situations is in Benefits Administration Letter 12-201 at
Those policies do not apply to a call to active military duty; for special rules for employees who enter active military duty, see Employment Rights of Those on Military Duty in Chapter 8, Section 8.
Basic Life Insurance
In situations of concurrent employment, the amount of Basic and Option B insurance is based on the combined salaries. If an employee accepts a temporary position while in non-pay status from a covered position, the amount is based on the higher of the salaries.
The cost of the Basic insurance is shared by the employee and the government. The employee’s share is two-thirds of the cost and is withheld from the worker’s salary. The employee pays 15¢ biweekly or 32.5¢ monthly per $1,000 of Basic coverage.
Agencies pay one-third of the total cost of Basic for their employees, except the U.S. Postal Service, which pays the entire cost for its employees.
The group policy provides two kinds of Basic insurance during employment: (a) life insurance without a medical examination (if you don’t waive coverage when first eligible or if you elect it during an open enrollment period), and (b) accidental death and dismemberment (AD&D) insurance providing double indemnity for accidental death, and payment for accidental loss of eyesight or one or more limbs.
AD&D pays the full amount of Basic coverage for death or the loss of two or more bodily members (defined as a hand, a foot or the loss of sight in one eye) and half of the Basic coverage for the loss of one member. It is not payable under certain circumstances (see FEGLI Benefit Payments, below), does not include the extra benefit for those under age 45 as explained below, and is not available to retirees.
The amount of Basic life insurance available to each eligible employee under age 45 is increased at no additional cost to the employee. The increase is graduated according to the employee’s age. For employees age 35 or under, their Basic insurance coverage is multiplied by two. Beginning at age 36, the multiplication factor for the amount of Basic insurance declines by 0.1 each year, until it reaches 1.0 (that is, no additional coverage) for employees age 45 and over.
The amount of Basic life insurance provided under FEGLI begins to decrease once an individual retires or reaches age 65, whichever is later. The rate of decrease is 2 percent per month, until 25 percent of the amount you had at time of retirement is reached. However, FEGLI-covered employees are given an opportunity at the time of retirement to elect either a lower rate of reduction or no coverage reduction after attaining age 65 in exchange for their agreement to make additional premium payments. See Retirees and Compensationers: Coverage and Premiums, below in this section.
Option A—(Standard Optional Insurance)
Option B—(Additional Optional Insurance)
Option C—(Family Optional Insurance)
Federal employees insured for the Basic insurance coverage may elect family optional insurance to cover eligible family members (the employee’s spouse and unmarried dependent children under age 22). An eligible spouse includes a “legally married” same-sex spouse, meaning one married in a jurisdiction (including in a foreign country) that recognizes such marriages, regardless of current place of residence; children of legally married same-sex couples are treated the same as children of married opposite-sex couples. Eligibility does not apply to domestic partnerships, civil unions or other arrangements not formally recognized as a marriage; eligibility for a common law spouse depends on the laws of the state of residence.
A prior policy of allowing a second chance for retirees to choose no reduction for some multiples and full reduction for others under Options B and C shortly before turning age 65 generally was ended effective October 1, 2010 by rules at 5 CFR 870.705(d). However, an exception was allowed for those who retired after April 24, 1999 but who had not reached age 65 by October 1, 2010.
Open seasons are rare and typically are linked to changes in the program’s provisions or premium rates. The allowable elections are determined in each instance.
As long as at least one year has passed since the effective date of your last waiver of life insurance coverage, you may provide satisfactory medical information at your own expense using the Request for Insurance (SF 2822). The SF 2822 is available only online at www.opm.gov/forms. You and your agency must complete part of the form. Then you take the form to your physician or other medical professional. He or she will examine you, complete the rest of the form, and send the form to the Office of Federal Employees’ Group Life Insurance (OFEGLI). If OFEGLI approves your request, Basic, Option A and Option B elections will be effective immediately, so long as certain conditions are met, such as being in pay status. You cannot elect Option C or increase Option C multiples by providing medical information.
Within 60 days of experiencing a qualifying life event, you may elect Basic insurance and any optional insurance, including up to the maximum number of multiples available under Option B and Option C. A qualifying life event means marriage (including a same-sex marriage in a jurisdiction that recognizes such marriages), divorce (including a divorce of a legally married same-sex spouse), the death of your spouse, or the birth or adoption of a child. You must complete a Life Insurance Election Form (SF 2817), available at www.opm.gov/forms, and submit it to your human resources office.
Certain prior restrictions on allowable elections after providing evidence of insurability or due to life events were ended effective October 1, 2010, by rules at 5 CFR 870.503 and 870.506. In addition, those rules allow for a belated opportunity for making a qualifying life event election up to six months after the event if the employing agency determines that the employee was unable to make a timely election for reasons beyond his or her control. See Benefits Administration Letter 11-201 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters.
Note: If you elect a living benefit (see below), salary changes will have no effect on the amount of Basic.
Filing a FEGLI Claim
For active employees, the individual’s employing office can supply a claim form upon request and will submit the notification to the Office of Federal Employees’ Group Life Insurance (OFEGLI). For retirees, contact the Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045, phone (888) 767-6738 or (724) 794-2005, TDD (800) 878-5707, www.opm.gov/forms.
To receive payment of dismemberment benefits under AD&D coverage, file form FE-7, available from the same sources. An accident that results in loss of life, limb, or eyesight must be reported within 20 days after the incident occurs. Proof of the loss resulting from the accident must be submitted on the form provided not later than 90 days after the date of the loss. However, if it is not possible to furnish notice or proof in the time specified, the requirements will be met if such notice or proof is furnished as soon as reasonably possible. The Office of Federal Employees’ Group Life Insurance has the right to have a physician examine individuals during the period that they are claiming benefits for loss of limb or eyesight, as well as the right to require an autopsy in the event of a claim for accidental death benefits (unless the autopsy is forbidden by law).
All claims are settled by the Office of Federal Employees’ Group Life Insurance, P.O. Box 6512, Utica, NY 13504-6512, phone (800) 633-4542 (from overseas, (212) 578-2975), fax (315) 792-6603 or 792-6802. For overnight deliveries only, the address is OFEGLI, 5950 Airport Road, Oriskany, NY 13424-3926.
FEGLI Beneficiaries: Order of Precedence
If you assigned ownership of your life insurance (see below), OFEGLI will pay benefits: first, to the beneficiary(ies) designated by your assignee(s), if any; and second, if there is no such beneficiary, to your assignee(s).
If you did not assign ownership and there is a valid court order on file, OFEGLI will pay benefits in accordance with that court order.
If you did not assign ownership and there is no valid court order on file, OFEGLI will pay benefits:
• first, to the beneficiary(ies) you designated;
• second, if there is no such beneficiary, to a surviving spouse, including a “legally married” same-sex spouse as described in Option C—(Family Optional Insurance), above;
• third, if none of the above, to your child or children, with the share of any deceased child distributed among descendants of that child (a court will usually have to appoint a guardian to receive payment for a minor child);
• fourth, if none of the above, to your parents in equal shares or the entire amount to your surviving parent;
• fifth, if none of the above, to the executor or administrator of your estate; and
• sixth, if none of the above, to your other next of kin as determined under the laws of the state where you lived.
You do not need to name a beneficiary if you are satisfied to have the death benefits of your insurance paid in that order of precedence. If you wish to make a designation, complete a Designation of Beneficiary (SF 2823), available from your personnel office or at www.opm.gov/forms, and submit it to your human resources office. Witnesses to the designation may not be named as beneficiaries.
In general, you do not need the consent of anyone to change your beneficiary. However, law authorizes an exception to the standard order of precedence under the FEGLI program if a court has issued a decree of divorce, annulment, or legal separation that calls for the benefits to be paid to someone else. The court decree must be received in the employing agency before the insured’s death. In the case of retirees, the same document must be received by OPM. The law also allows a court to direct the insured individual to make an irrevocable assignment of life insurance ownership to the person(s) named in the court order. However, the court documents do not themselves serve as an official assignment. The insured must still complete an Assignment of Insurance Form (see Assignment of Benefits).
A designation of beneficiary is automatically canceled 31 days after you cease to be insured. If your insurance is continued or reinstated when you retire or while you are receiving federal workers’ compensation benefits, your designation of beneficiary is placed on file in the OPM and remains in effect. To be valid, your designation of beneficiary must be received by the employing office before your death.
If you name more than one beneficiary, be sure to specify the exact share you wish each person to receive. If designated beneficiaries die before you do, their rights and interests in your insurance benefits end automatically.
If any person otherwise entitled to payment as explained above fails to make a benefits claim within one year after your death, or if payment to such person within that period is prohibited by federal statute or regulation, payment may be made in the order of precedence shown above as if such person had died before you.
FEGLI Benefit Payments
Death Benefits—The amount of your life insurance is payable in the event of your death while insured, no matter how caused.
Payment Under the Accidental Death and Dismemberment Insurance—Benefits under this type of insurance are payable if, while insured, you receive bodily injuries solely through violent, external, and accidental means (other than those noted under “Exceptions”) and if as a direct result of the bodily injuries, independently of all other causes, and within 90 days afterwards you lose your life, limb, or eyesight.
The full amount of your accidental death and dismemberment insurance (equal to your Basic insurance amount, plus Option A coverage if you have it) is payable in the case of loss of life under such circumstances. One-half the amount of such insurance is payable to you for the loss of one limb or sight of one eye, or the full amount for two or more such losses.
For all such losses resulting from any one accident, no more than the full amount of accidental death and dismemberment insurance is payable. If a loss of a hand or foot or the sight of one eye occurs in a different accident after a previous loss of such member, the benefit payable for the subsequent loss is one-half the amount of accidental death and dismemberment insurance. The payment of benefits for any loss will not affect the amount of benefits payable for losses resulting from any subsequent accident.
Payment Procedures—Beneficiaries receiving $5,000 or more may choose between receiving a single payment or having the insurance provider establish an account of the amount of the benefit. Beneficiaries with accounts may make withdrawals of $250 or more, up to the full amount in the account, at any time. The account pays interest but is operated by the insurance provider and is not federally insured. Beneficiaries receiving less than $5,000 receive a single payment for the entire amount.
Exceptions—Payment for accidental death or dismemberment will not be made if your death or loss is caused or contributed to by:
• physical or mental illness;
• the diagnosis or treatment of a physical or mental illness;
• ptomaine or bacterial infection, unless the loss is caused by an accidentally sustained external wound;
• a war (declared or undeclared), any act of war, or any aggression by armed forces, against the United States, in which nuclear weapons are being used;
• a war (declared or undeclared), any act of war, armed aggression, or insurrection, in which the employee is, at the time bodily injuries are sustained, in actual combat;
• suicide or attempted suicide;
• intentional infliction of self-injury;
• self-administration of illegal or illegally obtained drugs.
• driving a vehicle while intoxicated, as defined by the laws of the jurisdiction in which you were operating the vehicle.
Assignment of Benefits
If you are an employee and would like to request an assignment, use form RI 76-10, Assignment, Federal Employees’ Group Life Insurance, available from the sources in Filing a FEGLI Claim, above (online, select Retirement and Insurance Forms).
Only Basic insurance is available for living benefits. Employees may elect either a full living benefit—all of their Basic benefit—or a partial living benefit in multiples of $1,000. Retirees and compensationers may elect only a full living benefit. With a full benefit, withholding of premiums for Basic insurance ceases; with a partial benefit, they are recalculated.
Living benefits can be elected only once and an election cannot be retracted. If a full living benefit is elected, no Basic life insurance will remain. If a partial living benefit is taken (an option only available to employees), the amount of the remaining Basic insurance will be frozen. It will not change, even if there is a subsequent change in salary. However, you may assign any remaining insurance.
If you believe you qualify for and wish to elect a living benefit, use form FE-8, Claim for Living Benefits, available by calling OFEGLI at (800) 633-4542 (the form is not available through agencies or online). That office will send you the form and a calculation sheet, so you can determine the amount of Basic insurance available to you. This will take into account the age multiplication factor for employees under age 45 and the post-65 reduction for annuitants age 65 and over. The benefits received will be reduced by an amount representing interest lost to the life insurance fund because of the early payment of benefits.
If OFEGLI approves your request for a living benefit, you will receive a check, along with an explanation of benefits (FE-8C). You can change your mind about electing a living benefit up until you cash or deposit the check. The effective date of the living benefit election is the date you cash or deposit the check. If you decide not to elect the living benefit, you should write “Void” on the check and return it to OFEGLI. If the living benefit payment is not cashed before your death, your representative must return the check to OFEGLI. Your beneficiaries may then file a claim for death benefits.
If OFEGLI does not approve your request for a living benefit, there are no appeal rights. However, you may furnish additional medical evidence to support your claim or may reapply if future circumstance warrant.
Discontinuing FEGLI Coverage
1. Separation from service other than for retirement.
2. After 12 months of non-pay status.
3. Any other employment change that results in your ceasing to be a FEGLI-eligible employee, such as a move to a position excluded from eligibility.
4. Termination of your annuity.
5. At the end of the pay period in which it is determined that your pay, after all other deductions, is insufficient to cover the required withholding for your insurance. However, you may arrange to continue your insurance coverage by making payments directly to your agency or retirement system.
Note: Optional insurance stops when Basic insurance stops.
Converting to an Individual Policy
Generally, only the insured individual has the right to convert coverage when insurance terminates, with exceptions for assignments and designations of powers of attorney. In addition, a family member may convert Option C coverage. Any insurance policy purchased under the conversion privilege is a private business transaction between you and the insurance company. You will be responsible for the full amount of the premiums. There will be no government contribution. You will make your payments directly to the insurance company. Premiums will be retroactive to the end of the 31-day extension. The amount of those premiums will depend on four factors:
• the amount of insurance you apply for;
• the type of policy you apply for;
• your age; and
• the class of risk you fall into on the day following the termination of group coverage.
Premiums may well be higher than the group rates available under FEGLI, but no physical exam is required to convert.
If you decide to convert your FEGLI coverage to an individual life insurance policy, the following conditions apply:
• The individual policy will be issued by any eligible insurance company you select that has agreed to issue such policies under the provisions of the group policy.
• The individual policy may be in any form customarily issued by the insurance company you select, with the exception of term insurance, universal life insurance, or any other type of life insurance that has an indeterminate premium. It does not include disability or accidental death or dismemberment benefits.
• You may choose to have this individual policy written for an amount equal to or less than the total amount of life insurance you have under the group policy, including all options on the date your insurance stops.
You (or your assignee, if pertinent) must submit the request for conversion information to OFEGLI. OFEGLI must receive the request for conversion within 31 calendar days of the date on the conversion notification from the employing agency (60 days if overseas) or within 60 calendar days after the date of the terminating event (90 days if overseas), whichever is earlier.
For Option C, 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.
Family members must submit a request for conversion information to OFEGLI. OFEGLI must receive the request for conversion within 31 calendar days of the date on the conversion notification the employee receives from his or her employing agency (60 days if overseas) or within 60 calendar days after the date of the terminating event (90 days if overseas), whichever is earlier. There is no extension to these time limits. Family members are considered to have refused coverage if they do not request conversion within these time limits.
Information on how you can convert your insurance is found in the Notice of Conversion Privilege (SF 2819), available from personnel offices and at www.opm.gov/forms. Conversion requests should be sent to: Office of Federal Employees’ Group Life Insurance, P.O. Box 8149, Long Island City, NY 11101-8149 (an updated address from the one appearing on the form); for overnight deliveries only, the address is OFEGLI, FEGLI Conversion Team, 5th Floor, 27-01 Queens Plaza North, Queens, NY 11101.
Life Insurance and Workers’ Compensation
After this 12-month period, your FEGLI coverage may be continued (but without the AD&D) if you are in receipt of benefits from OWCP and are unable to return to duty and have been insured for: (1) the coverages you wish to continue for the five years of service immediately preceding the date of your entitlement to OWCP benefits or (2) the full period of service during which the coverages were available to you (if less than five years).
You must continue Basic life insurance to continue any Optional insurance you might have. Also, the number of multiples of pay you may continue under Optional B and C insurance is limited to the highest number of multiples you had that meet the above requirements.
At the end of 12 months of non-pay status (or at separation, if earlier), you will have the opportunity to convert all or a portion of your FEGLI insurance coverage to an individual (direct-pay) policy. If eligible to continue coverage and you do not convert, premium withholdings will be made from your compensation payment. For the purposes of the FEGLI program, a compensationer is treated as an annuitant. If a compensationer returns to federal employment under conditions that allow him or her to continue receiving compensation, Basic, Option A and Option C insurance held as a compensationer is suspended and the insured person obtains coverage as an employee. As with re-employed annuitants, Option B would remain with the individual’s compensation unless the individual elects to have it through re-employment. For other special policies for compensationers, see 5 CFR 870.
Life Insurance in Retirement
The amount of your life insurance will be the amount you had at retirement, or until the end of the calendar month that follows your 65th birthday or retirement, whichever is later. It then may begin to reduce in value (as explained below under Retirees and Compensationers: Coverage and Premiums.) An annuitant may elect either full reduction or no reduction for each separate multiple of Option B and Option C. For example, a person with five multiples may elect no reduction on two multiples, while the three remaining multiples reduce fully. Premiums will be set accordingly (see the Monthly Premiums for Annuitants table).
The above conditions also hold true if at the time your Basic life insurance would otherwise stop under conditions (1) or (2) OPM determines that you are retiring on an immediate annuity and you did not exercise your right to convert to an individual policy as described above.
Canceling Insurance—Unless you have assigned your insurance, you may cancel it at any time. If you cancel your Basic life insurance, you are canceling all your optional insurance as well. If you elected 50 percent reduction or no reduction for your Basic life insurance, you may cancel this additional coverage at any time. If you have Option A, you may cancel it at any time. You may reduce (or cancel) the amount of your Option B and Option C insurance at any time. To do so, write to Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045. Provide your civil service retirement claim number (CSA number) and specify what action you want taken. Generally, the reduction or cancellation is effective at the end of the month in which OPM receives your written request. You will not receive a refund of any premiums paid through that month.
Termination of Insurance—FEGLI coverage will terminate if your entitlement to annuity benefits ends. For example, if you are a disability retiree under age 60 and you are found recovered or restored to earning capacity, your disability annuity and life insurance coverage will end. You do not have the 31-day extension of coverage and may not convert the life insurance to an individual policy. If you are a disability retiree whose annuity terminated in that situation, you will retain your life insurance coverage if you are entitled to and apply for an immediate discontinued service annuity.
If you are under age 60 and your disability annuity is reinstated due to loss of earning capacity or a recurrence of the disability for which you retired, you will be given an opportunity to have your life insurance coverage reinstated. Only coverage of the type and up to the amount you had in effect at the time your disability annuity was terminated can be reinstated. If you are entitled only to a deferred annuity after your disability annuity terminates, you cannot retain your life insurance coverage as a retiree, and you cannot convert it to an individual policy.
See Chapter 4, Section 4 for special considerations for re-employed annuitants.
Retirees and Compensationers: Coverage and Premiums
Basic Insurance—Prior to retiring or receiving compensation, you must make a written election as to the amount of post-65 Basic life insurance coverage you want to retain. You can obtain this election form, Continuation of Life Insurance Coverage as a Retiree or Compensationer (SF 2818) from your employing office or at www.opm.gov/forms. Unless you have elected a partial living benefit, you have three choices: a 75 percent reduction, a 50 percent reduction or no reduction. If you elect a partial living benefit, you have only two choices: termination of the insurance and conversion to an individual policy, or no reduction. The percentage reduction choices operate as follows:
• 75 Percent Reduction—Coverage is reduced by 2 percent a month beginning at age 65, with an ultimate reduction to 25 percent of the basic policy value. Anyone who retires on or after January 1, 1990, must pay the same premium as active employees until age 65 ($.325 per month per $1,000 of coverage). No further premiums will be withheld after the calendar month in which the retiree becomes 65.
• 50 Percent Reduction—Beginning at age 65, coverage is reduced by 1 percent a month until it reaches 50 percent of the basic policy value. There is a higher premium charged for this lesser reduction ($.965 per month per $1,000 of coverage until age 65 and $.64 a month per $1,000 of coverage thereafter).
• No Reduction—The basic policy value remains unchanged, resulting in a larger premium being charged—$2.265 per month per $1,000 of coverage until age 65 and $1.94 per month per $1,000 of coverage thereafter.
Unless you elected a partial living benefit, failure to make a written choice will result in OPM concluding that you have elected the 75 percent reduction.
Generally, all premiums will be withheld from your annuity or compensation payments. However, you may pay the premiums directly to the retirement system, if your annuity is insufficient to withhold the premiums.
If you have not assigned your insurance and decide to cancel your increased post-retirement coverage under the second or third items above, the amount of your Basic insurance coverage and the premiums would immediately drop to the level they would have been if you had originally elected the 75 percent reduction. You must elect No Reduction if you previously elected a partial living benefit, and your election may not be changed at a later date.
Optional Insurance—The face value of any optional life insurance will be the same as the amount carried at retirement (or if a compensationer, the date your insurance would otherwise have terminated, as explained above). You must pay the full amount for any optional insurance coverage you retain until you reach age 65. However, you may elect to keep up to the full amount of the Option B and C insurance in force and continue to pay the pertinent premiums. Unless the insurance has been assigned, such an election may be cancelled at a later date. Generally, the cost of optional insurance premiums will be withheld from your annuity or compensation payments.
At the end of the calendar month that follows your 65th birthday or your retirement, whichever is later, your Option A life insurance will be reduced by 2 percent each month until it reaches 25 percent of its face value. Option B and Option C insurance will continue to be reduced for 50 months, at which time coverage ceases, unless you elected to continue premiums after age 65 or retirement.
Direct Payment of Premiums
The direct pay provision does not apply to employees in a non-pay status. Those employees are entitled to continue their FEGLI coverage for free for up to 12 months (unless they are receiving workers’ compensation benefits, in which case the coverage is not free). In general, at the end of 12 months in a non-pay status, FEGLI terminates.
Annuitants and compensationers whose payments are not large enough to cover their insurance premiums similarly may pay those premiums directly to the retirement system.
For More Information
Additional information about life insurance policies is at www.opm.gov/healthcare-insurance/life-insurance, where program booklets also are available: RI 76-21 for federal employees, RI 76-20 for Postal Service employees, and RI 76-12 for retirees.
Federal Long-Term Care Insurance Program
The Federal Long-Term Care Insurance Program, authorized by Public Law 106-265, the Long-Term Care Security Act of 2000, covers services that individuals may need because they are unable to care for themselves due to a chronic mental or physical condition. Included are services such as nursing home care, home health care, assisted living facilities, adult day care and personal/homemaker care. The coverage is provided by LTC Partners, LLC, and underwritten by the John Hancock Life & Health Insurance Company under contract with the Office of Personnel Management.
The original contract was for seven years. On its expiration in April 2009, OPM issued a revised contract to LTC Partners, with one of the original participating underwriters dropping out. It contained several changes in benefits that became available in October 2009 and premium increases for both prior and new enrollees effective in March 2010 for those with automatic compound inflation protection elected before age 70. Existing enrollees were given the choice of leaving their coverage unchanged, subject to the premium increases if applicable, or decreasing benefits to keep premiums approximately the same—for example, by lowering the daily benefit amount. They also had the opportunity to elect new benefit options, generally without undergoing underwriting unless they wished to increase the overall value of their benefits. See Changes Under Second Contract, below.
Coverage is voluntary and enrollees pay the entire cost of the premiums; there is no government contribution. The FLTCIP is “guaranteed renewable”—as long as you pay your premiums, it cannot be canceled for reasons of age, change in health, or any other reason, including leaving the eligible enrollment group.
The FLTCIP has had only two open seasons, one at the program’s introduction in 2002 and one in 2011. During an open season, employees and their spouses (and qualifying domestic partners, as described below, in the second open season) were eligible to enroll under abbreviated underwriting. Outside an open season, abbreviated underwriting applies only to newly eligible employees, spouses, or qualifying domestic partners. Full underwriting applies at all times to other categories of eligible people.
• Federal employees, including employees of the U.S. Postal Service and Tennessee Valley Authority. In general, an employee in a position eligible for Federal Employees Health Benefits program coverage is eligible for FLTCIP (whether enrolled in FEHB or not—the key is eligibility). TVA employees are eligible for FLTCIP even though they may not be eligible for FEHB.
• Federal annuitants, surviving spouses of deceased federal or postal employees or annuitants who are receiving a federal survivor annuity, individuals separated from the federal service who are eligible for a deferred annuity, individuals separated from the federal service who are receiving compensation from the Department of Labor.
• Same-sex domestic partners of federal and postal employees and retirees who meet certain conditions (see below).
• Members of the uniformed services who are on active duty or full-time National Guard duty for more than 30 days, active members of the Selected Reserve (but not members of the Individual Ready Reserve), former members of the uniformed services and retired military reservists who are entitled to retired or retainer pay, regardless of whether they are currently receiving military retired pay.
• Current spouses of employees, annuitants and survivor annuitants, including “legally married” same-sex spouses, meaning those married in a jurisdiction (including in a foreign country) that recognizes such marriages, regardless of current place of residence, and also including a common law marriage (either opposite sex or same-sex) recognized by the state of residence.
• Adult children (at least 18 years old, including natural children, adopted children and stepchildren) of living employees, annuitants and survivor annuitants. Children of legally married same-sex couples are treated the same as those of opposite-sex married couples. Foster children are not eligible.
• Parents, parents-in-law, and stepparents of living employees and their spouses, including legally married same-sex spouses (but not of domestic partners or annuitants).
There is no upper age limit for who can apply for this insurance but there is a minimum age; you must be at least 18 years old at the time you submit your application.
Domestic Partners—Under rules at 5 CFR 875.213 effective July 1, 2010, same-sex domestic partners of FLTCIP-eligible federal and U.S. Postal Service employees and annuitants are eligible to enroll. The 2013 U.S. Supreme Court decision in United States v. Windsor (No. 133 S. Ct. 2675) further extended eligibility to legally married same-sex spouses as described above and, by extension, to related children (see Benefits Administration Letter 13-203 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters). Thus, a legally married same-sex spouse would qualify under spousal policies, while an unmarried same-sex partner would qualify if meeting eligibility standards that define “domestic partner” for this purpose as a committed relationship between two adults, of the same sex, in which the partners:
• are each other’s sole domestic partner and intend to remain so indefinitely;
• have a common residence, and intend to continue the arrangement indefinitely;
• are at least 18 years of age;
• share responsibility for a significant measure of each other’s financial obligations (including where one is the sole earner);
• are not married to anyone else;
• are not a domestic partner of anyone else; and
• are not related in a way that, if they were of opposite sex, would prohibit legal marriage in the jurisdiction in which they resided when the partnership was formed.
A Declaration of Domestic Partnership form is at www.ltcfeds.com/documents/files/Declaration_of_SSDP.pdf. Use of the form is not mandatory but is recommended since any substitute would have to include the same information required on the form. An employee or his or her partner must file their declaration with the employee’s agency and it will be kept in the employee’s official personnel folder or equivalent. Annuitants or their partners must file their declaration with their retirement system, typically through OPM. Both must certify they understand that willful falsification of information within the documentation may lead to disciplinary action, loss of insurance coverage and/or the recovery of the cost of benefits received related to any falsification.
The employee or annuitant must be eligible for FLTCIP coverage, although need not be enrolled, for a partner to apply. Partners undergo the same underwriting as other eligible persons and similarly are not guaranteed coverage. Dissolution of a partnership must be disclosed to the employing agency or to OPM but does not affect coverage already in place.
Eligibility under these rules does not apply to opposite-sex domestic partners nor to same-sex domestic partners of military personnel or retirees. Guidance is in Benefits Administration Letter 10-901 www.opm.gov/retirement-services/publications-forms/benefits-administration-letters.
Eligible individuals may enroll at any time.
Newly hired employees and their spouses (including a same-sex spouse meeting the standards described in Eligibility, above) have 60 days to enroll and use abbreviated underwriting. Afterward, they must use full underwriting.
If you are an active employee eligible for the program and have newly married, your spouse is eligible to apply within 60 days and be subject only to abbreviated underwriting. You, however, are not eligible for abbreviated underwriting because of your marriage; full underwriting will be required for you if you choose to enroll. After 60 days, your spouse may apply for coverage but will be subject to full underwriting. Your new qualified relatives (such as parents-in-law) may apply for coverage with full underwriting at any time following the marriage.
Application forms are available through personnel offices, by calling (800) 582-3337, TTY (800) 843-3557, and at www.ltcfeds.com/apply. An online application at that site is available only to those eligible for abbreviated underwriting (see below).
Abbreviated underwriting applies to newly hired employees and their spouses within the first 60 days of the hiring or to spouses newly married afterward, as described above. The abbreviated underwriting application has seven health-related questions designed to determine who may be immediately eligible for benefits or eligible for benefits within a short time. Newly eligible spouses of active employees also are subject only to abbreviated underwriting, although they must answer two additional questions regarding their mobility and any need for help with everyday tasks.
All other applicants are subject to full underwriting at all times. This means that they must answer numerous health-related and lifestyle-related questions in addition to the questions asked in abbreviated underwriting.
Changes Under Second Contract
The contract provided for several changes in benefits effective October 1, 2009. Terms of the original contract remained available for new enrollments up to that point, with the new provisions effective for those enrolling afterward. Because of benefit enhancements in certain areas, premiums overall are slightly higher for coverage elected under the current contract than under the original contract for a similarly-structured package of benefit amount, length of benefit, age at purchase, waiting period and inflation protection.
In addition, under the second contract, premiums increased as of March 2010 for coverage with automatic compound inflation protection elected before the enrollee turned age 70, regardless of whether the enrollment was under the original or the second contract. The increases over similar elections made under the original contract were: 25 percent for those who were 65 and younger at the time of the election; 20 percent for those who were 66; 15 percent for those who were 67; 10 percent for those who were 68; and 5 percent for those who were 69.
That premium increase did not affect those with the future purchase option for inflation protection. Those under the Alternative Insurance Plan (see below) also were not affected but are not eligible for the current benefit provisions.
The revised benefit provisions of what is called FLTCIP 2.0 are:
• home health care reimbursement of up to 100 percent of the daily benefit amount;
• a two-year benefit period option;
• higher minimum and maximum daily benefit amounts of $100-$450, in $50 increments;
• extended coverage, for up to 500 days, for informal care provided by family members who do not normally live with the insured person at the time of the claim;
• a standard waiting period of 90 days based on calendar days, not days of covered services received;
• an option for 4 percent automatic inflation protection coverage in addition to the original 5 percent amount;
• extended coverage, for up to 60 days, for charges incurred for bed reservations; and
• no catastrophic coverage limitation.
Those enrolling after October 1, 2009, may not elect several options that were available under the original design (now called FLTCIP 1.0), including a choice of facilities-only coverage and an option for a 30-day waiting period. Those who enrolled before that date were given an opportunity to continue, reduce or cancel their coverage, or elect from the new benefit options with no underwriting required unless they chose to increase the value of their benefits.
For those eligible for benefits, neither premiums nor coverage changed due to the contract changes. Those who were drawing benefits but later recover receive information about any increases to premiums and their options for changing coverage as described above.
See Changes Under Second Contract, above, for an explanation of changes resulting from issuance of the current contract and the opportunity for those who enrolled before October 2009 to retain or change coverage elected under the original contract.
Benefit Amount—Your maximum daily benefit can range from $100 to $450 a day in $50 increments. (For coverage you elected under the original contract and retained, benefits can range from $50 to $300 a day in $25 increments, and you could also elect weekly benefits.)
Length of Policy—The length of your policy can be two years, three years, five years, or lifetime coverage. (For coverage elected under the original contract and retained, no two-year option was available). For other than lifetime coverage, the period and the maximum benefit create a pool of money. The insurance will pay benefits until your pool of money is exhausted, a process that may be shorter or longer than the length of the policy depending on your actual expenses.
A lifetime benefit has a limitless pool of money.
Inflation Protection—Two inflation-protection features are available.
Under automatic compound inflation protection, you choose to have your benefit increase by either 4 percent or 5 percent every year, compounded annually. The increases are effective at the anniversary of the effective date of that coverage, regardless of actual inflation. (For coverage elected under the original contract and retained, only a 5 percent level was available).
Under the future purchase option, every two years you have the option to increase your benefits based on a medical inflation index. Your premiums increase as your benefit increases; they further are based on the age you are at the time of election, not the age at which you first took out the policy. If you decline more than two offers, you still can apply for future inflation increases but would have to show satisfactory evidence of insurability.
You can switch from the future purchase option to the automatic compound inflation-protection option without proof of good health at the time of a notification if you have not declined more than two notifications in the past and are not eligible for benefits at that time. Premiums for those who make this change will be based on their age at that time and premiums already paid in, not on the rates for new enrollees.
Waiting Period—The waiting period—also called an elimination period or deductible—is the number of days of covered care that you (or other insurance coverage you may have) must pay for before the insurance begins to pay. The period is 90 calendar days, with no incurred expenses required. Days need not be consecutive or related to the same condition. For coverage elected under the original contract and retained, a 30-day waiting period was available, and waiting periods are measured in days during which you are eligible for benefits and receiving covered services.
Home Health Care—Home health care is reimbursable at up to 100 percent of the daily benefit amount (75 percent for coverage elected under the original contract and retained).
Informal Care—Under the comprehensive plan, informal care provided by family members who do not normally live with the insured at the time of claim is covered up to 500 days at 75 percent of the elected daily benefit amount (for coverage elected under the original contract and retained, only 365 days of coverage is available).
Bed Reservations—Charges incurred for bed reservations are reimbursed at 100 percent of the daily benefit amount for up to 60 days (up to 30 days for coverage elected under the original contract and retained).
Catastrophic Coverage—For coverage elected under the original contract and retained, benefits may be reduced if a war (declared or undeclared), act of war, or act of terrorism is determined to be a catastrophic event. Coverage elected under the current contract has no catastrophic event provision.
Changing Coverage Levels—You can request a decrease in your coverage at any time to anything that is available under the program, and your premiums (which will be based on your age at time of original enrollment) will also decrease. For example, if you have the five-year benefit period, you can decrease to a three-year benefit period. You do not have to undergo new underwriting in order to decrease your coverage. However, you don’t get paid-up benefits.
At any time, you also may request an increase in your coverage by contacting LTC Partners. To receive approval of a request for an increase outside an open season, you must provide, at your expense, evidence of your good health that is satisfactory to LTC Partners. The amount of an increase is subject to what’s then available under the program. If you request and LTC Partners approves an increase in your daily benefit amount (not counting any increase due to inflation protection), your additional premium will be based on your age and the premium rates in effect at the time the increase takes effect. Other coverage increases you request that LTC Partners approves will cause your entire premium to be based on your age and the premium rates in effect at the time the increase takes effect.
The Coverage Change Application is available through personnel offices and at www.ltcfeds.com/apply.
Canceling Coverage—You may cancel your coverage at any time. If you cancel during the initial “free look” period, your premiums will be refunded to you. If you cancel your coverage at any other time, cancellation will take effect on your requested cancellation date or at the end of the period covered by your last premium payment, whichever occurs first. You will not receive any refund of premiums paid, other than any premiums paid in advance for the period following the effective date of your cancellation of coverage, and you will not have to pay any more premiums unless you owed retroactive premiums.
Coverage Termination—Your coverage will terminate on the earliest of the following dates:
• the date you specify to the carrier that you wish your coverage to end;
• the date of your death;
• the end of the period covered by your last premium payment if you do not pay the required premiums when due, after a grace period of 30 days; or
• the date you have exhausted your maximum lifetime benefit, if applicable. (However, in this event, care coordination services will continue.)
Reinstating Coverage—Under certain circumstances, your coverage can be reinstated. The carrier will reinstate your coverage if it receives proof satisfactory to it, within six months from the termination date, that you suffered from a cognitive impairment or loss of functional capacity before the grace period ended that caused you to miss making premium payments. In that event, you will not be required to submit to underwriting. Your coverage will be reinstated retroactively to the termination date but you must pay back premiums for that period. The premium will be the same as it was prior to termination.
If your coverage has terminated because you did not pay premiums or because you requested cancellation, the carrier may reinstate your coverage within 12 months from the termination date at your request. You will be required to reapply based on full underwriting, and the carrier will determine whether you are still insurable. If you are insurable, your coverage will be reinstated retroactively to the termination date and you must pay back premiums for that period. The premium will be the same as it was prior to termination.
Enrollees pay the entire premium cost; there is no government contribution. A premium calculator is at www.ltcfeds.com.
Note: FLTCIP premiums, including premiums for the Alternative Plan or the Service Package, cannot be paid with pretax money from a flexible spending account, but actual expenses not reimbursed by the FLTCIP related to long-term care are reimbursable from an FSA. However, long-term care insurance premiums and certain long-term care costs are payable from a health savings account that is part of a high-deductible health plan (see FEHB Plan Options in Section 1 of this chapter).
Tax Break for Some Retirees—Section 845 of the Pension Protection Act of 2006, effective January 1, 2007, allows pretax payment of FLTCIP premiums (among certain other forms of insurance) for retired “public safety officers.” OPM in Benefits Administration Letter 07-201, available at www.opm.gov/retire/pubs/bals/bal07.asp, determined that the Civil Service Retirement System and the Federal Employees Retirement System are eligible retirement plans under the act and that retired public safety officers are deemed to have made an FLTCIP premium conversion election for this purpose.
As a result, retired public safety officers whose CSRS or FERS annuity payments include a direct premium payment to the FLTCIP carrier may self-identify eligibility for, and self-report, a tax exclusion to the Internal Revenue Service. To qualify, the distribution must be paid directly from the retirement system to the insurance provider. Premiums of up to $3,000 for coverage of the enrollee, spouse or dependents can be excluded, but only for amounts that otherwise would be included in taxable income, and the amount excluded cannot be used to claim a medical expense deduction.
IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits, at www.irs.gov/pub/irs-pdf/p721.pdf defines public safety officers as including retired law enforcement officers and firefighters. That publication also contains additional information on this tax advantage. Consult a tax adviser for guidance.
Transferring or Retiring—If you are paying FLTCIP premiums via payroll deduction and transfer to a new agency, contact LTC Partners as soon as you know where and when you will be transferring in order to arrange payroll deductions there. Depending on the timing of the premiums and the payroll cycles, a payment might be missed; in this case LTC Partners will send a bill directly to you. Payroll deductions cannot be adjusted to catch up for missed payments.
If an employee does not let LTC Partners know about the transfer, LTC Partners will continue to request deductions from the previous payroll location until three deductions have been missed. At that point, the employee will be taken off of payroll deduction and switched to direct billing of premiums. If the employee does not have regular access to mail, such as when deployed overseas, he or she may not realize that premiums are being billed directly. If premiums are not paid on a timely basis, Long-Term Care Partners will cancel the employee’s FLTCIP coverage.
Note: When there is a mass transfer that the servicing payroll location has communicated to LTC Partners, individual employees do not need to report the transfer.
Similarly, if you are retiring, deductions will not transfer automatically from payroll deductions to annuity deductions; you must contact LTC Partners to make the needed arrangements. Also, deductions cannot be taken from “interim” payments received until an annuity is finalized. During this period, you will be billed directly for premiums due. Annuity deductions cannot be adjusted to catch up for missed payments.
If you are paying FLTCIP deductions through direct billing or through automatic bank withdrawal, you do not need to contact LTC Partners if you transfer agencies, retire, or leave the government, unless a change affecting those payment arrangements is involved.
Leave Without Pay—When employees are put on leave without pay (including due to furlough; see Furloughs in Chapter 9, Section 1), they may change to direct billing or to payment via electronic funds transfer. If LTC Partners does not receive premium for one or two pay periods, it will adjust future premium deductions, increasing by no more than $50 per pay period to recover the missed premiums. Three consecutive pay periods of missed premiums will result in a direct billing. If premiums are not collected or a final bill is not paid within a 30-day grace period, it will send a termination letter. The employee has 35 days from the date of the letter to pay the premium; otherwise the employee will be disenrolled retroactively to the last pay period in which the premium was paid.
Military Duty—If you are called to active military duty, you can keep FLTCIP coverage but must keep your premium payments current; you cannot incur a debt for the premiums during the time in a non-pay status. If you will be deployed overseas, it may not be feasible for you to receive and pay direct bills on a timely basis, which risks cancellation of coverage. If you have payroll deduction of premiums, you can have premiums deducted from active duty pay by contacting LTC Partners. If you currently pay premiums through automatic bank withdrawal or direct bill, you will need to complete a billing change form to get premiums deducted from your military pay.
Alternative Insurance Plan/Service Package
Some applicants who are not approved to enroll in the insurance they originally applied for will be offered an Alternative Insurance Plan. It offers nursing home only coverage with a 180 day waiting period and two-year benefit period. The Alternative Insurance Plan also has higher premiums. This plan is not available to those who use the full underwriting application.
If you apply for and are denied the standard insurance and are not offered the Alternative Insurance Plan, you will be offered a Service Package. This is true for everyone who applies—those using the abbreviated underwriting application and those using the full underwriting application. The Service Package is not insurance. It provides access to a care coordinator, general information and referral services, and access to a discounted network of long-term care providers and services. It costs $59 per year for an individual or a couple.
Everyone who is denied standard coverage will receive information from Long-Term Care Partners to review at no obligation. The information will describe what is available in lieu of the standard insurance—either the Alternative Insurance Plan and/or the Service Package. Individuals who are offered both can decide which, if either, they wish to purchase.
Types of Care Covered
• nursing home care, assisted living facility care, and hospice care at up to 100 percent of the chosen daily benefit amount;
• respite care (temporary care if your normal caregiver needs time off) at up to 100 percent of the chosen daily benefit amount (limited to 30 times your daily benefit amount per calendar year, but the waiting period does not apply);
• bed reservations at up to 100 percent of the chosen daily benefit amount (limited to 60 days per calendar year);
• home care, adult day care, formal caregiver services, and hospice care at up to 100 percent of the chosen daily benefit amount (the waiting period does not apply to hospice care);
• informal caregiver services by people who didn’t normally live in the enrollee’s home at the time the enrollee became eligible for benefits (benefits for care provided by family members are limited to 500 days lifetime); and
• a stay-at-home benefit covering services such as care planning visits, home modifications, emergency medical response systems, durable medical equipment, caregiver training, and home safety checks (limited to 30 times the daily benefit amount, but the waiting period does not apply).
Note: Those electing coverage under the original contract had the option for a facilities-only coverage plan; also, different coverage levels applied to some benefits under that contract.
The FLTCIP does not cover:
• illnesses, treatments, or medical conditions arising out of participation in a felony, riot, or insurrection; from an attempted suicide while sane or insane; or from self-inflicted injuries;
• care or treatment for alcoholism or drug addiction;
• care or treatment provided in a government facility unless required by law;
• care received in a hospital except in designated nursing home or hospice units;
• any service or supply reimbursable under Medicare;
• services or supplies for which you are not obligated to pay in the absence of insurance; or
• services provided by any person who normally lives in your home at the time you become eligible for benefits.
Benefit Eligibility Determination and Appeals
• a licensed health care practitioner has certified within the last 12 months that you are unable to perform, without substantial assistance from another person, at least two activities of daily living for an expected period of at least 90 days due to a loss of functional capacity; or you require substantial supervision due to your severe cognitive impairment;
• LTC Partners agrees with that certification; and
• LTC Partners approves a written plan of care established for you by a licensed health care practitioner or its care coordinator.
Activities of daily living include eating, toileting, transferring (as from bed to chair), bathing, dressing, and bowel and bladder control. A cognitive impairment is impairment in short-term or long-term memory, orientation as to person, place and time, or deductive or abstract reasoning such that the person needs substantial supervision by another person to prevent him from harming himself or others.
There is no “war exclusion” in the FLTCIP. Therefore benefits may be payable for conditions due to war or acts of war, declared or undeclared, or service in the armed forces or auxiliary units. However, in general, benefits will not be paid for care received in a government facility, such as a Department of Defense or Department of Veterans Affairs medical center. The “catastrophic coverage” limitation under policies elected under the original contract and retained might affect benefits paid in the event of war, however.
You will not have to pay premiums after you have met a condition for eligibility and you use the care coordination program during the waiting period you select. If you do not use the care coordination program, you will pay premiums during your waiting period, but will stop paying them after you satisfy your waiting period. To apply for benefits, call (800) 582-3337, TTY (800) 843-3557. After you apply, LTC Partners may contact you, your physician or other persons familiar with your condition, access medical records and may have you examined by a licensed health care professional and/or conduct an on-site assessment.
LTC Partners will send you written notice of its decision on whether you are eligible for benefits no later than 10 business days after it receives all the information it needs. If LTC Partners determines that you are eligible for benefits, the notice will state the date as of which you are eligible for benefits and will include claim forms. At least once a year, but no more often than every 30 days, LTC Partners will reassess whether you continue to be eligible for benefits.
If LTC Partners determines that you are not eligible for benefits, the notice will provide the reason(s) for the denial and will let you know how to request a review of the denial, which must be filed within 60 days from the date of the denial. If that denial is upheld—an answer will be provided within 60 days after LTC Partners receives that request—you may appeal to an appeals committee whose members are agreed upon by OPM and LTC Partners.
If the appeals committee upholds the denial, that denial may be eligible for review by an independent third party. For example, appeal to an independent third party is available when the appeals committee upholds a denial of your eligibility for benefits because its review indicates that you can perform at least five out of six activities of daily living. However, appeal to an independent third party is not available for example when the appeals committee upholds a denial of your claim for benefits because you exhausted your maximum lifetime benefit.
The decision by the independent third party is final and binding on LTC Partners.
After you have gone through this administrative review process, you may seek judicial review of a final denial of eligibility for benefits or a claim. The amount of recovery available is limited to the benefit payable; no punitive, compensatory or other damages are allowed.
Note: These procedures apply only if you have valid coverage under the FLTCIP. If the carrier determines that your coverage was based on an erroneous application and voids the coverage, these provisions do not apply. The carrier will provide you with information on your review rights in its letter voiding your coverage.
Some states offer tax incentives designed to encourage the purchase of long-term care insurance. Check with your state’s insurance department.
For More Informationwww.ltcfeds.comwww.opm.gov/healthcare-insurance/long-term-care
Federal Employees Dental and Vision Insurance Program
The Federal Employees Dental and Vision Insurance Program provides vision and dental benefit benefits for employees, annuitants and certain family members apart from the limited coverage in those areas provided in the Federal Employees Health Benefits program. FEDVIP, which was authorized by Public Law 108-496 and became effective in 2007, is voluntary for eligible persons. Enrollees pay the full cost; there is no government contribution toward the premiums. Benefits are provided by insurers under contract to the Office of Personnel Management, which oversees the program.
Individuals eligible to enroll in both the FEDVIP and FEHB programs can choose to enroll in FEHB only, FEDVIP only, both, or neither. They can also choose different enrollment types for each program—enrolling, for example, in self and family coverage under FEHB, but self-only coverage under FEDVIP.
Other key features of FEDVIP are:
• Premiums are deducted from enrollees’ pay or annuity when possible.
• Employees (but not retirees) pay the premiums from pretax payroll dollars and may not opt out of this “premium conversion” arrangement.
• Employees may use money in health care flexible spending accounts to pay co-payments and deductibles (but not premiums) of either vision or dental care.
• There are no pre-existing condition limitations on care, although there are waiting periods for orthodontic benefits under the dental benefits plans, and a dental plan carrier may refuse to cover treatments related to teeth missing as of the date of enrollment.
• Where a FEDVIP carrier is also an FEHB carrier, those enrolled in the carrier’s FEHB plan need not choose its dental or vision plan.
• Employees enrolled in FEDVIP who subsequently retire on an immediate annuity or for disability under CSRS, FERS, or another retirement system for employees of the government may continue FEDVIP enrollment into retirement with no requirement that the retiree have been enrolled for the prior five years, as applies in the FEHB and Federal Employees’ Group Life Insurance programs.
• Eligible persons may enroll or change coverage for the following calendar year during an annual autumn open season running concurrent with that for FEHB. If they make no changes, the previous choice continues.
A link to each FEDVIP plan’s Web site, a provider search function and other information is available at www.opm.gov/healthcare-insurance/dental-vision/plan-information. The FEDVIP general information number is (877) 888-3337, TTY (877) 889-5680. Enrollment and related information is at www.benefeds.com. The mailing address is BENEFEDS, P.O. Box 797 Greenland, NH 03840-0797.
Coordination of Benefits—Some FEHB plans cover some dental and vision services. If a FEDVIP enrollee’s FEHB plan does provide any benefits for dental and vision services, the FEHB plan will be the first payor of any benefits. FEDVIP plans are responsible for coordinating benefits with the primary payor.
FEDVIP plans also coordinate benefit payments with the payment of benefits under other group health benefits coverage that enrollees may have and the payment of dental or vision costs under no-fault insurance. They also coordinate benefits with other group dental or vision insurance, if that information is provided by enrollees.
FEDVIP plans may request that enrollees verify or identify their health insurance plan(s) annually or at the time of service. Enrollees who change FEHB plans during an open season after enrolling should communicate that change to BENEFEDS. Providing FEHB information may reduce enrollees’ out-of-pocket costs.
Disputed Claims—Each plan has its own process and time frame for reviewing disputed claims, which are explained in its brochure. If an enrollee has completed the plan’s claims dispute process and still disagrees with the plan’s decision, he or she may request that an independent third party, mutually agreed to by the plan and OPM, review the decision. The decision of the independent third party is final and binding. OPM does not review disputed FEDVIP claims.
Annuitants—Federal annuitants are eligible to enroll in FEDVIP if they retired on an immediate annuity under the Civil Service Retirement System (CSRS), the Federal Employees Retirement System (FERS) or another retirement system for employees of the government, including those who retire for disability.
Employees separating with eligibility only for a deferred annuity cannot continue FEDVIP enrollment and are not eligible to enroll once their annuity benefits begin.
Employees enrolled in FEDVIP who retire on a FERS Minimum Retirement Age +10 annuity and elect to postpone receipt of their annuity lose FEDVIP coverage upon separation from service. Such individuals can again enroll in FEDVIP within 60 days of when they start receiving their annuity. They do not have to enroll in the same plan, option or same enrollment type they had when they separated.
Survivor Annuitants—If you are a survivor of a deceased federal/U.S. Postal Service employee or annuitant, you may enroll or continue an existing enrollment only if you are receiving a survivor annuity (unless you are otherwise eligible, such as through your own federal employment).
Compensationers—Injury compensationers are eligible to enroll in FEDVIP or continue FEDVIP enrollment into compensation status. A family member receiving monthly compensation from the Office of Workers’ Compensation Programs as the surviving beneficiary of an employee who dies as a result of illness or injury sustained while in performance of his/her duty can enroll in FEDVIP or continue the deceased’s FEDVIP enrollment.
Family Members—Under FEDVIP, eligible family members are:
• a spouse, including a “legally married” same-sex spouse, meaning one married in a jurisdiction (including in a foreign country) that recognizes such marriages, regardless of current place of residence, and including a common law spouse in states where such marriages are recognized (note: eligibility does not apply to domestic partnerships, civil unions or other arrangements not formally recognized as a marriage);
• unmarried dependent children under age 22, including adopted children and recognized children born out of wedlock who meet certain dependency requirements, stepchildren and foster children who live with the enrollee in a regular parent-child relationship; and children age 22 or over who are incapable of self-support because of a mental or physical disability that existed before reaching age 22 (children of legally married same-sex couples are treated the same as those of opposite-sex married couples).
Former spouses are not eligible, even if they are receiving an apportionment of an annuity or a survivor annuity, nor are parents and other relatives who are not eligible under FEHB, even if they live with and are dependent upon the enrollee. See www.opm.gov/healthcare-insurance/dental-vision/eligibility.
If the enrollee is in a same-sex domestic partnership meeting certain qualifications (see Domestic Partners in Chapter 8, Section 4) and living in a jurisdiction that does not recognize same-sex marriage, children of the partner are eligible as well, effective in 2014; the partner himself or herself is not eligible, however. An enrollee seeking to cover a child of a same-sex domestic partner must certify that he or she would marry the partner were that option available in their state of residence. Rules at 5 CFR 894 govern situations such as moves among jurisdictions with differing policies on the subject. In some circumstances, children of a same-sex partner eligible for coverage may not be eligible for pretax payment of premiums (see Premium Conversion, below) and the associated portion of the premium will have to be paid with after-tax money.
Stepchildren remain eligible after divorce from the spouse, termination of the domestic partnership or the death of the spouse or domestic partner if they continue to live with the enrollee in a regular parent-child relationship.
Enrollees self-certify the eligibility of dependents to be covered under self plus one or self and family coverage. FEDVIP plans may ask an enrollee to provide documentation that confirms a family member’s eligibility (such as a marriage certificate or adoption papers), either when an individual initially enrolls or when an enrollee adds a family member to an existing enrollment. If the employing agency or retirement system has already made a determination regarding a child’s eligibility under the FEHB program or the Federal Employees’ Group Life Insurance (FEGLI) program as a foster child or a child who is incapable of self-support because of a mental or physical disability, the enrollee should provide the FEDVIP plan with a copy of that determination. If such a determination has not been made, the enrollee must request that determination from his or her agency or retirement system and then submit a copy to the plan that will make the final determination of eligibility.
FEHB Temporary Continuation—Those who are eligible for FEHB only through enrollment in temporary continuation of coverage are ineligible under FEDVIP.
End of Coverage—Your coverage ends when you:
• no longer meet the definition of an eligible employee or annuitant;
• begin a period of non-pay status or pay that is insufficient to have your FEDVIP premiums withheld and you do not make direct premium payments to BENEFEDS;
• are making direct premium payments to BENEFEDS and you stop making the payments; or
• cancel the enrollment (see Canceling Enrollment under Enrollment, below).
Coverage for a family member ends when:
• you as the enrollee lose or cancel coverage; or
• the family member no longer meets the definition of an eligible family member.
Under FEDVIP, there is no 31-day extension of coverage, temporary continuation of coverage, spouse equity coverage, or right to convert to an individual policy as in FEHB.
Eligible individuals can enroll in dental care, vision care or both:
• during the annual open season that runs concurrent with the annual FEHB open season in mid-November through mid-December;
• within 60 days after first becoming eligible as a new employee or as a previously ineligible employee who transferred to a covered position;
• within 60 days after first becoming eligible as a survivor annuitant (if not already covered under FEDVIP);
• within 60 days after returning to service following a break in service of at least 31 days; or
• within 60 days after a qualifying life event that allows enrollment (see table).
Newly hired eligible employees and newly eligible employees have one opportunity to enroll for vision coverage and one opportunity to enroll for dental coverage in the 60-day period. Once they enroll in either type of plan, the opportunity for that type of enrollment ends, even if the period hasn’t elapsed. They cannot change or cancel that enrollment until the next open season, unless they experience a qualifying life event that allows such a change or cancellation.
Enrollment typically is done online through BENEFEDS at www.benefeds.com or by phone at (877) 888-3337 (TTY (877) 889-5680). In limited circumstances a paper form election is allowed. Enrollment is not allowed through the FEHB election form (SF 2809) or through agency self-service pay and benefits systems, although some of those systems provide links to BENEFEDS.
Options—An eligible individual may choose one of the following enrollment options:
• Self-Only. A self-only enrollment covers only the enrolled employee or annuitant. An eligible individual may enroll in self-only even though he or she has a family, but the family members are not covered.
• Self Plus One. A self plus one enrollment covers the enrolled employee or annuitant plus one person who is eligible as a family member (see above). Eligible individuals may enroll in self plus one even though they have more than one eligible family member, but the additional family members are not covered. The enrollee must specify during the enrollment process which one eligible family member he or she wishes to cover under a self plus one enrollment. The enrollee may change the covered family member to another eligible family member during an open season or because of a qualifying life event.
• Self and Family. A self and family enrollment covers the enrolled employee or annuitant and all persons who are eligible as family members (see above). Enrollees should list all eligible family members when they enroll in order to ensure timely claim payments. All of the enrollee’s eligible family members are automatically covered, even if the enrollee fails to list all of them when enrolling, but claim payments may be delayed for family members who were omitted. An eligible individual may enroll in self and family coverage in anticipation of gaining an eligible family member, as described under Qualifying Life Events, below. The family member (such as a newly adopted child or a new spouse) is automatically covered by a self and family enrollment from the date he or she becomes a family member. However, enrollees should still add new family members to existing self and family enrollments to ensure timely payment of claims.
For both self plus one and self and family enrollments, when an eligible family member on an existing enrollment loses eligibility (for example, a child reaches age 22) and there is at least one other eligible family member remaining on the enrollment, the enrollee should remove the ineligible family member. Failure to remove ineligible family members does not make them eligible.
The type of enrollment need not be the same as the type chosen in the FEHB, if applicable. Those enrolled in both vision and dental plans can choose different enrollment types for each. In addition, they can choose a different dependent for each if enrolled as self plus one in each.
“Dual enrollment” is when an individual is covered under more than one FEDVIP dental enrollment or more than one FEDVIP vision enrollment, for example when two eligible persons, each having children covered under self and family coverage, marry each other. Generally, dual enrollment is prohibited except when elimination of the dual enrollment would cause an enrollee or an eligible family member to lose coverage. Guidance on situations that are considered to be dual enrollment that must be rectified and the steps to be taken are in Benefits Administration Letter 10-202 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters.
Canceling Enrollment—Enrollment can be canceled only during an open season, except that:
• If BENEFEDS and/or a FEDVIP plan discover an unauthorized dual enrollment, one of the enrollments must be canceled. This is done prospectively from the date the dual enrollment was discovered. (Note: The premiums paid for the cancelled enrollment will not be refunded to the enrollee, but the enrollee is not required to refund any benefits paid under the cancelled enrollment).
• An individual taking an enrollment action based on experiencing a qualifying life event (QLE) may cancel that action within the time limit allowed for the QLE.
• If an employee changes his or her enrollment in anticipation of a permitted QLE, and that event does not occur, the change can be cancelled.
• You may cancel enrollment if you transfer to an eligible position with a federal agency that provides dental and/or vision coverage with 50 percent or more employer-paid premiums.
• You may cancel enrollment upon your deployment or your spouse’s deployment to active military duty.
These cancellations will become effective at the end of the pay period that you submit your request. An eligible family member’s coverage also ends upon the effective date of a cancellation.
Re-Enrollment—Re-enrollment is automatic each year unless an enrollee makes a change in an open season or a plan terminates its participation in FEDVIP.
Belated Enrollments or Changes—The time limit for enrolling or changing an enrollment may be extended for up to six months after the individual first becomes eligible, or has a qualifying life event, or after the end of open season, if the individual provides evidence to BENEFEDS that he or she was unable to enroll or change enrollment timely for reasons beyond his or her control. If BENEFEDS allows a belated enrollment or change in enrollment, the individual must enroll or change enrollment within 30 days after BENEFEDS notifies the enrollee. BENEFEDS will allow belated enrollments and changes only in exceptional circumstances, and its decisions cannot be appealed.
Effective Date—The effective date of open season enrollments is the start of the succeeding calendar year. Generally, enrollments and changes to enrollments that occur outside of open season become effective the first day of the pay period or annuity cycle following the one in which BENEFEDS receives the enrollment or change. For belated enrollments or belated changes in enrollments, the effective date will be retroactive to the date the enrollment or change in enrollment would have been effective if made timely.
Qualifying Life Events—A qualifying life event (QLE) is an event that may allow eligible individuals to enroll, or allow those already enrolled to change their enrollment, outside of an open season. The number and type of permitted QLEs are more limited than in the FEHB program. In addition, the rules for QLEs in FEDVIP apply to annuitants as well as employees. See the accompanying table.
The enrollment action taken must be consistent with the QLE. For example, an enrollee can change from self-only to self plus one when the QLE is “acquiring an eligible family member.” However, the enrollee cannot decrease from self plus one to self-only since that action is not consistent with adding a family member.
The time frame for requesting a QLE change is from 31 days before to 60 days after the event, except that:
• there is no time limit for a change based on losing a covered family member or moving from a regional plan’s service area; and
• an individual cannot request a new enrollment based on a QLE before the QLE occurs, except for enrollment because of the loss of other dental or vision insurance—apart from that exception, the individual must make the change no later than 60 days after the event.
If an employee changes his or her enrollment in anticipation of a permitted QLE, and that event does not occur, the change can be cancelled.
There are four vision plans, each of them national and each with standard and high options: Aetna Vision FEP BlueVision, UnitedHealthcare Vision, and Vision Service Plan (VSP). Each offers comprehensive vision services, including annual examinations, lenses and frames, discounts on laser vision correction, and coverage for elective or medically necessary contact lenses. See plan brochures for specific coverage terms.
To contact vision plans:
• Aetna Vision
• FEP BlueVision
• UnitedHealthcare Vision
• Vision Service Plan
There are 10 dental carriers. Six are national—Aetna, Delta Dental, FEP BlueDental, GEHA, MetLife, and United Concordia and four are regional—Dominion Dental (District of Columbia, Delaware, Maryland, Pennsylvania and parts of New Jersey and Virginia); EmblemHealth (state of New York and parts of Connecticut, New Jersey, and Pennsylvania); Humana Dental Company (Alabama, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Missouri, Mississippi, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, and parts of Maryland); and Triple-S Salud (Puerto Rico).
Dental coverage includes (see plan brochures for specific coverage terms):
• Basic services, such as oral examinations, prophylaxis, diagnostic evaluations, sealants, and X-rays.
• Intermediate services, such as fillings, prefabricated stainless steel crowns, periodontal scaling, tooth extractions, and denture adjustments.
• Major services, such as root canals, gingivectomy, crowns, oral surgery, bridges, and complete dentures.
• Orthodontic services, subject to a waiting period of up to 24 months of continuous enrollment in the same plan before eligibility for benefits begins.
Standard reimbursement rates are for in-network services. Costs to enrollees for using out of network providers are higher.
Premiums vary according to whether the enrollee chooses the high or standard option (where applicable), whether the enrollee chooses self-only, self plus one or self and family coverage, and according to geographic rating areas established by the plans.
Rating areas and premiums are at www.opm.gov/healthcare-insurance/dental-vision/plan-information.
To contact dental plans:
• Delta Dental
• Dominion Dental
• FEP BlueDental
• Humana Dental Company
• Triple-S Salud
• United Concordia
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