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Informed Investor: Next FEGLI open season coming Sept. 1–30

For the first time in 12 years, the Office of Personnel Management will be conduct an open season for the Federal Employee Group Life Insurance (FEGLI) program, the group-sponsored life insurance program offered to employees and annuitants. This week’s column discusses what the FEGLI open season means for employees—including which employees can participate, employee choices and when coverage becomes effective.

For the first time in 12 years, the Office of Personnel Management will have an open season for the Federal Employee Group Life Insurance (FEGLI) program. FEGLI is a group-sponsored life insurance program offered to federal employees and annuitants. The last FEGLI open season was held in September 2004. This column discusses what employees should know about this open season, and what they should consider in deciding whether or not to participate.

All employees who are eligible for the FEGLI program—including both full-and part-time employees—can participate in the open season. Compensationers cannot participate unless they are still insured as employees; that is, during the first 12 months in nonpay status. If a compensationer does participate during the open season, then his or her coverage does not become effective until the compensationer returns to pay status.

Annuitants cannot participate in the open season unless they are employed as a rehired annuitant. “Phased” annuitants are eligible to elect FEGLI coverage or change their coverage during the open season because employees who elect phased retirement are in fact employees who work a part-time tour of duty while receiving partial retirement benefits.

Elections and coverage

During the open season, employees who are not enrolled in the FEGLI program can enroll in the FEGLI Basic Insurance Amount (BIA) and in any or all of the optional coverage. Employees who are already enrolled in the FEGLI program can increase their coverage up to the maximum available. The different types of FEGLI coverage are discussed below.

Employees can elect coverage during the open season without having to prove insurability, pass a physical exam, or answer health questions. Coverage is guaranteed and applicants need not furnish evidence of insurability. Using Form SF 2817, employees can enroll in:

FEGLI BIA. Coverage is equal to an employee’s annual gross pay as shown on the employee’s most recent SF 50 (Notice of Personnel Action), rounded up to the next even $1,000, plus $2,000.

Example.  Richard’s SF 50 salary, as shown on his SF 50 for leave year 2016, is $97,500. His FEGLI BIA is therefore equal to $98,000 ($97,500 round to the next $1,000) plus $2,000, or $100,000.

Plus some, or all, of the “optional” insurances:

Option A – Standard covers the employee’s life for $10,000.
Option BAdditional coverage protects employee’s life for amount equal to one, two, three, four or five times the employee’s current SF 50 salary (after rounding up to the next even $1,000).
Option C – Family coverage on a spouse and eligible children. An employee can elect one, two, three, four or five multiples of Option C coverage. Each multiple is equal to $5,000 of coverage on the life of a spouse and $2,500 of coverage on the lives of each eligible child.

A few points with regard to the optional coverages: (1) An employee must elect or already have the BIA in order to elect any of the optional FEGLI insurances. (2) Option C coverage on a child terminates when a child becomes age 22. Many federal employees previously enrolled in Option C for their children when they children were very young. Some of these children are now at least age 22, and coverage has terminated. But Option C premiums continue to be deducted from the employee’s paycheck for these uninsured children. This means that employees who have Option C on their children over age 22 should immediately fill out Form SF 2817 to stop premium deductions from their paychecks. And (3) for more information on the types of coverage available, including information on Accidental Death and Dismemberment coverage, and the extra life insurance benefit for employees under age 45, see the “Your FEGLI Life Insurance” video at www.opm.gov/life.

FEGLI open season elections become effective on the first day of the first pay period that begins on or after Oct. 1, 2017, and follows a pay period during which the employee met the pay and duty status outlined below:

▪ A full-time employee on a biweekly pay period must be in pay and duty status for at least 32 hours during the pay period right before the one in which the coverage is to be effective.
▪ A full-time employee on a monthly pay period must be in pay and duty status for at least 64 hours during the pay period right before the one in which the coverage is to become effective.
▪ A part-time employee must be in pay and duty status for one-half of the regularly scheduled tour of duty shown on his or her SF 50.

Once coverage takes effect, premiums will be deducted from an employee’s paycheck. Sick leave, annual leave, donated leave or any other kind of leave, whether paid or unpaid, does not qualify as pay and duty status. New coverage does not begin until the employee meets the pay and duty status requirements, even if that occurs after October 2017.

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