Benefit Bits--The benefits topic this month covers changes in the Federal Employees' Group Life Insurance (FEGLI) Program Date: Tue, 19 Jan 1999 15:41:46 -0500 To: "USGS Employees" From: Joyce Pieritz Subject: Benefits Bits In Reply Refer To: Mail Stop 601 MEMORANDUM Supervisors, Managers, and Team Leaders: Please ensure that employees without access to e-mail receive a copy of this message. To: All U.S. Geological Survey Employees From: Robert Hosenfeld Personnel Officer Subject: Benefit Bits The benefits topic this month covers changes in the Federal Employees' Group Life Insurance (FEGLI) Program. These changes are a result of Public Law 105-311, Federal Employees Life Insurance Improvement Act, enacted October 30, 1998. Basic Insurance Coverage Previously, an employee's Basic Insurance Amount (BIA) could not exceed the annual rate of basic pay payable for positions at Level II of the Executive Schedule or $118,400. The BIA is equal to your annual basic pay rounded up to the next $1000, plus $2000. The new law eliminates any maximums payable for the BIA. This change was effective October 30, 1998. Option B - Additional Option B is an additional option under FEGLI. It can equal an amount one to five times your annual salary. Previously, this salary amount was capped at Level II of the Executive Schedule ($118,400). The new law eliminates the maximum payable under Option B effective October 30, 1998. A new provision allows retiring employees or those receiving regular workers' compensation payments to elect to continue Option B on an unreduced basis by continuing to pay premiums after age 65. This change will be effective April 24, 1999. The new law also provides for a 3-year portability demonstration project. This project will allow employees whose coverage is terminating due to separation or completion of 12 months in a nonpay status to continue Option B coverage by making direct premium payments. Employees will be eligible if they have had Option B coverage for 5 years before the coverage terminates, or if they been enrolled in Option B since their first opportunity for coverage. Coverage during the first 12 months in nonpay status will continue at no charge. The effective date for this change will be April 24, 1999. Option C - Family Option Currently, Option C coverage provides for $5000 life insurance for the spouse and $2500 for each eligible child. The new law allows employees to elect coverage in multiples up to 5 times each. This change will be effective April 24, 1999. The new law also allows employees or those receiving regular workers' compensation payments to elect to continue Option C on an unreduced basis by continuing to pay premiums after age 65. This change will be effective April 24, 1999. Foster Child Coverage One other major change as a result of Public Law 105-311 is that foster children are eligible for coverage under Option C of the FEGLI Program. Requirements to be met are: 1. The foster child must be unmarried and under the age of 22. If over age 22, he/she must be incapable of self-support because of a disabling condition which began before the child turned 22. 2. The child must be living with you. 3. The parent-child relationship must be with you, not with the biological parent. A parent-child relationship means that you are exercising parental authority, responsibility, and control over the child. 4. You must be the primary source of financial support for the child. 5. You must expect to raise the child to adulthood. There is no prohibition against a foster child's biological parent living in your home or contributing to the child's support. However, the parent-child relationship as described above must be with you, not the biological parent, and you must be the primary source of financial support for the child. Grandchildren can qualify as foster children if all requirements listed above are met. A child placed in your home by a welfare or social service agency where the agency retains control of the child does not qualify as a foster child. If the child moves out of your home to live with a biological parent, the child loses eligibility under Option C. If you feel you have a child who would meet the requirements for coverage under Option C, you should contact your servicing personnel office. You will have to sign a certification form regarding your foster child's eligibility. Once you submit the certification form, you have 60 days to elect Option C. The coverage will be effective the day you submit your election form, SF-2817, which is available from your servicing personnel office. While foster children now qualify for coverage under Option C, they are not included under the order of precedence to receive benefits upon your death. If you want your foster child to receive benefits if you die, you must complete a designation of beneficiary form, SF-2823, which is also available from your personnel office. Miscellaneous Changes in FEGLI The new law allows an employee, annuitant, or those receiving regular workers' compensation payments, whose pay is insufficient to cover the required life insurance withholdings, to arrange to make payment directly, either through the retirement system or employing office that administers the pay. Previously, Civil Service Retirement System retirees in this situation had their insurance terminated; Federal Employee Retirement System annuitants are already allowed to make direct payments. This legislation extends the direct pay option to other categories of insured individuals. This change was effective October 30, 1998. The Office of Personnel Management will be holding a FEGLI open season from April 24, 1999, through June 30, 1999. Elections made during this election period will become effective the first pay period beginning on or after April 23, 2000, which follows a pay period during which the employee was in a pay and duty status. Additional information on the new FEGLI provisions will be issued as the details become available from the Office of Personnel Management. Any questions regarding the above should be directed to your servicing personnel office.