By now most federal employees are aware that there will be an open season for Federal Employees Group Life Insurance (FEGLI) this September – that’s less than a month away. This article looks at some of the basic facts about FEGLI and the open season and discusses what federal employees need to consider if they are thinking about what actions they should take regarding their FEGLI during this rare event.
Q. When is the FEGLI open season?
A. The FEGLI open season runs from September 1, 2016 through September 30, 2016.
Q. What changes can I make in this open season?
A. If you are an employee who is not enrolled in FEGLI, you can enroll in Basic FEGLI and any or all of the Optional FEGLI choices. If you are an employee who is already enrolled in FEGLI, you can increase your coverage up to the maximum available, or change your coverage.
Q. I’m already enrolled in FEGLI; will I have to re-enroll in order to keep coverage?
A. No. If you take no action at all, the coverage you have will remain in place.
Q. When will changes made in this open season become effective?
A. The effective date for changes made in this open season is the first full pay period after October 1, 2017, if pay and duty requirements are met. Note that there is a one-year delay in the effective date of coverage elected in the open season.
Q. Will I have to pass a medical exam or answer any health questions in order to enroll or to increase my FEGLI coverage?
A. No; no medical exam is required and there are no health questions in connection with your FEGLI open Season election.
Q. How often does OPM conduct an open season for FEGLI?
A. Rarely. This is the first open season in 12 years and only the 10th open season since FEGLI was introduced in 1954.
Q. Why did OPM decide to have an open season now?
A. They haven’t told us, but I speculate that they simply felt that it was time to do so. Normally open seasons are held when there is a change in available coverage or a major change in premiums; neither of those applies here.
Q. Can a retiree participate in this FEGLI open season?
A. No, with one exception: retirees who have returned to work for the federal government (called “re-employed annuitants”) are allowed to participate.
Q. I’ll be retiring in a few years. Is there any length of coverage requirement for me to be able to carry my FEGLI into retirement?
A. Yes; like FEHB, FEGLI has a “five year rule”. You must have been enrolled in FEGLI for the five years immediately preceding retirement in order to carry it into retirement. If you elect new or additional coverage during this open season and retire before the new or additional coverage has been in place for 5 years (i.e., sometime after October 1, 2022), you will not be able to carry the new/additional coverage into retirement. If you elect changes in multiples in Options B or C (whether increasing or decreasing them), you will only be allowed to continue the lowest multiple you had for the entire five years before retirement.
Q. Didn’t FEGLI change premiums recently?
A. Yes. The changes were minor; some premiums went up, some went down and some stayed the same.
Q. Where can I find information about premiums and other aspects of FEGLI?
A. OPM has a booklet, FEGLI Program Booklet for Federal Employees (March 2016), which will tell you everything you need to know about FEGLI.
Q. How do I make a change in my FEGLI?
A. You will make the change on Form 2817, or through your agency’s human resources portal (e.g., EBIS, Employee Express, etc.). Your agency will provide you with guidance as to how to proceed.
Q. Does there have to be an open season for me to make a change in my FEGLI?
A. No. If you are an employee, you may enroll in or increase your FEGLI:
- Within 60 days of a qualifying life event such as marriage, divorce, death of a spouse or birth/adoption of an eligible child.
- By passing a medical exam, if it has been more than one year since you have waived FEGLI coverage.
Q. Can I cancel or drop my FEGLI outside of an open season, or without meeting one of the two circumstances in the above answer?
A. Yes. Both employees and retirees can cancel or reduce their FEGLI at any time.
Q. I’m thinking of changing my FEGLI, what should I consider in determining my life insurance needs?
A. Among the items you might want to consider when deciding how much insurance you need are:
- Why do you carry life insurance?
- Is your mortgage paid off? If not, how far are you from paying it off?
- Are your children grown and out of the house? Have they completed their schooling?
- How much extra income, if any, will be needed to run the household if you died?
- Do you have any other responsibilities for which you need to insure? Examples might be, special needs child, elderly parents, etc.
The “Theory of Decreasing Responsibility” (a general rule that applies in many situations) indicates that the further along we are in our life, the less life insurance we may need.
The National Association of Insurance Commissioners has a helpful website that they call “Insurance University” at http://www.insureuonline.org.
John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. Order your copy at shoplrp.com. Ask your human resources office to contact Federal Career Experts about pre-retirement training.