Open Season Highlights New Insurance Options
By Douglas J. Gillert
American Forces Press Service
WASHINGTON, Dec. 16, 1998 An open season for starting, stopping or changing life insurance tops recent changes to the Federal Employees Group Life Insurance program.
Legislation enacted Oct. 30 established the annual open season privilege, the first of which will be from April 15 to June 30, 1999. During this period, employees who previously declined insurance coverage may enroll while others already participating can make changes to their coverage.
Diane Disney, DoD's civilian personnel policy chief, lauded the decision by the Office of Personnel Management to inaugurate an annual open season. But she cautioned that open season changes don't become effective for one year. That is, if you start or change your coverage on April 15, 1999, those changes will become effective the first pay period beginning on or after April 1, 2000.
The new legislation also eliminated the caps on basic term insurance and Option B insurance that employees could buy. These changes took effect Nov. 8 and mostly affect senior civil servants and executive service employees.
The government contributes only to the premium of employees' basic term coverage. Employees pay the full cost of optional plan premiums.
In the past, basic term coverage equaled one year's salary rounded up to the next multiple of $1,000, plus $2,000; or $10,000, whichever was greater. For example, if your salary was $40,500 a year, you could purchase $43,000 in basic coverage; an employee earning $8,000 or less could buy up to $10,000. The most anyone could buy, however, was $139,000 -- that cap is gone.
Option B coverage remains controlled by your salary and is available only with basic coverage. You can elect additional coverage of one to five times your salary rounded up to the next $1,000, plus $2,000. In 1998, the annual cap on the salary multiple was $134,000.
Other provisions of the new law will be phased in, Disney said. They include unreduced Option B coverage when you retire, and the ability to retain Option B coverage if you separate from civil service or your nonpay status runs out. If you're eligible, you can continue the coverage by making direct premium payments, Disney said.
Option C family coverage also will change. Currently, you can elect $5,000 life insurance for your spouse and $2,500 for each eligible child. The new law allows you to elect coverage in multiples of up to five times the current amounts. You also can elect unreduced Option C coverage when you retire, again, by continuing to pay premiums.
OPM also will study alternative insurance products for federal employees, including group life insurance, group variable universal life insurance and additional voluntary accidental death and dismemberment insurance. After querying federal employees on their interest in these additional products, OPM will report its findings to Congress.
Because of the complexity of the federal insurance programs, Disney urges DoD employees to get help from their local civilian personnel benefits counselors. Details of the legislation and the insurance program in general also are available on the Internet. The electronic publication FedWeek outlines the legislation at http://www.fedweek.com/feglilaw.htm (this link is no longer available). The complete insurance handbook and forms are available on the OPM Web site at http://www.opm.gov/insure/life/76-21-1.htm.