Employees may be in nonpay status up to 12 months and their basic and optional life insurance coverage continues without cost. At the end of 12 months, the coverage ceases. The 12 months in nonpay status may be continuous or may be broken by periods of less than 4 consecutive months in nonpay status. If employees have at least 4 consecutive months during which they receive some pay in each pay period after a period of nonpay status, they are entitled to begin a new 12–month period.
See 535.63.
If employees return to positions not excluded from coverage after their insurance coverage ceases due to expiration of the allowable maximum 12 months in nonpay status, they are again eligible for insurance. Restoration is automatic at the time employees actually enter on duty in a pay status unless they file a waiver of Basic Life Insurance (or decline optional insurance). If the employees again go on LWOP and have not completed 4 consecutive months in pay status, insurance coverage ceases the last day of the last pay period in which they were in pay status.
If employees in nonpay status, who are entitled to free insurance (basic and/or optional) while in a nonpay status, accept temporary appointments to positions excluded from insurance coverage, they continue to receive insurance coverage. Basic Life Insurance coverage is based on the higher salary rate. Upon termination of the temporary appointment, the employee’s insurance coverage reverts to the first position and basic insurance coverage is based on that salary rate.
If employees serve and receive pay for 4 consecutive months in temporary positions, they are entitled to begin a new 12–month maximum nonpay period during which their insurance continues.
Withholdings for optional insurance are made from the employee’s pay earned in the temporary position.
Employees who are in nonpay status while their application for retirement annuity is pending, continue to be insured until the expiration of the 12 months in a nonpay status or until employees are separated, whichever occurs first. If insurance is terminated for either of these reasons, it is restored to employees as annuitants provided:
- Annuities become effective no later than 1 month after the insurance held as employees is terminated, and
- Employees are eligible to continue insurance coverage into retirement. (See 536.1.)
Employees who are granted leave without pay (LWOP) to serve as full–time officers or employees of an employee organization composed primarily of federal/postal government employees may elect to continue life insurance coverage for as long as they are on LWOP. The election is filed with the employee’s installation head within 60 days after LWOP begins.
If employees elect to continue insurance coverage, they pay for (or arrange to have paid), on a current basis, the total premium costs as determined by the Eagan ASC.
If employees do not elect to continue insurance coverage, the insurance continues for the maximum 12–month LWOP period, and then is terminated.
As soon as LWOP is authorized, the installation head notifies the employee of the right to elect to continue or to discontinue insurance coverage. The employee’s election must be in writing.
The installation sets up a follow–up system to remind employees that an election is to be filed within a 60–day time limit.
If an employee does not make an election, the installation contacts the employee to urge that an election be made (if possible).
If, after being contacted, the employee continues to refuse to make the election, all action taken is documented. Failure of the employee to make an election is considered an election not to continue the insurance.
A copy of the election (or installation head’s documentation) is filed in the employee’s official personnel folder.
Employees receiving OWCP benefits may retain basic insurance (not accidental death and dismemberment) provided:
- On the day that basic insurance would otherwise terminate, they are in receipt of benefits under the Federal Employees’ Compensation Act because of disease or injury, and the Department of Labor has held that they are unable to return to duty.
- They do not convert to an individual policy.
- They have been insured under the FEGLI Program for 5 years of service immediately preceding the date they became entitled to benefits under the Federal Employees’ Compensation Act, or the full period(s) of service since their first opportunity to be insured if less than 5 years.
Employees may retain optional life insurance (not accidental death and dismemberment) provided:
- They are eligible to continue Basic Life Insurance.
- They have had optional insurance in force no less than (1) the 5 years of service immediately preceding the date the employee becomes entitled to compensation benefits, or (2) if less than 5 years, the full period(s) of service during which the optional insurance was available to them.
The continued insurance coverage accorded employees who are receiving OWCP benefits and who are unable to return to active service terminates when their compensation benefits cease, or when the Department of Labor rules that the employees are able to return to active service. These employees do not have a 31–day extension of life insurance (see 535.62), nor do they have the privilege of converting to an individual policy (see 535.7). They may, however, resume coverage if they return to active service in a position which affords life insurance coverage, i.e., a career position (see 534.33).
Employees who receive OWCP benefits and then return to pay status (or separate and then are reemployed) again become insured as employees. Employees who receive OWCP benefits and then receive an immediate Civil Service annuity retain insurance coverage as annuitants.
Employees who have completed 12 months in a nonpay status and who are receiving benefits under the Federal Employees’ Compensation Act are given SF 2819, Notice of Conversion Privilege, and SF 2821, Agency Certification of Insurance Status, and are informed that they have a choice of converting to an individual policy or continuing with group life insurance (not accidental death or dismemberment) while in receipt of compensation. Employees must meet eligibility requirements cited in 534.31 in order to continue coverage.
If an employee is eligible to continue coverage during receipt of compensation, basic insurance continues without cost provided compensation benefits commence prior to January 1, 1990, and the employee elects a 75 percent reduction in coverage after attaining age 65. If the employee is also eligible to continue optional insurance, premiums are withheld from compensation payments.
If an eligible employee elects to continue group life insurance, the following procedures apply:
- The employing office has the employee complete SF 2818, Continuation of Life Insurance Coverage as a Retiree or Compensationer.
- The employing office forwards to OPM the following:
- SF 2821.
- SF 2818, Continuation of Life Insurance Coverage as a Retiree or Compensationer.
- SF 2817 and/or SF 176, Life Insurance Election (all copies).
- SF 2823 and/or SF 54, Designation of Beneficiary (all copies).
Forms are forwarded by certified or registered mail to:
RETIREMENT OPERATIONS CENTER
OFFICE OF PERSONNEL MANAGEMENT
PO BOX 45
BOYERS PA 16017–0045
A brief note should be attached to alert OPM that forms are being forwarded for “CSI (Civil Service Insurance) Processing.” A record of the action including copies of all forms should be kept in the employee’s OPF.
- OPM certifies insurance status and postretirement election to Department of Labor (OWCP) and then informs employee of insurability status.
Employees with written documentation of a medical prognosis of terminal illness, indicating life expectancy that does not exceed 9 months, are eligible to elect a lump sum payment of life insurance equal to or less than the value of their Basic Life Insurance. This option is not available for additional optional insurance elections.
Elections must be submitted to the Office of Federal Employees’ Group Life Insurance (OFEGLI) on Form FE–8, Election of Living Benefits. This form is not available in local personnel services offices and must be requested directly from OFEGLI by calling 1–800–633–4542.
Assignment means that the employee gives up ownership of all life insurance elected under OFEGLI (except Option C — Family) with no option to rescind the decision. The assignee becomes the beneficiary and the employee continues to pay premiums as appropriate. The employee no longer has the right to change beneficiaries or reduce the amount of coverage.
Assignments are usually made for one of the following reasons:
- To comply with a court order for divorce.
- For inheritance tax purposes.
- To obtain cash before death.
- To satisfy a debt.
Form RI 76–10, Assignment of Federal Employees’ Group Life Insurance, is required and may be obtained from the personnel services office.
In instances where an employee is allowed to enroll or increase benefits in either Basic or optional insurance and does not meet the criteria for completion of SF 2817, the enrollment may be allowed to stand. If the coverage remains in force for 2 years or more and the error is not detected and corrected within that 2–year period, the enrollment continues under the FEGLI Incontestability Clause.
