Employees who are newly eligible (newly hired persons or persons converted from positions in excluded categories to positions covered by life insurance) automatically acquire Basic Life Insurance coverage on the first day of active duty in pay status without cost to them (except postal inspector and Inspector General employees).
Eligible employees who transfer into the Postal Service on or after July 20, 1974, from a federal agency automatically obtain Basic Life Insurance coverage, at no cost to them, on the first day of active duty in pay status.
Previously submitted waivers are not accepted.
- A waiver of Basic Life Insurance in effect at the time an individual becomes an employee of the Postal Service (provided the appointment is on or after July 20, 1974, and the position is not excluded from insurance coverage) is automatically cancelled. The employee becomes insured for Basic Life Insurance on the first day of active duty in a pay status.
- All waivers of Basic Life Insurance in Postal Service employee’s personnel folders by virtue of Postal Service employment are to be officially cancelled before the folders are forwarded to another agency or sent to the National Personnel Records Center for retention. This also applies to cancelled waivers submitted to OPM with retirement applications. (A rubber stamp notice on SF 2817 citing 5 CFR 870.204 as the reason for the cancellation of the waiver is sufficient.)
Employees who have basic insurance and who have not previously declined optional insurance are eligible to elect optional insurance. Refer to 535.92 for automatic cancellation of previously declined optional insurance in the case of reinstated employees.
Employees must indicate whether they wish to elect or decline optional insurance.
- Within 31 days after becoming eligible for optional insurance, employees must complete and submit SF 2817, Life Insurance Election, for the purpose of electing or declining optional insurance, unless a declination of optional insurance filed on SF 2817 during earlier employment remains in effect.
- If eligible employees decline to file SF 2817, the employing office completes the form for them declining the optional insurance. In the space provided for the employee’s signature, the employing office enters the employee’s name and the date that the employee was contacted and failed to elect optional insurance. The installation official making the entry signs and dates the form.
Optional insurance affirmatively elected is effective on the first day the eligible employee actually enters on duty in a pay status on or after the day the election is received in the employing office.
If an employee submits an election after the required timelines, employing offices must consider the following:
- Cause Beyond Employee’s Control. If, within 6 months after an employee becomes eligible, the employing office determines that the employee was unable to timely elect optional insurance due to “cause beyond the employee’s control,” the employing office may accept the election within 31 days after notifying the employee of its determination.
Example: (1) the employing installation did not give new employees information about optional insurance, or (2) employees were told by the employing installation that they were not eligible for optional insurance.
- Documentation. If an employing office accepts a late election, it records on SF 2817 its determination that the employee was unable to make a timely election for cause beyond the employee’s control, giving the date the employee was notified of the determination. When an employee elects optional insurance, it is especially important that this be documented on SF 2817 for purposes of meeting the “coverage for the full period of service during which optional insurance was available or for the last 5 years” requirement for continuing optional insurance after retirement. The employee’s reason for failing to timely elect need not be stated on SF 2817. Instead, a memo stating the reason is attached to the original SF 2817.
- Retroactive. Late elections are effective retroactive to the pay period beginning immediately after the one in which the employee first became eligible.
New employees who, for religious or other reasons, do not want free Basic Life Insurance, must file SF 2817 with their employing offices, waiving insurance coverage.
A waiver becomes effective at the end of the pay period in which SF 2817 is received by the employing office.
The installation makes absolutely certain that an employee understands the consequence of the waiver. A statement signed by the employee, together with SF 2817 waiving insurance coverage, is filed as a permanent record in the employee’s official personnel folder. (See 535.24.)
Employees who elect the basic insurance but who do not desire the optional insurance must file a properly completed SF 2817, declining the optional insurance.
Once a properly executed waiver of basic insurance or declination of optional life insurance, completed on or after April 4, 1981, by a postal employee is received in the employing office and is made effective, it remains in effect until cancelled even though the employee may transfer to another agency or be reappointed after a break in service. See 535.8 for procedures for canceling waiver or declination and 535.92 for automatic cancellation of previously declined optional insurance, in the case of reinstated employees.
An eligible employee who has previously worked for the federal government, or District of Columbia government, and who has never filed a waiver automatically has Basic Life Insurance coverage. If an uncanceled waiver of Basic Life Insurance is outstanding and another waiver is not filed, the waiver is automatically cancelled when the individual is employed by the Postal Service, provided the position is not excluded from insurance coverage. (See 535.113.) The employee acquires free basic insurance on the first day of active duty in pay status.
If an uncanceled declination of optional insurance is outstanding, the employee cannot elect the declined optional insurance until the declination is cancelled. Refer to 535.9 for exceptions.
Employees may cancel insurance by filing a completed SF 2817 with employing offices. They may cancel basic life and optional insurance, or may cancel optional insurance only.
Cancellations become effective at the end of the pay period in which the SF 2817 canceling the insurance is received by the employing office.
A cancellation of family optional insurance becomes effective, and family optional insurance stops at the end of the pay period in which the declination or waiver is properly filed, except that, at the request of the employee and upon proof satisfactory to the employing office that there was no family member eligible for coverage, the effective date of the cancellation may be made retroactive to the end of the pay period in which there ceased to be eligible family members.
An employee’s basic insurance terminates:
- At the end of the last day of the pay period in which the employing office receives the employee’s waiver of life insurance coverage (SF 2817); or
- At the end of the day on which the employee is separated for any reason, including separation for transfer to another agency (except a mass change — transfer of the organizational unit); or
- At the end of the day on which the employee completes 12 months in a nonpay status as explained in 534.1; or
- At the end of the last day of the employee’s last pay period in pay status, if the employee is not entitled to any further continuation because he or she has not completed 4 consecutive months in pay status since exhausting 12 months maximum LWOP (see 534.11); or
- At the end of the day which precedes the day the employee moves to excluded employment (see Exhibit 531.3).
An employee’s optional insurance terminates:
- At the time the basic insurance terminates, or
- On the last day of the pay period in which the employing office received the employee’s declination of optional insurance (SF 2817), or
- On the date preceding the date the employee’s basic insurance is continued into retirement (or during the time that the employee is in receipt of compensation for a work injury, if not eligible to continue optional insurance also), or
- At the end of the pay period in which it is determined, in accordance with instructions in 533.225, that the employee’s periodic pay, after all other deductions are made, is insufficient to cover the full cost of the optional insurance.
When basic life and/or optional insurance terminates, except by waiver or declination, the employee continues to have life insurance protection (not accidental death and dismemberment) for 31 days thereafter. This 31–day temporary extension is automatic. There is no extension of protection when insurance terminates by waiver or declination.
The employing office is required to promptly issue SF 2821 and SF 2819 to employees when group insurance terminates under conditions entitling employees to convert to individual policies. The notification requirements are as follows:
- Conditions for Issuing SF 2821 and SF 2819. SF 2821 and SF 2819 are issued by the employing office when insurance terminates (except by waiver or declination) as a consequence of one of the following:
- Separation, such as but not limited to resignation, retirement, death, and removal.
- Completion of 12 months in a nonpay status, including when in receipt of benefits under OWCP.
- Assignment to a noncovered position (see 531.3) in which the employee is not eligible to continue or reacquire insurance coverage, or
- Entry into active military service covered by military leave with pay which terminates before the employee is scheduled for release from military duty. (SF 2821 is issued when military leave with pay ceases. Issuance of SF 2821 and SF 2819 is not necessary if it is known that within 3 calendar days after the date that military leave with pay ceases, the employee will return to government service and will be eligible to reacquire insurance.)
- Conditions for Not Issuing SF 2821 and SF 2819. SF 2821 and SF 2819 are not issued when employees are not entitled to convert to individual life insurance policies and insurance terminates under one of these two conditions:
- Basic life or optional insurance, or both, terminate because the employee filed a waiver or declination (SF 2817) canceling coverage; or
- It is known that within 3 calendar days after the date the insurance terminates, the employee will return to government/postal service in the same or another position in which the employee is eligible to reacquire insurance.
To have continuous insurance protection, the employee must normally apply for an individual policy and pay the first premium to the insurance company within the 31–day temporary extension period (see 535.62).
An employee entitled to convert insurance coverage may purchase an individual policy from any eligible insurance company that the employee selects. A medical examination for determining insurability is not required. The policy, at the employee’s option, may be equal to or less than the group insurance the individual had as an employee, including optional insurance but excluding accidental death or dismemberment benefits. The policy may be in any form customarily issued by the insurance company except term insurance.
Information regarding insurance companies which are eligible and willing to handle conversions may be obtained from the:
OFFICE OF FEDERAL EMPLOYEES
GROUP LIFE INSURANCE
PO BOX 2627
JERSEY CITY NJ 07303–2627
If through administrative error the conversion notice to the employee is not issued within 6 months after the insurance terminates, the employing office contacts the individual and determines whether the employee wishes to convert. If the individual wishes to convert coverage, permission must be obtained from OPM to issue a conversion notice. The employing office forwards the request to Compensation at Headquarters with a detailed explanation of the reasons for the delay in issuing the conversion notice. If the individual does not wish to convert coverage, it should be documented in the employee’s OPF. No further action will be required.
An employee must take action to convert insurance coverage.
- An employee who desires to convert to an individual policy submits SF 2821 and SF 2819 to the OFEGLI within 31 days after termination of the insurance, or, if not notified of conversion privilege at time of termination, within 31 days after being notified of conversion privilege.
- An employee who desires continuous coverage applies for conversion and pays the first premium within the 31–day period. (see 535.64)
Eligible family members also have the right to convert their coverage under the family optional insurance (Option C — Family) to individual policies within the 31 days following the death of an employee or during the 31 days after the termination of group insurance if the employee has a right to convert, but does not elect to exercise that right. The form to be used by family members for this purpose is SF 2819.
Employees who previously waived (or declined) insurance coverage may cancel a waiver (or declination) if the following conditions are met:
- The date that the employee requests the insurance is at least 1 year after the effective date of the last waiver (or declination), and
- The employee furnishes satisfactory medical evidence of insurability. For exceptions to the above conditions, refer to 535.9.
Note: Employees reinstated after a break in service of 180 days or more are eligible to complete a new SF 2817 election. This automatically cancels any previous election to waive coverage.
To cancel a waiver or declination, the personnel services office completes SF 2822, Request for Insurance, Part A, and forwards it to the employee. The employee completes Part B and proceeds by following instructions printed on SF 2822. Any fee for medical examination and certification is paid by the employee. If the request for insurance is approved by OFEGLI, appropriate steps are taken to assure that (optional) life insurance deductions are withheld as required (see 535.832). If denied, a request for further consideration may be made to OFEGLI. Their decision is final and cannot be appealed.
To continue basic coverage after a cancellation of waiver or declination the following procedures apply:
- Pay Status Requirement. Coverage is effective on the employee’s first day in a pay status following the date of approval by OFEGLI as shown on SF 2822. If the employee is not at that time in a pay status, coverage becomes effective at the time the employee enters on duty the first day in a pay status.
- Expiration of 31 Days. If, for any reason, the employee does not become insured within 31 days after OFEGLI approval, the authorization to cancel the waiver expires. The employee then repeats the procedure (if still eligible) by completing and filing another SF 2822.
- Subsequent Cancellation. If, after cancellation of the waiver of basic insurance, the employee wishes to again cancel insurance coverage, a new waiver on SF 2817 is filed.
To continue optional coverage after a cancellation of waiver or declination the following procedures apply:
- Filing Election. After approval by OFEGLI of an employee’s request for cancellation of a declination of optional insurance, the employee has 31 days in which to complete SF 2817 electing optional insurance and to file it with the employing installation. The election (and optional insurance coverage) is effective at the time the employee enters on duty that first day in pay status on or after the day the election is received in the employing installation. Withholdings for optional insurance begin with that pay period.
- Requirements. OFEGLI approval is revoked automatically, and the optional insurance does not become effective if the employee fails to submit an election or to meet the pay and duty status requirements within 31 days after the date of approval.
- Subsequent Declination. If, after electing the optional insurance, the employee wishes to again decline, a new declination on SF 2817 is filed.
An employee enrolled for basic insurance who has declined Option B — Additional and/or Option C — Family, may elect this coverage upon marriage, divorce, the spouse’s death, or the acquisition of an unmarried dependent child. Additionally, an employee who has in force at least one, but less than five, multiples of Option B coverage may also elect to increase the number of multiples of Option B coverage upon marriage, divorce, the spouse’s death, or the acquisition of an unmarried dependent child.
Election must be filed with the employing office on SF 2817 during the 60–day period following the date of the event which permits the election. This 60–day time limit may be extended if the employee is not serving in a covered position on the day of the event, or if the individual separates from covered service prior to completion of the 60–day time limit. This extension of the time limit is limited to coincide with the 31–day time limit for electing insurance following employment in a covered position.
The number of multiples for Option B coverage that an employee may elect or add is limited as follows:
- Marriage — One multiple for each additional family member (spouse, any unmarried dependent child) associated with the marriage.
- Acquisition of Child(ren) — One multiple for each newly born, adopted, etc., unmarried dependent child added to employee’s family.
- Divorce or Death of Spouse — One multiple for each unmarried, dependent child on date of event.
The effective date of coverage is the first day the employee actually enters on duty in a pay status on or after the day the election is received in the employing office.
Proof of the marriage or the acquisition of the eligible child must be submitted by the employee.
A declination of optional insurance (all options) filed on or after April 1, 1981, is automatically cancelled at the time an employee is reinstated, regardless of the employee’s age, if the following conditions are met.
- The employee was separated from the service for at least 180 days.
- The employee files an affirmative election of optional insurance coverage. When an employee fails to file a new SF 2817 within 31 days after reinstatement, it is determined that the employee has declined optional coverage.
Note: A previous declination of optional insurance, initiated on SF 176 prior to April 1, 1981, is automatically cancelled regardless of length of separation. All SF 176s were automatically cancelled effective April 1, 1981.
The effective date of coverage is the first day the employee actually enters on duty in a pay status on or after the day the election is received in the employing office.
