When insured annuitants are reemployed under conditions which terminate title to the annuity, the insurance carried as a retired employee is terminated without the right to convert. The employee, however, may acquire insurance provided the new employment is not a position that is excluded from coverage.
When insured annuitants are reemployed under conditions that do not terminate title to the annuity, they retain basic and any optional life insurance held as retired employees. A reemployed annuitant retains life insurance regardless of whether annuity is paid through the period of reemployment or payment of annuity is merely suspended. Life insurance is resumed at the same rate upon termination of the reemployment.
If the annuitant, however, acquires new insurance coverage as a result of employment, i.e., appointment to a covered position (see 537.13), then his or her insurance coverage as a retired employee is suspended. The total amount of basic, standard optional, family optional, and, in some cases, additional insurance (see 537.132) held as a retiree is suspended on the day before the first day in a pay status under the appointment.
- Reductions. While life insurance coverage is suspended, any reductions to it because of attaining, or having already attained, age 65 apply.
- Death in Service. If the covered annuitant dies during reemployment, the suspended Basic Life Insurance (less applicable reductions) is automatically reinstated upon death in the amount necessary to assure that the basic insurance benefit paid is no less than the amount which would have been paid if the annuitant had not been reemployed. In the case of any optional coverage, suspended coverage is not reinstated upon death.
For annuitants reemployed in positions which exclude coverage, the insurance maintained as a retired employee is not suspended, but continues in force.
Annuitants appointed to nonexcluded positions automatically acquire basic and optional insurance, except for additional optional (see 537.132), as an employee, on the first day in pay and duty status unless they file a waiver, or declination, or have an unrevoked declination of optional insurance on file during prior employment. The insurance acquired is the same as that held as an employee and includes full coverage, including applicable double indemnity and dismemberment benefits.
Where optional life insurance withholdings are involved, the employing office must notify OPM by completing OPM Form 1482, Agency Certification of Status of Reemployed Annuitant. Upon notification, OPM will terminate the optional insurance withholdings from the monthly annuity. Withholdings will be made from the employee’s salary.
Reemployed annuitants eligible for continued additional optional insurance (Option B) as retirees and as employees must elect either coverage.
- Election. If the reemployed annuitant wishes to have the annuitant coverage continue, no action is required. However, if the coverage as an annuitant is to be suspended and the employee elects coverage acquired by reemployment, SF 2817 must be completed within 31 days after reemployment.
- Procedures. Employee completes SF 2817 reconfirming coverage. Withholdings for coverage are made from salary. OPM Form 1482 is completed and forwarded to OPM, notifying that office of the effective date withholdings from salary began.
A declination or waiver filed by a reemployed annuitant applies to insurance as an employee and also to insurance as an annuitant.
The employing offices must make certain that a reemployed annuitant who wishes to file a waiver and/or declination understands the effect(s) of such action. Reemployed annuitants should not file a waiver and/or declination if they want the previously acquired insurance that they had as annuitants to continue.
One exception to this general rule applies to the decision of a reemployed annuitant to “cancel” additional optional insurance coverage available as an employee (see 537.132).
Whenever a declination or waiver is filed by a reemployed annuitant, the following procedures must be applied to assure that OPM records are noted regarding the waiver:
- SF 2817 is completed by the reemployed annuitant showing a confirmation of those forms of coverage the annuitant wishes to retain.
- The words “Reemployed Annuitant” and, if known, the retired employee’s Civil Service Annuitant (CSA) or CSI number are entered on all copies of SF 2817.
- A photocopy of SF 2817 with a brief transmittal letter is sent to:
INSURANCE SERVICES BRANCH
RETIREMENT AND INSURANCE GROUP
OFFICE OF PERSONNEL MANAGEMENT
1900 E ST NW
WASHINGTON DC 20415–0001
SF 2817 is processed in the usual manner.
The amount of a reemployed annuitant’s basic insurance coverage as an employee is based on the annual basic pay before reduction of pay by annuity allocable to the period of reemployment. The full amount of basic and optional insurance is acquired by the reemployed annuitant, even if the reemployed annuitant had attained age 65, and the amount of insurance coverage as an annuitant had already been reduced. Withholdings are made for optional insurance.
Unless retained under 537.17, insurance acquired during reemployment terminates (subject to a 31–day temporary extension) on the date the reemployment terminates.
Insurance acquired during reemployment may be converted only if the annuitant does not have insurance coverage as a retired employee. A reemployed annuitant who has insurance coverage (as a retired employee) which was suspended during the period of reemployment does not have the conversion privilege. The suspended insurance is reinstated as explained in 537.121.
Upon the employee’s separation from reemployment, the life insurance which was acquired during reemployment (not accidental death and dismemberment) may be retained only if the reemployed annuitant:
- Has completed the equivalent of at least 1 year of continuous full–time service which meets requirements for supplemental annuity, or has otherwise acquired a new retirement eligibility, and
- Meets the eligibility requirements for continuance of insurance coverage set forth in 536.
If the reemployed annuitant qualifies for a supplemental annuity, the employing office completes SF 2821. The words “Reemployed Annuitant” and the CSA or CSI number are typed under the name on SF 2821.
If the insurance acquired during reemployment is retained, it continues, subject to reduction at age 65, the same as for any other retired employee. At death, previous insurance as an employee, still in suspension, is automatically reinstated (see 537.121), to assure that the amount paid is not less than it would have been had the individual not been reemployed.
If withholdings for optional insurance were made from the reemployed annuitant’s pay and the period of reemployment was for less than 1 year, the OPM is notified when the reemployment terminates so that appropriate optional insurance withholdings are made from the annuity if withholdings were based on optional life insurance coverage retained from the employee’s actual retirement.
In the case of a reemployed annuitant, benefits are payable in the same amounts and under the same conditions as for other employees. If the amount of the reemployment acquired insurance benefit is more than the amount of suspended life insurance, the greater amount is paid. The total of all insurance benefits paid after death, accidental or otherwise, is not less than the amount that would have been paid had the retired employee not been reemployed. As needed, the amount of insurance suspended upon reemployment is reinstated automatically upon the employee’s death in such amount as is necessary to make up the benefit payable.
If an annuitant is eligible to continue reemployed acquired life insurance after separation (see 537.17), the amount in force at time of the death is compared with the amount of any suspended life insurance at that time. The greater amount is paid as the death benefit.
Example 1:
Amount of Coverage: A reemployed annuitant has $12,000 of Basic Life Insurance as an employee and $12,000 accidental death and dismemberment insurance. The employee’s suspended Basic Life Insurance is $11,000.
Death Benefit: The death benefit payable is $12,000. If death is accidental, the death benefit payment is $24,000.
Example 2:
Amount of Coverage: A reemployed annuitant has $10,000 of Basic Life Insurance as an employee and $10,000 accidental death and dismemberment insurance. The employee’s suspended Basic Life Insurance is $11,000.
Death Benefit: $1,000 of the suspended benefit is reinstated, and $11,000 is paid in death benefits. If death is accidental, the death benefit payment is $20,000.
A designation of beneficiary covers all insurance under the group policy. Any designation previously filed as a retired employee remains in effect until changed or cancelled.
A reemployed annuitant may designate a beneficiary or change or cancel a designation by executing SF 2823, Designation of Beneficiary, with the employing office.
A designation of beneficiary received by an employing office from a reemployed annuitant is not filed in the employee’s OPF but rather sent, for central filing, with other retired employee designations to:
INSURANCE SERVICES BRANCH
RETIREMENT AND INSURANCE GROUP
OFFICE OF PERSONNEL MANAGEMENT
1900 E ST NW
WASHINGTON DC 20415–0001
Type “Reemployed Annuitant” and the CSA or CSI number on the designated form; enter the date and the name of the person in the employing office who received the form.
