5 C.F.R. Subpart G—Annuitants and Compensationers
Title 5 - Administrative Personnel
(a) When an insured employee retires, Basic life insurance (but not accidental death and dismemberment) continues or is reinstated if he/she: (1) Is entitled to retire on an immediate annuity under a retirement system for civilian employees, including the retirement system of a nonappropriated fund instrumentality of the Department of Defense or the Coast Guard; (2) Was insured for the 5 years of service immediately before the date the annuity starts, or for the full period(s) of service during which he/she was eligible to be insured if less than 5 years; and (3) Has not converted to an individual policy as described in §870.603. If it is determined that an individual is eligible to continue the group coverage as an annuitant after he/she has already converted to an individual policy, the group enrollment may be reinstated. If the individual wants the group coverage reinstated, the conversion policy must be voided, the group policy must be reinstated retroactively, and the premiums already paid on the conversion policy must be refunded to the individual. (b) Following separation or the completion of 12 months' nonpay status, a compensationer's Basic life insurance (but not accidental death and dismemberment) continues or is reinstated if he/she: (1) Has been insured for the 5 years of service immediately before the date of entitlement to compensation, or for the full period(s) of service during which he/she was eligible to be insured if less than 5 years; and (2) Has not converted to an individual policy as described in §870.603. If it is not determined that an individual is eligible to continue the group coverage as a compensationer until after he/she has converted, the group enrollment may be reinstated. If the individual wants the group coverage reinstated, the conversion policy must be voided, the group policy must be reinstated retroactively, and the premiums already paid on the conversion policy must be refunded to the individual. (c) An individual who meets the requirements under paragraphs (a) or (b) of this section or §870.706 for continuation or reinstatement of life insurance must complete an election, in a manner designated by OPM, at the time entitlement is established. For the election to be valid, OPM must receive the election before OPM has made a final decision on the individual's application for annuity or supplemental annuity or an individual's request to continue life insurance as a compensationer. If there is no valid election, OPM considers the individual to have chosen the option described in paragraph (a)(2) of §870.702. (d) If the annuity or compensation of an insured individual is terminated, or if the Department of Labor finds that an insured compensationer is able to return to duty, his/her Basic life insurance held as an annuitant or compensationer stops on the date of the termination or finding. There is no 31–day extension of coverage or conversion right. (e)(1) An annuitant or compensationer who is eligible to continue or have reinstated Basic insurance is also eligible to continue or have reinstated Optional insurance if he/she meets the same coverage requirements for Optional insurance as those stated in paragraph (a) or (b) of this section for Basic insurance. (2) For the purpose of continuing insurance as an annuitant or compensationer, an employee is not considered to have been eligible for Option C during any period when the employee had no eligible family members. (a) The amount of Basic insurance an annuitant or compensationer can continue is the BIA on the date insurance would otherwise have stopped because of the individual's separation from service or completion of 12 months in nonpay status. The amount of Basic insurance in force is the BIA minus any reductions applicable under §870.703(a). (b)(1) For the purpose of paying benefits upon the death of an insured individual under age 45 who is retired or receiving compensation, the BIA will be multiplied by the appropriate age factor shown in §870.202(c) of this part. Exceptions: (i) If the insured individual retired or became insured as a compensationer before October 10, 1980, or (ii) If the insured individual elected a partial Living Benefit as an employee under subpart K of this part. (2)(i) For an annuitant or compensationer who elected a partial Living Benefit as an employee, the amount of Basic insurance he/she can continue is the post-election BIA, as shown in §870.203(a)(2) of this part. (ii) For the purpose of paying benefits upon the death of an insured annuitant or compensationer under age 45 who elected a partial Living Benefit as an employee, the BIA will be multiplied by the age factor in effect on the date OFEGLI received the completed Living Benefit application. [64 FR 72463, Dec. 28, 1999] (a) Unless he/she has elected a Living Benefit, an individual who makes an election under §870.701(c) must select one of the following options: (1) Termination of the insurance. The individual's insurance stops upon conversion to an individual policy as provided under §870.603. If the individual doesn't convert to an individual policy, insurance stops at the end of the month in which OPM or the employing office receives the election; (2) Continuation or reinstatement of Basic insurance with a maximum reduction of 75 percent during retirement. Premiums are withheld from annuity or compensation (except as provided under 870.401(d)(1)). The amount of Basic Life insurance in force reduces by 2 percent of the BIA each month until the maximum reduction is reached. This reduction starts at the beginning of the 2nd month after the date the insurance would otherwise have stopped or the date of the insured's 65th birthday, whichever is later; (3) Continuation or reinstatement of Basic insurance with a maximum reduction of 50 percent during retirement. Premiums are withheld from annuity or compensation. The amount of Basic insurance in force reduces by 1 percent of the BIA each month until the maximum reduction is reached. This reduction starts at the beginning of the 2nd month after the date the insurance would otherwise have stopped or the date of the insured's 65th birthday, whichever is later; or (4) Continuation or reinstatement of Basic insurance with no reduction after age 65. Premiums are withheld from annuity or compensation. (b)(1) Unless an employee has elected a partial Living Benefit under subpart K of this part or an individual has assigned the insurance under subpart I of this part, an insured individual may cancel an election under paragraph (a)(3) or (a)(4) of this section at any time. The amount of Basic insurance automatically switches to the amount that would have been in force if the individual had originally elected the 75 percent reduction. This revised amount is effective at the end of the month in which OPM receives the request to cancel the previous election. (2) If an individual files a waiver of insurance, the coverage stops without a 31–day extension of coverage or conversion right. This is effective at the end of the month in which OPM receives the waiver. (c) Unless he/she chooses to terminate his/her insurance, an employee who has elected a partial Living Benefit must choose the no reduction election under paragraph (a)(4) of this section. He/she cannot later change to the 75 percent reduction. (d) If an employee has assigned his/her insurance, he/she cannot cancel an election under paragraph (a)(3) or (a)(4) of this section. Only the assignee(s) may cancel this election. Exception: if the employee elected a partial Living Benefit before assigning the remainder of his/her insurance, the assignee(s) cannot cancel the election under paragraph (a)(4) of this section. [62 FR 48731, Sept. 17, 1997. Redesignated at 64 FR 72463, Dec. 28, 1999] (a) The amount of Option A coverage an annuitant or compensationer can continue is $10,000. (b) An annuitant's or compensationer's Option A coverage reduces by 2 percent of the original amount each month up to a maximum reduction of 75 percent. This reduction starts at the beginning of the 2nd month after the date the insurance would otherwise have stopped or the beginning of the 2nd month after the date of the insured's 65th birthday, whichever is later. [64 FR 72463, Dec. 28, 1999] (a) The number of multiples of Option B and Option C coverage an annuitant or compensationer can continue is the highest number of multiples in force during the applicable period of service required to continue Option B and Option C. (b)(1)(i) At the time an employee retires or becomes insured as a compensationer, he/she must elect the number of allowable multiples he/she wishes to continue during retirement or while receiving compensation. (ii) An employee who elects to continue fewer multiples than the number for which he/she is eligible is considered to have cancelled the multiples that are not continued. (iii) Employees separating for retirement and employees becoming insured as compensationers on or after April 24, 1999, must also elect either Full Reduction or No Reduction for all of the multiples being continued. (iv) An employee who does not make a reduction election is considered to have chosen Full Reduction. (2)(i) Prior to reaching age 65, an annuitant or compensationer can change from No Reduction to Full Reduction at any time. Exception: If the individual has assigned his/her insurance as provided in subpart I of this part, only the assignee can change from No Reduction to Full Reduction for the Option B coverage. (ii) Prior to reaching age 65, an annuitant or compensationer can change from Full Reduction to No Reduction at any time. (3)(i) After reaching age 65, an annuitant or compensationer can change from No Reduction to Full Reduction at any time. Exception: If the individual has assigned his/her insurance as provided in subpart I of this part, only the assignee can change from No Reduction to Full Reduction for the Option B coverage. If an individual age 65 or over changes to Full Reduction, the amount of insurance in force is computed as if he/she had elected Full Reduction initially. There is no refund of premiums. (ii) Except as provided in paragraph (b)(4) of this section, after reaching age 65, an annuitant or compensationer cannot change from Full Reduction to No Reduction. (4)(i) Shortly before an annuitant or compensationer's 65 birthday, the retirement system will send a reminder about the election he/she made and will offer the individual a chance to change the election. At that time, the annuitant or compensationer can choose to have some multiples of Option B and Option C reduce and some not reduce. (ii) If the individual is already 65 or older at the time of retirement or becoming insured as a compensationer, the retirement system will send the reminder and give the opportunity to change the election as soon as the retirement processing or compensation transfer is complete. (iii) If the individual assigned his/her insurance as provided in subpart I of this part, and if the employee elected No Reduction for Option B coverage at the time of retirement or becoming insured as a compensationer, the retirement system will send the reminder notice for Option B coverage to the assignee. (iv) An annuitant or compensationer who wishes to change his/her reduction election must return the notice by the end of the month following the month in which the individual turns 65, or if already over age 65, by the end of the 4th month after the date of the letter. An annuitant or compensationer who does not return the election notice will keep his/her initial election. (c)(1) For each multiple of Option B and/or Option C for which an individual elects Full Reduction, the coverage reduces by 2 percent of the original amount each month. This reduction starts at the beginning of the 2nd month after the date the insurance would otherwise have stopped or the beginning of the 2nd month after the insured's 65th birthday, whichever is later. At 12:00 noon on the day before the 50th reduction, the insurance stops, with no extension of coverage or conversion right. (2) For each multiple of Option B and/or Option C for which an individual elects No Reduction, the coverage in force does not reduce. After age 65 the annuitant or compensationer continues to pay premiums appropriate to his/her age. (d)(1) Employees who were already retired or insured as compensationers on April 24, 1999, and who had Option B, were given an opportunity to make an election for Option B. (i) Annuitants and compensationers who were under age 65 were notified of the option to elect No Reduction. The retirement system will send these individuals an actual election notice before their 65th birthday, as provided in paragraph (b)(4) of this section. (ii) Annuitants and compensationers who were age 65 or older, and who still had some Option B coverage remaining, were given the opportunity to stop further reductions. These individuals had until October 24, 1999, to make the No Reduction election. The amount of Option B coverage retained was the amount in effect on April 24, 1999. Those annuitants and compensationers who elected No Reduction were required to pay premiums retroactive to April 24, 1999. (2) Employees who were already retired or insured as compensationers on April 24, 1999, could not elect No Reduction for Option C. [64 FR 72464, Dec. 28, 1999] (a) An annuitant whose disability annuity terminates because he/she recovers from the disability or because his/her earning capacity returns, and whose disability annuity is later restored under 5 U.S.C. 8337(e) (after December 31, 1983), may elect to resume the Basic insurance held immediately before his/her disability annuity terminated. OPM must receive the election within 60 days after OPM mails a notice of insurance eligibility and an election form. (b) An annuitant described in paragraph (a) of this section may elect to resume any Optional insurance held immediately before the annuity terminated if: (1) He/she has made an election under paragraph (a) of this section; and (2) OPM receives the election within 60 days after OPM mails a notice of insurance eligibility and an election form. (c) Basic and Optional insurance reinstated under paragraphs (a) and (b) of this section is effective on the 1st day of the month after the date OPM receives the election. Any applicable annuity withholdings are also reinstated on the 1st day of the month after OPM receives the election. (d) The amounts of Basic and Optional insurance reinstated under paragraphs (a) and (b) of this section are the amounts that would have been in force if the individual's annuity hadn't terminated. [62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997. Redesignated at 64 FR 72463, Dec. 28, 1999] (a)(1) If an insured annuitant is appointed to a position in which he/she is eligible for insurance, the amount of his/her Basic life insurance as an annuitant (and any applicable annuity withholdings) is suspended on the day before the 1st day in pay status under the appointment, unless the reemployed annuitant waives all insurance coverage. The Basic insurance benefit payable upon the death of a reemployed annuitant who has Basic insurance in force as an employee can't be less than the benefit which would have been payable if the individual hadn't been reemployed. (2) Except as provided in paragraph (b) of this section, the Basic insurance obtained as an employee stops with no 31–day extension of coverage or conversion right, on the date reemployment terminates. Any suspended Basic insurance (and any applicable annuity withholdings) is reinstated on the day following termination of the reemployment. (b) Basic insurance obtained during reemployment can be continued after the reemployment terminates if: (1) The annuitant qualifies for a supplemental annuity or receives a new retirement right; (2) He/she has had Basic insurance as an employee for at least 5 years of service immediately before separation from reemployment or for the full period(s) during which such coverage was available to him/her, whichever is less; and (3) He/she doesn't convert to nongroup insurance when Basic insurance as an employee would otherwise terminate. (c) If the Basic insurance obtained during reemployment is continued as provided in paragraph (b) of this section, any suspended Basic life insurance stops, with no 31–day extension of coverage or conversion right. (d) (1) An annuitant appointed to a position in which he/she is eligible for Basic insurance, is also eligible for Optional insurance as an employee, unless he/she has on file an uncancelled waiver of Basic or Optional insurance. (2) If the individual has Option A or C as an annuitant, that insurance (and applicable annuity withholdings) is suspended on the day before his/her 1st day in pay status under the appointment. Unless he/she waives Option A or C (or waives Basic insurance), he/she obtains Option A or C as an employee. (3) If the individual has Option B as an annuitant, that insurance (and applicable annuity withholdings) continues as if the individual weren't reemployed, unless: (i) The individual files with his/her employing office an election of Option B, in a manner designated by OPM, within 31 days after the date of reemployment. in this case Option B (and applicable annuity withholdings) as an annuitant is suspended on the date that Option B as an employee becomes effective; or (ii) The individual waives Basic insurance. (4) The Option B benefit payable upon the death of a reemployed annuitant is the amount in effect as an annuitant, unless he/she elected to have Option B as an employee. (5) Except as provided in paragraph (e) of this section, the Optional insurance obtained as an employee stops, with no 31–day extension or conversion right, on the date reemployment terminates. The amount of suspended Optional insurance which remains in force after applicable monthly reductions after age 65 (and corresponding withholdings) is reinstated on the day after reemployment terminates. (e) Optional life insurance obtained during reemployment may be continued after the reemployment terminates if the annuitant: (1) Qualifies for a supplemental annuity or receives a new retirement right; (2) Continues his/her Basic life insurance under paragraph (a) (2), (3), or (4) of §870.702; and (3) Has had Optional insurance as an employee for at least the 5 years of service immediately before separation from reemployment or for the full period(s) of service during which it was available to him/her, whichever is less. (f) If Optional insurance obtained during reemployment is continued as provided in paragraph (e) of this section, any suspended Optional insurance stops, with no 31–day extension of coverage or conversion right. (g) If a reemployed annuitant waives life insurance as an employee, the waiver also cancels his/her life insurance as an annuitant. [62 FR 48731, Sept. 17, 1997; 62 FR 52181, Oct. 6, 1997. Redesignated at 64 FR 72463, Dec. 28, 1999] (a) The Basic insurance of an individual whose coverage terminates under §870.601(b), and who meets the requirements for continuing Basic insurance after retirement as stated in §870.701(a), resumes on the starting date of annuity or on the date OPM receives the application for annuity, whichever is later. The individual must file an election as provided in §870.701(c) so that OPM receives it within 60 days after OPM mails a notice of insurance eligibility and an election form. (b) Optional insurance of an individual whose coverage terminates under §870.602(b), and who meets the requirements for continuing Optional insurance after retirement under §870.701(e), resumes on the starting date of annuity or on the date OPM receives the application for annuity, whichever is later. [62 FR 48731, Sept. 17, 1997. Redesignated at 64 FR 72463, Dec. 28, 1999]
Title 5: Administrative Personnel
PART 870—FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM
Subpart G—Annuitants and Compensationers
§ 870.701 Eligibility for life insurance.
§ 870.702 Amount of Basic insurance.
§ 870.703 Election of Basic insurance.
§ 870.704 Amount of Option A.
§ 870.705 Amount and election of Option B and Option C.
§ 870.706 Reinstatement of life insurance.
§ 870.707 Reemployed annuitants.
§ 870.708 MRA-plus-10 annuitants.
