The cost of Basic insurance is shared between you and
the Government. You pay two-thirds of the cost, and the
Government pays one-third.
Your age does not affect the cost of Basic insurance.
The cost of Basic insurance may change from time to time. The
Office of Personnel Management will announce premium changes prior to
their effective date.
Effective January 2003, your share of the cost of Basic insurance is $0.15
biweekly for each $1,000 of your Basic Insurance
Amount.
This amount must be withheld from your pay for each
pay period during which you are in pay status for any
part of the pay period. If your Basic coverage becomes effective at any time other
than the beginning of the pay period, full withholdings for the entire
pay period are required.
If you are paid on other than a biweekly basis, the
amount withheld from your pay must be prorated and
adjusted to the nearest one-tenth of one cent.
The Government's share of the cost of Basic insurance
is an amount equal to one-half of your withholding (or
one-third of the total premium).
This amount must be contributed for each pay period
during which you are in pay status for any part of the
pay period.
The Government contribution comes from the
appropriation or fund that is used for the payment of
your salary. For an elected official, the contribution
must come from the appropriation or fund that is
available for payment of other salaries in the same
office.
You pay the full cost of all Optional insurance. There
is no Government contribution toward the cost of any
Optional insurance.
The cost of Optional insurance may change from time to time.
The Office of Personnel Management will announce premium changes prior
to their effective date.
The cost of Optional insurance depends on your age. Optional insurance premiums are based on 5-year age bands beginning at age 35. The last age band for Option A is 60+. The last age band for Options B and C is 80+. You are considered to reach the next age bracket the pay period following the pay period in which
your birthday occurs.
Effective January 2003, the biweekly cost of Option A coverage is:
For persons under age 35 |
$0.30
|
For persons ages 35 through 39 |
.40
|
For persons ages 40 through 44 |
.60
|
For persons ages 45 through 49 |
.90
|
For persons ages 50 through 54 |
1.40
|
For persons ages 55 through 59 |
2.70
|
For persons ages 60 through 64 |
6.00
|
For persons ages 65 through 69 |
6.00
|
For persons ages 70 and over |
6.00
|
This amount must be withheld from your pay for each
pay period during which you are in pay status for any
part of the pay period. If your Option A coverage becomes
effective at any time other than the beginning of the pay
period, full withholdings for the entire pay period are
required.
If you are paid on other than a biweekly basis, the
amount withheld from your pay must be prorated and
adjusted to the nearest cent.
Effective January 2003, the biweekly cost per $1,000 of Option B coverage is:
Age Band |
2003 |
2004* |
2005* |
For persons ages 35 and under |
$0.03 |
$0.03 |
$0.03 |
For persons ages 35 through 39 |
$0.04 |
$0.04 |
$0.04 |
For persons ages 40 through 44 |
$0.06 |
$0.06 |
$0.06 |
For persons ages 45 through 49 |
$0.09 |
$0.09 |
$0.09 |
For persons ages 50 through 54 |
$0.14 |
$0.14 |
$0.14 |
For persons ages 55 through 59 |
$0.28 |
$0.28 |
$0.28 |
For persons ages 60 through 64 |
$0.60 |
$0.60 |
$0.60 |
For persons ages 65 through 69 |
$0.71 |
$0.71 |
$0.72 |
For persons ages 70 through 74 |
$0.87 |
$1.03 |
$1.20 |
For persons ages 75 through 79 |
$1.07 |
$1.43 |
$1.80 |
For persons ages 80 & Over |
$1.27 |
$1.83 |
$2.40 |
* Premiums for the new Option B age bands (Ages 65-69), (Ages70-74), (Ages 75-79) and (Ages 80 & Over) are being phased-in over a 3- year period. The above chart has the biweekly premiums for 2003, 2004 and 2005.
This amount must be withheld from your pay for each
pay period during which you are in pay status for any
part of the pay period. If your Option B coverage becomes
effective at any time other than the beginning of the pay
period, full withholdings for the entire pay period are
required.
If you are paid on other than a biweekly basis, the
amount withheld from your pay must be prorated and
adjusted to the nearest one-tenth of one cent.
Effective January 2003, the biweekly cost per multiple of Option C coverage
is:
For persons under age 35 |
$0.27
|
For persons ages 35 through 39 |
.34
|
For persons ages 40 through 44 |
.46
|
For persons ages 45 through 49 |
.60
|
For persons ages 50 through 54 |
.90
|
For persons ages 55 through 59 |
1.45
|
For persons ages 60 through 64 |
2.60
|
For persons ages 65 through 69 |
3.00
|
For persons ages 70 through 74 |
3.40
|
For persons ages 75 through 79 |
4.50
|
For persons ages 80 and over |
6.00
|
This amount must be withheld from your pay for each
pay period during which you are in pay status for any
part of the pay period. If your Option C coverage becomes
effective at any time other than the beginning of the pay
period, full withholdings for the entire pay period are
required.
If you are paid on other than a biweekly basis, the
amount withheld from your pay must be prorated and
adjusted to the nearest cent.
If your annual pay is paid during a period shorter
than 52 workweeks, the amount withheld from your pay is
the amount obtained by converting the biweekly rate to an
annual rate and prorating the annual rate over the number
of installments of pay regularly paid during the year.
Example
Faith has Basic insurance and is paid biweekly but
works only 20 pay periods each year.
1. Convert the biweekly rate to an annual rate
($0.15 x 26 pay periods = an annual rate of $3.90 per
$1,000 of coverage).
2. Divide the annual rate by the number of pay
periods ($3.90 ÷ 20 = $0.195 per $1,000 of coverage per
pay period).
This applies to both Basic and Optional insurance. It
is used mostly for classes of employees such as teachers,
who are paid an annual pay but who usually receive their
pay over a 9- or 10-month school year.
It does not apply to classes of employees who
are paid at hourly, daily, or other rates, even though
these rates may be derived from an annual pay rate.
If you are serving in more than one position at the
same time (concurrent
employment), your employing office that pays the
higher (highest) of the salaries must contact your other
employing office(s), confirm the salaries paid, and
assume responsibility for withholding all of the required
premiums from the salary it pays. Withholdings are based
on the combined amount of Basic and Optional coverage
you have from all positions.
The agency that pays the higher (highest) salary must
also pay the full Government contribution, which is based
on the combined amount of Basic insurance you have from
all positions.
This eliminates the need for the other employing
office(s) to make partial withholdings and Government
contributions.
If one of your appointments is as a part-time flexible
schedule employee in the Postal field service, the amount
of Basic and Option B coverage is based on the higher
(highest) of your salaries, not the total.
Withholdings (and Government contributions, when
applicable) are based on the amount of insurance in force
on the last day of the pay period. The
amount of withholdings and contributions for non-Postal
intermittent employees must be determined at the end
of each pay period.
No withholdings or contributions are required between
the end of the pay period in which you separate and the
beginning date of your annuity or compensation.
No payment is required while you are in nonpay status for up to 12 months. This applies to both your share and the
Government contribution. Exception: If you are
in nonpay status while
receiving compensation, withholdings are made from
your compensation. Your employing office pays the Government
contribution until you separate or complete 12 months in nonpay status.
If you are awarded back pay after being fired or
suspended erroneously, no withholdings are made for life
insurance. Exception: If your death or
accidental dismemberment occurs during the period between
your removal and the finding that the agency action was
erroneous, insurance benefits will be paid, and premiums
must be withheld from the back pay awarded.
If you are awarded a settlement with no determination
that your firing or suspension was erroneous, your
employing office will ask Office of Personnel Management
to determine whether your insurance will be reinstated
and whether withholdings are required.
Deductions from pay are made according to the order of
precedence set forth in the Treasury Financial Manual. After
all other required deductions, if your pay for a
particular pay period isn't enough to cover the full
withholdings for life insurance, the amount withheld must
first be applied to Basic insurance. Any balance of pay
remaining must then be applied to Optional insurance
(first to Option B, then Option A, then Option C).
When your employing office expects that during the
next six months or more, your regular pay, after all
other deductions, will not be enough to cover the
required withholdings for the full cost of your
insurance,
your employing office must
notify you.
You can cancel or reduce other nonmandatory
deductions from your pay in order to bring the net pay up
to the required amount.
If you have more than one form of Optional insurance,
and your pay is not enough to cover all the premiums but
is enough for one or more of the coverages, you can
reduce coverage to a point where your pay is enough to
cover the withholdings.
You may also choose to pay premiums directly.
If your annuity or compensation is
insufficient to pay your life insurance premiums, you may
pay your premiums directly to OPM to continue your
coverage. If you choose to make direct payments, you will continue to do
so, even if your annuity or compensation becomes large enough for
withholdings.
If you choose to terminate coverage, your coverage will not be reinstated
if your annuity or compensation becomes large enough for withholdings.
Effective March 1, 1997, the Daily Proration Rule
applies when you transfer to a position serviced by a
different payroll office at a time other than the
beginning of the pay period. Each payroll office (gaining
and losing) is responsible for withholdings and
contributions for the actual time you occupied the
position that it services.
A daily rate must be computed as follows:
Daily withholding and
contribution rate |
|
Biweekly withholding and
contribution rate times 26, then divided by 364 |
Note: The denominator of 364 is always used,
even during a leap year.
For Basic insurance, the daily withholding rate is
$.0107 and the daily Government contribution rate is
$.0054 per $1,000 of coverage. The formula for
determining the amount of withholdings and contributions
for which losing and gaining agencies are responsible is:
Daily rate x
Coverage/$1,000 x Days on payroll
Example
Sam transfers to a different agency on the sixth
day into a biweekly pay period. His Basic Insurance
Amount is $48,000. The losing agency is responsible for:
Withholdings: $.0107 x $48,000/$1,000 x 5 days =
$2.57
Contributions: $.0054 x $48,000/$1,000 x 5 days =
$1.30
The gaining agency is responsible for:
Withholdings: $.0107 x $48,000/$1,000 x 9 days
=$4.62
Contributions: $.0054 x $48,000/$1,000 x 9 days
=$2.33
The payroll office must compute a daily rate for
Optional insurance coverage, using the same formula as
for Basic insurance. (See tables for the biweekly
withholding rates for Option A, Option B, and Option C.)
For Option A, the formula for determining the
amount of withholdings is:
Daily rate x
Days on payroll
The formula for determining the amount of Option B
withholdings is the same as for Basic insurance:
Daily rate x
Coverage/$1,000 x Days on payroll
For Option C, the formula for determining the amount of
withholdings is:
Daily rate x
Number of multiples x Days on payroll
Example
Sam also has Option A, one multiple of Option
B, and two multiples of Option C. He is 38 years old. The losing agency is responsible
for:
Option A: [$.40 x 26 ÷ 364] x 5 days = $.14
Option B: [$.04 x 26 ÷ 364] x $46,000/$1,000 x 5
days = $.66
Option C: [$.34 x 26 ÷ 364] x 2 x 5 days = $.24
The gaining agency is responsible for:
Option A: [$.40 x 26 ÷ 364] x 9 days = $.26
Option B: [$.04 x 26 ÷ 364] x $46,000/$1,000 x 9
days = $1.18
Option C: [$.34 x 26 ÷ 364] x 2 x 9 days = $.44
For retiring employees, your employing office's
responsibility for withholdings and contributions depends
on your age at the time of retirement.
- If the start of your annuity is after
the end of the pay period, your employing office
will make full withholdings and contributions for
the entire pay period.
- If the start of your annuity is before
the end of the pay period, your employing office
will make withholdings and contributions through
the day before the start of your annuity, using
the Daily Proration Rule.
See the CSRS/FERS Handbook section entitled
"Retirement Eligibility" for the rules
governing the starting date of CSRS/FERS annuities.
Example
Tyrone is age 60 and his start of annuity is
6/1/99. The pay period begins on 5/25/99 and ends on
6/7/99. He will carry Basic and Option A into retirement.
His Basic Insurance Amount is $35,000. His employing
office will make withholdings and contributions for the
period from 5/25/99 through 5/31/99.
Basic withholdings: $.0107 x $35,000/$1,000 x 7
days = $2.62
Basic contributions: $.0054 x $35,000/$1,000 x 7
days = $1.32
Option A withholding: ($6.00 x 26 ÷364) x 7 days
= $3.00
Your employing office's responsibility for
withholdings and contributions will
depend on your post-65
election.
For Basic insurance:
- If you elect 75% Reduction,
your employing office will make withholdings and
contributions through the end of the pay period
in which you separate for retirement.
- If you elect 50% Reduction
or No Reduction,
your employing office will make withholdings and
contributions based on the starting date of your
annuity, the same as for retiring
employees under age 65.
For Option A, your employing office will
make withholdings through the end of the pay period in
which you separate for retirement.
For Option B and Option C, if you elect Full Reduction,
your employing
office will make withholdings through the end of the pay period in which
you separate for retirement.
If you elect No Reduction for Option B and Option C, your employing office
will make withholdings based on the starting date of your annuity, the
same as for retiring employees under age 65.
Example
Bob is age 67 and he has elected to carry into
retirement No Reduction of Basic insurance and Full Reduction for 3
multiples of Option B. His Basic Insurance Amount is
$23,000, and Option B coverage is $63,000. The pay period
begins on 9/28/00 and ends on 10/11/00; his start of
annuity is 10/1/00.
His employing office will make withholdings and
contributions for the period from 9/28/00 through 9/30/00
for Basic insurance.
Withholdings: $.0107 x $23,000/$1,000 x 3 days =
$0.74
Contributions: $.0054 x $23,000/$1,000 x 3 days =
$0.37
His employing office will make withholdings
through the end of the pay period for Option B coverage.
Withholdings: $.71 x $63,000/$1,000 = $44.73
Prior to the March 1, 1997 effective date of the Daily
Proration Rule, the "Four-day Rule" applied.
Under the Four-day Rule, the gaining payroll office was
responsible for full withholdings and contributions for
the pay period when the transfer was effective before the
fourth day of the pay period. When the transfer was
effective during the last three days of the pay period,
the losing payroll office made full withholdings and
contributions for the entire pay period. If the transfer
was effective at any other time, each payroll office was
responsible for half of the withholdings and
contributions.
No withholding is made from a lump-sum payment
covering terminal
leave.
See "Effect
of a Living Benefit Election" for information on
withholdings and contributions following a living benefit election.
Your employing office must give you a written notice as soon as it becomes aware of your insufficient
pay situation. The notice will give you information about the choices you can make. If your employing
office cannot give you the notice directly, it must send the notice by first class mail.
You must choose either to terminate or continue your FEGLI coverage, and return the completed
notice to your employing office within 31 days after your receipt of the notice (45 days if you live
overseas). (When your employing office mails your notice, it is considered to be received by you 5
days after the date of the notice.)
If you choose to terminate your FEGLI coverage, or if you do not return the notice making a choice
within the time limit, your coverage will terminate retroactive to the end of the last pay period in which
premiums were withheld from your pay. You will get the 31-day
extension of coverage and conversion right.
Your employing office will prepare a memo indicating the reason for the termination and attach it to the
most recent Life Insurance Election Form (SF 2817) in your file. Your employing office will give you
the information necessary to convert your FEGLI coverage.
This termination is not considered a break in the continuous coverage
needed to continue FEGLI into
retirement.
Your FEGLI coverage will be automatically reinstated when your pay becomes sufficient to make the
withholdings.
You may choose to terminate some of your coverage. If you terminate enough coverage so that your
pay is sufficient for withholding the rest, your salary withholdings can continue. If you terminate some
coverage but your salary is still not enough for the remaining withholdings, you must make direct
payments for the premiums for the remaining coverage.
If you choose to continue your FEGLI coverage, you must agree to pay the premiums directly on a
current basis. You cannot have some of the premiums withheld and make direct payment for the rest.
Your employing office will set up a system to collect the premiums.
You must make premium payments after each pay period in which you are covered, according to the
schedule set by your employing office. If your employing office doesn't receive your payment by the
due date, it will send you a notice stating that for your coverage to continue, you must make payment
within 15 days (45 days if you live overseas) after you receive the notice. If you don't make any further
payments, your coverage will be cancelled retroactive to the end of the pay period for which you last
paid the premium.
If you were unable to make timely premium payments for reasons beyond your control, you may ask
your employing office to reinstate your coverage. Your request must be made in writing within 60 days
from the cancellation date and must include documentation of the reasons. If your employing office
grants your request, your coverage will be restored retroactive to the cancellation date. If your request
is denied, you may ask your employing office to
reconsider its decision.
FEDERAL EMPLOYEES' GROUP LIFE INSURANCE (FEGLI) OPTIONS WHEN PAY IS
INSUFFICIENT FOR WITHHOLDING PREMIUMS
Name of Employee: _____________________________ Date:_____________________
You must respond within 31 days of this notice (45 days for those living overseas) or your
FEGLI coverage will automatically terminate.
We have determined that your salary is not large enough for withholding FEGLI premiums and will
continue to be insufficient on an ongoing basis.
You have three choices: to terminate all of your FEGLI coverage, to terminate some of your FEGLI
coverage, or to continue your FEGLI coverage by paying the premiums directly on a current basis.
TERMINATION: If you choose to terminate your coverage (or if you don't return this notice on
time, and your coverage terminates automatically), the termination will take effect at the end of the last
pay period in which premiums were withheld. Your coverage will continue for an additional 31 days at
no cost to you. During those 31 days, you will be eligible to convert to a nongroup policy. You have
been given the information necessary for you to convert.
You may terminate all of your FEGLI coverage or just a part of it. If you terminate only a part of your
coverage, the premiums for the remaining coverage will be withheld from your salary, if it is large
enough to do so. If your pay is still insufficient for the withholdings for the remaining insurance, you
must make direct payments.
When your pay becomes sufficient for withholding: When your pay again becomes sufficient for
the premium withholdings, any terminated coverage will be reinstated automatically. If you converted
any of your coverage, you must contact the insurance company to terminate the conversion policy.
CONTINUATION: If you choose to continue your FEGLI coverage, you must pay the premiums
directly. Your check (or money order) in the amount of __________ must be made payable to______________________.
Include on the check your name, social security number, a note
that the payment is for "FEGLI premium," and the pay period for which the payment is being made.
Mail to:___________________________________.
By choosing to continue your coverage and make direct premium payments, you are agreeing that
if you do not make the payments, your coverage will be cancelled. If your coverage is cancelled for
nonpayment, you will not have the right to convert, and your coverage will not be reinstated if your
salary eventually becomes large enough for the premium withholdings.
Please check the appropriate space(s) below, sign the notice, and return it to your employing office at______________________________.
If you have any questions, contact _________________________ at ________________. [Insert
name and phone number of agency contact]
TO BE COMPLETED BY EMPLOYEE:
I have read this notice, and I understand my choices. I choose the following:
1. _____ I choose to terminate all my FEGLI coverage. I understand that the coverage will be reinstated
automatically when my pay becomes sufficient for withholding the premiums.
2. I choose to terminate only the following FEGLI coverage(s):
________ Option C (Show number of multiples [1-5] you want to terminate)
________ Option A
________ Option B (Show number of multiples [1-5] you want to terminate)
I understand that the premium for the coverage(s) that remain will be withheld from my pay if it
is sufficient for doing so; otherwise I must pay my premiums directly on a current basis.
3. _____ I choose to continue my FEGLI coverage. I understand that if I do not make the payments on
a current basis, my coverage will be cancelled and will not be reinstated when my pay becomes
sufficient for withholding the premiums.
______________________________________ (Employee's signature)
___________________(Date)
(End of Notice)
When your coverage is cancelled because you did not pay your premiums:
If you chose termination, or if your life insurance terminated because you didn't return the required
notice, your FEGLI coverage is automatically reinstated when your pay becomes sufficient to cover the
withholdings.
Your employing office must prepare a memo noting the reinstatement of your coverage and attach it to
the most recent Life Insurance Election Form (SF 2817) in your file. If you converted any of your
coverage, you must terminate the conversion policy.
If you chose direct pay and made the premium payments, your employing office must start withholding
premiums from your pay as soon as your pay becomes sufficient. If your employing office has
contracted with the National Finance Center (NFC), your employing office must notify NFC that
premiums are again being withheld from your pay, so that NFC can close out your account.
If you chose direct pay but you did not make the premium payments, your coverage remains cancelled
even when your pay becomes sufficient to cover the withholdings.
An employing office remits life insurance withholdings
and contributions to OPM on the same date it pays its
payroll.
The method for remitting payments and supporting
accounting information to OPM is the Retirement and
Insurance Transfer System (RITS).
OPM will credit the total amount reported for life
insurance to the Employees' Life Insurance Fund.
Payroll offices adjust errors in withholdings and
contributions on a subsequent payroll and include the
adjustments in a subsequent withholdings and
contributions report.
Your employing office ensures that your individual
payroll record shows not only the regular (current)
deductions as life insurance withholdings, but also the
adjustments.
When too much money has been withheld from your pay -
or when withholdings have been made when you are
ineligible or have waived coverage - your payroll office
adjusts the withholdings on a subsequent payroll on which
your name appears. This adjustment automatically corrects
any excess agency contribution.
When too little money - or no money - has been
withheld from your pay, your payroll office must remit
the payment to OPM no later than 60 calendar days after
the date it determines the amount of the underdeduction. This
payment must be made to the Office of Personnel Management
regardless of whether or when your employing office recovers the
underdeduction from you.
The underdeduction represents an overpayment of pay to
you. Your employing office must determine whether to
waive collection of the overpayment, in accordance with 5
U.S.C. 5584, as implemented by 4 CFR chapter 1,
subchapter G. This provides that an employing office can
waive recovery of the overpayment if, in its judgment,
you are without fault and recovery would be against
equity and good conscience. (If your employing office is
excluded from the provisions of 5 U.S.C. 5584, it can use
any applicable authority to waive the collection.)
If your employing office waives the collection of the
unpaid deductions, it must make the payment, along with
any applicable Government contributions, out of its own
funds.
When an adjustment in withholdings is necessary after
you have separated from service, your payroll office must
make the adjustment in your final pay (or payment to your
beneficiary or estate).