The Federal Government established the Federal Employees’ Group Life Insurance (FEGLI) Program on August 29, 1954. It is the largest group life insurance program in the world, covering over 4 million Federal employees and retirees, as well as many of their family members.
Most employees are eligible for FEGLI coverage. FEGLI provides group term life insurance. As such, it does not build up any cash value or paid-up value. It consists of Basic life insurance coverage and three options. In most cases, if you are a new Federal employee, you are automatically covered by Basic life insurance and your payroll office deducts premiums from your paycheck unless you waive the coverage. In addition to the Basic, there are three forms of Optional insurance you can elect. You must have Basic insurance in order to elect any of the options. Unlike Basic, enrollment in Optional insurance is not automatic — you must take action to elect the options.
The cost of Basic insurance is shared between you and the Government. You pay 2/3 of the total cost and the Government pays 1/3. Your age does not affect the cost of Basic insurance. You pay the full cost of Optional insurance, and the cost depends on your age.
Federal Long Term Care Insurance Plan
The Federal Long Term Care Insurance Plan is a group plan provided by the U.S. Office of Personnel Management in conjunction with John Hancock Long Term Care Insurance. Many Federal employees are eligible to apply for coverage including Federal and U.S. Postal Service employees and annuitants, active and retired members of the uniformed services, and qualified relatives. The Federal program is the largest group long term care insurance plan in the United States with over 200,000 plan participants.
Advantages To The Federal Long Term Care Insurance Plan (FLTCIP):
- Pre-Existing Health Conditions – As any group plant, Primary Insureds in poorer health will be accepted for coverage under the Federal program, however their family members must pass underwriting standards. Family members in poor health may not be accepted.
- No Excusion for Acts of War – For those in the military, this may be a positive benefit.
Disadvantages To The Federal Long Term Care Insurance Plan (FLTCIP):
- Expensive – Premium rates are higher when unhealthy people can enroll alongside healthy individuals. People in generally good health can get competitive coverage and pay less with a private plan.
- Restricted Eligibility – Only those in the Federal family may apply.
- Family Health Restriction – Family members are screened for health and are not accepted automatically.
- No Spousal Discount – Marrieds who apply together do not enjoy discounted rates.
- No Shared Care Benefits – Policy benefits cannot be blended between the couple.
- No Survivorship Benefit – Survivor’s policy is not “paid up” if their insured spouse dies.
Although the Federal Long Term Care Insurance Plan does not offer many of the benefits that private long term care insurance does, it may be the only way those already experiencing health problems can obtain long term care coverage. Applicants with good health will have much greater choice and pay less for their policy with private long term care insurance.
Helpful Links
- How to change your address (Postal Employees):
http://www.postalemployeenetwork.com/employee-change-of-address.htm - Claim form for FEGLI benefits:
http://www.opm.gov/FORMS/PDF_FILL/fe6.pdf - Designation form for FEGLI benefits:
http://www.opm.gov/forms/pdf_fill/sf2823.pdf - FEGLI enrollment form:
http://www.opm.gov/forms/pdf_fill/sf2817.pdf - Federal Employees Health Benefits Program for Retirees and Surviving Annuitants
http://www.opm.gov/forms/pdfimage/RI79-2.pdf - FAQ about Medicare and FEHB:
http://www.opm.gov/insure/health/medicare/index.asp#faq
