Posted on Thursday, 13th August 2015 by

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Even if you think, like I did in 2004 when the last open season was offered, that you have sufficient coverage you may be surprised at what you discover. I wish I knew then what I know now about these attractive low cost options.

OPM recently announced that a 2016 Federal Employees Group Life Insurance (FEGLI) Open Season will be available to change your coverage starting September 1, 2016 through September 30, 2016. If you are approaching retirement this is an excellent time to take advantage of low cost insurance options that you may not have thought of when you first signed up. FEGLI rate changes will also take effect the first pay period beginning on or after January 1, 2016. Employees’ basic insurance premiums won’t change and most rates for Option A, B, and C will decrease. Rates will increase for older Option A, B and C age bands and the 50% reduction and the no reduction rates will increase for retirees.

Active federal employees can increase their coverage at any time however they must take a physical to qualify. They can also add coverage for Qualifying Life Events. The benefit of increasing coverage during an open season is that you aren’t required to take a physical. Unfortunately, retirees can’t increase their coverage even during an open season, they only have the option, at any time, to reduce their coverage.

The Federal Register announcement states , “Open Seasons are one method by which healthy individuals can be attracted to join and reduce the risk profile of the program. Some less healthy individuals may elect coverage during Open Seasons. To mitigate this risk, the effective date for employees in active pay status who make an Open Season election would be delayed one full year to October 1, 2017, subject to FEGLI law and regulation, including applicable pay and duty status requirements.”

Now is a good time for all participants to evaluate their insurance needs and to take advantage of low cost insurance FEGLI options for you and your family. Basic and Options A, and C are reasonable. Option B, multiples, can get very expensive as you age and many seek to replace B with lower cost private insurance providers. If you do this be sure to check out the insurance provider’s rating first.

CAUTION: Prior to my retirement, in my mid forties, I was approached by an insurance company that offered to beat the FEGLI rates. Their projections showed considerable cost savings as I aged and I decided to drop Option A, and the Family Part C Option. The insurance company, due to lower than projected interest rates, reduced the insurance coverage unless we agreed to more than double our premiums! Fortunately I kept Basic coverage which at age 65 is free if you elect the 75% reduction. Option A and C have similar features. You can add or increase Part C family coverage and the inexpensive Option A this open season if desired. Family coverage can be kept for as long as you need it. For more information on Basic, Part A, B, and C coverage read the article titled FEGLI Insurance Options (Part 2) – Options A, B & C.

In the above mentioned article I state,” After retirement you can’t increase coverage, you can only reduce your coverage. If you remotely think you or your spouse will need insurance it’s best to elect that coverage now and if you run into a bind down the road you can always reduce multiples or certain options altogether if desired. If you do decided to obtain quotes from private insurance companies for Part B alternatives consider keeping your Basic, Part A and C options. They may try to talk you into dropping all of your FEGLI coverage and they can be convincing. From my perspective the FEGLI insurance costs for Basic, A, and C are reasonable and depending on what you elect in retirement two of the three are FREE when you reach age 65.”

The last FEGLI Open Season was in 2004 and prior to that 1999. Open seasons are few and far between. Take the time NOW to evaluate your insurance needs and take advantage of this opportunity.

Request a Retirement Benefits Summary & Analysis. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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    Posted in BENEFITS / INSURANCE, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION | Comments (1)


    One Response to “2016 FEGLI Open Season – Take Advantage of this Opportunity”

    1. Ellen Hall, Thanks for Your Posts Says:

      Thank you so much for sharing the wisdom you continue to acquire about being a Fed. We’ve been retired since 2010 and still so much comes up that we can change or modify to improve our situation. Your stories about the contractor breaking the drainpipe and your friend asking about your choice of Basic over Standard BCBS and revamping your estate docs are incredibly timely for us. And Self Plus One! Who really expected it to ever happen? Wishing you a continued successful retirement and good health, and thank you for your willingness to share your thoughts and experiences. You should be required reading for all who enter Federal Service!