Whether Option C coverage is a good choice for you first depends on whether you have a spouse or any children who are under age 22. Image: Jirsak/Shutterstock.com
By: Reg JonesThree weeks ago, I began this Federal Employees’ Group Life Insurance program series with an explanation of the cost and benefits of Basic Insurance, which you are enrolled in automatically unless you decline the coverage, and for which the government pays one-third of the premium cost.
Over the next two weeks I wrote about Option A (Standard Optional Insurance) and Option B (Additional Optional Insurance), for which you pay 100 percent of the premiums. At the same time, I pointed out that while you pay all of the premiums for that insurance, the government has negotiated lower premium rates than if you tried to purchase that coverage from a private insurer.
This time, I want to spend a little time explaining the last of the options: Option C (Family Optional Insurance) in which you as a federal employee or retiree also pay the full cost—but in which you are the beneficiary of the insurance, not the covered person.
If you are covered by Basic Insurance, Option C lets you purchase coverage for your spouse and any unmarried dependent children under age 22 (or, if age 22 or over, incapable of self support before reaching age 22). Eligible dependent children include your natural children, adopted children, stepchildren, if they live with you in a regular parent-child relationship, recognized natural children and foster children, if they live with you in a regular parent-child relationship.
If you enroll in Option C, the amount of the coverage can be up to five multiples of $5,000 for a spouse and $2,500 for each eligible child. The cost of bi-weekly premiums is based on your age and the multiples of coverage you elect. It begins at $0.20 per multiple of coverage up to age 35 and rises to $7.80 per multiple at age 80 or older.
If you are a retiree, you won’t have to pay any premiums if you are willing to let the value of that coverage decrease by 2 percent per month beginning at age 65 or when you retire, whichever is later, until it reaches zero. However, if you decide to maintain the full level of coverage, your monthly premiums will vary depending on your age—for example, $6.13 per month from age 65 to 69 and $16.90 from 80 on. Like all other optional coverage, Part C coverage can be canceled at any time.
Whether Option C coverage is a good choice for you first depends on whether you have a spouse or any children who are under age 22. If you don’t, you should have stopped reading before you got this far. If you do have a spouse or children, it may be worth the cost, but only if you accept the fact that Option C will cover only limited financial needs that may arise if one or more of your family members were to die before you do.
This concludes the articles on the costs and benefits of Basic and Optional insurance. Next week, I want to fill you in on the circumstances under which an employee who isn’t covered by Basic FEGLI can enroll or, if already enrolled, can increase that coverage.
Former head of retirement and insurance policy at the Office of Personnel Management, and longtime FEDweek contributor, Reg Jones is known throughout the federal workforce community as an authority on pay and benefits.
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