‘Paid Up’ Provision Also a Consideration

OPM has said that about 60 percent of affected enrollees will be eligible for the “paid-up” provision. That provision, which hasn’t been applicable in the program until now, kicks in if a person’s premium increases by a certain percentage over the cost at enrollment, including any prior increases such as the one that took effect for most enrollees in 2010. The applicable percentages differ according to a person’s age at enrollment and are set by standard insurance industry practices. Under that “contingent benefit upon lapse” provision, an enrollee can stop paying premiums and remain eligible for a lesser benefit: a lifetime maximum of up to the total premiums paid to date or 30 times the daily benefit amount in the policy, whichever is larger. The notice letters inform those who are eligible. This differs from canceling the policy, which leaves the person with no eligibility for any future benefit (and no return of any amount already paid in).