Reg Jones Expert's View

In recent weeks we have looked at survivor annuities provided to children and the special policies regarding disabilities. This time, let’s turn to insurance benefits.

Life insurance
If you are an employee or retiree who is covered by the Federal Employee Group Life Insurance (FEGLI) program, the proceeds of your life insurance are paid to your designated beneficiary, if you designated one—most commonly but not necessarily a surviving spouse—and then to any contingent beneficiaries if that person is no longer living at the time of your own death—most commonly but not necessarily a child/children. If you didn’t designate beneficiary, a standard order of precedence applies, starting with a surviving spouse and then to a child/children.

Health benefits
If you die while enrolled in the Federal Employees Health Benefits Program (FEHB) program and have self and family coverage, all your survivors who meet the definition of “family member” will automatically be able to continue that coverage, as long as any one of them receives a survivor annuity. Likewise, if you are covered by the self plus one option, and that “one” is your eligible child, he or she can continue that coverage.

In the past, a child could only continue coverage under a survivor parent’s FEHB plan until he or she reached age 22. However, the law changed. As a result, if you are enrolled in a self and family option of your plan and have a child who is under age 26, he or she can be covered by it, even if married (note: coverage would not extend to your child’s spouse or to any child of that marriage, however). The same is true if the “one” in your self plus one coverage is your child.

If there is no surviving parent, there wouldn’t be any annuity payments from which your child’s FEHB premiums could be deducted. At that point, the only option for your child would either be to 1) convert to an individual policy, which has no time limit or 2) apply for temporary continuation of coverage (TCC) which can continue for up to 36 months. In either case, the child would have to pay the full cost and, if enrolled in TCC, an additional 2 percent for administrative expenses.

The rules for continuing FEHB coverage are different for a disabled child and we will explore that next.

Read more on the Federal Employees Health Benefits program at ask.FEDweek.com