Retirement & Financial Planning Report

One valuable feature of the Federal Long Term Care Insurance Program is its more generous rules regarding coverage in retirement, as compared with the FEHB health insurance and FEGLI life insurance programs.

The “five-year rule” in both the FEHB and FEGLI requires continuous coverage for the five years leading up to retirement (or from the first opportunity to enroll, if that occurred less than five years before). Further, in both those programs retirees generally cannot newly enroll if they are not already enrolled (the exception being those who are rehired by the government and who gain eligibility to enroll as employees).

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In the FLTCIP, in contrast, retirees (and other eligible persons, including certain family members) may enroll at any time, subject to the same underwriting requirements that apply to employees and their eligible family members after an initial period following hiring in which lesser requirements apply.

In addition, while FEHB coverage can be changed outside an open season only when certain life events occur—such as marriage or the birth or adoption of a child—an FLTCIP enrollee can change coverage levels at any time (outside its rare open seasons, FEGLI allows changes for life events or, for active employees only, on presenting proof of insurability).

An FLTCIP enrollee can decrease to any options available under the program, and premiums (which will be based on the age at the original grant of coverage) will also decrease. Enrollees do not have to undergo new underwriting in order to decrease coverage. However, there is no “paid-up benefit” crediting for premiums already paid for a higher level of coverage.

An enrollee also at any time may request an increase in coverage. However, the enrollee would have to provide, at his or her own expense, evidence of good health that is satisfactory the carrier. The additional premium will be based on the enrollee’s age and the premium rates in effect at the time the increase takes effect. An FLTCIP enrollee also may cancel coverage at any time.

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