FEGLI life insurance rates changing…

The Office of Personnel Management (OPM) is announcing changes in premium rates for certain Federal Employees’ Group Life Insurance (FEGLI) categories. These include changes to premium rates for Employee Basic Insurance, Option A (most age bands), Option B (most age bands), Option C (most age bands), and Post-Retirement Basic Insurance. These rates will be effective the first pay period beginning on or after October 1, 2021.

Most employees are eligible for FEGLI coverage. FEGLI provides group term life insurance. As such, it does not build up any cash value or paid-up value. It consists of Basic life insurance coverage and three options. In most cases, a new Federal employee is are automatically covered by Basic life insurance and the employee’s payroll office deducts premiums from their paycheck unless they waive the coverage. In addition to the Basic, there are three forms of Optional insurance an employee can elect.  An employee must have Basic insurance in order to elect any of the options. Unlike Basic, enrollment in Optional insurance is not automatic an employee must take action to elect the options.

The cost of Basic insurance is shared between the employee and the Government.  An employee pays 2/3 of the total cost and the Government pays 1/3. An employee’s age does not affect the cost of Basic insurance. An employee pays the full cost of Optional insurance, and the cost depends on an employee’s age.

The Office of Federal Employees’ Group Life Insurance (OFEGLI), which is a private entity that has a contract with the Federal Government, processes and pays claims under the FEGLI Program.

FEGLI premium rates are assessed based on Program experience in accordance with FEGLI statutes and OPM’s Annual FEGLI Rate Review Process. The premium rates in the FEGLI program represent estimates of premium income necessary to pay future expected benefits costs. The rates for all coverage categories are specific to the experience of the FEGLI group and are not based on mortality rates within the general population. Actuarial analysis of changing mortality rates makes periodic premium adjustments necessary.

OPM has completed a study of funding and claims experience within the FEGLI Program. Based on this updated actuarial analysis of actual claims experience, OPM has determined that changes are required to Employee Basic, Option A, Option B, Option C and Post-Retirement Basic Insurance premiums. These changes reflect updated mortality and claims rates from actual program experience within each FEGLI category. The legislative structure of the FEGLI Program assumes that we set premium rates for each age band independently of the other bands so that each age band is financially self-supporting.

The new FEGLI premium rates for Basic, Option A, Option B, Option C and the Post-Retirement Basic Option are as follows.

FEGLI Rates Effective October 1, 2021

Employee Basic Insurance (per $1,000 of Insurance)

  Bi-weekly Monthly
Employee $0.16  $0.35 
     

Post-Retirement Basic Insurance for Annuitants

[Monthly rate per $1,000 of insurance]

  Before age 65 After age 65
75% Reduction $0.35  No cost
50% Reduction 1.0967 $0.75 
No Reduction 2.5967 2.25


Option A (for $10,000 of Insurance)

Age band Bi-weekly Monthly
<35 $0.20  $0.43 
35-39 0.2 0.43
40-44 0.3 0.65
45-49 0.6 1.3
50-54 1 2.17
55-59 1.8 3.9
60+ 6 13


Option B (per $1,000 of Insurance)

Age band Bi-weekly Monthly
<35 $0.02  $0.04 
35-39 0.02 0.043
40-44 0.03 0.065
45-49 0.06 0.13
50-54 0.1 0.217
55-59 0.18 0.39
60-64 0.4 0.867
65-69 0.48 1.04
70-74 0.86 1.863
75-79 1.8 3.9
80+ 2.88 6.24

 

Option C (per Multiple of Insurance)

Age band Bi-weekly Monthly
<35 $0.20  $0.43 
35-39 0.24 0.52
40-44 0.37 0.8
45-49 0.53 1.15
50-54 0.83 1.8
55-59 1.33 2.88
60-64 2.43 5.27
65-69 2.83 6.13
70-74 3.83 8.3
75-79 5.76 12.48
80+ 7.8 16.9

Shawn McCoy is the President and Founder of Federal Employee Benefits Advocates, LLC (FEBA) an educational company specializing in Federal Employee Benefits. Mr. McCoy is an expert on Federal employee benefits and over the last decade has spoken to over 30,000 Federal employees. For more details about the programs offered by FEBA, check their website. www.febadvocates.com