Daily Rules, Proposed Rules, and Notices of the Federal Government
This notice announces changes to FEGLI Option B (most age bands), Option C (all age bands) and Post-Retirement Basic Insurance. The last premium change for some age categories of Option B and Option C and Post-Retirement Basic insurances was on the first pay period beginning on or after January 1, 2003 (Option B and Option C coverages had a three-year phase-in of premium changes ending in January 2005). Those changes coincided with the implementation of the Federal Employees' Life Insurance Improvement Act, Public Law 105-311, (112 Stat. 2950) which provided expanded coverage choices for employees, retirees, and compensationers with Option B and Option C coverage past age 65.
The premiums 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.
Accordingly, 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 Option B, Option C and Post-Retirement Basic 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 premiums for each age band independently of the other bands, so that each age band is financially self-supporting.
Based on updated experience, premiums for all Option B age bands, other than the oldest groups (ages 75-79 and ages 80 and over), will decrease. Premiums for Option C age bands under age 45 will also decrease. However, a rate increase is needed for Option C premiums for those ages 45 and over. Premiums for Post-Retirement Basic FEGLI will also increase slightly for those enrollees who elect the 50% Reduction and No Reduction. These increases are necessary due to the experience of the group and are necessary to sufficiently fund the projected future increases.
We will issue guidance to all agencies for the purpose of counseling employees and we will notify affected annuitants directly via OPM's Office of Retirement Services. The FEGLI premium rates will be maintained on the FEGLI Web site
The new FEGLI premium rates for Option B, Option C and the Post-Retirement Basic Option are as follows: