PAYROLL OFFICE LETTER

U. S. Office of Personnel Management

Number: P-97-15 Date: November 14, 1997

SUBJECT: FEDERAL EMPLOYEES' GROUP LIFE INSURANCE: NEW MAXIMUM

AMOUNTS

This letter is to advise you that effective with the first pay period beginning on or after

January 1, 1998, the maximum allowable amounts of Basic and Option B Federal Employees'

Group Life Insurance (FEGLI) coverage will increase. By law, an employee's Basic

Insurance Amount cannot exceed the annual rate of basic pay payable for positions at level II

of the Executive Schedule, rounded to the next higher multiple of $1,000, plus $2,000. The

amount of Option B is also capped by law, based on the salary at level II of the Executive

Schedule. 

Since the January, 1998 pay raise will apply to Executive Schedule employees, the maximum

insurance amounts will increase. The new maximum for Basic insurance

will be $139,000 (from $136,000). The new maximum for each multiple of Option B will be

$137,000 (from $134,000). See the attached BAL 97-212 for further guidance.

If you have any questions on this matter, please call us on (202) 606-0666 or send us an

email, finance@opm.gov.

Robert A. Yuran, Chief

Financial Policy Staff

Retirement and Insurance Service 

Attachment (1)
 

Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System

United States

Office of Personnel Management

Retirement and Insurance Service

Benefits Administration Letter

Number: 97-212 Date: October 31, 1997 

Subject: Federal Employees' Group Life Insurance: New Maximum Amounts

General Information The amounts of Basic and Option B coverage available

under Federal Employees' Group Life Insurance (FEGLI)

are based on an employee's salary, but they are subject to

certain maximums.

Effective with the first pay period beginning on or after

January 1, 1998, the maximum allowable amounts of Basic

and Option B FEGLI coverage will increase.

________________________________________________

Basis for Maximums By law, an employee's Basic Insurance Amount (BIA)

cannot exceed the annual rate of basic pay payable for

positions at level II of the Executive Schedule, rounded to

the next higher multiple of $1,000, plus $2,000. Based on

this, the current maximum BIA is $136,000.

The amount of Option B is also capped by law, based on the

salary at level II of the Executive Schedule. The current

maximum amount of each multiple of Option B is $134,000.

________________________________________________

New Maximums Since the January pay raise will apply to Executive Schedule

employees, the maximum insurance amounts will increase.

The new salary for level II of the Executive Schedule will be

$136,700. Therefore, the new maximum for Basic

insurance will be $139,000. The new maximum for each

multiple of Option B will be $137,000.

________________________________________________

Effect on Option A Normally the amount of Option A coverage is $10,000. 

However, if an employee's annual rate of pay is more than
the sum of the annual rate of basic pay for level II Executive

Schedule positions plus $10,000, Option A coverage

automatically increases. The amount of Option A coverage

in this case is the difference between the annual rate of pay

(rounded to the next higher thousand, if not already an even

thousand) and the maximum BIA.

If you have an employee who has more than $10,000 in

Option A coverage because of this provision, you will have

to recalculate the amount of Option A coverage based on

the increase in the maximum BIA.

Example:

An employee earns $149,400. The current maximum BIA is

$136,000. If this employee has Option A, the current

amount of his/her Option A coverage would be $14,000

($149,400, rounded up to $150,000, minus the $136,000

BIA).

In January, this same employee's Option A coverage would

be reduced to $11,000 ($150,000 minus the new $139,000

maximum BIA).

For employees in this situation, you will need to adjust the

withholdings for Option A coverage, as well as the

withholdings for Basic and Option B (if applicable).

______________________________________________________________________________

Abby L. Block, Chief

Insurance Policy

 and Information Division