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: 98-209 Date: December 18, 1998

Subject: Federal Employees’ Group Life Insurance: Public Law 105-311 - Foster

Children and Miscellaneous Updates

GENERAL INFORMATION

________________________________________________

Background Pub. L. 105-311, Federal Employees Life Insurance

Improvement Act, enacted October 30, 1998, made

numerous changes to the Federal Employees’ Group Life

Insurance (FEGLI) Program.

These changes include the coverage of foster children under

Option C, the elimination of the maximums under Basic and

Option B, the election of unreduced Option B and Option C

at retirement, the portability of Option B, direct payment of

premiums, and the availability of increased coverage under

Option C. The new law also requires OPM to conduct an

open enrollment period for FEGLI.

________________________________________________

Purpose The purpose of this Benefits Administration Letter (BAL) is

to provide detailed guidance regarding the coverage of

foster children under Option C.

This BAL also discusses the elimination of the maximums

under Basic and Option B, the effective date of the Option

B and C changes, the establishment of a FEGLI Hotline,

and the revised dates for the upcoming open enrollment

period.

______________________________________________________________________________

FOSTER CHILDREN

________________________________________________
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What Changed? Prior to the enactment of Pub. L. 105-311, foster children

were not eligible as family members under Option C

coverage. The new law changes the definition of “family

member” to include foster children, if they live with the

employee (or annuitant) in a regular parent-child

relationship.

The change was effective October 30, 1998.

________________________________________________

What Are the Requirements The requirements for a foster child to be eligible for

for a Foster Child’s coverage under Option C are the same as those for a

Eligibility? foster child to be covered under the Federal Employees

Health Benefits (FEHB) Program.

These requirements are:

• The child must be unmarried and under the age of 22

(if the child is over age 22, he/she must be incapable

of self-support because of a disabling condition that

started before age 22);

• The child must be living with the employee;

• The parent-child relationship (see definition below)

must be with the employee, not the biological

parent;

• The employee must be the primary source of

financial support for the child; and

• The employee must expect to raise the child to

adulthood.

A child placed in an employee’s home by a welfare or social

service agency under an agreement where the agency retains

control of the child or pays for maintenance does not qualify

as a foster child.

________________________________________________

What Is Meant by a A “regular parent-child relationship” means that the

Parent-Child Relationship? employee is exercising parental authority, responsibility, and

control over the child by caring for, supporting, disciplining,

and guiding the child, including making decisions about the

child’s education and health care.

NOTE: There is no prohibition against a foster child’s

biological parent living in the employee’s home. Nor is

there any prohibition against a biological parent providing

some financial support. However, the parent-child
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relationship must be with the employee, and the primary

source of support must be the employee.

________________________________________________

What about Grandchildren? Grandchildren, as such, are not eligible family members. 

However, grandchildren can qualify as foster children if all

the requirements are met. This means the grandchild must

be living with the employee; the employee must be the

primary source of financial support for the grandchild; the

parent-child relationship must be with the employee, not

with the biological parent; and the employee must expect to

raise the grandchild to adulthood.

________________________________________________

What Does an Employee An employee must sign a certification (sample attached)

Have to Do to Get a stating that the foster child meets all the requirements and

Foster Child Covered? stating that he/she will notify the employing office if the

child marries, moves out of the home, or stops being

financially dependent on the employee.

________________________________________________

What Happens If the Foster If the foster child moves out of the employee’s home to

Child Moves out of the live with a biological parent, that child loses eligibility

Employee’s Home to Live under Option C (as well as under FEHB).

with a Biological Parent?

That child cannot again be covered as a foster child unless

the biological parent dies, is imprisoned, or becomes unable

to care for the child due to a disability, or unless the

employee obtains a court order taking parental responsibility

away from the biological parent.

________________________________________________

What Do Agencies Have Agencies must notify employees of the eligibility

to Do? requirements for covering a foster child under Option C. 

We have attached a sample notice to employees.

If an agency has already made a determination of eligibility

for a foster child’s coverage under the FEHB Program, no

additional certification is required. Exception: if the

employee does not have Option C and wishes to elect it

because of acquiring a foster child, he/she will have to

complete a new certification, as discussed below.

________________________________________________

What if an Eligibility If an eligibility determination has not yet been made, an

Determination Hasn’t Been employee who has a foster child can request the

Made Yet? certification form from the agency, so that eligibility can be
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established. 

When a claim is filed upon the death of a foster child, the

agency must verify that it has determined eligibility for the

foster child. If there is no certification on file at the time of

a foster child’s death, the agency will have to obtain the

certification from the employee before the Office of Federal

Employees’ Group Life Insurance can pay the claim.

________________________________________________

Is Having a Foster Child Acquiring a foster child is a life event that allows an

Considered a Life Event? employee to elect Option C (or to increase the multiples of

Option C, once that provision of the law becomes effective). 

The same 60-day time limit for making the election applies

as for acquiring any other eligible family member. 

HOWEVER, a child may be in an employee’s home awhile

before the employee decides that he/she is going to raise the

child to adulthood, or that he/she is going to be supporting

the child on an ongoing basis - in other words, before the

requirements for the child’s eligibility are met. Therefore,

the 60-day time frame for electing Option C will begin on

the day the employee completes the certification form. 

Option C coverage will become effective on the later of:

• the date the employing office receives the SF 2817

(if it is received within 60 days after the employee

completes the certification), or

• the date the employing office receives the

certification (if the employee submitted the SF 2817

before the certification).

NOTE: While an employee who already has a foster child

certification on file for FEHB coverage doesn’t have to

complete a new certification for FEGLI, a new certification

is required if the employee doesn’t have Option C and

wants to elect it. If such an employee doesn’t complete a

new certification, there is no way to start counting the 60-

day time limit; the employee would then have to wait until

the open enrollment period to elect Option C.

While having a foster child counts as a life event for the

election/increase of Option C, it does not count as a life

event for the election/increase of Option B.

________________________________________________

Can a Foster Child Receive No. While foster children are now considered eligible

Benefits under the Order of family members for coverage under Option C, they are
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Precedence When an not included under the order of precedence for receiving

Employee Dies? benefits when an employee dies. If an employee wants

his/her foster child to receive FEGLI benefits upon the

employee’s death, the employee must still complete a

designation of beneficiary.

______________________________________________________________________________

MISCELLANEOUS UPDATES

________________________________________________

Elimination of Maximums An employee’s Basic Insurance amount (BIA) is his/her

annual rate of basic pay, rounded to the next higher

thousand, plus $2,000. Each multiple of Option B coverage

is equal to an employee’s annual pay, rounded to the next

higher thousand.

Until the enactment of Pub. L. 105-311, the BIA was

limited to $139,000, and each multiple of Option B was

limited to $137,000. 

These maximums have been removed, effective with the first

pay period beginning on or after October 30, 1998. Since

the maximum on Basic insurance has been eliminated, there

is no longer any need to increase the amount of Option A

coverage. Therefore, effective with the first pay period

beginning on or after October 30, 1998, Option A can no

longer exceed $10,000.

Agencies whose payroll systems need to be modified to

reflect the proper insurance amounts will have to make

retroactive adjustments in the withholdings for Basic and

Option B (and Option A, if applicable), and in the

Government contribution for Basic insurance.

________________________________________________

Effective Date for Changes Pub. L. 105-311 allows retiring employees to elect

Affecting Options B and C unreduced Option B and Option C. The new law also

provides for a three-year portability demonstration project,

which allows employees whose coverage is terminating due

to separation or completion of 12 months in nonpay status

to continue Option B coverage by making direct premium

payments, if they meet the five-year/first opportunity

requirement. The new law also allows employees to elect

up to five multiples of the current amount of Option C

coverage.

The effective date for these provisions will be April 24,
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1999. We will provide details in a later BAL.

________________________________________________

FEGLI Hotline We have established a Hotline for questions relating to the

new FEGLI legislation. The FEGLI Hotline number is 202-

606-0163.

Other FEGLI questions, as well as questions relating to the

FEHB Program, should continue to be directed to our

Information staff on 202-606-0191.

________________________________________________

Revised Dates for Open In BAL 98-208 we announced the dates of the open

Enrollment Period enrollment period as April 1, 1999, through May 31, 1999.

After discussions with several agencies, we have changed

the dates of the open enrollment period to allow maximum

preparation time and notification to employees. Therefore,

the dates of the open enrollment period will be April 24,

1999, through June 30, 1999.

Elections made during the open enrollment period will

become effective the first pay period beginning on or after

April 23, 2000, which follows a pay period during which the

employee was in pay and duty status.

Detailed guidance regarding the open enrollment period will

be issued in a later Benefits Administration Letter.

______________________________________________________________________________

Abby L. Block, Chief

Insurance Policy

 and Information Division

Attachments
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Attachment 1

CERTIFICATION FORM FOR FOSTER CHILDREN

I have been informed of the following requirements for coverage of a foster child under Option C

of the Federal Employees’ Group Life Insurance Program and/or the Federal Employees Health

Benefits Program.

1. The child must be unmarried and under the age of 22. (If the child is over age 22, he/she

can only be covered if he/she is incapable of self-support because of a disabling condition

that began before age 22. I must provide documentation of this to my employing office.)

2. The child must be living with me.

3. The parent-child relationship must be with me, not with the biological parent. This means

that I am exercising parental authority, responsibility, and control; I am caring for,

supporting, disciplining, and guiding the child; I am making the decisions about the child’s

education and health care.

4. I must be the primary source of financial support for the child.

5. I must expect to raise the child to adulthood.

I understand that if the child moves out of my home to live with a biological parent, he/she loses

coverage and cannot ever again be covered as a foster child unless the biological parent dies, is

imprisoned, or becomes incapable of caring for the child due to a disability, or unless I obtain a

court order taking parental responsibility away from the biological parent.

This is to certify that: (name of child) lives with me; I have a regular parent-child relationship

with (name of child), as described above; I am the primary source of financial support for (name

of child); and I intend to raise (name of child) into adulthood.

I will immediately notify my employing office (and the health benefits carrier, if the child is

covered under FEHB) if the child marries, moves out of my home, or ceases to be financially

dependent on me.

______________________________________ _______________________

(Print name of employee/annuitant) (Employee/annuitant/s Social Security #)

______________________________________ _______________________

(Signature of employee/annuitant) (Date)
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Attachment 2

NOTICE TO EMPLOYEES REGARDING FOSTER CHILD COVERAGE

Effective October 30, 1998, foster children are eligible for coverage under Option C of the

Federal Employees’ Group Life Insurance (FEGLI) Program. (Option C is the Optional coverage

on your family members.)

WHAT ARE THE REQUIREMENTS FOR COVERING A FOSTER CHILD?

The requirements for a foster child’s eligibility under Option C are the same as those for eligibility

under the Federal Employees Health Benefits (FEHB) Program. All the requirements must be

met. These requirements are:

1. The foster child must be unmarried and under the age of 22. (If over age 22, he/she must

be incapable of self-support because of a disabling condition which began before the child

turned 22. Your personnel office can tell you what type of documentation is required.)

2. The child must be living with you.

3. The parent-child relationship must be with you, not with the biological parent. (A parentchild relationship means that you are exercising parental authority, responsibility, and

control over the child. You are caring for, supporting, disciplining, and guiding the child. 

You are the one making decisions about the child’s education and health care.)

4. You must be the primary source of financial support for the child.

5. You must expect to raise the child to adulthood.

There is no prohibition against a foster child’s biological parent living in your home or

contributing to the child’s support. However, the parent-child relationship as described above

must be with you, not the biological parent, and you must be the primary source of financial

support for the child.

A child placed in your home by a welfare or social service agency under an agreement where the

agency retains control of the child or pays you for maintenance does not qualify as a foster child.

WHAT ABOUT GRANDCHILDREN?

Grandchildren, as such, are not eligible family members. However, grandchildren can qualify as

foster children if all the requirements are met. This means your grandchild must be living with

you; you must be the primary source of financial support for your grandchild; the parent-child

relationship (as described above) must be with you, not with your grandchild’s biological parent;

and you must expect to raise your grandchild to adulthood.
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IF MY FOSTER CHILD MEETS THESE REQUIREMENTS, WHAT SHOULD I DO?

If all of these requirements are met, your foster child is eligible for coverage. You must sign a

certification regarding your foster child’s eligibility.

If you have already completed a certification for your foster child for FEHB purposes, and you

already have Option C coverage for your other eligible family members, you do not have to

complete a new certification for FEGLI; your foster child is automatically covered under Option

C.

If you haven’t completed a certification for your foster child, you can get the certification form

from your personnel office.

When you file a claim due to the death of a foster child, your agency must verify that your child’s

eligibility has been certified. If you do not have a certification on file, you will be asked to

complete one before the claim can be paid.

WHAT IF MY FOSTER CHILD MOVES OUT OF MY HOME TO LIVE WITH

HIS/HER BIOLOGICAL PARENT?

If your foster child moves out of your home to live with a biological parent, the child loses

eligibility under Option C (as well as under FEHB). That child cannot again be covered as a

foster child unless the biological parent dies, is imprisoned, or becomes unable to care for the

child because of a disability, or unless you obtain a court order taking parental responsibility away

from the biological parent.

WHAT IF I DON’T HAVE OPTION C? CAN I ELECT IT?

Yes. You can elect Option C within 60 days from the date you submit the certification form to

your personnel office. The coverage will be effective the day you turn in the election form (SF

2817).

Note that, while normally you don’t have to complete a new certification if you already have a

foster child certification on file for FEHB, you will have to complete one if you don’t already have

Option C and you want to elect it.

WILL MY FOSTER CHILD RECEIVE LIFE INSURANCE BENEFITS UNDER THE

ORDER OF PRECEDENCE IF I DIE?

No. While foster children now qualify for coverage under Option C, they are not included under

the order of precedence to receive benefits upon your death. If you want your foster child to

receive benefits if you die, you must complete a designation of beneficiary. You can get this form

from your personnel office.