Civil Service 

Retirement 

System 

Federal Employees’ 

Group Life 

Insurance Program 

Federal Employees 

Health Benefits 

Program 

Federal Employees 

Retirement 

System 

Long Term 

Care Insurance 

Program 

United States 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Retirement and Insurance Service 

Benefits Administration Letter 

Number: 01-216 Date: August 21, 2001 

Subject: Federal Employees' Group Life Insurance Program: Employees Who Are 

Not Eligible to Continue Life Insurance While Receiving Compensation

Purpose 

The purpose of this Benefits Administration Letter is to inform agencies of a new procedure for 

notifying the Office of Workers' Compensation Programs (OWCP) when an employee clearly is not 

eligible to continue Federal Employees' Group Life Insurance (FEGLI) as a compensationer. 

Background 

Employees who are receiving workers' compensation may continue their FEGLI coverage if they 

meet the 5-year/all-opportunity requirement as of the date they start receiving compensation. 

Whether or not an individual meets the requirement to continue FEGLI as a compensationer, he/she 

remains insured as an employee until he/she completes 12 months in nonpay status or separates 

from service (whichever happens first). Agencies notify OWCP of what type(s) of life insurance 

the employee has by means of a CA-7 (Claim for Compensation On Account of Traumatic Injury or 

Occupational Disease); OWCP withholds the FEGLI premiums from the individual's 

compensation. 

We currently have a policy in place for what agencies must do at the end of 12 months in nonpay 

(or separation) for employees who are clearly eligible to continue their FEGLI. We also have a 

procedure for situations in which it is not clear whether the employee is eligible. However, we do 

not currently have a procedure for notifying OWCP of an employee's ineligibility. Without such 

notification, OWCP continues to withhold premiums, and the individual is not given conversion 

rights. 

We are taking this opportunity to reiterate our existing policies, as well as provide you with the new 

policy for ineligible employees. 
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POLICIES AND PROCEDURES 

Employees Clearly Eligible to Continue FEGLI 

For some employees it is easy to determine that they meet the 5-year/all-opportunity requirement 

for at least some of their FEGLI coverage. In this case, at the end of 12 months in nonpay status (or 

at separation, if that happens first), issue an SF 2819 (Notice of Conversion Privilege) and an SF 

2821 (Agency Certification of Insurance Status); have the employee complete an SF 2818 

(Continuation of Life Insurance Coverage), and transfer the employee's life insurance records to 

OPM's Retirement Operations Center in Boyers, Pennsylvania. (Detailed guidance is in the FEGLI 

Handbook. See www.opm.gov/insure/life.) 

Employees for Whom It's Not Clear Whether They're Eligible to Continue FEGLI 

For some employees it is not at all clear whether they're eligible to continue coverage. They may 

have several breaks in service or several periods of nonpay. Or they may have picked up and 

dropped various types of coverage at different times. If you cannot easily tell whether the employee 

is eligible to continue FEGLI, follow the same procedures as above. The Retirement Operations 

Center will review the employee's records and make a determination as to whether he/she is 

eligible. 

Employees Clearly NOT Eligible to Continue FEGLI – New Procedure 

For some employees it is very easy to determine that they do not meet the 5-year/all-opportunity 

requirement for any of their coverage. In this case you must notify OWCP, so that it can stop the 

withholdings at the end of 12 months in nonpay (or separation, if that happens first). To notify 

OWCP, complete a Notice of Life Insurance Ineligibility (copy attached). Send this notice to 

OWCP at the same time you send the CA-7. OWCP will flag its system to stop the withholdings 

at the end of 12 months. 

IMPORTANT NOTE: If the employee separates before the end of 12 months in nonpay, you 

must notify OWCP so that it can stop the withholdings at the time of separation. 

In addition to sending the Notice of Life Insurance Ineligibility to OWCP, send a copy to the 

employee. This notifies the employee that his/her FEGLI will terminate upon separation or 

completion of 12 months in nonpay and that he/she has the right to convert the coverage. 

At the end of the 12 months in nonpay (or upon separation, if that happens first), you must follow 

the current procedures for terminations, i.e., you must give the employee an SF 2819 and SF 2821, 

so that he/she has the opportunity to convert the FEGLI coverage. 
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It is extremely important that you issue the SF 2819 and SF 2821 as soon as the employee has 

completed 12 months in nonpay. A delay in issuing these forms will result in the employee's 

losing his/her right to convert or having to pay a high amount of retroactive conversion premiums. 

 

 Abby L. Block 

 Assistant Director 

 for Insurance Programs 

Attachment 
4

NOTICE OF LIFE INSURANCE INELIGIBILITY 

__________________________________________ ____________________________ 

Employee's Name Employee's Social Security Number 

The Federal Employees' Group Life Insurance (FEGLI) law states that a person who is 

receiving workers' compensation may continue his/her life insurance if the person had the 

coverage for the 5 years of service immediately before he/she started receiving 

compensation (or for the entire time the coverage was available, if that's less than 5 years). 

You do not meet this 5-year/all-opportunity requirement. Your compensation started 

_______________. Your life insurance coverage was effective as follows: 

Date 

Type of Coverage Effective Date of Coverage 

Basic Insurance 

Option A 

Option B 

Option C 

You are therefore not eligible to continue your FEGLI as a compensationer. Your 

coverage, however, will not stop right away. You may keep your coverage for 12 months, 

while you are in a nonpay status. The Office of Workers' Compensation Programs will 

withhold your premiums from your compensation. 

At the end of 12 months in nonpay, your coverage terminates. You have the right to 

convert to a private individual policy. Your agency will send you the forms you need to 

convert your coverage (SF 2819 – Notice of Conversion Privilege; and SF 2821 – Agency 

Certification of Insurance Status). 

If you separate from service before you complete 12 months in nonpay, your life insurance 

terminates at that time, and your agency must send you the forms necessary for conversion. 

If you do not get these forms from your agency, contact your human resources office to

request them.