How Divorce Affects Your Federal Retirement Benefits
Access to pensions, retirement account balances, and Social Security benefits are all impacted by divorce. As a federal employee, if you become separated or divorced, there are significant consequences for you and your spouse, as well as other dependents and beneficiaries, with respect to your federal retirement benefits. This article provides information about these consequences and about what actions you need to take when divorce or separation occurs. Be sure to communicate with your human resources office during this process.
What is incredibly important to recognize is that separation from a spouse and very likely the reduction of household income will significantly impact what your retirement will look like and how much additional planning you will need to do. We strongly suggest that you contact a qualified Financial Professional who is knowledgeable concerning Civilian Public Sector benefits to make sure your life changes, your Benefit Eligibility and your Retirement/financial goals are still in line.
Federal Employees Health Benefits (FEHB) Program
If you have a Self-and-Family enrollment in FEHB, your spouse is eligible to continue coverage under your enrollment while you are legally separated or in the process of getting a divorce or an annulment. Once the divorce or annulment is final, your ex-spouse loses coverage at midnight of the day the divorce or annulment is final, subject to a 31-day extension of coverage.
You can find more information in the FEHB Handbook at http://www.opm.gov/healthcare-insurance/healthcare/reference-materials/reference/enrollment/#Divorce%20or%20Separation.
After the divorce or annulment is final, your ex-spouse cannot remain covered as a family member under your Self-and-Family enrollment (even if a court order requires it). Your ex-spouse may be eligible to enroll under Spouse Equity, or Temporary Continuation of Coverage (TCC), or convert to an individual policy with your carrier. Please visit the former spouses section of the FEHB Handbook from OPM for more information http://www.opm.gov/healthcare-insurance/healthcare/eligibility/#url=Former-Spouses.
If you have a Self-and-Family FEHB enrollment and there are no other eligible family members, the divorce is a Qualifying Life Event. Within 60 days of the date of your divorce or annulment, you can change to a Self-Only enrollment. At the same time, you can change plans or options.
If you have a Self-and-Family enrollment and there are other eligible family members on the enrollment in addition to your spouse, you must contact your FEHB plan to let them know the date of the divorce or annulment and have them remove your ex-spouse. You do not need to complete an SF 2809 (Health Benefits Election Form) or obtain any agency verification in these situations. However, your plan may ask for a copy of the divorce decree as proof.
Federal Employees Dental and Vision Insurance Program (FEDVIP)
If your spouse is currently covered under your FEDVIP enrollment, that coverage will continue until the final date of divorce or until the effective date of an Open Season change. You cannot remove your spouse outside of an Open Season just because you are separating or are in the process of divorce.
Once you are divorced, your ex-spouse will not be eligible as a family member under your enrollment in FEDVIP. There is no Spouse Equity, temporary continuation of coverage (TCC), or the right to convert to an individual policy in the FEDVIP Program.
If you have your spouse listed as your “One” under a Self-Plus-One enrollment or under your Self-and-Family enrollment, you must remove him or her from your FEDVIP enrollment immediately at the effective date of the divorce through your BENEFEDS account at http://www.BENEFEDS.com. However, even if you do not remove him or her from your account, he or she is not covered after the divorce and you may be responsible for any benefits paid in error on his or her behalf.
If the divorce means your coverage should now be a Self-Only or Self-Plus-One enrollment, you can decrease your enrollment type from 31 days before to 60 days after the date the separation is final, as a “Qualifying Life Event” at http://www.BENEFEDS.com. Don’t miss these dates or you will have to wait until the next Federal Benefits Open Season to make the change and may be paying a higher premium for coverage you cannot use.
If you do not have access to a computer, call BENEFEDS at 1-877-888-FEDS (3337), TTY 1-877-889-5680.
Federal Employees’ Group Life Insurance (FEGLI) Program
Unless you have assigned your coverage, you can reduce or cancel your coverage at any time. Benefits may also be paid based on a valid court order. If you have Family Option-C and don’t cancel it, coverage continues on your spouse until the marriage is terminated. However, once terminated, Family Option-C benefits are not payable even if you continue to pay Option-C premiums. You should notify your human resources office or retirement system promptly after the termination of your marriage.
Once separation is final, you also can change your designation at any time without prior notice to any beneficiary. You should also talk with a knowledgeable financial professional to make sure that your coverage and plans match your new circumstances.
Federal Flexible Spending Account Program (FSAFEDS)
You may be able to enroll in an FSAFEDS health care flexible spending account and/or dependent care account or change your current election(s) during a period from 31 days before the event to 60 days after the event (if your agency participates in FSAFEDS). For the health care account, you must also be eligible to enroll in the FEHB Program. Your requested change must be consistent with the event, and you cannot enroll or increase your election(s) after October 1 (you would have to wait until Open Season).
Federal Long-Term Care Insurance Program (FLTCIP)
A change in marital status does not affect your coverage or premiums, but may affect your eligibility to apply if you are no longer a qualified relative of an employee or annuitant.