Former Spouses Eligibility for FEHB Program Under “Spouse Equity”

Reviewing a Former Spouse’s Eligibility for Federal Employees Health Benefits Program Under “Spouse Equity”

Edward A. Zurndorfer–

The Civil Service Retirement Spouse Equity Act of 1984 (“Spouse Equity Act”) was enacted on Nov. 8, 1984. Under this act as amended, certain former spouses of federal employees, former employees, and annuitants may qualify to enroll in a health benefits plan under the Federal Employee Health Benefits Program (FEHBP).

This column discusses the rules for a former spouse of a federal employee, a former federal employee, or an annuitant for enrolling in the FEHBP under the Spouse Equity Act. The discussion includes the eligibility requirements, types of enrollments, the application process including deadlines to apply, and what an enrolled former spouse can do during an FEHBP “open season.” The current FEHBP “open season” is being held through Dec. 13, 2021, that allows employees, annuitants, and former spouses (enrolled in the FEHBP through the Spouse Equity Act) to make changes to their FEHBP enrollment for plan year 2022. 

In this column, “enrollee” means a current federal employee, a former federal employee, or a federal retiree currently receiving a CSRS or FERS annuity (an “annuitant”). “Divorce” includes certain annulments.

Eligibility

A former spouse is eligible to enroll in the FEHBP through the Spouse Equity Act provisions under the following conditions:

• the enrollee and the former spouse were divorced during the enrollee’s employment or receipt of a CSRS or FERS annuity,
• the former spouse was covered as a family member under an FEHBP enrollment at least one day during the 18 months before the marriage ended,
• the former spouse is entitled to receive a portion of the enrollee’s CSRS or FERS annuity, and
• the former spouse has not remarried before age 55.

Loss of Coverage as a Family Member

Because of a divorce or an annulment, a former spouse will lose coverage as a family member (subject to a 31-day extension of coverage). Assuming the former spouse can enroll in the FEHBP through the Spouse Equity Act provisions, the actual enrollment may not begin for several months after the divorce. Enrollment in the FEHBP will depend on how long it takes to establish eligibility for FEHBP enrollment. The following example illustrates:

Karl, a federal employee, has been married to Lisa for 15 years, all of which Karl has been a federal employee. Karl and Lisa are divorcing effective Dec. 31, 2021. Karl has been enrolled in the FEHBP and has continuously included Lisa on his FEHBP health plan. Since Karl and Lisa will be divorced as of Dec. 31, 2021, Karl during the current benefits “open season” switched his FEHBP enrollment from “self plus one” (“one” being Lisa) to “self only”. The enrollment change becomes effective Jan. 2, 2022, the first day of the 2022 leave year. Lisa will then have a 31-day extension of FEHBP enrollment from Jan. 2, 2022 to Feb. 1, 2022.

To avoid a gap in health insurance coverage between the end of the 31-day extension of coverage and when the Spouse Equity Act provisions take effect, the former spouse may:

• convert to a non-group contract during the 31-day extension of coverage, or
• continue FEHBP coverage under the Temporary Continuation of Coverage provisions of the FEHBP law.

If the former spouse acts promptly, he or she may require retroactive enrollment once the application for enrollment under the Spouse Equity Act provisions has been approved. For enrollment to be retroactive, the employing office must receive an appropriate request and satisfactory proof of eligibility from the former spouse within 60 days after the date of divorce. Returning to the example above, Lisa should request that her FEHBP enrollment be made retroactive to Jan. 2, 2022. To do so, she must make an appropriate request and provide satisfactory proof of eligibility by March 1, 2022 (60 days after the effective date of her divorce from Karl).

If the former spouse seeks FEHBP coverage under Spouse Equity Act provisions, it is advisable for the former to initially stay with the same FEHBP plan.

Enrollment Procedures Under the Spouse Equity Act Provisions

Enrolling under the Spouse Equity Act Provisions is a three-step process. The former spouse must:

• Apply to enroll within the required time limit,
• Establish eligibility to enroll, and
• When approved, immediately enroll.

Application to Enroll

A former spouse’s application to enroll can either be a completed SF 2809 (Health Benefits Election form) or a written notice of intent to apply for health benefits. The former spouse’s name, date of birth, and Social Security number are entered on Part A of Form SF 2809. The enrollee’s name and date of birth must be entered in the “Remarks” section.

If there is a mental or physical disability that prevents the former spouse from applying for FEHBP benefits, a court-appointed guardian may file the application.

Time Limit

A former spouse must apply for FEHBP health benefits coverage within:

• 60 days after the marriage ends,
• 60 days after the date of OPM’s notice of the former spouse’s eligibility to enroll based on a qualifying court order awarding entitlement to a portion of the enrollee’s future CSRS or FERS annuity, or
• 60 days after the date of the notice of the former spouse’s eligibility to enroll based on entitlement to a former spouse’s annuity under another retirement system for government employees.

If a former spouse does not apply to the employing office in person, the employing office will use the postmark date on the application to determine if he or she meets the time limit.

Deferred Enrollment

Once the former spouse has applied to enroll within the required time limit and has met all eligibility requirements, he or she may postpone actual enrollment in the FEHBP indefinitely.

Determination of Entitlement to Future Annuity

When a former spouse applies to the employing office for FEHBP benefits, the office will advise him or her that he or she must send a written requires to the retirement system for a determination of entitlement to either: (1) a portion of the enrollee’s future retirement CSRS or FERS annuity; or (2) a former spouse survivor annuity.

The request must include: (1) a certified copy (not a photocopy of a certified copy) of the divorce decree, property settlement, and/or court order (if applicable); and (2) the enrollee’s name, date of birth, Social Security number and last employing agency.

Unless the enrollee is subject to the CIA or Foreign Service retirement systems, OPM – not the employing agency – will make the former spouse annuity benefit determination based on the court order supplied. The former spouse cannot enroll in the FEHBP until OPM makes its determination.

OPM will send the former spouse a written decision. If eligibility is determined, he or she will submit a copy of the decision to the enrollee’s employing office.

Where the Former Spouse Sends the Written Request for Entitlement to the Enrollee’s Annuity

Employing Office Decision

If a former spouse is eligible for health benefits coverage, the employing office will provide the former spouse written confirmation of its decision, provide a premium payment schedule, and provide a certification form stating the requirements for continued enrollment. The former spouse will sign and date the certification form.

Enrollment Procedures

If the former spouse did not submit Form SF 2809 (Health Benefits Election Form) or another enrollment request as the application to enroll, he or she must complete one to enroll. He or she must put his or her own name, date of birth, and Social Security number on Part A of Form SF 2809. The employee, former employee, or annuitant’s name and date of birth must be entered in the “Remarks” section.

The employing office must establish a health benefits file for the former spouse. The effective date of enrollment is the first day of the first pay period after the employing office receives Form SF 2809 and has approved eligibility.

Type of Enrollment

A former spouse may elect a self-only, self plus one, or self and family enrollment. Self plus one provides FEHBP benefits for the former spouse and one eligible family member he or she designates. A self and family enrollment provides FEHBP benefits for the former spouse and multiple eligible family members. Eligible family members are any natural or adopted children (under the age of 26) of the enrollee and the former spouse who is applying for enrollment in the FEHBP through the Spouse Equity provisions.

Premium Payments

The former spouse must pay both the employee’s and the federal government’s shares of the FEHBP health plan premium cost for every pay period the former spouse is enrolled. Unlike an employee or an annuitant (in which the federal government pays on average 72 to 75 percent of the FEHBP premiums), there is no federal government contribution towards the FEHBP premiums of the former spouse’s health plan. The employing office must establish a premium payment schedule and is responsible for collecting the premiums.

“Open Season” Changes

A former spouse enrolled in the FEHBP under Spouse Equity Act Provisions may make the usual changes to his or her FEHBP enrollment during the annual “open season” that employees and annuitants can make. This includes changing from one FEHBP health plan to another FEHBP health plan for the coming plan year.

Why a Former Spouse Should Consider Enrolling in the FEHBP Under the Spouse Equity Provisions

In spite of the fact that a former spouse pays the full FEHBP health plan premium cost with no federal government contribution, an eligible former spouse should seriously consider enrollment in the FEHBP under Spouse Equity Act provisions. Among the reasons to enroll are guaranteed issue federal government-sponsored group health insurance (no underwriting), no waiting periods, no exclusions, and no catastrophic payout limit.

Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street – Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Former Spouses Eligibility for FEHB