A divorce can impact many aspects of a person’s life with repercussions that can extend well into the future, particularly where federal benefits are concerned. In fact, these benefits often form a substantial portion of the financial considerations in a divorce because they involve crucial matters such as health insurance and lifelong annuity payments. Learn more about what happens to federal benefits after a divorce.
Federal Retirement Benefits
One of the biggest perks of working for the federal government is access to its retirement plan; therefore, these benefits are often the subject of negotiation in a divorce. A state court order for a divorce or separation can divide an annuity or a refund of the contributions made to a retirement account when an employee leaves federal service before retirement.
Depending on when they began working for the federal government, employees may participate in the Federal Employment Retirement System (FERS) or the Civil Service Retirement System (CSRS). State orders cannot affect the benefits that are payable under FERS and CSRS as federal law prevails in these cases.
For example, the Employee Retirement Income Security Act governing retirement benefits in the private sector allows a former spouse to begin getting their share of retirement benefits when the employee reaches the minimum retirement age, even if they opt to continue working. Under FERS and CSRS, however, court orders cannot affect retirement benefits until the benefit is payable. Therefore, in addition to being eligible for the benefit, the employee must have retired and applied for it before it can be affected by court orders.
Federal Employee Health Benefits
Health benefits can be a contentious issue in a divorce, and there are some ways that a former spouse of a federal employee can keep their coverage. Former spouses who meet the spouse equity requirements of the Federal Employee Health Benefits law may enroll for their own health benefits coverage, but they cannot continue receiving FEHB coverage under the federal employee’s enrollment following a divorce.
A former spouse who wishes to continue FEHB coverage after a divorce must be covered as a family member in the employee’s FEHB enrollment and entitled to receive part of the retirement annuity following the employee’s retirement or a survivor’s annuity in the event of their death. Another stipulation is that they cannot remarry prior to age 55 if they wish to keep this coverage.
Former spouses who choose to enroll in FEHB coverage following a divorce pay both the government’s and the employee’s share of the premium. Those who do not meet the FEHB coverage criteria can continue their coverage for three years from the date of the divorce using what is known as a “temporary continuation of coverage”.
Federal Employee Life Insurance Benefits
A federal employee or former employee may irrevocably assign their coverage under the Federal Employees Group Life Insurance Policy, or FEGLI, to another person or a trust. A federal employee may be required to make an assignment of FEGLI coverage as part of a divorce court order. In many cases, a court will order a federal employee to name their former spouse as the beneficiary of their life insurance.
Thrift Savings Plan
A court divorce decree, legal separation or annulment can award part of a federal employee’s Thrift Savings Plan, or TSP, account to a former spouse. When the TSP receives a court order, it will freeze the participant’s account. This means participants may not make withdrawals from it or take out a loan against it, although other account activity is permitted. After any required disbursements have been made, the account will be unfrozen.
Dental And Vision Insurance
In a divorce, a federal employee enrolled in the Federal Dental and Vision Insurance Program, or FEDVIP, can change their coverage from self and family to the self only or self plus one option. However, this status can only be modified in the time period ranging from 31 days before to 60 days following the divorce.
If an enrollee misses this deadline, they must wait until the next annual benefits open season and will continue paying the higher premiums associated with the extra coverage in the meantime. Former spouses are not eligible to continue FEDVIP coverage after a divorce.
Federal Long-Term Care Insurance Program
A former spouse of a federal employee who was enrolled in the Federal Long-Term Care Insurance Program, or FLTCIP, at the time of their divorce can keep their coverage by paying the premiums. However, if they were not covered at the time of their divorce, they cannot begin a new enrollment afterward.
Request A Consultation With The Family Law Attorneys At SIEGELLAW
The division of federal benefits in a divorce is a complicated matter that requires guidance from a knowledgeable legal team. To learn more about how federal benefits and other assets are divided in divorce, or to discuss your case with a Maryland divorce attorney, contact SIEGELLAW today to schedule a consultation.