Have questions about the 2005/2006 SBP Open Enrollment? Here are some answers…

On beneficiary options…

Q: I'm retiring February 1, 2006 and might decline coverage. If I do that, then change my mind after retirement, can I enroll before the end of the Open enrollment period 30 September 2006?

A: No. Make your final decision on the date of your retirement! Those who retire during the Open Enrollment Period are not eligible to participate in the Open Enrollment Period. The law specifies that, to be eligible, a person must be entitled to retired pay on 30 September 2005, or will be entitled (if a reservist) except for the fact that they are not yet 60.

Q: I elected Spouse SBP coverage when I retired in 1994. During the 1998-1999 SBP disenrollment period I terminated my SBP coverage. Can I reenroll my spouse in SBP during the 2005-2006 open enrollment period?

A: No. Retirees who terminated their SBP coverage during the 1998-1999 SBP disenrollment period or between the 25th and 36th month following receipt of retired pay are not eligible to participate in the SBP open enrollment period.

When you terminated your SBP coverage, you signed a statement on the SBP Termination Request, DD Form 2656-2, that reads; "I further understand that once I discontinue SBP, I cannot reenter the Plan."

Q: I originally participated with spouse coverage. When I lost my spouse, participation/costs stopped. I remarried in 1990, and took action NOT to resume my spouse coverage. Can I cover my spouse now during the Open Enrollment Period?

A: Yes. Your "years since event" are determined by the first opportunity you had to enroll your current spouse (1st anniversary of remarriage), but failed to do so.

Q: My current base amount is less than my full retired pay. Can I increase it to full retired pay now?

A: Yes. You can do anything now that you once could have done, but did not. Your buy-in enrollment cost will be based on the difference in premium between your current amount and your desired amount. The "years since event" will be determined by the first opportunity you had to enroll your spouse fully, but did not.

Q: I had spouse coverage, which was suspended upon divorce. Former spouse SBP was court-ordered, but neither I nor my ex-spouse took action to comply. I've been in suspended status (and contempt of court) since then. I am not presently married, and would like to comply with the court order for my former spouse. Can I do that during the Open Enrollment period?

A: Yes. Since the law gave you only one year to make the switch and you didn't, the open period is your only opportunity to do so. Your "years since event" will be determined by the first chance you had to switch the coverage, but failed to. You and your former spouse must complete a DD Form 2656-1.

Q: I elected full coverage (i.e., full retired pay was used as base amount) for child only, spouse excluded at my retirement. The children are no longer eligible and I now want to cover my spouse. Since my children are no longer eligible, can I elect a reduced amount of coverage for my spouse?

A: Your coverage for spouse must be at full coverage. If you elect to add a new beneficiary category to existing SBP coverage, you can increase, but not decrease the current level of coverage. Even though you do not currently have an eligible child beneficiary, you still have 'suspended' child coverage at full base amount.

Q: When I retired I elected not to participate in SBP and my spouse concurred. When we divorced, my spouse could not receive court-ordered SBP because I had declined coverage. Could my spouse get the divorce decree amended to require me to elect Former Spouse SBP during the open enrollment period?

A: No. Open enrollment period elections are generally voluntary and may not be court-ordered.

Q: I originally elected child only coverage for children who are now adults. I have since divorced, remarried, and had an additional child. I took no action to add this child to my old child coverage. Can I add her now?

A: No. The Open Enrollment period is not an opportunity to resume already-existing (albeit, "suspended") coverage. By law, a retiree does not have the option to not enroll newly gained children when child coverage was previously in effect. A new child cost would be assessed based on your age when the child was born and the new child's age (0). Costs would be owed retroactively.

On Costs…

Q: I enrolled with "child only" coverage in 1998 because I was unmarried on that date. I married on 1 October 2000 and did not enroll my spouse in SBP I now wish to add my spouse to my coverage. How will my cost be determined?

A: Each open enrollment election has two costs.

Cost #1: New monthly premium. This is calculated by considering your age, and your spouse and child's ages.

Cost #2: Enrollment cost. Your old premium (for child coverage) is subtracted from your new premium. That product is assessed a lump sum buy-in cost (i.e., difference in premium X cost factor corresponding to the number of years since you first could have enrolled your spouse, but did not-1 October 2001, date of first anniversary). In addition to an enrollment cost, you will pay monthly spouse and child costs starting on the effective date of the election.  To find out your enrollment cost you can access one of the links listed below based on your branch of service:

Air Force: http://www.afpc.randolph.af.mil/sbp/openenroll.htm

Army: http://www.armyg1.army.mil/rso/sbpopenenrollment.asp

Navy & Marine Corps: https://www.manpower.usmc.mil/portal/page?_pageid=278,1950391&_dad=portal&_schema=PORTAL

Q: I originally covered my spouse at $300, which is now $600 due to COLA receipt. I would like to increase my base amount to my full retired pay of $2000. How will the cost of enrollment be calculated?

A: There are two costs of enrollment that must be calculated.

Cost #1: Monthly Cost: 6.5% times full retired pay.

Cost #2: Enrollment Cost: Your "years since event" are determined by the first chance you had to cover your full retired pay, but did not. Only the premium amount which is the difference between the cost of covering your current base amount ($600) and the cost of covering the base amount you're choosing now ($2000) is multiplied by the buy-in cost factor taken from the appropriate chart. That amount is payable upon enrollment in a lump sum, or 24 monthly installments, or a combination of both - in addition to prospective monthly premiums which begin upon enrollment.

Q: I did not elect SBP at retirement and want to make an election during the open enrollment. The election will not be effective unless I live two years from the effective date. What happens to the money I pay for the open enrollment buy-in and the prospective monthly premiums if I die within 2 years of the open enrollment election effective date?

A: Your beneficiary receives refund of all premiums paid for the open enrollment election.

Q: What happens to the money I pay for the open enrollment buy-in and the prospective monthly premiums for spouse coverage if my spouse dies within 2 years of the open enrollment effective date?

A: Your monthly prospective premium for spouse coverage is suspended. If you are paying the open enrollment buy-in premium in 24 monthly installments you will continue to pay. There is no refund of the open enrollment buy-in premium or the open enrollment prospective premium. You can resume coverage for a future spouse after one year of marriage.

Q: I elected SBP at retirement but not for my full retired pay. Now I want to increase coverage. What if I die within 2 years?

A: Your beneficiary will receive a refund of all premiums paid for the open enrollment election. SBP annuity will be based on your previous SBP coverage.

About the DoD SBP Open Season Calculator…

Q: When I went to the DOD Actuary Web site to use the DoD SBP Open Season Calculator, I couldn't find the election category “Former Spouse.”

A: You will use the category “Spouse.” The cost for spouse and former spouse are identical. The years from event will be based on the first opportunity that you could have elected Spouse and not the date of divorce. If you divorce after retirement, you must have had elected spouse coverage in order to elect former spouse.

Q: When I used the DoD SBP Open Season Calculator, under Enrollment Costs it listed an amount that I must pay upfront in a one time payment prior to being able to pay my Open Enrollment Buy-In Premium in 24 equal installments. What does this mean?

A: When the calculator lists an amount you must first pay in an upfront one time payment, this means you will not have enough retired pay remaining after deductions to pay the Open Enrollment Buy-In Premium in 24 equal payments unless you first make an upfront payment of the amount listed. Retirees whose retired pay is completely offset by VA would have to pay the Open Enrollment Buy-In Premium in an upfront one time payment.