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The NDAA 2023 SBP Open Season: What Retirees Need to Know About Enrolling 

 

The SBP Open Season allows for retirees receiving retired pay, eligible members, or former members awaiting retired pay who were NOT enrolled in SBP or RCSBP (Reserve Component Survivor Benefit Plan) as of December 22, 2022 to enroll. 

For a member already receiving retired pay: Upon enrollment you will be legally responsible and obligated to pay a “buy-in premium.” The buy-in premium is comprised of (a) amounts you would have been required to pay you had enrolled in SBP at an earlier opportunity plus (b) additional open season costs. 

You will also be responsible to pay monthly premiums beginning with the effective date of the election in the same manner that monthly premiums are collected for all SBP participants, until you reach “paid-up” status. 

To protect a retiree from making a legal commitment to payment of an undetermined amount for the buy-in premium (which may be thousands of dollars) we set up a four-step process that includes a request for an estimate prior to officially enrolling.  

The Enrollment Four-Step Process

STEP 1. Submit a completed and signed Letter of Intent to Enroll (LOI), including all required information and the type of enrollment so we can send you an estimate of your monthly premiums and most importantly, an estimate of your one-time buy-in premium. You can use our askDFAS online upload tool to submit your form or send it via postal mail or fax.

Download the “Letter of Intent to Enroll during the SBP Open Season” from our special focus webpage. The webpage also has information on how to submit your completed LOI and additional FAQs about enrollment: https://www.dfas.mil/sbpopenseason23

STEP 2. We will mail you an individual estimate, based on the information in your Letter of Intent (LOI). It will provide an estimate of your monthly premium cost going forward, as well as an estimate of the one-time “buy-in premium.” 

Keep in mind, your final enrollment costs, both the monthly premium and buy-in premium, may change if there is a time gap between when you submit your LOI and the time you submit your final enrollment form. Costs may also change if there are changes to the information submitted. In addition, if you choose to pay your buy-in premium over time, installment interest will be added to your buy-in premium. 

STEP 3. After considering the costs, if you want to officially enroll, submit your completed and signed SBP Open Season 2023 Enrollment Form, including your choice for how you will pay for the one-time buy-in premium. You can use our askDFAS online upload tool to submit your form or send it via postal mail or fax. 

Download the “SBP Open Season 2023 Enrollment Form” from our special focus webpage. The webpage also has information on how to submit your completed form and additional FAQs about enrollment: https://www.dfas.mil/sbpopenseason23

STEP 4. We will mail you a confirmation of your enrollment, including the final costs, and provide instructions on how to submit payment. Your enrollment will be effective the first day of the first calendar month following our receipt of your valid enrollment form. 
You are allowed 30 days from the date you sign the enrollment form to cancel your enrollment. Cancellation must be in writing and received within those 30 days.

Buy-In Premium Payment Options

Payment Option A = Choose to submit a lump sum payment for the total amount of the one-time buy-in SBP premium due.

Payment Option B = Choose to submit a partial payment of the SBP buy-in premium due and have the remainder of the SBP buy-in premium plus installment interest deducted from your retired pay or CRSC pay in 12 equal monthly installments. If you receive both retired pay and CRSC pay, we will deduct the installments from whichever has the highest net pay. If you want to submit a specific amount as a partial payment of the SBP buy-in premium due, please write a note on SBP Open Season 2023 Enrollment Form and include the specific amount you want to pay. 

Payment Option C = Choose to have the SBP buy-in premium plus installment interest deducted from either your retired pay or your CRSC pay in 12 equal monthly installments (if you receive both retired pay and CRSC pay, we will deduct the installments from whichever has the highest net pay); OR choose to make direct payments to DFAS in 12 equal monthly installments plus installment interest. 

You are strongly encouraged to review your retired pay or CRSC pay and keep in mind any expected changes to your pay in the upcoming months and how those changes might affect the payment option you choose. Also, keep in mind that your net pay will be reduced by your SBP monthly premium cost going forward. 

If you choose to make a lump sum payment, a partial payment or direct installment payments, we must receive payment within 30 days of the date of the enrollment confirmation letter. 

Important - About Enrollment and Premiums

Key points to keep in mind: 

•    Normal processing time is 30 days from the date we receive a valid request.

•    Your enrollment will be effective the first day of the first calendar month following our receipt of your valid enrollment form. 

•    Beginning with the effective date of your enrollment and going forward, SBP monthly premiums will be deducted from your retired pay or CRSC pay until you reach “paid-up” status. These are your “prospective monthly premiums.” This means the amount of your net pay will be lower than it is prior to your enrollment in SBP coverage. 

•    If you choose to pay your buy-in premium over time, installment interest will be added to your buy-in premium. This information will be included in your enrollment confirmation letter. 

•    If you want to submit a specific amount as a partial payment of the SBP buy-in premium due, please write a note on SBP Open Season 2023 Enrollment Form and include the specific amount you want to pay. 

•    If you choose to pay in 12 equal monthly installments, you must either have the installments deducted from your pay over the entire 12 months OR pay DFAS directly for the entire 12 months. We are not able to change your method of payment during the 12 months

•    If you choose to pay in 12 equal monthly installments, and you have enough net retired pay OR net CRSC pay to cover the deduction of the monthly installment, the default payment method for the buy-in premium is to deduct the installments from your pay. If you DO NOT want the installments deducted from your pay, please notify us promptly. In addition, in this case we must receive your first payment within 30 days of the date of the enrollment confirmation letter. 

•    If you choose to have the buy-in premium deducted from your pay in 12 equal monthly installments and we determine your net pay will not be high enough to cover the installments, you will be required to make a partial payment plus have the balance of the buy-in premium deducted in 12 equal monthly installments from your pay. We will include this information in your enrollment confirmation letter. We must receive your partial payment within 30 days of the date of the enrollment confirmation letter. 

•    Your final enrollment costs, both the monthly premium and buy-in premium, may change if there is a time gap between when you submit your LOI and the time you submit your final enrollment form. Costs may also change if there are changes to the information submitted. In addition, if you choose to pay your buy-in premium over time, installment interest will be added to your buy-in premium. 

•    If you choose to make a lump sum payment, a partial payment or direct installment payments, we must receive payment within 30 days of the date of the enrollment confirmation letter. 

•    If you were enrolled in SBP coverage at some point prior to this SBP Open Season and you paid monthly SBP premiums, those premiums can be credited toward your buy-in premium amount. 

•    The 2023 NDAA SBP Open Season specifically states enrollment in the Plan must be voluntary on the part of the eligible member. It further specifies that no court order may require an eligible member to make an Open Season election pursuant to section 643, P.L. 117-263.

•    An eligible member who, on December 22, 2022, was receiving retired pay and was not participating in SBP is not required to have concurrence of his/her spouse (or other beneficiary) to make an open season election. 

•    Since the one-time buy-in premium is not considered a reduction in retired pay due to an election under chapter 73 of title 10, United States Code, these amounts do not serve to reduce the member's taxable retired pay. The previous sentence applies even when paid through deductions from retired pay.

Frequently Asked Questions About Enrollment

We also have a list of Frequently Asked Questions about enrolling in SBP during the SBP 2023 Open Season on our special focus webpage: https://www.dfas.mil/sbpopenseason23

**NOTE: The above process is for ARMY, NAVY, AIR FORCE, SPACE FORCE, and MARINE CORPS RETIREES RECEIVING PAY

 

Page updated Mar 29, 2023