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Animal and Plant Health Inspection Service
U.S. Department of Agriculture
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FEHB Options


Each pay period you are enrolled in the Federal Employees Health Benefits (FEHB) program, you are responsible for payment of the premium. When you enter nonpay status, or your pay is insufficient to cover the premium, you must:

* Terminate the enrollment; or 
* Continue the enrollment and agree to pay the premium or incur a debt


If you elect to terminate your FEHB enrollment (or the enrollment terminates), the termination will take effect at the end of the last pay period in which premiums were withheld from pay. FEHB coverage will continue at no cost to you for an additional 31 days. During the 31 days, you and your covered family members may convert to an individual nongroup contract with your insurance carrier. The termination is not considered a break in the continuous coverage necessary for continuing FEHB coverage into retirement. However, the period during which the termination is in effect does not count toward satisfying the required 5 years of continuous coverage. When you return to pay and duty status, or at the end of the first pay period your pay becomes sufficient to cover your premium, you must reenroll within 60 days if you want FEHB coverage.


Your FEHB coverage will continue for up to 365 days while in a nonpay status. Previous periods of nonpay status count toward the 365 days if you do not return to duty for at least 4 consecutive months.

If you elect to continue your coverage, you must elect to:

* incur a debt in the amount of the unpaid premiums; or 
* pay premiums directly.

PREMIUM CONVERSION (Pretax withholding of your FEHB premium)

Before you make your payment decision, you should understand that premium conversion is a tax benefit, and you are automatically covered by it unless you waive it. When you are in a pay status, it allows your FEHB premium to be made on a pretax basis, which means that the premium is not subject to Federal income, Medicare, or Social Security taxes. This reduces your taxable income, so less tax is withheld, and your paycheck will be larger. Nonpay status is a qualifying life event which allows you to change your premium conversion election within 60 days of the effective date of the nonpay status or return to duty action. If you wish to change your coverage under premium conversion (pretax withholding), either to waive it, or to elect it if you waived it previously, contact your servicing Benefits Assistant or Specialist for a premium conversion waiver/election form.

INCUR A DEBT. Under the incur a debt option, you agree that you will continue your FEHB coverage while in nonpay status, your agency will advance your share of the FEHB premiums to your health plan during your nonpay period, and you will repay your share to your agency when you return to pay status. Your repayment will be treated on a pretax basis, if it's deducted from your pay and you participate in premium conversion.

If you elect this option, or if you elect to pay directly but fail to pay the entire amount due, you will receive a bill from the National Finance Center (NFC) stating the total amount due. The notice will be sent when you: return to pay status, your pay becomes sufficient, you separate from employment, or you have been in nonpay status for 365 days.

By electing to continue coverage, you agree that the amount due will be withheld from your salary by deducting the regular premium and an additional premium per pay period until the debt is paid. If the amount due cannot be withheld from salary, it will be recovered from a lump sum payment of accrued leave, income tax refunds, amounts payable under the Civil Service Retirement System or Federal Employees Retirement System, or any other source normally available for the recovery of a debt due the United States. If by the third pay period after your pay has become sufficient to cover the premium(s) you have not paid the entire amount, NFC will begin collection by administrative offset.

DIRECT PAY. Under the direct pay option, you may pay your FEHB premium on the same schedule as the payments would be made if you were not in nonpay status. The payments you make under the direct pay option are not subject to premium conversion and are made on an after-tax-basis. Therefore, under the direct pay option, you are not reducing your taxable income.

If you elect to pay directly, mail a check or money order payable to: USDA/NFC. Include on the check your name, social security number, a note that the payment is for “FEHB PREMIUM,” and the pay period for which the payment is being made.
Mail to:

National Finance Center 
Administrative Collections/Health Benefits 
PO Box 790342 
St. Louis, MO 63179-0342

Please make your decision on the enclosed Notice of Obligation to Pay Health Benefits Premiums while in Nonpay Status. YOU MUST COMPLETE THIS FORM AND RETURN IT TO HUMAN RESOURCES WITHIN 31 DAYS. If you have questions, please call your servicing Benefits Specialist.

Notice of Obligation

(For employees of USDA Marketing and Regulatory Programs and the Merit Systems Protection Board)


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