Divorce can be complicated, but for Alabama federal government employees pursuing divorce, it can come with additional layers of complexity. For example, retirement savings, deciphering health insurance, and other federal benefits can make the process more challenging and drawn out.
Understanding the unique aspects of federal government employee divorce is important, and having a Huntsville or Birmingham family lawyer with experience in this area is helpful for reaching a fair outcome. Here’s what you need to know about divorce for federal government employees in Alabama.
Terminating Federal Government Employee Benefits for a Former Spouse
A common concern for federal government employees is when their former spouse will lose coverage under their benefits, including health, dental, and vision insurance. If a federal employee is enrolled in Self Plus One or Self and Family options, their spouse remains eligible for coverage until the divorce is finalized.
After divorce, an ex-spouse will lose federal government employees Health Benefits (FEHB) coverage. However, there is an option for a 31-day extension of FEHB coverage. During this time, the former spouse can choose to move to an individual plan or continue under FEHB through Temporary Continuation of Coverage (TCC) for up to 36 months at their own expense.
To remove their ex-spouse from their health insurance, federal government employees must fill out form SF 2809 to change their enrollment. It’s also important to inform the Human Resources Office about the divorce. If the employee decides to keep Self and Family coverage, notifying HR of the divorce date allows the ex-spouse to be removed from the plan when the time comes.
Removing an Ex-Spouse from a Federal Government Employee Group Life Insurance Policy (FEGLI)
After a divorce, federal government employees generally also want to change the beneficiary of their federal government employee Group Life Insurance Policy (FEGLI) policy. This isn’t automatic and requires filling out Standard Form 2823. A court order can also mandate the assignment of FEGLI coverage to a former spouse or children under certain circumstances.
Dividing Federal Employee Retirement System (FERS) and Civil Service Retirement System (CSRS) Benefits During Divorce
federal government employees may worry about how their Federal Employee Retirement System (FERS) and Civil Service Retirement System (CSRS) plans will be affected. These federal retirement systems have different rules from private sector pensions and from each other.
The division of these benefits is typically negotiated during the divorce process. Under FERS, the maximum amount an ex-spouse can receive is 50 percent, with the remaining amount going to the current spouse if there is one. For CSRS, the maximum amount is 55 percent.
During a divorce, a Court Order Acceptable for Processing (COAP) is used to determine the marital share of a pension if the employee is still working at the time of divorce. This order remains on file with the Office of Personnel Management (OPM) until the employee retires.
Dividing a Thrift Savings Plan (TSP) During Divorce
The money contributed during marriage to a Thrift Savings Plan (TSP), a retirement savings plan available to federal government employees, is considered marital property. federal government employees are prohibited from taking out a loan against their TSP while married without their spouse’s written consent.
The court may issue an order to freeze the TSP account until the divorce is finalized, preventing loans or withdrawals during this period. TSP accounts can also be garnished for child or spousal support.
A TSP can be divided in divorce through a Retirement Benefits Court Order (RBCO) or a court-approved property settlement. Once there is an agreement on division, the spouse can choose how to receive their share. A separate court order is required to send the ex-spouse the amount awarded in the divorce decree.
Dividing a Federal Annuity During Divorce
A court order related to divorce, legal separation, or annulment can divide a federal annuity for a government employee. The spouse’s share is usually stated as a fixed amount or a percentage of the annuity, payable after deductions for insurance and taxes.
When a Federal Government Employee Gets Remarried
If a federal employee decides to remarry, they may want to add their new spouse to their benefits. Whether retired or still employed, the employee has the right to add a new spouse to their FEHB plan.
Coverage can start on the date of marriage or during any open enrollment period. The new spouse may also be eligible for spousal survivor benefits if the federal employee meets certain service requirements under FERS or CSRS.
Find an Alabama family law attorney to help with your divorce if you are a federal government employee.
If you are a federal government employee or married to one, and divorce is on the horizon, you’ll likely face emotional hurdles and significant financial considerations. Addressing these matters early in the divorce process can help to avoid costly mistakes later.
Working with a skilled and experienced Alabama family law attorney who understands the intricacy of federal employee divorce can help set you on a better future. At Summit Family Law, our team of Alabama family law attorneys has vast experience handling divorces on behalf of federal government employees or their spouses.
We have offices conveniently located in Huntsville or Birmingham to serve you. Call us today or schedule a consultation.
