Home > 105th Congressional Bills > H.R. 2675 (ih) To require that the Office of Personnel Management submit proposed legislation under which group universal life insurance and group variable universal life insurance would be available under chapter 87 of title 5, United States Code, and fo...H.R. 2675 (ih) To require that the Office of Personnel Management submit proposed legislation under which group universal life insurance and group variable universal life insurance would be available under chapter 87 of title 5, United States Code, and fo...
H.R.2675
One Hundred Fifth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-
eight
An Act
To provide for the Office of Personnel Management to conduct a study and
submit a report to Congress on the provision of certain options for
universal life insurance coverage and additional death and dismemberment
insurance under chapter 87 of title 5, United States Code, to improve
the administration of such chapter, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Employees Life Insurance
Improvement Act''.
SEC. 2. STUDY AND REPORT ON CERTAIN LIFE INSURANCE OPTIONS OFFERED TO
FEDERAL EMPLOYEES.
(a) In General.--Not later than July 31, 1998, the Office of
Personnel Management shall conduct a study on life insurance options
for Federal employees described under subsection (b) and submit a
report to Congress.
(b) Study and Report.--The study and report referred to under
subsection (a) shall--
(1) survey and ascertain the interest of Federal employees in
an offering under chapter 87 of title 5, United States Code, of
insurance coverage options relating to--
(A) group universal life insurance;
(B) group variable universal life insurance; and
(C) additional voluntary accidental death and dismemberment
insurance; and
(2) include any comments, analysis, and recommendations of the
Office of Personnel Management relating to such options.
SEC. 3. REPEAL OF MAXIMUM LIMITATION ON EMPLOYEE INSURANCE.
Chapter 87 of title 5, United States Code, is amended--
(1) in section 8701(c), in the first sentence, by striking the
comma immediately following ``$10,000'' and all that follows and
inserting a period; and
(2) in section 8714b(b), in the first sentence, by striking
``except'' and all that follows and inserting a period.
SEC. 4. FOSTER CHILD COVERAGE.
Section 8701(d)(1)(B) of title 5, United States Code, is amended by
inserting ``or foster child'' after ``stepchild'' both places it
appears.
SEC. 5. INCONTESTABILITY OF ERRONEOUS COVERAGE.
Section 8706 of title 5, United States Code, as amended by section
5(2), is further amended by adding at the end the following new
subsection:
``(g) The insurance of an employee under a policy purchased under
section 8709 shall not be invalidated based on a finding that the
employee erroneously became insured, or erroneously continued insurance
upon retirement or entitlement to compensation under subchapter I of
chapter 81 of this title, if such finding occurs after the erroneous
insurance and applicable withholdings have been in force for 2 years
during the employee's lifetime.''.
SEC. 6. DIRECT PAYMENT OF INSURANCE CONTRIBUTIONS.
Chapter 87 of title 5, United States Code, is amended--
(1) in section 8707--
(A) in subsection (a), by striking ``(a) During'' and
inserting ``(a) Subject to subsection (c)(2), during'';
(B) in subsection (b), by striking ``(b)(1) Whenever'' and
inserting ``(b)(1) Subject to subsection (c)(2), whenever'';
and
(C) in subsection (c), by inserting ``(1)'' immediately
after ``(c)'' and by adding at the end the following new
paragraph:
``(2) An employee who is subject to withholdings under this section
and whose pay, annuity, or compensation is insufficient to cover such
withholdings may nevertheless continue insurance if the employee
arranges to pay currently into the Employees' Life Insurance Fund,
through the agency or retirement system that administers pay, annuity,
or compensation, an amount equal to the withholdings that would
otherwise be required under this section.'';
(2) in section 8714a(d), by adding at the end the following new
paragraph:
``(3) Notwithstanding paragraph (1), an employee who is subject to
withholdings under this subsection and whose pay, annuity, or
compensation is insufficient to cover such withholdings may
nevertheless continue optional insurance if the employee arranges to
pay currently into the Employees' Life Insurance Fund, through the
agency or retirement system which administers pay, annuity, or
compensation, an amount equal to the withholdings that would otherwise
be required under this subsection.'';
(3) in section 8714b(d), by adding at the end the following new
paragraph:
``(3) Notwithstanding paragraph (1), an employee who is subject to
withholdings under this subsection and whose pay, annuity, or
compensation is insufficient to cover such withholdings may
nevertheless continue additional optional insurance if the employee
arranges to pay currently into the Employees' Life Insurance Fund,
through the agency or retirement system which administers pay, annuity,
or compensation, an amount equal to the withholdings that would
otherwise be required under this subsection.''; and
(4) in section 8714c(d), by adding at the end the following new
paragraph:
``(3) Notwithstanding paragraph (1), an employee who is subject to
withholdings under this subsection and whose pay, annuity, or
compensation is insufficient to cover such withholdings may
nevertheless continue optional life insurance on family members if the
employee arranges to pay currently into the Employees' Life Insurance
Fund, through the agency or retirement system that administers pay,
annuity, or compensation, an amount equal to the withholdings that
would otherwise be required under this subsection.''.
SEC. 7. ADDITIONAL OPTIONAL LIFE INSURANCE CONTINUATION AND
PORTABILITY.
(a) In General.--Section 8714b of title 5, United States Code, is
amended--
(1) in subsection (c)--
(A) by striking the last 2 sentences of paragraph (2); and
(B) by adding at the end the following:
``(3) The amount of additional optional insurance continued under
paragraph (2) shall be continued, with or without reduction, in
accordance with the employee's written election at the time eligibility
to continue insurance during retirement or receipt of compensation
arises, as follows:
``(A) The employee may elect to have withholdings cease in
accordance with subsection (d), in which case--
``(i) the amount of additional optional insurance continued
under paragraph (2) shall be reduced each month by 2 percent
effective at the beginning of the second calendar month after
the date the employee becomes 65 years of age and is retired or
is in receipt of compensation; and
``(ii) the reduction under clause (i) shall continue for 50
months at which time the insurance shall stop.
``(B) The employee may, instead of the option under
subparagraph (A), elect to have the full cost of additional
optional insurance continue to be withheld from such employee's
annuity or compensation on and after the date such withholdings
would otherwise cease pursuant to an election under subparagraph
(A), in which case the amount of additional optional insurance
continued under paragraph (2) shall not be reduced, subject to
paragraph (4).
``(C) An employee who does not make any election under the
preceding provisions of this paragraph shall be treated as if such
employee had made an election under subparagraph (A).
``(4) If an employee makes an election under paragraph (3)(B), that
individual may subsequently cancel such election, in which case
additional optional insurance shall be determined as if the individual
had originally made an election under paragraph (3)(A).
``(5)(A) An employee whose additional optional insurance under this
section would otherwise stop in accordance with paragraph (1) and who
is not eligible to continue insurance under paragraph (2) may elect,
under conditions prescribed by the Office of Personnel Management, to
continue all or a portion of so much of the additional optional
insurance as has been in force for not less than--
``(i) the 5 years of service immediately preceding the date of
the event which would cause insurance to stop under paragraph (1);
or
``(ii) the full period or periods of service during which the
insurance was available to the employee, if fewer than 5 years,
at group rates established for purposes of this section, in lieu of
conversion to an individual policy. The amount of insurance continued
under this paragraph shall be reduced by 50 percent effective at the
beginning of the second calendar month after the date the employee or
former employee attains age 70 and shall stop at the beginning of the
second calendar month after attainment of age 80, subject to a
provision for temporary extension of life insurance coverage and for
conversion to an individual policy of life insurance under conditions
approved by the Office. Alternatively, insurance continued under this
paragraph may be reduced or stopped at any time the employee or former
employee elects.
``(B) When an employee or former employee elects to continue
additional optional insurance under this paragraph following separation
from service or 12 months without pay, the insured individual shall
submit timely payment of the full cost thereof, plus any amount the
Office determines necessary to cover associated administrative
expenses, in such manner as the Office shall prescribe by regulation.
Amounts required under this subparagraph shall be deposited, used, and
invested as provided under section 8714 and shall be reported and
accounted for together with amounts withheld under section 8714a(d).
``(C)(i) Subject to clause (ii), no election to continue additional
optional insurance may be made under this paragraph 3 years after the
effective date of this paragraph.
``(ii) On and after the date on which an election may not be made
under clause (i), all additional optional insurance under this
paragraph for former employees shall terminate, subject to a provision
for temporary extension of life insurance coverage and for conversion
to an individual policy of life insurance under conditions approved by
the Office.''; and
(2) in the second sentence of subsection (d)(1) by inserting
``if insurance is continued as provided under subsection
(c)(3)(A),'' after ``except that,''.
(b) Report.--Not later than 3 years after the date of enactment of
this Act, the Office of Personnel Management shall submit a report to
Congress on additional optional insurance provided under section
8714b(c)(5) of title 5, United States Code (as added by subsection (a)
of this section). Such report shall include recommendations on whether
continuation for such additional optional insurance should terminate as
provided under such section, be extended, or be made permanent.
(c) Technical Amendment.--The last sentence of section 8714b(d)(1)
of title 5, United States Code, is amended by inserting ``(and any
amounts withheld as provided in subsection (c)(3)(B))'' after ``Amounts
so withheld''.
SEC. 8. IMPROVED OPTIONAL LIFE INSURANCE ON FAMILY MEMBERS.
(a) In General.--Section 8714c(b) of title 5, United States Code,
is amended to read as follows:
``(b)(1) The optional life insurance on family members provided
under this section shall be made available to each eligible employee
who has elected coverage under this section, under conditions the
Office shall prescribe, in multiples, at the employee's election, of 1,
2, 3, 4, or 5 times--
``(A) $5,000 for a spouse; and
``(B) $2,500 for each child described under section 8701(d).
``(2) An employee may reduce or stop coverage elected pursuant to
this section at any time.''.
(b) Technical and Conforming Amendments.--Section 8714c of title 5,
United States Code, is amended--
(1) in subsection (c)(2), by striking ``section 8714b(c)(2) of
this title'' and inserting ``section 8714b(c) (2) through (4)'';
and
(2) in subsection (d)(1), by inserting before the last sentence
the following: ``Notwithstanding the preceding sentence, the full
cost shall be continued after the calendar month in which the
former employee becomes 65 years of age if, and for so long as, an
election under this section corresponding to that described in
section 8714b(c)(3)(B) remains in effect with respect to such
former employee.''.
SEC. 9. OPEN SEASON.
Beginning not later than 180 days after the date of enactment of
this Act, the Office of Personnel Management shall conduct an open
enrollment opportunity for purposes of chapter 87 of title 5, United
States Code, over a period of not less than 8 weeks. During this
period, an employee (as defined under section 8701(a) of such title)--
(1) may, if the employee previously declined or voluntarily
terminated any coverage under chapter 87 of such title, elect to
begin, resume, or increase group life insurance (and acquire
applicable accidental death and dismemberment insurance) under all
sections of such chapter without submitting evidence of
insurability; and
(2) may, if currently insured for optional life insurance on
family members, elect an amount above the minimum insurance on a
spouse.
SEC. 10. MERIT SYSTEM JUDICIAL REVIEW.
(a) In General.--Section 7703 of title 5, United States Code, is
amended--
(1) in subsection (b)(1) by striking ``within 30 days'' and
inserting ``within 60 days''; and
(2) in subsection (d) in the first sentence, by inserting after
``filing'' the following: ``, within 60 days after the date the
Director received notice of the final order or decision of the
Board,''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of enactment of this Act, and apply to any suit,
action, or other administrative or judicial proceeding pending on such
date or commenced on or after such date.
SEC. 11. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided in this Act, the
amendments made by this Act shall take effect on the date of enactment
of this Act.
(b) Maximum Limitation on Employee Insurance.--Section 3 shall take
effect on the first day of the first applicable pay period beginning on
or after the date of enactment of this Act.
(c) Erroneous Coverage.--Section 5 shall be effective in any case
in which a finding of erroneous insurance coverage is made on or after
the date of enactment of this Act.
(d) Direct Payment of Insurance Contributions.--Section 6 shall
take effect on the first day of the first applicable pay period
beginning on or after the date of enactment of this Act.
(e) Additional Optional Life Insurance.--
(1) In general.--Section 7 shall take effect on the first day
of the first pay period that begins on or after the 180th day
following the date of enactment of this Act, or on any earlier date
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