[105th Congress Public Law 311]
[From the U.S. Government Printing Office]
<DOC>
[DOCID: f:publ311.105]
[[Page 2949]]
FEDERAL EMPLOYEES LIFE INSURANCE IMPROVEMENT ACT
[[Page 112 STAT. 2950]]
Public Law 105-311
105th Congress
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. <<NOTE: Oct.
30, 1998 - [H.R. 2675]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress <<NOTE: Federal Employees Life
Insurance Improvement Act.
5 USC 8701 note.>> 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.
[[Page 112 STAT. 2951]]
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
[[Page 112 STAT. 2952]]
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,
[[Page 112 STAT. 2953]]
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 <<NOTE: Deadline. 5 USC 8714b note.>> 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).
[[Page 112 STAT. 2954]]
``(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. <<NOTE: Deadline. 5 USC 8701 note.>> 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 <<NOTE: 5 USC 7703 note.>> 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. <<NOTE: 5 USC 8701 note.>> 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
[[Page 112 STAT. 2955]]
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 that the Office of Personnel Management may
prescribe that is at least 60 days after the date of enactment
of this Act.
(2) Regulations.--The Office shall prescribe regulations
under which an employee may elect to continue additional
optional insurance that remains in force on such effective date
without subsequent reduction and with the full cost withheld
from annuity or compensation on and after such effective date if
that employee--
(A) separated from service before such effective
date due to retirement or entitlement to compensation
under subchapter I of chapter 81 of title 5, United
States Code; and
(B) continued additional optional insurance pursuant
to section 8714b(c)(2) as in effect immediately before
such effective date.
(f) Improved Optional Life Insurance on Family Members.--The
amendments made by section 8 shall take effect on the first day of the
first pay period which begins on or after the 180th day following the
date of enactment of this Act or on any earlier date that the Office of
Personnel Management may prescribe.
(g) Open Season.--Any election made by an employee under section 9,
and applicable withholdings, shall be effective on the first day of the
first applicable pay period that--
(1) begins on or after the date occurring 365 days after the
first day of the election period authorized under section 9; and
(2) follows a pay period in which the employee was in a pay
and duty status.
Approved October 30, 1998.
LEGISLATIVE HISTORY--H.R. 2675:
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HOUSE REPORTS: No. 105-373 (Comm. on Government Reform and Oversight).
SENATE REPORTS: No. 105-337 (Comm. on Governmental Affairs).
CONGRESSIONAL RECORD:
Vol. 143 (1997):
Nov. 4, considered and passed House.
Vol. 144 (1998):
Oct. 5, considered and passed
Senate, amended.
Oct. 8, House concurred in Senate
amendments.
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