Text: H.R.2675 — 105th Congress (1997-1998)All Information (Except Text)

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Public Law No: 105-311 (10/30/1998)

 
[105th Congress Public Law 311]
[From the U.S. Government Printing Office]


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[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:
---------------------------------------------------------------------------

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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