I

104TH CONGRESS

1ST SESSION H. R. 2688

To amend chapter 87 of title 5, United States Code, to provide that the

reduction in additional optional life insurance for Federal retirees shall

not apply if the beneficiary is permanently disabled.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 29, 1995

Mrs. MORELLA (for herself, Mr. FRAZER, Mr. LEWIS of Georgia, and Mr. LIPINSKI) introduced the following bill; which was referred to the Committee on Government Reform and Oversight

A BILL

To amend chapter 87 of title 5, United States Code, to

provide that the reduction in additional optional life insurance for Federal retirees shall not apply if the beneficiary is permanently disabled.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. EXCEPTION FROM PROVISIONS REQUIRING RE4 DUCTION IN ADDITIONAL OPTIONAL LIFE IN5 SURANCE.

6 (a) IN GENERAL.—Subsection (c) of section 8714b

7 of title 5, United States Code, is amended by adding at

8 the end the following:
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1 ‘‘(3)(A) The amount of additional optional insurance

2 continued under paragraph (2) shall be continued, without

3 any reduction under the last two sentences thereof, if—

4 ‘‘(i) at the time of retirement, there is in effect

5 a designation under section 8705 under which the

6 entire amount of such insurance would be paid to an

7 individual who is permanently disabled; and

8 ‘‘(ii) an election under subsection (d)(3) on be9 half of such individual is made in timely fashion.

10 ‘‘(B) Notwithstanding subparagraph (A), any reduc11 tion required under paragraph (2) shall be made if—

12 ‘‘(i) the additional optional insurance is not in

13 fact paid in accordance with the designation under

14 section 8705, as in effect at the time of retirement;

15 ‘‘(ii) the Office finds that adequate arrange16 ments have not been made to ensure that the insur17 ance provided under this section will be used only

18 for the care and support of the individual so des19 ignated; or

20 ‘‘(iii) the election referred to in subparagraph

21 (A)(ii) terminates at any time before the death of

22 the individual who made such election.

23 ‘‘(C) For purposes of this paragraph, the term ‘per24 manently disabled’ shall have the meaning given such term

25 under regulations which the Office shall prescribe based
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1 on subparagraphs (A) and (C) of section 1614(a)(3) of

2 the Social Security Act, except that, in applying subpara3 graph (A) of such section for purposes of this subpara4 graph, ‘which can be expected to last permanently’ shall

5 be substituted for ‘which has lasted or can be expected

6 to last for a continuous period of not less than twelve

7 months’.’’.

8 (b) CONTINUED WITHHOLDINGS.—Subsection (d) of

9 such section 8714b is amended by adding at the end the

10 following:

11 ‘‘(3)(A) To be eligible for unreduced additional op12 tional insurance under subsection (c)(3), the insured indi13 vidual shall be required to elect, at such time and in such

14 manner as the Office by regulation requires (including

15 procedures for demonstrating compliance with the require16 ments of subsection (c)(3)), to have the full cost thereof

17 continue to be withheld from the former employee’s annu18 ity or compensation, as the case may be, beginning as of

19 when such withholdings would otherwise cease under the

20 second sentence of paragraph (1).

21 ‘‘(B) An election made by an insured individual under

22 subparagraph (A) (and withholdings pursuant thereto)

23 shall terminate in the event that—

24 ‘‘(i) the insured individual—

25 ‘‘(I) revokes such election; or
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1 ‘‘(II) makes any redesignation or other

2 change in the designation under section 8705

3 (as in effect at the time of retirement); or

4 ‘‘(ii) the Office finds, upon the application of

5 the insured individual or on its own initiative, that

6 any of the requirements or conditions for unreduced

7 additional optional insurance under subsection (c)(3)

8 are, at any time, no longer met.’’.

9 (c) EFFECTIVE DATE.—

10 (1) IN GENERAL.—The amendments made by

11 this section shall take effect on the date of the en12 actment of this Act.

13 (2) ELECTION FOR CERTAIN INDIVIDUALS NOT

14 OTHERWISE ELIGIBLE.—The Office of Personnel

15 Management shall prescribe regulations under which

16 an election under section 8714b(d)(3)(A) of title 5,

17 United States Code (as amended by this Act) may

18 be made, within 1 year after the date of the enact19 ment of this Act, by any individual not otherwise eli20 gible to make such an election, but only if such indi21 vidual—

22 (A) separated from service on or after the

23 first day of the 50-month period ending on the

24 date of enactment of this Act; and
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1 (B) would have been so eligible had the

2 amendments made by this Act (and implement3 ing regulations) been in effect as of the individ4 ual’s separation date (or, if earlier, the last day

5 for making such an election based on that sepa6 ration).

7 (3) WITHHOLDINGS.—

8 (A) PROSPECTIVE EFFECT.—If an individ9 ual makes an election under paragraph (2),

10 withholdings under section 8714b(d)(3)(A) of

11 such title 5 shall thereafter be made from such

12 individual’s annuity or compensation, as the

13 case may be.

14 (B) EARLIER AMOUNTS.—If, pursuant to

15 such election, benefits are in fact paid in ac16 cordance with section 8714b(c)(3) of such title

17 5 upon the death of the insured individual, an

18 appropriate reduction (computed under regula19 tions prescribed by the Office) shall be made in

20 such benefits to reflect the withholdings that—

21 (i) were not made (before the com22 mencement of withholdings under subpara23 graph (A)) by reason of the cessation of

24 withholdings under the second sentence of

25 section 8714b(d)(1) of such title; but
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1 (ii) would have been made had the

2 amendments made by this Act (and imple3 menting regulations) been in effect as of

4 the time described in paragraph (2)(B).

5 (4) NOTICE.—The Office shall, by publication

6 in the Federal Register and such other methods as

7 it considers appropriate, notify current and former

8 Federal employees as to the enactment of this Act

9 and any benefits for which they might be eligible

10 pursuant thereto. Included as part of such notifica11 tion shall be a brief description of the procedures for

12 making an election under paragraph (2) and any

13 other information that the Office considers appro14 priate.

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