IIA

103D CONGRESS

2D SESSION H. R. 512

IN THE SENATE OF THE UNITED STATES

JULY 20, 1994

Received; read twice and referred to the Committee on Governmental Affairs

A ACT

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

provide that group life insurance benefits under such

chapter may, upon application, be paid out to an insured

individual who is terminally ill, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘FEGLI Living

5 Benefits Act’’.

6 SEC. 2. OPTION TO RECEIVE ‘‘LIVING BENEFITS’’.

7 (a) IN GENERAL.—Chapter 87 of title 5, United

8 States Code, is amended by inserting after section 8714c

9 the following:
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1 ‘‘§ 8714d. Option to receive ‘living benefits’

2 ‘‘(a) For the purpose of this section, an individual

3 shall be considered to be ‘terminally ill’ if such individual

4 has a medical prognosis that such individual’s life expect5 ancy is 9 months or less.

6 ‘‘(b) The Office of Personnel Management shall pre7 scribe regulations under which any individual covered by

8 group life insurance under section 8704(a) may, if such

9 individual is terminally ill, elect to receive a lump-sum

10 payment equal to—

11 ‘‘(1) the full amount of insurance under section

12 8704(a) (or portion thereof designated for this pur13 pose under subsection (d)(4)) which would otherwise

14 be payable under this chapter (on the establishment

15 of a valid claim)—

16 ‘‘(A) computed based on a date determined

17 under regulations of the Office (but not later

18 than 30 days after the date on which the indi19 vidual’s application for benefits under this sec20 tion is approved or deemed approved under sub21 section (d)(3)); and

22 ‘‘(B) assuming continued coverage under

23 this chapter at that time;

24 reduced by
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1 ‘‘(2) an amount necessary to assure that there

2 is no increase in the actuarial value of the benefit

3 paid (as determined under regulations of the Office).

4 ‘‘(c)(1) If a lump-sum payment is taken under this

5 section—

6 ‘‘(A) no insurance under the provisions of sec7 tion 8704 (a) or (b) shall be payable based on the

8 death or any loss of the individual involved, unless

9 the lump-sum payment represents only a portion of

10 the total benefits which could have been taken, in

11 which case benefits under those provisions shall re12 main in effect, except that the basic insurance

13 amount on which they are based—

14 ‘‘(i) shall be reduced by the percentage

15 which the designated portion comprised relative

16 to the total benefits which could have been

17 taken (rounding the result to the nearest mul18 tiple of $1,000 or, if midway between multiples

19 of $1,000, to the next higher multiple of

20 $1,000); and

21 ‘‘(ii) shall not be subject to further adjust22 ment; and

23 ‘‘(B) deductions and withholdings under section

24 8707, and contributions under section 8708, shall be

25 terminated with respect to such individual (or re-
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1 duced in a manner consistent with the percentage

2 reduction in the individual’s basic insurance amount,

3 if applicable), effective with respect to any amounts

4 which would otherwise become due on or after the

5 date of payment under this section.

6 ‘‘(2) An individual who takes a lump-sum payment

7 under this section (whether full or partial) remains eligible

8 for optional benefits under sections 8714a–8714c (subject

9 to payment of the full cost of those benefits in accordance

10 with applicable provisions of the section or sections in11 volved, to the same extent as if no election under this sec12 tion had been made).

13 ‘‘(d)(1) The Office’s regulations shall include provi14 sions regarding the form and manner in which an applica15 tion under this section shall be made and the procedures

16 in accordance with which any such application shall be

17 considered.

18 ‘‘(2) An application shall not be considered to be com19 plete unless it includes such information and supporting

20 evidence as the regulations require, including certification

21 by an appropriate medical authority as to the nature of

22 the individual’s illness and that the individual is not ex23 pected to live more than 9 months because of that illness.

24 ‘‘(3)(A) In order to ascertain the reliability of any

25 medical opinion or finding submitted as part of an applica-
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1 tion under this section, the covered individual may be re2 quired to submit to a medical examination under the direc3 tion of the agency or entity considering the application.

4 The individual shall not be liable for the costs associated

5 with any examination required under this subparagraph.

6 ‘‘(B) Any decision by the reviewing agency or entity

7 with respect to an application for benefits under this sec8 tion (including one relating to an individual’s medical

9 prognosis) shall not be subject to administrative review.

10 ‘‘(4)(A) An individual making an election under this

11 section may designate that only a limited portion (ex12 pressed as a multiple of $1,000) of the total amount other13 wise allowable under this section be paid pursuant to such

14 election.

15 ‘‘(B) A designation under this paragraph may not be

16 made by an individual described in paragraph (1) or (2)

17 of section 8706(b).

18 ‘‘(5) An election to receive benefits under this section

19 shall be irrevocable, and not more than one such election

20 may be made by any individual.

21 ‘‘(6) The regulations shall include provisions to ad22 dress the question of how to apply section 8706(b)(3)(B)

23 in the case of an electing individual who has attained 65

24 years of age.’’.
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1 (b) TABLE OF SECTIONS.—The table of sections for

2 chapter 87 of title 5, United States Code, is amended by

3 inserting after the item relating to section 8714c the

4 following:

‘‘8714d. Option to receive ‘living benefits’.’’.

5 SEC. 3. EFFECTIVE DATE; OPEN SEASON AND NOTICE.

6 (a) EFFECTIVE DATE.—The amendments made by

7 section 2 shall take effect 9 months after the date of the

8 enactment of this Act.

9 (b) OPEN SEASON; NOTICE.—(1) The Office of Per10 sonnel Management shall prescribe regulations under

11 which, beginning not later than 9 months after the date

12 of the enactment of this Act, and over a period of not

13 less than 8 weeks—

14 (A) an employee (as defined by section 8701(a)

15 of title 5, United States Code) who declined or vol16 untarily terminated coverage under chapter 87 of

17 such title—

18 (i) may elect to begin, or to resume, group

19 life insurance and group accidental death and

20 dismemberment insurance; and

21 (ii) may make such other elections under

22 such chapter as the Office may allow; and

23 (B) such other elections as the Office allows

24 may be made.
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1 (2) The Office shall take such action as may be nec2 essary to ensure that employees and any other individuals

3 who would be eligible to make an election under this sub4 section are afforded advance notification to that effect.

5 SEC. 4. FUNDING.

6 Notwithstanding section 8714(a)(1) of title 5, United

7 States Code, the Office of Personnel Management shall

8 retain in the Employees’ Life Insurance Fund such por9 tion of premium payments otherwise due as will, no later

10 than September 30, 1995, permanently reduce the contin11 gency reserve established under the third sentence of sec12 tion 8712 of such title 5 by an amount equal to the

13 amount by which payments from the Employees’ Life In14 surance Fund during the fiscal year ending September 30,

15 1995, exceed the payments that would have been paid had

16 the amendments made by this Act not been enacted.

Passed the House of Representatives July 19, 1994.

Attest: DONNALD K. ANDERSON,

Clerk.