Calendar No. 708

103D CONGRESS

2D SESSION H. R. 512

[Report No. 103–395]

AN ACT

To amend chapter 87 of title 5, United States

O

nally ill, and for other purposes.paid out to an insured individual who is termifits under such chapter may, upon application, beCode, to provide that group life insurance beneCTOBER 3 (legislative day, SEPTEMBER 12), 1994

Reported without amendment and an amendment to the

title
II

Calendar No. 708

103D CONGRESS

2D SESSION H. R. 512

[Report No. 103–395]

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.

IN THE SENATE OF THE UNITED STATES

JULY 20, 1994

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

OCTOBER 3 (legislative day, SEPTEMBER 12), 1994

Reported by Mr. GLENN, without amendment and an amendment to the title

AN 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,
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1 SECTION 1. SHORT TITLE.

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

3 Benefits Act’’.

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

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

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

7 the following:

8 ‘‘§ 8714d. Option to receive ‘living benefits’

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

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

11 has a medical prognosis that such individual’s life expect12 ancy is 9 months or less.

13 ‘‘(b) The Office of Personnel Management shall pre14 scribe regulations under which any individual covered by

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

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

17 payment equal to—

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

19 8704(a) (or portion thereof designated for this pur20 pose under subsection (d)(4)) which would otherwise

21 be payable under this chapter (on the establishment

22 of a valid claim)—

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

24 under regulations of the Office (but not later

25 than 30 days after the date on which the indi26 vidual’s application for benefits under this sec-
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1 tion is approved or deemed approved under sub2 section (d)(3)); and

3 ‘‘(B) assuming continued coverage under

4 this chapter at that time;

5 reduced by

6 ‘‘(2) an amount necessary to assure that there

7 is no increase in the actuarial value of the benefit

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

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

10 section—

11 ‘‘(A) no insurance under the provisions of sec12 tion 8704 (a) or (b) shall be payable based on the

13 death or any loss of the individual involved, unless

14 the lump-sum payment represents only a portion of

15 the total benefits which could have been taken, in

16 which case benefits under those provisions shall re17 main in effect, except that the basic insurance

18 amount on which they are based—

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

20 which the designated portion comprised relative

21 to the total benefits which could have been

22 taken (rounding the result to the nearest mul23 tiple of $1,000 or, if midway between multiples

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

25 $1,000); and
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1 ‘‘(ii) shall not be subject to further adjust2 ment; and

3 ‘‘(B) deductions and withholdings under section

4 8707, and contributions under section 8708, shall be

5 terminated with respect to such individual (or re6 duced in a manner consistent with the percentage

7 reduction in the individual’s basic insurance amount,

8 if applicable), effective with respect to any amounts

9 which would otherwise become due on or after the

10 date of payment under this section.

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

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

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

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

15 with applicable provisions of the section or sections in16 volved, to the same extent as if no election under this sec17 tion had been made).

18 ‘‘(d)(1) The Office’s regulations shall include provi19 sions regarding the form and manner in which an applica20 tion under this section shall be made and the procedures

21 in accordance with which any such application shall be

22 considered.

23 ‘‘(2) An application shall not be considered to be com24 plete unless it includes such information and supporting

25 evidence as the regulations require, including certification
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1 by an appropriate medical authority as to the nature of

2 the individual’s illness and that the individual is not ex3 pected to live more than 9 months because of that illness.

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

5 medical opinion or finding submitted as part of an applica6 tion under this section, the covered individual may be re7 quired to submit to a medical examination under the direc8 tion of the agency or entity considering the application.

9 The individual shall not be liable for the costs associated

10 with any examination required under this subparagraph.

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

12 with respect to an application for benefits under this sec13 tion (including one relating to an individual’s medical

14 prognosis) shall not be subject to administrative review.

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

16 section may designate that only a limited portion (ex17 pressed as a multiple of $1,000) of the total amount other18 wise allowable under this section be paid pursuant to such

19 election.

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

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

22 of section 8706(b).

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

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

25 may be made by any individual.
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1 ‘‘(6) The regulations shall include provisions to ad2 dress the question of how to apply section 8706(b)(3)(B)

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

4 years of age.’’.

5 (b) TABLE OF SECTIONS.—The table of sections for

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

7 inserting after the item relating to section 8714c the

8 following:

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

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

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

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

12 enactment of this Act.

13 (b) OPEN SEASON; NOTICE.—(1) The Office of Per14 sonnel Management shall prescribe regulations under

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

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

17 less than 8 weeks—

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

19 of title 5, United States Code) who declined or vol20 untarily terminated coverage under chapter 87 of

21 such title—

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

23 life insurance and group accidental death and

24 dismemberment insurance; and
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1 (ii) may make such other elections under

2 such chapter as the Office may allow; and

3 (B) such other elections as the Office allows

4 may be made.

5 (2) The Office shall take such action as may be nec6 essary to ensure that employees and any other individuals

7 who would be eligible to make an election under this sub8 section are afforded advance notification to that effect.

9 SEC. 4. FUNDING.

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

11 States Code, the Office of Personnel Management shall

12 retain in the Employees’ Life Insurance Fund such por13 tion of premium payments otherwise due as will, no later

14 than September 30, 1995, permanently reduce the contin15 gency reserve established under the third sentence of sec16 tion 8712 of such title 5 by an amount equal to the

17 amount by which payments from the Employees’ Life In18 surance Fund during the fiscal year ending September 30,

19 1995, exceed the payments that would have been paid had

20 the amendments made by this Act not been enacted.

Passed the House of Representatives July 19, 1994.

Attest: DONNALD K. ANDERSON,

Clerk.

Amend the title so as to read: ‘‘An Act to amend

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

group life insurance benefits under such chapter may,
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upon application, be paid out to an insured individual

who is terminally ill, and for other purposes.’’.