64530 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 870

RIN 3206–AG63

Federal Employees’ Group Life

Insurance Program: Miscellaneous

Changes and Clarifications and Plain

Language Rewrite

AGENCY: Office of Personnel

Management.

ACTION: Proposed rule.

SUMMARY: The Office of Personnel

Management (OPM) is proposing a

complete rewrite of the Federal

Employees’ Group Life Insurance

(FEGLI) regulations. We are changing

the format of the regulations and using

plain language to make the regulations

easier to understand. We are also

proposing some miscellaneous changes,

clarifications, and corrections, which

are spelled out in the Supplementary

Information.

DATES: OPM must receive comments on

or before December 26, 2000.

ADDRESSES: Send written comments to

Abby L. Block, Chief, Insurance Policy

and Information Division, Office of

Insurance Programs, Retirement and

Insurance Service, Office of Personnel

Management, 1900 E Street NW.,

Washington, DC 20415–3666; or deliver

to OPM, Room 3425, 1900 E Street NW.,

Washington, DC; or FAX to (202) 606–

0633.

FOR FURTHER INFORMATION CONTACT:

Karen Leibach, (202) 606–0004.

SUPPLEMENTARY INFORMATION: In line

with the President’s Memorandum of

June 1, 1998 (Plain Language in

Government Writing), the Office of

Personnel Management (OPM) is

rewriting the Federal Employees’ Group

Life Insurance (FEGLI) regulations. We

are writing most of the sections in

question and answer format, using

tables, and addressing the regulations to

the intended reader (usually the insured

or eligible individual). We are also using

simpler language as much as possible.

The purpose is to make the regulations

easier to understand.

These regulations also propose

various changes, clarifications, and

corrections. These are:

Changes

(1) We recognize that sometimes there

are situations in which a terminally ill

person is not able to elect a living

benefit. In consideration of these

individuals, we are changing subpart K

to allow someone to elect a living

benefit on behalf of an insured

individual in certain circumstances. The

requirements are that the insured person

must be physically or mentally

incapable of making the election; the

applicant must have a power of attorney

or court order that would allow him/her

to make such an election; and the

applicant must either be the sole

beneficiary or have the written and

signed consent of each beneficiary.

(2) There are occasional situations in

which a person’s employment may be

creditable under subchapter III of

chapter 83 or chapter 84 of title 5,

United States Code, but may not give

the person eligibility for FEGLI. For

determining whether an employee is

eligible to continue FEGLI as an

annuitant or compensationer, we are

changing the definition of ‘‘service’’ to

mean service during which the

employee is eligible for FEGLI.

(3) We are removing the exclusion for

employees whose annual pay is $12 per

year or less, since it’s a rather outdated

provision. It’s not very likely that there

are any employees this would apply to.

Any employee earning a salary of $12 or

less per year is probably already

excluded under other provisions.

(4) We are adding information to the

regulations about the circumstances

allowing family members to convert

Option C coverage. Family members

may convert Option C if the insured

employee/annuitant/compensationer

dies, or if the insurance terminates and

the insured individual doesn’t convert

the coverage. Family members may not

convert if they lose eligibility as covered

family members.

(5) We are changing the regulations to

simplify what happens when an

employee transfers from a covered

position to an excluded position.

Currently, some such transfers allow the

employee to keep FEGLI coverage, some

cause him/her to lose the coverage, and

one allows the employee to keep

coverage if he/she expects to return to

the covered position. The new

regulations will allow all employees to

keep their FEGLI coverage, if they

transfer to a position excluded by

regulation with a break in service of not

more than 3 days. This does not apply

to positions excluded by law.

(6) We are expanding the regulations

to include a list of medical conditions

that automatically allow a child age 22

and over to be covered under Option C

coverage. These are the same conditions

that allow an overage dependent to be

covered under a self and family

enrollment under the Federal

Employees Health Benefits (FEHB)

Program.

(7) The current regulations state that

under Full Reduction, Option B and

Option C coverage terminates at 12:00

noon on the day before the 50th

reduction. We are changing this to the

end of the last day of the month in

which the 49th reduction occurs. This

allows for a full day of coverage on the

last day before the coverage ends.

(8) When reemployed annuitants

separate, they may keep the insurance

they got through reemployment if they

qualify for a supplemental annuity or

receive a new retirement right.

However, some retirement systems don’t

allow their annuitants to get a

supplemental annuity or new retirement

right. To be fair to these annuitants, we

are revising the regulations to allow

them to keep their reemploymentacquired insurance if they would

otherwise qualify for a supplemental

annuity or new retirement right—but are

unable to receive it due to the

provisions of their retirement system.

(9) The regulations currently state that

a child qualifies as a recognized natural

child if a court determines that the

insured person is the child’s father, and

the court makes that determination

before the man dies. We are expanding

the regulations to allow a court

determination of paternity based on the

results of DNA testing both before and

after the death of the insured.

(10) The regulations currently include

information on reemployed annuitants.

We have expanded the regulations to

include information on reemployed

compensationers.

(11) Current regulations require that

an employee who is retiring or

becoming insured as a compensationer

must choose the number of multiples of

Option B and Option C he/she wants to

continue into retirement. Any multiples

not continued cancel, and the employee

does not get the 31-day extension of

coverage or right to convert. Since some

employees may wish to convert their

insurance, instead of continuing it into

retirement or compensation, we are

changing the regulations to say that any

multiples not continued terminate,

rather than cancel. This will give the

employee the 31-day extension of

coverage and the right to convert.

(12) We are changing the time frames

for conversion and portability to make

them the same. Currently the time frame

for conversion is a postmark within 31

days from the date of the terminating

event or 31 days from the date the

employee or assignee receives the notice

of loss of group coverage and right to

convert, whichever is later. The

individual may also request conversion

within 6 months after becoming eligible,

if he/she was unable to do so on time

because of reasons beyond his/her

control. The current time frame for

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64531

portability is a request within 60 days

from the date of the terminating event.

We are making the time frame the same

for both conversion and portability.

OFEGLI (for conversion) or the

Portability Office (for portability) must

receive a request within 65 days from

the date of the terminating event, with

the 6-month ‘‘reasons beyond control’’

provision for both. We are also changing

the regulations to state that an

individual who wants to port Option B

must submit the request to the

Portability Office; currently the

individual must send the request to both

the employing office and the Portability

Office.

(13) If a disability annuitant’s annuity

stops because he/she recovers or returns

to earning capacity, or if a

compensationer’s compensation stops

because the Department of Labor finds

that he/she is able to return to work, the

individual’s FEGLI stops. Current

regulations state that the person does

not receive the 31-day extension of

coverage or right to convert. We are

changing the regulations to allow these

individuals to have the 31-day

extension and the opportunity to

convert their coverage.

(14) Current regulations spell out pay

and duty status requirements before

open season elections become effective.

We are removing the specific

requirements and stating that we will

announce the requirements for a

particular open season in a Federal

Register notice. This gives us the

flexibility to vary the requirements with

the needs of each open season.

Clarifications

(1) We are clarifying the regulations to

state that a faxed designation of

beneficiary is acceptable in certain

circumstances. The appropriate office

must receive the faxed designation

before the insured person dies, and the

office must receive the original

designation within 30 days of when it

received the faxed version. The original

must be identical to the faxed copy.

(2) We are stating in the regulations

that a witness to an assignment must be

someone other than the assignee.

(3) A witness to a designation cannot

be named as a beneficiary. We are

revising the regulations to show what

happens if an agency or retirement

system erroneously accepts such a

designation. The witness/beneficiary is

disqualified from receiving benefits. If

that person is the only beneficiary

listed, the designation is not valid.

Benefits will then be paid according to

the last designation on file; if there is

none, benefits will go to whoever is next

under the order of precedence. If the

designation lists another beneficiary or

beneficiaries, they will get the

disqualified person’s share.

(4) At the time of retirement or

becoming insured as a compensationer,

an employee must make an election for

post-65 reduction of Basic insurance.

We are making it clear that if a person

doesn’t make this election, he/she

automatically gets 75% Reduction.

(5) We are clarifying the regulations to

state that only the insured person (or the

assignee) has the right to convert when

insurance terminates. No one may

convert on behalf of the insured person.

(There is an exception that allows

family members to convert Option C

coverage in certain circumstances. We

discussed this previously in item (4)

under Changes.) We are also making it

clear that only the employee may elect

Optional insurance and make the initial

post-65 reduction election for Basic,

Option B, and Option C. No one may

make such an election on behalf of the

employee. And we are making it clear

that only the insured person (or the

assignee) can cancel FEGLI. No one may

cancel insurance on behalf of the

insured person.

(6) We have changed ‘‘change in

family circumstances’’ to ‘‘life event.’’

This is a simpler phrase and is

consistent with more common usage.

We have also changed ‘‘open enrollment

period’’ to ‘‘open season’’ for the same

reasons. This doesn’t mean that FEGLI

open seasons will become annual

events, as FEHB open seasons are.

FEGLI open seasons will remain

occasional events, as scheduled by

OPM.

(7) Acquiring an eligible child is a life

event that allows an employee to make

an Option B and/or Option C election.

We are clarifying the regulations to state

that the definition of child for life

events purposes is the same as the

definition of child as an eligible family

member.

(8) We are expanding the definitions

section to include definitions of

‘‘accidental death and dismemberment,’’

‘‘beneficiary,’’ ‘‘cancellation,’’ ‘‘days,’’

‘‘living benefits,’’ ‘‘port’’ and ‘‘ported

coverage,’’ ‘‘separation,’’ ‘‘termination,’’

and ‘‘we.’’

(9) If an insured person cancels his/

her insurance, the insurance stops at the

end of the pay period in which the

person files the waiver. We are

clarifying the regulations to say that this

is the end of the last day of that pay

period.

(10) We are dropping the phrase ‘‘if

not already an even thousand’’ from the

requirement for rounding annual pay to

determine the amount of Option B

coverage. If the salary is already an even

thousand, there is no need to round; so

the phrase is unnecessary.

(11) We are clarifying the regulations

to state that, even though there is no

longer a maximum on the amount of

Basic insurance and Option B, if an

employee’s salary is ‘‘capped’’ by law,

the Basic and Option B FEGLI amounts

are based on the capped salary (the

amount the employee is actually being

paid), not the amount the salary would

be without the cap.

(12) There are no waivers of the ‘‘5-

year/all-opportunity’’ requirements for

continuing FEGLI as an annuitant or

compensationer. We are clarifying the

regulations to state this.

Corrections

(1) We are correcting the regulations

to reflect that accidental death and

dismemberment benefits apply to loss of

sight, not just to loss of an eye.

(2) Employees who have an interim

appointment under § 772.102 of this

chapter are eligible for coverage unless

their position is excluded by law. This

provision was inadvertently removed

from the regulations.

(3) We are correcting the regulations

concerning how long FEGLI continues

for persons covered under the hostage

provisions (subpart J). For hostages in

Iraq and Kuwait, coverage terminates 12

months after hostage status ends. For

hostages captured in Lebanon, coverage

terminates 60 months after hostage

status ends.

(4) We are correcting § 870.103 to

show that OPM has the authority to

correct administrative errors. The word

‘‘administrative’’ was inadvertently

removed from the regulations.

Regulatory Flexibility Act

I certify that this regulation will not

have a significant economic impact on

a substantial number of small entities,

because the regulation only affects life

insurance benefits of Federal employees

and retirees.

List of Subjects in 5 CFR Part 870

Administrative practice and

procedure, Government employees,

Hostages, Iraq, Kuwait, Lebanon, Life

insurance, Retirement.

Office of Personnel Management.

Janice R. Lachance,

Director.

OPM is proposing to amend 5 CFR

part 870 as follows:

Part 870 is revised to read as follows:

64532 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

PART 870—FEDERAL EMPLOYEES’

GROUP LIFE INSURANCE PROGRAM

Subpart A—Administration and General

Provisions

Sec.

870.101 Definitions.

870.102 How is FEGLI set up?

870.103 Who can correct an error in my

coverage?

870.104 What if I get coverage by mistake?

870.105 What if I think my agency or

retirement system made the wrong

decision about my coverage?

870.106 How long do I have to request a

reconsideration?

870.107 Can I get an extension of this time

limit?

870.108 Who does the reconsideration?

870.109 What if someone thinks OFEGLI

paid benefits incorrectly?

870.110 Special information for census

workers.

Subpart B—Types and Amounts of

Insurance

870.201 What types of insurance does the

FEGLI Program have?

870.202 What is my Basic insurance

amount (BIA)?

870.203 Does my BIA ever change?

870.204 Is the BIA the amount my survivors

will receive when I die?

870.205 What is the post-election BIA?

870.206 What do you mean by my annual

rate of pay?

870.207 What is included in my annual

pay?

870.208 What if my pay isn’t annual or fulltime or regular?

870.209 What is the amount of my Optional

insurance?

870.210 Are these the amounts that will be

paid when I die or if a family member

dies?

870.211 Does FEGLI have accidental death

and dismemberment benefits?

870.212 What is the amount of my AD&D

coverage?

Subpart C—Eligibility

870.301 Am I eligible for Basic or Optional

insurance?

870.302 What is an excluded position?

870.303 Who is excluded by law?

870.304 Who is excluded by regulation?

870.305 Are there any other exceptions to

these exclusions?

870.306 Are foster children eligible as

family members under my Option C

coverage?

870.307 What do I have to do to cover a

disabled child over age 22?

Subpart D—Cost of Insurance

870.401 Who pays for FEGLI?

870.402 How much do I have to pay for

Basic insurance?

870.403 How much do I pay if I’m insured

as an annuitant or compensationer?

870.404 How does the Government

contribution for Basic insurance work?

870.405 How much do I have to pay for

Optional insurance?

870.406 When I move from one age group

to another, when do I start paying the

higher premiums?

870.407 What happens to my withholding if

I elect a living benefit?

870.408 What happens if my employing

office doesn’t withhold enough?

870.409 What if my pay is too low to make

the withholdings?

870.410 What else should I know about

withholdings and contributions?

Subpart E—Coverage

870.501 How do I get Basic insurance?

870.502 How do I get Optional insurance?

870.503 When does Optional insurance

become effective?

870.504 Are there any extensions to the 31-

day time limit for electing Optional

insurance?

870.505 Can I cancel my insurance?

870.506 How long does my waiver last?

870.507 How can I cancel my waiver and

get insurance?

870.508 How do I cancel my waiver by

getting a physical exam?

870.509 What happens after OFEGLI makes

its decision?

870.510 What is a life event?

870.511 How do I cancel my waiver if I

have a life event?

870.512 When can I make a life event

election?

870.513 How many multiples of Options B

and C can I elect due to a life event?

870.514 When does my Option B and

Option C life event coverage become

effective?

870.515 Are there any extensions to the

time limit for making a life event

election?

870.516 How often does OPM have FEGLI

open seasons?

870.517 What coverage can I elect during an

open season?

870.518 What is the effective date for open

season elections?

870.519 Are there any extensions to the

open season dates?

870.520 Can annuitants and

compensationers get FEGLI coverage?

870.521 What happens if I leave

Government and then return to service?

870.522 What happens if I go into a nonpay

status?

870.523 Special nonpay situations.

Subpart F—Termination and Conversion

870.601 When does my Basic insurance

stop?

870.602 When does my Optional insurance

stop?

870.603 Can I convert my insurance to a

private policy?

870.604 How long do I have to convert my

insurance?

870.605 Are there any extensions to the

time limit for conversion?

870.606 When is my conversion policy

effective?

870.607 Can my family members convert

my Option C coverage?

Subpart G—Annuitants and

Compensationers

870.701 Can I keep my life insurance when

I retire?

870.702 Can I keep my life insurance if I

become a compensationer?

870.703 Do I have to meet the 5-year/allopportunity requirement for all my

insurance?

870.704 How much insurance can I

continue as an annuitant or

compensationer?

870.705 Are these the amounts that will be

paid when I die or if a family member

dies?

870.706 What kind of election can I make

about reductions in my Basic insurance?

870.707 Can I change my post-65 reduction

election for Basic insurance?

870.708 What kind of election can I make

about reductions in my Optional

insurance?

870.709 When do I have to make the post65 reduction election for Option B and

Option C?

870.710 What if I was already retired or

insured as a compensationer on April 24,

1999?

870.711 Can I change my post-65 reduction

election for Option B or Option C?

870.712 Do the post-65 reductions apply to

all annuitants and compensationers?

870.713 What if I’m an MRA+10 annuitant?

870.714 What if I don’t want to continue

my insurance as an annuitant or

compensationer?

870.715 When does my insurance as an

annuitant or compensationer stop?

870.716 Can my insurance be reinstated?

870.717 What happens if I retire and then

come back to work for the Federal

Government?

870.718 Can I elect more life insurance if I

return to service?

870.719 What happens if I die or a family

member dies after I return to service?

870.720 What happens when I separate

from service again?

870.721 What happens if I come back to

work part-time, but I’m still receiving

compensation?

Subpart H—Order of Precedence and

Designation of Beneficiary

870.801 Who gets the life insurance benefits

when I die?

870.802 What are the requirements for a

court order to be valid?

870.803 Can I designate a beneficiary?

870.804 How do I make a designation?

870.805 Where do I have to file my

designation form?

870.806 Can I change my designation?

870.807 How long does my designation

last?

870.808 How does OFEGLI pay Option C

benefits if an eligible family member

dies?

Subpart I—Assignment

870.901 Who is allowed to make an

assignment?

870.902 What insurance can I assign?

870.903 Who can I assign my insurance to?

870.904 Can I change or cancel my

assignment?

870.905 How do I make an assignment?

870.906 Where do I have to file my

assignment form?

870.907 When is my assignment effective?

870.908 Can I elect more insurance after I

make an assignment?

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64533

870.909 Can I cancel or reduce my

insurance after I make an assignment?

870.910 Who pays the premiums after I

make an assignment?

870.911 What happens when I retire or

become insured as a compensationer?

870.912 What happens if my insurance

terminates after I make an assignment?

870.913 How long does my assignment last?

870.914 Can I designate a beneficiary after

I’ve assigned my insurance?

870.915 If I’ve assigned my insurance, who

gets the life insurance benefits when I

die?

870.916 Current addresses.

Subpart J—Benefits for United States

Hostages in Iraq and Kuwait and United

States Hostages Captured in Lebanon

870.1001 Purpose.

870.1002 Special definitions for this

subpart.

870.1003 Who is eligible for FEGLI under

this subpart?

870.1004 What is the amount of insurance

for those eligible as hostages?

870.1005 What is the effective date of this

coverage?

870.1006 How are the premiums paid?

870.1007 Can a person insured as a hostage

cancel the insurance?

870.1008 How are benefits paid when a

person insured as a hostage dies?

870.1009 How long does the insurance

continue?

870.1010 State Department responsibilities.

Subpart K—Living Benefits

870.1101 Who is eligible for a living

benefit?

870.1102 How much can I elect as a living

benefit?

870.1103 How do I apply for a living

benefit?

870.1104 What happens after OFEGLI

approves my application?

870.1105 What if OFEGLI doesn’t approve

my application?

870.1106 What happens to the rest of my

coverage after I elect a living benefit?

870.1107 What happens if I live longer than

9 months?

Subpart L—Portability

870.1201 Portability permitted.

870.1202 What are the eligibility

requirements for portability?

870.1203 How much Option B can I port?

870.1204 What is the cost of the ported

coverage?

870.1205 How do I port my coverage?

870.1206 Are there any extensions to the

time limit for porting?

870.1207 When is my ported coverage

effective?

870.1208 What about designations,

assignments, and court orders?

870.1209 Can I cancel my ported coverage?

870.1210 How long does my ported

coverage last?

870.1211 What happens if I come back to

work?

Authority: 5 U.S.C. 8716; subpart J also

issued under section 599C of Pub. L. 101–

513, 104 Stat. 2064, as amended;

§ 870.302(a)(3)(ii) also issued under section

153 of Pub. L. 104–134, 110 Stat. 1321;

§ 870.302(a)(3) also issued under sections

11202(f), 11232(e), and 11246(b) and (c) of

Pub. L. 105–33, 111 Stat. 251 and section 7(e)

of Pub. L. 105–274, 112 Stat. 2419.

Subpart A—Administration and

General Provisions

§ 870.101 Definitions.

Accidental death and dismemberment

means death or bodily injury caused

solely through violent, external, and

accidental means. This has meaning for

FEGLI if, as a direct result of the bodily

injuries, independent of all other

causes, you die or lose your hand, foot,

or eyesight within 90 days of the

accidental injury. If your physical or

mental condition or treatment for your

physical or mental condition

contributes to your death or

dismemberment, we do not consider

your injury to be accidental.

Annuitant means a former employee

who is entitled to an annuity (pension)

under a retirement system established

for employees. This includes the

retirement system of a nonappropriated

fund instrumentality of the Department

of Defense or the Coast Guard.

Assign and assignment mean the

insured individual’s transfer of

ownership of the FEGLI coverage to

another individual, corporation, trust, or

other entity. An assignment is

irrevocable (permanent—it cannot be

undone) and includes all FEGLI

coverage, except Option C.

Assignee means the individual,

corporation, trust, or other entity to

whom an insured individual irrevocably

transfers ownership of FEGLI coverage

(except Option C).

Beneficiary means the individual,

corporation, trust, or other entity that

receives FEGLI benefits when you die.

Cancellation means FEGLI stops. We

consider it to be a voluntary action. The

insured individual does not get a

temporary extension of coverage or right

to convert. Reducing the number of

multiples of Option B or Option C is a

cancellation of those multiples.

Child (a)—as used in the definition of

family member for Option C coverage

and as used with life events—means the

following:

(1) A legitimate child;

(2) An adopted child;

(3) A stepchild or foster child who

lives with the employee or former

employee in a regular parent-child

relationship; or

(4) A recognized natural child.

(b) This definition does not include a

stillborn child or a grandchild (unless

the grandchild meets all the

requirements of a foster child).

(c) The child must be under age 22.

A child age 22 or over is eligible if the

child is incapable of self-support

because of a physical or mental

disability which existed before the child

reached age 22.

Child (a)—as used in the order of

precedence for payment of benefits—

means the following:

(1) A legitimate child;

(2) An adopted child; or

(3) A recognized natural child.

(b) The child may be of any age.

(c) This definition does not include

the following:

(1) A stepchild;

(2) A stillborn child;

(3) A grandchild; or

(4) A foster child.

(d) Adopted children inherit from

their adoptive parents under the order

of precedence, not from their birth

parents (unless they are designated

beneficiaries).

(e) A child who has reached age 18 is

considered an adult and can receive a

benefit payment in his/her name. But if

the age of adulthood where the

individual has legal residence is set at

a lower age, the child is considered an

adult on reaching that lower age.

Compensation means compensation

under subchapter I of chapter 81 of title

5, United States Code, which is payable

because of an on-the-job injury or

disease.

Compensationer means an individual

who is receiving compensation and who

the Department of Labor determines is

unable to return to duty.

Court order (a) means one of the

following:

(1) A court decree of divorce,

annulment, or legal separation; or

(2) A court-approved property

settlement agreement relating to a court

decree of divorce, annulment, or legal

separation.

(b) A court order has meaning for

FEGLI if it requires FEGLI benefits to be

paid to a specific person or persons.

Date of retirement means the

commencing (starting) date of the

annuity.

Days means calendar days.

Dependent means living with or

receiving regular and substantial

support from the insured individual.

Employee means an individual who

meets the definition of section 8701(a)

of title 5, United States Code.

Employing office means the agency

office or retirement system office that

has responsibility for life insurance

actions.

(a) The Administrative Office of the

United States Courts is the employing

office for judges of the following courts:

(1) All United States Courts of

Appeals;

64534 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

(2) All United States District Courts;

(3) The Court of International Trade;

(4) The Court of Federal Claims; and

(5) The District Courts of Guam, the

Northern Mariana Islands, and the

Virgin Islands.

(b) The Washington Headquarters

Services is the employing office for

judges of the United States Court of

Appeals for the Armed Forces.

(c) The United States Tax Court is the

employing office for judges of the

United States Tax Court.

(d) The United States Court of

Veterans Appeals is the employing

office for judges of the United States

Court of Veterans Appeals.

Family member means a spouse

(including a valid common law

marriage) and unmarried dependent

child(ren).

Immediate annuity means:

(a) An annuity that begins no later

than 1 month after the date the

insurance would otherwise stop (the

date of separation from service); or

(b) An annuity under § 842.204(a)(1)

of this chapter for which the starting

date has been postponed under

§ 842.204(c) of this title (called an

MRA+10 annuity).

Judge means an individual appointed

as a Federal justice or judge under

Article I or Article III of the

Constitution.

Living benefits means life insurance

benefits that are paid to an insured

person while the person is living.

OFEGLI means the Office of Federal

Employees’ Group Life Insurance,

which pays benefits under the FEGLI

contract.

OPM means the Office of Personnel

Management.

OWCP means the Office of Workers’

Compensation Programs, U.S.

Department of Labor.

Parent means the mother or father of

a legitimate child or an adopted child.

The term parent includes the mother of

a recognized natural child. It also

includes the father of a recognized

natural child, if the child meets the

definition of recognized natural child.

Port and ported coverage mean

continuing FEGLI group coverage that

would otherwise terminate.

Portability Office means the office

OPM designates to manage ported

coverage and to collect premiums for

ported coverage.

Recognized natural child means a

biological child born outside of

marriage. An insured individual is

considered to be the father of such a

child under the following conditions:

(a)(1) The man acknowledges

paternity in writing;

(2) A court orders the man to provide

support;

(3) Before the man dies, a court

pronounces him to be the father (if the

court bases its determination on the

results of DNA testing, it is also

acceptable after the man dies);

(4) The man names himself as the

father of the child on a certified copy of

the public record of birth or church

record of baptism; or

(5) Public records, such as records of

schools or social welfare agencies, show

that—with his knowledge—the insured

is named as the father of the child.

(b) If paragraph (a) of this definition

does not establish paternity, OFEGLI

may consider other proof to establish

paternity. This includes evidence of the

child’s eligibility as a recognized natural

child under other State or Federal

programs or proof that the insured

included the child as a dependent on

his income tax returns.

Reconsideration means the final level

of administrative review of an

employing office’s initial decision. The

purpose of a reconsideration is to

determine if the employing office

followed the law and regulations

correctly in making the initial decision

concerning FEGLI eligibility and

coverage.

Regular parent-child relationship

means that the employee or former

employee is exercising parental

authority, responsibility, and control

over the child. The employee or former

employee is caring for, supporting, and

disciplining the child and is making the

decisions about the child’s education

and medical care.

Separation means leaving Federal

service, either by resignation or by

retirement.

Service means Federal civilian service

that is creditable under subchapter III of

chapter 83 or chapter 84 of title 5,

United States Code. For the purpose of

continuing FEGLI as an annuitant or

compensationer, it means service during

which an employee is eligible to be

covered under FEGLI. This includes

service under a nonappropriated fund

instrumentality of the Department of

Defense or the Coast Guard for an

individual who elected to remain under

a retirement system established for

employees described in section 2105(c)

of title 5 U.S.C.

Terminally ill means having a medical

prognosis of a life expectancy of 9

months or less.

Termination means FEGLI stops. We

consider it to be an involuntary action.

The insured individual gets a temporary

extension of coverage and right to

convert.

Underdeduction means not

withholding the required amount of life

insurance deductions from an

individual’s pay, annuity, or

compensation. This includes

nondeductions (when none of the

required amount is withheld) and

partial deductions (when only part of

the required amount is withheld).

We means OPM (the Office of

Personnel Management).

§ 870.102 How is FEGLI set up?

The Federal Employees’ Group Life

Insurance (FEGLI) Program is

authorized by law (chapter 87 of title 5,

United States Code). The Office of

Personnel Management (OPM)

administers the Program and sets the

premiums. OPM has a contract with an

insurance company to provide group

life insurance coverage for Federal

employees under the FEGLI Program.

The company has an office called

OFEGLI (the Office of Federal

Employees’ Group Life Insurance) to

pay benefits.

§ 870.103 Who can correct an error in my

coverage?

(a) Your employing office may correct

administrative errors about your

coverage or changes in coverage. If the

correction is retroactive, your

employing office must follow the

provisions of § 870.408.

(b) OPM may order correction of an

administrative error if we have evidence

that it would be against equity (fairness)

and good conscience not to order the

correction.

§ 870.104 What if I get coverage by

mistake?

(a) If you become insured in error,

your coverage will remain in effect if at

least 2 years pass before the error is

discovered and you paid the applicable

premiums during that time. This applies

to errors discovered on or after October

30, 1998.

(b) If you are allowed to continue your

insurance into retirement or

compensation in error, your coverage

will remain in effect if at least 2 years

pass before the error is discovered and

you paid the applicable premiums

during that time. This applies to such

errors discovered on or after October 30,

1998.

(c) If you are allowed to keep

erroneous coverage because of this

provision, but you don’t want the

coverage, you may cancel the coverage

on a prospective basis. You will not get

a refund of your premiums.

§ 870.105 What if I think my agency or

retirement system made the wrong decision

about my coverage?

(a) You may ask your agency or

retirement system to reconsider its

initial decision denying you life

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insurance coverage, the opportunity to

change your coverage, the opportunity

to designate a beneficiary, or the

opportunity to assign your insurance.

(b) Your employing office’s decision

is an initial decision when the

employing office gives it to you in

writing and tells you about the right to

a reconsideration.

(c) If you want a reconsideration, you

must make your request in writing and

follow the instructions in the initial

decision notice. Your request must

include the following:

(1) Your name;

(2) Your address;

(3) Your date of birth;

(4) Your Social Security number;

(5) The reason(s) for your

reconsideration request;

(6) A copy of the initial decision; and

(7) If you are retired, your retirement

claim number.

§ 870.106 How long do I have to request a

reconsideration?

You must request a reconsideration

within 30 days from the date of the

initial decision.

§ 870.107 Can I get an extension of this

time limit?

Yes. To get an extension you must

show either:

(a) That your employing office did not

notify you of the time limit and you

were not aware of it by any other means;

or

(b) That you were not able to make the

request on time because of reasons

beyond your control.

§ 870.108 Who does the reconsideration?

(a) Your agency or retirement system

performs the reconsideration. They

must do so at or above the level where

they made the initial decision.

(b) After performing the

reconsideration, the agency or

retirement system must issue a final

decision. The agency or retirement

system must give you the final decision

in writing and must state the findings

fully.

§ 870.109 What if someone thinks OFEGLI

paid benefits incorrectly?

(a) If you (or your beneficiaries) think

OFEGLI made an error in paying

benefits, you must contact OFEGLI

directly.

(b) If you (or your beneficiaries) think

you are due money from FEGLI benefits

and that you need to go to court to get

the money, you must take court action

against the company that we contract

with, not against OPM.

§ 870.110 Special information for census

workers.

If you are a Federal employee,

whether in pay status or nonpay status,

and you are hired for a temporary,

intermittent, position with the

decennial (every 10 years) census, your

census employment has no effect on:

(a) The amount of your Basic or

Option B insurance;

(b) The withholdings or Government

contribution for your insurance; or

(c) The determination of when 12

months in nonpay status ends.

Subpart B—Types and Amounts of

Insurance

§ 870.201 What types of insurance does

the FEGLI Program have?

(a) The FEGLI Program has 2 types of

life insurance: Basic and Optional.

(b) There are 3 types of Optional

insurance: Option A (standard optional

insurance), Option B (additional

optional insurance), and Option C

(family optional insurance).

§ 870.202 What is my Basic insurance

amount (BIA)?

(a)(1) Unless you elected a living

benefit under subpart K of this part, if

you are an employee, your Basic

insurance amount (BIA) is the higher of:

(i) Your annual rate of basic pay,

rounded to the next higher thousand,

plus $2,000; or

(ii) $10,000. Note: If your pay is

‘‘capped’’ by law, the amount of your

Basic insurance is based on the capped

amount, the amount you are actually

being paid. It is not based on the

amount your pay would be without the

cap.

(2) If you elected a living benefit, see

§ 870.205.

(3) Effective for pay periods beginning

on or after October 30, 1998, there is no

maximum BIA.

(b) If you are eligible to continue your

Basic insurance coverage as an

annuitant or compensationer, your BIA

is the BIA that is in effect at the time

your insurance as an employee would

stop under § 870.601.

§ 870.203 Does my BIA ever change?

(a) If you are an employee, your BIA

automatically changes whenever your

annual pay increases or decreases

enough to move you to a different

$1,000 bracket, unless you elected a

living benefit under subpart K of this

part. (If that applies to you, see

§ 870.205.)

(b) If you are insured as an annuitant

or compensationer, your BIA will not

change.

§ 870.204 Is the BIA the amount my

survivors will receive when I die?

(a) Your BIA is the starting point for

determining the amount that OFEGLI

will pay when you die.

(b) If you are under age 45 when you

die, your beneficiaries will receive a

higher amount. This is called an ‘‘extra

benefit.’’ OFEGLI multiplies your BIA

by a factor, depending on your age at the

time of your death. These are the

factors:

Age Factor

35 or under ..................................... 2.0

36 .................................................... 1.9

37 .................................................... 1.8

38 .................................................... 1.7

39 .................................................... 1.6

40 .................................................... 1.5

41 .................................................... 1.4

42 .................................................... 1.3

43 .................................................... 1.2

44 .................................................... 1.1

45 or over ....................................... 1.0

(c) If you are insured as an annuitant

or compensationer and are age 65 or

over, the amount of benefits paid may

be reduced, depending on the election

you made. See § 870.706.

(d) Depending on the cause of your

death, your beneficiaries also may

receive an accidental death benefit. See

§ 870.212.

§ 870.205 What is the post-election BIA?

(a) The post-election BIA is the

amount of Basic insurance left after you

elect a living benefit. (See subpart K of

this part)

(1) If you elect a full living benefit, the

post-election BIA is $0.

(2) If you elect a partial living benefit,

you still have some Basic insurance left.

OFEGLI determines this amount by

taking your BIA on the date OFEGLI

receives your completed living benefit

application and reducing it by a

percentage. This percentage represents

the amount of your partial living benefit

payment, compared to the amount you

could have received if you elected a full

living benefit. The amount that is left is

rounded up or down to the nearest

multiple of $1,000. (If it’s midway

between multiples, it is rounded up to

the next higher multiple.)

(b) The post-election BIA cannot

change, so changes in pay will have no

effect on it.

(c) If you elect a partial living benefit

and are under age 45 when you die,

OFEGLI will multiply your post-election

BIA by the ‘‘extra benefit’’ factor that

was in effect on the date OFEGLI

received your completed living benefit

application.

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§ 870.206 What do you mean by my annual

rate of pay?

Your annual pay is your annual rate

of basic pay as fixed by law or

regulation.

§ 870.207 What is included in my annual

pay?

Your annual pay includes the

following:

(a) Interim geographic adjustments

and locality-based comparability

payments, as provided by Pub. L. 101–

509 (104 Stat. 1479);

(b) Premium pay for standby duty

under 5 U.S.C. 5545(c)(1);

(c) If you are a customs officer,

premium pay for overtime inspectional

service, as provided by Pub. L. 103–66

(107 Stat. 453);

(d) If you are a law enforcement

officer as defined under 5 U.S.C.

8331(20) and §§ 831.902 and 842.802 of

this chapter, premium pay for

administratively uncontrollable

overtime under 5 U.S.C. 5545(c)(2);

(e) If you are a wage employee, night

differential pay;

(f) If you are an employee exposed to

danger or physical hardship,

environmental differential pay;

(g) If you are a citizen employee in

Panama, tropical differential pay;

(h) If you are a law enforcement

officer, special pay adjustments;

(i) If you are a criminal investigator,

availability pay under 5 U.S.C. 5545a;

(j) If you are a physician or dentist of

the Department of Veterans Affairs,

bonuses as provided by Pub. L. 96–330

(94 Stat. 1030); and

(k) If you are a firefighter, straighttime pay for regular overtime hours, as

provided in 5 U.S.C. 5545b and part

550, subpart M, of this chapter.

§ 870.208 What if my pay isn’t annual or

full-time or regular?

(a) If your pay is not annual, your

employing office will convert your pay

to an annual rate. The way to do this is

to multiply your pay rate by the number

of pay units in a 52-week work year.

(b) If you are a part-time employee,

your annual pay is your basic pay

applied to your tour of duty in a 52-

week work year.

(c) If you are on piecework rates, your

annual pay is your total basic earnings

for the previous calendar year, not

counting premium pay for overtime or

holidays.

(d) If you have a regular schedule but

work at different pay rates, your annual

pay is the weighted average of the rates

at which you are paid, projected to an

annual basis.

(e) If you are a non-Postal intermittent

employee or an employee who works at

different pay rates without a regular

schedule, your annual pay is the annual

rate that you are receiving at the end of

the pay period.

(f) If you legally serve in more than

one position at the same time, and at

least one of those positions entitles you

to life insurance coverage, your annual

pay is the sum of the annual basic pay

fixed by law or regulation for each

position. Exception: This doesn’t apply

to part-time flexible schedule employees

in the Postal Service.

§ 870.209 What is the amount of my

Optional insurance?

(a) Option A coverage is $10,000.

Effective for pay periods beginning on

or after October 30, 1998, Option A

cannot be more than $10,000.

Exception: This does not apply if you

retired or became insured as a

compensationer with a higher amount of

Option A before the removal of the

maximum on Basic insurance (the first

pay period beginning on or after October

30, 1998).

(b)(1) Option B coverage comes in 1,

2, 3, 4, or 5 multiples of your annual

pay (after rounding the pay to the next

higher thousand).

Note: If your pay is ‘‘capped’’ by law, the

amount of your Option B coverage is based

on the capped amount, the amount you are

actually being paid. It is not based on the

amount your pay would be without the cap.

(2) Effective for pay periods beginning

on or after October 30, 1998, there is no

maximum amount for each multiple.

(3) The amount of your Option B

coverage automatically changes

whenever your annual pay increases or

decreases enough to move you to a

different $1,000 bracket.

(c) Effective April 24, 1999, Option C

coverage comes in 1, 2, 3, 4, or 5

multiples of the following amounts:

$5,000 on the death of a spouse and

$2,500 on the death of an eligible child.

§ 870.210 Are these the amounts that will

be paid when I die or if a family member

dies?

(a) The amounts given in § 870.209

are the starting points for determining

the amount that OFEGLI will pay when

you die or when a covered family

member dies.

(b) There is no extra benefit if you or

your family member is under age 45 at

the time of death.

(c) If you are insured as an annuitant

or compensationer and are age 65 or

over, the amount of benefits paid for

Option A will be reduced. The amount

of benefits for Options B and C may also

be reduced, depending on the elections

you made. See § 870.708.

§ 870.211 Does FEGLI have accidental

death and dismemberment benefits?

(a)(1) If you are an employee, you

automatically have accidental death and

dismemberment (AD&D) benefits with

Basic insurance. You also automatically

have AD&D benefits with Option A, if

you have that coverage.

(2) There are no AD&D benefits with

Options B and C.

(b) If you are insured as an annuitant

or compensationer, you do not have

AD&D benefits.

§ 870.212 What is the amount of my AD&D

coverage?

(a) Accidental death benefit:

(1) Under Basic insurance, this is

equal to your BIA, but without the extra

benefit described in § 870.204(b).

(2) Under Option A, this is $10,000.

(b) The accidental dismemberment

benefit is for the loss of your hand, foot,

or vision.

(1) Under Basic insurance, the benefit

is equal to one-half your BIA (without

the extra benefit). If you lose more than

1 hand or foot or the vision in both eyes

in the same accident, the benefit is

equal to the whole BIA (without the

extra benefit).

(2) Under Option A, the benefit is

$5,000. If you lose more than 1 hand or

foot or the vision in both eyes in the

same accident, the benefit is $10,000.

(c)(1) OFEGLI pays accidental death

benefits to your beneficiaries (see

subpart H of this part).

(2) OFEGLI pays accidental

dismemberment benefits to you.

Subpart C—Eligibility

§ 870.301 Am I eligible for Basic or

Optional insurance?

(a) Unless you are in an excluded

position, you are eligible for FEGLI

coverage.

(b)(1) You get Basic insurance

automatically. If you don’t want Basic

insurance, you have to waive it.

(2) Optional insurance is not

automatic. If you want Optional

insurance, you must elect it.

(c) You may elect one or more types

of Optional insurance if:

(1) You have Basic insurance; and

(2) You do not have a waiver of that

type (or types) of Optional insurance

still in effect.

§ 870.302 What is an excluded position?

The law excludes some employees

from FEGLI coverage, and the regulation

excludes some employees. OPM makes

the final determination about whether

an exclusion applies to a specific

employee or group of employees.

§ 870.303 Who is excluded by law?

The law excludes you if you are:

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(a) An employee of a corporation

supervised by the Farm Credit

Administration, if private interests elect

or appoint a member of the board of

directors.

(b) An employee who is not a citizen

or national of the United States and

your permanent duty station is outside

the United States. Exception: You are

not excluded if you met the definition

of employee on September 30, 1979, by

service in an Executive agency, the

United States Postal Service, or the

Smithsonian Institution in the area that

was then known as the Canal Zone.

(c) An individual first employed by

the Government of the District of

Columbia on or after October 1, 1987.

Exceptions: You are not excluded if:

(1) You are an employee of St.

Elizabeths Hospital, and you went to

work for the District of Columbia

Government immediately following

Federal employment, without any break

in service, as provided in section 6 of

Pub. L. 98–621 (98 Stat. 3379).

(2) You are an employee of the

District of Columbia Financial

Responsibility and Management

Assistance Authority (Authority). To

qualify, you must make an election

under section 153 of Pub. L. 104–134

(110 Stat. 1321) to be considered a

Federal employee for life insurance and

other benefits purposes. If you are an

Authority employee who is a former

Federal employee, you are subject to the

provisions of §§ 870.507, 870.717, and

870.718.

(3) You are the Corrections Trustee or

the Pretrial Services, Parole, Adult

Probation and Offender Supervision

Trustee. You also are not excluded if

you are an employee of one of these

Trustees, and you went to work for the

District of Columbia Government within

3 days after separating from the Federal

Government.

(4) Effective October 1, 1997, you are

a judicial or nonjudicial employee of the

District of Columbia Courts, as provided

by Pub. L. 105–33 (111 Stat. 251).

(5) Effective April 1, 1999, you are an

employee of the Public Defender Service

of the District of Columbia, as provided

by Pub. L. 105–274 (112 Stat. 2419).

§ 870.304 Who is excluded by regulation?

OPM excludes you if you are:

(a) Serving under an appointment

limited to 1 year or less. Exceptions:

You are eligible if:

(1) You are an acting postmaster;

(2) You are a Presidential appointee

appointed to fill an unexpired term; or

(3) You are an employee with a

provisional appointment, as defined in

§ 316.403 of this chapter.

(b) Employed for an uncertain or

purely temporary period. We also

exclude you if you are employed for

brief periods at intervals, or if you are

expected to work fewer than 6 months

in each year. Exception: You are eligible

if you are employed under an OPMapproved career-related work-study

program under Schedule B. To qualify,

your work-study program must last at

least 1 year, and you must be expected

to be in pay status for at least one-third

of the total period of time from the date

of your first appointment to the date you

complete the work-study program.

(c) An intermittent employee (a nonfull-time employee without a regularly

scheduled tour of duty).

(d) A beneficiary or patient employee

in a Government hospital or home.

(e) Paid on a contract or fee basis.

Exception: You are eligible if you are a

United States citizen, and you are

appointed by a contract between you

and the Federal employing authority. To

qualify, your contract must require your

personal service, and you must be paid

on the basis of units of time.

(f) Paid on a piecework basis.

Exception: You are eligible if your work

schedule provides for full-time or parttime service, and you have a regularly

scheduled tour of duty.

§ 870.305 Are there any other exceptions

to these exclusions?

(a) If you have FEGLI and you transfer

to a position excluded by regulation (see

§ 870.304), your FEGLI continues,

unless you have a break in service of

more than 3 days. You cannot continue

your FEGLI if your position is excluded

by law (see § 870.303).

(b) If you have an interim

appointment under § 772.102 of this

chapter, you are eligible for coverage

even if your position is excluded by

regulation. You are not eligible for

coverage if your position is excluded by

law.

§ 870.306 Are foster children eligible as

family members under my Option C

coverage?

(a) Effective October 30, 1998, foster

children are eligible for coverage as

family members under Option C.

(b) To qualify for coverage as a foster

child, the child must meet the following

requirements:

(1) The child must live with you;

(2) The parent-child relationship (as

defined in § 870.101) must be with you,

not the biological parent;

(3) You must be the primary source of

financial support for the child; and

(4) You must expect to raise the child

to adulthood.

(c) A child does not qualify as a foster

child if:

(1) A welfare or social service agency

places the child in your home; and

(2) There is an agreement by which

the agency retains control of the child

or pays you for maintenance.

(d)(1) If you want to cover a foster

child, you must sign a certification

stating that the child meets all the

requirements. The certification must

also state that you will notify your

employing office if one of these

situations happens:

(i) The child marries;

(ii) The child moves out of your

home; or

(iii) The child stops being financially

dependent on you.

(2) Your employing office must keep

the signed certification in your file,

along with other life insurance forms.

(e) If your foster child moves out of

your home to live with a biological

parent, the child loses eligibility. The

child cannot again be covered as a foster

child unless:

(1) The biological parent dies;

(2) The biological parent is

imprisoned;

(3) The biological parent becomes

unable to care for the child due to a

disability; or

(4) You get a court order taking

parental responsibility away from the

biological parent.

§ 870.307 What do I have to do to cover a

disabled child over age 22?

(a)(1) A child age 22 or over is an

eligible family member if the child is

incapable of self-support because of a

physical or mental disability that

existed before the child reached age 22.

(2) You must provide your employing

office with a doctor’s certificate about

your child’s disability. The doctor must

sign the certificate, and the certificate

must show the doctor’s office address.

The certificate must state the following:

(i) That your child is incapable of selfsupport because of a physical or mental

disability;

(ii) That the disability started before

the child reached age 22; and

(iii) That the disability is expected to

continue for more than 1 year. The

certificate must also include:

(iv) Your child’s name;

(v) The type of disability;

(vi) How long the disability has

existed; and

(vii) The disability’s expected future

course and duration.

(b) If the doctor’s certificate shows

that your child has one of the following

conditions, your child is eligible:

(1) AIDS—CDC classes A3, B3, C1, C2,

and C3 (not seropositivity alone);

(2) Advanced muscular dystrophy;

(3) Any malignancy with metastases,

or any malignancy that is untreatable;

(4) Chronic hepatic failure;

64538 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

(5) Chronic neurological disease,

whatever the reason, with severe mental

retardation or neurological impairment.

These diseases include:

(i) Cerebral palsy,

(ii) Encephalopathies,

(iii) Uncontrollable seizure disorder,

and

(iv) Ectodermal dysplasia;

(6) Chronic renal failure;

(7) Inborn errors of metabolism with

complications, such as the following:

(i) Phenylketonuria,

(ii) Homocysteinuria,

(iii) Primary hyperoxaluria,

(iv) Adrenoleukodystrophy,

(v) Tay-Sachs disease,

(vi) Nieman-Pick disease,

(vii) Gaucher disease,

(viii) Glycogen storage diseases,

(ix) Mucopolysacharide disease, and

(x) Lesch-Nyhan disease;

(8) Mental retardation with IQ of 70

or less;

(9) Osteogenesis imperfecta;

(10) Severe congenital or acquired

heart disease with decompensation;

(11) Severe autism;

(12) Severe juvenile rheumatoid

arthritis;

(13) Severe mental illness requiring

prolonged or repeated hospitalization;

(14) Severe organic mental disorder;

or

(15) Xeroderm pigmentosa.

(c) If your child does not have one of

the conditions listed in paragraph (b) of

this section, your employing office will

arrange for a medical review of the

doctor’s certificate to determine whether

your child is eligible.

Subpart D—Cost of Insurance

§ 870.401 Who pays for FEGLI?

(a) You and the Government share the

cost of Basic insurance. You pay twothirds, and the Government pays onethird.

(b) You pay the full cost of Optional

insurance. There is no Government

contribution for any Optional insurance.

§ 870.402 How much do I have to pay for

Basic insurance?

(a)(1) Basic insurance costs $0.1550

biweekly for each $1,000 of your BIA.

Your employing office must withhold

that amount from your pay for each pay

period during which you are in pay

status for any part of the time.

(2) If your pay isn’t biweekly, your

employing office must prorate the

amount withheld and adjust it to the

nearest one-tenth of 1 cent.

(3) If your BIA changes during the pay

period, the amount withheld from your

pay is based on your BIA on the last day

of the pay period.

(b) There is no cost for the extra

benefit described in § 870.205, and there

is no cost for AD&D coverage.

§ 870.403 How much do I pay if I’m insured

as an annuitant or compensationer?

(a) If you are insured as an annuitant

or compensationer, the amount you pay

depends on the election you made about

the level of reduction you want at age

65 (see § 870.706). Your retirement

system withholds your payment from

your annuity. OWCP withholds your

payment from your compensation.

(b)(1) When you become insured as an

annuitant, you pay the following

amount for Basic insurance:

Election

Monthly withholding for each

$1,000 of your

BIA before age 65

Monthly withholding for each

$1,000 of of your

BIA after age 65

75% Reduction .............................................................................................................................................. $0.3358 None—Basic

insurance is free.

50% Reduction .............................................................................................................................................. 0.9258 $0.59.

No Reduction ................................................................................................................................................ 2.3758 $2.04.

(2) The changes in withholding take

place the month after the month in

which you turn 65. (If you retired before

January 1, 1990, and elected 75%

Reduction, you paid no premiums.) For

the purpose of this paragraph, if you

separate from service after meeting the

requirements for an immediate annuity

under 5 U.S.C. 8412(g), you are

considered to retire on the day before

your annuity begins.

(c)(1) When you become insured as a

compensationer, you pay the following

amount for Basic insurance.

Election

Weekly withholding for each

$1,000 of your

BIA before age 65

Weekly withholding for each

$1,000 of your

BIA after age 65

75% Reduction .............................................................................................................................................. $0.0775 None—Basic

insurance is free.

50% Reduction .............................................................................................................................................. 0.2175 $0.14.

No Reduction ................................................................................................................................................ 0.5475 $0.47.

(2) The changes in withholding take

place the month after the month in

which you turn 65. (If you began

receiving compensation before January

1, 1990, and elected 75% Reduction,

you paid no premiums.)

§ 870.404 How does the Government

contribution for Basic insurance work?

(a)(1) If you are an employee, for each

pay period in which you are insured,

your employing office must contribute

an amount equal to one-half the amount

withheld from your pay.

(2) Your agency’s contribution must

come from the appropriation or fund

that is used to pay your salary. If you

are an elected official, the Government

contribution must come from the

appropriation or fund that is available to

pay other salaries in the same office.

(b)(1) If you are insured as an

annuitant or compensationer, OPM

makes the Government contribution.

Exception: If you are a Postal Service

employee who becomes insured as an

annuitant or compensationer after

December 31, 1989, the Postal Service

pays the Government contribution.

(2) The amount OPM must pay is

equal to one-half the amount that would

be withheld from your annuity or

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64539

compensation if you elect 75%

Reduction. The amount of the

Government contribution is the same

whether you elect 75% Reduction, 50%

Reduction, or No Reduction.

(3) The Government contribution

stops the month after the month in

which you turn 65.

§ 870.405 How much do I have to pay for

Optional insurance?

(a) The cost of Optional insurance

depends on your age.

(b)(1) Your employing office must

withhold the full cost of Optional

insurance from your pay for each pay

period during which you are in pay

status for any part of the time.

(2) Unless you are a reemployed

annuitant or compensationer (see

§§ 870.717 and 870.721), your

retirement system must withhold the

full cost of Optional insurance from

your annuity, and OWCP must withhold

the full cost of Optional insurance from

your compensation.

(c)(1) The cost for $10,000 of Option

A coverage is:

Age Biweekly

cost

If you are under age 35 .............. $0.30

Ages 35 through 39 .................... .40

Ages 40 through 44 .................... .60

Ages 45 through 49 .................... .90

Ages 50 through 54 .................... 1.40

Ages 55 through 59 .................... 2.70

Ages 60 and over ....................... 6.00

(2) If your pay isn’t biweekly, your

employing office must prorate the

amount and adjust it to the nearest cent.

(3) If you are insured as an annuitant

or compensationer, your Option A

coverage is free, starting the month after

the month in which you turn 65.

(d)(1) The cost for each $1,000 of

Option B coverage is:

Age Biweekly

cost

If you are under age 35 .............. $0.03

Ages 35 through 39 .................... .04

Ages 40 through 44 .................... .06

Ages 45 through 49 .................... .10

Ages 50 through 54 .................... .15

Ages 55 through 59 .................... .31

Ages 60 and over ....................... .70

(2) If your pay isn’t biweekly, your

employing office must prorate the

amount and adjust it to the nearest onetenth of 1 cent.

(3) If you are insured as an annuitant

or compensationer, whether or not you

continue to pay premiums after you turn

65 depends on the election you make.

See § 870.708.

(i) If you elect Full Reduction, your

Option B coverage is free, starting the

month after the month in which you

turn 65.

(ii) If you elect No Reduction, you

continue to pay the premiums for your

age group, as long as you remain

insured.

(e)(1) The cost for each multiple of

Option C is:

Age Biweekly

cost

If you are under age 35 .............. $0.27

Ages 35 through 39 .................... .34

Ages 40 through 44 .................... .46

Ages 45 through 49 .................... .60

Ages 50 through 54 .................... .90

Ages 55 through 59 .................... 1.45

Ages 60 through 64 .................... 2.60

Ages 65 through 69 .................... 3.00

Ages 70 and over ....................... 3.40

(2) If your pay isn’t biweekly, your

employing office must prorate the

amount and adjust it to the nearest cent.

(3) If you are insured as an annuitant

or compensationer, whether or not you

continue to pay premiums after you turn

65 depends on the election you make.

See § 870.708.

(i) If you elect Full Reduction, your

Option C coverage is free, starting the

month after the month in which you

turn 65.

(ii) If you elect No Reduction, you

continue to pay the premiums for your

age group, as long as you remain

insured.

§ 870.406 When I move from one age

group to another, when do I start paying the

higher premiums?

Effective April 24, 1999, your

premium changes the pay period after

the one in which you turn 35, 40, 45,

50, 55, or 60, and for Option C, 65, or

70.

§ 870.407 What happens to my withholding

if I elect a living benefit?

(a) If you elect a full living benefit,

your withholding for Basic insurance

and the Government contribution stop

at the end of the pay period in which

your living benefit election is effective.

(b) If you elect a partial living benefit,

your withholding for Basic insurance

and the Government contribution are

reduced at the end of the pay period in

which your living benefit election is

effective. The new withholding and

contribution amounts are based on the

post-election BIA.

(c) If you elect a living benefit, your

withholdings for Optional insurance do

not change.

§ 870.408 What happens if my employing

office doesn’t withhold enough?

(a)(1) If your employing office does

not make any withholdings, or

withholds too low an amount, it must

deposit the correct amount into the

Employees’ Life Insurance Fund within

60 days after it discovers the error. Your

employing office must make the deposit

regardless of whether or when it

recovers the money from you.

(2) If your employing office does not

withhold enough, you receive an

overpayment of your pay. If this

happens, your agency or retirement

system must determine whether to

collect the money from you or waive

collection of the overpayment. The

provisions for waiving collection of an

overpayment of pay are in 5 U.S.C.

5584, as spelled out in 4 CFR chapter I,

subchapter G. If your agency is excluded

from these provisions, it may use any

applicable authority to waive the

collection.

(b) If your employing office does not

make the Government contribution for

Basic insurance, or makes too low a

contribution, it must deposit the correct

amount into the Employees’ Life

Insurance Fund within 60 days after it

discovers the error.

§ 870.409 What if my pay is too low to

make the withholdings?

(a) Since January 1, 1988, annuitants

who retired under 5 U.S.C. chapter 84

(Federal Employees’ Retirement System)

have been able to make direct premium

payments if their annuity became too

low to cover the premiums. Effective the

first pay period beginning on or after

October 30, 1998, all employees,

annuitants, and compensationers whose

pay, annuity, or compensation is too

low to cover the withholdings may

make direct premium payments.

(b)(1) You are eligible to make direct

premium payments if your employing

office determines that your pay,

annuity, or compensation, after all other

deductions, is expected to be

insufficient to cover the withholdings

on an ongoing basis, i.e., for the next 6

months or more.

(2) This section does not apply to

employees in nonpay status. If you are

in nonpay status, see § 870.410(d).

(c)(1) When your employing office

determines that your pay, annuity, or

compensation will be insufficient on an

ongoing basis, it must notify you in

writing and tell you about the available

choices. (If you have assigned your

coverage under subpart I of this part,

your employing office must give the

notice to your assignee(s).)

(2) You (or your assignee) must return

the notice to your employing office

within 31 days of receiving it (45 days,

if you live overseas). (We consider that

you receive a mailed notice 5 days after

the date of the notice.) When you return

64540 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

the notice, you must state which of

these choices you want:

(i) To terminate some or all of your

insurance; or

(ii) To make direct premium

payments.

(3) If you do not return the notice

within the required time frames, your

employing office will terminate your

insurance.

(d)(1) Terminated coverage stops at

the end of the last pay period for which

your employing office withheld

premiums.

(2) If your insurance terminates, either

by choice or by failure to return the

notice, you get the 31-day extension of

coverage and right to convert, as

provided in subpart F of this part.

(e)(1) If you are an employee, and

your coverage terminates under this

section, your employing office will

reinstate the terminated coverage

automatically, when your pay again

becomes sufficient to allow premium

withholdings.

(2) If you are insured as an annuitant

or compensationer, and your coverage

terminates under this section, your

retirement system will not reinstate

your coverage when your annuity or

compensation becomes sufficient to

cover withholdings.

(f)(1) Employing offices must establish

a method for accepting premium

payments for insured individuals who

choose to pay directly.

(2) If you are paying premiums

directly, you must send the required

payment for every pay period during

which your insurance continues. You

must make the payment after each pay

period, according to the schedule your

employing office sets up.

(g)(1) If you are an employee making

direct payments, your employing office

will begin to withhold premiums from

your pay automatically, when your pay

again becomes sufficient to allow

withholdings. You must stop making

direct payments.

(2) If you are insured as an annuitant

or compensationer, you must continue

to make direct payments, even if your

annuity or compensation becomes

sufficient to allow withholdings.

(h) Your employing office must

submit all direct premium payments to

OPM, along with the regular life

insurance premiums, according to

OPM’s procedures.

(i)(1) If you are on direct pay, and you

don’t make the required payment on

time, your employing office (or its

designated agent) must notify you. You

must make the payment within 15 days

after receiving the notice (45 days, if

you live overseas). (We consider that

you receive a mailed notice 5 days after

the date of the notice.)

(2) If you do not make the overdue

payment, your insurance cancels.

Cancellation is effective at the end of

the last pay period for which your

employing office (or its designated

agent) received payment.

(3) If your insurance cancels for

nonpayment, you do not get the 31-day

extension of coverage or the right to

convert provided in subpart F of this

part.

(4) Coverage that cancels for

nonpayment is not reinstated when your

pay, annuity, or compensation becomes

sufficient to allow withholdings.

Cancelled coverage cannot be reinstated,

except as provided in paragraph (i)(5) of

this section.

(5) If you are unable to pay within 15

days of receiving the past due notice (45

days, if you live overseas) for reasons

beyond your control, you may request

reinstatement of your coverage. You

must make the request to your

employing office in writing within 30

days from the date of cancellation. You

must provide proof that you were

unable to pay within the time limit for

reasons beyond your control. Your

employing office will decide if you are

eligible for reinstatement. If your

employing office approves your request,

it will reinstate your coverage back to

the date of cancellation, and you must

pay the back premiums.

§ 870.410 What else should I know about

withholdings and contributions?

(a) If your annual pay is paid during

a period shorter than 52 work weeks,

your employing office must determine

the amount to withhold. To do this, it

converts the biweekly cost to an annual

cost and prorates it over the number of

installments of your pay regularly paid

during the year.

(b) Withholdings (and Government

contributions, if applicable) are based

on the amount of insurance you have at

the end of the pay period.

(c) You do not have to pay any

premiums for the period between the

end of the pay period in which you

separate from service and the date your

annuity or compensation begins.

(d) You do not have to pay any

premiums while you are in nonpay

status for up to 12 months. Exceptions:

(1) If you are in nonpay status while

receiving compensation, you do have to

pay premiums. OWCP withholds the

payments from your compensation.

(2) If you accept another position

while you are in nonpay status, you do

have to pay premiums. The agency that

is actually paying you a salary

withholds the payments from your

salary.

(e) Effective October 21, 1972, if there

is an official finding that you were

suspended or fired erroneously, no

withholdings are made from your back

pay award. Exception: If you die or have

an accidental dismemberment between

your removal and the finding that your

agency’s action was erroneous,

premiums are withheld from your back

pay award.

(f) If your pay, annuity, or

compensation is high enough to cover

some of your premium withholdings,

but not all of them, your employing

office must make the withholdings in

the following order:

(1) Basic insurance;

(2) Option B;

(3) Option A; then

(4) Option C.

Subpart E—Coverage

§ 870.501 How do I get Basic insurance?

(a) You get Basic insurance

automatically when you are appointed

or transferred to a position in which you

are eligible for FEGLI. The coverage is

effective the first day you are in pay and

duty status. Exceptions:

(1) If you file a waiver with your

employing office before the end of the

first pay period, you will not have Basic

insurance.

(2) If you previously filed a waiver of

Basic insurance, and it’s still in effect,

you will not have Basic insurance.

(b) If you are an employee of the

District of Columbia Financial

Responsibility and Management

Assistance Authority, and you elect to

be considered a Federal employee under

section 153 of Pub. L. 104–134 (110 Stat.

1321), you are insured automatically on

the later of:

(1) The first day you are in pay and

duty status with the Authority; or

(2) The date the Authority receives

your election to be considered a Federal

employee.

(c) If you return to pay and duty status

after 12 months or more in nonpay

status, you automatically get Basic

insurance the first day you are back in

pay and duty status. Exceptions:

(1) If you file a waiver with your

employing office before the end of the

first pay period back in pay and duty

status, you will not have Basic

insurance.

(2) If you previously filed a waiver of

Basic insurance, and it’s still in effect,

you will not have Basic insurance.

(d) If you serve in cooperation with a

non-Federal agency, and you are paid in

whole or in part from non-Federal

funds, OPM sets the effective date for

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64541

your Basic insurance. This date must be

part of an agreement between OPM and

the non-Federal agency. The agreement

must provide either:

(1) That the required withholdings

and contributions be made from

Federally controlled funds and

deposited on time into the Employees’

Life insurance Fund; or

(2) That the cooperating non-Federal

agency, by written agreement with the

Federal agency, make the required

withholdings and contributions from

non-Federal funds. The non-Federal

agency must send the payment to the

Federal agency to deposit on time into

the Employees’ Life Insurance Fund.

§ 870.502 How do I get Optional

insurance?

(a) You must have Basic insurance

before you may elect Optional

insurance.

(b)(1) If you want Optional insurance,

you must elect it (in a way that OPM

designates) within 31 days after

becoming eligible. The 31-day time limit

begins on the first day (after February

28, 1981) on which you meet the

definition of employee. Exception: If

you previously filed a waiver of

Optional insurance, and it’s still in

effect, you cannot elect Optional

insurance.

(2) If you do not elect a particular type

of Optional insurance, we consider that

you waived that type of coverage.

(3) For Options B and C, if you elect

fewer than 5 multiples, we consider that

you waived the multiples you did not

elect.

(4) Only you may elect Optional

insurance. No one may elect it on your

behalf.

(c) If you are an employee of the

District of Columbia Financial

Responsibility and Management

Assistance Authority, and you elect to

be considered a Federal employee under

section 153 of Public Law 104–134 (110

Stat. 1321), you may elect Optional

insurance. You must make an election

within 31 days after the later of:

(1) The date your employment with

the Authority begins; or

(2) The date the Authority receives

your election to be considered a Federal

employee.

(d) If your Optional insurance stopped

for a reason other than a waiver, your

insurance reinstates automatically on

the first day you are in pay and duty

status in a position in which you again

become eligible.

§ 870.503 When does Optional insurance

become effective?

Optional insurance is effective the

first day you are in pay and duty status

on or after the day your employing

office receives your election.

§ 870.504 Are there any extensions to the

31-day time limit for electing Optional

insurance?

(a)(1) The time limit may be extended

up to 6 months after the date you

became eligible. To qualify, you must

demonstrate to your employing office

that you were not able to make your

election on time for reasons beyond

your control.

(2) If your employing office allows

you to make a belated election, you

must make your election within 31 days

after your employing office notifies you

of the determination.

(b) If you make a belated election as

described in paragraph (a) of this

section, your Optional insurance

coverage is retroactive to the first day of

the first pay period beginning after the

date you became eligible (or after April

1, 1981, if that is later). You must pay

the full cost of your Optional insurance

back to that effective date for the time

that you are in pay status (or retired or

receiving compensation and under age

65).

§ 870.505 Can I cancel my insurance?

(a) You may cancel some or all of your

insurance at any time by filing a waiver.

Only you may cancel your insurance; no

one may cancel your insurance on your

behalf. Exception: If you have assigned

your insurance under subpart I of this

part, you cannot cancel your Basic,

Option A, or Option B insurance or

reduce the number of multiples of

Option B.

(1) If you are an employee, you must

file the waiver with your agency

employing office.

(2) If you are an annuitant, you must

file the waiver with OPM.

(3) If you are a compensationer within

the first 12 months of nonpay status,

you must file the waiver with your

employing office. If you have separated

or completed 12 months in nonpay

status, you must file the waiver with

OPM.

(b) Your waiver is effective, and your

insurance stops, at the end of the last

day of the pay period in which you

properly file the waiver. Exception: If

you cancel Option C because you do not

have any eligible family members, the

effective date is retroactive to the end of

the pay period in which there stopped

being any eligible family members.

(c) If you cancel your Basic insurance,

you automatically cancel all of your

Optional insurance.

§ 870.506 How long does my waiver last?

Your waiver lasts until you:

(a) Cancel the waiver, as explained in

§ 870.507 of this part; or

(b) Have a break in service of at least

180 days.

§ 870.507 How can I cancel my waiver and

get insurance?

(a) If you are an employee, there are

3 ways you may cancel a waiver and

become insured:

(1) Getting a physical exam (providing

medical evidence of insurability);

(2) Having a life event; or

(3) Making an election during an open

season.

(b) You may elect only certain types

of insurance with each of these, as

follows:

Basic Option A Option B Option C

Physical exam ................... Yes .................................... Yes .................................... Yes .................................... No.

Life event ........................... No ...................................... No ...................................... Yes (if you have Basic) ..... Yes (if you have Basic).

Open season ..................... As announced by OPM ..... As announced by OPM ..... As announced by OPM ..... As announced by OPM.

§ 870.508 How do I cancel my waiver by

getting a physical exam?

(a) You cannot cancel a waiver of

Option C by having a physical exam.

(b)(1) You may cancel a waiver of

Basic insurance, Option A, and Option

B by getting a physical exam to provide

medical evidence of insurability, if at

least 1 year has passed since the

effective date of your waiver. You are

responsible for any costs associated

with the physical exam. Exception: The

1-year requirement doesn’t apply to

Option B coverage if you elected fewer

than 5 multiples of Option B because of

the limitation stated in § 870.513.

(2) You and your employing office

each must complete part of the Request

for Insurance form. Your doctor also

must complete part of the form and then

send it to OFEGLI.

(c) OFEGLI reviews the Request for

Insurance and decides whether to

approve it. OFEGLI notifies your agency

of its decision, and your agency notifies

you.

64542 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

§ 870.509 What happens after OFEGLI

makes its decision?

(a)(1) If OFEGLI approves your

Request for Insurance, your Basic

insurance (if you do not already have

Basic) is effective the first day you are

in pay and duty status after OFEGLI’s

approval.

(2) If you are not in pay and duty

status within 31 days after OFEGLI’s

approval, the approval is revoked

automatically, and you are not insured.

(b)(1) If you want to elect Option A or

Option B, you must file an election

within 31 days after OFEGLI’s approval.

You may elect any number of multiples

of Option B, up to the maximum of 5.

Your coverage is effective the first day

you are in pay and duty status on or

after the day your employing office

receives your election. We consider that

you again waived any coverage that you

do not elect.

(2) If you are not in pay and duty

status within 31 days after OFEGLI’s

approval, the approval is revoked

automatically, and you do not have the

Optional insurance.

§ 870.510 What is a life event?

A life event is one of the following:

(a) Marriage;

(b) Divorce;

(c) Death of your spouse; or

(d) Acquiring an eligible child.

§ 870.511 How do I cancel my waiver if I

have a life event?

(a)(1) You cannot cancel a waiver of

Basic insurance or Option A because of

a life event.

(2) You must have Basic insurance to

make an Option B or Option C election

because of a life event.

(b)(1) You may elect Option B and/or

Option C if you get married or acquire

an eligible child. If you have Option B

or Option C, but you have fewer than 5

multiples, you may increase the number

of multiples. Exception: If your life

event is acquiring a foster child, you

cannot make an Option B election.

(2) You may elect Option B or Option

C if you get divorced or your spouse

dies only if you have at least 1 eligible

child. If you have Option B or Option

C, but you have fewer than 5 multiples,

you may increase the number of

multiples.

(3) There are limitations on the

number of multiples of Option B you

may elect with a life event. See

§ 870.513(a) of this part.

(c) If you elect Option B and/or

Option C, and your life event is

acquiring a disabled child age 22 or

older, you must provide a doctor’s

certificate to your employing office at

the time you make the election. The

doctor’s certificate must show that your

child meets the requirements stated in

§ 870.307.

§ 870.512 When can I make a life event

election?

(a) You must make your election, in

a way that OPM designates, and provide

proof of the event, within 60 days after

your life event.

(b) You may also make your election

before the life event. In this case you

must provide proof of the event within

60 days after the date of the life event.

(c) If you are making an Option C

election because of acquiring an eligible

foster child, you must file the election

with your employing office no later than

60 days after completing the required

certification.

(d) Employees with Option C coverage

who had a life event between October

30, 1998, and April 23, 1999, had until

June 23, 1999, to make an election

under this section to increase the

number of Option C multiples.

§ 870.513 How many multiples of Options

B and C can I elect due to a life event?

(a) For Option B you may elect the

following number of multiples (the total

number of Option B multiples cannot be

more than 5):

(1) For marriage, the number of

additional family members (spouse and

eligible children) you acquire with the

marriage.

(2) For acquiring an eligible child or

children, the number of eligible

children you acquire; foster children are

not included in this count.

(3) For divorce or death of your

spouse, the total number of eligible

children you have.

(4) If you want more multiples of

Option B than you can elect with a life

event, you may elect additional

multiples by following the procedure

given in § 870.508 of this part.

(b) For Option C you may elect any

number of multiples you want, as long

as the total is not more than 5.

§ 870.514 When does my Option B and

Option C life event coverage become

effective?

(a) For Option B,

(1) If you file your election on or after

the date of your life event, coverage

becomes effective the first day you are

in pay and duty status on or after the

date your employing office receives

your election.

(2) If you file your election before

your life event, coverage becomes

effective the first day you are in pay and

duty status on or after the date of your

life event.

(b) For Option C:

(1) If your election is based on a life

event other than acquiring a foster child,

(i) If you file your election on or after

the date of your life event, coverage

becomes effective the date your

employing office receives your election.

(ii) If you file your election before

your life event, coverage becomes

effective on the date of your life event.

(iii) If you made an Option C election

under § 870.512(d), your coverage was

effective April 24, 1999.

(2) If your election is based on

acquiring a foster child, your coverage is

effective the later of:

(i) The date your employing office

receives your election; or

(ii) The date you complete the

certification.

(3) You do not have to be in pay and

duty status for Option C life event

coverage to become effective.

§ 870.515 Are there any extensions to the

time limit for making a life event election?

(a) If you are not serving in a covered

position on the date of your life event,

you may make your life event election

within 31 days after you do become

employed in a covered position.

(b) If you separate from service before

the end of the 60-day time limit, you

may make your life event election

within 31 days after you return to

service in a covered position.

(c) If you don’t have Basic insurance

on the date of your life event, and you

are electing it by having a physical

exam, you may make an Option C life

event election within 31 days after the

date OFEGLI approves your Request for

Insurance.

§ 870.516 How often does OPM have

FEGLI open seasons?

OPM does not hold FEGLI open

seasons on a regular basis. We schedule

them only occasionally.

§ 870.517 What coverage can I elect during

an open season?

When we schedule an open season,

we announce the types of coverage you

may elect.

§ 870.518 What is the effective date for

open season elections?

OPM sets the effective date when we

announce an open season. Your new

coverage becomes effective the first day

of the first pay period which begins on

or after the date we set and which

follows a pay period in which you meet

certain pay and duty status

requirements. Before the start of an open

season, we will announce the pay and

duty status requirements in a Federal

Register notice.

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64543

§ 870.519 Are there any extensions to the

open season dates?

(a)(1) The time limit may be extended

up to 6 months after the open season

ends. To qualify, you must demonstrate

to your employing office that you were

not able to make your open season

election on time for reasons beyond

your control.

(2) If your employing office makes

that determination, you must make your

election within 31 days after your

employing office notifies you of the

determination.

(b) If you make a belated open season

election as described in paragraph (a) of

this section, your new coverage becomes

effective the first pay period which

begins on or after the effective date OPM

set. You have to meet the pay and duty

status requirements that OPM

announced in the Federal Register.

§ 870.520 Can annuitants and

compensationers get FEGLI coverage?

(a) If you are an annuitant, you cannot

elect FEGLI coverage, unless you are

reemployed in a position in which you

are eligible for FEGLI.

(b)(1) If you are a compensationer

within the first 12 months of nonpay

status, you may elect coverage.

However, you must be back in pay and

duty status before your new coverage

can become effective. Exception: If you

make an Option C election due to a life

event, you do not have to be in pay and

duty status for the coverage to become

effective.

(2) If you have separated or completed

12 months in nonpay status, you cannot

elect FEGLI coverage.

§ 870.521 What happens if I leave

Government and then return to service?

(a) Waivers are cancelled

automatically after a 180-day break in

service.

(b)(1) When you return to service in

a covered position after a break of at

least 180 days, you get Basic insurance

automatically, as stated in § 870.501.

(2) Unless you waive Basic insurance,

you may elect any Optional insurance

within 31 days after your return to

service.

(3) If you do not make a new Optional

insurance election, you will get back

whatever Optional insurance you had

immediately before you separated from

service. Any Optional insurance that

you had previously waived is waived

again.

(c) When you return to service in a

covered position after a break of less

than 180 days, you get back whatever

Optional insurance you had

immediately before you separated from

service. You cannot elect more coverage,

except as described in § 870.507.

§ 870.522 What happens if I go into a

nonpay status?

If you go into a nonpay status, your

life insurance continues for up to 12

months. You do not have to pay any

premiums. Exceptions:

(a) If you are receiving compensation,

OWCP withholds the FEGLI premiums

from your compensation.

(b) If, while you are in nonpay status,

you accept an appointment to another

position, the agency where you are

receiving a salary withholds the

premiums from your salary.

§ 870.523 Special nonpay situations.

(a) Employee organizations:

(1) If you go on leave without pay

(LWOP) to serve as a full-time officer or

employee, you may elect to continue

your life insurance. You must make the

election within 60 days of the start of

the LWOP.

(2) Your coverage continues for the

length of the appointment, even if your

LWOP lasts longer than 12 months.

(3) You must pay to your employing

office the full cost of Basic and Optional

insurance. There is no Government

contribution.

(b) State government, local

government, and institutions of higher

education:

(1) If you go on LWOP while assigned

to one of these, your life insurance

continues for the length of the

assignment, even if your LWOP lasts

longer than 12 months.

(2) You must pay your premiums to

your Federal agency on a current basis.

The agency must continue to pay its

contribution for Basic insurance as long

as you make your payment.

(c) International organizations:

(1) If you go on LWOP when

transferred to an international

organization, you must state in writing

whether you want to continue your

FEGLI coverage. You may continue

FEGLI whether or not you choose to

continue your Federal retirement or

health benefits.

(2) If you choose to continue your

coverage, you must pay your premiums

to your Federal agency on a current

basis. The agency must continue to pay

its contribution for Basic insurance as

long as you make your payments.

(3) If you separate from service,

instead of going on LWOP, for FEGLI

purposes we treat you as being in a

nonpay status.

(4) The regulations on transfers to

international organizations are in part

352, subpart C, of this chapter.

Subpart F—Termination and

Conversion

§ 870.601 When does my Basic insurance

stop?

(a) Unless you are eligible to continue

your insurance as an annuitant or

compensationer (see subpart G of this

part), your Basic insurance stops on the

date you separate from service. (See

paragraph (f) of this section.)

(b) If you separate from service after

meeting the requirement for an

immediate annuity under

§ 842.204(a)(1) of this chapter, and you

postpone receiving the annuity as

provided by § 842.204(c) of this chapter,

your Basic insurance stops on the date

you separate from service. (See

paragraph (f) of this section)

(c) If you move to a position in which

you are excluded from FEGLI, your

Basic insurance stops on the last day in

your former position. (See paragraph (f)

of this section.) Exception: If the

position is excluded by regulation (not

by law), and you do not have a break in

service of more than 3 days, your FEGLI

continues.

(d)(1) Unless you are eligible to

continue your insurance as a

compensationer, your Basic insurance

stops on the date you complete 12

months in nonpay status. (See

paragraph (f) of this section.)

(2) Your 12-month nonpay period

does not have to be continuous. If you

return to pay status for less than 4

consecutive months, your 12-month

period continues when you go back into

a nonpay status. If you’ve already used

up your 12-month period, and you

return to service for less than 4

consecutive months, your Basic

insurance stops on the last day of the

last pay period in pay status.

(3) If you return to pay status for at

least 4 consecutive months, you start a

new 12-month period if you go back

into a nonpay status.

(4) To meet the ‘‘4 consecutive

months’’ requirement, you must be in

pay status for at least part of each pay

period during 4 consecutive months.

(5) If you are entitled to benefits

under part 353 of this chapter

(USERRA—Uniformed Services

Employment and Reemployment Rights

Act of 1994), we consider you to be an

employee in nonpay status.

(e) Unless you choose to make direct

premium payments under § 870.409,

your Basic insurance stops at the end of

the pay period in which your employing

office determines that your pay,

annuity, or compensation is not enough

to cover the full cost of Basic insurance.

(See paragraph (f) of this section.)

64544 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

(f)(1) When your Basic insurance

stops as described in paragraphs (a), (b),

(c), (d), and (e) of this section, we

consider it a termination. When your

insurance terminates, you are entitled to

a 31-day extension of coverage from the

date of the termination.

(2) You do not have to pay any

premiums for the 31-day extension, and

your employing office does not have to

pay any Government contribution for

the 31-day extension.

(3) Your coverage during this 31-day

extension does not include AD&D

benefits.

(g) Your Basic insurance also stops if

you file a waiver as described in

§ 870.505. We consider this a voluntary

cancellation. You do not get a 31-day

extension of coverage if you cancel your

insurance.

§ 870.602 When does my Optional

insurance stop?

(a)(1) Your Optional insurance stops

at the same time your Basic insurance

stops. (See paragraph (d) of this section.)

(2) If your Optional insurance stops

because of separation or completing 12

months in a nonpay status, and you

meet the requirements for portability

(see subpart L of this part), you may

choose to port your Option B coverage,

instead of having it terminate.

(b)(1) If you are eligible to continue

your Basic insurance as an annuitant or

compensationer, but you are not eligible

to continue your Optional insurance

(see §§ 870.701 and 870.702 of this

part), your Optional insurance stops on

the date that your Basic insurance is

continued or reinstated. (See paragraph

(d) of this section.)

(2) If you are a compensationer who

meets the requirements for portability

(see subpart L of this part), you may

choose to port your Option B coverage,

instead of having it terminate.

(c)(1) Unless you choose to make

direct premium payments under

§ 870.409, your Optional insurance

stops at the end of the pay period in

which your employing office determines

that your pay, annuity, or compensation

is not enough to cover the full cost of

your Optional insurance. (See paragraph

(d) of this section.)

(2) If your pay, annuity, or

compensation is enough to cover the

cost of some of your Optional insurance,

but not all of it, and you choose not to

make direct premium payments, your

Optional insurance stops in the

following order:

(i) Option C;

(ii) Option A; then

(iii) Option B.

(d)(1) When your Optional insurance

stops as described in paragraphs (a), (b),

and (c) of this section, we consider it a

termination. When your insurance

terminates, you are entitled to a 31-day

extension of coverage from the date of

the termination. You do not have to pay

any premiums for the 31-day extension.

(2) Your Option A coverage during the

31-day extension does not include

AD&D benefits.

(e) Your Optional insurance also stops

if you file a waiver as described in

§ 870.505. We consider this a voluntary

cancellation. You do not get a 31-day

extension of coverage if you cancel your

insurance.

§ 870.603 Can I convert my insurance to a

private policy?

(a) Whenever your group coverage

stops (except for a voluntary

cancellation), you may convert any or

all of your Basic and Optional insurance

to an individual policy. You do not have

to have a medical examination. The

premiums for your individual policy

depend on your age and class of risk.

Exception: You cannot convert if you

return to service in a covered position

within 3 days after the terminating

event.

(b) If you have assigned your

insurance, the assignee(s) has (have) the

right to convert, instead of you. In this

case, the word ‘‘you’’ in this section and

in §§ 870.604, 870.605, and 870.606

refers to your assignee(s). Your

assignee(s) must pay the premiums for

the converted coverage.

(c) Your employing office must notify

you (or your assignee(s)) of your right to

convert when your insurance stops. It

must give you this notification either

before or immediately after the event

that causes your insurance to stop.

(d) Unless you have assigned your

insurance, only you have the right to

convert. No one may convert on your

behalf.

§ 870.604 How long do I have to convert

my insurance?

(a) You must submit your request for

conversion information to OFEGLI.

OFEGLI must receive your request

within 65 days after the date of the

terminating event (79 days, if you live

overseas).

(b) If you do not use your conversion

right within that time period, we

consider that you have refused coverage.

§ 870.605 Are there any extensions to the

time limit for conversion?

(a) The time limit may be extended up

to 6 months after the date of the

terminating event. To qualify, you must

demonstrate to OFEGLI that:

(1) Your employing office did not give

you the required notification and you

were not aware of the time limit for

conversion; or

(2) You were not able to convert on

time for reasons beyond your control.

(b) If OFEGLI approves your request

to convert, you must convert within 31

days of that approval.

§ 870.606 When is my conversion policy

effective?

Your individual conversion policy is

effective at the end of your 31-day

extension of coverage.

§ 870.607 Can my family members convert

my Option C coverage?

(a) Your family members may convert

Option C coverage (and name

beneficiaries of their choice) if:

(1) You die; or

(2) Your insurance stops under

circumstances that allow you to convert

your coverage, but you do not convert

your Option C coverage.

(b) Family members may convert an

amount up to the full value of your

Option C insurance. (For your spouse,

the maximum amount possible is

$25,000; for an eligible child the

maximum amount possible is $12,500.)

Family members may also convert a

lesser amount of coverage.

(c)(1) If you have Option C coverage

and you die, your employing office must

send a conversion notice to your family

members at your last address on file.

(2) If your coverage stops and you do

not convert, your family members must

contact your agency or retirement

system to request a conversion notice if

they want to convert.

(d) Your family members must submit

the request for conversion to OFEGLI

within 31 days of the later of:

(1) The date of your death or the

terminating event; or

(2) The date they receive the notice of

the right to convert.

(e) Your family members’ conversion

policy is effective at the end of your 31-

day extension of coverage.

(f)(1) Your spouse does not have the

right to convert when he/she loses

eligibility due to divorce or annulment

of your marriage.

(2) Your children do not have the

right to convert when they marry, reach

age 22, or otherwise no longer meet the

definition of ‘‘child’’ given in § 870.101.

Subpart G—Annuitants and

Compensationers

§ 870.701 Can I keep my life insurance

when I retire?

(a) When you retire, you may keep

your FEGLI if you meet the following

requirements:

(1) You retire on an immediate

annuity under a retirement system for

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64545

civilian employees. This includes the

retirement system of a nonappropriated

fund instrumentality of the Department

of Defense or the Coast Guard;

(2) You meet the ‘‘5-year/allopportunity’’ requirement. This means

you had FEGLI for either:

(i) The 5 years of service immediately

before the date your annuity starts, or

(ii) The entire time you were eligible

for FEGLI, if that’s less than 5 years; and

(3) You do not convert your

insurance, as described in subpart F of

this part. (If we do not determine that

you are eligible to continue FEGLI as an

annuitant until after you have converted

your coverage, your group coverage may

be reinstated. To qualify, you must void

your conversion policy. We will

reinstate your group coverage

retroactively, and the company issuing

your conversion policy must refund

your premiums.)

(b) Your Basic and Option A

insurance as an annuitant does not

include AD&D benefits.

§ 870.702 Can I keep my life insurance if I

become a compensationer?

(a) During your first 12 months in

nonpay status while you are a

compensationer, you keep your FEGLI

coverage as an employee.

(b) When you separate or complete 12

months in nonpay status, you may

continue your FEGLI if you meet the

following requirements:

(1) You had FEGLI for either:

(i) The 5 years of service immediately

before the date you became entitled to

receive compensation, or

(ii) The entire time you were eligible

for FEGLI, if that’s less than 5 years; and

(2) You do not convert your

insurance, as described in subpart F of

this part. (If we do not determine that

you are eligible to continue FEGLI as a

compensationer until after you have

converted your coverage, your group

coverage may be reinstated. To qualify,

you must void your conversion policy.

We will reinstate your group coverage

retroactively, and the company issuing

your conversion policy must refund

your premiums.)

(c) Your Basic and Option A

insurance as a compensationer does not

include AD&D benefits.

§ 870.703 Do I have to meet the 5-year/allopportunity requirement for all my

insurance?

(a)(1) To continue a particular type of

insurance as an annuitant or

compensationer, you must meet the 5-

year/all-opportunity requirement for

that type of insurance. For Option B and

Option C, the requirement applies to

each multiple.

(2) If you do not meet the requirement

for a particular type or multiple of

insurance, that coverage or multiple will

terminate. You will get the 31-day

extension of coverage and right to

convert for any insurance that

terminates.

(b) There are no waivers of the 5-year/

all-opportunity requirement.

(c) For the purpose of meeting the 5-

year/all-opportunity requirement, we do

not consider you to have been eligible

for Option C during any period when

you had no eligible family members.

§ 870.704 How much insurance can I

continue as an annuitant or

compensationer?

(a) Basic insurance: The amount you

may continue as an annuitant or

compensationer is your BIA on the date

your insurance would otherwise stop

because of your separation or

completion of 12 months in nonpay

status. If you elected a partial living

benefit, this amount is your postelection BIA.

(b) Option A: You may continue

$10,000.

(c) Option B and Option C: You may

continue the number of multiples that

meet the 5-year/all-opportunity

requirement. You may also choose to

continue fewer multiples.

§ 870.705 Are these the amounts that will

be paid when I die or if a family member

dies?

(a)(1) Basic insurance: Your BIA is the

starting point for determining the

amount that OFEGLI will pay when you

die.

(2) If you are under age 45, you still

have the extra benefit described in

§ 870.204. Exception: If you retired or

started receiving compensation before

October 10, 1980, you do not have an

extra benefit.

(3) If you are age 65 or older, the

amount of benefits may be reduced,

depending on the election you made.

See § 870.706.

(4) You do not have AD&D benefits

when you are insured as an annuitant or

compensationer.

(b)(1) Option A: If you are under age

65, the benefit payable is $10,000.

(2) If you are age 65 or older, the

Option A benefit payable is reduced.

See § 870.708(a).

(3) You do not have AD&D benefits

when you are insured as an annuitant or

compensationer.

(c)(1) Option B and Option C: If you

are under age 65, the benefit payable is

the full amount you continued (unless

you later cancelled some of the

coverage).

(2) If you are age 65 or older, the

benefit payable may be reduced,

depending on the election you made.

See § 870.708.

§ 870.706 What kind of election can I make

about reductions in my Basic insurance?

(a)(1) At the time you retire or become

insured as a compensationer, you must

choose the level of post-65 reduction

you want for your Basic insurance.

There are 3 choices: 75% Reduction,

50% Reduction, and No Reduction.

(2) You must make your election in a

way that OPM designates. We must

receive your election before we make a

final decision on your application for

annuity (or supplemental annuity) or

your request to continue FEGLI as a

compensationer. If you do not make an

election, you get 75% Reduction

automatically.

(3) If you elected a partial living

benefit under subpart K of this part, you

must elect No Reduction.

(4) Only you may make this initial

election. No one may make the election

on your behalf.

(b) The amount of Basic insurance

payable reduces by 2 percent of your

BIA each month. The reduction

continues until 75 percent of your BIA

is gone, and 25 percent remains.

(1) This reduction starts at the

beginning of the 2nd month after the

date you turn 65.

(2) If you are already age 65 or older

when you retire or become insured as a

compensationer, the reduction starts at

the beginning of the 2nd month after the

date you separate or complete 12

months in nonpay status.

(c) The amount of Basic insurance

payable reduces by 1 percent of your

BIA each month. The reduction

continues until 50 percent of your BIA

is gone, and 50 percent remains.

(1) This reduction starts at the

beginning of the 2nd month after the

date you turn 65.

(2) If you are already age 65 or older

when you retire or become insured as a

compensationer, the reduction starts at

the beginning of the 2nd month after the

date you separate or complete 12

months in nonpay status.

(d) The amount of Basic insurance

payable does not reduce. The full

amount of your BIA remains payable

when you die.

(e) See § 870.403 for how your

election affects your premiums.

§ 870.707 Can I change my post-65

reduction election for Basic insurance?

(a) You may make certain changes.

They are shown in the following table

and discussed in more detail after the

table:

64546 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

You (or your assignee) can change

basic insurance from To 75% reduction To 50% reduction To no reduction

75% Reduction ........................................ Not applicable ........................................ No ........................................................... No.

50% Reduction ........................................ Yes ......................................................... Not applicable ........................................ No.

No Reduction ........................................... Yes (unless you elected a partial living

benefit).

No ........................................................... Not applicable.

(b)(1) If you elect 50% Reduction or

No Reduction, you may cancel this

election at any time. You will then get

75% Reduction. Exceptions:

(i) If you have assigned your

insurance, you cannot cancel your

election of 50% Reduction or No

Reduction. Only your assignee(s) can

cancel your election.

(ii) If you elected a partial living

benefit, you must elect No Reduction for

your Basic insurance. You cannot later

cancel that election. If you assigned

your remaining coverage after electing a

partial living benefit, your assignee(s)

cannot cancel your election of No

Reduction.

(2) The amount of your Basic

insurance remaining switches

automatically to the amount that would

be in effect if you had elected 75%

Reduction originally. You do not get a

refund of the extra premiums you paid

for the higher level of coverage.

(c)(1) If you elect 75% Reduction, you

cannot cancel the election.

(2) If you elect 50% Reduction, you

cannot change the election to No

Reduction.

(3) If you elect No Reduction, you

cannot change the election to 50%

Reduction.

§ 870.708 What kind of election can I make

about reductions in my Optional insurance?

(a)(1) For Option A, there is no

election for the post-65 reduction.

(2) The amount of Option A insurance

payable reduces 2 percent of the original

amount each month. The reduction

continues until 75 percent ($7,500) of

your coverage is gone, and 25 percent

($2,500) remains.

(b)(1) You must make a post-65

reduction election for Option B and

Option C. There are 2 choices: Full

Reduction and No Reduction.

(2) If you do not make an election,

you get Full Reduction automatically.

(3) If you elected a living benefit, it

has no effect on your Optional

insurance. You may elect whatever you

want for Option B and Option C.

(4) You do not have to make the same

election for both Option B and Option

C. If you want, you may make different

elections for each one.

(5) This initial election applies to all

multiples of a particular type of

insurance. You cannot elect initially to

have some multiples of an option

reduce and others not reduce.

(6) Only you may make this initial

election. No one may make the election

on your behalf.

(c) The amount of Option B and/or

Option C insurance payable reduces by

2 percent of the original amount each

month. The reduction continues until

your insurance is completely gone. This

happens at the end of the last day before

the 50th reduction. You do not get a 31-

day extension of coverage or right to

convert.

(d) The amount of Option B and/or

Option C insurance payable does not

reduce. The full amount of your Option

B coverage remains payable when you

die. The full amount of your Option C

coverage remains payable when an

eligible family member dies.

(e)(1) The reductions described in

paragraphs (a) and (c) of this section

start at the beginning of the 2nd month

after the date you turn 65.

(2) If you are already age 65 or older

when you retire or become insured as a

compensationer, the reductions start at

the beginning of the 2nd month after the

date you separate or complete 12

months in nonpay status.

(f)(1) Your Option A coverage is free,

starting the month after the month in

which you turn 65.

(2) If you elect Full Reduction for

Option B or Option C, that coverage is

free, starting the month after the month

in which you turn 65.

(3) If you elect No Reduction for

Option B or Option C, you continue to

pay the premiums for your age group for

that coverage, as long as you remain

insured.

§ 870.709 When do I have to make the

post-65 reduction election for Option B and

Option C?

(a) At the time you retire or become

insured as a compensationer, you must

elect the number of multiples you want

to continue during retirement or while

receiving compensation.

(b)(1) If you separate for retirement or

become insured as a compensationer on

or after April 24, 1999, you must elect

either Full Reduction or No Reduction

for all the multiples you continue.

(2) If you do not make an election,

you get Full Reduction automatically.

§ 870.710 What if I was already retired or

insured as a compensationer on April 24,

1999?

(a) If you were already retired or

insured as a compensationer on April

24, 1999, and you had Option B, you

were given an opportunity to make a

reduction election for Option B.

(1) If you were under age 65, you were

notified of the right to elect No

Reduction. Your retirement system will

send you an actual election notice

before your 65th birthday, as provided

in § 870.711(d).

(2) If you were age 65 or older, and

you still had some Option B coverage

remaining, you were given the

opportunity to stop further reductions.

You had until October 24, 1999, to make

an election. If you elected No

Reduction, the amount of your Option B

coverage in effect on April 24, 1999, was

frozen. You had to pay premiums

retroactive to April 24, 1999.

(b) If you were already retired or

insured as an annuitant or

compensationer on April 24, 1999, you

could not make a reduction election for

Option C.

§ 870.711 Can I change my post-65

reduction election for Option B or Option

C?

(a) You may make certain changes.

They are shown in the following tables

and discussed in more detail after the

tables:

Can change Option B from You Your

assignee

Full Reduction to No Reduction—if you are under age 65 ........... Yes ................................................................................................ No.

Full Reduction to No Reduction—if you are age 65 or older ........ No, except as stated in § 870.711(d)(2) ....................................... No.

No Reduction to Full Reduction—if you are under age 65 ........... Yes, unless you assigned your insurance .................................... Yes.

No Reduction to Full Reduction—if you are age 65 or older ........ Yes, unless you assigned your insurance .................................... Yes.

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64547

Can change Option C from You Your

assignee

Full Reduction to No Reduction—if you are under age 65 ........... Yes ................................................................................................ No.

Full Reduction to No Reduction—if you are age 65 or older ........ No, except as stated in § 870.711(d)(2) ....................................... No.

No Reduction to Full Reduction—if you are under age 65 ........... Yes ................................................................................................ No.

No Reduction to Full Reduction—if you are age 65 or older ........ Yes ................................................................................................ No.

(b)(1) Before you reach age 65, you

may change from No Reduction to Full

Reduction at any time. Exception: If you

have assigned your insurance, only your

assignee(s) may change from No

Reduction to Full Reduction for your

Option B coverage.

(2) Before you reach age 65, you may

change from Full Reduction to No

Reduction at any time.

(c)(1) After you reach age 65, you may

change from No Reduction to Full

Reduction at any time. Exception: If you

have assigned your insurance, only your

assignee(s) may change from No

Reduction to Full Reduction for your

Option B coverage. If you change to Full

Reduction after you reach age 65, the

amount of insurance remaining switches

automatically to the amount that would

be in effect if you had elected Full

Reduction originally. You do not get a

refund of the premiums you paid after

age 65.

(2) After you reach age 65, you cannot

change from Full Reduction to No

Reduction, except as provided in

paragraph (d)(2) of this section.

(d)(1) Shortly before you reach age 65,

your retirement system will send a

reminder about the election you made

and will offer you a chance to change

the election. At that time, you may

choose to have some multiples of

Option B and Option C reduce and some

not reduce.

(2) If you are already age 65 or older

at the time you retire or become insured

as a compensationer, your retirement

system will send the reminder and give

you the opportunity to change your

election as soon as the retirement

processing or compensation transfer is

complete.

(3) If you have assigned your

insurance, and if you elected No

Reduction for Option B coverage, your

retirement system will send the

reminder notice for Option B to your

assignee(s).

(4) If you want to change your

reduction election, you must return the

notice by the end of the month

following the month in which you turn

65. If you are already over age 65, you

must return the notice by the end of the

4th month after the date of the letter. If

you do not return the election notice,

you will keep your initial election.

§ 870.712 Do the post-65 reductions apply

to all annuitants and compensationers?

(a) There is an exception if you are a

judge, and you retire under one of the

following provisions:

(1) 28 U.S.C. 371(a) or (b);

(2) 28 U.S.C. 372(a); or

(3) 26 U.S.C. 7447.

(b) If this exception applies to you,

you do not have any post-65 reductions.

For FEGLI purposes, we consider you an

employee. Your Basic and Optional

insurance continues without

interruption or reduction. Exception: If

you are a judge eligible for

compensation, and you choose to

receive that instead of your annuity, the

post-65 reductions and elections do

apply to you.

§ 870.713 What if I’m an MRA+10

annuitant?

(a) An MRA+10 annuity counts as an

immediate annuity. (See § 870.101 for

the definition of an immediate annuity.)

You must meet the 5-year/allopportunity requirement described in

§ 870.701(a). If you do, OPM sends you

a notice of insurance eligibility and an

election form.

(b) Your FEGLI will be reinstated on

the later of:

(1) The date your annuity starts; or

(2) The date we receive your

application for annuity.

(c) You may reinstate only the

coverage you had immediately before

your insurance stopped—or a lesser

amount of coverage. You cannot elect

any new coverage.

(d) You must make a post-65

reduction election for Basic insurance

and for Option B and Option C, if you

have that coverage. OPM must receive

your election within 60 days after the

date we send it to you.

§ 870.714 What if I don’t want to continue

my insurance as an annuitant or

compensationer?

(a) You don’t have to continue your

insurance if you don’t want to. At the

time you retire or would become

insured as a compensationer, you may

choose not to continue some or all of

your FEGLI. However, if you do not

continue your Basic insurance, you

cannot continue any of your Optional

insurance.

(b) Any coverage that you choose not

to continue terminates, with the 31-day

extension of coverage and right to

convert. (See subpart F.)

§ 870.715 When does my insurance as an

annuitant or compensationer stop?

(a) If you are retired on disability, and

your annuity stops because you recover

or return to earning capacity, your

FEGLI stops. Your FEGLI stops on the

date your annuity stops, with the 31-day

extension of coverage and right to

convert. Exception: If you apply for and

receive an immediate annuity under

other provisions of retirement law, your

FEGLI continues.

(b) If you are a compensationer, and

the Department of Labor finds that you

are able to return to work, your FEGLI

stops. Your coverage stops on the date

your compensation stops, with the 31-

day extension of coverage and right to

convert. Exceptions: Your FEGLI

continues if:

(1) You become an annuitant and are

eligible to continue your coverage as an

annuitant; or

(2) You return to work in a covered

position.

(c) Unless you have assigned your

insurance, you may cancel your

insurance at any time, as described in

§ 870.505.

§ 870.716 Can my insurance be

reinstated?

(a)(1) If you are an annuitant whose

insurance stopped as described in

§ 870.710(a), and your disability annuity

is restored (after December 31, 1983),

you may reinstate your FEGLI.

(2) If your annuity is restored as

described in paragraph (a)(1) of this

section, OPM will mail you a notice of

insurance eligibility and an election

form. If you want to reinstate your

FEGLI, you must complete the election

form and return it to OPM. We must

receive your election within 60 days

after the date we send it to you.

(3) If you are reinstating your

insurance, you may reinstate only the

types of coverage you had immediately

before your insurance stopped. You may

also choose to reinstate only some types

of Optional insurance or to reinstate

fewer multiples of Option B or Option

C. If you reinstate less coverage than

you are eligible for, we consider that

you are cancelling any coverage that do

not reinstate. You cannot elect any new

coverage.

64548 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

(4) Your reinstated coverage becomes

effective on the first day of the month

after the date we receive your election.

Your annuity withholdings are

reinstated at the same time.

(5) If you are age 65 or older, and you

elected 75% Reduction or 50%

Reduction for Basic insurance or Full

Reduction for Option B and/or Option

C, the amount of your reinstated

insurance is the same amount you

would have if your insurance had not

stopped. We determine the amount by

computing the reductions during the

period after your insurance stopped.

(b) If you are a compensationer whose

insurance stopped as described in

§ 870.710(b), your FEGLI cannot be

reinstated unless you successfully

appeal the termination of your

compensation.

(c) If your insurance stops for any

other reason, it cannot be reinstated.

§ 870.717 What happens if I retire and then

come back to work for the Federal

Government?

(a) If your annuity stops when you are

reemployed, the life insurance you have

as an annuitant also stops.

(1) If you are reemployed in an

excluded position, you get the 31-day

extension and right to convert. You

cannot get FEGLI as an employee.

(2) If you are reemployed in a covered

position, you get FEGLI as an employee.

(b) If your annuity continues when

you are reemployed, and you are

reemployed in an excluded position,

you keep your insurance as an

annuitant.

(c)(1) If your annuity continues when

you are reemployed, and you are

reemployed in a covered position, any

Basic, Option A, and Option C

insurance you have as an annuitant is

suspended. Your annuitant

withholdings for this insurance are also

suspended. The suspension is effective

the day before your first day in pay

status in your reemployment.

(2) Your Basic, Option A, and Option

C insurance transfers to your

employment. The amount of your Basic

insurance and the withholdings for your

Basic insurance are based on your salary

in reemployment. Your agency

employing office makes the Government

contribution for Basic insurance, instead

of OPM.

(3)(i) If you have Option B as an

annuitant, you keep that coverage as an

annuitant unless you elect to have it as

an employee.

(ii) If you want to have Option B as

an employee, you must make the

election within 31 days after the date of

your reemployment. If you make this

election, the Option B you have as an

annuitant is suspended the day before

your Option B as an employee becomes

effective. The amount of your Option B

coverage and your withholdings are

based on your salary in reemployment.

(d) If you are reemployed in a covered

position, in addition to your annuitant

coverage transferring to your

employment, you will get back any

coverage that terminated at the time you

separated for retirement. Exception: If

you have Option B coverage as an

annuitant, and there were some

multiples of Option B that terminated

when you retired, you will not get those

multiples back unless you elect to

transfer your Option B coverage to your

employment.

(e) If you are reemployed and then go

into a nonpay status, the insurance you

have through your reemployment

terminates after 12 months. If this

happens, you will get back your

suspended annuitant coverage. If you

later return to a pay status, your

annuitant coverage will again be

suspended, and you will get back the

coverage you had through your

reemployment.

§ 870.718 Can I elect more life insurance if

I return to service?

(a) If you have a break in service of

at least 180 days before you are

reemployed, you may elect any coverage

that you previously waived.

(b) If your break in service is less than

180 days, you may elect coverage only

as described in § 870.507.

§ 870.719 What happens if I die or a family

member dies after I return to service?

(a) If you die while you are

reemployed, for each type of insurance

you have, the amount payable is:

(1) Basic insurance: the higher of:

(i) The amount you have through your

reemployment; or

(ii) The amount of your suspended

annuitant coverage.

(2) Option A: the amount you have

through your reemployment.

(3) Option B: the amount based on

your election (either keeping Option B

as an annuitant or having it as an

employee).

(b) If you have Option C and an

eligible family member dies while you

are reemployed, the amount payable is

the amount you have through your

reemployment.

§ 870.720 What happens when I separate

from service again?

(a) When you separate from service,

you may keep the insurance you got

through your reemployment if:

(1) You meet the 5-year/allopportunity requirement described in

§ 870.701; and

(2) You qualify for a supplemental

annuity or receive a new retirement

right. If your retirement system does not

allow its annuitants to receive a

supplemental annuity or new retirement

right, but you otherwise meet the

requirements for one, we consider that

you meet the requirements of this

paragraph.

(b) If you meet the requirements in

paragraph (a) of this section, this is what

happens to each type of insurance you

have:

(1) Basic insurance: You must choose

between the insurance you got through

your reemployment and your suspended

annuitant coverage. (If you are age 65 or

older and elected 75% Reduction or

50% Reduction, the reductions

continued while your insurance was

suspended.)

(2) Option A and Option C: You

automatically continue the coverage you

got through your reemployment.

(3) Option B:

(i) If you kept your Option B as an

annuitant, you continue that coverage.

(ii) If you elected Option B as an

employee, you must choose between the

Option B you got through your

reemployment and your suspended

annuitant coverage. (If you are age 65 or

older and elected Full Reduction, the

reductions continued while your

insurance was suspended.)

(c) If you are making an election

under both paragraph (b)(1) and

paragraph (b)(3)(ii) of this section, you

do not have to make the same choice for

Basic and Option B. You may choose to

continue one type of coverage from your

reemployment and the other type from

your suspended annuitant insurance.

(d)(1) If you are eligible and choose to

continue the Basic insurance and/or the

Option B you got through your

reemployment, you must make a new

post-65 reduction election.

(2) If you are eligible to continue the

Option C you got through your

reemployment, you must make a new

post-65 reduction election.

§ 870.721 What happens if I come back to

work part-time, but I’m still receiving

compensation?

(a) When you return to active Federal

service, your insurance as a

compensationer stops.

(1) If you are employed in an

excluded position, you get the 31-day

extension of coverage and right to

convert. You cannot get FEGLI as an

employee.

(2) If you are employed in a covered

position, your FEGLI transfers to your

employment. The amount of your Basic

insurance and Option B, if you have that

coverage, is based on your salary in

reemployment.

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64549

(b) If you:

(1) Applied for retirement, and your

application was approved, but

(2) You suspended receipt of your

annuity while receiving compensation,

we consider you to be a reemployed

annuitant. The provisions of §§ 870.717,

870.718, 870.719, and 870.720 apply to

you.

Subpart H—Order of Precedence and

Designation of Beneficiary

§ 870.801 Who gets the life insurance

benefits when I die?

(a) If you have assigned your

insurance, OFEGLI will pay benefits to

your assignee or your assignee’s

designated beneficiary. See § 870.915.

(b) If you have not assigned your

insurance, and there is a valid court

order in effect naming a specific person

or persons to receive the life insurance

benefits when you die, OFEGLI will pay

the benefits to the person(s) named in

the court order.

(c) If you have not assigned your

insurance and there is no valid court

order in effect, OFEGLI pays benefits

according to an order of precedence,

which is stated in 5 U.S.C. 8705(a). The

same order of precedence applies to

Basic insurance, Option A, and Option

B. The order of precedence is:

(1) To your designated beneficiary or

beneficiaries;

(2) If none, to your widow(er);

(3) If none, to your child, or children

in equal shares. If any child dies before

you, that child’s share goes to his/her

children or grandchildren;

(4) If none, to your parents in equal

shares. If one of your parents dies before

you, your surviving parent gets the

entire amount;

(5) If none, to the executor or

administrator of your estate;

(6) If none, to your next of kin,

according to the laws of the State where

you had your legal residence at the time

of your death.

(d) Assignments and court orders

preempt the order of precedence and are

the only exceptions to the order of

precedence.

§ 870.802 What are the requirements for a

court order to be valid?

(a) For a court order to be valid, the

appropriate office must receive a

certified copy on or after July 22, 1998,

and before you die. The appropriate

office is:

(1) If you are an employee, or a

compensationer within the first 12

months of nonpay status, your

employing agency;

(2) If you are insured as an annuitant

or compensationer, OPM; and

(3) If you have ported Option B

coverage, the Portability Office.

(b) If, within the stated time frames,

the appropriate office receives

conflicting court orders, entitling

different persons to the same insurance,

OFEGLI will pay benefits based on

whichever court order was issued first.

§ 870.803 Can I designate a beneficiary?

(a) If you want benefits paid

differently from the order of precedence,

you must file a designation of

beneficiary. Exception: If you have

assigned your insurance, you cannot

designate a beneficiary. Only your

assignee(s) may designate beneficiaries.

(b) If there is a valid court order on

file as described in § 870.802, you

cannot designate a beneficiary (other

than the person(s) named in the court

order) unless:

(1) The person(s) named in the court

order agrees in writing;

(2) The court order is modified so that

the person previously named is no

longer named, without naming a new

person to receive the benefits. The

appropriate office must receive a

certified copy of the modified court

order before you die. (If the court order

is modified, but you do not designate a

beneficiary, OFEGLI will pay benefits

according to the order of precedence.);

or

(3) The court order applies to only

part of your insurance benefits. In this

case, you may designate a beneficiary to

receive the benefits that are not

included under the court order. If you

do not designate a beneficiary for these

benefits, OFEGLI will pay according to

the order of precedence.

§ 870.804 How do I make a designation?

(a) Unless you have assigned your

insurance, no one except you may

designate a beneficiary. No one may

make a designation on your behalf. If

you have assigned your insurance, no

one except your assignee(s) may

designate a beneficiary.

(b)(1) Your designation must be in

writing. You must sign the designation,

and 2 people must witness your

signature and also sign the designation.

(2) You cannot name one (or both) of

your witnesses as a beneficiary.

(3) If your employing office

erroneously accepts a designation listing

a beneficiary who is also a witness, that

person is disqualified from receiving

benefits under the designation.

(i) If that person is the only

beneficiary listed, the designation is

invalid. OFEGLI will pay benefits under

your last valid designation. If you do not

have a valid designation on file, OFEGLI

will pay benefits to the next person(s)

under the order of precedence.

(ii) If you have listed other

beneficiaries, the designation may still

be valid. In this case, the remaining

beneficiaries will receive equal shares of

the disqualified person’s share of the

benefits when you die.

(c) If you make a designation or a

change of beneficiary in your will or any

other document, and it does not meet

the requirements of this section, it is not

valid. OFEGLI will pay benefits as if you

did not make a designation.

(d)(1) You (or your assignee(s)) may

name any individual, firm, corporation,

or legal entity as a beneficiary.

Exception: You cannot designate an

agency of the Federal or District of

Columbia Government.

(2) You must designate percentages or

fractions. You cannot designate dollar

amounts. If you designate 2 or more

beneficiaries, you may also designate a

type of insurance to go to each

beneficiary.

(e) Your designation may state that a

beneficiary is entitled to the insurance

benefits only if he/she survives you by

a specified period of time (not more

than 30 days). If that beneficiary does

not survive for the specified period of

time, OFEGLI will pay benefits as if that

beneficiary had died before you.

§ 870.805 Where do I have to file my

designation form?

(a)(1) If you are an employee, or a

compensationer within the first 12

months of nonpay status, your agency

employing office must receive your

designation before you die.

(2) If you are insured as an annuitant

or compensationer, OPM must receive

your designation before you die.

(3) If you have ported Option B

coverage, the Portability Office must

receive your designation before you die.

(b) A faxed designation is valid if:

(1) The appropriate office, as stated in

paragraph (a) of this section, receives

the faxed designation before you die;

(2) The appropriate office receives the

original designation within 30 days after

receiving the faxed designation; and

(3) The original designation is

identical to the faxed designation.

§ 870.806 Can I change my designation?

Yes. Unless you have assigned your

insurance, or unless you are subject to

the court order provisions stated in

§ 870.804, you may change your

designation at any time. You cannot

waive your right to change designated

beneficiaries, and the right cannot be

restricted in any way. You do not have

to notify the previous beneficiary, and

you do not have to have the previous

beneficiary’s approval.

64550 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

§ 870.807 How long does my designation

last?

(a) Your designation of beneficiary

cancels automatically 31 days after your

insurance stops, unless within those 31

days you are reemployed in a position

that entitles you to FEGLI. Exception: If

you port Option B, your designation

remains in effect. In this case, if you

return to Federal service, Basic and any

Option A insurance acquired through

returning to service is included in the

existing designation.

(b) If you assign your insurance, your

designation cancels automatically on

the effective date of the assignment.

§ 870.808 How does OFEGLI pay Option C

benefits if an eligible family member dies?

(a) If you have Option C and an

eligible family member dies, OFEGLI

pays benefits to you.

(b) If you are entitled to receive

Option C benefits, but you die before

OFEGLI makes the payment, OFEGLI

will pay whoever is entitled to receive

your Basic insurance benefits under the

statutory order of precedence. If you

assigned your insurance, OFEGLI will

still follow the order of precedence for

payment of Option C benefits in this

situation, but will start with the second

on the list (widow(er)).

Subpart I—Assignment

§ 870.901 Who is allowed to make an

assignment?

(a) Effective July 10, 1984, section 208

of the Bankruptcy Amendments and

Federal Judgeship Act of 1984, Pub. L.

98–353 (98 Stat. 355), allows Federal

judges to assign their FEGLI coverage.

(b) Effective October 3, 1994, section

4 of Pub. L. 103–336 (108 Stat. 2661)

allows all Federal employees,

annuitants, and compensationers to

assign their FEGLI coverage.

§ 870.902 What insurance can I assign?

(a) If you make an assignment, you

assign your Basic, Option A, and Option

B insurance. An assignment applies to

all of this coverage; you cannot assign

only part of your insurance.

(b) You cannot assign Option C.

(c) If you elected a living benefit

under subpart K of this part, you may

assign your remaining coverage.

§ 870.903 Who can I assign my insurance

to?

(a) You may assign your insurance to

one or more individuals, corporations,

trusts, or other entities.

(b) You cannot name contingent

assignees, in case your primary assignee

dies before you do.

(c) If you assign your insurance to 2

or more assignees, you must state the

percentage or fraction to go to each

assignee. You cannot assign dollar

amounts, and you cannot assign types of

insurance.

(d) Once assigned, the value of your

insurance increases or decreases

automatically, as provided by this part.

Exception: If you elected a partial living

benefit before assigning the remainder

of your insurance, the amount of your

Basic insurance does not increase or

decrease.

§ 870.904 Can I change or cancel my

assignment?

No. An assignment is irrevocable.

Once you have assigned your insurance,

you cannot undo the assignment or

change it in any way.

§ 870.905 How do I make an assignment?

(a) Only you may assign your

insurance. No one may make an

assignment on your behalf.

(b)(1) To assign your insurance, you

must complete an approved assignment

form. (Assignments submitted before

November 28, 1986, were acceptable

without an approved assignment form.)

You must sign the form, and 2 people

must witness your signature and also

sign the form.

(2) You cannot assign your insurance

to one of your witnesses.

(c) A court order may direct you to

make an assignment to the person(s)

named in the court order. For an

assignment to be effective, you must

follow the procedures in this section.

§ 870.906 Where do I have to file my

assignment form?

(a) If you are an employee, or a

compensationer within the first 12

months of nonpay status, you must

submit the assignment form to your

agency employing office.

(b) If you are insured as an annuitant

or compensationer, you must submit the

assignment form to OPM.

(c) If you have ported Option B

coverage, you must submit the

assignment form to the Portability

Office.

§ 870.907 When is my assignment

effective?

Your assignment is effective on the

date the employing office receives your

properly completed, signed, and

witnessed assignment form.

§ 870.908 Can I elect more insurance after

I make an assignment?

Yes. You have the right to elect

insurance as described in subpart E of

this part. Any Option A or Option B

coverage that you elect is included

automatically in your existing

assignment.

§ 870.909 Can I cancel or reduce my

insurance after I make an assignment?

(a) No. You cannot cancel or reduce

your insurance after you make an

assignment. The right to cancel or

reduce your insurance transfers to the

assignee(s).

(b) If there is more than 1 assignee, all

assignees must agree to the cancellation

or reduction.

§ 870.910 Who pays the premiums after I

make an assignment?

You, the insured individual, still pay

the premiums after you assign your

insurance. The premiums are withheld

from your pay, annuity, or

compensation, the same as they were

before you made the assignment.

§ 870.911 What happens when I retire or

become insured as a compensationer?

(a)(1) If you are eligible to continue

your insurance as an annuitant or

compensationer, the assignment will

continue.

(2) You will make the initial post-65

reduction election for Basic insurance

and Option B.

(b)(1) Once you’ve made your initial

post-65 reduction election for Basic, you

cannot change it. However, unless

you’ve elected a partial living benefit,

your assignee(s) may change your post65 reduction election as stated in

subpart G of this part.

(2) Once you’ve made your initial

post-65 reduction election for Option B:

(i) If you elected Full Reduction, only

you may change to No Reduction, as

stated in § 870.711.

(ii) If you elected No Reduction, only

your assignee may change to Full

Reduction, as stated in § 870.711.

(c)(1) Your assignee may choose to

convert your insurance instead of

continuing it when you become insured

as an annuitant or compensationer.

(2) If there is more than one assignee,

some assignees may choose to convert

their part of your insurance instead of

continuing it when you become insured

as an annuitant or compensationer, and

other assignees may choose to continue

their part of your insurance.

(3) The amount of each type of

continued insurance is determined by

the total percentage of the shares of the

assignees who choose to continue the

coverage.

(d)(1) If you become reemployed in a

position that entitles you to FEGLI, the

insurance you get through your

employment is included automatically

in your existing assignment.

(2) The right to elect Option B as an

employee rather than keeping it as an

annuitant (see § 870.717(c)(3)) stays

with you; it does not transfer to the

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64551

assignee(s). Any Option B coverage you

elect as an employee is included in your

existing assignment.

§ 870.912 What happens if my insurance

terminates after I make an assignment?

(a)(1) If your insurance stops, each

assignee has the right to convert all or

a part of his/her share of your insurance.

The conditions stated in subpart F of

this part apply to your assignee(s).

(2) Any assignee who does not

convert his/her share of your insurance

loses all ownership of the insurance.

(b) When there is more than 1

assignee, the maximum amount of

insurance each assignee may convert is

determined by the dollar amount

corresponding to the assignee’s share of

your total insurance. This amount will

be rounded up to the next higher

thousand.

(c)(1) Premiums for the converted

insurance are based on your age and

class of risk at the time your assignee

converts.

(2) If an assignee converts your

insurance, the assignee is responsible

for paying the premiums on the

converted coverage.

(d) If you have assigned your

insurance, your employing office must

notify your assignee(s) of the right to

convert when your insurance

terminates.

§ 870.913 How long does my assignment

last?

(a) Your assignment cancels

automatically 31 days after your

insurance stops, unless within those 31

days you are reemployed in a position

that entitles you to FEGLI. Exception: If

you port Option B, your assignment

remains in effect. In this case, if you

return to Federal service, Basic

insurance and any Option A or

additional Option B insurance acquired

through returning to service is included

in the existing assignment.

(b) Your assignee has the right to

assign your insurance to someone else,

including assigning it back to you. If

this happens, all the rights of the

assignee revert to you.

§ 870.914 Can I designate a beneficiary

after I’ve assigned my insurance?

No. When you assign your insurance,

any designation of beneficiary you have

on file cancels automatically. You

cannot file a new designation. Only

your assignee has the right to designate

a beneficiary. The provisions of

§ 870.804 apply to your assignee(s).

§ 870.915 If I’ve assigned my insurance,

who gets the life insurance benefits when

I die?

(a) Each assignee may designate a

beneficiary (or beneficiaries). An

assignee may designate himself/herself

as the primary beneficiary and name

another contingent beneficiary(ies) in

case the assignee dies before you.

(b) If your assignee does not designate

a beneficiary, OFEGLI will pay benefits

to your assignee when you die.

(c) If your assignee dies before you

and did not designate a beneficiary,

OFEGLI will pay benefits to your

assignee’s estate when you die.

§ 870.916 Current addresses.

Each assignee and each beneficiary of

an assignee must keep the office where

your assignment is filed informed of

his/her current address.

Subpart J—Benefits for United States

Hostages in Iraq and Kuwait and

United States Hostages Captured in

Lebanon

§ 870.1001 Purpose.

This subpart gives the conditions for

life insurance coverage for certain

hostages. The provisions for this

coverage are in section 599C of Pub. L.

101–513 (104 Stat. 2035).

§ 870.1002 Special definitions for this

subpart.

Hostage and hostage status have the

meaning given in section 599C of Pub.

L. 101–513 (104 Stat. 2035).

Pay period for individuals insured

under this subpart means the pay period

that the U.S. Department of State sets

up.

§ 870.1003 Who is eligible for FEGLI under

this subpart?

(a)(1) The U.S. State Department

determines who is eligible for coverage.

(2) Those who are eligible for hostage

coverage are not considered employees

for the purpose of this part.

(b) Eligibility for insurance under this

subpart depends on the availability of

funds under section 599C(e) of Pub. L.

101–513 (104 Stat. 2035).

§ 870.1004 What is the amount of

insurance for those eligible as hostages?

(a)(1) Section 599C(b)(2) of Pub. L.

101–513 (104 Stat. 2035) specifies a

payment for these individuals. The BIA

is the amount of this payment, rounded

to the next higher $1,000, plus $2,000.

(2) Basic insurance includes AD&D

coverage.

(b) These hostages are not eligible for

Optional insurance.

§ 870.1005 What is the effective date of

this coverage?

(a)(1) For hostages in Iraq and Kuwait

coverage was effective August 2, 1990.

(2) For hostages captured in Lebanon

coverage was effective June 1, 1982.

(b) The U.S. Department of State may

set a later effective date.

§ 870.1006 How are the premiums paid?

(a) Section 599C of Pub. L. 101–513

provides funds for the FEGLI premiums.

(b) If the person is not insured for the

full pay period, premiums are paid only

for the days he/she is actually insured.

The daily premium is the monthly

premium multiplied by 12 and divided

by 365.

(c) OPM may accept the premium

payments in advance from a State

Department appropriation, if it is

necessary to fund the 12-month period

beginning the earlier of:

(1) The day after hostilities or

sanctions end; or

(2) The day after the person’s hostage

status ends.

(d) OPM will place any funds

received under paragraph (c) of this

section in an account set up for that

purpose. OPM will make the deposit

required under 5 U.S.C. 8714 from the

account when the appropriate pay

period occurs.

§ 870.1007 Can a person insured as a

hostage cancel the insurance?

(a) A person insured under this

subpart may cancel the insurance at any

time by written request. The insured

individual must request the

cancellation. No one can make the

request on the person’s behalf.

(b) The cancellation is effective on the

first day of the pay period after the pay

period in which the U.S. Department of

State receives the request.

(c) A person who cancels insurance

under this section cannot get the

insurance again, unless the State

Department determines that it would be

against equity and good conscience not

to allow the person to be insured.

§ 870.1008 How are benefits paid when a

person insured as a hostage dies?

When a person insured as a hostage

dies, OFEGLI pays benefits according to

the same statutory order of precedence

that applies to other FEGLI coverage. A

person insured under this subpart has

the right to designate a beneficiary(ies);

the provisions of subpart H of this part

apply.

§ 870.1009 How long does the insurance

continue?

(a) Unless the person cancels coverage

earlier, insurance under this subpart

stops:

64552 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules

(1) For hostages in Iraq and Kuwait,

12 months after hostage status ends; and

(2) For hostages captured in Lebanon,

60 months after hostage status ends.

(b) When his/her insurance

terminates, the person gets the 31-day

extension of coverage and the right to

convert. (See subpart F of this part.)

§ 870.1010 State Department

responsibilities.

(a) The U.S. Department of State

serves as the ‘‘employing office’’ for

persons insured under this subpart.

(b) The State Department must

determine the eligibility of persons

under this subpart. This includes

determining whether a person is barred

from FEGLI because of other life

insurance, as provided in section 599C

of Pub. L. 101–513 (104 Stat. 2035).

Subpart K—Living Benefits

§ 870.1101 Who is eligible for a living

benefit?

Effective July 25, 1995, you may

receive a living benefit if you are

terminally ill, as defined in § 870.101.

Exception: If you have assigned your

insurance, you cannot elect a living

benefit.

§ 870.1102 How much can I elect as a

living benefit?

(a) Only Basic insurance is available

for a living benefit. You cannot get

Optional insurance as a living benefit.

(b)(1) If you are an employee, you may

elect to receive either:

(i) A full living benefit, which is all

of your Basic insurance; or

(ii) A partial living benefit, which is

a portion of your Basic insurance, in a

multiple of $1,000.

(2) If you are insured as an annuitant

or compensationer, you may elect only

a full living benefit. You cannot elect a

partial living benefit.

(c) The amount of Basic insurance

available for payment is based on your

age 9 months from the date OFEGLI

receives your application.

(d) The amount of Basic insurance

you elect as a living benefit will be

reduced by an actuarial amount

representing the amount of interest lost

to the Fund because of the early

payment of benefits.

§ 870.1103 How do I apply for a living

benefit?

(a)(1) You must request an application

form directly from OFEGLI. Neither

your employing office nor OPM has the

form.

(2) You must complete the first part

of the application and have your doctor

complete the second part. You or your

doctor must send the completed

application directly to OFEGLI.

(b) Another person may apply for a

living benefit on your behalf if all of the

following conditions are met:

(1) You must be physically or

mentally incapable of making an

election;

(2) The applicant must have a power

of attorney or court order authorizing

him/her to elect a living benefit on your

behalf; and

(3) The applicant must either be your

sole beneficiary or have each

beneficiary’s written and signed

consent.

(c) OFEGLI reviews the application,

obtains certification from your

employing office regarding the amount

of your insurance, and verifies that you

have not assigned your insurance.

OFEGLI then determines whether you

meet the requirements to elect a living

benefit.

(d)(1) If OFEGLI needs additional

information, it will contact you or your

doctor.

(2) Under certain circumstances,

OFEGLI may require a medical

examination before making a decision.

In this case, OFEGLI must pay for the

medical exam.

§ 870.1104 What happens after OFEGLI

approves my application?

(a) If OFEGLI approves your

application, it sends you a check and an

explanation of benefits.

(b) You can change your mind about

electing a living benefit until you cash

or deposit the check. If this happens,

you must mark the check ‘‘void’’ and

return it to OFEGLI.

(c) Your living benefit election is

effective on the date you cash or deposit

the check. After that date you cannot

change your mind and revoke the

election.

(d) Once you have cashed or

deposited the check, OFEGLI sends an

explanation of benefits to your

employing office, so it can make the

necessary changes in your premium

withholdings.

(e) If you die before cashing or

depositing the check, the payment must

be returned to OFEGLI.

§ 870.1105 What if OFEGLI doesn’t

approve my application?

If OFEGLI does not approve your

application, it will notify you and your

employing office. OFEGLI’s decision is

not subject to administrative review or

appeal, but you may submit additional

medical information. You may also

reapply at a later date if your situation

changes.

§ 870.1106 What happens to the rest of my

coverage after I elect a living benefit?

(a)(1) If you elect a full living benefit,

your post-election BIA is $0.

Withholdings for Basic insurance stop at

the end of the pay period in which your

living benefit election is effective. Your

Basic AD&D coverage reduces to $0 on

the effective date of your living benefit

election.

(2) If you elect a partial living benefit,

your post-election BIA is a reduced

amount (see § 870.205). Your

withholdings and the Government

contribution for Basic insurance are

based on the amount of your postelection BIA and are reduced at the end

of the pay period in which your living

benefit election is effective. Your Basic

AD&D coverage reduces to equal your

post-election BIA.

(b)(1) Your post-election BIA cannot

change. Subsequent changes in pay will

have no effect on the amount of your

Basic insurance.

(2) If you retire or become insured as

a compensationer after electing a partial

living benefit, you must elect No

Reduction for your Basic insurance.

(c) Electing a living benefit has no

effect on your Optional insurance.

(d) After electing a living benefit, you

may assign the remainder of your

insurance.

(e) You may elect a living benefit only

once. If you elect a partial living benefit,

you cannot later elect a living benefit for

some or all of your remaining Basic

insurance.

§ 870.1107 What happens if I live longer

than 9 months?

If you live longer than 9 months, you

do not have to return the living benefit

payment.

Subpart L—Portability

§ 870.1201 Portability permitted.

(a) Effective April 24, 1999, until

April 24, 2002, you may port (keep)

Option B coverage that would otherwise

terminate.

(b) You cannot port Basic insurance,

Option A, or Option C.

§ 870.1202 What are the eligibility

requirements for portability?

(a) You are eligible to port your

Option B if:

(1) Your coverage is terminating

because you are separating or

completing 12 months in nonpay status;

and

(2) You meet the 5-year/allopportunity requirement stated in

§ 870.701.

(b) If you have assigned your

insurance, it is your assignee(s) who

has(have) the right to port. Your

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Proposed Rules 64553

assignee(s) must pay the premiums for

the ported coverage.

§ 870.1203 How much Option B can I port?

(a)(1) You may port the number of

Option B multiples that meet the 5-year/

all-opportunity requirement.

(2) You may also choose to port fewer

multiples. If you do, any multiples that

you do not port terminate, with the 31-

day extension of coverage and right to

convert.

(b)(1) If you port your coverage, you

may reduce the number of multiples at

any time. Exception: If you have

assigned your insurance, only your

assignee has the right to reduce the

number of multiples.

(2) You cannot increase the number of

multiples.

(c) If you port Option B, future salary

changes have no effect on the amount of

your coverage.

(d) The amount of your ported

coverage reduces by 50% at the

beginning of the 2nd month after you

reach age 70. If you are already age 70

or older at the time you port your

Option B, the reduction takes place the

2nd month after the effective date of

your ported coverage.

§ 870.1204 What is the cost of the ported

coverage?

(a)(1) Ported Option B costs the same

as ‘‘regular’’ Option B. (See

§ 870.405(d).)

(2) In addition to the premium

payments for Option B, you must pay a

monthly administrative fee for ported

coverage. OPM negotiates the amount of

this administrative fee with the

Portability Office.

(b) When your coverage reduces, as

stated in § 870.1203(d), your premiums

also reduce, based on the new amount

of your coverage.

§ 870.1205 How do I port my coverage?

(a) If you are eligible to port your

Option B, your employing office must

notify you (or your assignee) in writing

of the loss of coverage and your right to

port. The employing office must do this

either before or immediately after the

event that causes your coverage to stop.

(b)(1) If you want to port your Option

B, you must submit your request to the

Portability Office. The Portability office

must receive your request within 65

days after the date of the terminating

event (79 days, if you live overseas).

(2) If you do not request portability

within the required time frame, we

consider that you have refused coverage.

§ 870.1206 Are there any extensions to the

time limit for porting?

(a) The time limit may be extended up

to 6 months after the date of the

terminating event. To qualify, you must

demonstrate to the Portability Office

that:

(1) Your employing office did not give

you the required notification and you

were not aware of the time limit for

porting your Option B; or

(2) You were not able to port on time

for reasons beyond your control.

(b) If the Portability Office approves

your request to port, you must port

within 31 days of that approval.

§ 870.1207 When is my ported coverage

effective?

Your ported coverage is effective the

day after your coverage as an employee

stops.

§ 870.1208 What about designations,

assignments, and court orders?

(a)(1) If you have a valid designation

of beneficiary on file at the time you

port your Option B, that designation

remains in effect for the ported

coverage.

(2) If you want to designate a

beneficiary after you have ported your

coverage, you must submit the

designation form to the Portability

Office.

(3) If you return to Federal service,

any valid designation of beneficiary

remains in effect.

(b)(1) If you have assigned your

coverage, and your assignee ports your

Option B, that assignment remains in

effect.

(2) If you want to make an assignment

after you have ported your coverage,

you must submit the assignment form to

the Portability Office.

(3) If you return to Federal service,

any valid assignment remains in effect.

Basic insurance and any Option A and

additional Option B coverage you get

through your employment is included

automatically in your existing

assignment.

(c)(1) If your employing office

received a valid court order on or after

July 22, 1998, that court order remains

valid for your ported coverage.

(2) Anyone wanting to submit a court

order relating to your ported coverage

must submit it to the Portability Office.

(3) If you return to Federal service,

any valid court order on file remains in

effect.

(d) When you submit a request to port

your Option B, your employing office

must send the originals of all

designations, assignments, and court

orders on file to the Portability Office.

§ 870.1209 Can I cancel my ported

coverage?

(a) You may cancel your ported

coverage or reduce the number of

multiples at any time. Exception: If you

have assigned your insurance, only your

assignee may cancel or reduce your

coverage.

(b) If you do not make a premium

payment on time, the Portability Office

will send you a notice stating that your

coverage will continue only if you make

the payment within 15 days after

receiving the notice (45 days, if you live

overseas). We consider that you

received the notice 5 days after the date

on the notice (19 days, if you live

overseas). If you do not make the

payment within this time frame, your

Option B coverage cancels.

(c) If your ported coverage cancels,

whether voluntarily or for nonpayment,

you do not get the 31-day extension of

coverage or the right to convert.

§ 870.1210 How long does my ported

coverage last?

Your ported coverage stops at the

earlier of:

(a) April 24, 2002. You get the 31-day

extension of coverage and the right to

convert, as stated in subpart F of this

part.

(b) The beginning of the 2nd calendar

month after you reach 80. If you are

already age 80 or older at the time you

port your Option B, your coverage stops

at the beginning of the 2nd month after

the effective date of the ported coverage.

You get the 31-day extension of

coverage and the right to convert, as

stated in subpart F of this part.

§ 870.1211 What happens if I come back to

work?

(a)(1) When you return to active

Federal service, your agency must notify

the Portability Office.

(2) The Portability Office must

terminate your ported coverage and

send the originals of all designations,

assignments, and court orders to your

new employing office.

(b) You will get back the number of

multiples of Option B that you had

before the terminating event.

Exceptions:

(1) If you cancel a multiple or

multiples of Option B at the time you

port or after you port, you will get back

only the number of multiples remaining.

(2) If you cancel your Option B

coverage, or if your coverage cancels for

nonpayment of premiums, you will not

get back any Option B coverage.

[FR Doc. 00–27513 Filed 10–26–00; 8:45 am]

BILLING CODE 6325–01–U