This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

21759

Vol. 60, No. 85

Wednesday, May 3, 1995

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Parts 870, 871, 872, 873, and 874

RIN 3206–AF32

Federal Employees’ Group Life

Insurance Program: Merger of Life

Insurance Regulations

AGENCY: Office of Personnel

Management.

ACTION: Proposed rule.

SUMMARY: The Office of Personnel

Management (OPM) is issuing proposed

regulations to combine the five parts of

title 5 of the Code of Federal

Regulations relating to the Federal

Employees’ Group Life Insurance

(FEGLI) Program. This will ease

administration and aid in understanding

the Program. We are also simplifying the

language and incorporating policy

information from FPM Supplement

870–1, which is being abolished as of

December 31, 1994.

DATES: We must receive comments on or

before July 3, 1995.

ADDRESSES: Send your comments to

Lucretia F. Myers, Assistant Director for

Insurance Programs, Retirement and

Insurance Group, Office of Personnel

Management, P.O. Box 57, Washington,

DC 20044; deliver them to OPM, Room

3451, 1900 E Street NW., Washington,

DC; or FAX them to 202–606–0633.

FOR FURTHER INFORMATION CONTACT:

Karen Leibach, 202–606–0004.

SUPPLEMENTARY INFORMATION: The FEGLI

Act of 1980 made sweeping changes in

the Program, including establishing two

new forms of optional coverage. At that

time, we decided to pattern the

regulations after the law by setting up

separate parts of the Code for each of the

types of insurance (basic, standard

optional, additional optional, and

family optional coverages). Although we

recognized that this method of

translating the law into regulations

would result in a lot of duplication, we

believed that the format helped OPM

and agencies put the new provisions in

place. We believe that the regulations

can now be merged to eliminate the

duplication, without losing clearness or

content.

The proposed merger involves

deleting parts 871, 872, 873, and 874

and combining the information now

contained in those parts into an

expanded part 870. This results in a

complete presentation of material in one

place.

In addition to merging the regulations,

we have reorganized the material;

incorporated some material formerly

found in FPM Supplement 870–1,

which is being abolished as of December

31, 1994; and simplified the language to

make the regulations easier to

understand.

Regulatory Flexibility Act

I certify that these regulations will not

have a significant economic impact on

a substantial number of small entities,

because the regulations will affect only

Federal employees and annuitants.

List of Subjects in 5 CFR Parts 870, 871,

872, 873, and 874

Administrative practice and

procedure, Government employees,

Hostages, Iraq, Kuwait, Lebanon,

Reporting and recordkeeping

requirements, Life insurance,

Retirement.

Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM proposes to amend

title 5, Code of Federal Regulations, as

follows:

Part 870 is revised to read as follows:

PART 870—FEDERAL EMPLOYEES’

GROUP LIFE INSURANCE PROGRAM

Subpart A—Administration and General

Provisions

Sec.

870.101 Definitions.

870.102 The policy.

870.103 Correction of errors.

870.104 Initial decision and

reconsideration.

Subpart B—Types and Amount of Insurance

870.201 Types of insurance.

870.202 Basic insurance amount (BIA).

870.203 Annual rates of pay.

870.204 Amount of optional insurance.

870.205 Accidental death and

dismemberment.

Subpart C—Eligibility

870.301 Eligibility for life insurance.

870.302 Exclusions.

Subpart D—Cost of Insurance

870.401 Withholdings and contributions for

basic insurance.

870.402 Withholdings for optional

insurance.

870.403 Withholdings and contributions

provisions that apply to both basic and

optional insurance.

870.404 Direct premium payments under 5

U.S.C. chapter 84 (Federal Employees’

Retirement System—FERS).

Subpart E—Coverage

870.501 Basic insurance: effective dates of

automatic coverage.

870.502 Basic insurance: waiver/

cancellation of insurance.

870.503 Basic insurance: cancelling a

waiver.

870.504 Optional insurance: election.

870.505 Optional insurance: waiver/

cancellation of insurance.

870.506 Optional insurance: cancelling a

waiver.

870.507 Open enrollment periods.

870.508 Nonpay status.

870.509 Transfers to international

organizations.

Subpart F—Termination and Conversion

870.601 Termination of basic insurance.

870.602 Termination of optional insurance.

870.603 Conversion of basic and optional

insurance.

Subpart G—Annuitants and

Compensationers

870.701 Eligibility for life insurance.

870.702 Election of basic insurance.

870.703 Amount of life insurance.

870.704 Reinstatement of life insurance.

870.705 Waiver or suspension of annuity or

compensation.

870.706 Reemployed annuitants.

870.707 MRA-plus-10 annuitants.

Subpart H—Order of Precedence and

Designation of Beneficiary

870.801 Order of precedence and payment

of benefits.

870.802 Designation of beneficiary.

870.803 Child incapable of self-support.

Subpart I—Assignments of Life Insurance

870.901 Assignments permitted.

870.902 Making an assignment.

870.903 Effective date of assignment.

870.904 Amount of insurance.

870.905 Withholdings.

870.906 Cancellation of insurance.

870.907 Termination and conversion.

870.908 Annuitants and compensationers.

870.909 Designations and changes of

beneficiary.

870.910 Notification of current addresses.
21760 Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules

Subpart J—Benefits for United States

Hostages in Iraq and Kuwait and United

States Hostages Captured in Lebanon

870.1001 Purpose.

870.1002 Definitions.

870.1003 Coverage and amount of

insurance.

870.1004 Effective date of insurance.

870.1005 Premiums.

870.1006 Cancellation of insurance.

870.1007 Termination and conversion.

870.1008 Order of precedence and

designation of beneficiary.

870.1009 Responsibilities of the U.S.

Department of State.

Authority: 5 U.S.C. 8716.

Subpart A—Administration and

General Provisions

§ 870.101 Definitions.

Annuitant means a former employee

entitled to an annuity 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 refer to a

judge’s irreversible transfer to another

individual, corporation, or trustee all

ownership of FEGLI coverage (except

Option C).

Assignee means the individual,

corporation, or trustee to which a judge

irreversibly transfers ownership of

FEGLI coverage (except Option C).

Child, as used in the definition of

family member, means a legitimate

child, an adopted child, a stepchild who

lives with the employee or former

employee in a regular parent-child

relationship, or a recognized natural

child. It does not include a stillborn

child, a grandchild, or a foster child.

The child must be under age 22, or if

over age 22, must be incapable of selfsupport because of a mental or physical

disability which existed before the child

reached age 22.

Child, as used in the order of

precedence, means a legitimate child, an

adopted child, or a recognized natural

child. It does not include a stillborn

child, a stepchild, a grandchild, or a

foster child. An individual who has

reached age 18 is considered an adult.

However, if the age of adulthood where

the individual has his/her legal

residence is set at a lower age, the

individual is considered an adult upon

reaching that lower age. Adopted

children do not inherit under the order

of precedence stated in 5 U.S.C. 8705

from their birth parents, other than as

designated beneficiaries, but inherit

from their adoptive parents. However, a

child who is adopted by the spouse of

a birth parent inherits from that birth

parent.

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 employee

or former employee who is entitled to

compensation and whom the

Department of Labor determines is

unable to return to duty.

Date of retirement, as used in 5 U.S.C.

8706(b)(1)(A), means the starting date of

annuity.

Dependent means living with or

receiving support from the insured

individual.

Duly appointed representative of the

insured’s estate means an individual

named in a court order granting the

individual the authority to receive, or

the right to possess, the insured’s

property; the order must be issued by a

court having jurisdiction over the

insured’s estate. Where the law of the

insured’s legal residence provides for

the administration of estates through

alternative procedures which do away

with the need for a court order, this

term also means an individual who

shows that he/she is entitled to receive,

or possess, the insured’s property under

the terms of those alternative

procedures.

Employee means an individual

defined by 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;

(2) All United States District Courts;

(3) The Court of International Trade;

(4) The Claims Court; 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

Military Appeals.

(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 (1) an

annuity that begins no later than 1

month after the date the insurance

would otherwise stop, and (2) an

annuity under § 842.204(a)(1) of this

title for which the starting date has been

postponed under § 842.204(c) of this

title.

Judge means an individual appointed

as a Federal justice or judge under

Article I or Article III of the

Constitution. Administrative law judges,

bankruptcy judges, and magistrates are

not judges for purposes of assignment of

FEGLI coverage.

OFEGLI means the Office of Federal

Employees’ Group Life Insurance,

which makes payments to beneficiaries

under the policy.

OPM means the Office of Personnel

Management.

OWCP means the Office of Workers’

Compensation Programs, U.S.

Department of Labor, which administers

subchapter I of chapter 81 of title 5,

United States Code.

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 recognized natural

child meets the definition provided

below.

Recognized natural child, with

respect to paternity, is one for whom the

father meets one of the following:

(a) (1) Has acknowledged paternity in

writing;

(2) Was ordered by a court to provide

support;

(3) Before his death, was pronounced

by a court to be the father;

(4) Was established as the father by a

certified copy of the public record of

birth or church record of baptism, if the

insured was the informant and named

himself as the father of the child; or

(5) Established paternity on public

records, such as records of schools or

social welfare agencies, which show

that with his knowledge the insured was

named as the father of the child.

(b) If paternity is not established by

paragraph (a) of this definition, such

evidence as 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

recognized natural child on his income

tax returns may be considered to

establish paternity.

Reconsideration means the final level

of administrative review of an agency’s

initial decision to determine if the

employing office followed the law and

regulations correctly in making the

initial decision.

Service means civilian service which

is creditable under subchapter III of

chapter 83 or chapter 84 of title 5,

United States Code. This includes
Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules 21761

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.

Underdeduction means a failure to

withhold the required amount of life

insurance deductions from an

individual’s pay, annuity, or

compensation. This includes

nondeductions (when none of the

required amount was withheld) and

partial deductions (when only part of

the required amount was withheld).

§ 870.102 The policy.

Basic, Option A, Option B, and

Option C benefits are payable according

to a contract with the company or

companies that issue a policy under

section 8709 of title 5, United States

Code. Any court action to obtain money

due from an insurance policy must be

taken against the company that issues

the policy.

§ 870.103 Correction of errors.

(a) The employing office may make

corrections of administrative errors

regarding coverage or changes in

coverage. Retroactive corrections are

subject to the provisions of § 870.401(f).

(b) OPM may order correction of an

error after reviewing evidence that it

would be against equity and good

conscience not to do so.

§ 870.104 Initial decision and

reconsideration.

(a) (1) An employee may ask his/her

agency to reconsider its initial decision

denying life insurance coverage or the

opportunity to change coverage.

(2) An annuitant may ask his/her

retirement system to reconsider its

initial decision affecting life insurance

coverage.

(3) A judge may ask his/her agency, or

retirement system if applicable, to

reconsider its initial decision denying

an entitlement related to assignments

under 5 U.S.C. 8706(e) or subpart I of

this part.

(4) An individual insured under

subpart J of this part may ask the U.S.

Department of State to reconsider its

initial decision affecting life insurance

coverage.

(b) An employing office’s decision is

an initial decision when the employing

office gives it in writing and informs the

individual of the right to an

independent level of review

(reconsideration) by the appropriate

agency or retirement system.

(c) A request for reconsideration must

be made in writing and must include

the employee’s (or annuitant’s) name,

address, date of birth, Social Security

number, reason(s) for the request, and,

if applicable, retirement claim number.

(d) A request for reconsideration must

be made within 30 calendar days from

the date of the initial decision. This

time limit may be extended when the

individual shows that he/she was not

notified of the time limit and was not

otherwise aware of it or that he/she was

unable, due to reasons beyond his/her

control, to make the request within the

time limit.

(e) The reconsideration must take

place at or above the level at which the

initial decision was made.

(f) After reconsideration, the agency

or retirement system must issue a final

decision. This decision must be in

writing and must fully state the

findings.

Subpart B—Types and Amount of

Insurance

§ 870.201 Types of insurance.

(a) There are two types of life

insurance under the FEGLI Program:

Basic and optional.

(b) There are three types of optional

insurance: Option A (standard optional

insurance), Option B (additional

optional insurance), and Option C

(family optional insurance).

§ 870.202 Basic insurance amount (BIA).

(a) (1) An employee’s basic insurance

amount (BIA) is either: (i) His/her

annual rate of basic pay, rounded to the

next higher thousand, plus $2,000; or

(ii) $10,000; whichever is higher.

However, the BIA can never be more

than the annual rate of pay for Level II

Executive Schedule positions under

section 5313 of title 5, U.S.C., rounded

to the next higher thousand, plus

$2,000.

(2) The BIA of an individual who is

eligible to continue basic life insurance

coverage as an annuitant or

compensationer is the BIA in effect at

the time his/her insurance as an

employee would stop under § 870.601.

(b) An employee’s BIA automatically

changes whenever annual pay is

increased or decreased by an amount

sufficient to raise or lower pay to a

different $1,000 bracket.

(c) The amount of an employee’s basic

life insurance coverage is equal to his/

her BIA multiplied by the appropriate

factor based on the employee’s age, as

follows:

Age Factor

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

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

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

Age Factor

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

§ 870.203 Annual rates of pay.

(a) (1) An insured employee’s annual

pay is his/her annual rate of basic pay

as fixed by law or regulation.

(2) Annual pay for this purpose

includes the following:

(i) Interim geographic adjustments

and locality-based comparability

payments as provided by Pub. L. 101–

509;

(ii) Premium pay under 5 U.S.C.

5545(c)(1);

(iii) For a law enforcement officer as

defined under 5 U.S.C. 8331(20) and

§ 831.903 of this title, premium pay

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

(iv) Night differential pay for wage

employees;

(v) Environmental differential pay for

employees exposed to danger or

physical hardship;

(vi) Tropical differential pay for

citizen employees in Panama; and

(vii) Special pay adjustments for law

enforcement officers.

(b) To convert a pay rate of other than

annual salary to an annual rate,

multiply the pay rate by the number of

pay periods in a 52-week work year.

(c) The annual pay for a part-time

employee is his/her basic pay applied to

his/her tour of duty in a 52-week work

year.

(d) The annual pay for an employee

on piecework rates is the total basic

earnings for the previous calendar year,

not counting premium pay for overtime

or holidays.

(e) The annual pay for an employee

with a regular schedule who works at

different pay rates is the weighted

average of the rates at which the

employee is paid, projected to an annual

basis.

(f) The annual pay for a non-Postal

intermittent employee or an employee

who works at different pay rates without

a regular schedule is the annual rate

which he/she is receiving at the end of

the pay period.

(g) If an employee legally serves in

more than 1 position at the same time,

and at least 1 of those positions entitles

him/her to life insurance coverage, the

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.
21762 Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules

§ 870.204 Amount of optional insurance.

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

However, if an employee’s annual rate

of pay is more than the sum of the

annual rate of basic pay for Level II

Executive Schedule positions under 5

U.S.C. 5313 plus $10,000, Option A

coverage automatically increases. The

amount of Option A coverage in this

case is the difference between the

employee’s annual rate of pay, (rounded

to the next higher thousand if not

already an even thousand) and the BIA.

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

2, 3, 4, or 5 multiples of an employee’s

annual pay (after the pay has been

rounded to the next higher thousand, if

not already an even thousand). A

multiple can not be more than the

annual rate of basic pay for Level II

Executive Schedule positions under 5

U.S.C. 5313, rounded to the next higher

thousand.

(2) The amount of Option B coverage

automatically changes whenever annual

pay is increased or decreased by an

amount sufficient to raise or lower pay

to a different $1,000 bracket.

(c) Option C coverage is $5,000

payable upon the death of a spouse and

$2,500 payable upon the death of a

child. Payments are made to the insured

individual.

§ 870.205 Accidental death and

dismemberment.

(a) (1) Accidental death and

dismemberment coverage is an

automatic part of basic and Option A

insurance for employees.

(2) There is no accidental death and

dismemberment coverage with Options

B and C.

(3) Individuals who are insured as

annuitants or compensationers do not

have accidental death and

dismemberment coverage.

(b) Under basic insurance, accidental

death benefits are equal to the BIA, but

without the age factor described in

§ 870.202(c).

(c) (1) Under basic insurance,

accidental dismemberment benefits for

the loss of a hand, foot, or eye are equal

to one-half the BIA. For loss of 2 of

these, benefits are equal to the BIA.

(2) For more than one type of loss in

a single accident, total benefits cannot

be more than the BIA.

(3) Accidental dismemberment

benefits are paid to the employee.

(d) Under Option A, accidental death

and dismemberment benefits are equal

to the amount of Option A.

Subpart C—Eligibility

§ 870.301 Eligibility for life insurance.

(a) Each nonexcluded employee is

automatically insured for basic

insurance unless he/she waives it.

(b) (1) Optional insurance must be

specifically elected; it is not automatic.

(2) An employee may elect optional

insurance if:

(i) He/she has basic insurance;

(ii) He/she doesn’t have a waiver of

that type of optional insurance still in

effect; and

(iii) His/her periodic pay, after all

other deductions, is enough to cover the

full cost.

§ 870.302 Exclusions.

(a) The following employees are

excluded from life insurance coverage

by law:

(1) An employee of a corporation

supervised by the Farm Credit

Administration, if private interests elect

or appoint a member of the board of

directors.

(2) An individual who is not a citizen

or national of the United States and

whose permanent duty station is outside

the United States. Exception: An

individual who 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

which was then known as the Canal

Zone.

(3) An individual first employed by

the Government of the District of

Columbia on or after October 1, 1987.

Exception: An employee of St.

Elizabeths Hospital, who accepts

employment with the District of

Columbia Government following

Federal employment without a break in

service, as provided in section 6 of Pub.

L. 98–621.

(4) Teachers in Department of Defense

dependents schools overseas, if

employed by the Federal Government in

a nonteaching position during the recess

period between school years.

(b) The following employees are also

excluded from life insurance coverage:

(1) An employee serving under an

appointment limited to 1 year or less.

Exceptions:

(i) An employee whose full-time or

part-time temporary appointment has a

regular tour of duty and follows a

position in which he/she was insured,

with a break in service of no more than

3 days;

(ii) An acting postmaster;

(iii) A Presidential appointee

appointed to fill an unexpired term; and

(iv) Certain temporary employees who

receive provisional appointments as

defined in §§ 316.401 and 316.403 of

this title.

(2) An employee who is employed for

an uncertain or purely temporary

period, who is employed for brief

periods at intervals, or who is expected

to work less than 6 months in each year.

Exception: An employee who is

employed under an OPM-approved

career-related work-study program

under Schedule B lasting at least 1 year

and who is in pay status for at least onethird of the total period of time from the

date of the first appointment to the

completion of the work-study program.

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

scheduled tour of duty). Exception: An

employee whose intermittent

appointment follows, with a break in

service of no more than 3 days, a

position in which he/she was insured

and to which he/she is expected to

return.

(4) An employee whose pay, on an

annual basis, is $12 a year or less.

(5) A beneficiary or patient employee

in a Government hospital or home.

(6) An employee paid on a contract or

fee basis. Exception: An employee who

is a United States citizen, who is

appointed by a contract between the

employee and the Federal employing

authority which requires his/her

personal service, and who is paid on the

basis of units of time.

(7) An employee paid on a piecework

basis. Exception: An employee whose

work schedule provides for full-time or

part-time service with a regularly

scheduled tour of duty.

(c) OPM makes the final

determination about whether the above

categories apply to a specific employee

or group of employees.

Subpart D—Cost of Insurance

§ 870.401 Withholdings and contributions

for basic insurance.

(a) The cost of basic insurance is

shared between the insured individual

and the Government. The employee

pays two-thirds of the cost, and the

Government pays one-third.

(b) (1) During each pay period in

which an insured employee is in pay

status for any part of the period, $0.165

must be withheld from the employee’s

biweekly pay for each $1,000 of the

employee’s BIA. The amount withheld

from the pay of an employee who is

paid on other than a biweekly basis

must be prorated and adjusted to the

nearest one-tenth of 1 cent.

(2) The amount withheld from the pay

of an insured employee whose annual

pay is paid during a period shorter than

52 workweeks is the amount obtained
Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules 21763

by converting the biweekly rate to an

annual rate and prorating the annual

rate over the number of installments of

pay regularly paid during the year.

(3) The amount withheld from the pay

of an insured employee whose BIA

changes during a pay period is based on

the BIA in force at the end of the pay

period.

(4) No payment is required while an

insured employee is in nonpay status

for up to 12 months.

(c) For each pay period in which an

employee is insured, the employing

agency must contribute an amount equal

to one-half the amount withheld from

the employee’s pay. This agency

contribution must come from the

appropriation or fund that is used for

the payment of the employee’s pay. For

an elected official, the contribution

must come from the appropriation or

fund that is available for payment of

other salaries in the same office.

(d) (1) For an annuitant who elects to

continue basic insurance and chooses

the maximum reduction of 75 percent

after age 65 under § 870.702(a)(2), the

amount withheld monthly is $0.3575 for

each $1,000 of the BIA. For a

compensationer who makes this

election, the amount withheld weekly is

$0.0825 for each $1,000. These

withholdings stop the month after the

month in which the individual reaches

age 65. There are no withholdings from

individuals who retired or began

receiving compensation before January

1, 1990, and who elected the 75 percent

reduction. For the purpose of this

paragraph, an individual who separates

from service after meeting the

requirements for an immediate annuity

under 5 U.S.C. 8412(g) is considered to

retire on the day before the annuity

begins.

(2) For an annuitant who elects to

continue basic insurance and chooses

the maximum reduction of 50 percent

after age 65 under § 870.702(a)(3), the

amount withheld monthly is $0.8775 for

each $1,000 of the BIA until the

annuitant reaches age 65; the amount is

then reduced to $0.52 for each $1,000.

For a compensationer who makes this

election, the amount withheld weekly is

$0.2025 for each $1,000 of the BIA until

age 65; the amount is then reduced to

$0.12 for each $1,000.

(3) For an annuitant who elects to

continue basic insurance and chooses

no reduction after age 65 under

§ 870.702(a)(4), the amount withheld

monthly is $2.0475 for each $1,000 of

the BIA until the annuitant reaches age

65; the amount is then reduced to $1.69

for each $1,000. For a compensationer

who makes this election, the amount

withheld weekly is $0.4725 for each

$1,000 of the BIA until age 65; the

amount is then reduced to $0.39 for

each $1,000.

(e) (1) For each period in which an

annuitant or compensationer is insured,

OPM must contribute an amount equal

to one-half the amount that would be

withheld under paragraph (d)(1) of this

section. Exception: For USPS employees

who become annuitants or

compensationers after December 31,

1989, the Postal Service pays the

Government contributions.

(2) The Government contribution is

the same amount whether the

individual elects a maximum 75 percent

reduction, a maximum 50 percent

reduction, or no reduction.

(3) The Government contribution

stops the month after the month in

which the individual reaches age 65.

(f) When an agency withholds less

than or none of the proper amount of

basic life insurance deductions from an

individual’s pay, annuity, or

compensation, the agency must submit

an amount equal to the sum of the

uncollected deductions and any

applicable agency contributions

required under 5 U.S.C. 8708 to OPM

for deposit in the Employees’ Life

Insurance Fund.

§ 870.402 Withholdings for optional

insurance.

(a) The insured individual pays the

full cost of all optional insurance. There

is no Government contribution toward

the cost of any optional insurance.

Exception: The United States Postal

Service may make a contribution toward

the cost of optional insurance for USPS

employees in some situations.

(b) During each pay period in any part

of which an insured employee is in pay

status, the employing agency must

withhold the full cost of optional

insurance from his/her pay.

(c) Subject to the provisions for

reemployed annuitants in § 870.706(d),

the full cost of optional insurance must

be withheld from the annuity of an

annuitant and from the compensation of

a compensationer. These withholdings

stop after the end of the month in which

an annuitant or compensationer reaches

age 65.

(d) (1) The biweekly cost per $10,000

of Option A coverage is:

For persons under age 35......................... $0.40

For persons ages 35 through 39................... .50

For persons ages 40 through 44................... .70

For persons ages 45 through 49................. 1.10

For persons ages 50 through 54................. 1.80

For persons ages 55 through 59................. 3.00

For persons ages 60 and over .................... 7.00

(2) The amount withheld from pay,

annuity, or compensation paid on other

than a biweekly basis must be prorated

and adjusted to the nearest cent.

(e) (1) The biweekly cost per $1,000

of Option B coverage is:

For persons under age 35......................... $0.04

For persons ages 35 through 39................... .05

For persons ages 40 through 44................... .07

For persons ages 45 through 49................... .11

For persons ages 50 through 54................... .18

For persons ages 55 through 59................... .30

For persons ages 60 and over ...................... .70

(2) The amount withheld from pay,

annuity, or compensation paid on other

than a biweekly basis must be prorated

and adjusted to the nearest one-tenth of

1 cent.

(f) (1) The biweekly cost of Option C

coverage is based on the age of the

employee, annuitant, or

compensationer. The cost is:

For persons under age 35......................... $0.30

For persons ages 35 through 39................... .31

For persons ages 40 through 44................... .52

For persons ages 45 through 49................... .70

For persons ages 50 through 54................. 1.00

For persons ages 55 through 59................. 1.50

For persons ages 60 and over .................... 2.60

(2) The amount withheld from pay,

annuity, or compensation paid on other

than a biweekly basis must be prorated

and adjusted to the nearest cent.

(g) For the purpose of this subpart, an

individual is considered to reach age 35,

40, 45, 50, 55, or 60 on the first day of

the first pay period beginning on or after

the January 1 following his/her

corresponding birthday.

(h) The amount withheld from the pay

of an insured employee whose annual

pay is paid during a period shorter than

52 workweeks is the amount obtained

by converting the biweekly rate for his/

her age group to an annual rate and

prorating the annual rate over the

number of installments of pay regularly

paid during the year.

(i) When an agency withholds less

than or none of the proper amount of

optional life insurance deductions from

an individual’s pay, annuity, or

compensation, the agency must submit

an amount equal to the uncollected

deductions required under 5 U.S.C.

8714a to OPM for deposit in the

Employees’ Life Insurance Fund.

§ 870.403 Withholdings and contributions

provisions that apply to both basic and

optional insurance.

(a) Withholdings (and Government

contributions, when applicable) are

based on the amount of insurance in

force at the end of the pay period.

(b) Withholdings are not required for

the period between the end of the pay

period in which an employee separates

from service and the date his/her

annuity or compensation begins.
21764 Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules

(c) The deposit described in

§§ 870.401(f) and 870.402(i) must be

made no later than 60 calendar days

after the date the employing office

determines the amount of the

underdeduction that has occurred,

regardless of whether or when the

underdeduction is recovered by the

agency. The agency must determine

whether to waive collection of the

overpayment of pay, in accordance with

5 U.S.C. 5584, as implemented by 4 CFR

ch. I, subchapter G. However, if the

agency involved is excluded from the

provisions of 5 U.S.C. 5584, it may use

any applicable authority to waive the

collection.

(d) Effective October 21, 1972, when

an employee returns to work after being

suspended or fired erroneously, no

withholdings are made from the back

pay.

(e) If an individual’s periodic pay,

compensation, or annuity isn’t sufficient

to cover the full withholdings, any

amount available for life insurance

withholding must be applied first to

basic insurance, with any remainder

applied to optional insurance.

§ 870.404 Direct premium payments under

5 U.S.C. chapter 84 (Federal Employees’

Retirement System—FERS).

(a) If the FERS annuity, excluding

subchapter III of 5 U.S.C. chapter 84

(Thrift Savings Plan), is too low to cover

any of the insurance premiums, the

retirement system must notify the

annuitant of the opportunity to pay his/

her share of the basic premium and the

optional premium(s) directly to the

retirement system.

(b) The retirement system must

establish a method for accepting these

direct premium payments. The

retirement system must provide the

annuitant with a premium payment

schedule and the requirements for

continued enrollment.

(c) The annuitant must send the

retirement system the required

premium(s) for every pay period during

which the coverage(s) continue,

excluding the 31-day temporary

extension of coverage provided in

§ 870.601. The annuitant must make

payment after the pay period in which

he/she is covered, according to the

schedule established by the retirement

system. If it does not receive payment

by the due date, the retirement system

must notify the annuitant that

coverage(s) will be continued only if he/

she makes payment within 15 days after

receiving the notice. The basic and

optional insurance coverage(s) of an

annuitant who does not pay within the

specified time limit terminate. An

individual whose coverage(s) terminate

because of nonpayment of premium

cannot reelect or reinstate coverage,

except as provided in paragraph (d) of

this section.

(d) If, for reasons beyond his/her

control, an annuitant is unable to pay

within 15 days after receiving the

notice, he/she may request

reinstatement of coverage by writing to

the retirement system. Such a request

must be made within 30 calendar days

from the date of termination and must

be accompanied by proof that the

annuitant was prevented from paying

within the time limit for reasons beyond

his/her control. The retirement system

will decide if the individual is eligible

for reinstatement of coverage. If the

decision is yes, the coverage is

reinstated back to the date of

termination.

(e) Termination of coverage for failure

to pay premiums within the time limit

established according to paragraph (c) of

this section is effective at the end of the

last pay period for which payment has

been received on time.

(f) The retirement system must submit

all direct premium payments, along

with its regular life insurance

premiums, to OPM according to

procedures set by OPM.

Subpart E—Coverage

§ 870.501 Basic insurance: Effective dates

of automatic coverage.

(a)(1) When an employee is appointed

or transferred to a position in which he/

she is eligible for insurance, the

employee is automatically insured for

basic insurance on the day he/she enters

on duty in pay status, unless, before the

end of the first pay period, the employee

files a waiver of basic insurance with

the employing office or had previously

filed a waiver which remains in effect.

(2) An insured employee who moves

to another covered position is

automatically insured on the effective

date of the move, unless the employee

files a waiver of basic insurance with

the new employing office before the end

of the first pay period in the new

position.

(b) An employee who returns to pay

and duty status after a period of more

than 12 months of nonpay status is

automatically insured at the time he/she

actually enters on duty in pay status,

unless, before the end of the first pay

period, the employee files a waiver of

basic insurance coverage with the

employing office or had previously filed

a waiver which remains in effect.

(c) For an employee who serves in

cooperation with a non-Federal agency

and who is paid in whole or in part from

non-Federal funds, OPM sets the

effective date. 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 into the Employees’ Life

Insurance Fund on a timely basis, 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 and transmit that

amount to the Federal agency for

deposit into the Employees’ Life

Insurance Fund on a timely basis.

(d) If an employee waived basic

insurance on or before February 28,

1981, the waiver was automatically

cancelled effective on the 1st day the

employee entered on duty in pay status

on or after April 1, 1981. Basic

insurance coverage was automatically

effective on the date of the waiver’s

cancellation, unless the employee filed

a new waiver of basic insurance with

the employing office before the end of

the pay period during which the

coverage became effective.

§ 870.502 Basic insurance: Waiver/

cancellation of insurance.

(a) An insured individual may cancel

his/her basic insurance at any time by

filing a waiver of basic insurance

coverage. An employee files with the

employing office. An annuitant files

with OPM or other office that

administers his/her retirement system. If

still employed, a compensationer files

with the employing office, and if not

still employed, with OWCP. The waiver

is effective, and the insurance stops, at

the end of the pay period in which the

waiver is properly filed.

(b) An individual who cancels his/her

basic insurance automatically cancels

all forms of optional insurance.

§ 870.503 Basic insurance: Cancelling a

waiver.

(a) An annuitant who has filed a

waiver of basic insurance cannot cancel

the waiver.

(b) An employee who has filed a

waiver of basic insurance may cancel

the waiver and become insured if:

(1) At least 1 year has passed since the

effective date of the waiver, and

(2) He/she provides satisfactory

medical evidence of insurability.

(c) OFEGLI reviews the Request for

Insurance filed by an employee who has

complied with paragraph (b) of this

section and decides whether to approve

it. The insurance is effective when, after

OFEGLI’s approval, the employee

actually enters on duty in pay status in
Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules 21765

a position in which he/she is eligible for

insurance. If the employee doesn’t enter

on duty in pay status within 31 days

following the date of OFEGLI’s

approval, the approval is automatically

revoked and the employee is not

insured.

(d) When an employee who has been

separated from service for at least 180

days is reinstated on or after April 1,

1981, a previous waiver of basic

insurance is automatically cancelled.

Unless the employee files a new waiver,

basic insurance becomes effective on the

1st day he/she actually enters on duty

in pay status in a position in which he/

she is eligible for coverage. Exception:

For employees who waived basic

insurance after February 28, 1981,

separated, and returned to Federal

service before December 9, 1983, the

waiver remained in effect; these

employees were permitted to elect basic

insurance by applying to their

employing office before March 7, 1984.

§ 870.504 Optional insurance: Election.

(a)(1) Each employee must, on the

form entitled Life Insurance Election,

elect or waive Option A, Option B, and

Option C coverage within 31 days after

becoming eligible, unless during earlier

employment he/she filed an election or

waiver which remains in effect. The 31-

day time limit for Option B or Option

C begins on the 1st day after February

28, 1981, on which an individual meets

the definition of an employee.

(2) Within 6 months after an

employee becomes eligible, an

employing office may determine that the

employee was unable, for reasons

beyond his/her control, to elect any type

of optional insurance within the time

limit. In this case, the employee must

elect or waive that type of optional

insurance within 31 days after he/she is

notified of the determination. The

insurance is retroactive to the 1st day of

the first pay period beginning after the

date the individual became eligible or

after April 1, 1981, whichever is later.

The individual must pay the full cost of

the insurance from that date for the time

that he/she is in pay status, retired, or

receiving compensation and under age

65.

(b) An employee who doesn’t file a

Life Insurance Election form with his/

her employing office specifically

electing any type of optional insurance

is considered to have waived it and does

not have that type of optional insurance.

(c) For the purpose of having Option

A as an employee, an election of this

insurance filed on or before February

28, 1981, is considered to have been

cancelled effective at the end of the pay

period which included March 31, 1981,

unless the employee didn’t actually

enter on duty in pay status during the

1st pay period which began on or after

April 1, 1981. In that case the election

is considered to have been cancelled on

the 1st day after the end of the next pay

period in which the employee actually

entered on duty in pay status. In order

to have Option A as an employee after

the date of this cancellation, an

employee must specifically elect the

coverage by filing the Life Insurance

Election form with his/her employing

office, subject to the provisions of

§ 870.504(a) or 870.506.

(d) Optional insurance is effective the

1st day an employee actually enters on

duty in pay status on or after the day the

employing office receives the election.

(e) For an employee whose optional

insurance stopped for a reason other

than a waiver, the insurance is

reinstated on the 1st day he/she actually

enters on duty in pay status in a

position in which he/she again becomes

eligible.

§ 870.505 Optional insurance: Waiver/

cancellation of insurance.

(a) An insured individual may cancel

entirely any type of optional insurance,

or reduce the number of multiples of

his/her Option B insurance, at any time

by filing a waiver of optional insurance

coverage. An employee files with the

employing office. An annuitant files

with OPM or other office that

administers his/her retirement system. If

still employed, a compensationer files

with the employing office, and if not

still employed, with OWCP.

(b) A cancellation of optional

insurance becomes effective, and

optional insurance stops, at the end of

the pay period in which the waiver is

properly filed. Exception: If Option C is

cancelled because there are no 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) A waiver of optional insurance

remains in effect until it is cancelled as

provided in § 870.506.

§ 870.506 Optional insurance: Cancelling a

waiver.

(a)(1) An employee who has waived

Option B coverage may elect it, and an

employee who has Option B of fewer

than five multiples of annual pay may

increase the number of multiples, upon

his/her marriage or divorce, upon a

spouse’s death, or upon acquiring an

eligible child.

(2) The number of multiples of Option

B coverage that an employee can obtain

or add (which can’t exceed a total of

five) is limited to the following:

(i) For marriage, the number of

additional family members (spouse and

eligible children) acquired with the

marriage;

(ii) For acquisition of children, the

number of eligible children acquired;

and

(iii) For divorce or death of a spouse,

the total number of eligible children of

the enrollee.

(3) An employee who has waived

Option C coverage may elect it upon

his/her marriage or upon acquiring an

eligible child. An employee may also

elect Option C coverage upon divorce or

death of a spouse, if the employee has

any eligible children.

(4)(i) The employee must file the

election on the Life Insurance Election

form, along with proof of the event, with

the employing office no later than 60

days following the date of the event that

permits the election.

(ii) This 60-day time limit may be

extended if the individual isn’t serving

in a covered position on the date of the

event or if the individual separates from

covered service prior to the end of the

60-day time limit. This extension cannot

exceed the 31-day time limit for electing

insurance following employment in a

covered position or the 31-day period

following the 1st day on which the

individual becomes eligible to cancel a

waiver of basic insurance.

(5)(i) The effective date of Option B

insurance elected under this paragraph

is the 1st day the employee actually

enters on duty in pay status on or after

the day the employing office receives

the election.

(ii) The effective date of Option C

insurance elected under this paragraph

is the day the employing office receives

the election.

(b)(1) An employee who has waived

Option A or Option B coverage may

elect it if:

(i) At least 1 year has passed since the

effective date of the waiver, and

(ii) He/she provides satisfactory

medical evidence of insurability.

(2) An employee who has Option B

coverage of fewer than five multiples of

annual pay may increase the number of

multiples if:

(i) At least 1 year has passed since the

effective date of his/her last election of

fewer than five multiples (including a

reduction in the number of multiples),

and

(ii) He/she provides satisfactory

medical evidence of insurability.

(iii) The requirement for at least 1

year to have passed since the effective

date of the last election doesn’t apply

when an employee elected fewer than

five multiples because of the limitation

under paragraph (a)(2) of this section.
21766 Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules

(c) OFEGLI reviews the request filed

by an employee who has complied with

paragraph (b) of this section and decides

whether to approve it. The optional

insurance is effective when, after

OFEGLI’s approval, the employee

actually enters on duty in pay status in

a position in which he/she is eligible for

insurance. If the employee doesn’t enter

on duty in pay status within 31 days

following the date of OFEGLI’s

approval, the approval is automatically

revoked and the employee does not

have the optional insurance requested.

(d)(1) If an employee waived Option

A insurance on or before February 28,

1981, the waiver was automatically

cancelled effective on the 1st day the

employee entered on duty in pay status

on or after April 1, 1981. Option A was

effective on the date of the waiver’s

cancellation, if the employee filed an

election of Option A during the March

1, 1981 through March 31, 1981 open

enrollment period. If the employee

didn’t file the election form with his/her

employing office during the March,

1981 open enrollment period, the

employee will be considered to have

waived Option A on March 31, 1981.

(2) When an employee who has been

separated from service for at least 180

days is reinstated on or after April 1,

1981, a previous waiver of optional

insurance is automatically cancelled, as

follows:

(i) An employee who returned to

service between April 1, 1981 and

December 8, 1983, after a 180-day break

in service was permitted to elect any

form of optional insurance by applying

to his/her employing office before

March 7, 1984.

(ii) An employee who returns to

service after December 8, 1983,

following a 180-day break in service

may elect any form of optional

insurance by applying to his/her

employing office within 31 days after

reinstatement. Coverage is effective on

the 1st day the employee actually enters

on duty in pay status in a position in

which he/she is eligible for insurance

on or after the date the employing office

receives the election. If the employee

doesn’t file a Life Insurance Election

form within the 31-day period, the

employee is considered to have waived

optional insurance. However, an

employee who fails to file during the 31-

day period due to reasons beyond his/

her control may enroll belatedly under

the conditions stated in § 870.504(a)(2).

(e) An annuitant or compensationer is

not eligible to cancel a waiver or to

increase multiples of Option B under

this section.

(f) The United States Postal Service

may have less limiting requirements for

cancelling waivers for USPS employees

in some situations.

§ 870.507 Open enrollment periods.

(a) There are no regularly scheduled

open enrollment periods for life

insurance. Open enrollment periods are

held only when specifically scheduled

by OPM.

(b) During an OPM-scheduled open

enrollment period, eligible employees

may cancel their existing waivers of

basic and/or optional insurance by

electing the insurance on an OPMdesignated form.

(c)(1) OPM sets the effective date for

all insurance elected during an open

enrollment period. The newly elected

insurance is effective on the 1st day of

the first pay period which begins on or

after the OPM-established date and

which follows a pay period during

which the employee was in pay and

duty status for at least 32 hours.

(2) A part-time employee must be in

pay and duty status for one-half the

regularly scheduled tour of duty shown

on his/her current Standard Form 50 for

newly elected coverage to become

effective.

(3) An employee who has no regularly

scheduled tour of duty or who is

employed on an intermittent basis must

be in pay and duty status for one-half

the hours customarily worked before

newly elected coverage can become

effective. For the purpose of this

paragraph, employing offices can

determine the number of hours

customarily worked by averaging the

number of hours worked in the most

recent calendar year quarter prior to the

start of the open enrollment period.

(d) Within 6 months after an open

enrollment period ends, an employing

office may determine that an employee

was unable, for reasons beyond his/her

control, to cancel an existing waiver by

electing to be insured during the open

enrollment period. In this case, if the

employee wants coverage, he/she must

submit an election within 31 days after

being notified of the determination.

Coverage is retroactive to the first pay

period which begins on or after the

effective date set by OPM and which

follows a pay period during which the

employee was in pay and duty status for

at least 32 hours. If the employee

doesn’t file an election within this 31-

day time limit, he/she will be

considered to have waived coverage.

§ 870.508 Nonpay status.

(a) An employee who is on leave

without pay is entitled to continue life

insurance for up to 12 months. No

premium payments are required.

(b) If an insured employee who is

entitled to free insurance while in

nonpay status accepts a temporary

appointment to a position in which he/

she would normally be excluded from

insurance, the insurance continues. The

amount of basic insurance is based on

whichever position’s salary is higher.

Withholdings are made from the

employee’s pay in the temporary

position.

(c) If an insured employee goes on

leave without pay to serve as a full-time

officer or employee of certain employee

organizations, within 60 days of the

start of the leave-without-pay he/she

may elect to continue life insurance.

The insurance continues for the length

of the appointment, even if the leavewithout-pay lasts longer than 12

months. The employee must pay to the

employing office the full cost of basic

and optional insurance. There is no

Government contribution for these

employees.

(d) If an insured employee goes on

leave without pay while assigned to a

State government, local government, or

institution of higher education, life

insurance continues for the length of the

assignment, even if the leave-withoutpay lasts longer than 12 months. The

employee must pay his/her premiums to

the Federal agency on a current basis.

The agency must continue to pay its

contribution as long as the employee

makes his/her payments.

§ 870.509 Transfers to international

organizations.

An employee transferred to an

international organization as provided

in 5 U.S.C. 3582 may continue life

insurance coverage. Regulations

governing these transfers are in part 352

of this title.

Subpart F—Termination and

Conversion

§ 870.601 Termination of basic insurance.

(a) Except as provided in § 870.701,

the basic insurance of an insured

employee stops on the date he/she

separates from service, subject to a 31-

day extension of coverage.

(b) The basic insurance of an

employee who separates from service

after meeting the requirement for an

immediate annuity under

§ 842.204(a)(1) of this title and who

postpones receiving the annuity, as

provided by § 842.204(c) of this title,

stops on the date he/she separates from

service, subject to a 31-day extension of

coverage.

(c) The basic insurance of an insured

employee who moves without a break in

service to a position in which he/she is
Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules 21767

excluded from life insurance stops on

his/her last day in the former position,

subject to a 31-day extension of

coverage.

(d)(1) Except as provided in § 870.701,

the basic insurance of an insured

employee who is in nonpay status stops

on the date the employee completes 12

months in nonpay status, subject to a

31-day extension of coverage. The 12

months’ nonpay status may be broken

by periods of less than 4 consecutive

months in pay status. If an employee

has at least 4 consecutive months in pay

status after a period of nonpay status,

he/she is entitled to begin the 12

months’ continuation of basic insurance

again. If an employee has used up his/

her 12 months’ continuation in nonpay

status and returns to duty for less than

4 consecutive months, his/her basic

insurance stops on the 32nd day after

the last day of the last pay period in pay

status.

(2) For the purpose of this paragraph,

4 consecutive months in pay status

means any 4-month period during

which the employee is in pay status for

at least part of each pay period.

§ 870.602 Termination of optional

insurance.

(a) The optional insurance of an

insured employee stops when his/her

basic insurance stops, subject to the

same 31-day extension of coverage.

(b) The optional insurance of an

employee who separates from service

after meeting the requirement for an

immediate annuity under

§ 842.204(a)(1) of this title and who

postpones receiving the annuity, as

provided by § 842.204(c) of this title,

stops on the date he/she separates from

service, subject to a 31-day extension of

coverage.

(c) If, because of a waiver, an insured

employee isn’t eligible to continue

optional coverage as an annuitant or

compensationer (see § 870.701), the

optional insurance stops on the date

that his/her basic insurance is

continued or reinstated under the

provisions of § 870.701, subject to a 31-

day extension of coverage.

(d) If, at the time of an individual’s

election of basic insurance during

receipt of annuity or compensation (see

§ 870.701), he/she elects no basic life

insurance, the optional insurance stops

at the end of the month in which the

election is received in OPM, subject to

a 31-day extension of coverage.

(e) Except as provided in § 870.404,

optional insurance stops, subject to a

31-day extension of coverage, at the end

of the pay period in which it’s

determined that an individual’s periodic

pay, compensation, or annuity, after all

other deductions, isn’t enough to cover

the full cost of the optional insurance.

If an individual has more than one type

of optional insurance, and his/her pay,

compensation, or annuity is sufficient to

cover some but not all of the insurance,

Option C terminates first, followed by

Option A and then Option B.

§ 870.603 Conversion of basic and

optional insurance.

(a)(1) When group coverage

terminates for any reason other than

voluntary cancellation, an employee

may apply to convert all or any part of

his/her basic and optional insurance to

an individual policy; no medical

examination is required. The premiums

for the individual policy are based on

the employee’s age and class of risk. An

employee is eligible to convert the

policy only if he/she doesn’t return,

within 3 calendar days from the

terminating event, to a position allowing

coverage under the group plan.

(2) The employing agency must notify

the employee of the loss of coverage and

the right to convert to an individual

policy either before or immediately after

the event causing the loss of coverage.

(3) The employee must submit the

request for conversion information to

OFEGLI. It must be postmarked within

31 days following the date of the

terminating event or within 31 days of

the date the employee received the

notice of loss of group coverage and

right to convert, whichever is later.

(4) An employee who fails to use his/

her conversion right within 31 days

after receiving notice of the right to

convert or within 31 days of the

terminating event, whichever is later, is

considered to have refused coverage,

unless OFEGLI determines the failure

was for reasons beyond the employee’s

control, as described in paragraph (a)(5)

of this section.

(5) When the employee fails to request

conversion information within the time

limit set in paragraph (a)(3) of this

section for reasons beyond his/her

control, he/she may make a belated

request by writing to OFEGLI. The

employee must make the request within

6 months after becoming eligible to

convert the insurance. The employee

must show that he/she wasn’t notified

of the loss of coverage and the right to

convert and was not otherwise aware of

it or that he/she was unable to convert

to an individual policy for reasons

beyond his/her control. OFEGLI will

determine if the employee is eligible to

convert. When the request is approved,

the employee must convert within 31

days of that determination.

(b) The individual conversion policy

is effective the day after the group

coverage ends. The employee must pay

the premiums for any period retroactive

to that date.

(c) The 31-day extension of coverage

provided under this subpart does not

depend upon timely notification of the

right to convert to an individual policy.

The extension cannot be continued

beyond 31 days.

Subpart G—Annuitants and

Compensationers

§ 870.701 Eligibility for life insurance.

(a) When an insured employee retires,

basic life insurance (but not accidental

death and dismemberment) continues or

is reinstated if he/she:

(1) Is entitled to retire on an

immediate annuity under a retirement

system for civilian employees, including

the retirement system of a

nonappropriated fund instrumentality

of the Department of Defense or the

Coast Guard;

(2) Was insured for the 5 years of

service immediately before the date the

annuity starts, or for the full period(s) of

service during which he/she was

eligible to be insured if less than 5

years; and

(3) Has not converted to an individual

policy as described in § 870.603. If it is

not determined that an individual is

eligible to continue the group coverage

as an annuitant until after he/she has

converted, the group enrollment must

be reinstated. The conversion policy

must be voided, and the premiums

already paid on the policy must be

refunded to the individual.

(b) A compensationer’s basic life

insurance (but not accidental death and

dismemberment) continues or is

reinstated if he/she:

(1) Has been insured for the 5 years

of service immediately before the date of

entitlement to compensation, or for the

full period(s) of service during which

he/she was eligible to be insured if less

than 5 years; and

(2) Has not converted to an individual

policy as described in § 870.603. If it is

not determined that an individual is

eligible to continue the group coverage

as a compensationer until after he/she

has converted, the group enrollment

must be reinstated. The conversion

policy must be voided, and the

premiums already paid on the policy

must be refunded to the individual.

(c) An individual who meets the

requirements under paragraphs (a) or (b)

of this section or § 870.707 for

continuation or reinstatement of life

insurance must complete a written

election on the appropriate form at the

time entitlement is established. For the

election to be valid, OPM must receive
21768 Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules

the election form before it has made a

final decision on the individual’s

application for annuity or supplemental

annuity or an individual’s request to

continue life insurance as a

compensationer. If there is no valid

election, OPM considers the individual

to have chosen the option described in

paragraph (a)(2) of § 870.702.

(d) If the annuity or compensation of

an insured individual is terminated, or

if the Department of Labor finds that an

insured compensationer is able to return

to duty, his/her basic life insurance held

as an annuitant or compensationer stops

on the date of the termination or

finding. There is no 31-day extension of

coverage or conversion right.

(e)(1) An annuitant or compensationer

who is eligible to continue or have

reinstated basic insurance is also

eligible to continue or have reinstated

optional insurance if he/she meets the

same coverage requirements for optional

insurance as those stated in paragraph

(a) or (b) of this section for basic

insurance.

(2) For the purpose of continuing

insurance as an annuitant or

compensationer, an employee is not

considered to have been eligible for

Option C during any period when the

employee had no eligible family

member.

§ 870.702 Election of basic insurance.

(a) An individual who makes an

election under § 870.701(c) must select

one of the following options:

(1) Termination of the insurance. The

individual’s insurance stops upon

conversion to an individual policy as

provided under § 870.603. If the

individual doesn’t convert to an

individual policy, insurance stops at the

end of the month in which OPM or the

employing office receives the election;

(2) Continuation or reinstatement of

basic insurance with a maximum

reduction of 75 percent during

retirement. Premiums are withheld from

annuity or compensation (except as

provided under § 870.401(d)(1)). The

amount of basic life insurance in force

reduces by 2 percent a month until the

maximum reduction is reached. This

reduction starts at the beginning of the

2nd month after the date the insurance

would otherwise have stopped or the

date of the insured’s 65th birthday,

whichever is later;

(3) Continuation or reinstatement of

basic insurance with a maximum

reduction of 50 percent during

retirement. Premiums are withheld from

annuity or compensation. The amount

of basic insurance in force reduces by 1

percent a month until the maximum

reduction is reached. This reduction

starts at the beginning of the 2nd month

after the date the insurance would

otherwise have stopped or the date of

the insured’s 65th birthday, whichever

is later; or

(4) Continuation or reinstatement of

basic insurance with no reduction after

age 65. Premiums are withheld from

annuity or compensation.

(b)(1) An insured individual may

cancel an election under paragraph

(a)(3) or (a)(4) of this section at any time.

The amount of basic insurance

automatically switches to the amount

that would have been in force if the

individual had originally elected the 75

percent reduction. This revised amount

is effective at the end of the month in

which OPM receives the request to

cancel the previous election.

(2) If the individual files a waiver of

insurance, the coverage stops without a

31-day extension of coverage or

conversion right. This is effective at the

end of the month in which OPM

receives the waiver.

§ 870.703 Amount of life insurance.

(a)(1) The amount of an annuitant’s or

compensationer’s basic insurance is his/

her BIA on the date insurance would

otherwise have stopped because of

separation from service or completion of

12 months in nonpay status, minus any

reductions applicable under

§ 870.702(a).

(2) For the purpose of paying benefits

upon the death of a retired insured

individual under age 45, the BIA is

multiplied by the appropriate age factor

shown in § 870.202(c). Exception: If the

insured individual retired before

October 10, 1980.

(b) The amount of an annuitant’s or

compensationer’s Option A coverage

reduces by 2 percent a month up to a

maximum reduction of 75 percent. This

reduction starts at the beginning of the

2nd month after the date the insurance

would otherwise have stopped or the

date of the insured’s 65th birthday,

whichever is later.

(c) (1) The number of multiples of

Option B coverage an annuitant or

compensationer can continue is the

smallest number of multiples in force

during the applicable period of service

required to continue Option B.

(2) Each multiple of an annuitant’s or

compensationer’s Option B coverage

reduces by 2 percent a month. This

reduction starts at the beginning of the

2nd month after the date the insurance

would otherwise have stopped or the

insured’s 65 birthday, whichever is

later. At 12 noon on the day before the

50th reduction, the insurance stops,

with no extension of coverage or

conversion right.

(d) The amount of an annuitant’s or

compensationer’s Option C coverage on

each family member reduces by 2

percent a month. This reduction starts at

the beginning of the 2nd month after the

date the insurance would otherwise

have stopped or the annuitant’s or

compensationer’s 65th birthday,

whichever is later. At 12 noon on the

day before the 50th reduction, the

insurance stops, with no extension of

coverage or conversion right.

(e)(1) Judges retiring under 28 U.S.C.

371 (a) and (b), 28 U.S.C. 372(a), and 26

U.S.C. 7447 are considered employees

under the FEGLI law. Basic and optional

insurance for these judges continues

without interruption or reduction upon

retirement.

(2) If a judge chooses to receive

compensation instead of an annuity,

his/her optional insurance reduces as

stated in paragraphs (b), (c), and (d) of

this section.

§ 870.704 Reinstatement of life insurance.

(a) An annuitant whose disability

annuity terminates because he/she

recovers from the disability or because

his/her earning capacity returns, and

whose disability annuity is later

restored under 5 U.S.C. 8337(e) (after

December 31, 1983), may elect to

resume the basic insurance held

immediately before his/her disability

annuity terminated. OPM must receive

the election within 60 days after OPM

mails a notice of insurance eligibility

and election form.

(b) An annuitant described in

paragraph (a) of this section may elect

to resume any optional insurance held

immediately before the annuity

terminated if:

(1) He/she has made an election under

paragraph (a) of this section; and

(2) OPM receives the election within

60 days after OPM mails a notice of

insurance eligibility and election form.

(c) Basic and optional insurance

reinstated under paragraphs (a) and (b)

of this section are effective on the 1st

day of the month after the date OPM

receives the election form. Any

applicable annuity withholdings are

also reinstated on the 1st day of the

month after OPM receives the election

form.

(d) The amounts of basic and optional

insurance reinstated under paragraphs

(a) and (b) of this section are the

amounts that would have been in force

if the individual’s annuity hadn’t

terminated.

§ 870.705 Waiver or suspension of annuity

or compensation.

(a) Except as provided in paragraph

(b) of this section, when annuity or
Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules 21769

compensation is waived or suspended,

optional life insurance continues. When

the annuity or compensation is

resumed, back payments must be

withheld for the full cost of the optional

insurance for the period of waiver or

suspension during which the person is

under age 65.

(b) If suspension of annuity or

compensation is because of

reemployment, the reemploying office

must withhold the full cost of the

insurance during each pay period of

reemployment.

§ 870.706 Reemployed annuitants.

(a) (1) If an insured annuitant is

appointed to a position in which he/she

is eligible for insurance, the amount of

his/her basic life insurance as an

annuitant (and any applicable annuity

withholdings) is suspended on the day

before the 1st day in pay status under

the appointment, unless the reemployed

annuitant waives all insurance coverage.

The benefit payable upon the death of

a reemployed annuitant who has basic

insurance in force as an employee

cannot be less than the benefit which

would have been payable if the

individual hadn’t been reemployed.

(2) Except as provided in paragraph

(b) of this section, the basic insurance

obtained as an employee stops, with no

31-day extension of coverage or

conversion right, on the date

reemployment terminates. Any

suspended basic insurance (and any

applicable annuity withholdings) is

reinstated on the day following

termination of the reemployment.

(b) Basic insurance obtained during

reemployment can be continued after

the reemployment terminates if:

(1) The annuitant qualifies for a

supplemental annuity or receives a new

retirement right;

(2) He/she has had basic insurance as

an employee for at least 5 years of

service immediately before separation

from reemployment or for the full

period(s) during which such coverage

was available to him/her, whichever is

less; and

(3) He/she doesn’t convert to

nongroup insurance when basic

insurance as an employee would

otherwise terminate.

(c) If the basic insurance obtained

during reemployment is continued as

provided in paragraph (b) of this

section, any suspended basic life

insurance stops, with no 31-day

extension of coverage or conversion

right.

(d)(1) An annuitant appointed to a

position in which he/she is eligible for

basic insurance, is also eligible for

optional insurance as an employee,

unless he/she has on file an uncanceled

waiver of basic or optional insurance.

(2) If the individual has Option A or

C as an annuitant, that insurance (and

applicable annuity withholdings) is

suspended on the day before his/her 1st

day in pay status under the

appointment. Unless he/she waives

Option A or C (or waives basic

insurance), he/she obtains Option A or

C as an employee.

(3) If the individual has Option B as

an annuitant, that insurance (and

applicable annuity withholdings)

continues as if the individual weren’t

reemployed, unless:

(i) The individual files with his/her

employing office an election of Option

B on the Life Insurance Election form

within 31 days after the date of

reemployment. In this case Option B

(and applicable annuity withholdings)

as an annuitant is suspended on the

date that Option B as an employee

becomes effective; or

(ii) The individual waives basic

insurance.

(4) Except as provided in paragraph

(e) of this section, the optional

insurance obtained as an employee

stops, with no 31-day extension or

conversion right, on the date

reemployment terminates. The amount

of suspended optional insurance which

remains in force after applicable

monthly reductions after age 65 (and

corresponding withholdings) is

reinstated on the day after

reemployment terminates.

(e) Optional life insurance obtained

during reemployment may be continued

after the reemployment terminates if the

annuitant:

(1) Qualifies for a supplemental

annuity or receives a new retirement

right;

(2) Continues his/her basic life

insurance under paragraph (d)(2), (3), or

(4) of § 870.701; and

(3) Has had optional insurance in

force for the 5 years of service

immediately before separation from

reemployment or for the full period(s) of

service during which it was available to

him/her, whichever is less.

(f) If optional insurance obtained

during reemployment is continued as

provided in paragraph (e) of this

section, any suspended optional

insurance stops, with no 31-day

extension of coverage or conversion

right.

(g) If a reemployed annuitant waives

life insurance as an employee, the

waiver also cancels his/her life

insurance as an annuitant.

§ 870.707 MRA-plus-10 annuitants.

(a) The basic insurance of an

individual whose coverage terminates

under § 870.601(a), and who meets the

requirements for continuing basic

insurance after retirement as stated in

§ 870.601(b), resumes on the starting

date of annuity or on the date OPM

receives the application for annuity,

whichever is later. The individual must

file an election as provided in

§ 870.701(c) so that OPM receives it

within 60 days after OPM mails a notice

of insurance eligibility and election

form.

(b) Optional insurance of an

individual whose coverage terminates

under § 870.602(a), and who meets the

requirements for continuing optional

insurance after retirement under

§ 870.602(b), resumes on the starting

date of annuity or on the date OPM

receives the application for annuity,

whichever is later.

Subpart H—Order of Precedence and

Designation of Beneficiary

§ 870.801 Order of precedence and

payment of benefits.

(a) Benefits are paid according to the

order of precedence stated in 5 U.S.C.

8705, as follows:

(1) To the designated beneficiary (or

beneficiaries);

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

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

in equal shares, with the share of any

deceased child going to his/her

children;

(4) If none, to the parents in equal

shares or the entire amount to the

surviving parent;

(5) If none, to the executor or

administrator of the estate;

(6) If none, to the next of kin

according to the laws of the State in

which the insured individual legally

resided.

(b) If an insured individual provided

in a valid designation of beneficiary for

insurance benefits to be payable to the

insured’s estate, or to the Executor,

Administrator, or other representative of

the insured’s estate, or if the benefits

would otherwise be payable to the duly

appointed representative of the

insured’s estate under the order of

precedence specified in 5 U.S.C.

8705(a), payment of the benefits to the

duly appointed representative of the

insured’s estate bars recovery by any

other person.

(c) Option A or B insurance in force

on a person on the date of his/her death

is paid, on receipt of a valid claim, in

the same order of precedence and under

the same conditions as basic insurance.

A designation of beneficiary for basic
21770 Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules

insurance is also a designation of

beneficiary for Option A or B, unless the

insured individual states otherwise in

his/her designation.

(d) Upon the death of an insured

family member, Option C benefits are

paid to the employee, annuitant, or

compensationer responsible for

withholdings under § 870.402(f), except

as provided in paragraph (e) of this

section.

(e) In spite of an assignment of life

insurance under subpart I of this part,

if an employee, annuitant, or

compensationer entitled to receive

Option C benefits dies before the

benefits are paid, the Option C benefits

are paid to the individual(s) entitled to

receive basic life insurance benefits.

§ 870.802 Designation of beneficiary.

(a) If an insured individual wants

benefits paid differently from the order

of precedence, he/she may file a

designation of beneficiary. A

designation of beneficiary cannot be

filed by anyone other than the insured

individual.

(b) A designation of beneficiary must

be in writing, signed, and witnessed by

two people. The employing office (or

OPM, in the case of an individual

receiving an annuity or compensation

must receive the designation before the

death of the insured.

(c) A designation, change, or

cancellation of beneficiary in a will or

any other document not witnessed and

filed as required by this section has no

legal effect with respect to benefits

under this chapter.

(d) A witness to a designation of

beneficiary cannot be named as a

beneficiary.

(e) Any individual, firm, corporation,

or legal entity can be named as a

beneficiary, except an agency of the

Federal or District of Columbia

Government.

(f) An insured individual may change

his/her beneficiary at any time without

the knowledge or consent of the

previous beneficiary. This right cannot

be waived or restricted.

(g) A designation of beneficiary is

automatically cancelled 31 days after

the individual stops being insured.

(h) An insured individual may

provide that a designated beneficiary is

entitled to the insurance benefits only if

the beneficiary survives him/her for a

specified period of time (not more than

30 days). If the beneficiary doesn’t

survive for the specified period,

insurance benefits will be paid as if the

beneficiary had died before the insured.

§ 870.803 Child incapable of self-support.

(a) When it receives a claim for

Option C benefits because of the death

of a child over age 21, OFEGLI

determines, based on whatever evidence

it considers necessary, whether the

deceased child was incapable of selfsupport because of a mental or physical

disability which existed before the child

reached age 22.

(b) If an employee elects Option C

under § 870.506(a)(3), and the

opportunity to elect is based solely on

the acquisition of a child over age 21,

the employee must submit to the

employing office at the time of making

the election a doctor’s certificate stating

that the child is incapable of selfsupport because of a physical or mental

disability which existed before the child

reached age 22 and which is expected

to continue for more than 1 year. The

certificate must include the name of the

child, the type of disability, how long it

has existed, and its expected future

course and duration. The certificate

must be signed by the doctor and show

his/her office address.

Subpart I—Assignments of Life

Insurance

§ 870.901 Assignments permitted.

(a) Section 208 of the Bankruptcy

Amendments and Federal Judgeship Act

of 1984, Pub. L. 98–353, effective July

10, 1984, permits Federal judges to

irreversibly assign their FEGLI coverage

to one or more individuals,

corporations, or trustees. A judge may

assign ownership of all life insurance

under this part, except Option C. If a

judge owns more than one type of

coverage, he/she must assign all the

insurance; a judge cannot assign only a

portion of the coverage. Option C cannot

be assigned.

(b) A judge cannot name conditional

assignees in case the primary assignee

dies before the insured judge.

(c) If the insurance is assigned to two

or more individuals, corporations, or

trustees, the judge must specify

percentage shares, rather than dollar

amounts or types of insurance, to go to

each assignee.

(d) If a judge who has made an

assignment later elects increased

insurance coverage under § 870.506 or

during an open enrollment period, the

increased coverage is considered

included in the already-existing

assignment. The right to increase

coverage remains with the judge, rather

than transferring to the assignee.

(e) A judge who assigns ownership of

insurance continues to be the insured

individual, but the assignee receives

those rights of an insured employee that

are specified in this part.

(f) Once assigned, the value of the

insurance increases or decreases

automatically as provided by this part.

§ 870.902 Making an assignment.

To assign insurance, a judge must

make a written request for an approved

assignment form. The judge must

complete and submit to the employing

office the signed and witnessed form

indicating the intent to irreversibly

assign all ownership of the insurance.

(Assignments submitted prior to

November 28, 1986, were accepted

without an approved assignment form.)

§ 870.903 Effective date of assignment.

An assignment under this section is

effective on the date the employing

office receives the properly completed,

signed, and witnessed assignment form.

§ 870.904 Amount of insurance.

The amount of insurance is based on

the judge’s basic pay as stated in subpart

B of this part.

§ 870.905 Withholdings.

Premium withholdings for assigned

insurance are withheld from the salary,

annuity, or compensation of the judge,

as provided in subpart D of this part.

§ 870.906 Cancellation of insurance.

The assignee has the right to cancel

insurance according to the provisions of

§§ 870.502 and 870.505. When there is

more than 1 assignee, all assignees must

agree to the cancellation. A cancellation

of basic insurance also cancels all

optional insurance.

§ 870.907 Termination and conversion.

(a) Assigned insurance terminates

under the conditions stated in subpart F

of this part.

(b) (1) When a judge’s insurance

terminates, an assignee has the right to

convert all or part of the group

insurance to an individual policy on the

judge. The conditions stated in subpart

F of this part apply to assignees who

elect to convert.

(2) When there is more than 1

assignee, each assignee has the right to

convert all or part of his/her share of the

insurance. Any assignee who doesn’t

convert loses all ownership of the

insurance.

(3) When there is more than 1

assignee and they wish to convert the

assigned insurance to individual

policies on the judge, the maximum

amount of insurance each assignee will

be able to convert is determined by the

dollar amount corresponding to the

assignee’s share of the total insurance.

This amount will be rounded up to the

next higher thousand, if it’s not already

an even thousand dollar amount.
Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules 21771

(4) Premiums for converted life

insurance are based on the insured

judge’s age and class of risk at the time

the conversion policy is issued.

(5) The employing office must notify

each assignee of the conversion right at

the time the assigned group insurance

terminates.

§ 870.908 Annuitants and

compensationers.

(a) If a judge assigns basic insurance

and later becomes eligible to continue

such insurance coverage while receiving

annuity or compensation as provided in

§ 870.701:

(1) At the time he/she retires or

becomes eligible to receive

compensation, the judge may elect

unreduced or partially reduced

insurance coverage as provided in

§ 870.702(a).

(2) After the judge has made the

election described in paragraph (a)(1) of

this section, the assignee (or, if more

than one, all of the assignees acting

together) may, at any time, elect to

cancel all or part of the basic insurance

coverage as provided in § 870.702(b).

(b) Judges retiring under 28 U.S.C. 371

(a) and (b), 28 U.S.C. 372(a), and 26

U.S.C. 7747 are considered employees

under the FEGLI law. Insurance for

these judges continues without

interruption or reduction upon

retirement. The amount of basic

insurance for a judge who elects to

receive compensation in lieu of annuity

will be computed according to

§ 870.703(e)(2).

§ 870.909 Designations and changes of

beneficiary.

(a) Each assignee (or the legally

appointed guardian of an assignee) may

designate a beneficiary or beneficiaries

to receive insurance benefits upon the

death of the insured judge and may also

later change the beneficiaries. Assignees

may designate themselves the primary

beneficiaries and name other

conditional beneficiaries to receive

insurance benefits if the assignees die

before the insured judge.

(b) Benefits for assigned insurance are

paid to an assignee’s estate if the

assignee dies before the insured judge

and:

(1) The assignee did not designate a

beneficiary; or

(2) The assignee’s designated

beneficiary dies before the insured

judge.

(c) An assignment automatically

cancels a judge’s prior designation of

beneficiary.

(d) The provisions of § 870.802 apply

to designations of beneficiary made by

assignees.

§ 870.910 Notification of current

addresses.

Each assignee and each beneficiary of

an assignee must keep the office where

the 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 sets forth the conditions

for life insurance coverage according to

the provisions of section 599C of Pub.

L. 101–513.

§ 870.1002 Definitions.

In this subpart:

Hostage and hostage status have the

meaning set forth in section 599C of

Pub. L. 101–513.

Pay period for individuals insured

under this subpart means the pay period

set by the U.S. Department of State.

Period of eligibility means the period

beginning on the effective date set forth

in § 870.1004 and ending 12 months

after hostage status ends.

§ 870.1003 Coverage and amount of

insurance.

(a) An individual is covered under

this subpart when the U.S. Department

of State determines that the individual

is eligible under section 599C of Pub. L.

101–513.

(b) (1) The amount of basic life

insurance for these individuals is the

amount specified in § 870.202, subject

to the applicable conditions stated in

this subpart.

(2) The BIA under § 870.202 is the

amount of the payment specified in

section 599C(b)(2) of Pub. L. 101–513,

rounded to the next higher $1,000, plus

$2,000.

(c) Individuals who have basic

insurance under this section also have

group accidental death and

dismemberment insurance.

(d) Individuals insured by this

subpart are not eligible for optional

insurance.

(e) Individuals insured by this subpart

are not considered employees for the

purpose of this part.

(f) Eligibility for insurance under this

subpart depends on the availability of

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

101–513.

§ 870.1004 Effective date of insurance.

Insurance under this subpart was

effective on August 2, 1990, for hostages

in Iraq and Kuwait and on January 1,

1990, for hostages captured in Lebanon,

unless the U.S. Department of State sets

a later date.

§ 870.1005 Premiums.

(a) Government contributions and

employee withholdings required under

subpart D of this part are paid from the

funds provided under section 599C(e) of

Pub. L. 101–513.

(b) If an individual isn’t 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 payments

required by this section in advance from

a State Department appropriation, if

necessary to fund the 12-month period

of coverage beginning the earlier of:

(1) The day after sanctions or

hostilities end; or

(2) The day after the individual’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.

§ 870.1006 Cancellation of insurance.

(a) An individual who is insured

under this subpart may cancel his/her

insurance at any time by written

request. The cancellation is effective on

the 1st day of the pay period after the

pay period in which the U.S.

Department of State receives the

request.

(b) Cancellation must be requested by

the insured individual and cannot be

requested by a representative acting on

the individual’s behalf.

(c) An individual who cancels the

insurance under this section cannot

obtain the insurance again, unless the

U.S. Department of State determines

that it would be against equity and good

conscience not to allow the individual

to be insured.

§ 870.1007 Termination and conversion.

(a) Insurance under this subpart

terminates 12 months after hostage

status ends, unless the individual

cancels the insurance earlier.

(b) Insured individuals whose

coverage terminates are eligible for the

31-day extension of coverage and

conversion as set forth in subpart F of

this part, unless the individual

cancelled the coverage.

§ 870.1008 Order of precedence and

designation of beneficiary.

Insurance benefits are paid under the

order of precedence set forth in 5 U.S.C.

8705 and under the provisions of

subpart H of this part.
21772 Federal Register / Vol. 60, No. 85 / Wednesday, May 3, 1995 / Proposed Rules

§ 870.1009 Responsibilities of the U.S.

Department of State.

(a) The U.S. Department of State

functions as the ‘‘employing office’’ for

individuals insured under this subpart.

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

determine the eligibility of individuals

under Pub. L. 101–513 for insurance

under this subpart. This includes

determining whether an individual is

barred from insurance under chapter 87

of title 5 U.S.C. because of other life

insurance, as provided in section 599C

of Pub. L. 101–513.

PART 871—[REMOVED]

2. Part 871 is removed.

PART 872—[REMOVED]

3. Part 872 is removed.

PART 873—[REMOVED]

4. Part 873 is removed.

PART 874—[REMOVED]

5. Part 874 is removed.

[FR Doc. 95–10778 Filed 5–2–95; 8:45 am]

BILLING CODE 6325–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 92–NM–75–AD]

Airworthiness Directives;

Construcciones Aeronauticas, S.A.

(CASA), Model C–212–CB, –CC, –CD,

–CE, –CF, and –DF Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes the

adoption of a new airworthiness

directive (AD) that is applicable to all

CASA Model C–212–CB, –CC, –CD,

–CE, –CF, and –DF series airplanes. This

proposal would require supplemental

structural inspections, and repair or

replacement, as necessary, to ensure the

continued airworthiness of these

airplanes. This proposal is prompted by

a structural reevaluation, which

identified certain significant structural

components to inspect for fatigue cracks

as these airplanes approach and exceed

the manufacturer’s original fatigue

design life goal. The actions specified by

the proposed AD are intended to

prevent reduced structural integrity of

these airplanes.

DATES: Comments must be received by

June 12, 1995.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–103,

Attention: Rules Docket No. 92–NM–

75–AD, 1601 Lind Avenue, SW.,

Renton, Washington 98055–4056.

Comments may be inspected at this

location between 9:00 a.m. and 3:00

p.m., Monday through Friday, except

Federal holidays.

The service information referenced in

the proposed rule may be obtained from

Construcciones Aeronauticas, S.A.,

Getafe, Madrid, Spain. This information

may be examined at the FAA, Transport

Airplane Directorate, 1601 Lind

Avenue, SW., Renton, Washington.

FOR FURTHER INFORMATION CONTACT: Sam

Grober, Aerospace Engineer,

Standardization Branch, ANM–113,

FAA, Transport Airplane Directorate,

1601 Lind Avenue, SW., Renton,

Washington 98055–4056; telephone

(206) 227–1187; fax (206) 227–1320.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to

participate in the making of the

proposed rule by submitting such

written data, views, or arguments as

they may desire. Communications shall

identify the Rules Docket number and

be submitted in triplicate to the address

specified above. All communications

received on or before the closing date

for comments, specified above, will be

considered before taking action on the

proposed rule. The proposals contained

in this notice may be changed in light

of the comments received.

Comments are specifically invited on

the overall regulatory, economic,

environmental, and energy aspects of

the proposed rule. All comments

submitted will be available, both before

and after the closing date for comments,

in the Rules Docket for examination by

interested persons. A report

summarizing each FAA-public contact

concerned with the substance of this

proposal will be filed in the Rules

Docket.

Commenters wishing the FAA to

acknowledge receipt of their comments

submitted in response to this notice

must submit a self-addressed, stamped

postcard on which the following

statement is made: ‘‘Comments to

Docket Number 92–NM–75–AD.’’ The

postcard will be date stamped and

returned to the commenter.

Availability of NPRMs

Any person may obtain a copy of this

NPRM by submitting a request to the

FAA, Transport Airplane Directorate,

ANM–103, Attention: Rules Docket No.

92–NM–75–AD, 1601 Lind Avenue,

SW., Renton, Washington 98055–4056.

Discussion

In June 1988, the FAA sponsored a

conference on aging airplane issues,

which was attended by representatives

of the aviation industry from around the

world. It became obvious that, because

of the tremendous increase in air travel,

the relatively slow pace of new airplane

production, and the apparent economic

feasibility of operating older technology

airplanes rather than retiring them,

increased attention needed to be

focused on this aging fleet and

maintaining its continued operational

safety.

The FAA, in concert with the

Regional Airline Association (RAA);

several U.S. and non-U.S. operators of

the affected airplanes; the Direccio ́n

General de Aviacio ́n Civil (DGAC),

which is the airworthiness authority for

Spain; and Construcciones

Aeronauticas, S.A. (CASA); has agreed

to undertake the task of identifying and

implementing procedures to ensure

continuing structural airworthiness of

aging commuter-class airplanes. This

group reviewed selected service

bulletins, applicable to CASA Model C–

212–CB, –CC, –CD, –CE, –CF, and –DF

series airplanes, to be recommended for

mandatory rulemaking action to ensure

the continued operational safety of these

airplanes.

The group reviewed and

recommended CASA Supplemental

Inspection Document (SID) C–212–PV–

01–SID, dated June 1, 1987 (hereinafter

referred to as the ‘‘Document’’), for

mandatory rulemaking action. The

Document describes procedures for

implementing a structural inspection

program, which includes inspections of

the following Principal Structural

Elements (PSE’s) on the airplane:

1. 6 PSE’s of the flap controls;

2. 24 PSE’s of the fuselage structure,

attach lugs and bolts, frame, and

attachments;

3. 14 PSE’s of the horizontal and

vertical tails;

4. 14 PSE’s of the wings; and

5. 8 PSE’s of the engine support

structure, firewall attach fittings, attach

fittings to the wing, and attach bolts.

The Document also provides

information addressing retirement lives,

stress analysis, and fatigue inspections.

The intent of this Document is to

positively address fatigue cracking of