I 

111TH CONGRESS 

2D SESSION H. R. 6368 

To provide for a voluntary, non-work related disability insurance program 

for Federal employees. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 29, 2010 

Ms. NORTON introduced the following bill; which was referred to the 

Committee on Oversight and Government Reform 

A BILL 

To provide for a voluntary, non-work related disability 

insurance program for Federal employees. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Federal Employee Dis5 ability Insurance Act of 2010’’. 

6 SEC. 2. NON-WORK RELATED DISABILITY INSURANCE. 

7 (a) Title 5, United States Code, is amended by add8 ing after chapter 87 the following: 


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1 ‘‘CHAPTER 88—NON-WORK RELATED 

2 DISABILITY INSURANCE 

‘‘Sec. 

‘‘8801. Definitions. 

‘‘8802. Availability of insurance. 

‘‘8803. Contracting authority. 

‘‘8804. Benefits. 

‘‘8805. Premiums. 

‘‘8806. Preemption. 

‘‘8807. Studies, reports, and audits. 

‘‘8808. Jurisdiction of courts. 

‘‘8809. Administrative functions. 

‘‘8810. Cost accounting standards. 

3 ‘‘§ 8801. Definitions 

4 ‘‘For purposes of this chapter— 

5 ‘‘(1) the term ‘Director’ means the Director of 

6 the Office of Personnel Management; 

7 ‘‘(2) the term ‘employee’ has the meaning given 

8 such term in section 8901(1); 

9 ‘‘(3) the term ‘carrier’ means a voluntary asso10 ciation, corporation, partnership, or other non11 governmental organization which is lawfully engaged 

12 in providing, paying for, or reimbursing lost wages 

13 or salaries under group insurance policies or con14 tracts, membership or subscription contracts, or 

15 similar group arrangements, in consideration of pre16 miums or other periodic charges payable to the car17 rier, including an insurance plan duly sponsored or 

18 underwritten by an employee organization and an 

19 association of organizations or other entities deVerDate Mar 15 2010 22:30 Oct 14, 2010 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6368.IH H6368

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1 scribed in this paragraph sponsoring a temporary 

2 benefits plan; 

3 ‘‘(4) the term ‘injury’ includes an injury related 

4 to pregnancy and childbirth; 

5 ‘‘(5) the term ‘sickness’ includes a sickness re6 lated to pregnancy and childbirth; 

7 ‘‘(6) the term ‘State’ includes the District of 

8 Columbia; and 

9 ‘‘(7) the term ‘totally disabled’, used with re10 spect to an employee, means such employee is unable 

11 to perform the essential functions of such employee’s 

12 position. 

13 ‘‘§ 8802. Availability of insurance 

14 ‘‘(a) The Director shall establish and administer a 

15 program to make available insurance coverage under this 

16 chapter for an injury occurring outside the workplace or 

17 other disability otherwise not covered under chapter 81. 

18 ‘‘(b) Insurance shall not be available under this chap19 ter if the injury of an employee is caused by such employ20 ee’s intention to bring about the injury to himself or to 

21 another individual. 

22 ‘‘(c) In addition to the requirements otherwise appli23 cable under section 8801(3), an insurance contract under 

24 this chapter must be fully insured, whether through rein25 surance with other carriers or otherwise. 


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1 ‘‘§ 8803. Contracting authority 

2 ‘‘(a) The Director shall, without regard to section 5 

3 of title 41 or any other statute requiring competitive bid4 ding, contract with one or more carriers for a policy or 

5 policies of disability insurance as described under this 

6 chapter. The Director shall ensure that each resulting con7 tract is awarded on the basis of contractor qualifications, 

8 price, and reasonable competition. 

9 ‘‘(b)(1) Each contract under this section shall con10 tain— 

11 ‘‘(A) a detailed statement of the benefits of12 fered (including any maximums, limitations, exclu13 sions, and other definitions of benefits); 

14 ‘‘(B) the premiums charged (including any limi15 tations or other conditions on their subsequent ad16 justment); 

17 ‘‘(C) the terms of the enrollment period; and 

18 ‘‘(D) such other terms and conditions (includ19 ing procedures for establishing eligibility for insur20 ance under this chapter) as may be determined by 

21 the Director, consistent with the requirements of 

22 this chapter. 

23 ‘‘(2) Premiums charged under a contract under this 

24 section shall reasonably and equitably reflect the cost of 

25 the benefits provided, as determined by the Director. 


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1 ‘‘(c)(1) Each contract under this section shall require 

2 the carrier— 

3 ‘‘(A) to provide payments or benefits described 

4 in subsection (c) or (d) of section 8804 to an em5 ployee if such employee is entitled thereto under the 

6 terms of the contract; and 

7 ‘‘(B) with respect to disputes regarding claims 

8 for payments or benefits under the terms of the con9 tract— 

10 ‘‘(i) to establish internal procedures de11 signed to resolve such disputes expeditiously; 

12 and 

13 ‘‘(ii) to establish for disputes not resolved 

14 through procedures under clause (i), procedures 

15 for one or more alternative means of dispute 

16 resolution involving independent third-party re17 view under circumstances acceptable to the Di18 rector. 

19 ‘‘(2) The carrier’s determination as to whether or not 

20 a particular employee is eligible to obtain insurance cov21 erage under this chapter shall be subject to review to the 

22 extent and in the manner provided in the applicable mas23 ter contract. 


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1 ‘‘(3) Nothing in this chapter shall be considered to 

2 grant authority for the third-party reviewer to change the 

3 terms of any contract under this chapter. 

4 ‘‘(d)(1) Each contract under this section shall be for 

5 a term of 7 years, unless terminated earlier by the Direc6 tor in accordance with the terms of such contract. How7 ever, the rights and responsibilities of the enrolled em8 ployee, the insurer, and the Director under each contract 

9 shall continue with respect to such employee until the ter10 mination of coverage of the enrolled employee or the effec11 tive date of a successor contract. 

12 ‘‘(2) A 7-year contract described in paragraph (1) 

13 may be made automatically renewable, for a term of 1 year 

14 each January first, unless written notice of non-renewal 

15 is given either by the Director or the carrier not less than 

16 180 calendar days before the renewal date, or unless modi17 fied by mutual agreement. 

18 ‘‘(3) A 7-year contract described in paragraph (1) 

19 shall include such provisions as may be necessary to en20 sure that, once an employee becomes duly enrolled, insur21 ance coverage pursuant to that enrollment shall be termi22 nated only if the individual is separated from Federal serv23 ice or, where appropriate, for non-payment of premiums. 


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1 ‘‘§ 8804. Benefits 

2 ‘‘(a) The Director may prescribe reasonable minimum 

3 standards for benefit plans offered under this chapter. The 

4 benefits under this chapter shall provide for benefits as 

5 described in subsections (c) and (d). 

6 ‘‘(b)(1) Benefits under this chapter may supplement 

7 other benefits of an employee, including worker’s com8 pensation and disability retirement income. 

9 ‘‘(2) A contract providing benefits under this chapter 

10 shall not provide for a preexisting condition exclusion. 

11 ‘‘(c)(1) An eligible employee may receive benefits 

12 under this chapter during the first 12 months that an em13 ployee qualifies for such benefits. An employee shall re14 ceive such benefits after the expiration of the waiting pe15 riod selected by such employee under paragraph (2)(A). 

16 The amount of benefits shall be the lesser of— 

17 ‘‘(A) 70 percent of the monthly pay, excluding 

18 bonuses, of an employee at the time of the injury or 

19 sickness of such employee occurs; or 

20 ‘‘(B) 70 percent of the maximum rate of basic 

21 pay provided for grade GS–15 of the general sched22 ule. 

23 ‘‘(2)(A) The period for which benefits are payable to 

24 an employee under this subsection will begin after the 

25 completion of a waiting period. An employee shall elect 

26 one of the following waiting period options: 


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1 ‘‘(i) On the 8th day of continuous disability. 

2 ‘‘(ii) On the 31st day of continuous disability. 

3 ‘‘(iii) On the 91st day of continuous disability. 

4 ‘‘(iv) On the 181st day of continuous disability. 

5 ‘‘(B) Employees who elect to receive benefits earlier 

6 shall pay a higher premium. 

7 ‘‘(d)(1) An employee may receive benefits after the 

8 12-month period established under subsection (c) has ex9 pired only if such employee is totally disabled due to injury 

10 or sickness. 

11 ‘‘(2) The amount of total disability benefits shall be 

12 50 percent of an employee’s monthly pay, excluding bo13 nuses, at the time of the benefits under subsection (c) have 

14 expired. Total disability benefits shall not be available to 

15 an employee once such employee reaches the age of 67. 

16 ‘‘(e) A contract approved under this chapter shall re17 quire the carrier to cover the geographic service delivery 

18 area specified by the Director. The Director shall require 

19 carriers to include non-work related disability underserved 

20 areas in their service delivery areas. 

21 ‘‘(f) A surviving spouse, disability annuitant, or sur22 viving child whose annuity is terminated and is later re23 stored, may continue enrollment in a disability benefits 

24 plan subject to the terms and conditions prescribed in reg25 ulations issued by the Office. 


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1 ‘‘§ 8805. Premiums 

2 ‘‘(a) Each eligible individual obtaining insurance cov3 erage under this chapter shall be responsible for 100 per4 cent of the premiums for such coverage. 

5 ‘‘(b) The amount necessary to pay the premiums for 

6 enrollment shall be withheld from the pay of the enrolled 

7 individual. 

8 ‘‘(c) The carrier participating under this chapter 

9 shall maintain records that permit it to account for all 

10 amounts received under this chapter (including investment 

11 earnings on those amounts) separate and apart from all 

12 other funds. 

13 ‘‘(d)(1)(A) The Employees’ Life Insurance Fund is 

14 available, without fiscal year limitation, for reasonable ex15 penses incurred in administering this chapter before the 

16 start of the first term described in section 8803(d)(1), in17 cluding reasonable implementation costs. 

18 ‘‘(B) Such Fund shall be reimbursed, before the end 

19 of the first year of the first 7-year period described in sec20 tion 8803(d)(1), for all amounts obligated or expended 

21 under subparagraph (A) (including lost investment in22 come). Reimbursement under this subparagraph shall be 

23 made by the carrier in accordance with applicable provi24 sions included in the relevant contract. 

25 ‘‘(C)(i) There is hereby established in the Employees’ 

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1 surance Administrative Account, which shall be available 

2 to the Office of Personnel Management, without fiscal 

3 year limitation, to defray reasonable expenses incurred by 

4 the Office in administering this chapter after the start of 

5 the first term described in section 8803(d)(1). 

6 ‘‘(ii) A contract under this chapter shall include ap7 propriate provisions under which the carrier involved shall, 

8 during each year, make such periodic contributions to the 

9 Non-Work Related Disability Insurance Administrative 

10 Account as necessary to ensure that the reasonable antici11 pated expenses of the Office of Personnel Management in 

12 administering this chapter during such year (adjusted to 

13 reconcile for any earlier overestimates or underestimates 

14 under this subparagraph) are defrayed. 

15 ‘‘(e) Nothing in this chapter shall, in the case of an 

16 enrolled individual applying for an extension of disability 

17 insurance coverage under this chapter after the expiration 

18 of such enrolled individual’s first opportunity to enroll, 

19 preclude the application of underwriting standards for 

20 later enrollment. 

21 ‘‘§ 8806. Preemption 

22 ‘‘(a) The terms of any contract under this chapter 

23 which relate to the nature, provision, or extent of coverage 

24 or benefits (including payments with respect to benefits) 

25 shall supersede and preempt any State, territorial, tribal, 


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1 or local law, or any regulation issued thereunder, which 

2 relates to non-work related disability insurance or con3 tracts. 

4 ‘‘(b)(1) No tax, fee, or other monetary payment may 

5 be imposed or collected, directly or indirectly, by any 

6 State, territory, tribe, or locality, or by any political sub7 division or other governmental authority thereof, on, or 

8 with respect to, any premium paid for an insurance policy 

9 under this chapter. 

10 ‘‘(2) Paragraph (1) shall not be construed to exempt 

11 any company or other entity issuing a policy of insurance 

12 under this chapter from the imposition, payment, or collec13 tion of a tax, fee, or other monetary payment on the net 

14 income or profit accruing to or realized by such entity 

15 from business conducted under this chapter, if that tax, 

16 fee, or payment is applicable to a broad range of business 

17 activity. 

18 ‘‘(c) No law of a State, territory, tribe, or locality, 

19 pertaining to subrogation or reimbursement with respect 

20 to benefits provided under this chapter, shall operate ex21 cept as expressly adopted by the Director. 

22 ‘‘§ 8807. Studies, reports, and audits 

23 ‘‘(a) A contract under this chapter shall contain pro24 visions requiring the carrier to furnish such reasonable re25 ports as the Director determines to be necessary to enable 


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1 the Director to carry out the Director’s functions under 

2 this chapter. 

3 ‘‘(b) Each Federal agency shall keep such records, 

4 make such certifications, and furnish the Director, the 

5 carrier, or both, with such information and reports as the 

6 Director may require. 

7 ‘‘(c) The Director shall conduct periodic reviews of 

8 each plan under this chapter to ensure its competitiveness. 

9 ‘‘§ 8808. Jurisdiction of courts 

10 ‘‘The district courts of the United States have origi11 nal jurisdiction, concurrent with the United States Court 

12 of Federal Claims, of a civil action or claim against the 

13 United States under this chapter after such administrative 

14 remedies as required under section 8803(c) have been ex15 hausted, but only to the extent judicial review is not pre16 cluded by any dispute resolution or other remedy under 

17 this chapter. 

18 ‘‘§ 8809. Administrative functions 

19 ‘‘(a)(1) Except as otherwise provided in this chapter, 

20 the Director shall prescribe regulations necessary to carry 

21 out this chapter and to make arrangements as necessary 

22 with other agencies and payroll systems to implement the 

23 program. 

24 ‘‘(2) Except as otherwise provided by law, the Direc25 tor shall specify in regulation the treatment of time spent 


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1 by an individual in receipt of benefits under this chapter 

2 for the purposes of periodic increases in pay, retention 

3 purposes, and other rights, benefits, and conditions of em4 ployment for which length of service is a factor. 

5 ‘‘(b) The carrier shall provide for periodic coordinated 

6 enrollment, promotion, and education efforts, as specified 

7 by the Director. 

8 ‘‘§ 8810. Cost accounting standards 

9 ‘‘The cost accounting standards issued pursuant to 

10 section 26(f) of the Office of Federal Procurement Policy 

11 Act (41 U.S.C. 422(f)) shall not apply with respect to an 

12 insurance contract under this chapter.’’. 

13 (b) The analysis for part III of title 5, United States 

14 Code, is amended by adding at the end of subpart G the 

15 following: 

‘‘88. Non-Work Related Disability Insurance .......................... 8801’’. 

Æ 


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