II

Calendar No. 685

106TH CONGRESS

2D SESSION S. 2420

[Report No. 106–344]

To amend title 5, United States Code, to provide for the establishment

of a program under which long-term care insurance is made available

to Federal employees, members of the uniformed services, and civilian

and military retirees, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 13, 2000

Mr. GRASSLEY (for himself, Ms. MIKULSKI, Ms. COLLINS, Mr. CLELAND, Mr.

SARBANES, Mr. AKAKA, Mr. GRAHAM, Mr. DURBIN, Mr. HAGEL, and Mr.

ROBB) introduced the following bill; which was read twice and referred

to the Committee on Governmental Affairs

JULY 14, 2000

Reported by Mr. THOMPSON, with an amendment and an amendment to the

title

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To amend title 5, United States Code, to provide for the

establishment of a program under which long-term care

insurance is made available to Federal employees, members of the uniformed services, and civilian and military

retirees, and for other purposes.
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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 ‘‘Long-Term Care Secu5 rity Act’’.

6 SEC. 2. LONG-TERM CARE INSURANCE.

7 (a) IN GENERAL.—Subpart G of part III of title 5,

8 United States Code, is amended by adding at the end the

9 following:

10 ‘‘CHAPTER 90—LONG-TERM CARE

11 INSURANCE

‘‘Sec.

‘‘9001. Definitions.

‘‘9002. Availability of insurance.

‘‘9003. Contracting authority.

‘‘9004. Financing.

‘‘9005. Preemption.

‘‘9006. Studies, reports, and audits.

‘‘9007. Jurisdiction of courts.

‘‘9008. Administrative functions.

‘‘9009. Cost accounting standards.

12 ‘‘§ 9001. Definitions

13 For purposes of this chapter:

14 ‘‘(1) EMPLOYEE.—The term ‘employee’

15 means—

16 ‘‘(A) an employee as defined by section

17 8901(1); and

18 ‘‘(B) an individual described in section

19 2105(e);
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1 but does not include an individual employed by the

2 government of the District of Columbia.

3 ‘‘(2) ANNUITANT.—The term ‘annuitant’ has

4 the meaning such term would have under paragraph

5 (3) of section 8901 if, for purposes of such para6 graph, the term ‘employee’ were considered to have

7 the meaning given to it under paragraph (1) of this

8 subsection.

9 ‘‘(3) MEMBER OF THE UNIFORMED SERV10 ICES.—The term ‘member of the uniformed services’

11 means a member of the uniformed services, other

12 than a retired member of the uniformed services.

13 ‘‘(4) RETIRED MEMBER OF THE UNIFORMED

14 SERVICES.—The term ‘retired member of the uni15 formed services’ means a member or former member

16 of the uniformed services entitled to retired or re17 tainer pay.

18 ‘‘(5) QUALIFIED RELATIVE.—The term ‘quali19 fied relative’ means each of the following:

20 ‘‘(A) The spouse of an individual described

21 in paragraph (1), (2), (3), or (4).

22 ‘‘(B) A parent, stepparent, or parent-in23 law of an individual described in paragraph (1)

24 or (3).
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1 ‘‘(C) A child (including an adopted child, a

2 stepchild, or, to the extent the Office of Per3 sonnel Management by regulation provides, a

4 foster child) of an individual described in para5 graph (1), (2), (3), or (4), if such child is at

6 least 18 years of age.

7 ‘‘(D) An individual having such other rela8 tionship to an individual described in paragraph

9 (1), (2), (3), or (4) as the Office may by regula10 tion prescribe.

11 ‘‘(6) ELIGIBLE INDIVIDUAL.—The term ‘eligible

12 individual’ refers to an individual described in para13 graph (1), (2), (3), (4), or (5).

14 ‘‘(7) QUALIFIED CARRIER.—The term ‘qualified

15 carrier’ means an insurance company (or consortium

16 of insurance companies) that is licensed to issue

17 long-term care insurance in all States, taking any

18 subsidiaries of such a company into account (and, in

19 the case of a consortium, considering the member

20 companies and any subsidiaries thereof, collectively).

21 ‘‘(8) STATE.—The term ‘State’ includes the

22 District of Columbia.

23 ‘‘(9) QUALIFIED LONG-TERM CARE INSURANCE

24 CONTRACT.—The term ‘qualified long-term care in25 surance contract’ has the meaning given such term
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1 by section 7702B of the Internal Revenue Code of

2 1986.

3 ‘‘(10) APPROPRIATE SECRETARY.—The term

4 ‘appropriate Secretary’ means—

5 ‘‘(A) except as otherwise provided in this

6 paragraph, the Secretary of Defense;

7 ‘‘(B) with respect to the Coast Guard when

8 it is not operating as a service of the Navy, the

9 Secretary of Transportation;

10 ‘‘(C) with respect to the commissioned

11 corps of the National Oceanic and Atmospheric

12 Administration, the Secretary of Commerce;

13 and

14 ‘‘(D) with respect to the commissioned

15 corps of the Public Health Service, the Sec16 retary of Health and Human Services.

17 ‘‘§ 9002. Availability of insurance

18 ‘‘(a) IN GENERAL.—The Office of Personnel Manage19 ment shall establish and, in consultation with the appro20 priate Secretaries, administer a program through which

21 an individual described in paragraph (1), (2), (3), (4), or

22 (5) of section 9001 may obtain long-term care insurance

23 coverage under this chapter for such individual.

24 ‘‘(b) GENERAL REQUIREMENTS.—Long-term care in25 surance may not be offered under this chapter unless—
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1 ‘‘(1) the only coverage provided is under quali2 fied long-term care insurance contracts; and

3 ‘‘(2) each insurance contract under which any

4 such coverage is provided is issued by a qualified

5 carrier.

6 ‘‘(c) DOCUMENTATION REQUIREMENT.—As a condi7 tion for obtaining long-term care insurance coverage under

8 this chapter based on one’s status as a qualified relative,

9 an applicant shall provide documentation to demonstrate

10 the relationship, as prescribed by the Office.

11 ‘‘(d) UNDERWRITING STANDARDS.—

12 ‘‘(1) DISQUALIFYING CONDITION.—Nothing in

13 this chapter shall be considered to require that long14 term care insurance coverage be made available in

15 the case of any individual who would be eligible for

16 benefits immediately.

17 ‘‘(2) SPOUSAL PARITY.—For the purpose of un18 derwriting standards, a spouse of an individual de19 scribed in paragraph (1), (2), (3), or (4) of section

20 9001 shall, as nearly as practicable, be treated like

21 that individual.

22 ‘‘(3) GUARANTEED ISSUE.—Nothing in this

23 chapter shall be considered to require that long-term

24 care insurance coverage be guaranteed to an eligible

25 individual.
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1 ‘‘(4) REQUIREMENT THAT CONTRACT BE FULLY

2 INSURED.—In addition to the requirements other3 wise applicable under section 9001(9), in order to be

4 considered a qualified long-term care insurance con5 tract for purposes of this chapter, a contract must

6 be fully insured, whether through reinsurance with

7 other companies or otherwise.

8 ‘‘(5) HIGHER STANDARDS ALLOWABLE.—Noth9 ing in this chapter shall, in the case of an individual

10 applying for long-term care insurance coverage

11 under this chapter after the expiration of such indi12 vidual’s first opportunity to enroll, preclude the ap13 plication of underwriting standards more stringent

14 than those that would have applied if that oppor15 tunity had not yet expired.

16 ‘‘(e) GUARANTEED RENEWABILITY.—The benefits

17 and coverage made available to eligible individuals under

18 any insurance contract under this chapter shall be guaran19 teed renewable (as defined by section 7A(2) of the model

20 regulations described in section 7702B(g)(2) of the Inter21 nal Revenue Code of 1986), including the right to have

22 insurance remain in effect so long as premiums continue

23 to be timely made. However, the authority to revise pre24 miums under this chapter shall be available only on a class
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1 basis and only to the extent otherwise allowable under sec2 tion 9003(b).

3 ‘‘§ 9003. Contracting authority

4 ‘‘(a) IN GENERAL.—The Office of Personnel Manage5 ment shall, without regard to section 5 of title 41 or any

6 other statute requiring competitive bidding, contract with

7 1 or more qualified carriers for a policy or policies of long8 term care insurance. The Office shall ensure that each re9 sulting contract (hereinafter in this chapter referred to as

10 a ‘master contract’) is awarded on the basis of contractor

11 qualifications, price, and reasonable competition.

12 ‘‘(b) TERMS AND CONDITIONS.—

13 ‘‘(1) IN GENERAL.—Each master contract

14 under this chapter shall contain—

15 ‘‘(A) a detailed statement of the benefits

16 offered (including any maximums, limitations,

17 exclusions, and other definitions of benefits);

18 ‘‘(B) the premiums charged (including any

19 limitations or other conditions on their subse20 quent adjustment);

21 ‘‘(C) the terms of the enrollment period;

22 and

23 ‘‘(D) such other terms and conditions as

24 may be mutually agreed to by the Office and
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1 the carrier involved, consistent with the require2 ments of this chapter.

3 ‘‘(2) PREMIUMS.—Premiums charged under

4 each master contract entered into under this section

5 shall reasonably and equitably reflect the cost of the

6 benefits provided, as determined by the Office. The

7 premiums shall not be adjusted during the term of

8 the contract unless mutually agreed to by the Office

9 and the carrier.

10 ‘‘(3) NONRENEWABILITY.—Master contracts

11 under this chapter may not be made automatically

12 renewable.

13 ‘‘(c) PAYMENT OF REQUIRED BENEFITS; DISPUTE

14 RESOLUTION.—

15 ‘‘(1) IN GENERAL.—Each master contract

16 under this chapter shall require the carrier to

17 agree—

18 ‘‘(A) to provide payments or benefits to an

19 eligible individual if such individual is entitled

20 thereto under the terms of the contract; and

21 ‘‘(B) with respect to disputes regarding

22 claims for payments or benefits under the terms

23 of the contract—
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1 ‘‘(i) to establish internal procedures

2 designed to expeditiously resolve such dis3 putes; and

4 ‘‘(ii) to establish, for disputes not re5 solved through procedures under clause (i),

6 procedures for 1 or more alternative means

7 of dispute resolution involving independent

8 third-party review under appropriate cir9 cumstances by entities mutually acceptable

10 to the Office and the carrier.

11 ‘‘(2) ELIGIBILITY.—A carrier’s determination

12 as to whether or not a particular individual is eligi13 ble to obtain long-term care insurance coverage

14 under this chapter shall be subject to review only to

15 the extent and in the manner provided in the appli16 cable master contract.

17 ‘‘(3) OTHER CLAIMS.—For purposes of apply18 ing the Contract Disputes Act of 1978 to disputes

19 arising under this chapter between a carrier and the

20 Office—

21 ‘‘(A) the agency board having jurisdiction

22 to decide an appeal relative to such a dispute

23 shall be such board of contract appeals as the

24 Director of the Office of Personnel Management

25 shall specify in writing (after appropriate ar-
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1 rangements, as described in section 8(c) of such

2 Act); and

3 ‘‘(B) the district courts of the United

4 States shall have original jurisdiction, concur5 rent with the United States Court of Federal

6 Claims, of any action described in section

7 10(a)(1) of such Act relative to such a dispute.

8 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in

9 this chapter shall be considered to grant authority

10 for the Office or a third-party reviewer to change the

11 terms of any contract under this chapter.

12 ‘‘(d) DURATION.—

13 ‘‘(1) IN GENERAL.—Each master contract

14 under this chapter shall be for a term of 7 years,

15 unless terminated earlier by the Office in accordance

16 with the terms of such contract. However, the rights

17 and responsibilities of the enrolled individual, the in18 surer, and the Office (or duly designated third-party

19 administrator) under such contract shall continue

20 with respect to such individual until the termination

21 of coverage of the enrolled individual or the effective

22 date of a successor contract thereto.

23 ‘‘(2) EXCEPTION.—

24 ‘‘(A) SHORTER DURATION.—In the case of

25 a master contract entered into before the end of
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1 the period described in subparagraph (B), para2 graph (1) shall be applied by substituting ‘end3 ing on the last day of the 7-year period de4 scribed in paragraph (2)(B)’ for ‘of 7 years’.

5 ‘‘(B) DEFINITION.—The period described

6 in this subparagraph is the 7-year period begin7 ning on the earliest date as of which any long8 term care insurance coverage under this chapter

9 becomes effective.

10 ‘‘(3) CONGRESSIONAL NOTIFICATION.—No later

11 than 180 days after receiving the second report re12 quired under section 9006(c), the President (or his

13 designee) shall submit to the Committees on Govern14 ment Reform and on Armed Services of the House

15 of Representatives and the Committees on Govern16 mental Affairs and on Armed Services of the Senate,

17 a written recommendation as to whether the pro18 gram under this chapter should be continued with19 out modification, terminated, or restructured. Dur20 ing the 180-day period following the date on which

21 the President (or his designee) submits the rec22 ommendation required under the preceding sentence,

23 the Office of Personnel Management may not take

24 any steps to rebid or otherwise contract for any cov25 erage to be available at any time following the expi-
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1 ration of the 7-year period described in paragraph

2 (2)(B).

3 ‘‘(4) FULL PORTABILITY.—Each master con4 tract under this chapter shall include such provisions

5 as may be necessary to ensure that, once an indi6 vidual becomes duly enrolled, long-term care insur7 ance coverage obtained by such individual pursuant

8 to that enrollment shall not be terminated due to

9 any change in status (such as separation from Gov10 ernment service or the uniformed services) or ceas11 ing to meet the requirements for being considered a

12 qualified relative (whether as a result of dissolution

13 of marriage or otherwise).

14 ‘‘§ 9004. Financing

15 ‘‘(a) IN GENERAL.—Each eligible individual obtain16 ing long-term care insurance coverage under this chapter

17 shall be responsible for 100 percent of the premiums for

18 such coverage.

19 ‘‘(b) WITHHOLDINGS.—

20 ‘‘(1) IN GENERAL.—The amount necessary to

21 pay the premiums for enrollment may—

22 ‘‘(A) in the case of an employee, be with23 held from the pay of such employee;

24 ‘‘(B) in the case of an annuitant, be with25 held from the annuity of such annuitant;
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1 ‘‘(C) in the case of a member of the uni2 formed services described in section 9001(3), be

3 withheld from the basic pay of such member;

4 and

5 ‘‘(D) in the case of a retired member of

6 the uniformed services described in section

7 9001(4), be withheld from the retired pay or re8 tainer pay payable to such member.

9 ‘‘(2) VOLUNTARY WITHHOLDINGS FOR QUALI10 FIED RELATIVES.—Withholdings to pay the pre11 miums for enrollment of a qualified relative may,

12 upon election of the appropriate eligible individual

13 (described in section 9001(1)–(4)), be withheld

14 under paragraph (1) to the same extent and in the

15 same manner as if enrollment were for such indi16 vidual.

17 ‘‘(c) DIRECT PAYMENTS.—All amounts withheld

18 under this section shall be paid directly to the carrier.

19 ‘‘(d) OTHER FORMS OF PAYMENT.—Any enrollee

20 who does not elect to have premiums withheld under sub21 section (b) or whose pay, annuity, or retired or retainer

22 pay (as referred to in subsection (b)(1)) is insufficient to

23 cover the withholding required for enrollment (or who is

24 not receiving any regular amounts from the Government,

25 as referred to in subsection (b)(1), from which any such
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1 withholdings may be made, and whose premiums are not

2 otherwise being provided for under subsection (b)(2)) shall

3 pay an amount equal to the full amount of those charges

4 directly to the carrier.

5 ‘‘(e) SEPARATE ACCOUNTING REQUIREMENT.—Each

6 carrier participating under this chapter shall maintain

7 records that permit it to account for all amounts received

8 under this chapter (including investment earnings on

9 those amounts) separate and apart from all other funds.

10 ‘‘(f) REIMBURSEMENTS.—

11 ‘‘(1) REASONABLE INITIAL COSTS.—

12 ‘‘(A) IN GENERAL.—The Employees’ Life

13 Insurance Fund is available, without fiscal year

14 limitation, for reasonable expenses incurred by

15 the Office of Personnel Management in admin16 istering this chapter before the start of the 7-

17 year period described in section 9003(d)(2)(B),

18 including reasonable implementation costs.

19 ‘‘(B) REIMBURSEMENT REQUIREMENT.—

20 Such Fund shall be reimbursed, before the end

21 of the first year of that 7-year period, for all

22 amounts obligated or expended under subpara23 graph (A) (including lost investment income).

24 Such reimbursement shall be made by carriers,

25 on a pro rata basis, in accordance with appro-
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1 priate provisions which shall be included in

2 master contracts under this chapter.

3 ‘‘(2) SUBSEQUENT COSTS.—

4 ‘‘(A) IN GENERAL.—There is hereby estab5 lished in the Employees’ Life Insurance Fund a

6 Long-Term Care Administrative Account, which

7 shall be available to the Office, without fiscal

8 year limitation, to defray reasonable expenses

9 incurred by the Office in administering this

10 chapter after the start of the 7-year period de11 scribed in section 9003(d)(2)(B).

12 ‘‘(B) REIMBURSEMENT REQUIREMENT.—

13 Each master contract under this chapter shall

14 include appropriate provisions under which the

15 carrier involved shall, during each year, make

16 such periodic contributions to the Long-Term

17 Care Administrative Account as necessary to

18 ensure that the reasonable anticipated expenses

19 of the Office in administering this chapter dur20 ing such year (adjusted to reconcile for any ear21 lier overestimates or underestimates under this

22 subparagraph) are defrayed.

23 ‘‘§ 9005. Preemption

24 ‘‘The terms of any contract under this chapter which

25 relate to the nature, provision, or extent of coverage or
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1 benefits (including payments with respect to benefits)

2 shall supersede and preempt any State or local law, or

3 any regulation issued thereunder, which relates to long4 term care insurance or contracts.

5 ‘‘§ 9006. Studies, reports, and audits

6 ‘‘(a) PROVISIONS RELATING TO CARRIERS.—Each

7 master contract under this chapter shall contain provi8 sions requiring the carrier—

9 ‘‘(1) to furnish such reasonable reports as the

10 Office of Personnel Management determines to be

11 necessary to enable it to carry out its functions

12 under this chapter; and

13 ‘‘(2) to permit the Office and representatives of

14 the General Accounting Office to examine such

15 records of the carrier as may be necessary to carry

16 out the purposes of this chapter.

17 ‘‘(b) PROVISIONS RELATING TO FEDERAL AGEN18 CIES.—Each Federal agency shall keep such records,

19 make such certifications, and furnish the Office, the car20 rier, or both, with such information and reports as the

21 Office may require.

22 ‘‘(c) REPORTS BY THE GENERAL ACCOUNTING OF23 FICE.—The General Accounting Office shall prepare and

24 submit to the President, the Office of Personnel Manage25 ment, and each House of Congress, before the end of the
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1 third and fifth years during which the program under this

2 chapter is in effect, a written report evaluating such pro3 gram. Each such report shall include an analysis of the

4 competitiveness of the program, as compared to both

5 group and individual coverage generally available to indi6 viduals in the private insurance market. The Office shall

7 cooperate with the General Accounting Office to provide

8 periodic evaluations of the program.

9 ‘‘§ 9007. Jurisdiction of courts

10 ‘‘The district courts of the United States have origi11 nal jurisdiction of a civil action or claim described in para12 graph (1) or (2) of section 9003(c), after such administra13 tive remedies as required under such paragraph (1) or (2)

14 (as applicable) have been exhausted, but only to the extent

15 judicial review is not precluded by any dispute resolution

16 or other remedy under this chapter.

17 ‘‘§ 9008. Administrative functions

18 ‘‘(a) IN GENERAL.—The Office of Personnel Manage19 ment shall prescribe regulations necessary to carry out

20 this chapter.

21 ‘‘(b) ENROLLMENT PERIODS.—The Office shall pro22 vide for periodic coordinated enrollment, promotion, and

23 education efforts in consultation with the carriers.

24 ‘‘(c) CONSULTATION.—Any regulations necessary to

25 effect the application and operation of this chapter with
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1 respect to an eligible individual described in paragraph (3)

2 or (4) of section 9001, or a qualified relative thereof, shall

3 be prescribed by the Office in consultation with the appro4 priate Secretary.

5 ‘‘(d) INFORMED DECISIONMAKING.—The Office shall

6 ensure that each eligible individual applying for long-term

7 care insurance under this chapter is furnished the infor8 mation necessary to enable that individual to evaluate the

9 advantages and disadvantages of obtaining long-term care

10 insurance under this chapter, including the following:

11 ‘‘(1) The principal long-term care benefits and

12 coverage available under this chapter, and how those

13 benefits and coverage compare to the range of long14 term care benefits and coverage otherwise generally

15 available.

16 ‘‘(2) Representative examples of the cost of

17 long-term care, and the sufficiency of the benefits

18 available under this chapter relative to those costs.

19 The information under this paragraph shall also

20 include—

21 ‘‘(A) the projected effect of inflation on the

22 value of those benefits; and

23 ‘‘(B) a comparison of the inflation-adjusted

24 value of those benefits to the projected future

25 costs of long-term care.
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1 ‘‘(3) Any rights individuals under this chapter

2 may have to cancel coverage, and to receive a total

3 or partial refund of premiums. The information

4 under this paragraph shall also include—

5 ‘‘(A) the projected number or percentage

6 of individuals likely to fail to maintain their

7 coverage (determined based on lapse rates expe8 rienced under similar group long-term care in9 surance programs and, when available, this

10 chapter); and

11 ‘‘(B)(i) a summary description of how and

12 when premiums for long-term care insurance

13 under this chapter may be raised;

14 ‘‘(ii) the premium history during the last

15 10 years for each qualified carrier offering long16 term care insurance under this chapter; and

17 ‘‘(iii) if cost increases are anticipated, the

18 projected premiums for a typical insured indi19 vidual at various ages.

20 ‘‘(4) The advantages and disadvantages of long21 term care insurance generally, relative to other

22 means of accumulating or otherwise acquiring the

23 assets that may be needed to meet the costs of long24 term care, such as through tax-qualified retirement

25 programs or other investment vehicles.
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1 ‘‘§ 9009. Cost accounting standards

2 ‘‘The cost accounting standards issued pursuant to

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

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

5 long-term care insurance contract under this chapter.’’.

6 (b) CONFORMING AMENDMENT.—The analysis for

7 part III of title 5, United States Code, is amended by add8 ing at the end of subpart G the following:

‘‘90. Long-Term Care Insurance ......................................................... 9001.’’.

9 SEC. 3. EFFECTIVE DATE.

10 The Office of Personnel Management shall take such

11 measures as may be necessary to ensure that long-term

12 care insurance coverage under title 5, United States Code,

13 as amended by this Act, may be obtained in time to take

14 effect not later than the first day of the first applicable

15 pay period of the first fiscal year which begins after the

16 end of the 18-month period beginning on the date of en17 actment of this Act.

18 TITLE I—FEDERAL LONG-TERM

19 CARE INSURANCE

20 SEC. 1001. SHORT TITLE.

21 This title may be cited as the ‘‘Long-Term Care Secu22 rity Act’’.
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1 SEC. 1002. LONG-TERM CARE INSURANCE.

2 (a) IN GENERAL.—Subpart G of part III of title 5,

3 United States Code, is amended by adding at the end the

4 following:

5 ‘‘CHAPTER 90—LONG-TERM CARE

6 INSURANCE

‘‘Sec.

‘‘9001. Definitions.

‘‘9002. Availability of insurance.

‘‘9003. Contracting authority.

‘‘9004. Financing.

‘‘9005. Preemption.

‘‘9006. Studies, reports, and audits.

‘‘9007. Jurisdiction of courts.

‘‘9008. Administrative functions.

‘‘9009. Cost accounting standards.

7 ‘‘§ 9001. Definitions

8 For purposes of this chapter:

9 ‘‘(1) EMPLOYEE.—The term ‘employee’ means—

10 ‘‘(A) an employee as defined by section

11 8901(1); and

12 ‘‘(B) an individual described in section

13 2105(e),

14 but does not include an individual employed by the

15 government of the District of Columbia.

16 ‘‘(2) ANNUITANT.—The term ‘annuitant’ has the

17 meaning such term would have under paragraph (3)

18 of section 8901 if, for purposes of such paragraph, the

19 term ‘employee’ were considered to have the meaning

20 given to it under paragraph (1) of this subsection.
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1 ‘‘(3) MEMBER OF THE UNIFORMED SERVICES.—

2 The term ‘member of the uniformed services’ means a

3 member of the uniformed services, other than a retired

4 member of the uniformed services, who is—

5 ‘‘(A) on active duty or full-time National

6 Guard duty for a period of more than 30 days;

7 and

8 ‘‘(B) a member of the Selected Reserve.

9 ‘‘(4) RETIRED MEMBER OF THE UNIFORMED

10 SERVICES.—The term ‘retired member of the uni11 formed services’ means a member or former member

12 of the uniformed services entitled to retired or re13 tainer pay, including a member or former member re14 tired under chapter 1223 of title 10 who has attained

15 the age of 60 and who satisfies such eligibility re16 quirements as the Office of Personnel Management

17 prescribes under section 9008.

18 ‘‘(5) QUALIFIED RELATIVE.—The term ‘qualified

19 relative’ means each of the following:

20 ‘‘(A) The spouse of an individual described

21 in paragraph (1), (2), (3), or (4).

22 ‘‘(B) A parent, stepparent, or parent-in-law

23 of an individual described in paragraph (1) or

24 (3).
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1 ‘‘(C) A child (including an adopted child, a

2 stepchild, or, to the extent the Office of Personnel

3 Management by regulation provides, a foster

4 child) of an individual described in paragraph

5 (1), (2), (3), or (4), if such child is at least 18

6 years of age.

7 ‘‘(D) An individual having such other rela8 tionship to an individual described in paragraph

9 (1), (2), (3), or (4) as the Office may by regula10 tion prescribe.

11 ‘‘(6) ELIGIBLE INDIVIDUAL.—The term ‘eligible

12 individual’ refers to an individual described in para13 graph (1), (2), (3), (4), or (5).

14 ‘‘(7) QUALIFIED CARRIER.—The term ‘qualified

15 carrier’ means an insurance company (or consortium

16 of insurance companies) that is licensed to issue long17 term care insurance in all States, taking any subsidi18 aries of such a company into account (and, in the

19 case of a consortium, considering the member compa20 nies and any subsidiaries thereof, collectively).

21 ‘‘(8) STATE.—The term ‘State’ includes the Dis22 trict of Columbia.

23 ‘‘(9) QUALIFIED LONG-TERM CARE INSURANCE

24 CONTRACT.—The term ‘qualified long-term care insur-
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1 ance contract’ has the meaning given such term by

2 section 7702B of the Internal Revenue Code of 1986.

3 ‘‘(10) APPROPRIATE SECRETARY.—The term ‘ap4 propriate Secretary’ means—

5 ‘‘(A) except as otherwise provided in this

6 paragraph, the Secretary of Defense;

7 ‘‘(B) with respect to the Coast Guard when

8 it is not operating as a service of the Navy, the

9 Secretary of Transportation;

10 ‘‘(C) with respect to the commissioned corps

11 of the National Oceanic and Atmospheric Ad12 ministration, the Secretary of Commerce; and

13 ‘‘(D) with respect to the commissioned corps

14 of the Public Health Service, the Secretary of

15 Health and Human Services.

16 ‘‘§ 9002. Availability of insurance

17 ‘‘(a) IN GENERAL.—The Office of Personnel Manage18 ment shall establish and, in consultation with the appro19 priate Secretaries, administer a program through which an

20 individual described in paragraph (1), (2), (3), (4), or (5)

21 of section 9001 may obtain long-term care insurance cov22 erage under this chapter for such individual.

23 ‘‘(b) GENERAL REQUIREMENTS.—Long-term care in24 surance may not be offered under this chapter unless—
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1 ‘‘(1) the only coverage provided is under quali2 fied long-term care insurance contracts; and

3 ‘‘(2) each insurance contract under which any

4 such coverage is provided is issued by a qualified car5 rier.

6 ‘‘(c) DOCUMENTATION REQUIREMENT.—As a condition

7 for obtaining long-term care insurance coverage under this

8 chapter based on one’s status as a qualified relative, an ap9 plicant shall provide documentation to demonstrate the re10 lationship, as prescribed by the Office.

11 ‘‘(d) UNDERWRITING STANDARDS.—

12 ‘‘(1) DISQUALIFYING CONDITION.—Nothing in

13 this chapter shall be considered to require that long14 term care insurance coverage be made available in the

15 case of any individual who would be eligible for bene16 fits immediately.

17 ‘‘(2) SPOUSAL PARITY.—For the purpose of un18 derwriting standards, a spouse of an individual de19 scribed in paragraph (1), (2), (3), or (4) of section

20 9001 shall, as nearly as practicable, be treated like

21 that individual.

22 ‘‘(3) GUARANTEED ISSUE.—Nothing in this

23 chapter shall be considered to require that long-term

24 care insurance coverage be guaranteed to an eligible

25 individual.
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1 ‘‘(4) REQUIREMENT THAT CONTRACT BE FULLY

2 INSURED.—In addition to the requirements otherwise

3 applicable under section 9001(9), in order to be con4 sidered a qualified long-term care insurance contract

5 for purposes of this chapter, a contract must be fully

6 insured, whether through reinsurance with other com7 panies or otherwise.

8 ‘‘(5) HIGHER STANDARDS ALLOWABLE.—Nothing

9 in this chapter shall, in the case of an individual ap10 plying for long-term care insurance coverage under

11 this chapter after the expiration of such individual’s

12 first opportunity to enroll, preclude the application of

13 underwriting standards more stringent than those

14 that would have applied if that opportunity had not

15 yet expired.

16 ‘‘(e) GUARANTEED RENEWABILITY.—The benefits and

17 coverage made available to eligible individuals under any

18 insurance contract under this chapter shall be guaranteed

19 renewable (as defined by section 7A(2) of the model regula20 tions described in section 7702B(g)(2) of the Internal Rev21 enue Code of 1986), including the right to have insurance

22 remain in effect so long as premiums continue to be timely

23 made. However, the authority to revise premiums under

24 this chapter shall be available only on a class basis and

25 only to the extent otherwise allowable under section 9003(b).
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1 ‘‘§ 9003. Contracting authority

2 ‘‘(a) IN GENERAL.—The Office of Personnel Manage3 ment shall, without regard to section 5 of title 41 or any

4 other statute requiring competitive bidding, contract with

5 one or more qualified carriers for a policy or policies of

6 long-term care insurance. The Office shall ensure that each

7 resulting contract (hereafter in this chapter referred to as

8 a ‘master contract’) is awarded on the basis of contractor

9 qualifications, price, and reasonable competition.

10 ‘‘(b) TERMS AND CONDITIONS.—

11 ‘‘(1) IN GENERAL.—Each master contract under

12 this chapter shall contain—

13 ‘‘(A) a detailed statement of the benefits of14 fered (including any maximums, limitations, ex15 clusions, and other definitions of benefits);

16 ‘‘(B) the premiums charged (including any

17 limitations or other conditions on their subse18 quent adjustment);

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

20 ‘‘(D) such other terms and conditions as

21 may be mutually agreed to by the Office and the

22 carrier involved, consistent with the requirements

23 of this chapter.

24 ‘‘(2) PREMIUMS.—Premiums charged under each

25 master contract entered into under this section shall

26 reasonably and equitably reflect the cost of the benefits
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1 provided, as determined by the Office. The premiums

2 shall not be adjusted during the term of the contract

3 unless mutually agreed to by the Office and the car4 rier.

5 ‘‘(3) NONRENEWABILITY.—Master contracts

6 under this chapter may not be made automatically

7 renewable.

8 ‘‘(c) PAYMENT OF REQUIRED BENEFITS; DISPUTE

9 RESOLUTION.—

10 ‘‘(1) IN GENERAL.—Each master contract under

11 this chapter shall require the carrier to agree—

12 ‘‘(A) to provide payments or benefits to an

13 eligible individual if such individual is entitled

14 thereto under the terms of the contract; and

15 ‘‘(B) with respect to disputes regarding

16 claims for payments or benefits under the terms

17 of the contract—

18 ‘‘(i) to establish internal procedures de19 signed to expeditiously resolve such dis20 putes; and

21 ‘‘(ii) to establish, for disputes not re22 solved through procedures under clause (i),

23 procedures for one or more alternative

24 means of dispute resolution involving inde25 pendent third-party review under appro-
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1 priate circumstances by entities mutually

2 acceptable to the Office and the carrier.

3 ‘‘(2) ELIGIBILITY.—A carrier’s determination as

4 to whether or not a particular individual is eligible

5 to obtain long-term care insurance coverage under

6 this chapter shall be subject to review only to the ex7 tent and in the manner provided in the applicable

8 master contract.

9 ‘‘(3) OTHER CLAIMS.—For purposes of applying

10 the Contract Disputes Act of 1978 to disputes arising

11 under this chapter between a carrier and the Office—

12 ‘‘(A) the agency board having jurisdiction

13 to decide an appeal relative to such a dispute

14 shall be such board of contract appeals as the Di15 rector of the Office of Personnel Management

16 shall specify in writing (after appropriate ar17 rangements, as described in section 8(c) of such

18 Act); and

19 ‘‘(B) the district courts of the United States

20 shall have original jurisdiction, concurrent with

21 the United States Court of Federal Claims, of

22 any action described in section 10(a)(1) of such

23 Act relative to such a dispute.

24 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in this

25 chapter shall be considered to grant authority for the
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1 Office or a third-party reviewer to change the terms

2 of any contract under this chapter.

3 ‘‘(d) DURATION.—

4 ‘‘(1) IN GENERAL.—Each master contract under

5 this chapter shall be for a term of 7 years, unless ter6 minated earlier by the Office in accordance with the

7 terms of such contract. However, the rights and re8 sponsibilities of the enrolled individual, the insurer,

9 and the Office (or duly designated third-party admin10 istrator) under such contract shall continue with re11 spect to such individual until the termination of cov12 erage of the enrolled individual or the effective date

13 of a successor contract thereto.

14 ‘‘(2) EXCEPTION.—

15 ‘‘(A) SHORTER DURATION.—In the case of a

16 master contract entered into before the end of the

17 period described in subparagraph (B), para18 graph (1) shall be applied by substituting ‘end19 ing on the last day of the 7-year period described

20 in paragraph (2)(B)’ for ‘of 7 years’.

21 ‘‘(B) DEFINITION.—The period described in

22 this subparagraph is the 7-year period beginning

23 on the earliest date as of which any long-term

24 care insurance coverage under this chapter be25 comes effective.
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1 ‘‘(3) CONGRESSIONAL NOTIFICATION.—No later

2 than 180 days after receiving the second report re3 quired under section 9006(c), the President (or his

4 designee) shall submit to the Committees on Govern5 ment Reform and on Armed Services of the House of

6 Representatives and the Committees on Governmental

7 Affairs and on Armed Services of the Senate, a writ8 ten recommendation as to whether the program under

9 this chapter should be continued without modifica10 tion, terminated, or restructured. During the 180-day

11 period following the date on which the President (or

12 his designee) submits the recommendation required

13 under the preceding sentence, the Office of Personnel

14 Management may not take any steps to rebid or oth15 erwise contract for any coverage to be available at

16 any time following the expiration of the 7-year period

17 described in paragraph (2)(B).

18 ‘‘(4) FULL PORTABILITY.—Each master contract

19 under this chapter shall include such provisions as

20 may be necessary to ensure that, once an individual

21 becomes duly enrolled, long-term care insurance cov22 erage obtained by such individual pursuant to that

23 enrollment shall not be terminated due to any change

24 in status (such as separation from Government serv25 ice or the uniformed services) or ceasing to meet the
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1 requirements for being considered a qualified relative

2 (whether as a result of dissolution of marriage or oth3 erwise).

4 ‘‘§ 9004. Financing

5 ‘‘(a) IN GENERAL.—Each eligible individual obtaining

6 long-term care insurance coverage under this chapter shall

7 be responsible for 100 percent of the premiums for such cov8 erage.

9 ‘‘(b) WITHHOLDINGS.—

10 ‘‘(1) IN GENERAL.—The amount necessary to

11 pay the premiums for enrollment may—

12 ‘‘(A) in the case of an employee, be withheld

13 from the pay of such employee;

14 ‘‘(B) in the case of an annuitant, be with15 held from the annuity of such annuitant;

16 ‘‘(C) in the case of a member of the uni17 formed services described in section 9001(3), be

18 withheld from the pay of such member; and

19 ‘‘(D) in the case of a retired member of the

20 uniformed services described in section 9001(4),

21 be withheld from the retired pay or retainer pay

22 payable to such member.

23 ‘‘(2) VOLUNTARY WITHHOLDINGS FOR QUALIFIED

24 RELATIVES.—Withholdings to pay the premiums for

25 enrollment of a qualified relative may, upon election
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1 of the appropriate eligible individual (described in

2 section 9001(1)–(4)), be withheld under paragraph

3 (1) to the same extent and in the same manner as if

4 enrollment were for such individual.

5 ‘‘(c) DIRECT PAYMENTS.—All amounts withheld under

6 this section shall be paid directly to the carrier.

7 ‘‘(d) OTHER FORMS OF PAYMENT.—Any enrollee who

8 does not elect to have premiums withheld under subsection

9 (b) or whose pay, annuity, or retired or retainer pay (as

10 referred to in subsection (b)(1)) is insufficient to cover the

11 withholding required for enrollment (or who is not receiving

12 any regular amounts from the Government, as referred to

13 in subsection (b)(1), from which any such withholdings may

14 be made, and whose premiums are not otherwise being pro15 vided for under subsection (b)(2)) shall pay an amount

16 equal to the full amount of those charges directly to the car17 rier.

18 ‘‘(e) SEPARATE ACCOUNTING REQUIREMENT.—Each

19 carrier participating under this chapter shall maintain

20 records that permit it to account for all amounts received

21 under this chapter (including investment earnings on those

22 amounts) separate and apart from all other funds.

23 ‘‘(f) REIMBURSEMENTS.—

24 ‘‘(1) REASONABLE INITIAL COSTS.—
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1 ‘‘(A) IN GENERAL.—The Employees’ Life

2 Insurance Fund is available, without fiscal year

3 limitation, for reasonable expenses incurred by

4 the Office of Personnel Management in admin5 istering this chapter before the start of the 7-year

6 period described in section 9003(d)(2)(B), in7 cluding reasonable implementation costs.

8 ‘‘(B) REIMBURSEMENT REQUIREMENT.—

9 Such Fund shall be reimbursed, before the end of

10 the first year of that 7-year period, for all

11 amounts obligated or expended under subpara12 graph (A) (including lost investment income).

13 Such reimbursement shall be made by carriers,

14 on a pro rata basis, in accordance with appro15 priate provisions which shall be included in

16 master contracts under this chapter.

17 ‘‘(2) SUBSEQUENT COSTS.—

18 ‘‘(A) IN GENERAL.—There is hereby estab19 lished in the Employees’ Life Insurance Fund a

20 Long-Term Care Administrative Account, which

21 shall be available to the Office, without fiscal

22 year limitation, to defray reasonable expenses in23 curred by the Office in administering this chap24 ter after the start of the 7-year period described

25 in section 9003(d)(2)(B).
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1 ‘‘(B) REIMBURSEMENT REQUIREMENT.—

2 Each master contract under this chapter shall

3 include appropriate provisions under which the

4 carrier involved shall, during each year, make

5 such periodic contributions to the Long-Term

6 Care Administrative Account as necessary to en7 sure that the reasonable anticipated expenses of

8 the Office in administering this chapter during

9 such year (adjusted to reconcile for any earlier

10 overestimates or underestimates under this sub11 paragraph) are defrayed.

12 ‘‘§ 9005. Preemption

13 ‘‘The terms of any contract under this chapter which

14 relate to the nature, provision, or extent of coverage or bene15 fits (including payments with respect to benefits) shall su16 persede and preempt any State or local law, or any regula17 tion issued thereunder, which relates to long-term care in18 surance or contracts.

19 ‘‘§ 9006. Studies, reports, and audits

20 ‘‘(a) PROVISIONS RELATING TO CARRIERS.—Each

21 master contract under this chapter shall contain provisions

22 requiring the carrier—

23 ‘‘(1) to furnish such reasonable reports as the Of24 fice of Personnel Management determines to be nec-
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1 essary to enable it to carry out its functions under

2 this chapter; and

3 ‘‘(2) to permit the Office and representatives of

4 the General Accounting Office to examine such records

5 of the carrier as may be necessary to carry out the

6 purposes of this chapter.

7 ‘‘(b) PROVISIONS RELATING TO FEDERAL AGEN8 CIES.—Each Federal agency shall keep such records, make

9 such certifications, and furnish the Office, the carrier, or

10 both, with such information and reports as the Office may

11 require.

12 ‘‘(c) REPORTS BY THE GENERAL ACCOUNTING OF13 FICE.—The General Accounting Office shall prepare and

14 submit to the President, the Office of Personnel Manage15 ment, and each House of Congress, before the end of the

16 third and fifth years during which the program under this

17 chapter is in effect, a written report evaluating such pro18 gram. Each such report shall include an analysis of the

19 competitiveness of the program, as compared to both group

20 and individual coverage generally available to individuals

21 in the private insurance market. The Office shall cooperate

22 with the General Accounting Office to provide periodic eval23 uations of the program.
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1 ‘‘§ 9007. Jurisdiction of courts

2 ‘‘The district courts of the United States have original

3 jurisdiction of a civil action or claim described in para4 graph (1) or (2) of section 9003(c), after such administra5 tive remedies as required under such paragraph (1) or (2)

6 (as applicable) have been exhausted, but only to the extent

7 judicial review is not precluded by any dispute resolution

8 or other remedy under this chapter.

9 ‘‘§ 9008. Administrative functions

10 ‘‘(a) IN GENERAL.—The Office of Personnel Manage11 ment shall prescribe regulations necessary to carry out this

12 chapter.

13 ‘‘(b) ENROLLMENT PERIODS.—The Office shall provide

14 for periodic coordinated enrollment, promotion, and edu15 cation efforts in consultation with the carriers.

16 ‘‘(c) CONSULTATION.—Any regulations necessary to ef17 fect the application and operation of this chapter with re18 spect to an eligible individual described in paragraph (3)

19 or (4) of section 9001, or a qualified relative thereof, shall

20 be prescribed by the Office in consultation with the appro21 priate Secretary.

22 ‘‘(d) INFORMED DECISIONMAKING.—The Office shall

23 ensure that each eligible individual applying for long-term

24 care insurance under this chapter is furnished the informa25 tion necessary to enable that individual to evaluate the ad-
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1 vantages and disadvantages of obtaining long-term care in2 surance under this chapter, including the following:

3 ‘‘(1) The principal long-term care benefits and

4 coverage available under this chapter, and how those

5 benefits and coverage compare to the range of long6 term care benefits and coverage otherwise generally

7 available.

8 ‘‘(2) Representative examples of the cost of long9 term care, and the sufficiency of the benefits available

10 under this chapter relative to those costs. The infor11 mation under this paragraph shall also include—

12 ‘‘(A) the projected effect of inflation on the

13 value of those benefits; and

14 ‘‘(B) a comparison of the inflation-adjusted

15 value of those benefits to the projected future

16 costs of long-term care.

17 ‘‘(3) Any rights individuals under this chapter

18 may have to cancel coverage, and to receive a total or

19 partial refund of premiums. The information under

20 this paragraph shall also include—

21 ‘‘(A) the projected number or percentage of

22 individuals likely to fail to maintain their cov23 erage (determined based on lapse rates experi24 enced under similar group long-term care insur-
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1 ance programs and, when available, this chap2 ter); and

3 ‘‘(B)(i) a summary description of how and

4 when premiums for long-term care insurance

5 under this chapter may be raised;

6 ‘‘(ii) the premium history during the last

7 10 years for each qualified carrier offering long8 term care insurance under this chapter; and

9 ‘‘(iii) if cost increases are anticipated, the

10 projected premiums for a typical insured indi11 vidual at various ages.

12 ‘‘(4) The advantages and disadvantages of long13 term care insurance generally, relative to other means

14 of accumulating or otherwise acquiring the assets that

15 may be needed to meet the costs of long-term care,

16 such as through tax-qualified retirement programs or

17 other investment vehicles.

18 ‘‘§ 9009. Cost accounting standards

19 ‘‘The cost accounting standards issued pursuant to sec20 tion 26(f) of the Office of Federal Procurement Policy Act

21 (41 U.S.C. 422(f)) shall not apply with respect to a long22 term care insurance contract under this chapter.’’.

23 (b) CONFORMING AMENDMENT.—The analysis for part

24 III of title 5, United States Code, is amended by adding

25 at the end of subpart G the following:

‘‘90. Long-Term Care Insurance ............................................................... 9001.’’.
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1 SEC. 1003. EFFECTIVE DATE.

2 The Office of Personnel Management shall take such

3 measures as may be necessary to ensure that long-term care

4 insurance coverage under title 5, United States Code, as

5 amended by this title, may be obtained in time to take effect

6 not later than the first day of the first applicable pay period

7 of the first fiscal year which begins after the end of the 18-

8 month period beginning on the date of the enactment of this

9 Act.

10 TITLE II—FEDERAL RETIREMENT

11 COVERAGE ERRORS CORREC12 TION

13 SEC. 2001. SHORT TITLE; TABLE OF CONTENTS.

14 (a) SHORT TITLE.—This title may be cited as the

15 ‘‘Federal Erroneous Retirement Coverage Corrections Act’’.

16 (b) TABLE OF CONTENTS.—The table of contents for

17 this title is as follows:

TITLE II—FEDERAL RETIREMENT COVERAGE ERRORS CORRECTION

Sec. 2001. Short title; table of contents.

Sec. 2002. Definitions.

Sec. 2003. Applicability.

Sec. 2004. Irrevocability of elections.

Subtitle A—Description of Retirement Coverage Errors to Which This Title

Applies and Measures for Their Rectification

CHAPTER 1—EMPLOYEES AND ANNUITANTS WHO SHOULD HAVE BEEN FERS

COVERED, BUT WHO WERE ERRONEOUSLY CSRS COVERED OR CSRS-OFFSET COVERED INSTEAD, AND SURVIVORS OF SUCH EMPLOYEES AND ANNUITANTS

Sec. 2101. Employees.

Sec. 2102. Annuitants and survivors.
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CHAPTER 2—EMPLOYEE WHO SHOULD HAVE BEEN FERS COVERED, CSRSOFFSET COVERED, OR CSRS COVERED, BUT WHO WAS ERRONEOUSLY SOCIAL SECURITY-ONLY COVERED INSTEAD

Sec. 2111. Applicability.

Sec. 2112. Correction mandatory.

CHAPTER 3—EMPLOYEE WHO SHOULD OR COULD HAVE BEEN SOCIAL SECURITY-ONLY COVERED BUT WHO WAS ERRONEOUSLY CSRS-OFFSET COVERED

OR CSRS COVERED INSTEAD

Sec. 2121. Employee who should be Social Security-Only covered, but who is erroneously CSRS or CSRS-Offset covered instead.

CHAPTER 4—EMPLOYEE WHO WAS ERRONEOUSLY FERS COVERED

Sec. 2131. Employee who should be Social Security-Only covered, CSRS covered,

or CSRS-Offset covered and is not FERS-Eligible, but who is

erroneously FERS covered instead.

Sec. 2132. FERS-Eligible employee who should have been CSRS covered, CSRSOffset covered, or Social Security-Only covered, but who was erroneously FERS covered instead without an election.

Sec. 2133. Retroactive effect.

CHAPTER 5—EMPLOYEE WHO SHOULD HAVE BEEN CSRS-OFFSET COVERED,

BUT WHO WAS ERRONEOUSLY CSRS COVERED INSTEAD

Sec. 2141. Applicability.

Sec. 2142. Correction mandatory.

CHAPTER 6—EMPLOYEE WHO SHOULD HAVE BEEN CSRS COVERED, BUT

WHO WAS ERRONEOUSLY CSRS-OFFSET COVERED INSTEAD

Sec. 2151. Applicability.

Sec. 2152. Correction mandatory.

Subtitle B—General Provisions

Sec. 2201. Identification and notification requirements.

Sec. 2202. Information to be furnished to and by authorities administering this

title.

Sec. 2203. Service credit deposits.

Sec. 2204. Provisions related to Social Security coverage of misclassified employees.

Sec. 2205. Thrift Savings Plan treatment for certain individuals.

Sec. 2206. Certain agency amounts to be paid into or remain in the CSRDF.

Sec. 2207. CSRS coverage determinations to be approved by OPM.

Sec. 2208. Discretionary actions by Director.

Sec. 2209. Regulations.

Subtitle C—Other Provisions

Sec. 2301. Provisions to authorize continued conformity of other Federal retirement systems.

Sec. 2302. Authorization of payments.

Sec. 2303. Individual right of action preserved for amounts not otherwise provided for under this title.
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Subtitle D—Effective Date

Sec. 2401. Effective date.

1 SEC. 2002. DEFINITIONS.

2 For purposes of this title:

3 (1) ANNUITANT.—The term ‘‘annuitant’’ has the

4 meaning given such term under section 8331(9) or

5 8401(2) of title 5, United States Code.

6 (2) CSRS.—The term ‘‘CSRS’’ means the Civil

7 Service Retirement System.

8 (3) CSRDF.—The term ‘‘CSRDF’’ means the

9 Civil Service Retirement and Disability Fund.

10 (4) CSRS COVERED.—The term ‘‘CSRS cov11 ered’’, with respect to any service, means service that

12 is subject to the provisions of subchapter III of chap13 ter 83 of title 5, United States Code, other than serv14 ice subject to section 8334(k) of such title.

15 (5) CSRS-OFFSET COVERED.—The term ‘‘CSRS16 Offset covered’’, with respect to any service, means

17 service that is subject to the provisions of subchapter

18 III of chapter 83 of title 5, United States Code, and

19 to section 8334(k) of such title.

20 (6) EMPLOYEE.—The term ‘‘employee’’ has the

21 meaning given such term under section 8331(1) or

22 8401(11) of title 5, United States Code.

23 (7) EXECUTIVE DIRECTOR.—The term ‘‘Execu24 tive Director of the Federal Retirement Thrift Invest-
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1 ment Board’’ or ‘‘Executive Director’’ means the Ex2 ecutive Director appointed under section 8474 of title

3 5, United States Code.

4 (8) FERS.—The term ‘‘FERS’’ means the Fed5 eral Employees’ Retirement System.

6 (9) FERS COVERED.—The term ‘‘FERS cov7 ered’’, with respect to any service, means service that

8 is subject to chapter 84 of title 5, United States Code.

9 (10) FORMER EMPLOYEE.—The term ‘‘former

10 employee’’ means an individual who was an em11 ployee, but who is not an annuitant.

12 (11) OASDI TAXES.—The term ‘‘OASDI taxes’’

13 means the OASDI employee tax and the OASDI em14 ployer tax.

15 (12) OASDI EMPLOYEE TAX.—The term

16 ‘‘OASDI employee tax’’ means the tax imposed under

17 section 3101(a) of the Internal Revenue Code of 1986

18 (relating to Old-Age, Survivors and Disability Insur19 ance).

20 (13) OASDI EMPLOYER TAX.—The term

21 ‘‘OASDI employer tax’’ means the tax imposed under

22 section 3111(a) of the Internal Revenue Code of 1986

23 (relating to Old-Age, Survivors and Disability Insur24 ance).
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1 (14) OASDI TRUST FUNDS.—The term ‘‘OASDI

2 trust funds’’ means the Federal Old-Age and Sur3 vivors Insurance Trust Fund and the Federal Dis4 ability Insurance Trust Fund.

5 (15) OFFICE.—The term ‘‘Office’’ means the Of6 fice of Personnel Management.

7 (16) RETIREMENT COVERAGE DETERMINATION.—

8 The term ‘‘retirement coverage determination’’ means

9 a determination by an employee or agent of the Gov10 ernment as to whether a particular type of Govern11 ment service is CSRS covered, CSRS-Offset covered,

12 FERS covered, or Social Security-Only covered.

13 (17) RETIREMENT COVERAGE ERROR.—The term

14 ‘‘retirement coverage error’’ means an erroneous re15 tirement coverage determination that was in effect for

16 a minimum period of 3 years of service after Decem17 ber 31, 1986.

18 (18) SOCIAL SECURITY-ONLY COVERED.—The

19 term ‘‘Social Security-Only covered’’, with respect to

20 any service, means Government service that—

21 (A) constitutes employment under section

22 210 of the Social Security Act (42 U.S.C. 410);

23 and

24 (B)(i) is subject to OASDI taxes; but

25 (ii) is not subject to CSRS or FERS.
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1 (19) SURVIVOR.—The term ‘‘survivor’’ has the

2 meaning given such term under section 8331(10) or

3 8401(28) of title 5, United States Code.

4 (20) THRIFT SAVINGS FUND.—The term ‘‘Thrift

5 Savings Fund’’ means the Thrift Savings Fund estab6 lished under section 8437 of title 5, United States

7 Code.

8 SEC. 2003. APPLICABILITY.

9 (a) IN GENERAL.—This title shall apply with respect

10 to retirement coverage errors that occur before, on, or after

11 the date of enactment of this Act.

12 (b) LIMITATION.—Except as otherwise provided in this

13 title, this title shall not apply to any erroneous retirement

14 coverage determination that was in effect for a period of

15 less than 3 years of service after December 31, 1986.

16 SEC. 2004. IRREVOCABILITY OF ELECTIONS.

17 Any election made (or deemed to have been made) by

18 an employee or any other individual under this title shall

19 be irrevocable.
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1 Subtitle A—Description of Retire2 ment Coverage Errors to Which

3 This Title Applies and Measures

4 for Their Rectification

5 CHAPTER 1—EMPLOYEES AND ANNU6 ITANTS WHO SHOULD HAVE BEEN

7 FERS COVERED, BUT WHO WERE ERRO8 NEOUSLY CSRS COVERED OR CSRS9 OFFSET COVERED INSTEAD, AND SUR10 VIVORS OF SUCH EMPLOYEES AND AN11 NUITANTS

12 SEC. 2101. EMPLOYEES.

13 (a) APPLICABILITY.—This section shall apply in the

14 case of any employee or former employee who should be (or

15 should have been) FERS covered but, as a result of a retire16 ment coverage error, is (or was) CSRS covered or CSRS17 Offset covered instead.

18 (b) UNCORRECTED ERROR.—

19 (1) APPLICABILITY.—This subsection applies if

20 the retirement coverage error has not been corrected

21 before the effective date of the regulations described

22 under paragraph (3). As soon as practicable after dis23 covery of the error, and subject to the right of an elec24 tion under paragraph (2), if CSRS covered or CSRS25 Offset covered, such individual shall be treated as
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1 CSRS-Offset covered, retroactive to the date of the re2 tirement coverage error.

3 (2) COVERAGE.—

4 (A) ELECTION.—Upon written notice of a

5 retirement coverage error, an individual may

6 elect to be CSRS-Offset covered or FERS covered,

7 effective as of the date of the retirement coverage

8 error. Such election shall be made not later than

9 180 days after the date of receipt of such notice.

10 (B) NONELECTION.—If the individual does

11 not make an election by the date provided under

12 subparagraph (A), a CSRS-Offset covered indi13 vidual shall remain CSRS-Offset covered and a

14 CSRS covered individual shall be treated as

15 CSRS-Offset covered.

16 (3) REGULATIONS.—The Office shall prescribe

17 regulations to carry out this subsection.

18 (c) CORRECTED ERROR.—

19 (1) APPLICABILITY.—This subsection applies if

20 the retirement coverage error was corrected before the

21 effective date of the regulations described under sub22 section (b).

23 (2) COVERAGE.—

24 (A) ELECTION.—
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1 (i) CSRS-OFFSET COVERED.—Not

2 later than 180 days after the date of enact3 ment of this Act, the Office shall prescribe

4 regulations authorizing individuals to elect,

5 during the 18-month period immediately

6 following the effective date of such regula7 tions, to be CSRS-Offset covered, effective as

8 of the date of the retirement coverage error.

9 (ii) THRIFT SAVINGS FUND CONTRIBU10 TIONS.—If under this section an individual

11 elects to be CSRS-Offset covered, all em12 ployee contributions to the Thrift Savings

13 Fund made during the period of FERS cov14 erage (and earnings on such contributions)

15 may remain in the Thrift Savings Fund in

16 accordance with regulations prescribed by

17 the Executive Director, notwithstanding

18 any limit that would otherwise be applica19 ble.

20 (B) PREVIOUS SETTLEMENT PAYMENT.—An

21 individual who previously received a payment

22 ordered by a court or provided as a settlement of

23 claim for losses resulting from a retirement cov24 erage error shall not be entitled to make an elec25 tion under this subsection unless that amount is
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1 waived in whole or in part under section 2208,

2 and any amount not waived is repaid.

3 (C) INELIGIBILITY FOR ELECTION.—An in4 dividual who, subsequent to correction of the re5 tirement coverage error, received a refund of re6 tirement deductions under section 8424 of title 5,

7 United States Code, or a distribution under sec8 tion 8433 (b), (c), or (h)(1)(A) of title 5, United

9 States Code, may not make an election under

10 this subsection.

11 (3) CORRECTIVE ACTION TO REMAIN IN EF12 FECT.—If an individual is ineligible to make an elec13 tion or does not make an election under paragraph

14 (2) before the end of any time limitation under this

15 subsection, the corrective action taken before such time

16 limitation shall remain in effect.

17 SEC. 2102. ANNUITANTS AND SURVIVORS.

18 (a) IN GENERAL.—This section shall apply in the case

19 of an individual who is—

20 (1) an annuitant who should have been FERS

21 covered but, as a result of a retirement coverage error,

22 was CSRS covered or CSRS-Offset covered instead; or

23 (2) a survivor of an employee who should have

24 been FERS covered but, as a result of a retirement
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1 coverage error, was CSRS covered or CSRS-Offset

2 covered instead.

3 (b) COVERAGE.—

4 (1) ELECTION.—Not later than 180 days after

5 the date of enactment of this Act, the Office shall pre6 scribe regulations authorizing an individual described

7 under subsection (a) to elect CSRS-Offset coverage or

8 FERS coverage, effective as of the date of the retire9 ment coverage error.

10 (2) TIME LIMITATION.—An election under this

11 subsection shall be made not later than 18 months

12 after the effective date of the regulations prescribed

13 under paragraph (1).

14 (3) REDUCED ANNUITY.—

15 (A) AMOUNT IN ACCOUNT.—If the indi16 vidual elects CSRS-Offset coverage, the amount

17 in the employee’s Thrift Savings Fund account

18 under subchapter III of chapter 84 of title 5,

19 United States Code, on the date of retirement

20 that represents the Government’s contributions

21 and earnings on those contributions (whether or

22 not such amount was subsequently distributed

23 from the Thrift Savings Fund) will form the

24 basis for a reduction in the individual’s annuity,

25 under regulations prescribed by the Office.
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1 (B) REDUCTION.—The reduced annuity to

2 which the individual is entitled shall be equal to

3 an amount which, when taken together with the

4 amount referred to in subparagraph (A), would

5 result in the present value of the total being ac6 tuarially equivalent to the present value of an

7 unreduced CSRS-Offset annuity that would have

8 been provided the individual.

9 (4) REDUCED BENEFIT.—If—

10 (A) a surviving spouse elects CSRS-Offset

11 benefits; and

12 (B) a FERS basic employee death benefit

13 under section 8442(b) of title 5, United States

14 Code, was previously paid;

15 then the survivor’s CSRS-Offset benefit shall be sub16 ject to a reduction, under regulations prescribed by

17 the Office. The reduced annuity to which the indi18 vidual is entitled shall be equal to an amount which,

19 when taken together with the amount of the payment

20 referred to under subparagraph (B) would result in

21 the present value of the total being actuarially equiva22 lent to the present value of an unreduced CSRS-Offset

23 annuity that would have been provided the indi24 vidual.
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1 (5) PREVIOUS SETTLEMENT PAYMENT.—An indi2 vidual who previously received a payment ordered by

3 a court or provided as a settlement of claim for losses

4 resulting from a retirement coverage error may not

5 make an election under this subsection unless repay6 ment of that amount is waived in whole or in part

7 under section 2208, and any amount not waived is

8 repaid.

9 (c) NONELECTION.—If the individual does not make

10 an election under subsection (b) before any time limitation

11 under this section, the retirement coverage shall be subject

12 to the following rules:

13 (1) CORRECTIVE ACTION PREVIOUSLY TAKEN.—If

14 corrective action was taken before the end of any time

15 limitation under this section, that corrective action

16 shall remain in effect.

17 (2) CORRECTIVE ACTION NOT PREVIOUSLY

18 TAKEN.—If corrective action was not taken before

19 such time limitation, the employee shall be CSRS-Off20 set covered, retroactive to the date of the retirement

21 coverage error.
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1 CHAPTER 2—EMPLOYEE WHO SHOULD

2 HAVE BEEN FERS COVERED, CSRS-OFF3 SET COVERED, OR CSRS COVERED,

4 BUT WHO WAS ERRONEOUSLY SOCIAL

5 SECURITY-ONLY COVERED INSTEAD

6 SEC. 2111. APPLICABILITY.

7 This chapter shall apply in the case of any employee

8 who—

9 (1) should be (or should have been) FERS cov10 ered but, as a result of a retirement coverage error,

11 is (or was) Social Security-Only covered instead;

12 (2) should be (or should have been) CSRS-Offset

13 covered but, as a result of a retirement coverage error,

14 is (or was) Social Security-Only covered instead; or

15 (3) should be (or should have been) CSRS cov16 ered but, as a result of a retirement coverage error,

17 is (or was) Social Security-Only covered instead.

18 SEC. 2112. CORRECTION MANDATORY.

19 (a) UNCORRECTED ERROR.—If the retirement coverage

20 error has not been corrected, as soon as practicable after

21 discovery of the error, such individual shall be covered

22 under the correct retirement coverage, effective as of the date

23 of the retirement coverage error.
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1 (b) CORRECTED ERROR.—If the retirement coverage

2 error has been corrected, the corrective action previously

3 taken shall remain in effect.

4 CHAPTER 3—EMPLOYEE WHO SHOULD OR

5 COULD HAVE BEEN SOCIAL SECURITY6 ONLY COVERED BUT WHO WAS ERRO7 NEOUSLY CSRS-OFFSET COVERED OR

8 CSRS COVERED INSTEAD

9 SEC. 2121. EMPLOYEE WHO SHOULD BE SOCIAL SECURITY10 ONLY COVERED, BUT WHO IS ERRONEOUSLY

11 CSRS OR CSRS-OFFSET COVERED INSTEAD.

12 (a) APPLICABILITY.—This section applies in the case

13 of a retirement coverage error in which a Social Security14 Only covered employee was erroneously CSRS covered or

15 CSRS-Offset covered.

16 (b) UNCORRECTED ERROR.—

17 (1) APPLICABILITY.—This subsection applies if

18 the retirement coverage error has not been corrected

19 before the effective date of the regulations described in

20 paragraph (3).

21 (2) COVERAGE.—In the case of an individual

22 who is erroneously CSRS covered, as soon as prac23 ticable after discovery of the error, and subject to the

24 right of an election under paragraph (3), such indi-
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1 vidual shall be CSRS-Offset covered, effective as of the

2 date of the retirement coverage error.

3 (3) ELECTION.—

4 (A) IN GENERAL.—Upon written notice of a

5 retirement coverage error, an individual may

6 elect to be CSRS-Offset covered or Social Secu7 rity-Only covered, effective as of the date of the

8 retirement coverage error. Such election shall be

9 made not later than 180 days after the date of

10 receipt of such notice.

11 (B) NONELECTION.—If the individual does

12 not make an election before the date provided

13 under subparagraph (A), the individual shall re14 main CSRS-Offset covered.

15 (C) REGULATIONS.—The Office shall pre16 scribe regulations to carry out this paragraph.

17 (c) CORRECTED ERROR.—

18 (1) APPLICABILITY.—This subsection applies if

19 the retirement coverage error was corrected before the

20 effective date of the regulations described under sub21 section (b)(3).

22 (2) ELECTION.—Not later than 180 days after

23 the date of enactment of this Act, the Office shall pre24 scribe regulations authorizing individuals to elect,

25 during the 18-month period immediately following
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1 the effective date of such regulations, to be CSRS-Off2 set covered or Social Security-Only covered, effective

3 as of the date of the retirement coverage error.

4 (3) NONELECTION.—If an eligible individual

5 does not make an election under paragraph (2) before

6 the end of any time limitation under this subsection,

7 the corrective action taken before such time limitation

8 shall remain in effect.

9 CHAPTER 4—EMPLOYEE WHO WAS

10 ERRONEOUSLY FERS COVERED

11 SEC. 2131. EMPLOYEE WHO SHOULD BE SOCIAL SECURITY12 ONLY COVERED, CSRS COVERED, OR CSRS13 OFFSET COVERED AND IS NOT FERS-ELIGI14 BLE, BUT WHO IS ERRONEOUSLY FERS COV15 ERED INSTEAD.

16 (a) APPLICABILITY.—This section applies in the case

17 of a retirement coverage error in which a Social Security18 Only covered, CSRS covered, or CSRS-Offset covered em19 ployee not eligible to elect FERS coverage under authority

20 of section 8402(c) of title 5, United States Code, was erro21 neously FERS covered.

22 (b) UNCORRECTED ERROR.—

23 (1) APPLICABILITY.—This subsection applies if

24 the retirement coverage error has not been corrected
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1 before the effective date of the regulations described in

2 paragraph (2).

3 (2) COVERAGE.—

4 (A) ELECTION.—

5 (i) IN GENERAL.—Upon written notice

6 of a retirement coverage error, an indi7 vidual may elect to remain FERS covered

8 or to be Social Security-Only covered,

9 CSRS covered, or CSRS-Offset covered, as

10 would have applied in the absence of the er11 roneous retirement coverage determination,

12 effective as of the date of the retirement cov13 erage error. Such election shall be made not

14 later than 180 days after the date of receipt

15 of such notice.

16 (ii) TREATMENT OF FERS ELECTION.—

17 An election of FERS coverage under this

18 subsection is deemed to be an election under

19 section 301 of the Federal Employees Re20 tirement System Act of 1986 (5 U.S.C. 8331

21 note; Public Law 99–335; 100 Stat. 599).

22 (B) NONELECTION.—If the individual does

23 not make an election before the date provided

24 under subparagraph (A), the individual shall re-
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1 main FERS covered, effective as of the date of

2 the retirement coverage error.

3 (3) EMPLOYEE CONTRIBUTIONS IN THRIFT SAV4 INGS FUND.—If under this section, an individual

5 elects to be Social Security-Only covered, CSRS cov6 ered, or CSRS-Offset covered, all employee contribu7 tions to the Thrift Savings Fund made during the pe8 riod of erroneous FERS coverage (and all earnings on

9 such contributions) may remain in the Thrift Savings

10 Fund in accordance with regulations prescribed by

11 the Executive Director, notwithstanding any limit

12 under section 8351 or 8432 of title 5, United States

13 Code.

14 (4) REGULATIONS.—Except as provided under

15 paragraph (3), the Office shall prescribe regulations

16 to carry out this subsection.

17 (c) CORRECTED ERROR.—

18 (1) APPLICABILITY.—This subsection applies if

19 the retirement coverage error was corrected before the

20 effective date of the regulations described under para21 graph (2).

22 (2) ELECTION.—Not later than 180 days after

23 the date of enactment of this Act, the Office shall pre24 scribe regulations authorizing individuals to elect,

25 during the 18-month period immediately following
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1 the effective date of such regulations to remain Social

2 Security-Only covered, CSRS covered, or CSRS-Offset

3 covered, or to be FERS covered, effective as of the date

4 of the retirement coverage error.

5 (3) NONELECTION.—If an eligible individual

6 does not make an election under paragraph (2), the

7 corrective action taken before the end of any time lim8 itation under this subsection shall remain in effect.

9 (4) TREATMENT OF FERS ELECTION.—An elec10 tion of FERS coverage under this subsection is

11 deemed to be an election under section 301 of the Fed12 eral Employees Retirement System Act of 1986 (5

13 U.S.C. 8331 note; Public Law 99–335; 100 Stat.

14 599).

15 SEC. 2132. FERS-ELIGIBLE EMPLOYEE WHO SHOULD HAVE

16 BEEN CSRS COVERED, CSRS-OFFSET COV17 ERED, OR SOCIAL SECURITY-ONLY COVERED,

18 BUT WHO WAS ERRONEOUSLY FERS COVERED

19 INSTEAD WITHOUT AN ELECTION.

20 (a) IN GENERAL.—

21 (1) FERS ELECTION PREVENTED.—If an indi22 vidual was prevented from electing FERS coverage

23 because the individual was erroneously FERS covered

24 during the period when the individual was eligible to

25 elect FERS under title III of the Federal Employees
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1 Retirement System Act or the Federal Employees’ Re2 tirement System Open Enrollment Act of 1997 (Pub3 lic Law 105–61; 111 Stat. 1318 et seq.), the

4 individual—

5 (A) is deemed to have elected FERS cov6 erage; and

7 (B) shall remain covered by FERS, unless

8 the individual declines, under regulations pre9 scribed by the Office, to be FERS covered.

10 (2) DECLINING FERS COVERAGE.—If an indi11 vidual described under paragraph (1)(B) declines to

12 be FERS covered, such individual shall be CSRS cov13 ered, CSRS-Offset covered, or Social Security-Only

14 covered, as would apply in the absence of a FERS

15 election, effective as of the date of the erroneous retire16 ment coverage determination.

17 (b) EMPLOYEE CONTRIBUTIONS IN THRIFT SAVINGS

18 FUND.—If under this section, an individual declines to be

19 FERS covered and instead is Social Security-Only covered,

20 CSRS covered, or CSRS-Offset covered, as would apply in

21 the absence of a FERS election, all employee contributions

22 to the Thrift Savings Fund made during the period of erro23 neous FERS coverage (and all earnings on such contribu24 tions) may remain in the Thrift Savings Fund in accord25 ance with regulations prescribed by the Executive Director,
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1 notwithstanding any limit that would otherwise be applica2 ble.

3 (c) INAPPLICABILITY OF DURATION OF ERRONEOUS

4 COVERAGE.—This section shall apply regardless of the

5 length of time the erroneous coverage determination re6 mained in effect.

7 SEC. 2133. RETROACTIVE EFFECT.

8 This chapter shall be effective as of January 1, 1987,

9 except that section 2132 shall not apply to individuals who

10 made or were deemed to have made elections similar to those

11 provided in this section under regulations prescribed by the

12 Office before the effective date of this title.

13 CHAPTER 5—EMPLOYEE WHO SHOULD

14 HAVE BEEN CSRS-OFFSET COVERED,

15 BUT WHO WAS ERRONEOUSLY CSRS

16 COVERED INSTEAD

17 SEC. 2141. APPLICABILITY.

18 This chapter shall apply in the case of any employee

19 who should be (or should have been) CSRS-Offset covered

20 but, as a result of a retirement coverage error, is (or was)

21 CSRS covered instead.

22 SEC. 2142. CORRECTION MANDATORY.

23 (a) UNCORRECTED ERROR.—If the retirement coverage

24 error has not been corrected, as soon as practicable after

25 discovery of the error, such individual shall be covered
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1 under the correct retirement coverage, effective as of the date

2 of the retirement coverage error.

3 (b) CORRECTED ERROR.—If the retirement coverage

4 error has been corrected before the effective date of this title,

5 the corrective action taken before such date shall remain

6 in effect.

7 CHAPTER 6—EMPLOYEE WHO SHOULD

8 HAVE BEEN CSRS COVERED, BUT WHO

9 WAS ERRONEOUSLY CSRS-OFFSET

10 COVERED INSTEAD

11 SEC. 2151. APPLICABILITY.

12 This chapter shall apply in the case of any employee

13 who should be (or should have been) CSRS covered but, as

14 a result of a retirement coverage error, is (or was) CSRS15 Offset covered instead.

16 SEC. 2152. CORRECTION MANDATORY.

17 (a) UNCORRECTED ERROR.—If the retirement coverage

18 error has not been corrected, as soon as practicable after

19 discovery of the error, such individual shall be covered

20 under the correct retirement coverage, effective as of the date

21 of the retirement coverage error.

22 (b) CORRECTED ERROR.—If the retirement coverage

23 error has been corrected before the effective date of this title,

24 the corrective action taken before such date shall remain

25 in effect.
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1 Subtitle B—General Provisions

2 SEC. 2201. IDENTIFICATION AND NOTIFICATION REQUIRE3 MENTS.

4 Government agencies shall take all such measures as

5 may be reasonable and appropriate to promptly identify

6 and notify individuals who are (or have been) affected by

7 a retirement coverage error of their rights under this title.

8 SEC. 2202. INFORMATION TO BE FURNISHED TO AND BY AU9 THORITIES ADMINISTERING THIS TITLE.

10 (a) APPLICABILITY.—The authorities identified in this

11 subsection are—

12 (1) the Director of the Office of Personnel Man13 agement;

14 (2) the Commissioner of Social Security; and

15 (3) the Executive Director of the Federal Retire16 ment Thrift Investment Board.

17 (b) AUTHORITY TO OBTAIN INFORMATION.—Each au18 thority identified in subsection (a) may secure directly from

19 any department or agency of the United States information

20 necessary to enable such authority to carry out its respon21 sibilities under this title. Upon request of the authority in22 volved, the head of the department or agency involved shall

23 furnish that information to the requesting authority.

24 (c) AUTHORITY TO PROVIDE INFORMATION.—Each

25 authority identified in subsection (a) may provide directly
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1 to any department or agency of the United States all infor2 mation such authority believes necessary to enable the de3 partment or agency to carry out its responsibilities under

4 this title.

5 (d) LIMITATION; SAFEGUARDS.—Each of the respective

6 authorities under subsection (a) shall—

7 (1) request or provide only such information as

8 that authority considers necessary; and

9 (2) establish, by regulation or otherwise, appro10 priate safeguards to ensure that any information ob11 tained under this section shall be used only for the

12 purpose authorized.

13 SEC. 2203. SERVICE CREDIT DEPOSITS.

14 (a) CSRS DEPOSIT.—In the case of a retirement cov15 erage error in which—

16 (1) a FERS covered employee was erroneously

17 CSRS covered or CSRS-Offset covered;

18 (2) the employee made a service credit deposit

19 under the CSRS rules; and

20 (3) there is a subsequent retroactive change to

21 FERS coverage;

22 the excess of the amount of the CSRS civilian or military

23 service credit deposit over the FERS civilian or military

24 service credit deposit, together with interest computed in ac25 cordance with paragraphs (2) and (3) of section 8334(e)
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1 of title 5, United States Code, and regulations prescribed

2 by the Office, shall be paid to the employee, the annuitant

3 or, in the case of a deceased employee, to the individual

4 entitled to lump-sum benefits under section 8424(d) of title

5 5, United States Code.

6 (b) FERS DEPOSIT.—

7 (1) APPLICABILITY.—This subsection applies in

8 the case of an erroneous retirement coverage deter9 mination in which—

10 (A) the employee owed a service credit de11 posit under section 8411(f) of title 5, United

12 States Code; and

13 (B)(i) there is a subsequent retroactive

14 change to CSRS or CSRS-Offset coverage; or

15 (ii) the service becomes creditable under

16 chapter 83 of title 5, United States Code.

17 (2) REDUCED ANNUITY.—

18 (A) IN GENERAL.—If at the time of com19 mencement of an annuity there is remaining un20 paid CSRS civilian or military service credit

21 deposit for service described under paragraph

22 (1), the annuity shall be reduced based upon the

23 amount unpaid together with interest computed

24 in accordance with section 8334(e) (2) and (3)
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1 of title 5, United States Code, and regulations

2 prescribed by the Office.

3 (B) AMOUNT.—The reduced annuity to

4 which the individual is entitled shall be equal to

5 an amount that, when taken together with the

6 amount referred to under subparagraph (A),

7 would result in the present value of the total

8 being actuarially equivalent to the present value

9 of the unreduced annuity benefit that would have

10 been provided the individual.

11 (3) SURVIVOR ANNUITY.—

12 (A) IN GENERAL.—If at the time of com13 mencement of a survivor annuity, there is re14 maining unpaid any CSRS service credit de15 posit described under paragraph (1), and there

16 has been no actuarial reduction in an annuity

17 under paragraph (2), the survivor annuity shall

18 be reduced based upon the amount unpaid to19 gether with interest computed in accordance with

20 section 8334(e) (2) and (3) of title 5, United

21 States Code, and regulations prescribed by the

22 Office.

23 (B) AMOUNT.—The reduced survivor annu24 ity to which the individual is entitled shall be

25 equal to an amount that, when taken together
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1 with the amount referred to under subparagraph

2 (A), would result in the present value of the total

3 being actuarially equivalent to the present value

4 of an unreduced survivor annuity benefit that

5 would have been provided the individual.

6 SEC. 2204. PROVISIONS RELATED TO SOCIAL SECURITY

7 COVERAGE OF MISCLASSIFIED EMPLOYEES.

8 (a) DEFINITIONS.—In this section, the term—

9 (1) ‘‘covered individual’’ means any employee,

10 former employee, or annuitant who—

11 (A) is or was employed erroneously subject

12 to CSRS coverage as a result of a retirement cov13 erage error; and

14 (B) is or was retroactively converted to

15 CSRS-offset coverage, FERS coverage, or Social

16 Security-only coverage; and

17 (2) ‘‘excess CSRS deduction amount’’ means an

18 amount equal to the difference between the CSRS de19 ductions withheld and the CSRS-Offset or FERS de20 ductions, if any, due with respect to a covered indi21 vidual during the entire period the individual was er22 roneously subject to CSRS coverage as a result of a

23 retirement coverage error.

24 (b) REPORTS TO COMMISSIONER OF SOCIAL SECU25 RITY.—
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1 (1) IN GENERAL.—In order to carry out the

2 Commissioner of Social Security’s responsibilities

3 under title II of the Social Security Act, the Commis4 sioner may request the head of each agency that em5 ploys or employed a covered individual to report (in

6 coordination with the Office of Personnel Manage7 ment) in such form and within such timeframe as the

8 Commissioner may specify, any or all of—

9 (A) the total wages (as defined in section

10 3121(a) of the Internal Revenue Code of 1986)

11 paid to such individual during each year of the

12 entire period of the erroneous CSRS coverage;

13 and

14 (B) such additional information as the

15 Commissioner may require for the purpose of

16 carrying out the Commissioner’s responsibilities

17 under title II of the Social Security Act (42

18 U.S.C. 401 et seq.).

19 (2) COMPLIANCE.—The head of an agency or the

20 Office shall comply with a request from the Commis21 sioner under paragraph (1).

22 (3) WAGES.—For purposes of section 201 of the

23 Social Security Act (42 U.S.C. 401), wages reported

24 under this subsection shall be deemed to be wages re25 ported to the Secretary of the Treasury or the Sec-
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1 retary’s delegates pursuant to subtitle F of the Inter2 nal Revenue Code of 1986.

3 (c) PAYMENT RELATING TO OASDI EMPLOYEE

4 TAXES.—

5 (1) IN GENERAL.—The Office shall transfer from

6 the Civil Service Retirement and Disability Fund to

7 the General Fund of the Treasury an amount equal

8 to the lesser of the excess CSRS deduction amount or

9 the OASDI taxes due for covered individuals (as ad10 justed by amounts transferred relating to applicable

11 OASDI employee taxes as a result of corrections

12 made, including corrections made before the date of

13 enactment of this Act). If the excess CSRS deductions

14 exceed the OASDI taxes, any difference shall be paid

15 to the covered individual or survivors, as appropriate.

16 (2) TRANSFER.—Amounts transferred under this

17 subsection shall be determined notwithstanding any

18 limitation under section 6501 of the Internal Revenue

19 Code of 1986.

20 (d) PAYMENT OF OASDI EMPLOYER TAXES.—

21 (1) IN GENERAL.—Each employing agency shall

22 pay an amount equal to the OASDI employer taxes

23 owed with respect to covered individuals during the

24 applicable period of erroneous coverage (as adjusted

25 by amounts transferred for the payment of such taxes
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1 as a result of corrections made, including corrections

2 made before the date of enactment of this Act).

3 (2) PAYMENT.—Amounts paid under this sub4 section shall be determined subject to any limitation

5 under section 6501 of the Internal Revenue Code of

6 1986.

7 (e) APPLICATION OF OASDI TAX PROVISIONS OF THE

8 INTERNAL REVENUE CODE OF 1986 TO AFFECTED INDIVID9 UALS AND EMPLOYING AGENCIES.—A covered individual

10 and the individual’s employing agency shall be deemed to

11 have fully satisfied in a timely manner their responsibil12 ities with respect to the taxes imposed by sections 3101(a),

13 3102(a), and 3111(a) of the Internal Revenue Code of 1986

14 on the wages paid by the employing agency to such indi15 vidual during the entire period such individual was erro16 neously subject to CSRS coverage as a result of a retirement

17 coverage error based on the payments and transfers made

18 under subsections (c) and (d). No credit or refund of taxes

19 on such wages shall be allowed as a result of this subsection.

20 SEC. 2205. THRIFT SAVINGS PLAN TREATMENT FOR CER21 TAIN INDIVIDUALS.

22 (a) APPLICABILITY.—This section applies to an indi23 vidual who—

24 (1) is eligible to make an election of coverage

25 under section 2101 or 2102, and only if FERS cov-
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1 erage is elected (or remains in effect) for the employee

2 involved; or

3 (2) is described in section 2111, and makes or

4 has made retroactive employee contributions to the

5 Thrift Savings Fund under regulations prescribed by

6 the Executive Director.

7 (b) PAYMENT INTO THRIFT SAVINGS FUND.—

8 (1) IN GENERAL.—

9 (A) PAYMENT.—With respect to an indi10 vidual to whom this section applies, the employ11 ing agency shall pay to the Thrift Savings Fund

12 under subchapter III of chapter 84 of title 5,

13 United States Code, for credit to the account of

14 the employee involved, an amount equal to the

15 earnings which are disallowed under section

16 8432a(a)(2) of such title on the employee’s retro17 active contributions to such Fund.

18 (B) AMOUNT.—Earnings under subpara19 graph (A) shall be computed in accordance with

20 the procedures for computing lost earnings under

21 section 8432a of title 5, United States Code. The

22 amount paid by the employing agency shall be

23 treated for all purposes as if that amount had

24 actually been earned on the basis of the em25 ployee’ s contributions.
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1 (C) EXCEPTIONS.—If an individual made

2 retroactive contributions before the effective date

3 of the regulations under section 2101(c), the Di4 rector may provide for an alternative calculation

5 of lost earnings to the extent that a calculation

6 under subparagraph (B) is not administratively

7 feasible. The alternative calculation shall yield

8 an amount that is as close as practicable to the

9 amount computed under subparagraph (B), tak10 ing into account earnings previously paid.

11 (2) ADDITIONAL EMPLOYEE CONTRIBUTION.—In

12 cases in which the retirement coverage error was cor13 rected before the effective date of the regulations under

14 section 2101(c), the employee involved shall have an

15 additional opportunity to make retroactive contribu16 tions for the period of the retirement coverage error

17 (subject to applicable limits), and such contributions

18 (including any contributions made after the date of

19 the correction) shall be treated in accordance with

20 paragraph (1).

21 (c) REGULATIONS.—

22 (1) EXECUTIVE DIRECTOR.—The Executive Di23 rector shall prescribe regulations appropriate to carry

24 out this section relating to retroactive employee con-
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1 tributions and payments made on or after the effec2 tive date of the regulations under section 2101(c).

3 (2) OFFICE.—The Office, in consultation with

4 the Federal Retirement Thrift Investment Board,

5 shall prescribe regulations appropriate to carry out

6 this section relating to the calculation of lost earnings

7 on retroactive employee contributions made before the

8 effective date of the regulations under section 2101(c).

9 SEC. 2206. CERTAIN AGENCY AMOUNTS TO BE PAID INTO OR

10 REMAIN IN THE CSRDF.

11 (a) CERTAIN EXCESS AGENCY CONTRIBUTIONS TO RE12 MAIN IN THE CSRDF.—

13 (1) IN GENERAL.—Any amount described under

14 paragraph (2) shall—

15 (A) remain in the CSRDF; and

16 (B) may not be paid or credited to an agen17 cy.

18 (2) AMOUNTS.—Paragraph (1) refers to any

19 amount of contributions made by an agency under

20 section 8423 of title 5, United States Code, on behalf

21 of any employee, former employee, or annuitant (or

22 survivor of such employee, former employee, or annu23 itant) who makes an election to correct a retirement

24 coverage error under this title, that the Office deter25 mines to be excess as a result of such election.
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1 (b) ADDITIONAL EMPLOYEE RETIREMENT DEDUC2 TIONS TO BE PAID BY AGENCY.—If a correction in a retire3 ment coverage error results in an increase in employee de4 ductions under section 8334 or 8422 of title 5, United

5 States Code, that cannot be fully paid by a reallocation of

6 otherwise available amounts previously deducted from the

7 employee’s pay as employment taxes or retirement deduc8 tions, the employing agency—

9 (1) shall pay the required additional amount

10 into the CSRDF; and

11 (2) shall not seek repayment of that amount

12 from the employee, former employee, annuitant, or

13 survivor.

14 SEC. 2207. CSRS COVERAGE DETERMINATIONS TO BE AP15 PROVED BY OPM.

16 No agency shall place an individual under CSRS cov17 erage unless—

18 (1) the individual has been employed with CSRS

19 coverage within the preceding 365 days; or

20 (2) the Office has agreed in writing that the

21 agency’s coverage determination is correct.

22 SEC. 2208. DISCRETIONARY ACTIONS BY DIRECTOR.

23 (a) IN GENERAL.—The Director of the Office of Per24 sonnel Management may—
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1 (1) extend the deadlines for making elections

2 under this title in circumstances involving an indi3 vidual’s inability to make a timely election due to a

4 cause beyond the individual’s control;

5 (2) provide for the reimbursement of necessary

6 and reasonable expenses incurred by an individual

7 with respect to settlement of a claim for losses result8 ing from a retirement coverage error, including attor9 ney’s fees, court costs, and other actual expenses;

10 (3) compensate an individual for monetary losses

11 that are a direct and proximate result of a retirement

12 coverage error, excluding claimed losses relating to

13 forgone contributions and earnings under the Thrift

14 Savings Plan under subchapter III of chapter 84 of

15 title 5, United States Code, and all other investment

16 opportunities; and

17 (4) waive payments required due to correction of

18 a retirement coverage error under this title.

19 (b) SIMILAR ACTIONS.—In exercising the authority

20 under this section, the Director shall, to the extent prac21 ticable, provide for similar actions in situations involving

22 similar circumstances.

23 (c) JUDICIAL REVIEW.—Actions taken under this sec24 tion are final and conclusive, and are not subject to admin25 istrative or judicial review.
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1 (d) REGULATIONS.—The Office of Personnel Manage2 ment shall prescribe regulations regarding the process and

3 criteria used in exercising the authority under this section.

4 (e) REPORT.—The Office of Personnel Management

5 shall, not later than 180 days after the date of enactment

6 of this Act, and annually thereafter for each year in which

7 the authority provided in this section is used, submit a re8 port to each House of Congress on the operation of this sec9 tion.

10 SEC. 2209. REGULATIONS.

11 (a) IN GENERAL.—In addition to the regulations spe12 cifically authorized in this title, the Office may prescribe

13 such other regulations as are necessary for the administra14 tion of this title.

15 (b) FORMER SPOUSE.—The regulations prescribed

16 under this title shall provide for protection of the rights of

17 a former spouse with entitlement to an apportionment of

18 benefits or to survivor benefits based on the service of the

19 employee.

20 Subtitle C—Other Provisions

21 SEC. 2301. PROVISIONS TO AUTHORIZE CONTINUED CON22 FORMITY OF OTHER FEDERAL RETIREMENT

23 SYSTEMS.

24 (a) FOREIGN SERVICE.—Sections 827 and 851 of the

25 Foreign Service Act of 1980 (22 U.S.C. 4067 and 4071)
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1 shall apply with respect to this title in the same manner

2 as if this title were part of—

3 (1) the Civil Service Retirement System, to the

4 extent this title relates to the Civil Service Retirement

5 System; and

6 (2) the Federal Employees’ Retirement System,

7 to the extent this title relates to the Federal Employ8 ees’ Retirement System.

9 (b) CENTRAL INTELLIGENCE AGENCY.—Sections 292

10 and 301 of the Central Intelligence Agency Retirement Act

11 (50 U.S.C. 2141 and 2151) shall apply with respect to this

12 title in the same manner as if this title were part of—

13 (1) the Civil Service Retirement System, to the

14 extent this title relates to the Civil Service Retirement

15 System; and

16 (2) the Federal Employees’ Retirement System,

17 to the extent this title relates to the Federal Employ18 ees’ Retirement System.

19 SEC. 2302. AUTHORIZATION OF PAYMENTS.

20 All payments authorized or required by this title to

21 be paid from the Civil Service Retirement and Disability

22 Fund, together with administrative expenses incurred by

23 the Office in administering this title, shall be deemed to

24 have been authorized to be paid from that Fund, which is

25 appropriated for the payment thereof.
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1 SEC. 2303. INDIVIDUAL RIGHT OF ACTION PRESERVED FOR

2 AMOUNTS NOT OTHERWISE PROVIDED FOR

3 UNDER THIS TITLE.

4 Nothing in this title shall preclude an individual from

5 bringing a claim against the Government of the United

6 States which such individual may have under section

7 1346(b) or chapter 171 of title 28, United States Code, or

8 any other provision of law (except to the extent the claim

9 is for any amounts otherwise provided for under this title).

10 Subtitle D—Effective Date

11 SEC. 2401. EFFECTIVE DATE.

12 Except as otherwise provided in this title, this title

13 shall take effect on the date of enactment of this Act.

Amend the title so as to read: ‘‘A bill to amend title

5, United States Code, to provide for the establishment

of a program under which long-term care insurance is

made available to Federal employees, members of the

uniformed services, and civilian and military retirees, provide for the correction of retirement coverage errors

under chapters 83 and 84 of such title, and for other

purposes.’’.
Calendar No. 685

106TH CONGRESS

2D SESSION S. 2420

[Report No. 106–344]

A BILL

To amend title 5, United States Code, to provide

for the establishment of a program under whichlong-term care insurance is made available toFederal employees, members of the uniformedservices, and civilian and military retirees, andfor other purposes.

JULY 14, 2000

Reported with an amendment and an amendment to the

title