This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

60573 

Vol. 75, No. 190 

Friday, October 1, 2010 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Part 870 

RIN 3206–AG63 

Federal Employees’ Group Life 

Insurance Program: Miscellaneous 

Changes, Clarifications, and 

Corrections 

AGENCY: U.S. Office of Personnel 

Management. 

ACTION: Final rule. 

SUMMARY: The U.S. Office of Personnel 

Management (OPM) is adopting as final 

changes to the Federal Employees’ 

Group Life Insurance (FEGLI) Program 

regulations to provide for the new 

election opportunities for certain 

civilian and Defense Department 

employees deployed in support of a 

contingency operation required by 

Public Law 110–417; to provide for the 

continuation of coverage opportunities 

for Federal employees called to active 

duty required by Public Law 110–181; 

and to update the regulations with other 

changes, clarifications, and corrections. 

DATES: Effective October 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Ronald Brown, Policy Analyst, at (202) 

606–0004 or e-mail: 

ronald.brown@opm.gov. 

SUPPLEMENTARY INFORMATION: On 

December 31, 2009, OPM published 

proposed regulations (74 FR 69288) 

with miscellaneous changes, 

clarifications, and corrections. We have 

identified an additional correction in 

section 870.506(g)(2) which stated ‘‘an 

election of Optional elect insurance 

must be made within 60 days after the 

date of notification of deployment in 

support of a contingency operation.’’ 

The word ‘‘elect’’ has been removed so 

that section correctly states ‘‘an election 

of Optional insurance must be made 

within 60 days of notification of 

deployment in support of a contingency 

operation.’’ These final regulations 

reflect that change. Only one comment 

was received on the proposed 

rulemaking. The commenter requested 

we hold a FEGLI open season. We will 

evaluate the options for an open season 

and will make information available to 

Federal employees when we decide to 

hold one. Accordingly, we are adopting 

the December 31, 2009, proposed 

regulations with one correction. 

The final changes, clarifications, and 

corrections are: 

Changes 

(1) Public Law 106–398 amended 5 

U.S.C. 8702 to allow Department of 

Defense (DoD) employees who are 

designated as ‘‘emergency essential’’ 

under 10 U.S.C. 1580 to elect Basic 

insurance within 60 days of being so 

designated. Section 1103 of Public Law 

110–417, the Duncan Hunter National 

Defense Authorization Act for Fiscal 

Year 2009, which became effective on 

October 14, 2008, further amended 

chapter 87 of title 5, U.S. Code, to allow 

‘‘emergency essential’’ DoD employees, 

as well as civilian employees deployed 

in support of a contingency operation, 

to elect Basic insurance, Option A 

(Standard) coverage and Option B 

(Additional) coverage up to a maximum 

of five (5) multiples. We are amending 

the regulations to include these election 

opportunities. These changes can be 

found in § 870.503(e) and (f) and 

§ 870.506(f) and (g). 

(2) Public Law 110–279, enacted July 

17, 2008, provides for certain Federal 

employee benefits to be continued for 

certain employees of the Senate 

Restaurants after the operations of the 

Senate Restaurants are contracted to be 

performed by a private business 

concern. The law provides that a Senate 

Restaurants employee, who is an 

employee of the Architect of the Capitol 

on the date of enactment and who 

accepts employment by the private 

business concern as part of the 

transition, may elect to continue 

coverage under certain Federal 

employee benefits programs during 

continuous employment with the 

business concern. Former Senate 

Restaurants employees who have FEGLI 

coverage as of the date of transfer may 

continue their coverage, if they also 

elected to continue their retirement 

coverage under either chapter 83 or 84 

of title 5, U.S. Code. These individuals 

will continue to be eligible for FEGLI 

during continuous employment with the 

private contractor unless the employees 

opt out of the FEGLI program. We are 

revising the FEGLI regulations to 

address coverage for these individuals. 

These changes can be found in 

§ 870.601(a) and § 870.602(b). 

(3) Section 1102 of Public Law 110– 

181, the National Defense Authorization 

Act for Fiscal Year 2008, enacted 

January 28, 2008, amended 5 U.S.C. 

8706 to authorize the continuation of 

FEGLI coverage for up to 24 months for 

Federal employees called to active duty. 

FEGLI coverage is free for the first 12 

months, but employees must pay the 

full cost (Government and employee 

share) of the premiums for the 

additional 12 months. We are amending 

the regulations to include this election 

opportunity. These changes can be 

found in § 870.601(d)(3)(iii). 

(4) Public Law 110–177, the Court 

Security Improvement Act of 2007, 

enacted January 7, 2008, deems certain 

categories of judicial officers to be 

considered as judges of the United 

States under section 8701 of title 5, 

United States Code. The law requires 

magistrate judges retired under section 

377 of title 28, United States Code, to be 

considered Federal judges under the 

FEGLI law. Public Law 111–8, the 

Omnibus Appropriations Act of 2009, 

enacted March 9, 2009, further amended 

the FEGLI law, by identifying additional 

judges who should continue to be 

treated as employees following 

retirement. This law requires 

bankruptcy judges and magistrate judges 

retired under section 377 of title 28, 

U.S. Code, and judges retired under 

section 373 of title 28, to be considered 

Federal judges under the FEGLI law. In 

addition, we identified additional 

judges who also should continue to be 

treated as employees following 

retirement (DC judges and Tax Court 

judges). We are changing the regulations 

to add these judges. These changes can 

be found in § 870.703(e)(1). 

(5) Currently, with a change in family 

circumstances an employee must 

already have Basic insurance and may 

elect only Option B and Option C. The 

number of multiples of Option B that 

such an employee may elect with a 

change in family circumstances is 

limited. We are eliminating the 

limitations on the coverage an employee 

mstockstill on DSKH9S0YB1PROD with RULES

60574 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 

may elect, so that an employee making 

an election based on a change in family 

circumstances, may elect Basic 

insurance and any and all Optional 

insurance, including up to the 

maximum number of multiples 

available of Option B and Option C. 

These changes can be found in 

§ 870.503(b)(3) and § 870.506(a). 

(6) Newly eligible employees must be 

in pay and duty status before Optional 

insurance can become effective. The sixmonth belated election opportunity 

allows Optional insurance to become 

effective retroactive to the pay period 

following the one in which the 

employee became eligible, but it does 

not require the employee to be in pay 

and duty status at that time. We are 

changing the regulations to apply the 

same pay and duty status requirements 

for belated elections that are required 

for elections made on a timely basis. 

These changes can be found in 

§ 870.503 and § 870.506. 

(7) We are making a change to provide 

that no one but the insured individual 

has the right to convert coverage when 

insurance terminates, unless the insured 

individual has assigned his or her 

insurance, with the exception that an 

individual having power of attorney 

may convert on behalf of the insured. In 

addition, a family member may convert 

Option C coverage. These changes can 

be found in § 870.603(a)(1). 

(8) We are changing the time frame for 

making an initial election of Optional 

insurance from 31 days to 60 calendar 

days after the employee becomes 

eligible. We are also extending the time 

frame for electing coverage by providing 

satisfactory medical information from 

31 days to 60 calendar days after 

OFEGLI’s (Office of Federal Employees’ 

Group Life Insurance) approval. These 

changes will make these election time 

frames consistent with other election 

opportunities for Federal benefits. These 

changes can be found in § 870.504 (a)(1) 

and § 870.506(c). 

(9) When an employee who elected a 

partial living benefit dies, the postelection BIA (Basic Insurance Amount) 

is multiplied by the extra benefit age 

factor in effect at the time that OFEGLI 

received the living benefit application. 

We are changing this computation to 

use the age factor in effect nine months 

from the date OFEGLI received the 

living benefit application to be 

consistent with the age factor used to 

compute the amount of the living 

benefit. These changes can be found in 

§ 870.203. 

(10) Public Law 108–445, The 

Department of Veterans Affairs (VA) 

Health Care Personnel Enhancement Act 

of 2004, provided for the payment of 

market pay, in addition to base pay, for 

physicians and dentists employed by 

the VA. Accordingly, in addition to base 

pay, market pay must be used to 

determine the annual rate of pay 

described in § 870.204 for these 

individuals. Public Law 96–330, 

currently cited in § 870.204(a)(2)(x), 

relating to the treatment of bonuses for 

physicians and dentists employed by 

the VA, is no longer in effect. We are 

revising § 870.204 to include market pay 

in the determination of annual pay for 

these individuals. 

(11) In situations of concurrent 

employment, the amount of Basic 

insurance and Option B insurance is 

based on the combined salaries. 

However, if an employee accepts a 

temporary position while in nonpay 

status from a covered position, the 

amount of insurance is based on 

whichever salary is higher. We are 

eliminating this exception, so that this 

situation will be treated the same as 

other instances of concurrent 

employment. These changes can be 

found in § 870.204(g). 

(12) Currently, the earliest that 

coverage elected as a result of providing 

satisfactory medical information can 

become effective is the day after the date 

OFEGLI approves the employee’s 

request for coverage. We are changing 

the regulations to allow Basic insurance 

to become effective on the date of 

OFEGLI’s approval if the employee is in 

pay and duty status. We are also 

allowing Option A and Option B 

coverage to become effective on the date 

of OFEGLI’s approval if the employing 

office receives the employee’s election 

on or before that date and the employee 

is in pay and duty status. These changes 

can be found in § 870.503 and § 870.506. 

(13) We are changing the regulations 

to treat reemployed compensationers 

the same as reemployed annuitants. 

When a compensationer returns to work 

under conditions that allow him or her 

to continue receiving compensation, 

Basic insurance (and Options A and C) 

held as a compensationer are suspended 

and the insured obtains coverage as an 

employee. If the reemployed 

compensationer dies in service, OFEGLI 

would pay Basic insurance benefits 

based on whichever amount is higher: 

The suspended compensationer 

coverage or the coverage through 

reemployment. As with reemployed 

annuitants, Option B would remain 

with the individual’s compensation, 

unless the employee elects to have it 

through reemployment. If a reemployed 

compensationer stops working and 

continues to receive compensation, he 

or she could continue the FEGLI 

acquired through reemployment if the 

individual meets the 5-year/allopportunity requirement and has been 

reemployed for the length of time 

required for a reemployed annuitant to 

earn a supplemental annuity (1 year for 

full-time employment). These changes 

can be found in § 870.707. 

(14) Public Law 106–522, 114 Stat. 

2440, enacted November 22, 2000, 

changed the entitlement to Federal 

employee benefits for the District of 

Columbia (DC) Offender Supervision 

Trustee and employees of the Trustee. 

Previously these employees were treated 

as Federal employees for purposes of 

Federal employee retirement and 

insurance programs only if they 

transferred to the DC government within 

three days of separating from Federal 

service. Public Law 106–522 gave these 

employees retroactive entitlement to be 

treated as Federal employees on the date 

of their appointment or the date their 

sub-organizations transferred to the 

Trustee’s office, whichever is later. We 

are reflecting this change in the 

regulations. These changes can be found 

in § 870.302(a)(3). 

(15) Public Law 105–311, the Federal 

Employees Life Insurance Improvement 

Act, 112 Stat. 2950, enacted October 30, 

1998, amended chapter 87 of title 5, 

U.S. Code, to allow retiring employees 

to elect either No Reduction or Full 

Reduction for their Option B and Option 

C coverage. This election was to be 

made at the time of retirement, the same 

as the election for Basic insurance. 

Implementing this provision required 

programming changes to the electronic 

records system for annuitants to allow 

for ‘‘mixed’’ elections, i.e., electing 

reductions for some coverage, but not 

for other coverage. While these system 

changes were being made, annuitants 

were required to elect either No 

Reduction or Full Reduction for Option 

B and Option C coverage at the time of 

retirement. Then, shortly before the 

annuitant’s 65th birthday, the insured 

was given a second opportunity to make 

another election, this time being 

allowed to choose No Reduction for 

some multiples and Full Reduction for 

others. We are eliminating the 

opportunity for a second election at age 

65. There are several reasons for this 

change: (i) The law states the election 

must be made at the time of retirement; 

(ii) administering the second election 

opportunity at age 65 is an ongoing cost 

to the Program; (iii) the 2nd election 

may be confusing to some annuitants, 

since the election for the Basic 

insurance reduction is made at the time 

of retirement without a second 

opportunity at age 65; and (iv) the 

mailing itself is problematic with regard 

to individuals who are paying their 

mstockstill on DSKH9S0YB1PROD with RULES

Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 60575 

premiums directly, as described in 

§ 870.405, and individuals who have 

assigned their coverage. Individuals 

who have retired since this statutory 

provision became effective (April 24, 

1999) and who have not yet turned 65 

will be given the opportunity to make 

their ‘‘final’’ election. These changes can 

be found in § 870.705(d). 

(16) We are eliminating the 

requirement for designated beneficiaries 

of assignees to notify the appropriate 

employing office of any change in 

address, since we do not require any 

other designated beneficiaries to make 

such a notification. The requirement 

will still apply to assignees themselves. 

These changes can be found in 

§ 870.910. 

(17) The current regulations regarding 

reconsiderations require the insured 

individual to provide his or her Social 

Security Number when filing a request 

for reconsideration. We are eliminating 

this requirement. Annuitants and 

compensationers may be identified by 

their retirement or compensation claim 

numbers. Agencies are able to identify 

employees by their names, addresses, 

and dates of birth. These changes can be 

found in § 870.105. 

(18) Beginning April 24, 1999 and 

continuing until April 24, 2002, eligible 

employees could elect portability for 

Option B coverage that would otherwise 

terminate. The 3-year portability 

demonstration project has expired and 

employees are no longer able to elect 

portability. We are removing subpart L 

and all references to portability from the 

regulations, including the definitions of 

‘‘Portability Office’’ and ‘‘ported 

coverage’’ from § 870.101. 

(19) The current regulations specify 

that only the insured individual may 

elect a living benefit and no one can 

elect a living benefit on his or her 

behalf. We are changing the regulations 

to allow another person with a power of 

attorney to apply for a living benefit on 

the insured individual’s behalf. These 

changes can be found in § 870.1103. 

Clarifications 

(1) The regulations state that when 

incontestability (allowing erroneous 

coverage to remain in effect under 

certain conditions) applies, if the 

individual does not want the erroneous 

coverage, he or she may cancel the 

coverage on a prospective basis; there is 

no refund of premiums. We are 

clarifying the regulations to state that if 

the erroneous coverage is Option C, and 

there are no eligible family members, 

the cancellation is retroactive to the end 

of the pay period in which the 

individual last had any eligible family 

members. In this case, the revision also 

provides for a refund of the Option C 

premiums for this period of erroneous 

coverage. We are also clarifying the 

regulations to provide that an annuitant 

or compensationer cannot enroll for life 

insurance coverage after retirement and 

any erroneous enrollments must be 

corrected. These changes can be found 

in § 870.104. 

(2) We are clarifying the regulations to 

better describe the ‘‘on or after’’ 

provision for the effective date of 

coverage. Most elections require that the 

employee be in pay and duty status 

before coverage can become effective. In 

these instances, the coverage becomes 

effective the day the employing office 

receives the election, if the employee is 

in pay and duty status on that date. If 

the employee is not in pay and duty 

status on the date the employing office 

receives the election, the coverage 

becomes effective the next date that the 

employee is in pay and duty status. 

These changes are found throughout the 

regulations where effective dates are 

discussed. 

(3) We are clarifying the computation 

of premium pay and availability pay to 

state that the employee’s annual rate of 

basic pay is multiplied by the applicable 

percentage factor to determine pay for 

FEGLI purposes. These changes can be 

found in § 870.204(g). 

(4) We are adding some definitions for 

clarity, including definitions of ‘‘covered 

position,’’ ‘‘beneficiary,’’ ‘‘acquisition of 

an eligible child,’’ and ‘‘accidental death 

and dismemberment.’’ We are also 

clarifying the definition of ‘‘court order.’’ 

These changes can be found in 

§ 870.101. 

(5) We are clarifying the requirements 

for continuing FEGLI during an 

extended period of non-pay for the 

special non-pay situations discussed in 

§ 870.508 to require that all such 

elections for continuing coverage must 

be made in writing. 

Corrections 

(1) We are correcting the regulations 

to state that premiums are based on the 

amount of insurance last in force for an 

individual during the pay period, rather 

than the amount in force on the last day 

of the pay period. In most instances this 

is the same thing; however, if an 

individual dies or separates during a 

pay period, the amount of insurance in 

force on the last day of the pay period 

is $0. In these instances, the amount of 

withholding from the final pay must be 

based on the amount of insurance on the 

date of death or separation. This change 

can be found in § 870.401(b). 

(2) In § 870.701(c), Eligibility for life 

insurance, there is an incorrect 

reference at the end to § 870.702(a)(2). 

That reference should be to 

§ 870.703(a)(2). The regulations have 

been changed to reflect this correction. 

(3) In § 870.707(e)(2), Reemployed 

annuitants and compensationers, there 

is an incorrect reference at the end to 

§ 870.702. That reference should be to 

§ 870.703. The regulations have been 

changed to reflect this correction. 

Regulatory Flexibility Act 

I certify that this regulation will not 

have a significant economic impact on 

a substantial number of small entities 

because the regulation only affects life 

insurance benefits of Federal employees 

and retirees. 

Executive Order 12866, Regulatory 

Review 

This rule has been reviewed by the 

Office of Management and Budget in 

accordance with Executive Order 12866. 

List of Subjects in 5 CFR Part 870 

Administrative practice and 

procedure, Government employees, 

Hostages, Iraq, Kuwait, Lebanon, Life 

insurance, Retirement. 

U.S. Office of Personnel Management. 

John Berry, 

Director. 

■ Accordingly, OPM is amending 5 CFR 

part 870 as follows: 

PART 870—FEDERAL EMPLOYEES’ 

GROUP LIFE INSURANCE PROGRAM 

■ 1. The authority citation for 5 CFR 

part 870 is revised to read as follows: 

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

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

513, 104 Stat. 2064, as amended; Sec. 

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

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

870.302(a)(3) also issued under sections 

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

Pub. L. 105–33, 111 Stat. 251, and section 

7(e) of Pub. L. 105–274, 112 Stat. 2419; Sec. 

870.302(a)(3) also issued under section 145 of 

Pub. L. 106–522, 114 Stat. 2472; Secs. 

870.302(b)(8), 870.601(a), and 870.602(b) also 

issued under Pub. L. 110–279, 122 Stat. 2604; 

Subpart E also issued under 5 U.S.C. 8702(c); 

Sec. 870.601(d)(3) also issued under 5 U.S.C. 

8706(d); Sec. 870.703(e)(1) also issued under 

section 502 of Pub. L. 110–177, 121 Stat. 

2542; Sec. 870.705 also issued under 5 U.S.C. 

8714b(c) and 8714c(c); Public Law 104–106, 

110 Stat. 521; 

Subpart A—Administration and 

General Provisions 

■ 2. Section 870.101 is amended as 

follows: 

■ a. Remove the definitions of 

‘‘Portability Office’’ and ‘‘ported 

coverage’’; 

■ b. Add the following definitions of 

‘‘accidental death and dismemberment’’, 

mstockstill on DSKH9S0YB1PROD with RULES

60576 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 

‘‘acquisition of an eligible child’’, 

‘‘beneficiary’’, and ‘‘covered position’’; 

and 

■ c. Revise the definition of ‘‘court 

order’’. 

The additions and revision read as 

follows: 

§ 870.101 Definitions. 

Accidental death and dismemberment 

refers to the insured’s death or loss of 

a hand, a foot, or vision in one eye that 

results directly from, and occurs within 

one year of, a bodily injury caused 

solely through violent, external, and 

accidental means. 

Acquisition of an eligible child occurs 

when: 

(1) A child is born to the insured; 

(2) The insured adopts a child; 

(3) The insured acquires a foster 

child; 

(4) The insured’s stepchild or 

recognized natural child moves in with 

the insured; 

(5) An otherwise eligible child’s 

marriage is dissolved by divorce or 

annulment, or his or her spouse dies; 

(6) The insured gains custody of an 

eligible child. 

* * * * * 

Beneficiary means the individual, 

corporation, trust, or other entity that 

receives FEGLI benefits when an 

insured individual dies. 

* * * * * 

Court order means: 

(1) A court decree of divorce, 

annulment, or legal separation; or 

(2) A court-approved property 

settlement agreement relating to a court 

decree of divorce, annulment, or legal 

separation—that requires benefits to be 

paid to a specific person or persons and 

is received in the employing office 

before the insured dies. 

Covered position means a position in 

which an employee is not excluded 

from FEGLI eligibility by law or 

regulation. 

* * * * * 

■ 3. Sections 870.104 and 870.105 are 

revised to read as follows: 

§ 870.104 Incontestability. 

(a) If an individual erroneously 

becomes insured, the coverage will 

remain in effect if at least 2 years pass 

before the error is discovered, and if the 

individual has paid applicable 

premiums during that time. This applies 

to errors discovered on or after October 

30, 1998, and applies only to 

employees, not retirees or 

compensationers. 

(b) If an employee is erroneously 

allowed to continue insurance into 

retirement or while receiving 

compensation, the coverage will remain 

in effect if at least 2 years pass before 

the error is discovered, and if the 

annuitant or compensationer has paid 

applicable premiums during that time. 

This applies to such errors discovered 

on or after October 30, 1998. 

(c) If an individual is erroneously 

enrolled in life insurance on or after the 

date he or she retires or begins receiving 

compensation, the coverage cannot 

remain in effect even if 2 years pass and 

the individual paid applicable 

premiums. 

(d) If an individual who is allowed to 

continue erroneous coverage under this 

section does not want the coverage, he 

or she may cancel the coverage on a 

prospective basis, effective at the end of 

the pay period in which the waiver is 

properly filed. There is no refund of 

premiums. Exception: If an employee 

obtained Option C erroneously and did 

not have any eligible family members, 

that coverage may be cancelled 

retroactively and the insured will obtain 

a refund of the erroneous Option C 

premiums. 

§ 870.105 Initial decision and 

reconsideration. 

(a) An individual may ask his or her 

agency or retirement system to 

reconsider its initial decision denying: 

(1) Life insurance coverage; 

(2) The opportunity to change 

coverage; 

(3) The opportunity to designate a 

beneficiary; or 

(4) The opportunity to assign 

insurance. 

(b) An employing office’s decision is 

an initial decision when the employing 

office gives it in writing and informs the 

individual of the right to an 

independent level of review 

(reconsideration) by the appropriate 

agency or retirement system. 

(c) A request for reconsideration must 

be made in writing and must include 

the following: 

(1) The employee’s (or annuitant’s) 

name, address, date of birth; 

(2) The reason(s) for the request; and 

(3) The retirement claim number 

(Civil Service Annuity Claim Number) 

or compensation number, if applicable. 

(d) A request for reconsideration must 

be made within 31 calendar days from 

the date of the initial decision (60 

calendar days if overseas). This time 

limit may be extended when the 

individual shows that he or she was not 

notified of the time limit and was not 

otherwise aware of it or that he or she 

was unable, due to reasons beyond the 

individual’s control, to make the request 

within the time limit. 

(e) The reconsideration must take 

place at or above the level at which the 

initial decision was made. 

(f) After reconsideration, the agency 

or retirement system must issue a final 

decision to the insured individual. This 

decision must be in writing and must 

fully state the findings. 

Subpart B—Types and Amounts of 

Insurance 

■ 4. In § 870.202, paragraph (a)(1) is 

revised to read as follows: 

§ 870.202 Basic insurance amount (BIA). 

(a)(1) An employee’s Basic insurance 

amount (BIA) is either: 

(i) The employee’s annual rate of 

basic pay, rounded to the next higher 

thousand, plus $2,000; or 

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

unless the employee has elected a 

Living Benefit under subpart K of this 

part. Effective for pay periods beginning 

on or after October 30, 1998, there is no 

maximum BIA. Note: If an employee’s 

pay is ‘‘capped’’ by law, the amount of 

the Basic insurance is based on the 

capped amount, which is the amount 

the employee is actually being paid. It 

is not based on the amount the 

employee’s pay would have been 

without the pay cap. 

* * * * * 

■ 5. Section 870.203 is revised to read 

as follows: 

§ 870.203 Post-election BIA. 

(a) The BIA of an individual who 

elects a Living Benefit under subpart K 

of this part is the amount of insurance 

left after the effective date of the Living 

Benefit election. This amount is the 

individual’s post-election BIA. 

(1) The post-election BIA of an 

individual who elects a full Living 

Benefit is 0. 

(2) If an employee elects a partial 

Living Benefit, the employee still has 

some Basic insurance. OFEGLI 

determines this amount by computing 

the BIA as of the date it receives the 

completed Living Benefit application 

and reducing the amount by a 

percentage. This percentage represents 

the amount of the employee’s partial 

Living Benefit payment, compared to 

the amount the employee could have 

received if he or she had elected a full 

Living Benefit. The amount that is left 

is rounded up or down to the nearest 

multiple of $1,000. (If the amount is 

midway between multiples, it is 

rounded up to the next higher multiple.) 

(b) The post-election BIA cannot 

change after the effective date of the 

Living Benefit election. 

(c) If an employee elected a partial 

Living Benefit and that employee is 

mstockstill on DSKH9S0YB1PROD with RULES

Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 60577 

under age 45 at the time of death, 

OFEGLI will multiply the post-election 

BIA by the appropriate factor, as 

specified in § 870.202(c), in effect on the 

date 9 months after the date OFEGLI 

received the completed Living Benefit 

application. 

■ 6. In § 870.204, paragraphs (a)(2)(x) 

and (g) are revised to read as follows: 

§ 870.204 Annual rates of pay. 

(a) * * * 

(2) * * * 

(x) Market pay for physicians and 

dentists of the Department of Veterans 

Affairs under 38 U.S.C. 7431; and 

* * * * * 

(g)(1) Except as provided in 

paragraphs (g)(2) and (3) of this section, 

if an employee legally serves in more 

than one position at the same time, and 

at least one of those positions entitles 

the employee to life insurance coverage, 

the annual pay for life insurance 

purposes is the sum of the annual rate 

of basic pay fixed by law or regulation 

for each position. 

(2) Paragraph (g)(1) of this section 

does not apply to— 

(i) An employee of the Postal Service 

who works on a part-time flexible 

schedule; or 

(ii) A temporary, intermittent 

decennial census worker. 

(3) If an employee’s annual pay 

includes premium pay or availability 

pay under paragraphs (e), (f), or (g) of 

this section, the annual pay is 

determined by multiplying the 

employee’s annual rate of basic pay by 

the applicable percentage factor. 

■ 7. In section 870.205, paragraph (b)(1) 

is revised to read as follows: 

§ 870.205 Amount of Optional insurance. 

* * * * * 

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

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

annual pay (after the pay has been 

rounded to the next higher thousand, if 

not already an even thousand). Effective 

for pay periods beginning on or after 

October 30, 1998, there is no maximum 

amount for each multiple. Note: If an 

employee’s pay is ‘‘capped’’ by law, the 

amount of the Option B insurance is 

based on the capped amount, which is 

the amount the employee is actually 

being paid. It is not based on the 

amount the employee’s pay would have 

been without the pay cap. 

* * * * * 

■ 8. Section 870.206 is revised to read 

as follows: 

§ 870.206 Accidental death and 

dismemberment. 

(a)(1) Accidental death and 

dismemberment coverage is an 

automatic part of Basic and Option A 

insurance for employees. 

(2) There is no accidental death and 

dismemberment coverage with Option B 

or Option C. 

(3) Individuals who are insured as 

annuitants or compensationers do not 

have accidental death and 

dismemberment coverage. 

(b)(1) Under Basic insurance, 

accidental death benefits are equal to 

the BIA, but without the age factor 

described in § 870.202(c). 

(2) Under Option A, accidental death 

benefits are equal to the amount of 

Option A. 

(c)(1) Under Basic insurance, 

accidental dismemberment benefits for 

the loss of a hand, foot, or the vision in 

one eye are equal to one-half the BIA. 

For loss of 2 or more of these in a single 

accident, benefits are equal to the BIA. 

(2) Under Option A, accidental 

dismemberment benefits for the loss of 

a hand, foot, or the vision in one eye are 

equal to one-half the amount of Option 

A. For loss of 2 or more of these in a 

single accident, benefits are equal to the 

amount of Option A. 

(3) Accidental dismemberment 

benefits are paid to the employee. 

(4) Accidental death benefits are paid 

to the employee’s beneficiaries. 

Subpart C—Eligibility 

■ 9. Section 870.302 is revised to read 

as follows: 

§ 870.302 Exclusions. 

(a) The following individuals are 

excluded from life insurance coverage 

by law: 

(1) An employee of a corporation 

supervised by the Farm Credit 

Administration, if private interests elect 

or appoint a member of the board of 

directors. 

(2) An individual who is not a citizen 

or national of the United States and 

whose permanent duty station is outside 

the United States. Exception: an 

individual who met the definition of 

employee on September 30, 1979, by 

service in an Executive agency, the 

United States Postal Service, or the 

Smithsonian Institution in the area 

which was then known as the Canal 

Zone. 

(3) An individual first employed by 

the government of the District of 

Columbia on or after October 1, 1987. 

Exceptions: 

(i) An employee of St. Elizabeths 

Hospital, who accepts employment with 

the District of Columbia government 

following Federal employment without 

a break in service, as provided in 

section 6 of Public Law 98–621 (98 Stat. 

3379); 

(ii) An employee of the District of 

Columbia Financial Responsibility and 

Management Assistance Authority 

(Authority), who makes an election 

under the Technical Corrections to 

Financial Responsibility and 

Management Assistance Act (section 

153 of Pub. L. 104–134 (110 Stat. 1321)) 

to be considered a Federal employee for 

life insurance and other benefits 

purposes; employees of the Authority 

who are former Federal employees are 

subject to the provisions of 

§§ 870.503(d) and 870.705 of this part; 

(iii) The Corrections Trustee or an 

employee of that Trustee who accepts 

employment with the District of 

Columbia government within 3 days 

after separating from the Federal 

Government. 

(iv) The Pretrial Services, Parole, 

Adult Probation and Offender 

Supervision Trustee or an employee of 

that Trustee; 

(v) Effective October 1, 1997, a 

judicial or nonjudicial employee of the 

District of Columbia Courts, as provided 

by Public Law 105–33 (111 Stat. 251); 

and 

(vi) Effective April 1, 1999, an 

employee of the Public Defender Service 

of the District of Columbia, as provided 

by Public Law 105–274 (112 Stat. 2419). 

(4) A teacher in a Department of 

Defense dependents school overseas, if 

employed by the Federal Government in 

a nonteaching position during the recess 

period between school years. 

(b) The following employees are also 

excluded from life insurance coverage: 

(1) An employee serving under an 

appointment limited to 1 year or less. 

Exceptions: 

(i) An employee whose full-time or 

part-time temporary appointment has a 

regular tour of duty and follows 

employment in a position in which the 

employee was insured, with no break in 

service or with a break in service of no 

more than 3 days; 

(ii) An acting postmaster; 

(iii) A Presidential appointee 

appointed to fill an unexpired term; and 

(iv) Certain employees who receive 

provisional appointments as defined in 

§ 316.403 of this chapter. 

(2) An employee who is employed for 

an uncertain or purely temporary 

period, who is employed for brief 

periods at intervals, or who is expected 

to work less than 6 months in each year. 

Exception: an employee who is 

employed under an OPM-approved 

career-related work-study program 

mstockstill on DSKH9S0YB1PROD with RULES

60578 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 

under Schedule B lasting at least 1 year 

and who is expected to be in pay status 

for at least one-third of the total period 

of time from the date of the first 

appointment to the completion of the 

work-study program. 

(3) An intermittent employee (a nonfull-time employee without a regularlyscheduled tour of duty). Exception: an 

employee whose intermittent 

appointment follows, with no break in 

service or with a break in service of no 

more than 3 days, employment in a 

position in which he or she was insured 

and to which he or she is expected to 

return. 

(4) An employee whose pay, on an 

annual basis, is $12 a year or less. 

(5) A beneficiary or patient employee 

in a Government hospital or home. 

(6) An employee paid on a contract or 

fee basis. Exception: an employee who 

is a United States citizen, who is 

appointed by a contract between the 

employee and the Federal employing 

authority which requires his or her 

personal service, and who is paid on the 

basis of units of time. 

(7) An employee paid on a piecework 

basis. Exception: an employee whose 

work schedule provides for full-time or 

part-time service with a regularlyscheduled tour of duty. 

(8) A Senate restaurant employee, 

except a former Senate restaurant 

employee who had life insurance 

coverage on the date of transfer to a 

private contractor on or after July 17, 

2008, and who elected to continue such 

coverage and to continue coverage 

under either chapter 83 or 84 of title 5, 

United States Code. 

(c) OPM makes the final 

determination regarding the 

applicability of the provisions of this 

section to a specific employee or group 

of employees. 

Subpart D—Cost of Insurance 

■ 10. In section 870.401, paragraph 

(b)(3) is revised to read as follows: 

§ 870.401 Withholdings and contributions 

for Basic insurance. 

* * * * * 

(b) * * * 

(3) The amount withheld from the pay 

of an insured employee whose BIA 

changes during a pay period is based on 

the BIA last in force during the pay 

period 

* * * 

■ 11. In section 870.404, paragraph (a) is 

revised to read as follows: 

§ 870.404 Withholdings and contributions 

provisions that apply to both Basic and 

Optional insurance. 

(a) Withholdings (and Government 

contributions, when applicable) are 

based on the amount of insurance last 

in force on an employee during the pay 

period. 

* * * * * 

■ 12. In section 870.405, paragraphs 

(c)(2), (g)(1), and (g)(5) are revised to 

read as follows: 

§ 870.405 Direct premium payments. 

* * * * * 

(c) * * * 

(2) Within 31 calendar days of 

receiving the notice (60 days for 

individuals living overseas), the insured 

individual (or assignee) must return the 

notice to the employing office or 

retirement system, choosing either to 

terminate some or all of the insurance 

or to make direct premium payments. 

An employee, annuitant, or 

compensationer is considered to receive 

a mailed notice 15 days after the date of 

the notice. 

* * * * * 

(g)(1) If an individual on direct pay 

fails to make the required premium 

payment on time, the employing office 

or retirement system must notify the 

individual. The individual must make 

the payment within 31 calendar days 

after receiving the notice (60 days if 

living overseas). An individual is 

considered to have received a mailed 

notice 15 days after the date of the 

notice, 30 days if living overseas. 

* * * * * 

(5) If, for reasons beyond his or her 

control, an insured individual is unable 

to pay within 30 days of receiving the 

past due notice (45 days if living 

overseas), he or she may request 

reinstatement of coverage by writing to 

the employing office or retirement 

system within 60 days from the date of 

cancellation. The individual must 

provide proof that the inability to pay 

within the time limit was for reasons 

beyond his or her control. The 

employing office or retirement system 

will decide if the individual is eligible 

for reinstatement of coverage. If the 

employing office or retirement system 

approves the request, the coverage is 

reinstated back to the date of 

cancellation, and the individual must 

pay the back premiums. 

Subpart E—Coverage 

■ 13. Sections 870.503 and 870.504 are 

revised to read as follows: 

§ 870.503 Basic insurance: Canceling a 

waiver. 

(a) An annuitant or compensationer 

who has filed a waiver of Basic 

insurance cannot cancel the waiver. 

(b) An employee who has filed a 

waiver of Basic insurance may cancel 

the waiver and become insured if: 

(1) The employee makes an election 

during an open enrollment period as 

described in § 870.507; 

(2) At least 1 year has passed since the 

effective date of the waiver, and the 

employee provides satisfactory medical 

evidence of insurability; or 

(3) The employee has a change in 

family circumstances (marriage or 

divorce, a spouse’s death, or acquisition 

of an eligible child) and files an election 

as provided in paragraph (b)(3(i), 

(b)(3)(ii), or (b)(3)(iii) of this section. 

Except as provided in paragraph 

(b)(3)(iii), the effective date of Basic 

insurance elected under this paragraph 

(b)(3) is the 1st day the employee 

actually enters on duty in a pay status 

on or after the day the employing office 

receives the election. 

(i) An employee must file an election 

under this paragraph with the 

employing office, in a manner 

designated by OPM, along with proof of 

the event, no later than 60 calendar days 

following the date of the change in 

family circumstances that permits the 

election; the employee may also file the 

election before the event and provide 

proof no later than 60 calendar days 

following the event. 

(ii) An employee making an election 

under this paragraph based on 

acquisition of an eligible foster child 

must file the election with the 

employing office no later than 60 

calendar days after completing the 

required certification. 

(iii) Within 6 months after an 

employee becomes eligible to make an 

election of Basic insurance due to a 

change in family circumstances, an 

employing office may determine that the 

employee was unable, for reasons 

beyond his or her control, to elect Basic 

insurance within the time limit. In this 

case, the employee must elect Basic 

insurance within 60 calendar days after 

he or she is notified of the 

determination. The insurance is 

retroactive to the 1st day of the first pay 

period beginning after the date the 

individual became eligible, if the 

employee was in pay and duty status 

that day. If the employee was not in pay 

and duty status that day, the coverage 

becomes effective the 1st day after the 

date the employee returned to pay and 

duty status. The individual must pay 

the full cost of the Basic insurance from 

mstockstill on DSKH9S0YB1PROD with RULES

Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 60579 

that date for the time that he or she is 

in pay status. 

(c) OFEGLI reviews the employee’s 

request and determines whether the 

employee complied with paragraph 

(b)(2) of this section. If the employee 

complied, then OFEGLI approves the 

Request for Insurance. The Basic 

insurance is effective on the date of 

OFEGLI’s approval if the employee is in 

pay and duty status on that date. If the 

employee is not in pay and duty status 

on the date of OFEGLI’s approval, the 

Basic insurance is effective the first day 

the employee returns to pay and duty 

status, as long as it is within 60 calendar 

days after OFEGLI’s approval. If the 

employee is not in pay and duty status 

within 60 calendar days after OFEGLI’s 

approval, the approval is revoked 

automatically. 

(d) When an employee who has been 

separated from service for at least 180 

days is reinstated on or after April 1, 

1981, a previous waiver of Basic 

insurance is automatically cancelled. 

Unless the employee files a new waiver, 

Basic insurance becomes effective on 

the 1st day he or she actually enters on 

duty in pay status in a position in which 

he or she is eligible for coverage. 

Exception: For employees who waived 

Basic insurance after February 28, 1981, 

separated, and returned to Federal 

service before December 9, 1983, the 

waiver remained in effect; these 

employees were permitted to elect Basic 

insurance by applying to their 

employing office before March 7, 1984. 

(e)(1) An employee of the Department 

of Defense who is designated as an 

‘‘emergency essential employee’’ under 

section 1580 of title 10, United States 

Code, may cancel a waiver of Basic 

insurance without providing satisfactory 

medical information. 

(2) An election of Basic insurance 

under paragraph (e)(1) of this section 

must be made within 60 days of being 

designated ‘‘emergency essential.’’ Basic 

insurance is effective on the date the 

employing office receives the election, if 

the employee is in pay and duty status 

on that date. If the employee is not in 

pay and duty status on the day the 

employing office receives the election, 

the coverage becomes effective on the 

date the employee returns to pay and 

duty status. 

(f)(1) A civilian employee who is 

eligible for Basic insurance coverage 

and is deployed in support of a 

contingency operation as defined by 

section 101(a)(13) of title 10, United 

States Code, may cancel a waiver of 

Basic Insurance without providing 

satisfactory medical information. 

(2) An election of Basic insurance 

under paragraph (f)(1) of this section 

must be made within 60 days after the 

date of notification of deployment in 

support of a contingency operation. 

Basic insurance is effective on the date 

the employing office receives the 

election, if the employee is in pay and 

duty status on that date. If the employee 

is not in pay and duty status on the day 

the employing office receives the 

election, the coverage becomes effective 

on the date the employee returns to pay 

and duty status. 

§ 870.504 Optional insurance: Election. 

(a)(1) Each employee must elect or 

waive Option A, Option B, and Option 

C coverage, in a manner designated by 

OPM, within 60 days after becoming 

eligible unless, during earlier 

employment, he or she filed an election 

or waiver that remains in effect. The 60- 

day time limit for Option B or Option 

C begins on the 1st day after February 

28, 1981, on which an individual is an 

employee as defined in § 870.101. 

(2) An employee of the District of 

Columbia Financial Responsibility and 

Management Assistance Authority who 

elects to be considered a Federal 

employee under section 153 of Public 

Law 104–134 (110 Stat. 1321) must elect 

or waive Option A, Option B, and 

Option C coverage within 31 days after 

the later of: 

(i) The date his or her employment 

with the Authority begins, or 

(ii) The date the Authority receives 

his or her election to be considered a 

Federal employee. 

(3) Within 6 months after an 

employee becomes eligible, an 

employing office may determine that the 

employee was unable, for reasons 

beyond his or her control, to elect any 

type of Optional insurance within the 

time limit. In this case, the employee 

must elect or waive that type of 

Optional insurance within 60 days after 

being notified of the determination. The 

insurance is retroactive to the 1st day of 

the 1st pay period beginning after the 

date the individual became eligible (or 

after April 1, 1981, whichever is later), 

if the employee was in pay and duty 

status that day. If the employee was not 

in pay and duty status that day, the 

coverage becomes effective the 1st day 

after the date the employee returned to 

pay and duty status. The individual 

must pay the full cost of the Optional 

insurance from that date for the time 

that he or she is in pay status (or retired 

or receiving compensation with 

unreduced Optional insurance). 

(b) Any employee who does not file 

a Life Insurance Election with his or her 

employing office, in a manner 

designated by OPM, specifically electing 

any type of Optional insurance, is 

considered to have waived it and does 

not have that type of Optional 

insurance. 

(c) For the purpose of having Option 

A as an employee, an election of this 

insurance filed on or before February 

28, 1981, is considered to have been 

cancelled effective at the end of the pay 

period which included March 31, 1981, 

unless the employee did not actually 

enter on duty in pay status during the 

1st pay period that began on or after 

April 1, 1981. In that case, the election 

is considered to have been cancelled on 

the 1st day after the end of the next pay 

period in which the employee actually 

entered on duty in pay status. In order 

to have Option A as an employee after 

the date of this cancellation, an 

employee must specifically elect the 

coverage by filing the Life Insurance 

Election with his or her employing 

office, subject to § 870.504(a) or 

870.506(b). 

(d) Optional insurance is effective the 

1st day an employee actually enters on 

duty in pay status on or after the day the 

employing office receives the election. If 

the employee is not in pay and duty 

status on the date the employing office 

receives the election, the coverage 

becomes effective the next date that the 

employee is in pay and duty status. 

(e) For an employee whose Optional 

insurance stopped for a reason other 

than a waiver, the insurance is 

reinstated on the 1st day he or she 

actually enters on duty in pay status in 

a position in which he or she again 

becomes eligible. 

■ 14. Sections 870.506, 870.507, and 

870.508 are revised to read as follows: 

§ 870.506 Optional insurance: Canceling a 

waiver. 

(a) When there is a change in family 

circumstances (see § 870.503(b)(3)). (1) 

An employee may cancel a waiver of 

Options A, B, and C due to a change in 

family circumstances as provided in 

paragraphs (a)(2) through (6) of this 

section. 

(2) An employee who has waived 

Options A and B coverage may elect 

coverage, and an employee who has 

fewer than 5 multiples of Option B may 

increase the number of multiples, upon 

his or her marriage or divorce, upon a 

spouse’s death, or upon acquisition of 

an eligible child. 

(3) An employee electing or 

increasing Option B coverage may elect 

any number of multiples, as long as the 

total number of multiples does not 

exceed 5. 

(4)(i) An employee who has waived 

Option C coverage may elect it, and an 

employee who has fewer than 5 

multiples of Option C may increase the 

mstockstill on DSKH9S0YB1PROD with RULES

60580 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 

number of multiples, upon his or her 

marriage or acquisition of an eligible 

child. An employee may also elect or 

increase Option C coverage upon 

divorce or death of a spouse, if the 

employee has any eligible children. 

(ii) An employee electing or 

increasing Option C coverage may elect 

any number of multiples, as long as the 

total number of multiples does not 

exceed 5. 

(5)(i) Except as stated in paragraph 

(a)(5)(iii) of this section, the employee 

must file an election under paragraph 

(a)(2) or (a)(4) of this section with the 

employing office, in a manner 

designated by OPM, along with proof of 

the event, no later than 60 calendar days 

following the date of the event that 

permits the election; the employee may 

also file the election before the event 

and provide proof no later than 60 

calendar days following the event. 

(ii) An employee making an election 

under paragraph (a)(4)(i) of this section 

following the acquisition of an eligible 

foster child must file the election with 

the employing office no later than 60 

calendar days after completing the 

required certification. 

(iii) In the case of an employee who 

had a change in family circumstances 

between October 30, 1998, and April 23, 

1999, an election under this section 

must have been made on or before June 

23, 1999. 

(iv) Within 6 months after an 

employee becomes eligible to make an 

election due to a change in family 

circumstances, an employing office may 

determine that the employee was 

unable, for reasons beyond his or her 

control, to elect or increase Optional 

insurance within the time limit. In this 

case, the employee must elect or 

increase Optional insurance within 60 

calendar days after he or she is notified 

of the determination. The insurance is 

retroactive to the 1st day of the first pay 

period beginning after the date the 

individual became eligible if the 

employee was in pay and duty status 

that day. If the employee was not in pay 

and duty status that day, the coverage 

becomes effective the 1st day after that 

date the employee returned to pay and 

duty status. The individual must pay 

the full cost of the Optional insurance 

from that date for the time that he or she 

is in pay status. 

(6)(i) The effective date of Options A 

and B insurance elected under 

paragraph (a)(1) of this section is the 1st 

day the employee actually enters on 

duty in pay status on or after the day the 

employing office receives the election. 

(ii) Except as provided in paragraphs 

(a)(5)(iii) and (a)(6)(iv) of this section, 

the effective date of Option C coverage 

elected because of marriage, divorce, 

death of a spouse, or acquisition of an 

eligible child is the day the employing 

office receives the election, or the date 

of the event, whichever is later. 

Exception: Coverage elected under 

paragraph (a)(5)(iii) of this section was 

effective April 24, 1999. 

(iii) The effective date of Option C 

coverage elected because of the 

acquisition of a foster child is the date 

the employing office receives the 

election or the date the employee 

completes the certification, whichever is 

later. 

(iv) If the employee does not elect 

Basic insurance and Option C together 

(and did not have Basic insurance 

before), then Option C becomes effective 

the same day as his or her Basic 

insurance becomes effective. 

(b) When there is no change in family 

circumstances. (1) An employee who 

has waived Option A or Option B 

coverage may cancel the waiver and 

elect coverage if: 

(i) The employee makes an election 

during an open enrollment period; or 

(ii) At least 1 year has passed since 

the effective date of the waiver, and the 

employee provides satisfactory medical 

evidence of insurability. 

(2) An employee who has Option B 

coverage of fewer than five multiples of 

annual pay may increase the number of 

multiples if at least 1 year has passed 

since the effective date of his or her last 

election of fewer than five multiples 

(including a reduction in the number of 

multiples), and the employee provides 

satisfactory medical evidence of 

insurability. 

(3) A waiver of Option C may be 

cancelled only if there is a change in 

family circumstances or during an open 

enrollment period. 

(c) OFEGLI reviews the employee’s 

request and determines whether the 

employee complied with paragraphs 

(b)(1)(ii) and (b)(2) of this section. If the 

employee complied, then OFEGLI 

approves the Request for Insurance. The 

Option A and B insurance is effective on 

the date of OFEGLI’s approval, if the 

employee is in pay and duty status on 

that date. If the employee is not in pay 

and duty status on the date of OFEGLI’s 

approval, the insurance is effective the 

first day the employee returns to pay 

and duty status, as long as it is within 

60 calendar days of OFEGLI’s approval. 

If the employee is not in pay and duty 

status within 60 calendar days after 

OFEGLI’s approval, the approval is 

revoked automatically. 

(d) If an employee waived Option A 

insurance on or before February 28, 

1981, the waiver was automatically 

cancelled effective on the 1st day the 

employee entered on duty in pay status 

on or after April 1, 1981. Option A 

coverage was effective on the date of the 

waiver’s cancellation, if the employee 

filed an election of Option A during the 

March 1, 1981, through March 31, 1981, 

open enrollment period. If the employee 

did not file the election with his or her 

employing office during the March 1981 

open enrollment period, the employee is 

considered to have waived Option A on 

March 31, 1981. 

(e) When an employee who has been 

separated from service for at least 180 

days is reinstated on or after April 1, 

1981, a previous waiver of Optional 

insurance is automatically cancelled, as 

follows: 

(1) An employee who returned to 

service between April 1, 1981, and 

December 8, 1983, after a 180-day break 

in service was permitted to elect any 

form of Optional insurance by applying 

to his or her employing office before 

March 7, 1984. 

(2) An employee who returns to 

service after December 8, 1983, 

following a 180-day break in service 

may elect any form of Optional 

insurance by applying to his or her 

employing office within 60 calendar 

days after reinstatement. Coverage is 

effective on the 1st day the employee 

actually enters on duty in pay status in 

a position in which he or she is eligible 

for insurance on or after the date the 

employing office receives the election. If 

the employee does not file a Life 

Insurance Election in a manner 

designated by OPM within the 60-day 

period, the employee has whatever 

Optional insurance coverage he or she 

had immediately before separating from 

Federal service and is considered to 

have waived any other Optional 

insurance. However, an employee who 

fails to file an election during the 60-day 

period due to reasons beyond his or her 

control may enroll belatedly under the 

conditions stated in § 870.504(a)(3). 

(f)(1) An employee of the Department 

of Defense who is designated as 

‘‘emergency essential’’ under section 

1580 of title 10, United States Code, 

may cancel a waiver of Option A and 

Option B insurance. 

(2) An election of Option A or Option 

B insurance under paragraph (f)(1) must 

be made within 60 days of being 

designated ‘‘emergency essential.’’ 

Optional insurance is effective on the 

date the employing office receives the 

election, if the employee is in pay and 

duty status on that date. If the employee 

is not in pay and duty status on the day 

the employing office receives the 

election, the coverage becomes effective 

on the date the employee returns to pay 

and duty status. 

mstockstill on DSKH9S0YB1PROD with RULES

Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 60581 

(g)(1) A civilian employee who is 

eligible for life insurance coverage and 

who is deployed in support of a 

contingency operation as defined by 

section 101(a)(13) of title 10, United 

States Code, may cancel a waiver of 

Option A and/or Option B insurance. 

(2) An election of Optional insurance 

under paragraph (g)(1) of this section 

must be made within 60 days after the 

date of notification of deployment in 

support of a contingency operation. 

Optional insurance is effective on the 

date the employing office receives the 

election, if the employee is in pay and 

duty status on that date. If the employee 

is not in pay and duty status on the day 

the employing office receives the 

election, the coverage becomes effective 

on the date the employee returns to pay 

and duty status. 

(h) An annuitant or compensationer is 

not eligible to cancel a waiver of any 

type of Optional insurance or to 

increase multiples of Option B under 

this section. 

§ 870.507 Open enrollment periods. 

(a) There are no regularly scheduled 

open enrollment periods for life 

insurance. Open enrollment periods are 

held only when specifically scheduled 

by OPM. 

(b) During an open enrollment period, 

unless OPM announces otherwise, 

eligible employees may cancel their 

existing waivers of Basic and/or 

Optional insurance by electing the 

insurance in a manner designated by 

OPM. 

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

all insurance elected during an open 

enrollment period. The newly elected 

insurance is effective on the 1st day of 

the 1st pay period that begins on or after 

the OPM-established date and that 

follows a pay period during which the 

employee was in pay and duty status for 

at least 32 hours, unless OPM 

announces otherwise. 

(2) A part-time employee must be in 

pay and duty status for one-half the 

regularly-scheduled tour of duty shown 

on his or her current Standard Form 50 

for newly-elected coverage to become 

effective, unless OPM announces 

otherwise. 

(3) An employee who has no 

regularly-scheduled tour of duty or who 

is employed on an intermittent basis 

must be in pay and duty status for onehalf the hours customarily worked 

before newly-elected coverage can 

become effective, unless OPM 

announces otherwise. For the purpose 

of this paragraph, an employing office 

may determine the number of hours 

customarily worked by averaging the 

number of hours worked in the most 

recent calendar year quarter prior to the 

start of the open enrollment period. 

(d) Within 6 months after an open 

enrollment period ends, an employing 

office may determine that an employee 

was unable, for reasons beyond his or 

her control, to cancel an existing waiver 

by electing to be insured during the 

open enrollment period. An election 

under this paragraph must be submitted 

within 60 days after being notified of 

the determination. Coverage is 

retroactive to the first pay period that 

begins on or after the effective date set 

by OPM and that follows a pay period 

during which the employee was in pay 

and duty status for at least 32 hours, 

unless OPM announces otherwise. If the 

employee does not file an election 

within this 60-day time limit, he or she 

will be considered to have waived 

coverage. 

§ 870.508 Nonpay status. 

(a) An employee who is in nonpay 

status is entitled to continue life 

insurance for up to 12 months. No 

premium payments are required, unless 

the employee is receiving 

compensation. 

(b) If an insured employee who is 

entitled to free insurance while in 

nonpay status accepts a temporary 

appointment to a position in which he 

or she would normally be excluded 

from insurance coverage, the insurance 

continues. The amount of Basic 

insurance (and Option B coverage if the 

employee has it) is based on the 

combined salaries of the two positions. 

Withholdings are made from the 

employee’s pay in the temporary 

position. 

(c) If an insured employee goes on 

leave without pay (LWOP) to serve as a 

full-time officer or employee of an 

employee organization, he or she may 

elect in writing to continue life 

insurance within 60 days after the 

beginning of the LWOP. The insurance 

continues for the length of the 

appointment, even if the LWOP lasts 

longer than 12 months. The employee 

must pay to the employing office the 

full cost of Basic and Optional 

insurance starting with the beginning of 

the nonpay status; the employee is not 

entitled to 12 months of free coverage. 

There is no Government contribution for 

these employees. 

(d) If an insured employee goes on 

LWOP while assigned to a State 

government, local government, or 

institution of higher education, the 

employee may elect in writing to 

continue the life insurance for the 

length of the assignment, even if the 

LWOP lasts longer than 12 months. The 

employee must pay his or her premiums 

to the Federal agency on a current basis 

starting with the beginning of the 

nonpay status; the employee is not 

entitled to 12 months of free coverage. 

The agency must continue to pay its 

contribution as long as the employee 

makes his or her payments. 

Subpart F—Termination and 

Conversion 

15. Sections 870.601, 870.602, and 

870.603 are revised to read as follows: 

§ 870.601 Termination of Basic insurance. 

(a) Except as otherwise provided in 

this section or § 870.701, the Basic 

insurance of an insured employee stops 

on the date the employee separates from 

service, subject to a 31-day extension of 

coverage. Exception: If the employee 

was employed by the Architect of the 

Capitol as a Senate Restaurants 

employee the day before the food 

services operations of the Senate 

Restaurants were transferred to a private 

business concern and the employee 

accepted employment by the business 

concern and elected to continue his or 

her Federal retirement benefits and 

FEGLI coverage, the employee continues 

to be eligible for FEGLI coverage as long 

as he or she remains employed by the 

business concern or its successor. 

(b) The Basic insurance of an 

employee who separates from service 

after meeting the requirement for an 

immediate annuity under 

§ 842.204(a)(1) of this chapter and who 

postpones receiving the annuity, as 

provided by § 842.204(c) of this chapter 

(an MRA+10 annuity), stops on the date 

he or she separates from service, subject 

to a 31-day extension of coverage. 

(c) The Basic insurance of an insured 

employee who moves without a break in 

service to a position in which he or she 

is excluded from life insurance stops on 

the last day of employment in the 

former position, subject to a 31-day 

extension of coverage. Exception: If the 

position is excluded by regulation (not 

by law), and the employee does not 

have a break in service of more than 

three days, the Basic insurance 

continues. 

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

the Basic insurance of an insured 

employee who is in nonpay status stops 

on the date the employee completes 12 

months in nonpay status, subject to a 

31-day extension of coverage. The 12 

months’ nonpay status may be broken 

by periods of less than 4 consecutive 

months in pay status. If an employee 

has at least 4 consecutive months in pay 

status after a period of nonpay status, he 

or she is entitled to begin the 12 

months’ continuation of Basic insurance 

mstockstill on DSKH9S0YB1PROD with RULES

60582 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 

again. If an employee has used up his 

or her 12 months’ continuation in 

nonpay status and returns to duty for 

less than 4 consecutive months, his or 

her Basic insurance stops on the 32nd 

day after the last day of the last pay 

period in pay status. 

(2) For the purpose of paragraph (d)(1) 

of this section, 4 consecutive months in 

pay status means any 4-month period 

during which the employee is in pay 

status for at least part of each pay 

period. 

(3)(i) For the purpose of paragraph 

(d)(1) of this section, an individual who 

is entitled to benefits under part 353 of 

this chapter (USERRA—Uniformed 

Services Employment and 

Reemployment Act of 1994), who 

separates to go on military duty instead 

of going into a nonpay status, is treated 

as an employee in nonpay status for life 

insurance purposes. 

(ii) Basic insurance continues free for 

12 months or until 90 days after military 

service ends, whichever comes first. 

(iii) Effective January 28, 2008, an 

employee who enters on active duty, or 

active duty for training in one of the 

uniformed services for more than 30 

days, may continue enrollment for an 

additional 12 months, for a total of up 

to 24 months. 

(A) Each agency must notify its 

employees of the opportunity to elect to 

continue coverage for the additional 12 

months. 

(B) An employee wanting coverage for 

the additional 12 months must elect it 

prior to the end of the first 12 months 

in nonpay status, in a manner 

designated by the employing agency. 

(C) Insurance continues free for the 

first 12 months; however, an employee 

must pay both the employee and agency 

share of premiums to the agency on a 

current basis for Basic coverage, and 

must pay the entire cost (there is no 

agency share) for any Optional 

insurance for the additional 12 months 

of coverage elected. 

(D) For an employee who does not 

elect to continue coverage for an 

additional 12 months, coverage 

terminates at the end of the first 12 

months in nonpay status subject to the 

31-day extension of coverage and 

conversion rights as provided in 

§ 870.603 of this part. 

(e) Except for employees, annuitants, 

and compensationers who elect direct 

payment as provided in § 870.405 of this 

part, Basic insurance stops, subject to a 

31-day extension of coverage, at the end 

of the pay period in which the 

employing office or retirement system 

determines that an individual’s periodic 

pay, annuity, or compensation, after all 

other deductions, is not enough to cover 

the full cost of Basic insurance. 

§ 870.602 Termination of Optional 

insurance. 

(a) The Optional insurance of an 

insured employee stops when his or her 

Basic insurance stops, subject to the 

same 31-day extension of coverage. 

(b) The Optional insurance of an 

employee who separates from service 

after meeting the requirement for an 

immediate annuity under 

§ 842.204(a)(1) of this chapter and who 

postpones receiving the annuity, as 

provided by § 842.204(c) of this chapter 

(an MRA+10 annuity), stops on the date 

he or she separates from service, subject 

to a 31-day extension of coverage. 

Exception: If the employee was 

employed by the Architect of the 

Capitol as a Senate Restaurants 

employee the day before the food 

services operations of the Senate 

Restaurants were transferred to a private 

business concern and the employee 

accepted employment with the business 

concern and elected to continue his or 

her Federal retirement benefits and 

FEGLI coverage, the employee continues 

to be eligible for FEGLI coverage as long 

as he or she remains employed by the 

business concern or its successor. 

(c)(1) If an insured employee is not 

eligible to continue Optional coverage 

as an annuitant or compensationer as 

provided by § 870.701, the Optional 

insurance stops on the date that his or 

her Basic insurance is continued or 

reinstated under § 870.701, subject to a 

31-day extension of coverage. 

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

election of Basic insurance during 

receipt of annuity or compensation, he 

or she elects no Basic life insurance as 

provided by § 870.702(a)(1), the 

Optional insurance stops at the end of 

the month in which the election is 

received in OPM, subject to a 31-day 

extension of coverage. 

(e) Except for employees, annuitants, 

and compensationers who elect direct 

payment as provided in § 870.405, 

Optional insurance stops, subject to a 

31-day extension of coverage, at the end 

of the pay period in which the 

employing office or retirement system 

determines that an individual’s periodic 

pay, annuity, or compensation, after all 

other deductions, is not enough to cover 

the full cost of the Optional insurance. 

If an individual has more than one type 

of Optional insurance and his or her 

pay, annuity, or compensation is 

sufficient to cover some but not all of 

the insurance, the multiples of Option C 

terminate first, followed by Option A, 

and then the multiples of Option B. 

§ 870.603 Conversion of Basic and 

Optional insurance. 

(a)(1) When group coverage 

terminates for any reason other than 

voluntary cancellation, an employee 

may apply to convert all or any part of 

his or her Basic and Optional insurance 

to an individual policy; no medical 

examination is required. The premiums 

for the individual policy are based on 

the employee’s age and class of risk. An 

employee is eligible to convert the 

policy only if he or she does not return, 

within 3 calendar days from the 

terminating event, to a position covered 

under the group plan. Exception: If an 

employee is unable to convert, a person 

having power of attorney for that 

employee may convert on his or her 

behalf. If insurance has been assigned 

under subpart I of this part, it is the 

assignee(s), not the employee, who has 

(have) the right to convert. 

(2) The employing agency must notify 

the employee/assignee(s) of the loss of 

coverage and the right to convert to an 

individual policy either before or 

immediately after the event causing the 

loss of coverage. 

(3) The employee/assignee(s) must 

submit the request for conversion 

information to OFEGLI. OFEGLI must 

receive the request for conversion 

within 31 calendar days of the date on 

the conversion notification the 

employee receives from the employing 

agency (60 days if overseas) or within 60 

calendar days after the date of the 

terminating event (90 days, if overseas), 

whichever is earlier. 

(4) If the employee does not request 

conversion information within the 

specified time period as described in 

paragraph (a)(3) of this section, the 

employee is considered to have refused 

coverage unless OFEGLI determines the 

failure was for reasons beyond the 

employee’s control, as described in 

paragraph (a)(5) of this section. 

(5) When an agency fails to provide 

the notification required in paragraph 

(a)(2) of this section, or the employee/ 

assignee fails to request conversion 

information within the time limit set in 

paragraph (a)(3) of this section for 

reasons beyond his or her control, the 

employee may make a belated request 

by writing to OFEGLI. The employee/ 

assignee must make the request within 

6 months after becoming eligible to 

convert the insurance. The employee/ 

assignee must show that he or she was 

not notified of the loss of coverage and 

the right to convert and was not 

otherwise aware of it or that he or she 

was unable to convert to an individual 

policy for reasons beyond his or her 

control. OFEGLI will determine if the 

employee/assignee is eligible to convert. 

mstockstill on DSKH9S0YB1PROD with RULES

Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 60583 

If the request is approved, the employee 

must convert within 31 calendar days of 

that determination. 

(b) The individual conversion policy 

is effective the day after the group 

coverage ends. The employee/assignee 

must pay the premiums for any period 

retroactive to that date. 

(c) The 31-day extension of coverage 

provided under this subpart does not 

depend upon timely notification of the 

right to convert to an individual policy. 

The extension cannot be continued 

beyond 31 days. 

(d) Family members may convert 

Option C coverage (and name 

beneficiaries of their choice) if: 

(1) The employee dies; or 

(2) The insurance stops under 

circumstances that allow the employee 

to convert Option C coverage but the 

employee does not convert. 

(e) If an employee with Option C 

coverage dies, the employing office 

must send a conversion notice to the 

family members at the employee’s last 

address on file. 

(f) Family members must submit the 

request for conversion information to 

OFEGLI. OFEGLI must receive the 

request for conversion within 31 

calendar days of the date on the 

conversion notification the employee 

receives from his or her employing 

agency (60 days if overseas) or within 60 

calendar days after the date of the 

terminating event (90 days, if overseas), 

whichever is earlier. There is no 

extension to these time limits. Family 

members are considered to have refused 

coverage if they do not request 

conversion within these time limits. 

(g) The family members’ conversion 

policy is effective at the end of the 

employee’s 31-day extension of 

coverage. 

Subpart G—Annuitants and 

Compensationers 

■ 16. Section 870.701(c) is revised to 

read as follows: 

§ 870.701 Eligibility for life insurance. 

* * * * * 

(c) An individual who meets the 

requirements of paragraph (a) or (b) of 

this section or § 870.706 for 

continuation or reinstatement of life 

insurance must complete an election, in 

a manner designated by OPM, at the 

time entitlement is established. For the 

election to be valid, OPM must receive 

the election before OPM has made a 

final decision on the individual’s 

application for annuity or supplemental 

annuity or an individual’s request to 

continue life insurance as a 

compensationer. If there is no valid 

election, OPM considers the individual 

to have chosen the option described in 

§ 870.703(a)(2). 

■ 17. Section 870.702(b)(2) is revised to 

read as follows: 

§ 870.702 Amount of Basic insurance. 

* * * * * 

(b) * * * 

(2)(i) For an annuitant or 

compensationer who elected a partial 

Living Benefit as an employee, the 

amount of Basic insurance he or she can 

continue is the post-election BIA, as 

described in § 870.203(a)(2). 

(ii) If an employee elected a partial 

Living Benefit and that employee is 

under age 45 at the time of death, 

OFEGLI will multiply the post-election 

BIA by the appropriate factor, as 

specified in § 870.202(c), that was in 

effect on the date that is nine months 

after the date OFEGLI received the 

completed Living Benefit application. 

■ 18. Section 870.703 is revised to read 

as follows: 

§ 870.703 Election of Basic insurance. 

(a) An individual who makes an 

election under § 870.701(c) and who has 

not elected a Living Benefit must select 

one of the options in paragraphs (a)(1) 

through (4) of this section. No one else 

can make this election on the 

individual’s behalf. 

(1) Termination of the insurance. The 

individual’s insurance stops upon 

conversion to an individual policy as 

provided under § 870.603. If the 

individual does not convert to an 

individual policy, insurance stops at the 

end of the month in which OPM or the 

employing office receives the election; 

(2) Continuation or reinstatement of 

Basic insurance with a maximum 

reduction of 75 percent during 

retirement. Premiums are withheld from 

annuity or compensation (except as 

provided under § 870.401(d)(1)). The 

amount of Basic Life insurance in force 

reduces by 2 percent of the BIA each 

month until the maximum reduction is 

reached. This reduction starts at the 

beginning of the 2nd month after the 

date the insurance would otherwise 

have stopped or the date of the insured’s 

65th birthday, whichever is later; 

(3) Continuation or reinstatement of 

Basic insurance with a maximum 

reduction of 50 percent during 

retirement. Premiums are withheld from 

annuity or compensation. The amount 

of Basic insurance in force reduces by 

1 percent of the BIA each month until 

the maximum reduction is reached. This 

reduction starts at the beginning of the 

2nd month after the date the insurance 

would otherwise have stopped or the 

date of the insured’s 65th birthday, 

whichever is later; or 

(4) Continuation or reinstatement of 

Basic insurance with no reduction after 

age 65. Premiums are withheld from 

annuity or compensation. 

(b)(1) Unless an employee has elected 

a partial Living Benefit under subpart K 

of this part or an individual has 

assigned the insurance under subpart I 

of this part, an insured individual may 

cancel an election under paragraph 

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

The amount of Basic insurance 

automatically switches to the amount 

that would have been in force if the 

individual had originally elected the 75 

percent reduction. This revised amount 

is effective at the end of the month in 

which OPM receives the request to 

cancel the previous election. There is no 

refund of premiums. 

(2) If an individual files a waiver of 

insurance, the coverage stops without a 

31-day extension of coverage or 

conversion right. Coverage ceases at the 

end of the month in which OPM 

received the waiver. 

(c) Unless he/she chooses to terminate 

his/her insurance, an employee who has 

elected a partial Living Benefit must 

choose the no reduction election under 

paragraph (a)(4) of this section. The 

employee cannot later change to the 75 

percent reduction. 

(d) If an employee has assigned his or 

her insurance, he/she cannot cancel an 

election under paragraph (a)(3) or (a)(4) 

of this section. Only the assignee(s) may 

cancel this election. Exception: If the 

employee elected a partial Living 

Benefit before assigning the remainder 

of his or her insurance, the assignee(s) 

cannot cancel the election under 

paragraph (a)(4) of this section. 

(e)(1) For purposes of this part, a 

judge who retires under one of the 

following provisions is considered to be 

an employee after retirement: 

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

(ii) 28 U.S.C. 372(a); 

(iii) 28 U.S.C. 377; 

(iv) 26 U.S.C. 7447; 

(v) 11 DC Code 776; 

(vi) Section 7447 of the Internal 

Revenue Code; 

(2) The insurance of a judge described 

in paragraph (e)(1) of this section does 

not reduce after age 65. Basic insurance 

continues without interruption or 

reduction. Exception: If the insured is a 

judge eligible for compensation, and 

chooses to receive compensation instead 

of annuity, he or she must select an 

option described in paragraph (a) of this 

section. 

■ 19. Sections 870.704 and 870.705 are 

revised to read as follows: 

mstockstill on DSKH9S0YB1PROD with RULES

60584 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 

§ 870.704 Amount of Option A. 

(a) The amount of Option A coverage 

an annuitant or compensationer can 

continue is $10,000. 

(b) An annuitant’s or 

compensationer’s Option A coverage 

reduces by 2 percent of the original 

amount each month up to a maximum 

reduction of 75 percent. This reduction 

starts at the beginning of the 2nd month 

after the date the insurance would 

otherwise have stopped or the beginning 

of the 2nd month after the date of the 

insured’s 65th birthday, whichever is 

later. 

(c) Paragraph (b) of this section does 

not apply to a judge who retires under 

one of the provisions listed in 

§ 870.703(e)(1). For purposes of this 

part, such a judge is considered to be an 

employee after retirement, and Option A 

insurance continues without 

interruption or reduction. Exception: If 

the judge is eligible for compensation 

and chooses to receive compensation 

instead of annuity, paragraph (b) of this 

section applies. 

§ 870.705 Amount and election of Option B 

and Option C. 

(a) The number of multiples of Option 

B and Option C coverage an annuitant 

or compensationer can continue is the 

highest number of multiples in force 

during the applicable period of service 

required to continue Option B and 

Option C. 

(b)(1)(i) At the time an employee 

retires or becomes insured as a 

compensationer, he or she must elect 

the number of allowable multiples he or 

she wishes to continue during 

retirement or while receiving 

compensation. 

(ii) An employee who elects to 

continue fewer multiples than the 

number for which he or she is eligible 

is considered to have cancelled the 

multiples that are not continued. 

(iii) An employee separating for 

retirement and an employee becoming 

insured as a compensationer on or after 

April 24, 1999, must choose the level of 

post-age-65 reduction he or she wants. 

There are two choices: Full Reduction 

and No Reduction. The election may be 

made only by the employee and must be 

made in the manner that OPM 

designates. The employee may make 

different elections for Option B and for 

Option C. He or she may choose Full 

Reduction for some multiples of an 

Option and No Reduction for other 

multiples of the same Option. Failure to 

make an election for Option B or for 

Option C will be considered to be an 

election of Full Reduction for all 

multiples of that Option. 

(iv) For purposes of this part, a judge 

who retires under one of the provisions 

listed in § 870.703(e)(1) is considered to 

be an employee after retirement. The 

insurance of such a judge does not 

reduce after age 65. Exception: If the 

judge is eligible for compensation and 

chooses to receive compensation instead 

of annuity, the post-65 reductions and 

elections apply. 

(2)(i) Prior to reaching age 65, an 

annuitant or compensationer can change 

from No Reduction to Full Reduction at 

any time. Exception: If the individual 

has assigned his or her insurance as 

provided in subpart I of this part, only 

the assignee can change from No 

Reduction to Full Reduction for the 

Option B coverage. 

(3)(i) After reaching age 65, an 

annuitant or compensationer can change 

from No Reduction to Full Reduction at 

any time. Exception: If the individual 

has assigned his or her insurance as 

provided in subpart I of this part, only 

the assignee can change from No 

Reduction to Full Reduction for the 

Option B coverage. If an individual age 

65 or over changes to Full Reduction, 

the amount of insurance in force is 

computed as if he or she had elected 

Full Reduction initially. There is no 

refund of premiums. 

(ii) After reaching age 65, an 

annuitant or compensationer cannot 

change from Full Reduction to No 

Reduction. 

(c)(1) For each multiple of Option B 

and/or Option C for which an 

individual elects Full Reduction, the 

coverage reduces by 2 percent of the 

original amount each month. This 

reduction starts at the beginning of the 

2nd month after the date the insurance 

would otherwise have stopped or the 

beginning of the 2nd month after the 

insured’s 65th birthday, whichever is 

later. At 12:00 noon on the day before 

the 50th reduction, the insurance stops, 

with no extension of coverage or 

conversion right. 

(2) For each multiple of Option B and/ 

or Option C for which an individual 

elects No Reduction, the coverage in 

force does not reduce. After age 65 the 

annuitant or compensationer continues 

to pay premiums appropriate to his or 

her age. 

(d)(1) An employee who was already 

retired or insured as a compensationer 

on April 24, 1999, and who had Option 

B, was given an opportunity to make an 

election for Option B. 

(i) Each such annuitant or 

compensationer who was under age 65 

on April 24, 1999, was notified of the 

option to elect No Reduction. The 

retirement system will send the 

individual an election notice before his 

or her 65th birthday. 

(ii) Each such annuitant or 

compensationer who was age 65 or 

older on April 24, 1999, and who still 

had some Option B coverage remaining, 

was given the opportunity to stop 

further reductions. The individual had 

until October 24, 1999, to make the No 

Reduction election. The amount of 

Option B coverage retained was the 

amount in effect on April 24, 1999. Each 

annuitant or compensationer who 

elected No Reduction was required to 

pay premiums retroactive to April 24, 

1999. 

(2) An employee who was already 

retired or insured as a compensationer 

on April 24, 1999, could not elect No 

Reduction for Option C. 

■ 20. Section 870.707 is revised to read 

as follows: 

§ 870.707 Reemployed annuitants and 

compensationers. 

(a)(1) If an insured annuitant or 

compensationer is appointed to a 

position in which he or she is eligible 

for insurance, the amount of his or her 

Basic life insurance as a annuitant or 

compensationer (and any applicable 

withholdings) is suspended on the day 

before the 1st day in pay status under 

the appointment, unless the reemployed 

annuitant or compensationer waives all 

insurance coverage as an employee. The 

Basic insurance benefit payable upon 

the death of a reemployed annuitant or 

compensationer who has Basic 

insurance in force as an employee, 

cannot be less than the benefit that 

would have been payable if the 

individual had not been reemployed. 

(2) Except as provided in paragraph 

(b) of this section, the Basic insurance 

obtained as an employee stops with no 

31-day extension of coverage or 

conversion right, on the date 

reemployment terminates. Any 

suspended Basic insurance (and any 

applicable withholdings) is reinstated 

on the day following termination of the 

reemployment. 

(b) Basic insurance obtained during 

reemployment can be continued after 

the reemployment terminates if the 

individual: 

(1) Qualifies for a supplemental 

annuity or receives a new retirement 

right (or if a compensationer, he or she 

worked an amount of time equivalent to 

that required for an annuitant to qualify 

for a supplemental annuity); 

(2) Has had Basic insurance as an 

employee for at least 5 years of service 

immediately before separation from 

reemployment or for the full period(s) 

during which such coverage was 

mstockstill on DSKH9S0YB1PROD with RULES

Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 60585 

available to the individual, whichever is 

less; and 

(3) Does not convert to nongroup 

insurance when Basic insurance as an 

employee would otherwise terminate. 

(c) If the Basic insurance obtained 

during reemployment is continued as 

provided in paragraph (b) of this 

section, any suspended Basic life 

insurance stops, with no 31-day 

extension of coverage or conversion 

right. 

(d)(1) An annuitant or 

compensationer appointed to a position 

in which he or she is eligible for Basic 

insurance is also eligible for Optional 

insurance as an employee, unless he or 

she has on file an uncancelled waiver of 

Basic or Optional insurance. 

(2) If the individual has Option A or 

C as an annuitant, that insurance (and 

applicable withholdings) is suspended 

on the day before his or her 1st day in 

pay status under the appointment. 

Unless he or she waives Option A or C 

(or waives Basic insurance), the 

individual obtains Option A or C as an 

employee. 

(3) If the individual has Option B as 

an annuitant or compensationer, that 

insurance (and applicable withholdings) 

continues as if the individual were not 

reemployed, unless: 

(i) The individual files with his/her 

employing office an election of Option 

B, in a manner designated by OPM, 

within 60 calendar days after the date of 

reemployment. In this case Option B 

(and applicable withholdings) as an 

annuitant or compensationer is 

suspended on the date that Option B as 

an employee becomes effective; or 

(ii) The individual waives Basic 

insurance. 

(4) The Option B benefit payable upon 

the death of a reemployed annuitant or 

compensationer is the amount in effect 

as an annuitant or compensationer, 

unless the individual elected to have 

Option B as an employee. 

(5) Except as provided in paragraph 

(e) of this section, the Optional 

insurance obtained as an employee 

stops, with no 31-day extension or 

conversion right, on the date 

reemployment terminates. The amount 

of suspended Optional insurance that 

remains in force after applicable 

monthly reductions after age 65 (and 

corresponding withholdings) is 

reinstated on the day after 

reemployment terminates. 

(e) Optional life insurance obtained 

during reemployment may be continued 

after the reemployment terminates if the 

annuitant: 

(1) Qualifies for a supplemental 

annuity or receives a new retirement 

right (or if a compensationer, he or she 

worked an amount of time equivalent to 

that required for an annuitant to qualify 

for a supplemental annuity); 

(2) Continues Basic life insurance 

under § 870.703(a)(2), (3), or (4); and 

(3) Has had Optional insurance as an 

employee for at least the 5 years of 

service immediately before separation 

from reemployment or for the full 

period(s) of service during which it was 

available to him or her, whichever is 

less. 

(f) If Optional insurance obtained 

during reemployment is continued as 

provided in paragraph (e) of this 

section, any suspended Optional 

insurance stops, with no 31-day 

extension of coverage or conversion 

right. 

(g) If a reemployed annuitant or 

compensationer waives life insurance as 

an employee, the waiver also cancels his 

or her life insurance as an annuitant or 

compensationer. 

Subpart H—Order of Precedence and 

Designation of Beneficiary 

■ 21. Section 870.801(a) and (d) are 

revised to read as follows: 

§ 870.801 Order of precedence and 

payment of benefits. 

(a) Except as provided in paragraph 

(d) of this section and § 870.802(g)(2), 

benefits are paid according to the order 

of precedence stated in 5 U.S.C. 8705(a), 

as follows: 

(1) To the designated beneficiary (or 

beneficiaries); 

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

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

in equal shares, with the share of any 

deceased child going to his or her 

children; 

(4) If none, to the parents in equal 

shares or the entire amount to the 

surviving parent; 

(5) If none, to the executor or 

administrator of the estate; 

(6) If none, to the next of kin 

according to the laws of the State in 

which the insured individual legally 

resided. 

* * * * * 

(d)(1) If there is a court order in effect 

naming a specific person or persons to 

receive life insurance benefits upon the 

death of an insured individual, Basic 

insurance and Option A and Option B 

insurance will be paid to the person or 

persons named in the court order, 

instead of according to the order of 

precedence. 

(2) To qualify a person for such 

payment, a certified copy of the court 

order must be received by the 

appropriate office on or after July 22, 

1998, and before the death of the 

insured. 

(3)(i) For an employee, the 

appropriate office is the employing 

agency. 

(ii) For an annuitant, the appropriate 

office is OPM. 

(iii) For a compensationer during the 

first 12 months of nonpay status, the 

appropriate office is the employing 

agency. 

(iv) For a compensationer after 

separation or the completion of 12 

months in nonpay status, the 

appropriate office is OPM. 

(4) If, within the applicable time 

frames, the appropriate office receives 

conflicting court orders entitling 

different persons to the same insurance, 

benefits will be paid based on 

whichever court order was issued first. 

* * * * * 

■ 22. Section 870.802(b) and (g)(1) are 

revised to read as follows: 

§ 870.802 Designation of beneficiary. 

* * * * * 

(b) A designation of beneficiary must 

be in writing, signed by the insured 

individual, and witnessed and signed by 

2 people. The completed designation of 

beneficiary form may be submitted to 

the appropriate office via appropriate 

methods approved by the employing 

office. The appropriate office must 

receive the designation before the death 

of the insured. 

(1) For an employee, the appropriate 

office is the employing office. 

(2) For an annuitant or 

compensationer, the appropriate office 

is OPM. 

* * * * * 

(g)(1) A designation of beneficiary is 

automatically cancelled 31 days after 

the individual stops being insured. 

* * * * * 

Subpart I—Assignments of Life 

Insurance 

■ 23. Section 870.902 is revised to read 

as follows: 

§ 870.902 Making an assignment. 

(a) To assign insurance, an insured 

individual must complete an approved 

assignment form. Only the insured 

individual may make an assignment; no 

one may assign insurance on behalf of 

an insured individual. 

(b) The assignment form must be in 

writing, signed by the insured 

individual, and witnessed and signed by 

2 people. The completed assignment 

form, indicating the intent to 

irrevocably assign all ownership of the 

insurance, must be received by the 

appropriate office. 

(1) For an employee, the appropriate 

office is the employing office. 

mstockstill on DSKH9S0YB1PROD with RULES

60586 Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules and Regulations 

(2) For an annuitant or 

compensationer, the appropriate office 

is OPM. 

■ 24. Section 870.907(c) is revised to 

read as follows: 

§ 870.907 Termination and conversion. 

* * * * * 

(c) An assignment terminates 31 days 

after the insurance terminates, unless 

the insured individual is reemployed in 

or returns to a position in which he or 

she is entitled to coverage under this 

part within 31 days after the insurance 

terminates. If the individual returns to 

Federal service, Basic insurance and any 

Option A and/or Option B insurance 

acquired through returning to service is 

subject to the existing assignment. 

■ 25. Section 870.910 is revised to read 

as follows: 

§ 870.910 Notification of current 

addresses. 

Each assignee must keep the office 

where the assignment is filed informed 

of his/her current address. 

Subpart K—Living Benefits 

■ 26. Section 870.1103 is revised to read 

as follows: 

§ 870.1103 Election procedures. 

(a) The insured individual must 

request information on Living Benefits 

and an application form directly from 

OFEGLI. 

(b)(1) The insured individual must 

complete the first part of the application 

and have his or her physician complete 

the second part. The completed 

application must be submitted directly 

to OFEGLI. 

(2) Another person may apply for a 

Living Benefit on the insured 

individual’s behalf if all of the following 

conditions are met: 

(i) The insured’s physician must 

certify that the insured individual is 

physically or mentally incapable of 

making an election; 

(ii) The applicant must have power of 

attorney or a court order authorizing 

him or her to elect a Living Benefit on 

the insured individual’s behalf; 

(iii) The applicant must place his or 

her own signature on the application 

and attach it to a true and correct copy 

of the power of attorney or court order 

authorizing the applicant to make the 

election on the insured individual’s 

behalf; and 

(iv) The applicant must either be the 

insured individual’s sole beneficiary or 

attach a true and correct copy of each 

beneficiary’s written and signed 

consent. 

(c)(1) OFEGLI reviews the application, 

obtains certification from the insured’s 

employing office regarding the amount 

of insurance and the absence of an 

assignment, and determines whether the 

individual meets the requirements to 

elect a Living Benefit. 

(2) If OFEGLI needs additional 

information, it will contact the insured 

or the insured’s physician. 

(3) Under certain circumstances, 

OFEGLI may require a medical 

examination before making a decision. 

In these cases, OFEGLI is financially 

responsible for the cost of the medical 

examination. 

(d)(1) If the application is approved, 

OFEGLI sends the insured a check or 

makes an electronic funds transfer to the 

insured’s account for the Living Benefit 

payment and an explanation of benefits. 

(i) Until the check has been cashed or 

deposited, or before the electronic funds 

transfer has been received, the 

individual may change his or her mind 

about electing a Living Benefit; if this 

happens, the individual must mark the 

check ‘‘void’’ and return it to OFEGLI. 

(ii) Once the insured individual has 

cashed or deposited the payment, the 

Living Benefit election becomes 

effective and cannot be revoked; 

OFEGLI then sends explanations of 

benefits to the insured’s employing 

office, so it can make the necessary 

changes in withholdings and 

deductions. 

(2) If the application is not approved, 

OFEGLI will notify the insured 

individual and the employing office. 

The decision is not subject to 

administrative review; however, the 

individual may submit additional 

medical information or reapply at a later 

date if future circumstances warrant. 

Subpart L [Removed and Reserved] 

■ 27. Subpart L, consisting of 

§§ 870.1201 through 870.1208, is 

removed and reserved. 

[FR Doc. 2010–24493 Filed 9–30–10; 8:45 am] 

BILLING CODE 6325–39–P 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

9 CFR Part 77 

[Docket No. APHIS–2010–0097] 

Tuberculosis in Cattle and Bison; State 

and Zone Designations; Minnesota 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Interim rule and request for 

comments. 

SUMMARY: We are amending the bovine 

tuberculosis regulations regarding State 

and zone classifications by reclassifying 

the two zones in Minnesota. We have 

determined that the zone consisting of 

an area in the northwest corner of the 

State meets the criteria for designation 

as a modified accredited advanced zone, 

and the zone comprising the remainder 

of the State meets the criteria for 

designation as an accredited-free zone. 

This action relieves certain restrictions 

on the interstate movement of cattle and 

bison from Minnesota. 

DATES: This interim rule is effective 

October 1, 2010. We will consider all 

comments that we receive on or before 

November 30, 2010. 

ADDRESSES: You may submit comments 

by either of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov/fdmspublic/

component/main?main=DocketDetail&

d=APHIS-2010-0097 to submit or view 

comments and to view supporting and 

related materials available 

electronically. 

• Postal Mail/Commercial Delivery: 

Please send one copy of your comment 

to Docket No. APHIS–2010–0097, 

Regulatory Analysis and Development, 

PPD, APHIS, Station 3A–03.8, 4700 

River Road Unit 118, Riverdale, MD 

20737–1238. Please state that your 

comment refers to Docket No. APHIS– 

2010–0097. 

Reading Room: You may read any 

comments that we receive on this 

docket in our reading room. The reading 

room is located in Room 1141 of the 

USDA South Building, 14th Street and 

Independence Avenue, SW., 

Washington, DC. Normal reading room 

hours are 8 a.m. to 4:30 p.m., Monday 

through Friday, except holidays. To be 

sure someone is there to help you, 

please call (202) 690–2817 before 

coming. 

Other Information: Additional 

information about APHIS and its 

programs is available on the Internet at 

http://www.aphis.usda.gov. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Alecia Naugle, Coordinator, National 

Tuberculosis Eradication Program, 

Veterinary Services, APHIS, 4700 River 

Road Unit 43, Riverdale, MD 20737; 

(301) 734–6954. 

SUPPLEMENTARY INFORMATION: 

Background 

Bovine tuberculosis is a contagious 

and infectious granulomatous disease 

caused by the bacterium Mycobacterium 

bovis. Although commonly defined as a 

chronic debilitating disease, bovine 

tuberculosis can occasionally assume an 

acute, rapidly progressive course. While 

mstockstill on DSKH9S0YB1PROD with RULES