enrolled employee or the effective date of a successor con-
tract. 
‘‘(2) A contract described in paragraph (1) may be 
made automatically renewable, for a term of 1 year each 
January 1, unless written notice of non-renewal is given 
either by the Director or the carrier not less than 180 
days before the renewal date, or unless modified by mutual 
agreement. 
‘‘(3) A contract described in paragraph (1) shall in-
clude such provisions as may be necessary to ensure that, 
once an employee becomes duly enrolled, insurance cov-
erage pursuant to that enrollment shall be terminated only 
if the individual is separated from Federal service or, 
where appropriate, for non-payment of premiums. 
‘‘§ 8804. Benefits 
‘‘(a) The Director may prescribe reasonable minimum 
standards for benefit plans offered under this chapter. 
‘‘(b)(1) Benefits provided to an employee under this 
chapter shall offset other benefits received by such em-
ployee for the same injury or disability, leave to care for 
or make arrangements to care for a member of family (in-
cluding the birth of a son or a daughter), or leave to make 
arrangements to adopt a child or become a foster parent 
including worker’s compensation and disability retirement 
income. 
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‘‘(2) A contract providing benefits under this chap-
ter— 
‘‘(A) shall not provide for a preexisting condi-
tion exclusion; and 
‘‘(B) shall not charge higher premiums, deny 
coverage, or drop coverage of an employee with a 
preexisting condition. 
‘‘(3) A contract providing benefits under this chapter 
shall provide incentives for an employee who is receiving 
benefits under such contract to return to work. 
‘‘(c)(1) For each instance that such employee suffers 
an injury or disability, takes leave to care for or make 
arrangements to care for a member of family (including 
the birth of a son or a daughter), or takes leave to make 
arrangements to adopt a child or become a foster parent, 
and is eligible for benefits under this chapter, such em-
ployee may receive benefits under this chapter for a period 
not to exceed 12 months beginning on the date on which 
such employee qualifies for such benefits. An employee 
shall receive such benefits after the expiration of the wait-
ing period selected by such employee under paragraph 
(2)(A). The amount of benefits shall be equal to the lesser 
of— 
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‘‘(A) 70 percent of the annual rate of pay, ex-
cluding bonuses, of an employee at the time of the 
injury or disability of such employee occurs; or 
‘‘(B) 70 percent of the maximum rate of basic 
pay provided for grade GS–15 of the General Sched-
ule. 
‘‘(2)(A) The period for which benefits are payable to 
an employee under this subsection shall begin after the 
completion of a waiting period, subject to the requirement 
in subparagraph (C). An employee shall elect one of the 
following waiting period options: 
‘‘(i) On the 8th day of continuous injury or dis-
ability, leave to care for or to make arrangements to 
care for a member of family (including the birth of 
a son or a daughter), or leave to make arrangements 
to adopt a child or become a foster parent. 
‘‘(ii) On the 31st day of continuous disability, 
leave to care for or to make arrangements to care 
for a member of family (including the birth of a son 
or a daughter), or leave to make arrangements to 
adopt a child or become a foster parent. 
‘‘(iii) On the 91st day of continuous disability, 
leave to care for or to make arrangements to care 
for a member of family (including the birth of a son 
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or a daughter), or leave to make arrangements to 
adopt a child or become a foster parent. 
‘‘(iv) On the 181st day of continuous disability, 
leave to care for or to make arrangements to care 
for a member of family (including the birth of a son 
or a daughter), or leave to make arrangements to 
adopt a child or become a foster parent. 
‘‘(B) An employee who elects to receive benefits ear-
lier shall pay a higher premium. 
‘‘(C) A waiting period selected under subparagraph 
(A) shall begin on the first day of an employee’s injury 
or disability. 
‘‘§ 8805. Premiums 
‘‘(a) Each eligible individual obtaining insurance cov-
erage under this chapter shall be responsible for 100 per-
cent of the premiums for such coverage. 
‘‘(b) The amount necessary to pay the premiums for 
enrollment shall be withheld from the pay of the enrolled 
individual. 
‘‘(c) The carrier participating under this chapter 
shall maintain records that permit it to account for all 
amounts received under this chapter (including investment 
earnings on those amounts) separate and apart from all 
other funds. 
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‘‘(d)(1)(A) The Employees’ Life Insurance Fund is 
available, without fiscal year limitation, for reasonable ex-
penses incurred in administering this chapter before the 
start of the first term described in section 8803(d)(1), in-
cluding reasonable implementation costs. 
‘‘(B) Such Fund shall be reimbursed, before the end 
of the first year of a contract described in section 
8803(d)(1), for all amounts obligated or expended under 
subparagraph (A) (including lost investment income). Re-
imbursement under this subparagraph shall be made by 
the carrier in accordance with applicable provisions in-
cluded in the relevant contract. 
‘‘(C)(i) There is hereby established in the Employees’ 
Life Insurance Fund a Non-Work Related Disability In-
surance Administrative Account, which shall be available 
to the Office of Personnel Management, without fiscal 
year limitation, to defray reasonable expenses incurred by 
the Office in administering this chapter after the start of 
the first term described in section 8803(d)(1). 
‘‘(ii) A contract under this chapter shall include ap-
propriate provisions under which the carrier involved shall, 
during each year, make such periodic contributions to the 
Non-Work Related Disability Insurance Administrative 
Account as necessary to ensure that the reasonable antici-
pated expenses of the Office of Personnel Management in 
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administering this chapter during such year (adjusted to 
reconcile for any earlier overestimates or underestimates 
under this subparagraph) are defrayed. 
‘‘(e) Nothing in this chapter shall, in the case of an 
enrolled individual applying for an extension of insurance 
coverage under this chapter after the expiration of such 
enrolled individual’s first opportunity to enroll, preclude 
the application of underwriting standards for later enroll-
ment. 
‘‘§ 8806. Preemption 
‘‘(a) The terms of any contract under this chapter 
which relate to the nature, provision, or extent of coverage 
or benefits (including payments with respect to benefits) 
shall supersede and preempt any State, territorial, tribal, 
or local law, or any regulation issued thereunder, which 
relates to non-work related disability insurance or con-
tracts. 
‘‘(b)(1) No tax, fee, or other monetary payment may 
be imposed or collected, directly or indirectly, by any 
State, territory, tribe, or locality, or by any political sub-
division or other governmental authority thereof, on, or 
with respect to, any premium paid for an insurance policy 
under this chapter. 
‘‘(2) Paragraph (1) shall not be construed to exempt 
any company or other entity issuing a policy of insurance 
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under this chapter from the imposition, payment, or collec-
tion of a tax, fee, or other monetary payment on the net 
income or profit accruing to or realized by such entity 
from business conducted under this chapter, if that tax, 
fee, or payment is applicable to a broad range of business 
activity. 
‘‘(c) No law of a State, territory, tribe, or locality, 
pertaining to subrogation or reimbursement with respect 
to benefits provided under this chapter, shall operate ex-
cept as expressly adopted by the Director. 
‘‘§ 8807. Studies, reports, and audits 
‘‘(a) A contract under this chapter shall contain pro-
visions requiring the carrier to furnish such reasonable re-
ports as the Director determines to be necessary to enable 
the Director to carry out the Director’s functions under 
this chapter. 
‘‘(b) Each Federal agency shall keep such records, 
make such certifications, and furnish the Director, the 
carrier, or both, with such information and reports as the 
Director may require. 
‘‘(c) The Director shall conduct periodic reviews of 
each plan under this chapter to ensure its competitiveness. 
‘‘§ 8808. Jurisdiction of courts 
‘‘The district courts of the United States have origi-
nal jurisdiction, concurrent with the United States Court 
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of Federal Claims, of a civil action or claim against the 
United States under this chapter after such administrative 
remedies as required under section 8803(c) have been ex-
hausted, but only to the extent judicial review is not pre-
cluded by any dispute resolution or other remedy under 
this chapter. 
‘‘§ 8809. Administrative functions 
‘‘(a)(1) Except as otherwise provided in this chapter, 
the Director shall prescribe regulations necessary to carry 
out this chapter and to make arrangements as necessary 
with other agencies and payroll systems to implement the 
program. 
‘‘(2) Except as otherwise provided by law, the Direc-
tor shall specify in regulation the treatment of time spent 
by an individual in receipt of benefits under this chapter 
for the purposes of periodic increases in pay, retention 
purposes, and other rights, benefits, and conditions of em-
ployment for which length of service is a factor. 
‘‘(b) The carrier shall provide for periodic coordinated 
enrollment, promotion, and education efforts, as specified 
by the Director. 
‘‘§ 8810. Cost accounting standards 
‘‘The cost accounting standards issued pursuant to 
section 1502 of title 41 shall not apply with respect to 
an insurance contract under this chapter.’’. 
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(b) CONFORMING AMENDMENT.—Section 1005(f) of 
title 39, United States Code, is amended by inserting 
‘‘88,’’ after ‘‘87,’’. 
(c) CLERICAL AMENDMENT.—The analysis for part 
III of title 5, United States Code, is amended by adding 
at the end of subpart G the following: 
‘‘88. Non-Work Related Short-Term Disability 
Insurance .................................................................. 8801’’. 
(d) DATE OF APPLICATION.—The amendment made 
by subsection (a) shall apply to contracts that take effect 
with respect to the first calender year that begins more 
than 18 months after the date of enactment of this sec-
tion. 
Æ 
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