IIA
103D CONGRESS
2D SESSION
H. R. 512
IN THE SENATE OF THE UNITED STATES
JULY 20, 1994
Received; read twice and referred to the Committee on Governmental Affairs
A ACT
To amend chapter 87 of title 5, United States Code, to
provide that group life insurance benefits under such
chapter may, upon application, be paid out to an insured
individual who is terminally ill, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘FEGLI Living
Benefits Act’’.
SEC. 2. OPTION TO RECEIVE ‘‘LIVING BENEFITS’’.
(a) IN GENERAL.—Chapter 87 of title 5, United
States Code, is amended by inserting after section 8714c
the following:
‘‘§ 8714d. Option to receive ‘living benefits’
‘‘(a) For the purpose of this section, an individual
shall be considered to be ‘terminally ill’ if such individual
has a medical prognosis that such individual’s life expect-
ancy is 9 months or less.
‘‘(b) The Office of Personnel Management shall pre-
scribe regulations under which any individual covered by
group life insurance under section 8704(a) may, if such
individual is terminally ill, elect to receive a lump-sum
payment equal to—
‘‘(1) the full amount of insurance under section
8704(a) (or portion thereof designated for this pur-
pose under subsection (d)(4)) which would otherwise
be payable under this chapter (on the establishment
of a valid claim)—
‘‘(A) computed based on a date determined
under regulations of the Office (but not later
than 30 days after the date on which the indi-
vidual’s application for benefits under this sec-
tion is approved or deemed approved under sub-
section (d)(3)); and
‘‘(B) assuming continued coverage under
this chapter at that time;
reduced by
‘‘(2) an amount necessary to assure that there
is no increase in the actuarial value of the benefit
paid (as determined under regulations of the Office).
‘‘(c)(1) If a lump-sum payment is taken under this
section—
‘‘(A) no insurance under the provisions of sec-
tion 8704 (a) or (b) shall be payable based on the
death or any loss of the individual involved, unless
the lump-sum payment represents only a portion of
the total benefits which could have been taken, in
which case benefits under those provisions shall re-
main in effect, except that the basic insurance
amount on which they are based—
‘‘(i) shall be reduced by the percentage
which the designated portion comprised relative
to the total benefits which could have been
taken (rounding the result to the nearest mul-
tiple of $1,000 or, if midway between multiples
of $1,000, to the next higher multiple of
$1,000); and
‘‘(ii) shall not be subject to further adjust-
ment; and
‘‘(B) deductions and withholdings under section
8707, and contributions under section 8708, shall be
terminated with respect to such individual (or re-
duced in a manner consistent with the percentage
reduction in the individual’s basic insurance amount,
if applicable), effective with respect to any amounts
which would otherwise become due on or after the
date of payment under this section.
‘‘(2) An individual who takes a lump-sum payment
under this section (whether full or partial) remains eligible
for optional benefits under sections 8714a–8714c (subject
to payment of the full cost of those benefits in accordance
with applicable provisions of the section or sections in-
volved, to the same extent as if no election under this sec-
tion had been made).
‘‘(d)(1) The Office’s regulations shall include provi-
sions regarding the form and manner in which an applica-
tion under this section shall be made and the procedures
in accordance with which any such application shall be
considered.
‘‘(2) An application shall not be considered to be com-
plete unless it includes such information and supporting
evidence as the regulations require, including certification
by an appropriate medical authority as to the nature of
the individual’s illness and that the individual is not ex-
pected to live more than 9 months because of that illness.
‘‘(3)(A) In order to ascertain the reliability of any
medical opinion or finding submitted as part of an applica-
tion under this section, the covered individual may be re-
quired to submit to a medical examination under the direc-
tion of the agency or entity considering the application.
The individual shall not be liable for the costs associated
with any examination required under this subparagraph.
‘‘(B) Any decision by the reviewing agency or entity
with respect to an application for benefits under this sec-
tion (including one relating to an individual’s medical
prognosis) shall not be subject to administrative review.
‘‘(4)(A) An individual making an election under this
section may designate that only a limited portion (ex-
pressed as a multiple of $1,000) of the total amount other-
wise allowable under this section be paid pursuant to such
election.
‘‘(B) A designation under this paragraph may not be
made by an individual described in paragraph (1) or (2)
of section 8706(b).
‘‘(5) An election to receive benefits under this section
shall be irrevocable, and not more than one such election
may be made by any individual.
‘‘(6) The regulations shall include provisions to ad-
dress the question of how to apply section 8706(b)(3)(B)
in the case of an electing individual who has attained 65
years of age.’’.
(b) TABLE OF SECTIONS.—The table of sections for
chapter 87 of title 5, United States Code, is amended by
inserting after the item relating to section 8714c the
following:
‘‘8714d. Option to receive ‘living benefits’.’’.
SEC. 3. EFFECTIVE DATE; OPEN SEASON AND NOTICE.
(a) EFFECTIVE DATE.—The amendments made by
section 2 shall take effect 9 months after the date of the
enactment of this Act.
(b) OPEN SEASON; NOTICE.—(1) The Office of Per-
sonnel Management shall prescribe regulations under
which, beginning not later than 9 months after the date
of the enactment of this Act, and over a period of not
less than 8 weeks—
(A) an employee (as defined by section 8701(a)
of title 5, United States Code) who declined or vol-
untarily terminated coverage under chapter 87 of
such title—
(i) may elect to begin, or to resume, group
life insurance and group accidental death and
dismemberment insurance; and
(ii) may make such other elections under
such chapter as the Office may allow; and
(B) such other elections as the Office allows
may be made.
(2) The Office shall take such action as may be nec-
essary to ensure that employees and any other individuals
who would be eligible to make an election under this sub-
section are afforded advance notification to that effect.
SEC. 4. FUNDING.
Notwithstanding section 8714(a)(1) of title 5, United
States Code, the Office of Personnel Management shall
retain in the Employees’ Life Insurance Fund such por-
tion of premium payments otherwise due as will, no later
than September 30, 1995, permanently reduce the contin-
gency reserve established under the third sentence of sec-
tion 8712 of such title 5 by an amount equal to the
amount by which payments from the Employees’ Life In-
surance Fund during the fiscal year ending September 30,
1995, exceed the payments that would have been paid had
the amendments made by this Act not been enacted.
Passed the House of Representatives July 19, 1994.
Attest:
DONNALD K. ANDERSON,
Clerk.