In the Senate of the United States,
October 5 (legislative day, October 2), 1998.
Resolved, That the bill from the House of Representa-
tives (H.R. 2675) entitled ‘‘An Act to require that the Office
of Personnel Management submit proposed legislation under
which group universal life insurance and group variable uni-
versal life insurance would be available under chapter 87 of
title 5, United States Code, and for other purposes.’’, do pass
with the following
AMENDMENTS:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Federal Employees Life
Insurance Improvement Act’’.
SEC. 2. STUDY AND REPORT ON CERTAIN LIFE INSURANCE
OPTIONS OFFERED TO FEDERAL EMPLOYEES.
(a) IN GENERAL.—Not later than July 31, 1998, the
Office of Personnel Management shall conduct a study on
life insurance options for Federal employees described under
subsection (b) and submit a report to Congress.
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(b) STUDY AND REPORT.—The study and report re-
ferred to under subsection (a) shall—
(1) survey and ascertain the interest of Federal
employees in an offering under chapter 87 of title 5,
United States Code, of insurance coverage options re-
lating to—
(A) group universal life insurance;
(B) group variable universal life insurance;
and
(C) additional voluntary accidental death
and dismemberment insurance; and
(2) include any comments, analysis, and rec-
ommendations of the Office of Personnel Management
relating to such options.
SEC. 3. REPEAL OF MAXIMUM LIMITATION ON EMPLOYEE
INSURANCE.
Chapter 87 of title 5, United States Code, is amend-
ed—
(1) in section 8701(c), in the first sentence, by
striking the comma immediately following ‘‘$10,000’’
and all that follows and inserting a period; and
(2) in section 8714b(b), in the first sentence, by
striking ‘‘except’’ and all that follows and inserting a
period.
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SEC. 4. FOSTER CHILD COVERAGE.
Section 8701(d)(1)(B) of title 5, United States Code,
is amended by inserting ‘‘or foster child’’ after ‘‘stepchild’’
both places it appears.
SEC. 5. INCONTESTABILITY OF ERRONEOUS COVERAGE.
Section 8706 of title 5, United States Code, as amend-
ed by section 5(2), is further amended by adding at the
end the following new subsection:
‘‘(g) The insurance of an employee under a policy pur-
chased under section 8709 shall not be invalidated based
on a finding that the employee erroneously became insured,
or erroneously continued insurance upon retirement or enti-
tlement to compensation under subchapter I of chapter 81
of this title, if such finding occurs after the erroneous insur-
ance and applicable withholdings have been in force for 2
years during the employee’s lifetime.’’.
SEC. 6. DIRECT PAYMENT OF INSURANCE CONTRIBUTIONS.
Chapter 87 of title 5, United States Code, is amend-
ed—
(1) in section 8707—
(A) in subsection (a), by striking ‘‘(a) Dur-
ing’’ and inserting ‘‘(a) Subject to subsection
(c)(2), during’’;
(B) in subsection (b), by striking ‘‘(b)(1)
Whenever’’ and inserting ‘‘(b)(1) Subject to sub-
section (c)(2), whenever’’; and
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(C) in subsection (c), by inserting ‘‘(1)’’ im-
mediately after ‘‘(c)’’ and by adding at the end
the following new paragraph:
‘‘(2) An employee who is subject to withholdings under
this section and whose pay, annuity, or compensation is
insufficient to cover such withholdings may nevertheless
continue insurance if the employee arranges to pay cur-
rently into the Employees’ Life Insurance Fund, through
the agency or retirement system that administers pay, an-
nuity, or compensation, an amount equal to the
withholdings that would otherwise be required under this
section.’’;
(2) in section 8714a(d), by adding at the end the
following new paragraph:
‘‘(3) Notwithstanding paragraph (1), an employee who
is subject to withholdings under this subsection and whose
pay, annuity, or compensation is insufficient to cover such
withholdings may nevertheless continue optional insurance
if the employee arranges to pay currently into the Employ-
ees’ Life Insurance Fund, through the agency or retirement
system which administers pay, annuity, or compensation,
an amount equal to the withholdings that would otherwise
be required under this subsection.’’;
(3) in section 8714b(d), by adding at the end the
following new paragraph:
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‘‘(ii) the full period or periods of service during
which the insurance was available to the employee, if
fewer than 5 years,
at group rates established for purposes of this section, in
lieu of conversion to an individual policy. The amount of
insurance continued under this paragraph shall be reduced
by 50 percent effective at the beginning of the second cal-
endar month after the date the employee or former employee
attains age 70 and shall stop at the beginning of the second
calendar month after attainment of age 80, subject to a pro-
vision for temporary extension of life insurance coverage
and for conversion to an individual policy of life insurance
under conditions approved by the Office. Alternatively, in-
surance continued under this paragraph may be reduced
or stopped at any time the employee or former employee
elects.
‘‘(B) When an employee or former employee elects to
continue additional optional insurance under this para-
graph following separation from service or 12 months with-
out pay, the insured individual shall submit timely pay-
ment of the full cost thereof, plus any amount the Office
determines necessary to cover associated administrative ex-
penses, in such manner as the Office shall prescribe by regu-
lation. Amounts required under this subparagraph shall be
deposited, used, and invested as provided under section
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8714 and shall be reported and accounted for together with
amounts withheld under section 8714a(d).
‘‘(C)(i) Subject to clause (ii), no election to continue
additional optional insurance may be made under this
paragraph 3 years after the effective date of this paragraph.
‘‘(ii) On and after the date on which an election may
not be made under clause (i), all additional optional insur-
ance under this paragraph for former employees shall ter-
minate, subject to a provision for temporary extension of
life insurance coverage and for conversion to an individual
policy of life insurance under conditions approved by the
Office.’’; and
(2) in the second sentence of subsection (d)(1) by
inserting ‘‘if insurance is continued as provided
under subsection (c)(3)(A),’’ after ‘‘except that,’’.
(b) REPORT.—Not later than 3 years after the date
of enactment of this Act, the Office of Personnel Manage-
ment shall submit a report to Congress on additional op-
tional insurance provided under section 8714b(c)(5) of title
5, United States Code (as added by subsection (a) of this
section). Such report shall include recommendations on
whether continuation for such additional optional insur-
ance should terminate as provided under such section, be
extended, or be made permanent.
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(c) TECHNICAL AMENDMENT.—The last sentence of sec-
tion 8714b(d)(1) of title 5, United States Code, is amended
by inserting ‘‘(and any amounts withheld as provided in
subsection (c)(3)(B))’’ after ‘‘Amounts so withheld’’.
SEC. 8. IMPROVED OPTIONAL LIFE INSURANCE ON FAMILY
MEMBERS.
(a) IN GENERAL.—Section 8714c(b) of title 5, United
States Code, is amended to read as follows:
‘‘(b)(1) The optional life insurance on family members
provided under this section shall be made available to each
eligible employee who has elected coverage under this sec-
tion, under conditions the Office shall prescribe, in mul-
tiples, at the employee’s election, of 1, 2, 3, 4, or 5 times—
‘‘(A) $5,000 for a spouse; and
‘‘(B) $2,500 for each child described under sec-
tion 8701(d).
‘‘(2) An employee may reduce or stop coverage elected
pursuant to this section at any time.’’.
(b) TECHNICAL
AND CONFORMING AMENDMENTS.—
Section 8714c of title 5, United States Code, is amended—
(1) in subsection (c)(2), by striking ‘‘section
8714b(c)(2) of this title’’ and inserting ‘‘section
8714b(c) (2) through (4)’’; and
(2) in subsection (d)(1), by inserting before the
last sentence the following: ‘‘Notwithstanding the pre-
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ceding sentence, the full cost shall be continued after
the calendar month in which the former employee be-
comes 65 years of age if, and for so long as, an elec-
tion under this section corresponding to that described
in section 8714b(c)(3)(B) remains in effect with re-
spect to such former employee.’’.
SEC. 9. OPEN SEASON.
Beginning not later than 180 days after the date of
enactment of this Act, the Office of Personnel Management
shall conduct an open enrollment opportunity for purposes
of chapter 87 of title 5, United States Code, over a period
of not less than 8 weeks. During this period, an employee
(as defined under section 8701(a) of such title)—
(1) may, if the employee previously declined or
voluntarily terminated any coverage under chapter 87
of such title, elect to begin, resume, or increase group
life insurance (and acquire applicable accidental
death and dismemberment insurance) under all sec-
tions of such chapter without submitting evidence of
insurability; and
(2) may, if currently insured for optional life in-
surance on family members, elect an amount above
the minimum insurance on a spouse.
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SEC. 10. MERIT SYSTEM JUDICIAL REVIEW.
(a) IN GENERAL.—Section 7703 of title 5, United
States Code, is amended—
(1) in subsection (b)(1) by striking ‘‘within 30
days’’ and inserting ‘‘within 60 days’’; and
(2) in subsection (d) in the first sentence, by in-
serting after ‘‘filing’’ the following: ‘‘, within 60 days
after the date the Director received notice of the final
order or decision of the Board,’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of enactment of this Act,
and apply to any suit, action, or other administrative or
judicial proceeding pending on such date or commenced on
or after such date.
SEC. 11. EFFECTIVE DATES.
(a) IN GENERAL.—Except as otherwise provided in
this Act, the amendments made by this Act shall take effect
on the date of enactment of this Act.
(b) MAXIMUM LIMITATION
ON EMPLOYEE INSUR-
ANCE.—Section 3 shall take effect on the first day of the
first applicable pay period beginning on or after the date
of enactment of this Act.
(c) ERRONEOUS COVERAGE.—Section 5 shall be effec-
tive in any case in which a finding of erroneous insurance
coverage is made on or after the date of enactment of this
Act.
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(d) DIRECT PAYMENT
OF INSURANCE CONTRIBU-
TIONS.—Section 6 shall take effect on the first day of the
first applicable pay period beginning on or after the date
of enactment of this Act.
(e) ADDITIONAL OPTIONAL LIFE INSURANCE.—
(1) IN GENERAL.—Section 7 shall take effect on
the first day of the first pay period that begins on or
after the 180th day following the date of enactment of
this Act, or on any earlier date that the Office of Per-
sonnel Management may prescribe that is at least 60
days after the date of enactment of this Act.
(2) REGULATIONS.—The Office shall prescribe
regulations under which an employee may elect to
continue additional optional insurance that remains
in force on such effective date without subsequent re-
duction and with the full cost withheld from annuity
or compensation on and after such effective date if
that employee—
(A) separated from service before such effec-
tive date due to retirement or entitlement to
compensation under subchapter I of chapter 81
of title 5, United States Code; and
(B) continued additional optional insur-
ance pursuant to section 8714b(c)(2) as in effect
immediately before such effective date.
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(f) IMPROVED OPTIONAL LIFE INSURANCE ON FAMILY
MEMBERS.—The amendments made by section 8 shall take
effect on the first day of the first pay period which begins
on or after the 180th day following the date of enactment
of this Act or on any earlier date that the Office of Person-
nel Management may prescribe.
(g) OPEN SEASON.—Any election made by an em-
ployee under section 9, and applicable withholdings, shall
be effective on the first day of the first applicable pay period
that—
(1) begins on or after the date occurring 365
days after the first day of the election period author-
ized under section 9; and
(2) follows a pay period in which the employee
was in a pay and duty status.
Amend the title so as to read: ‘‘An Act to provide
for the Office of Personnel Management to conduct a
study and submit a report to Congress on the provision
of certain options for universal life insurance coverage
and additional death and dismemberment insurance
under chapter 87 of title 5, United States Code, to im-
prove the administration of such chapter, and for other
purposes.’’.
Attest:
Secretary.