HR 2675 RS
(1) in subsection (c)—
(A) by striking the last 2 sentences of
paragraph (2); and
(B) by adding at the end the following:
‘‘(3) The amount of additional optional insurance
continued under paragraph (2) shall be continued, with
or without reduction, in accordance with the employee’s
written election at the time eligibility to continue insur-
ance during retirement or receipt of compensation arises,
as follows:
‘‘(A)
The
employee
may
elect
to
have
withholdings cease in accordance with subsection
(d), in which case—
‘‘(i) the amount of additional optional in-
surance continued under paragraph (2) shall be
reduced each month by 2 percent effective at
the beginning of the second calendar month
after the date the employee becomes 65 years of
age and is retired or is in receipt of compensa-
tion; and
‘‘(ii) the reduction under clause (i) shall
continue for 50 months at which time the insur-
ance shall stop.
‘‘(B) The employee may, instead of the option
under subparagraph (A), elect to have the full cost
HR 2675 RS
of additional optional insurance continue to be with-
held from such employee’s annuity or compensation
on and after the date such withholdings would other-
wise cease pursuant to an election under subpara-
graph (A), in which case the amount of additional
optional insurance continued under paragraph (2)
shall not be reduced, subject to paragraph (4).
‘‘(C) An employee who does not make any elec-
tion under the preceding provisions of this para-
graph shall be treated as if such employee had made
an election under subparagraph (A).
‘‘(4) If an employee makes an election under para-
graph (3)(B), that individual may subsequently cancel
such election, in which case additional optional insurance
shall be determined as if the individual had originally
made an election under paragraph (3)(A).’’; and
(2) in the second sentence of subsection (d)(1)
by inserting ‘‘if insurance is continued as provided
in subparagraph (A) of paragraph (3),’’ after ‘‘ex-
cept that,’’.
(b) TECHNICAL AMENDMENT.—The last sentence of
section 8714b(d)(1) of title 5, United States Code, is
amended by inserting ‘‘(and any amounts withheld as pro-
vided in subsection (c)(3)(B))’’ after ‘‘Amounts so with-
held’’.
HR 2675 RS
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the 120th day after the
date of enactment of this Act and shall apply with respect
to employees who become eligible, on or after such 120th
day, to continue additional optional insurance during re-
tirement or receipt of compensation.
SEC. 4. IMPROVED OPTIONAL LIFE INSURANCE ON FAMILY
MEMBERS.
(a) IN GENERAL.—Subsection (b) of section 8714c
of title 5, United States Code, is amended to read as fol-
lows:
‘‘(b) 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—
‘‘(1) $5,000 for a spouse; and
‘‘(2) $2,500 for each child described in section
8701(d).
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 amend-
ed—
HR 2675 RS
(1) in subsection (c)(2) by striking ‘‘section
8714b(c)(2) of this title’’ and inserting ‘‘section
8714b(c)(2)–(4)’’; and
(2) in subsection (d)(1) by inserting before the
last sentence the following: ‘‘Notwithstanding the
preceding sentence, the full cost shall be continued
after the calendar month in which the former em-
ployee becomes 65 years of age if, and for so long
as, an election under this section corresponding to
that described in section 8714b(c)(3)(B) remains in
effect with respect to such former employee.’’.
(c) EFFECTIVE DATE; OPEN ENROLLMENT PE-
RIOD.—
(1) EFFECTIVE DATE.—The amendments made
by this section 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.
(2) OPEN ENROLLMENT PERIOD.—
(A) IN
GENERAL.—Before the effective
date under paragraph (1), the Office shall af-
ford eligible employees a reasonable opportunity
to elect to begin coverage under section 8714c
of title 5, United States Code (as amended by
HR 2675 RS
this section), or to increase any existing op-
tional life insurance on family members to any
amount allowable under such section (as so
amended), beginning on such effective date.
(B) DEFINITION
OF
AN
ELIGIBLE
EM-
PLOYEE.—For purposes of subparagraph (A),
the term ‘‘eligible employee’’ means any em-
ployee (within the meaning of section 8701 of
title 5, United States Code) covered by group
life insurance under section 8704(a) of such
title.
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.
(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,
HR 2675 RS
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.
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.
HR 2675 RS
‘‘(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:
‘‘(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
HR 2675 RS
withholdings may nevertheless continue additional optional
insurance if the employee arranges to pay currently into
the Employees’ 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.’’; and
(4) in section 8714c(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 life insur-
ance on family members if the employee arranges to pay
currently 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
subsection.’’.
SEC. 7. ADDITIONAL OPTIONAL LIFE INSURANCE CONTINU-
ATION AND PORTABILITY.
(a) IN GENERAL.—Section 8714b of title 5, United
States Code, is amended—
(1) in subsection (c)—
(A) by striking the last 2 sentences of para-
graph (2); and
HR 2675 RS
(B) by adding at the end the following:
‘‘(3) The amount of additional optional insurance con-
tinued under paragraph (2) shall be continued, with or
without reduction, in accordance with the employee’s writ-
ten election at the time eligibility to continue insurance
during retirement or receipt of compensation arises, as fol-
lows:
‘‘(A) 
The 
employee 
may 
elect 
to 
have
withholdings cease in accordance with subsection (d),
in which case—
‘‘(i) the amount of additional optional in-
surance continued under paragraph (2) shall be
reduced each month by 2 percent effective at the
beginning of the second calendar month after the
date the employee becomes 65 years of age and
is retired or is in receipt of compensation; and
‘‘(ii) the reduction under clause (i) shall
continue for 50 months at which time the insur-
ance shall stop.
‘‘(B) The employee may, instead of the option
under subparagraph (A), elect to have the full cost of
additional optional insurance continue to be withheld
from such employee’s annuity or compensation on
and after the date such withholdings would otherwise
cease pursuant to an election under subparagraph
HR 2675 RS
(A), in which case the amount of additional optional
insurance continued under paragraph (2) shall not be
reduced, subject to paragraph (4).
‘‘(C) An employee who does not make any elec-
tion under the preceding provisions of this paragraph
shall be treated as if such employee had made an elec-
tion under subparagraph (A).
‘‘(4) If an employee makes an election under para-
graph (3)(B), that individual may subsequently cancel such
election, in which case additional optional insurance shall
be determined as if the individual had originally made an
election under paragraph (3)(A).
‘‘(5)(A) An employee whose additional optional insur-
ance under this section would otherwise stop in accordance
with paragraph (1) and who is not eligible to continue in-
surance under paragraph (2) may elect, under conditions
prescribed by the Office of Personnel Management, to con-
tinue all or a portion of so much of the additional optional
insurance as has been in force for not less than—
‘‘(i) the 5 years of service immediately preceding
the date of the event which would cause insurance to
stop under paragraph (1); or
‘‘(ii) the full period or periods of service during
which the insurance was available to the employee, if
fewer than 5 years,
HR 2675 RS
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
8714 and shall be reported and accounted for together with
amounts withheld under section 8714a(d).
HR 2675 RS
‘‘(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.
(c) TECHNICAL AMENDMENT.—The last sentence of sec-
tion 8714b(d)(1) of title 5, United States Code, is amended