[House Report 105-373]
[From the U.S. Government Publishing Office]
105th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 105-373
_______________________________________________________________________
FEDERAL EMPLOYEES LIFE INSURANCE IMPROVEMENT ACT
_______
November 4, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Burton of Indiana, from the Committee on Government Reform and
Oversight, submitted the following
R E P O R T
[To accompany H.R. 2675]
[Including cost estimate of the Congressional Budget Office]
The Committee on Government Reform and Oversight, to whom
was referred the bill (H.R. 2675) to require that the Office of
Personnel Management submit proposed legislation under which
group universal life insurance and group variable universal
life insurance would be available under chapter 87 of title 5,
United States Code, and for other purposes, having considered
the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
CONTENTS
Page
I. Summary of Legislation...........................................3
II. Background and Need for the Legislation..........................4
III. Legislative Hearings and Committee Actions.......................5
IV. Committee Hearings and Written Testimony.........................5
V. Explanation of the Bill..........................................7
VI. Compliance With Rule XI..........................................7
VII. Budget Analysis and Projections..................................7
VIII.Cost Estimate of the Congressional Budget Office.................8
IX. Specific Constitutional Authority for this Legislation..........11
X. Committee Recommendation........................................11
XI. Congressional Accountability Act; Public Law 104-1..............11
XII. Federal Advisory Committee Act (5 U.S.C. APP.) Section 5(b).....11
XIII.Unfunded Mandates Reform Act; P.L. 104-4, Section 423...........11
XIV. Changes in Existing Law.........................................11
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Employees Life Insurance
Improvement Act''.
SEC. 2. REQUIREMENT THAT A LEGISLATIVE PROPOSAL BE SUBMITTED.
(a) In General.--Within 6 months after the date of enactment of
this Act, the Office of Personnel Management shall submit to Congress
proposed legislation under which there would be made available to
Federal employees and annuitants the following:
(1) Group universal life insurance.
(2) Group variable universal life insurance.
(3) Additional voluntary accidental death and
dismemberment insurance.
The proposal shall indicate whether any such insurance could be taken
in addition to, in lieu of, or in combination with any insurance
otherwise offered under chapter 87 of title 5, United States Code.
(b) Description of Policies and Costs.--The proposed legislation
shall be accompanied by a report which shall include a concise
description of the policies proposed, an estimate of the cost to the
Government anticipated with respect to each of those policies, and any
other information which the Office of Personnel Management may consider
appropriate.
SEC. 3. UNREDUCED ADDITIONAL OPTIONAL LIFE INSURANCE.
(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 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 insurance 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 insurance
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 insurance 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 (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 election under the
preceding provisions of this paragraph shall be treated as if
such employee had made an election under subparagraph (A).
``(4) If an employee makes an election under paragraph (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 ``except 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 provided in subsection (c)(3)(B))'' after ``Amounts
so withheld''.
(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
retirement 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 follows:
``(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 section, under conditions the Office shall
prescribe, in multiples, 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 amended--
(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 employee 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 Period.--
(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
Personnel Management may prescribe.
(2) Open enrollment period.--
(A) In general.--Before the effective date under
paragraph (1), the Office shall afford eligible
employees a reasonable opportunity to elect to begin
coverage under section 8714c of title 5, United States
Code (as amended by this section), or to increase any
existing optional 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 employee.--For purposes
of subparagraph (A), the term ``eligible employee''
means any employee (within the meaning of section 8701
of title 5, United States Code) covered by group life
insurance under section 8704(a) of such title.
I. Summary of Legislation
H.R. 2675, as amended, will improve the life insurance
benefits available to Federal employees under the Federal
Employees Group Life Insurance program (FEGLI). It directs the
Office of Personnel Management (OPM) to submit a legislative
proposal for offering Federal employees group universal life
insurance, group variable universal life insurance, and
additional voluntary accidental death and dismemberment
policies. In addition, it permits employees to continue
unreduced additional optional life insurance coverage beyond
their 65th birthday at their own expense and to purchase larger
amounts of optional life insurance on family members.
II. Background and Need for the Legislation
H.R. 2675 was introduced by Mr. Mica to improve the
benefits available to Federal employees under FEGLI and
implement several recommendations received by the civil service
subcommittee in connection with an April 30, 1997 oversight
hearing it held on the FEGLI program. A recurrent theme at that
hearing was that Federal employees should have more choices. To
expand the choices available, witnesses recommended that
Congress consider providing group universal life insurance,
group variable life insurance, and additional voluntary
accidental death and dismemberment policies to Federal
employees.
This bill, therefore, directs OPM to submit a legislative
proposal for offering these options six months after the date
of enactment. It provides OPM with maximum flexibility to
expand employee choices. OPM may propose that employees be
permitted to choose such insurance in addition to the term
policies already available under the program. Or OPM may
recommend that employees be given the opportunity to choose
those policies instead of the options already available.
Another recommendation received as a result of the hearing
was that employees should be able to purchase higher amounts of
optional life insurance on family members. Accordingly, at Mr.
Cummings's recommendation the bill was amended to increase the
amount of optional life insurance that employees may purchase
on spouses from $5,000 to $25,000 and from $2,500 to $12,500
per child. Employees may purchase coverage on spouses in $5,000
increments and in $2,500 increments on dependent children.
According to information received by the subcommittee, these
increases will not affect the current rate per $1,000 of
coverage. OPM must establish an open season providing eligible
employees a reasonable opportunity to elect optional insurance
coverage on family members or to increase existing coverage.
The bill also incorporates a provision that was included in
H.R. 3841, the Omnibus Civil Service Reform Act of 1996, which
passed the House last year, but was not considered by the
Senate. Here, too, the bill provides additional options. Under
existing law, employees may retain unreduced additional
optional life insurance coverage at their own expense until age
65. At age 65 employees are no longer required to pay for the
insurance, but its face value declines at the rate of 2% per
month until there is no insurance left. This may be fine for
some employees. But others may want more protection for their
families. To accommodate their needs, the bill permits
employees to continue carrying additional optional insurance at
full face value beyond age 65 at their own expense.
III. Legislative Hearings and Committee Actions
H.R. 2675 was introduced on October 21, 1997 by the
Honorable John L. Mica (R-FL). The bill was referred to the
Committee on Government Reform and Oversight on October 22,
1997, and it was referred to the Subcommittee on Civil Service
on the same day. The subcommittee held a mark up on October 22,
1997. Representative Cummings offered an amendment that was
adopted by voice vote. On October 31, 1997, the Committee on
Government Reform and Oversight met to consider the bill as
amended. Chairman Burton offered an amendment in the nature of
a substitute that incorporated the subcommittee's amendments.
The amendment in the nature of a substitute was adopted by
voice vote. The Committee favorably reported the bill, as
amended by the subcommittee, to the full House by voice vote.
IV. Committee Hearings and Written Testimony
The committee held no hearings and received no written
testimony on H.R. 2675. However, on April 30, 1997, the Civil
Service Subcommittee held an oversight hearing on FEGLI.
Witnesses were Margery Brittain, Vice President, Group National
Accounts, MetLife; G. Scott Cahill, CLU, Chief Executive
Officer, James B. Greene & Associates, Inc.; Barnett I.
Chepenik, President, Lincoln Financial Group, Inc. and Chepenik
& Associates; and William E. Flynn, III, Associate Director,
Retirement and Insurance Services, OPM.
Ms. Brittain testified that MetLife has been the primary
insurance carrier for the FEGLI program since its inception in
1954. The existing contract was negotiated in 1954, and has
been modified over 70 times since then to reflect the evolution
of the program and incorporate changes in applicable laws and
regulations. MetLife is paid a monthly premium from the
Employees' Life Insurance Fund (a fund within the Treasury of
the United States). Each year OPM and MetLife agree upon a
premium ($1.74 billion for FY 97), which is intended to cover
the estimated claims expense for the program, MetLife's
allowable administrative expenses, the service charge to which
MetLife is entitled, an investment management fee, and
applicable Federal income taxes.
According to Ms. Brittain, FEGLI is administratively unique
and complex in several ways. Its benefits are determined by
law; the customers are millions of individuals in hundreds of
locations affiliated with multiple Federal agencies, some in
remote locations of the world; and the size of the program is
unique--MetLife adjudicates approximately 85,000 claims per
year, significantly more than it does for any other group
contract. Approximately $1.6 billion in claims are paid per
year.
In comparing benefits available under FEGLI with those
provided by other large employers, Ms. Brittain noted that in
the private sector most employers offer supplemental life
benefits, which include optional term insurance, group
universal life, group variable universallife, or, in some
cases, a combination of the latter two. She found no notable
differences between public and private sector employers with respect to
dependent life benefits.
Ms. Brittain also identified both group universal and group
variable life insurance policies as financially feasible
alternative insurance options for Federal employees. These
plans, which are increasingly being offered in the private
sector, permit the insured to accumulate a cash value in the
policy by making contributions in excess of the level required
to provide the term insurance death benefit. They can provide
permanent insurance that is portable and can be converted to
``paid up'' insurance that will not reduce or cancel. She also
identified voluntary accidental death and dismemberment
insurance as an alternative. This coverage has become
increasingly popular in recent years because of its low cost
and the protection it affords against one of the leading causes
of death for younger segments of the workforce.
Mr. Cahill and Mr. Chepenik noted several differences
between FEGLI benefits and insurance coverage provided in the
private sector. Under the FEGLI basic life program, he pointed
out, employees under age 45 receive a greater benefit than 1 x
salary, which is uncommon in the private sector. In the private
sector, he noted, employers typically pay 100% of the basic
term cost, but under FEGLI the Federal Government pays 33% and
the employee 67%. Mr. Cahill also observed that in the private
sector there is often an annual open enrollment period during
which employees may increase or decrease their optional
insurance, which is not true under FEGLI. He found the FEGLI
dependent insurance coverage competitive with private sector
plans, but suggested there is an opportunity for Congress to
tailor a program to offer additional competitive life insurance
benefits.
According to Mr. Cahill, the trend in the private sector is
to move away from providing traditional post-retirement life
insurance benefits. Instead, private employers have been
addressing the need for post-retirement insurance by offering
group universal and group variable universal life insurance
policies. These are 100% employee-funded and can be tailored to
each individual employee's needs. He explained that the
policies are often fully funded during the employee's working
life so the employee can retire with a cash value policy that
would potentially require no future premiums. In addition, Mr.
Cahill observed that these policies permit employees to receive
an annuity upon retirement instead of providing death benefits
to beneficiaries.
Mr. Flynn testified that although the FEGLI program began
as a one-size-fits-all approach, it has evolved to offer a
``considerable array'' of options to address each enrollee's
individual circumstances, pointing out that they may choose:
basic life insurance, six levels of additional life insurance,
family insurance, and three options with respect to post-
retirement basic insurance, plus accelerated payment options
for the terminally ill. He noted that close to 90% of the
eligible Federal workforce has consistently participated in the
FEGLI program, attesting to its popularity. OPM has held only
six open enrollment periods in the history of FEGLI, two of
which have been held since 1993. These open seasons were
offered in response to significant program developments,
according to Mr. Flynn.
Mr. Flynn indicated that in light of the extremely high
participation rate and the number of options and benefit levels
currently available, OPM did not see a need for any basic
restructuring of the program.
V. Explanation of the Bill as Reported: Section-by-Section Analysis
Sec. 1.--The short title is ``The Federal Employees Life
Insurance Improvement Act.''
Sec. 2.--This section directs OPM to submit a legislative
proposal under which Federal employees would be offered the
opportunity to purchase group universal life insurance, group
variable universal life insurance, and additional voluntary
accidental death and dismemberment insurance under FEGLI. OPM
is to recommend whether such insurance should be offered in
addition to, or in lieu of, insurance already offered under
FEGLI. OPM's proposal is to be submitted within 6 months after
enactment, and it must include a concise description of the
policies proposed and the cost to the Government.
Sec. 3.--This section amends 5 U.S.C. Sec. 8714b to allow
employees to carry additional optional life insurance at full
face value beyond age 65 at their own expense. Under current
law, employees stop paying for this insurance at the end of the
month in which they turn 65. However, the face value of the
insurance is reduced by 2% per month for 50 months, at which
point the insurance stops. The amendments made by this section
allow employees to elect to continue paying for the insurance
beyond age 65, in which case the face value of the insurance is
not reduced.
Sec. 4.--This section amends 5 U.S.C. Sec. 8714c to
increase the amount of optional life insurance on family
members that employees may purchase. Maximum coverage on
spouses is increased from $5,000 to $25,000 and from $2,500 to
$12,500 per child. The employee may purchase coverage on
spouses in $5,000 increments and in $2,500 increments on
children. It also requires OPM to establish an open season
providing Federal employees covered by group insurance a
reasonable opportunity to elect to begin or increase optional
insurance coverage on family members. Technical and conforming
amendments are included to reflect the amendments made by this
section. The amendments made by this section shall take effect
on the first day of the first pay period beginning 180 days
after the date of enactment, unless OPM establishes an earlier
date.
VI. Compliance With Rule XI
Pursuant to rule XI, clause 2(l)(3)(A), of the Rules of the
House of Representatives, under the authority of rule X, clause
2(b)(1) and clause 3(f), the results and findings for those
oversight activities are incorporated in the recommendations
found in the bill and in this report.
VII. Budget Analysis and Projections
H.R. 2675, as amended, provides for no new authorization,
budget authority, or tax expenditures. Consequently, the
provisions of section 308(a) of the Congressional Budget Act
are not applicable.
VIII. Cost Estimate of the Congressional Budget Office
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 4, 1997.
Hon. Dan Burton,
Chairman, Committee on Government Reform and Oversight,
House of Representatives, Washington, DC.
Dear Mr. Chairman. The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2675, the Federal
Employees' Life Insurance Improvement Act of 1997.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Eric Rollins.
Sincerely,
June E. O'Neill, Director.
Enclosure.
H.R. 2675--To require that the Office of Personnel management submit
proposed legislation under which group universal life insurance
and group variable universal life insurance would be available
under chapter 87 of title 5, United States Code, and for other
purposes.
Summary: H.R. 2675 would require the Office of Personnel
Management (OPM) to submit legislation that would make group
universal life insurance and group variable universal life
insurance available through the Federal Employees' Group Life
Insurance (FEGLI) program. In addition, H.R. 2675 would change
FEGLI in two ways. First the bill would increase the amount of
optional life insurance for spouses and children that federal
employees may purchase through FEGLI. Second, the bill would
allow retired federal employees who have optional FEGLI life
insurance for themselves, their spouses, or their children to
continue paying premiums after turning 65 and avoid having
their coverage phased out. This bill would affect direct
spending and would therefore be subject to pay-as-you-go
procedures.
CBO estimates that this bill would reduce direct spending
by $72 million over the FY 1998-2002 period. Direct spending
would decrease because additional premiums would be larger than
additional claims. CBO estimates that employee premium payments
to FEGLI, which are treated as offsetting collections, would
rise by $287 million over the 1998-2002 period, and FEGLI
claims payments would increase by $215 million.
H.R. 2675 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act of 1995 (UMRA) and would
have no impact on the budgets of state, local, or tribal
governments. H.R. 2675 also contains no private-sector mandates
as defined in UMRA.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2675 is shown in the table below.
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Increased FEGLI premium payments.............................. -23 -58 -63 -68 -75
Increased FEGLI claims payments............................... 18 44 47 51 55
-------------------------------------------------
Total direct spending................................... -6 -14 -16 -18 -20
----------------------------------------------------------------------------------------------------------------
Note.--Numbers may not sum to totals due to rounding. This estimate assumes that HR 2675 is enacted by November
15, 1997.
The costs of this legislation fall within budget function
600, Income Security.
Basis of estimate: Federal employees are currently allowed
to purchase term life insurance through the Federal Employees'
Group Life Insurance (FEGLI) program. In addition, employees
may supplement their basic life insurance with three forms of
optional insurance. Option A allows employees to buy $10,000 of
additional life insurance as well as additional accidental
death and dismemberment insurance. Under Option B, federal
employees may buy additional life insurance worth 1, 2, 3, 4,
or 5 times their annual basic pay. Under Option C, employees
may purchase life insurance for their family members at the
fixed amount of $5,000 (for a spouse) or $2,500 (for each
dependent child).
H.R. 2675 would require the Office of Personnel Management
(OPM) to submit proposed legislation to Congress that would
expand the types of insurance available through FEGLI to
include group universal life insurance and group variable
universal life insurance. OPM is required to submit its
proposals within six months of the bill's enactment. CBO
estimates that this provision would not have a significant cost
impact.
Unlike basic FEGLI life insurance, which requires a
matching employer contribution, employees pay the full cost of
any optional FEGLI insurance. If an employee has Option B or C
coverage for the entire five years prior to retiring or going
on worker's compensation, he may keep the optional insurance
after he retires. However, once the retiree reaches age 65, he
no longer pays premiums, and the amount of coverage decreases
by 2 percentage points a month over 50 months until no coverage
is left.
H.R. 2675 would amend Options B and C in two ways. First,
employees would be allowed to select 1, 2, 3, 4, or 5 times the
current $5,000 and $2,500 amounts under Option C. In addition,
federal employees who continue their Option B or C coverage
during retirement would be able to continue paying premiums
after age 65 and avoid having their coverage phased out. The
changes to Option B would take effect 120 days after enactment
and would affect only those employees who retire on or after
the effective date. The changes to Option C would take effect
180 days after enactment and would affect all current
enrollees.
Increased FEGLI Premium Payments.--A significant number of
current and retired federal employees have Option B or C
coverage. Approximately 126,000 retirees carry Option B
coverage, and 1 million current workers and 314,000 retirees
have Option C coverage. CBO used data from OPM to project the
number of people who would enroll in Options B and C over the
next five years. These projections included the number of
retirees with Option B or C coverage, the number of retirees
over age 65, and the average amount of coverage.
CBO assumed that Option C enrollees would increase their
coverage to an average of 2.5 times the current level. This
amount is the midpoint of the new coverage amounts that would
be available. Employees currently pay a fixed premium for
Option C coverage, and OPM has indicated that Option C premiums
would increase to reflect the increase in available coverage
envisioned under H.R. 2675. CBO assumed that premiums for
Option C would rise in proportion to the amount of coverage
selected. For example, an employee who currently pays $18.20
for $5,000 of coverage for a spouse would pay $54.60 for
$15,000 of coverage. Finally, CBO assumed that half of the
retirees with Option B or C coverage would decide to keep their
coverage after turning 65.
Given these assumptions, CBO estimated that additional
premium payments from retirees with Option B coverage would
rise by $50 million between 1998 and 2002. Premiums from
current employees with Option C coverage would increase by $83
million during this period. Finally, premiums from retirees
with Option C coverage would increase $155 million. The
increase in the premium payments for Option C retirees would be
relatively large since they would be able both to select more
coverage and keep that coverage past age 65.
Increased FEGLI Claims Payments.--Because federal employees
and retirees would purchase more FEGLI coverage, claims
payments would increase under H.R. 2675. Using data from OPM,
CBO estimated the number of claims that would be made under
Options B and C and the average amount of each claim. Separate
projections were made for current employees and retirees.
Claims payments to retirees with Option B coverage would
rise by $34 million between 1998 and 2002 as some future
retirees keep their coverage past age 65. Claims payments to
current employees with Option C coverage would increase by the
same proportion as the assumed increase in coverage, and would
total $98 million over the 1998-2002 period. As with premium
payments, claims payments to retirees with Option C coverage
would be relatively larger, totaling $82 million between FY
1998 and FY 2002.
Pay-as-you-go considerations: The provisions of this bill
would affect direct spending and would therefore be subject to
pay-as-you-go procedures.
SUMMARY OF PAY-AS-YOU-GO EFFECTS
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Change in outlays............................................. -6 -14 -16 -18 -20
Change in receipts............................................ 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------
Estimated impact on State, local, and tribal governments:
H.R. 2675 contains no intergovernmental mandates as defined in
the Unfunded Mandates Reform Act of 1995 (UMRA) and would have
no impact on the budgets of state, local, or tribal
governments.
Estimated impact on the private sector: H.R. 2675 contains
no private-sector mandates as defined in UMRA.
Estimate prepared by: Federal cost: Eric Rollins; Impact on
State, local, and tribal governments: Leo Lex; Impact on the
private sector: Matthew Eyles.
Estimate approved by: Paul N. Van de Water, Assistant
Director for Budget Analysis.
IX. Specific Constitutional Authority for This Legislation
Pursuant to rule XI, clauses 1 and 18 of Article 1, Sec. 8
of the Constitution grants Congress the power to enact this
law.
X. Committee Recommendation
On October 31, 1997, a quorum being present, the Committee
ordered the bill, as amended, favorably reported to the House
for consideration.
Committee on Government Reform and Oversight--105th Congress Rollcall
Date: October 31, 1997.
Amendment No. 1.
Description: Amendment in the nature of a substitute.
Offered By: Mr. Dan Burton, (R-IN).
Adopted by voice vote.
Final Passage of H.R. 2675, as amended.
Offered by: Hon. John L. Mica (R-FL).
Adopted by voice vote.
XI. Congressional Accountability Act; Public Law 104-1; Section
102(B)(3)
The amendments made by H.R. 2675 will apply to employees
and former employees of the legislative branch who participate
in the Federal Employees Group Life Insurance program to the
same extent as it applies to other participating employees.
XII. Federal Advisory Committee Act (5 U.S.C. App.) Section 5(b)
The Committee finds that the legislation does not establish
or authorize establishment of an advisory committee within the
definition of 5 U.S.C. App., Section 5(b).
XIII. Unfunded Mandates Reform Act; Public Law 104-4; Section 423
H.R. 2675, as amended, does not impose any Federal mandates
on State, local, and tribal governments, or the private sector
or pre-empt any State and local law.
XIV. Changes in Existing Law
In compliance with clause 3 of rule XIII, of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 5, UNITED STATES CODE
* * * * * * *
CHAPTER 87--LIFE INSURANCE
* * * * * * *
Sec. 8714b. Additional optional life insurance
(a) * * *
* * * * * * *
(c)(1) Except as otherwise provided in this subsection, the
additional optional insurance elected by an employee pursuant
to this section shall stop on separation for service or 12
months after discontinuance of his pay, whichever is earlier,
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.
Justices and judges of the United States described in section
8701(a)(5) (ii) and (iii) of this chapter are deemed to
continue in active employment for purposes of this chapter. A
justice or judge of the United States as defined by section
8701(a)(5) of this title who resigns his office without meeting
the requirements of section 371(a) of title 28, United States
Code, for continuation of the judicial salary shall have the
right to convert additional optional life insurance coverage
issued under this section during his judicial service to an
individual policy of life insurance under the same conditions
approved by the Office governing conversion of basic life
insurance coverage for employees eligible as provided in
section 8706(a) of this title.
(2) In the case of any employee who retires on an immediate
annuity or who becomes entitled to receive compensation under
subchapter I of chapter 81 of this title because of disease or
injury to the employee, so much of the additional optional
insurance as has been in force for not less than--
(A) the 5 years of service immediately preceding the
date of retirement or entitlement to compensation, or
(B) the full period or periods of service during
which the insurance was available to the employee, if
fewer than 5 years,
may be continued under conditions determined by the Office
after retirement or while the employee is receiving
compensation under subchapter I of chapter 81 of this title and
is held by the Secretary of Labor (or the Secretary's delegate)
to be unable to return to duty. [The amount of insurance
continued under this paragraph 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. The reduction shall
continue for 50 months at which time the insurance stops.]
(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 insurance 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
insurance 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
insurance 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 (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 election under
the preceding provisions of this paragraph shall be
treated as if such employee had made an election under
subparagraph (A).
(4) If an employee makes an election under paragraph
(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).
(d)(1) During each period in which the additional optional
insurance is in force on an employee the full cost thereof
shall be withheld from the employee's pay. During each period
in which an employee continues additional optional insurance
after retirement or while in receipt of compensation under
subchapter I of chapter 81 of this title because of disease or
injury to the employee, as provided in subsection (c) of this
section, the full cost thereof shall be withheld from the
former employee's annuity or compensation, except that, if
insurance is continued as provided in subparagraph (A) of
paragraph (3), beginning at the end of the calendar month in
which the former employee becomes 65 years of age, the
additional optional life insurance shall be without cost to the
former employee. Amounts so withheld (and any amounts withheld
as provided in subsection (c)(3)(B)) shall be deposited, used,
and invested as provided in section 8714 of this title and
shall be reported and accounted for together with amounts
withheld under section 8714a(d) of this title.
* * * * * * *
Sec. 8714c. Optional life insurance on family members
(a) * * *
[(b) The optional life insurance on family members provided
under this section shall be made available to each eligible
employee who elects coverage under this section, under
conditions the Office shall prescribe, in the amount of $5,000
for a spouse and $2,500 for each child described in section
8701(d). The employee may stop coverage elected under this
section at any time.]
(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 section, under
conditions the Office shall prescribe, in multiples, 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.
(c)(1) Except as otherwise provided in this subsection, the
optional life insurance on family members shall stop at the
earlier of the employee's death, the employee's separation from
the service, for temporary extension of life insurance coverage
and for conversion to individual policies of life insurance
under conditions approved by the Office.
(2) In the case of any employee who retires on an immediate
annuity or who becomes entitled to receive compensation under
subchapter I of chapter 81 of this title because of disease or
injury to the employee and who has had in force insurance under
this section for no less than--
(A) the 5 years of service immediately preceding the
date of retirement or entitlement to compensation, or
(B) the full period or periods of service during
which the insurance was available to the employee, if
fewer than 5 years,
optional life insurance on family members may be continued
under the same conditions as provided in [section 8714b(c)(2)
of this title] section 8714b(c)(2)-(4).
(d)(1) During each period in which the optional life
insurance on family members is in force the full cost thereof
shall be withheld from the employee's pay. During each period
in which an employee continues optional life insurance on
family members after retirement or while in receipt of
compensation under subchapter I of chapter 81 of this title
because of disease or injury to the employee, as provided in
subsection (c) of this section, the full cost shall be withheld
from the annuity or compensation, except that, beginning at the
end of the calendar month in which the former employee becomes
65 years of age, the optional life insurance on family members
shall be without cost to the employee. Notwithstanding the
preceding sentence, the full cost shall be continued after the
calendar month in which the former employee 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. Amounts
so withheld shall be deposited, used, and invested as provided
in section 8714 of this title and shall be reported and
accounted for together with amounts withheld under section
8714a(d) of this title.
* * * * * * *