[Congressional Record Volume 140, Number 94 (Tuesday, July 19, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 19, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       FEGLI LIVING BENEFITS ACT

  Ms. NORTON. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 512) 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, as amended.
  The Clerk read as follows:

                                H.R. 512

       Be it enacted by the Senate and House of Representatives 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:

     ``Sec. 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 expectancy is 9 
     months or less.
       ``(b) The Office of Personnel Management shall prescribe 
     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 purpose 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 individual's application for benefits under this 
     section is approved or deemed approved under subsection 
     (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 section 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 
     remain 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 multiple 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 adjustments; and
       ``(B) deductions and withholdings under section 8707, and 
     contributions under section 8708, shall be terminated with 
     respect to such individual (or reduced 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 involved, to 
     the same extent as if no election under this section had been 
     made).
       ``(d)(1) The Office's regulations shall include provisions 
     regarding the form and manner in which an application 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 complete 
     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 expected 
     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 
     application under this section, the covered individual may be 
     required to submit to a medical examination under the 
     direction 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 section 
     (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 (expressed 
     as a multiple of $1,000) of the total amount otherwise 
     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 address 
     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 Personnel 
     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 voluntarily 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 necessary 
     to ensure that employees and any other individuals who would 
     be eligible to make an election under this subsection 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 portion of premium 
     payments otherwise due as will, no later than September 30, 
     1995, permanently reduce the contingency reserve established 
     under the third sentence of section 8712 of such title 5 by 
     an amount equal to the amount by which payments from the 
     Employees' Life Insurance 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.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
the District of Columbia [Ms. Norton] will be recognized for 20 
minutes, and the gentleman from New York [Mr. Gilman] will be 
recognized for 20 minutes.
  The Chair recognizes the gentlewoman from the District of Columbia 
[Ms. Norton].
  Ms. NORTON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, H.R. 512, introduced by Congressman Benjamin Gilman, 
provides that Federal employees who are diagnosed as terminally ill 
with a life expectancy of 9 months or less could elect to receive all 
or a portion of their basic life insurance benefit in advance of their 
deaths as a ``living benefit.'' In order to be eligible for the living 
benefit, the enrollee would be required to provide certification from 
medical authorities that he or she is terminally ill. While the living 
benefits could be used at the discretion of the enrollee, it is 
anticipated that these funds would most often be used for providing 
care and medical treatment during the remaining period of the 
enrollee's life.
  In return for electing the living benefit, the enrollee would sever 
all rights that any beneficiaries might have had in the proceeds of the 
policy. However, H.R. 512 only affects the basic life insurance amount 
and does not negate beneficiary rights in the optional FEGLI benefits. 
H.R. 512 provides that the living benefit election is irrevocable and 
that the enrollee is no longer liable for monthly premiums on the basic 
insurance policy.
  The Subcommittee on Compensation and Employee Benefits held a hearing 
on H.R. 512 on April 20, 1994. Congressman Gilman, OPM, and the 
National Association of Retired Federal Employees testified in favor of 
the legislation. The subcommittee also received written statements for 
the record which expressed support for the bill from the American 
Federation of Government Employees, the National Treasury Employees 
Union, and the National Association of Government Employees.
  The bill, as amended, directs OPM to withhold premium payments to the 
FEGLI reserve contingency fund in an amount sufficient to offset the 
increase in direct spending that would occur as a result of the bill. 
The contingency reserve is funded by payments from the FEGLI trust fund 
and is held outside the budget at a targeted amount of $50 million. The 
withheld amount will permanently reduce the fund and the reduction will 
take place no later than September 30, 1995. CBO estimates that this 
provision makes the bill budget neutral. I urge its adoption by the 
House.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GILMAN. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. GILMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. GILMAN. Mr. Speaker, I rise today in strong support of H.R. 512, 
the Federal Employees Group Life Insurance Living Benefits Act. At this 
time I would like to take the opportunity to thank the supporters of 
this legislation, including the distinguished chair of the Subcommittee 
on Compensation and Employee Benefits, the gentlewoman from the 
District of Columbia [Ms. Norton], the ranking minority member of the 
subcommittee, the gentlewoman from Maryland [Mrs. Morella], and the 
ranking minority member of the full committee, the gentleman from 
Indiana [Mr. Myers]. I also want to thank the distinguished chairman of 
the House Post Office and Civil Service Committee, the gentleman from 
Missouri [Mr. Clay] for promptly scheduling this legislation for floor 
action following its favorable reporting from the committee.
  H.R. 512 is sensible, cost-effective legislation aimed at helping 
employees and retirees covered under the Federal Employees Group Life 
Insurance [FEGLI] program cope with the financial burdens associated 
with a terminal illness. While this body cannot begin to alleviate the 
emotional toll a terminal illness places on an individual and his or 
her family, we can undertake efforts to ease the financial burdens.
  H.R. 512 allows a FEGLI enrollee the option of receiving an 
actuarially reduced accelerated insurance benefit if diagnosed with a 
terminal illness with a life expectancy of 9 months or less. This 
accelerated benefit would represent the insured's basic life insurance 
amount less an actuarial reduction to compensate for any lost interest 
to the life insurance fund. An election of this accelerated benefit 
negates all rights the insured or any beneficiaries might have in the 
basic insurance amount. However, the additional options provided under 
FEGLI are not subject to election and remain intact for any 
beneficiaries' interest.
  I am gratified to note that H.R. 512 enjoys broad bipartisan support. 
In a hearing conducted by the subcommittee chair, Ms. Norton, Federal 
employee groups, retiree groups and the administration all voiced 
support for the legislation.
  I want to particularly acknowledge the efforts on the part of the 
subcommittee chair Ms. Norton in crafting the financing mechanism for 
the legislation. This provision directs the Office of Personnel 
Management to withhold premium payments to the insurance reserve 
contingency fund in an amount sufficient to offset any direct spending 
incurred during the first year of the program as a result of the 
accelerated payments elected by enrollees. This amendment was the 
product of a joint effort on the part of staff and the Office of 
Personnel Management. I also want to thank OPM for its support of the 
legislation and for providing technical assistance in helping craft 
this provision which meets fiscal constraints while easing 
administrative burdens. The congressional Budget Office estimates 
enactment of H.R. 512, as amended, will prove budget neutral over a 5 
year period.
  Mr. Speaker, I am pleased to bring this measure before the full House 
today. In this day and age of strict budget scrutiny, I am pleased to 
sponsor a measure with humanitarian intent and a cost-conscious price 
tag. Facing a terminal illness is morally and emotionally difficult in 
itself. However, the depletion of one's financial resources compounds 
the already serious ordeal facing the patient and his or her family. 
H.R. 512 will help ease the financial burdens placed on the insured 
while providing a needed source of income in order to allow the insured 
to live any remaining months of life in dignity and comfort.
  I hope our colleagues in the other body share our concerns for 
providing a humanitarian, yet cost effective benefit and will quickly 
approve this measure on a timely basis. Accordingly, Mr. Speaker, I 
urge all my colleagues to join me today in support of H.R. 512.
  Mr. Speaker, I have no requests for time, and I yield back the 
balance of my time.
  Ms. NORTON. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Montgomery). The question is on the 
motion offered by the gentlewoman from the District of Columbia [Ms. 
Norton] that the House suspend the rules and pass the bill, H.R. 512, 
as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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