[Congressional Record Volume 144, Number 137 (Monday, October 5, 1998)]
[Senate]
[Pages S11505-S11506]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            FEDERAL EMPLOYEES LIFE INSURANCE IMPROVEMENT ACT

  Mr. GRAMS. Mr. President, I ask unanimous consent that the Senate now 
proceed to the consideration of calendar No. 590, H.R. 2675.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       A 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.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the 
bill, which had been reported from the Committee on Governmental 
Affairs, with an amendment to strike all after the enacting clause and 
inserting in lieu thereof the following:

     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 referred 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 relating 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 recommendations 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 amended--
       (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.

     SEC. 5. INCONTESTABILITY OF ERRONEOUS COVERAGE.

       Section 8706 of title 5, United States Code, as amended 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 purchased 
     under section 8709 shall not be invalidated based on a 
     finding that the employee erroneously became insured, or 
     erroneously continued insurance upon retirement or 
     entitlement to compensation under subchapter I of chapter 81 
     of this title, if such finding occurs after the erroneous 
     insurance 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 amended--
       (1) in section 8707--
       (A) in subsection (a), by striking ``(a) During'' and 
     inserting ``(a) Subject to subsection (c)(2), during'';
       (B) in subsection (b), by striking ``(b)(1) Whenever'' and 
     inserting ``(b)(1) Subject to subsection (c)(2), whenever''; 
     and
       (C) in subsection (c), by inserting ``(1)'' immediately 
     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 currently 
     into the Employees' Life Insurance Fund, through the agency 
     or retirement system that administers pay, annuity, 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 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.'';
       (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 
     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 
     insurance 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, 
     annuity, or compensation, an amount equal to the withholdings 
     that would otherwise be required under this subsection.''.

     SEC. 7. ADDITIONAL OPTIONAL LIFE INSURANCE CONTINUATION 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 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).
       ``(5)(A) An employee whose additional optional insurance 
     under this section would otherwise stop in accordance with 
     paragraph (1) and who is not eligible to continue insurance 
     under paragraph (2) may elect, under conditions prescribed by 
     the Office of Personnel Management, to continue 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,
     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 calendar 
     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 provision for 
     temporary extension of life insurance coverage and for 
     conversion to an individual policy of life insurance under 
     conditions approved by the Office. Alternatively, insurance 
     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 paragraph 
     following separation from service or 12 months without pay, 
     the insured individual shall submit timely payment of the 
     full cost thereof, plus any amount the Office determines 
     necessary to cover associated administrative expenses, in 
     such manner as the Office shall prescribe by regulation. 
     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).

[[Page S11506]]

       ``(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 insurance 
     under this paragraph for former employees shall terminate, 
     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 Management 
     shall submit a report to Congress on additional optional 
     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 insurance 
     should terminate as provided under such section, be extended, 
     or be made permanent.
       (c) 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''.

     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 
     section, under conditions the Office shall prescribe, in 
     multiples, 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 section 
     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 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.''.

     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 sections of such chapter without 
     submitting evidence of insurability; and
       (2) may, if currently insured for optional life insurance 
     on family members, elect an amount above the minimum 
     insurance on a spouse.

     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 inserting 
     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 Insurance.--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 effective in 
     any case in which a finding of erroneous insurance coverage 
     is made on or after the date of enactment of this Act.
       (d) Direct Payment of Insurance Contributions.--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 Personnel 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 reduction 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 effective 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 insurance pursuant to 
     section 8714b(c)(2) as in effect immediately before such 
     effective date.
       (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 Personnel Management 
     may prescribe.
       (g) Open Season.--Any election made by an employee 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 authorized 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 improve 
     the administration of such chapter, and for other purposes.

  Mr. GRAMS. I ask unanimous consent that the committee substitute be 
agreed, the bill be considered read a third time and passed, the motion 
to reconsider be laid upon the table, the amendment to the title and 
the title, as amended, be agreed to, and that any statements relating 
to the bill appear at the appropriate place in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The committee substitute amendment was agreed to.
  The bill (H.R. 2675), as amended, was considered read the third time, 
and passed.
  The title was amended 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 improve 
     the administration of such chapter, and for other purposes.

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