[Congressional Record Volume 146, Number 98 (Tuesday, July 25, 2000)]
[Senate]
[Pages S7575-S7582]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      LONG-TERM CARE SECURITY ACT

  Mr. NICKLES. Mr. President, I ask unanimous consent that the Senate 
now proceed to the consideration of Calendar No. 685, S. 2420.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 2420) to amend title 5, United States Code, to 
     provide for the establishment of a program under which long-
     term care insurance is made available to Federal employees, 
     members of the uniformed services, and civilian and military 
     retirees, and for other purposes.

  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on Governmental Affairs, 
with an amendment and an amendment to the title, as follows:

       (Strike out all after the enacting clause and insert the 
     part printed in italic.)

               TITLE I--FEDERAL LONG-TERM CARE INSURANCE

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Long-Term Care Security 
     Act''.

     SEC. 1002. LONG-TERM CARE INSURANCE.

       (a) In General.--Subpart G of part III of title 5, United 
     States Code, is amended by adding at the end the following:

                 ``CHAPTER 90--LONG-TERM CARE INSURANCE

``Sec.
``9001. Definitions.
``9002. Availability of insurance.
``9003. Contracting authority.
``9004. Financing.
``9005. Preemption.
``9006. Studies, reports, and audits.
``9007. Jurisdiction of courts.
``9008. Administrative functions.
``9009. Cost accounting standards.

     ``Sec. 9001. Definitions

       For purposes of this chapter:

[[Page S7576]]

       ``(1) Employee.--The term `employee' means--
       ``(A) an employee as defined by section 8901(1); and
       ``(B) an individual described in section 2105(e),

     but does not include an individual employed by the government 
     of the District of Columbia.
       ``(2) Annuitant.--The term `annuitant' has the meaning such 
     term would have under paragraph (3) of section 8901 if, for 
     purposes of such paragraph, the term `employee' were 
     considered to have the meaning given to it under paragraph 
     (1) of this subsection.
       ``(3) Member of the uniformed services.--The term `member 
     of the uniformed services' means a member of the uniformed 
     services, other than a retired member of the uniformed 
     services, who is--
       ``(A) on active duty or full-time National Guard duty for a 
     period of more than 30 days; and
       ``(B) a member of the Selected Reserve.
       ``(4) Retired member of the uniformed services.--The term 
     `retired member of the uniformed services' means a member or 
     former member of the uniformed services entitled to retired 
     or retainer pay, including a member or former member retired 
     under chapter 1223 of title 10 who has attained the age of 60 
     and who satisfies such eligibility requirements as the Office 
     of Personnel Management prescribes under section 9008.
       ``(5) Qualified relative.--The term `qualified relative' 
     means each of the following:
       ``(A) The spouse of an individual described in paragraph 
     (1), (2), (3), or (4).
       ``(B) A parent, stepparent, or parent-in-law of an 
     individual described in paragraph (1) or (3).
       ``(C) A child (including an adopted child, a stepchild, or, 
     to the extent the Office of Personnel Management by 
     regulation provides, a foster child) of an individual 
     described in paragraph (1), (2), (3), or (4), if such child 
     is at least 18 years of age.
       ``(D) An individual having such other relationship to an 
     individual described in paragraph (1), (2), (3), or (4) as 
     the Office may by regulation prescribe.
       ``(6) Eligible individual.--The term `eligible individual' 
     refers to an individual described in paragraph (1), (2), (3), 
     (4), or (5).
       ``(7) Qualified carrier.--The term `qualified carrier' 
     means an insurance company (or consortium of insurance 
     companies) that is licensed to issue long-term care insurance 
     in all States, taking any subsidiaries of such a company into 
     account (and, in the case of a consortium, considering the 
     member companies and any subsidiaries thereof, collectively).
       ``(8) State.--The term `State' includes the District of 
     Columbia.
       ``(9) Qualified long-term care insurance contract.--The 
     term `qualified long-term care insurance contract' has the 
     meaning given such term by section 7702B of the Internal 
     Revenue Code of 1986.
       ``(10) Appropriate secretary.--The term `appropriate 
     Secretary' means--
       ``(A) except as otherwise provided in this paragraph, the 
     Secretary of Defense;
       ``(B) with respect to the Coast Guard when it is not 
     operating as a service of the Navy, the Secretary of 
     Transportation;
       ``(C) with respect to the commissioned corps of the 
     National Oceanic and Atmospheric Administration, the 
     Secretary of Commerce; and
       ``(D) with respect to the commissioned corps of the Public 
     Health Service, the Secretary of Health and Human Services.

     ``Sec. 9002. Availability of insurance

       ``(a) In General.--The Office of Personnel Management shall 
     establish and, in consultation with the appropriate 
     Secretaries, administer a program through which an individual 
     described in paragraph (1), (2), (3), (4), or (5) of section 
     9001 may obtain long-term care insurance coverage under this 
     chapter for such individual.
       ``(b) General Requirements.--Long-term care insurance may 
     not be offered under this chapter unless--
       ``(1) the only coverage provided is under qualified long-
     term care insurance contracts; and
       ``(2) each insurance contract under which any such coverage 
     is provided is issued by a qualified carrier.
       ``(c) Documentation Requirement.--As a condition for 
     obtaining long-term care insurance coverage under this 
     chapter based on one's status as a qualified relative, an 
     applicant shall provide documentation to demonstrate the 
     relationship, as prescribed by the Office.
       ``(d) Underwriting Standards.--
       ``(1) Disqualifying condition.--Nothing in this chapter 
     shall be considered to require that long-term care insurance 
     coverage be made available in the case of any individual who 
     would be eligible for benefits immediately.
       ``(2) Spousal parity.--For the purpose of underwriting 
     standards, a spouse of an individual described in paragraph 
     (1), (2), (3), or (4) of section 9001 shall, as nearly as 
     practicable, be treated like that individual.
       ``(3) Guaranteed issue.--Nothing in this chapter shall be 
     considered to require that long-term care insurance coverage 
     be guaranteed to an eligible individual.
       ``(4) Requirement that contract be fully insured.--In 
     addition to the requirements otherwise applicable under 
     section 9001(9), in order to be considered a qualified long-
     term care insurance contract for purposes of this chapter, a 
     contract must be fully insured, whether through reinsurance 
     with other companies or otherwise.
       ``(5) Higher standards allowable.--Nothing in this chapter 
     shall, in the case of an individual applying for long-term 
     care insurance coverage under this chapter after the 
     expiration of such individual's first opportunity to enroll, 
     preclude the application of underwriting standards more 
     stringent than those that would have applied if that 
     opportunity had not yet expired.
       ``(e) Guaranteed Renewability.--The benefits and coverage 
     made available to eligible individuals under any insurance 
     contract under this chapter shall be guaranteed renewable (as 
     defined by section 7A(2) of the model regulations described 
     in section 7702B(g)(2) of the Internal Revenue Code of 1986), 
     including the right to have insurance remain in effect so 
     long as premiums continue to be timely made. However, the 
     authority to revise premiums under this chapter shall be 
     available only on a class basis and only to the extent 
     otherwise allowable under section 9003(b).

     ``Sec. 9003. Contracting authority

       ``(a) In General.--The Office of Personnel Management 
     shall, without regard to section 5 of title 41 or any other 
     statute requiring competitive bidding, contract with one or 
     more qualified carriers for a policy or policies of long-term 
     care insurance. The Office shall ensure that each resulting 
     contract (hereafter in this chapter referred to as a `master 
     contract') is awarded on the basis of contractor 
     qualifications, price, and reasonable competition.
       ``(b) Terms and Conditions.--
       ``(1) In general.--Each master contract under this chapter 
     shall contain--
       ``(A) a detailed statement of the benefits offered 
     (including any maximums, limitations, exclusions, and other 
     definitions of benefits);
       ``(B) the premiums charged (including any limitations or 
     other conditions on their subsequent adjustment);
       ``(C) the terms of the enrollment period; and
       ``(D) such other terms and conditions as may be mutually 
     agreed to by the Office and the carrier involved, consistent 
     with the requirements of this chapter.
       ``(2) Premiums.--Premiums charged under each master 
     contract entered into under this section shall reasonably and 
     equitably reflect the cost of the benefits provided, as 
     determined by the Office. The premiums shall not be adjusted 
     during the term of the contract unless mutually agreed to by 
     the Office and the carrier.
       ``(3) Nonrenewability.--Master contracts under this chapter 
     may not be made automatically renewable.
       ``(c) Payment of Required Benefits; Dispute Resolution.--
       ``(1) In general.--Each master contract under this chapter 
     shall require the carrier to agree--
       ``(A) to provide payments or benefits to an eligible 
     individual if such individual is entitled thereto under the 
     terms of the contract; and
       ``(B) with respect to disputes regarding claims for 
     payments or benefits under the terms of the contract--
       ``(i) to establish internal procedures designed to 
     expeditiously resolve such disputes; and
       ``(ii) to establish, for disputes not resolved through 
     procedures under clause (i), procedures for one or more 
     alternative means of dispute resolution involving independent 
     third-party review under appropriate circumstances by 
     entities mutually acceptable to the Office and the carrier.
       ``(2) Eligibility.--A carrier's determination as to whether 
     or not a particular individual is eligible to obtain long-
     term care insurance coverage under this chapter shall be 
     subject to review only to the extent and in the manner 
     provided in the applicable master contract.
       ``(3) Other claims.--For purposes of applying the Contract 
     Disputes Act of 1978 to disputes arising under this chapter 
     between a carrier and the Office--
       ``(A) the agency board having jurisdiction to decide an 
     appeal relative to such a dispute shall be such board of 
     contract appeals as the Director of the Office of Personnel 
     Management shall specify in writing (after appropriate 
     arrangements, as described in section 8(c) of such Act); and
       ``(B) the district courts of the United States shall have 
     original jurisdiction, concurrent with the United States 
     Court of Federal Claims, of any action described in section 
     10(a)(1) of such Act relative to such a dispute.
       ``(4) Rule of construction.--Nothing in this chapter shall 
     be considered to grant authority for the  Office or a third-
     party reviewer to change the terms of any contract under 
     this chapter.
       ``(d) Duration.--
       ``(1) In general.--Each master contract under this chapter 
     shall be for a term of 7 years, unless terminated earlier by 
     the Office in accordance with the terms of such contract. 
     However, the rights and responsibilities of the enrolled 
     individual, the insurer, and the Office (or duly designated 
     third-party administrator) under such contract shall continue 
     with respect to such individual until the termination of 
     coverage of the enrolled individual or the effective date of 
     a successor contract thereto.
       ``(2) Exception.--
       ``(A) Shorter duration.--In the case of a master contract 
     entered into before the end of the period described in 
     subparagraph (B), paragraph (1) shall be applied by 
     substituting `ending on the last day of the 7-year period 
     described in paragraph (2)(B)' for `of 7 years'.
       ``(B) Definition.--The period described in this 
     subparagraph is the 7-year period beginning on the earliest 
     date as of which any long-term care insurance coverage under 
     this chapter becomes effective.
       ``(3) Congressional notification.--No later than 180 days 
     after receiving the second report required under section 
     9006(c), the President (or his designee) shall submit to the 
     Committees on Government Reform and on Armed Services of the 
     House of Representatives and the Committees on Governmental 
     Affairs and on Armed Services of the Senate, a written 
     recommendation as to whether the program under this chapter 
     should be continued without modification,

[[Page S7577]]

     terminated, or restructured. During the 180-day period 
     following the date on which the President (or his designee) 
     submits the recommendation required under the preceding 
     sentence, the Office of Personnel Management may not take any 
     steps to rebid or otherwise contract for any coverage to be 
     available at any time following the expiration of the 7-year 
     period described in paragraph (2)(B).
       ``(4) Full portability.--Each master contract under this 
     chapter shall include such provisions as may be necessary to 
     ensure that, once an individual becomes duly enrolled, long-
     term care insurance coverage obtained by such individual 
     pursuant to that enrollment shall not be terminated due to 
     any change in status (such as separation from Government 
     service or the uniformed services) or ceasing to meet the 
     requirements for being considered a qualified relative 
     (whether as a result of dissolution of marriage or 
     otherwise).

     ``Sec. 9004. Financing

       ``(a) In General.--Each eligible individual obtaining long-
     term care insurance coverage under this chapter shall be 
     responsible for 100 percent of the premiums for such 
     coverage.
       ``(b) Withholdings.--
       ``(1) In general.--The amount necessary to pay the premiums 
     for enrollment may--
       ``(A) in the case of an employee, be withheld from the pay 
     of such employee;
       ``(B) in the case of an annuitant, be withheld from the 
     annuity of such annuitant;
       ``(C) in the case of a member of the uniformed services 
     described in section 9001(3), be withheld from the pay of 
     such member; and
       ``(D) in the case of a retired member of the uniformed 
     services described in section 9001(4), be withheld from the 
     retired pay or retainer pay payable to such member.
       ``(2) Voluntary withholdings for qualified relatives.--
     Withholdings to pay the premiums for enrollment of a 
     qualified relative may, upon election of the appropriate 
     eligible individual (described in section 9001(1)-(4)), be 
     withheld under paragraph (1) to the same extent and in the 
     same manner as if enrollment were for such individual.
       ``(c) Direct Payments.--All amounts withheld under this 
     section shall be paid directly to the carrier.
       ``(d) Other Forms of Payment.--Any enrollee who does not 
     elect to have premiums withheld under subsection (b) or whose 
     pay, annuity, or retired or retainer pay (as referred to in 
     subsection (b)(1)) is insufficient to cover the withholding 
     required for enrollment (or who is not receiving any regular 
     amounts from the Government, as referred to in subsection 
     (b)(1), from which any such withholdings may be made, and 
     whose premiums are not otherwise being provided for under 
     subsection (b)(2)) shall pay an amount equal to the full 
     amount of those charges directly to the carrier.
       ``(e) Separate Accounting Requirement.--Each carrier 
     participating under this chapter shall maintain records that 
     permit it to account for all amounts received under this 
     chapter (including investment earnings on those amounts) 
     separate and apart from all other funds.
       ``(f) Reimbursements.--
       ``(1) Reasonable initial costs.--
       ``(A) In general.--The Employees' Life Insurance Fund is 
     available, without fiscal year limitation, for reasonable 
     expenses incurred by the Office of Personnel Management in 
     administering this chapter before the start of the 7-year 
     period described in section 9003(d)(2)(B), including 
     reasonable implementation costs.
       ``(B) Reimbursement requirement.--Such Fund shall be 
     reimbursed, before the end of the first year of that 7-year 
     period, for all amounts obligated or expended under 
     subparagraph (A) (including lost investment income). Such 
     reimbursement shall be made by carriers, on a pro rata basis, 
     in accordance with appropriate provisions which shall be 
     included in master contracts under this chapter.
       ``(2) Subsequent costs.--
       ``(A) In general.--There is hereby established in the 
     Employees' Life Insurance Fund a Long-Term Care 
     Administrative Account, which shall be available to the 
     Office, without fiscal year limitation, to defray reasonable 
     expenses incurred by the Office in administering this chapter 
     after the start of the 7-year period described in section 
     9003(d)(2)(B).
       ``(B) Reimbursement requirement.--Each master contract 
     under this chapter shall include appropriate provisions under 
     which the carrier involved shall, during each year, make such 
     periodic contributions to the Long-Term Care Administrative 
     Account as necessary to ensure that the reasonable 
     anticipated expenses of the Office in administering this 
     chapter during such year (adjusted to reconcile for any 
     earlier overestimates or underestimates under this 
     subparagraph) are defrayed.

     ``Sec. 9005. Preemption

       ``The terms of any contract under this chapter which relate 
     to the nature, provision, or extent of coverage or benefits 
     (including payments with respect to benefits) shall supersede 
     and preempt any State or local law, or any regulation issued 
     thereunder, which relates to long-term care insurance or 
     contracts.

     ``Sec. 9006. Studies, reports, and audits

       ``(a) Provisions Relating to Carriers.--Each master 
     contract under this chapter shall contain provisions 
     requiring the carrier--
       ``(1) to furnish such reasonable reports as the Office of 
     Personnel Management determines to be necessary to enable it 
     to carry out its functions under this chapter; and
       ``(2) to permit the Office and representatives of the 
     General Accounting Office to examine such records of the 
     carrier as may be necessary to carry out the purposes of this 
     chapter.
       ``(b) Provisions Relating to Federal Agencies.--Each 
     Federal agency shall keep such records, make such 
     certifications, and furnish the Office, the carrier, or both, 
     with such information and reports as the Office may require.
       ``(c) Reports by the General Accounting Office.--The 
     General Accounting Office shall prepare and submit to the 
     President, the Office of Personnel Management, and each House 
     of Congress, before the end of the third and fifth years 
     during which the program under this chapter is in effect, a 
     written report evaluating such program. Each such report 
     shall include an analysis of the competitiveness of the 
     program, as compared to both group and individual coverage 
     generally available to individuals in the private insurance 
     market. The Office shall cooperate with the General 
     Accounting Office to provide periodic evaluations of the 
     program.

     ``Sec. 9007. Jurisdiction of courts

       ``The district courts of the United States have original 
     jurisdiction of a civil action or claim described in 
     paragraph (1) or (2) of section 9003(c), after such 
     administrative remedies as required under such paragraph (1) 
     or (2) (as applicable) have been exhausted, but only to the 
     extent judicial review is not precluded by any dispute 
     resolution or other remedy under this chapter.

     ``Sec. 9008. Administrative functions

       ``(a) In General.--The Office of Personnel Management shall 
     prescribe regulations necessary to carry out this chapter.
       ``(b) Enrollment Periods.--The Office shall provide for 
     periodic coordinated enrollment, promotion, and education 
     efforts in consultation with the carriers.
       ``(c) Consultation.--Any regulations necessary to effect 
     the application and operation of this chapter with respect to 
     an eligible individual described in paragraph (3) or (4) of 
     section 9001, or a qualified relative thereof, shall be 
     prescribed by the Office in consultation with the appropriate 
     Secretary.
       ``(d) Informed Decisionmaking.--The Office shall ensure 
     that each eligible individual applying for long-term care 
     insurance under this chapter is furnished the information 
     necessary to enable that individual to evaluate the 
     advantages and disadvantages of obtaining long-term care 
     insurance under this chapter, including the following:
       ``(1) The principal long-term care benefits and coverage 
     available under this chapter, and how those benefits and 
     coverage compare to the range of long-term care benefits and 
     coverage otherwise generally available.
       ``(2) Representative examples of the cost of long-term 
     care, and the sufficiency of the benefits available under 
     this chapter relative to those costs. The information under 
     this paragraph shall also include--
       ``(A) the projected effect of inflation on the value of 
     those benefits; and
       ``(B) a comparison of the inflation-adjusted value of those 
     benefits to the projected future costs of long-term care.
       ``(3) Any rights individuals under this chapter may have to 
     cancel coverage, and to receive a total or partial refund of 
     premiums. The information under this paragraph shall also 
     include--
       ``(A) the projected number or percentage of individuals 
     likely to fail to maintain their coverage (determined based 
     on lapse rates experienced under similar group long-term care 
     insurance programs and, when available, this chapter); and
       ``(B)(i) a summary description of how and when premiums for 
     long-term care insurance under this chapter may be raised;
       ``(ii) the premium history during the last 10 years for 
     each qualified carrier offering long-term care insurance 
     under this chapter; and
       ``(iii) if cost increases are anticipated, the projected 
     premiums for a typical insured individual at various ages.
       ``(4) The advantages and disadvantages of long-term care 
     insurance generally, relative to other means of accumulating 
     or otherwise acquiring the assets that may be needed to meet 
     the costs of long-term care, such as through tax-qualified 
     retirement programs or other investment vehicles.

     ``Sec. 9009. Cost accounting standards

       ``The cost accounting standards issued pursuant to section 
     26(f) of the Office of Federal Procurement Policy Act (41 
     U.S.C. 422(f)) shall not apply with respect to a long-term 
     care insurance contract under this chapter.''.
       (b) Conforming Amendment.--The analysis for part III of 
     title 5, United States Code, is amended by adding at the end 
     of subpart G the following:

``90. Long-Term Care Insurance.................................9001.''.

      SEC. 1003. EFFECTIVE DATE.

       The Office of Personnel Management shall take such measures 
     as may be necessary to ensure that long-term care insurance 
     coverage under title 5, United States Code, as amended by 
     this title, may be obtained in time to take effect not later 
     than the first day of the first applicable pay period of the 
     first fiscal year which begins after the end of the 18-month 
     period beginning on the date of the enactment of this Act.

        TITLE II--FEDERAL RETIREMENT COVERAGE ERRORS CORRECTION

     SEC. 2001. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This title may be cited as the ``Federal 
     Erroneous Retirement Coverage Corrections Act''.
       (b) Table of Contents.--The table of contents for this 
     title is as follows:

        TITLE II--FEDERAL RETIREMENT COVERAGE ERRORS CORRECTION

Sec. 2001. Short title; table of contents.
Sec. 2002. Definitions.
Sec. 2003. Applicability.
Sec. 2004. Irrevocability of elections.

[[Page S7578]]

  Subtitle A--Description of Retirement Coverage Errors to Which This 
           Title Applies and Measures for Their Rectification

Chapter 1--Employees and Annuitants Who Should Have Been FERS Covered, 
 but Who Were Erroneously CSRS Covered or CSRS-Offset Covered Instead, 
             and Survivors of Such Employees and Annuitants

Sec. 2101. Employees.
Sec. 2102. Annuitants and survivors.

  Chapter 2--Employee Who Should Have Been FERS Covered, CSRS-Offset 
Covered, or CSRS Covered, but Who Was Erroneously Social Security-Only 
                            Covered Instead

Sec. 2111. Applicability.
Sec. 2112. Correction mandatory.

Chapter 3--Employee Who Should or Could Have Been Social Security-Only 
  Covered but Who Was Erroneously CSRS-Offset Covered or CSRS Covered 
                                Instead

Sec. 2121. Employee who should be Social Security-Only covered, but who 
              is erroneously CSRS or CSRS-Offset covered instead.

          Chapter 4--Employee Who Was Erroneously FERS Covered

Sec. 2131. Employee who should be Social Security-Only covered, CSRS 
              covered, or CSRS-Offset covered and is not FERS-Eligible, 
              but who is erroneously FERS covered instead.
Sec. 2132. FERS-Eligible employee who should have been CSRS covered, 
              CSRS-Offset covered, or Social Security-Only covered, but 
              who was erroneously FERS covered instead without an 
              election.
Sec. 2133. Retroactive effect.

 Chapter 5--Employee Who Should Have Been CSRS-Offset Covered, but Who 
                  Was Erroneously CSRS Covered Instead

Sec. 2141. Applicability.
Sec. 2142. Correction mandatory.

  Chapter 6--Employee Who Should Have Been CSRS Covered, but Who Was 
                Erroneously CSRS-Offset Covered Instead

Sec. 2151. Applicability.
Sec. 2152. Correction mandatory.

                     Subtitle B--General Provisions

Sec. 2201. Identification and notification requirements.
Sec. 2202. Information to be furnished to and by authorities 
              administering this title.
Sec. 2203. Service credit deposits.
Sec. 2204. Provisions related to Social Security coverage of 
              misclassified employees.
Sec. 2205. Thrift Savings Plan treatment for certain individuals.
Sec. 2206. Certain agency amounts to be paid into or remain in the 
              CSRDF.
Sec. 2207. CSRS coverage determinations to be approved by OPM.
Sec. 2208. Discretionary actions by Director.
Sec. 2209. Regulations.

                      Subtitle C--Other Provisions

Sec. 2301. Provisions to authorize continued conformity of other 
              Federal retirement systems.
Sec. 2302. Authorization of payments.
Sec. 2303. Individual right of action preserved for amounts not 
              otherwise provided for under this title.

                       Subtitle D--Effective Date

Sec. 2401. Effective date.

     SEC. 2002. DEFINITIONS.

       For purposes of this title:
       (1) Annuitant.--The term ``annuitant'' has the meaning 
     given such term under section 8331(9) or 8401(2) of title 5, 
     United States Code.
       (2) CSRS.--The term ``CSRS'' means the Civil Service 
     Retirement System.
       (3) CSRDF.--The term ``CSRDF'' means the Civil Service 
     Retirement and Disability Fund.
       (4) CSRS covered.--The term ``CSRS covered'', with respect 
     to any service, means service that is subject to the 
     provisions of subchapter III of chapter 83 of title 5, United 
     States Code, other than service subject to section 8334(k) of 
     such title.
       (5) CSRS-offset covered.--The term ``CSRS-Offset covered'', 
     with respect to any service, means service that is subject to 
     the provisions of subchapter III of chapter 83 of title 5, 
     United States Code, and to section 8334(k) of such title.
       (6) Employee.--The term ``employee'' has the meaning given 
     such term under section 8331(1) or 8401(11) of title 5, 
     United States Code.
       (7) Executive director.--The term ``Executive Director of 
     the Federal Retirement Thrift Investment Board'' or 
     ``Executive Director'' means the Executive Director appointed 
     under section 8474 of title 5, United States Code.
       (8) FERS.--The term ``FERS'' means the Federal Employees' 
     Retirement System.
       (9) FERS covered.--The term ``FERS covered'', with respect 
     to any service, means service that is subject to chapter 84 
     of title 5, United States Code.
       (10) Former employee.--The term ``former employee'' means 
     an individual who was an employee, but who is not an 
     annuitant.
       (11) OASDI taxes.--The term ``OASDI taxes'' means the OASDI 
     employee tax and the OASDI employer tax.
       (12) OASDI employee tax.--The term ``OASDI employee tax'' 
     means the tax imposed under section 3101(a) of the Internal 
     Revenue Code of 1986 (relating to Old-Age, Survivors and 
     Disability Insurance).
       (13) OASDI employer tax.--The term ``OASDI employer tax'' 
     means the tax imposed under section 3111(a) of the Internal 
     Revenue Code of 1986 (relating to Old-Age, Survivors and 
     Disability Insurance).
       (14) OASDI trust funds.--The term ``OASDI trust funds'' 
     means the Federal Old-Age and Survivors Insurance Trust Fund 
     and the Federal Disability Insurance Trust Fund.
       (15) Office.--The term ``Office'' means the Office of 
     Personnel Management.
       (16) Retirement coverage determination.--The term 
     ``retirement coverage determination'' means a determination 
     by an employee or agent of the Government as to whether a 
     particular type of Government service is CSRS covered, CSRS-
     Offset covered, FERS covered, or Social Security-Only 
     covered.
       (17) Retirement coverage error.--The term ``retirement 
     coverage error'' means an erroneous retirement coverage 
     determination that was in effect for a minimum period of 3 
     years of service after December 31, 1986.
       (18) Social security-only covered.--The term ``Social 
     Security-Only covered'', with respect to any service, means 
     Government service that--
       (A) constitutes employment under section 210 of the Social 
     Security Act (42 U.S.C. 410); and
       (B)(i) is subject to OASDI taxes; but
       (ii) is not subject to CSRS or FERS.
       (19) Survivor.--The term ``survivor'' has the meaning given 
     such term under section 8331(10) or 8401(28) of title 5, 
     United States Code.
       (20) Thrift savings fund.--The term ``Thrift Savings Fund'' 
     means the Thrift Savings Fund established under section 8437 
     of title 5, United States Code.

     SEC. 2003. APPLICABILITY.

       (a) In General.--This title shall apply with respect to 
     retirement coverage errors that occur before, on, or after 
     the date of enactment of this Act.
       (b) Limitation.--Except as otherwise provided in this 
     title, this title shall not apply to any erroneous retirement 
     coverage determination that was in effect for a period of 
     less than 3 years of service after December 31, 1986.

     SEC. 2004. IRREVOCABILITY OF ELECTIONS.

       Any election made (or deemed to have been made) by an 
     employee or any other individual under this title shall be 
     irrevocable.

  Subtitle A--Description of Retirement Coverage Errors to Which This 
           Title Applies and Measures for Their Rectification

CHAPTER 1--EMPLOYEES AND ANNUITANTS WHO SHOULD HAVE BEEN FERS COVERED, 
 BUT WHO WERE ERRONEOUSLY CSRS COVERED OR CSRS-OFFSET COVERED INSTEAD, 
             AND SURVIVORS OF SUCH EMPLOYEES AND ANNUITANTS

     SEC. 2101. EMPLOYEES.

       (a) Applicability.--This section shall apply in the case of 
     any employee or former employee who should be (or should have 
     been) FERS covered but, as a result of a retirement coverage 
     error, is (or was) CSRS covered or CSRS-Offset covered 
     instead.
       (b) Uncorrected Error.--
       (1) Applicability.--This subsection applies if the 
     retirement coverage error has not been corrected before the 
     effective date of the regulations described under paragraph 
     (3). As soon as practicable after discovery of the error, and 
     subject to the right of an election under paragraph (2), if 
     CSRS covered or CSRS-Offset covered, such individual shall be 
     treated as CSRS-Offset covered, retroactive to the date of 
     the retirement coverage error.
       (2) Coverage.--
       (A) Election.--Upon written notice of a retirement coverage 
     error, an individual may elect to be CSRS-Offset covered or 
     FERS covered, effective as of the date of the retirement 
     coverage error. Such election shall be made not later than 
     180 days after the date of receipt of such notice.
       (B) Nonelection.--If the individual does not make an 
     election by the date provided under subparagraph (A), a CSRS-
     Offset covered individual shall remain CSRS-Offset covered 
     and a CSRS covered individual shall be treated as CSRS-Offset 
     covered.
       (3) Regulations.--The Office shall prescribe regulations to 
     carry out this subsection.
       (c) Corrected Error.--
       (1) Applicability.--This subsection applies if the 
     retirement coverage error was corrected before the effective 
     date of the regulations described under subsection (b).
       (2) Coverage.--
       (A) Election.--
       (i) CSRS-offset covered.--Not later than 180 days after the 
     date of enactment of this Act, the Office shall prescribe 
     regulations authorizing individuals to elect, during the 18-
     month period immediately following the effective date of such 
     regulations, to be CSRS-Offset covered, effective as of the 
     date of the retirement coverage error.
       (ii) Thrift savings fund contributions.--If under this 
     section an individual elects to be CSRS-Offset covered, all 
     employee contributions to the Thrift Savings Fund made during 
     the period of FERS coverage (and earnings on such 
     contributions) may remain in the Thrift Savings Fund in 
     accordance with regulations prescribed by the Executive 
     Director, notwithstanding any limit that would otherwise be 
     applicable.
       (B) Previous settlement payment.--An individual who 
     previously received a payment ordered by a court or provided 
     as a settlement of claim for losses resulting from a 
     retirement coverage error shall not be entitled to make an 
     election under this subsection unless that amount is waived 
     in whole or in part under section 2208, and any amount not 
     waived is repaid.
       (C) Ineligibility for election.--An individual who, 
     subsequent to correction of the retirement coverage error, 
     received a refund of retirement deductions under section 8424 
     of title 5, United States Code, or a distribution under 
     section 8433 (b), (c), or (h)(1)(A) of title 5, United States 
     Code, may not make an election under this subsection.
       (3) Corrective action to remain in effect.--If an 
     individual is ineligible to make an election or does not make 
     an election under paragraph (2) before the end of any time 
     limitation under this subsection, the corrective action

[[Page S7579]]

     taken before such time limitation shall remain in effect.

     SEC. 2102. ANNUITANTS AND SURVIVORS.

       (a) In General.--This section shall apply in the case of an 
     individual who is--
       (1) an annuitant who should have been FERS covered but, as 
     a result of a retirement coverage error, was CSRS covered or 
     CSRS-Offset covered instead; or
       (2) a survivor of an employee who should have been FERS 
     covered but, as a result of a retirement  coverage error, was 
     CSRS covered or CSRS-Offset covered instead.
       (b) Coverage.--
       (1) Election.--Not later than 180 days after the date of 
     enactment of this Act, the Office shall prescribe regulations 
     authorizing an individual described under subsection (a) to 
     elect CSRS-Offset coverage or FERS coverage, effective as of 
     the date of the retirement coverage error.
       (2) Time limitation.--An election under this subsection 
     shall be made not later than 18 months after the effective 
     date of the regulations prescribed under paragraph (1).
       (3) Reduced annuity.--
       (A) Amount in account.--If the individual elects CSRS-
     Offset coverage, the amount in the employee's Thrift Savings 
     Fund account under subchapter III of chapter 84 of title 5, 
     United States Code, on the date of retirement that represents 
     the Government's contributions and earnings on those 
     contributions (whether or not such amount was subsequently 
     distributed from the Thrift Savings Fund) will form the basis 
     for a reduction in the individual's annuity, under 
     regulations prescribed by the Office.
       (B) Reduction.--The reduced annuity to which the individual 
     is entitled shall be equal to an amount which, when taken 
     together with the amount referred to in subparagraph (A), 
     would result in the present value of the total being 
     actuarially equivalent to the present value of an unreduced 
     CSRS-Offset annuity that would have been provided the 
     individual.
       (4) Reduced benefit.--If--
       (A) a surviving spouse elects CSRS-Offset benefits; and
       (B) a FERS basic employee death benefit under section 
     8442(b) of title 5, United States Code, was previously paid;

     then the survivor's CSRS-Offset benefit shall be subject to a 
     reduction, under regulations prescribed by the Office. The 
     reduced annuity to which the individual is entitled shall be 
     equal to an amount which, when taken together with the amount 
     of the payment referred to under subparagraph (B) would 
     result in the present value of the total being actuarially 
     equivalent to the present value of an unreduced CSRS-Offset 
     annuity that would have been provided the individual.
       (5) Previous settlement payment.--An individual who 
     previously received a payment ordered by a court or provided 
     as a settlement of claim for losses resulting from a 
     retirement coverage error may not make an election under this 
     subsection unless repayment of that amount is waived in whole 
     or in part under section 2208, and any amount not waived is 
     repaid.
       (c) Nonelection.--If the individual does not make an 
     election under subsection (b) before any time limitation 
     under this section, the retirement coverage shall be subject 
     to the following rules:
       (1) Corrective action previously taken.--If corrective 
     action was taken before the end of any time limitation under 
     this section, that corrective action shall remain in effect.
       (2) Corrective action not previously taken.--If corrective 
     action was not taken before such time limitation, the 
     employee shall be CSRS-Offset covered, retroactive to the 
     date of the retirement coverage error.

  CHAPTER 2--EMPLOYEE WHO SHOULD HAVE BEEN FERS COVERED, CSRS-OFFSET 
COVERED, OR CSRS COVERED, BUT WHO WAS ERRONEOUSLY SOCIAL SECURITY-ONLY 
                            COVERED INSTEAD

     SEC. 2111. APPLICABILITY.

       This chapter shall apply in the case of any employee who--
       (1) should be (or should have been) FERS covered but, as a 
     result of a retirement coverage error, is (or was) Social 
     Security-Only covered instead;
       (2) should be (or should have been) CSRS-Offset covered 
     but, as a result of a retirement coverage error, is (or was) 
     Social Security-Only covered instead; or
       (3) should be (or should have been) CSRS covered but, as a 
     result of a retirement coverage error, is (or was) Social 
     Security-Only covered instead.

     SEC. 2112. CORRECTION MANDATORY.

       (a) Uncorrected Error.--If the retirement coverage error 
     has not been corrected, as soon as practicable after 
     discovery of the error, such individual shall be covered 
     under the correct retirement coverage, effective as of the 
     date of the retirement coverage error.
       (b) Corrected Error.--If the retirement coverage error has 
     been corrected, the corrective action previously taken shall 
     remain in effect.

CHAPTER 3--EMPLOYEE WHO SHOULD OR COULD HAVE BEEN SOCIAL SECURITY-ONLY 
  COVERED BUT WHO WAS ERRONEOUSLY CSRS-OFFSET COVERED OR CSRS COVERED 
                                INSTEAD

     SEC. 2121. EMPLOYEE WHO SHOULD BE SOCIAL SECURITY-ONLY 
                   COVERED, BUT WHO IS ERRONEOUSLY CSRS OR CSRS-
                   OFFSET COVERED INSTEAD.

       (a) Applicability.--This section applies in the case of a 
     retirement coverage error in which a Social Security-Only 
     covered employee was erroneously CSRS covered or CSRS-Offset 
     covered.
       (b) Uncorrected Error.--
       (1) Applicability.--This subsection applies if the 
     retirement coverage error has not been corrected before the 
     effective date of the regulations described in paragraph (3).
       (2) Coverage.--In the case of an individual who is 
     erroneously CSRS covered, as soon as practicable after 
     discovery of the error, and subject to the right of an 
     election under paragraph (3), such individual shall be CSRS-
     Offset covered, effective as of the date of the retirement 
     coverage error.
       (3) Election.--
       (A) In general.--Upon written notice of a retirement 
     coverage error, an individual may elect to be CSRS-Offset 
     covered or Social Security-Only covered, effective as of the 
     date of the retirement coverage error. Such election shall be 
     made not later than 180 days after the date of receipt of 
     such notice.
       (B) Nonelection.--If the individual does not make an 
     election before the date provided under subparagraph (A), the 
     individual shall remain CSRS-Offset covered.
       (C) Regulations.--The Office shall prescribe regulations to 
     carry out this paragraph.
       (c) Corrected Error.--
       (1) Applicability.--This subsection applies if the 
     retirement coverage error was corrected before the effective 
     date of the regulations described under subsection (b)(3).
       (2) Election.--Not later than 180 days after the date of 
     enactment of this Act, the Office shall prescribe regulations 
     authorizing individuals to elect, during the 18-month period 
     immediately following the effective date of such regulations, 
     to be CSRS-Offset covered or Social Security-Only covered, 
     effective as of the date of the retirement coverage error.
       (3) Nonelection.--If an eligible individual does not make 
     an election under paragraph (2) before the end of any time 
     limitation under this subsection, the corrective action taken 
     before such time limitation shall remain in effect.

          CHAPTER 4--EMPLOYEE WHO WAS ERRONEOUSLY FERS COVERED

     SEC. 2131. EMPLOYEE WHO SHOULD BE SOCIAL SECURITY-ONLY 
                   COVERED, CSRS COVERED, OR CSRS-OFFSET COVERED 
                   AND IS NOT FERS-ELIGIBLE, BUT WHO IS 
                   ERRONEOUSLY FERS COVERED INSTEAD.

       (a) Applicability.--This section applies in the case of a 
     retirement coverage error in which a Social Security-Only 
     covered, CSRS covered, or CSRS-Offset covered employee not 
     eligible to elect FERS coverage under authority of section 
     8402(c) of title 5, United States Code, was erroneously FERS 
     covered.
       (b) Uncorrected Error.--
       (1) Applicability.--This subsection applies if the 
     retirement coverage error has not been corrected before the 
     effective date of the regulations described in paragraph (2).
       (2) Coverage.--
       (A) Election.--
       (i) In general.--Upon written notice of a retirement 
     coverage error, an individual may elect to remain FERS 
     covered or to be Social Security-Only covered, CSRS covered, 
     or CSRS-Offset covered, as would have applied in the absence 
     of the erroneous retirement coverage determination, effective 
     as of the date of the retirement coverage error. Such 
     election shall be made not later than 180 days after the date 
     of receipt of such notice.
       (ii) Treatment of fers election.--An election of FERS 
     coverage under this subsection is deemed to be an election 
     under section 301 of the Federal Employees Retirement System 
     Act of 1986 (5 U.S.C. 8331 note; Public Law 99-335; 100 Stat. 
     599).
       (B) Nonelection.--If the individual does not make an 
     election before the date provided under subparagraph (A), the 
     individual shall remain FERS covered, effective as of the 
     date of the retirement coverage error.
       (3) Employee contributions in thrift savings fund.--If 
     under this section, an individual elects to be Social 
     Security-Only covered, CSRS covered, or CSRS-Offset covered, 
     all employee contributions to the Thrift Savings Fund made 
     during the period of erroneous FERS coverage (and all 
     earnings on such contributions) may remain in the Thrift 
     Savings Fund in accordance with regulations prescribed by the 
     Executive Director, notwithstanding any limit under section 
     8351 or 8432 of title 5, United States Code.
       (4) Regulations.--Except as provided under paragraph (3), 
     the Office shall prescribe regulations to carry out this 
     subsection.
       (c) Corrected Error.--
       (1) Applicability.--This subsection applies if the 
     retirement coverage error was corrected before the effective 
     date of the regulations described under paragraph (2).
       (2) Election.--Not later than 180 days after the date of 
     enactment of this Act, the Office shall prescribe regulations 
     authorizing individuals to elect, during the 18-month period 
     immediately following  the effective date of such regulations 
     to remain Social Security-Only covered, CSRS covered, or 
     CSRS-Offset covered, or to be FERS covered, effective as 
     of the date of the retirement coverage error.
       (3) Nonelection.--If an eligible individual does not make 
     an election under paragraph (2), the corrective action taken 
     before the end of any time limitation under this subsection 
     shall remain in effect.
       (4) Treatment of fers election.--An election of FERS 
     coverage under this subsection is deemed to be an election 
     under section 301 of the Federal Employees Retirement System 
     Act of 1986 (5 U.S.C. 8331 note; Public Law 99-335; 100 Stat. 
     599).

     SEC. 2132. FERS-ELIGIBLE EMPLOYEE WHO SHOULD HAVE BEEN CSRS 
                   COVERED, CSRS-OFFSET COVERED, OR SOCIAL 
                   SECURITY-ONLY COVERED, BUT WHO WAS ERRONEOUSLY 
                   FERS COVERED INSTEAD WITHOUT AN ELECTION.

       (a) In General.--

[[Page S7580]]

       (1) FERS election prevented.--If an individual was 
     prevented from electing FERS coverage because the individual 
     was erroneously FERS covered during the period when the 
     individual was eligible to elect FERS under title III of the 
     Federal Employees Retirement System Act or the Federal 
     Employees' Retirement System Open Enrollment Act of 1997 
     (Public Law 105-61; 111 Stat. 1318 et seq.), the individual--
       (A) is deemed to have elected FERS coverage; and
       (B) shall remain covered by FERS, unless the individual 
     declines, under regulations prescribed by the Office, to be 
     FERS covered.
       (2) Declining fers coverage.--If an individual described 
     under paragraph (1)(B) declines to be FERS covered, such 
     individual shall be CSRS covered, CSRS-Offset covered, or 
     Social Security-Only covered, as would apply in the absence 
     of a FERS election, effective as of the date of the erroneous 
     retirement coverage determination.
       (b) Employee Contributions in Thrift Savings Fund.--If 
     under this section, an individual declines to be FERS covered 
     and instead is Social Security-Only covered, CSRS covered, or 
     CSRS-Offset covered, as would apply in the absence of a FERS 
     election, all employee contributions to the Thrift Savings 
     Fund made during the period of erroneous FERS coverage (and 
     all earnings on such contributions) may remain in the Thrift 
     Savings Fund in accordance with regulations prescribed by the 
     Executive Director, notwithstanding any limit that would 
     otherwise be applicable.
       (c) Inapplicability of Duration of Erroneous Coverage.--
     This section shall apply regardless of the length of time the 
     erroneous coverage determination remained in effect.

     SEC. 2133. RETROACTIVE EFFECT.

       This chapter shall be effective as of January 1, 1987, 
     except that section 2132 shall not apply to individuals who 
     made or were deemed to have made elections similar to those 
     provided in this section under regulations prescribed by the 
     Office before the effective date of this title.

 CHAPTER 5--EMPLOYEE WHO SHOULD HAVE BEEN CSRS-OFFSET COVERED, BUT WHO 
                  WAS ERRONEOUSLY CSRS COVERED INSTEAD

     SEC. 2141. APPLICABILITY.

       This chapter shall apply in the case of any employee who 
     should be (or should have been) CSRS-Offset covered but, as a 
     result of a retirement coverage error, is (or was) CSRS 
     covered instead.

     SEC. 2142. CORRECTION MANDATORY.

       (a) Uncorrected Error.--If the retirement coverage error 
     has not been corrected, as soon as practicable after 
     discovery of the error, such individual shall be covered 
     under the correct retirement coverage, effective as of the 
     date of the retirement coverage error.
       (b) Corrected Error.--If the retirement coverage error has 
     been corrected before the effective date of this title, the 
     corrective action taken before such date shall remain in 
     effect.

  CHAPTER 6--EMPLOYEE WHO SHOULD HAVE BEEN CSRS COVERED, BUT WHO WAS 
                ERRONEOUSLY CSRS-OFFSET COVERED INSTEAD

     SEC. 2151. APPLICABILITY.

       This chapter shall apply in the case of any employee who 
     should be (or should have been) CSRS covered but, as a result 
     of a retirement coverage error, is (or was) CSRS-Offset 
     covered instead.

     SEC. 2152. CORRECTION MANDATORY.

       (a) Uncorrected Error.--If the retirement coverage error 
     has not been corrected, as soon as practicable after 
     discovery of the error, such individual shall be covered 
     under the correct retirement coverage, effective as of the 
     date of the retirement coverage error.
       (b) Corrected Error.--If the retirement coverage error has 
     been corrected before the effective date of this title, the 
     corrective action taken before such date shall remain in 
     effect.

                     Subtitle B--General Provisions

     SEC. 2201. IDENTIFICATION AND NOTIFICATION REQUIREMENTS.

       Government agencies shall take all such measures as may be 
     reasonable and appropriate to promptly identify and notify 
     individuals who are (or have been) affected by a retirement 
     coverage error of their rights under this title.

     SEC. 2202. INFORMATION TO BE FURNISHED TO AND BY AUTHORITIES 
                   ADMINISTERING THIS TITLE.

       (a) Applicability.--The authorities identified in this 
     subsection are--
       (1) the Director of the Office of Personnel Management;
       (2) the Commissioner of Social Security; and
       (3) the Executive Director of the Federal Retirement Thrift 
     Investment Board.
       (b) Authority To Obtain Information.--Each authority 
     identified in subsection (a) may secure directly from any 
     department or agency of the United States information 
     necessary to enable such authority to carry out its 
     responsibilities under this title. Upon request of the 
     authority involved, the head of the department or agency 
     involved shall furnish that information to the requesting 
     authority.
       (c) Authority To Provide Information.--Each authority 
     identified in subsection (a) may provide directly  to any 
     department or agency of the United States all information 
     such authority believes necessary to enable the department 
     or agency to carry out its responsibilities under this 
     title.
       (d) Limitation; Safeguards.--Each of the respective 
     authorities under subsection (a) shall--
       (1) request or provide only such information as that 
     authority considers necessary; and
       (2) establish, by regulation or otherwise, appropriate 
     safeguards to ensure that any information obtained under this 
     section shall be used only for the purpose authorized.

     SEC. 2203. SERVICE CREDIT DEPOSITS.

       (a) CSRS Deposit.--In the case of a retirement coverage 
     error in which--
       (1) a FERS covered employee was erroneously CSRS covered or 
     CSRS-Offset covered;
       (2) the employee made a service credit deposit under the 
     CSRS rules; and
       (3) there is a subsequent retroactive change to FERS 
     coverage;

     the excess of the amount of the CSRS civilian or military 
     service credit deposit over the FERS civilian or military 
     service credit deposit, together with interest computed in 
     accordance with paragraphs (2) and (3) of section 8334(e) of 
     title 5, United States Code, and regulations prescribed by 
     the Office, shall be paid to the employee, the annuitant or, 
     in the case of a deceased employee, to the individual 
     entitled to lump-sum benefits under section 8424(d) of title 
     5, United States Code.
       (b) FERS Deposit.--
       (1) Applicability.--This subsection applies in the case of 
     an erroneous retirement coverage determination in which--
       (A) the employee owed a service credit deposit under 
     section 8411(f) of title 5, United States Code; and
       (B)(i) there is a subsequent retroactive change to CSRS or 
     CSRS-Offset coverage; or
       (ii) the service becomes creditable under chapter 83 of 
     title 5, United States Code.
       (2) Reduced annuity.--
       (A) In general.--If at the time of commencement of an 
     annuity there is remaining unpaid CSRS civilian or military 
     service credit deposit for service described under paragraph 
     (1), the annuity shall be reduced based upon the amount 
     unpaid together with interest computed in accordance with 
     section 8334(e) (2) and (3) of title 5, United States Code, 
     and regulations prescribed by the Office.
       (B) Amount.--The reduced annuity to which the individual is 
     entitled shall be equal to an amount that, when taken 
     together with the amount referred to under subparagraph (A), 
     would result in the present value of the total being 
     actuarially equivalent to the present value of the unreduced 
     annuity benefit that would have been provided the individual.
       (3) Survivor annuity.--
       (A) In general.--If at the time of commencement of a 
     survivor annuity, there is remaining unpaid any CSRS service 
     credit deposit described under paragraph (1), and there has 
     been no actuarial reduction in an annuity under paragraph 
     (2), the survivor annuity shall be reduced based upon the 
     amount unpaid together with interest computed in accordance 
     with section 8334(e) (2) and (3) of title 5, United States 
     Code, and regulations prescribed by the Office.
       (B) Amount.--The reduced survivor annuity to which the 
     individual is entitled shall be equal to an amount that, when 
     taken together with the amount referred to under subparagraph 
     (A), would result in the present value of the total being 
     actuarially equivalent to the present value of an unreduced 
     survivor annuity benefit that would have been provided the 
     individual.

     SEC. 2204. PROVISIONS RELATED TO SOCIAL SECURITY COVERAGE OF 
                   MISCLASSIFIED EMPLOYEES.

       (a) Definitions.--In this section, the term--
       (1) ``covered individual'' means any employee, former 
     employee, or annuitant who--
       (A) is or was employed erroneously subject to CSRS coverage 
     as a result of a retirement coverage error; and
       (B) is or was retroactively converted to CSRS-offset 
     coverage, FERS coverage, or Social Security-only coverage; 
     and
       (2) ``excess CSRS deduction amount'' means an amount equal 
     to the difference between the CSRS deductions withheld and 
     the CSRS-Offset or FERS deductions, if any, due with respect 
     to a covered individual during the entire period the 
     individual was erroneously subject to CSRS coverage as a 
     result of a retirement coverage error.
       (b) Reports to Commissioner of Social Security.--
       (1) In general.--In order to carry out the Commissioner of 
     Social Security's responsibilities under title II of the 
     Social Security Act, the Commissioner may request the head of 
     each agency that employs or employed a covered individual to 
     report (in coordination with the Office of Personnel 
     Management) in such form and within such timeframe as the 
     Commissioner may specify, any or all of--
       (A) the total wages (as defined in section 3121(a) of the 
     Internal Revenue Code of 1986) paid to such individual during 
     each year of the entire period of the erroneous CSRS 
     coverage; and
       (B) such additional information as the Commissioner may 
     require for the purpose of carrying out the Commissioner's 
     responsibilities under title II of the Social Security Act 
     (42 U.S.C. 401 et seq.).
       (2) Compliance.--The head of an agency or the Office shall 
     comply with a request from the Commissioner under paragraph 
     (1).
       (3) Wages.--For purposes of section 201 of the Social 
     Security Act (42 U.S.C. 401), wages reported under this 
     subsection shall be deemed to be wages reported to the 
     Secretary of the Treasury or the Secretary's delegates 
     pursuant to subtitle F of the Internal Revenue Code of 1986.
       (c) Payment Relating to OASDI Employee Taxes.--
       (1) In general.--The Office shall transfer from the Civil 
     Service Retirement and Disability Fund to the General Fund of 
     the Treasury an amount equal to the lesser of the excess CSRS 
     deduction amount or the OASDI taxes due for covered 
     individuals (as adjusted by amounts transferred relating to 
     applicable OASDI employee taxes as a result of corrections 
     made, including corrections made before the date of enactment 
     of this Act). If the excess CSRS deductions exceed the OASDI 
     taxes, any difference

[[Page S7581]]

     shall be paid to the covered individual or survivors, as 
     appropriate.
       (2) Transfer.--Amounts transferred under this subsection 
     shall be determined notwithstanding any limitation under 
     section 6501 of the Internal Revenue Code of 1986.
       (d) Payment of OASDI Employer Taxes.--
       (1) In general.--Each employing agency shall pay an amount 
     equal to the OASDI employer taxes owed with respect to 
     covered individuals during the applicable period of erroneous 
     coverage (as adjusted by amounts transferred for the payment 
     of such taxes as a result of corrections made, including 
     corrections made before the date of enactment of this Act).
       (2) Payment.--Amounts paid under this subsection shall be 
     determined subject to any limitation under section 6501 of 
     the Internal Revenue Code of 1986.
       (e) Application of OASDI Tax Provisions of the Internal 
     Revenue Code of 1986 to Affected Individuals and Employing 
     Agencies.--A covered individual and the individual's 
     employing agency shall be deemed to have fully satisfied in a 
     timely manner their responsibilities with respect to the 
     taxes imposed by sections 3101(a), 3102(a), and 3111(a) of 
     the Internal Revenue Code of 1986 on the wages paid by the 
     employing agency to such individual during the entire period 
     such individual was erroneously subject to CSRS coverage as a 
     result of a retirement coverage error based on the payments 
     and transfers made under subsections (c) and (d). No credit 
     or refund of taxes on such wages shall be allowed as a result 
     of this subsection.

      SEC. 2205. THRIFT SAVINGS PLAN TREATMENT FOR CERTAIN 
                   INDIVIDUALS.

       (a) Applicability.--This section applies to an individual 
     who--
       (1) is eligible to make an election of coverage under 
     section 2101 or 2102, and only if FERS coverage is elected 
     (or remains in effect) for the employee involved; or
       (2) is described in section 2111, and makes or has made 
     retroactive employee contributions to the Thrift Savings Fund 
     under regulations prescribed by the Executive Director.
       (b) Payment Into Thrift Savings Fund.--
       (1) In general.--
       (A) Payment.--With respect to an individual to whom this 
     section applies, the employing agency shall pay to the Thrift 
     Savings Fund under subchapter III of chapter 84 of title 5, 
     United States Code, for credit to the account of the employee 
     involved, an amount equal to the earnings which are 
     disallowed under section 8432a(a)(2) of such title on the 
     employee's retroactive contributions to such Fund.
       (B) Amount.--Earnings under subparagraph (A) shall be 
     computed in accordance with the procedures for computing lost 
     earnings under section 8432a of title 5, United States Code. 
     The amount paid by the employing agency shall be treated for 
     all purposes as if that amount had actually been earned on 
     the basis of the employee' s contributions.
       (C) Exceptions.--If an individual made retroactive 
     contributions before the effective date of the regulations 
     under section 2101(c), the Director may provide for an 
     alternative calculation of lost earnings to the extent that a 
     calculation under subparagraph (B) is not administratively 
     feasible. The alternative calculation shall yield an amount 
     that is as close as practicable to the amount computed under 
     subparagraph (B), taking into account earnings previously 
     paid.
       (2) Additional employee contribution.--In cases in which 
     the retirement coverage error was corrected before the 
     effective date of the regulations under section 2101(c), the 
     employee involved shall have an additional opportunity to 
     make retroactive contributions for the period of the 
     retirement coverage error (subject to applicable limits), and 
     such contributions (including any contributions made after 
     the date of the correction) shall be treated in accordance 
     with paragraph (1).
       (c) Regulations.--
       (1) Executive director.--The Executive Director shall 
     prescribe regulations appropriate to carry out this section 
     relating to retroactive employee contributions and payments 
     made on or after the effective date of the regulations under 
     section 2101(c).
       (2) Office.--The Office, in consultation with the Federal 
     Retirement Thrift Investment Board, shall prescribe 
     regulations appropriate to carry out this section relating to 
     the calculation of lost earnings on retroactive employee 
     contributions made before the effective date of the 
     regulations under section 2101(c).

     SEC. 2206. CERTAIN AGENCY AMOUNTS TO BE PAID INTO OR REMAIN 
                   IN THE CSRDF.

       (a) Certain Excess Agency Contributions To Remain in the 
     CSRDF.--
       (1) In general.--Any amount described under paragraph (2) 
     shall--
       (A) remain in the CSRDF; and
       (B) may not be paid or credited to an agency.
       (2) Amounts.--Paragraph (1) refers to any amount of 
     contributions made by an agency under section 8423 of title 
     5, United States Code, on behalf of any employee, former 
     employee, or annuitant (or survivor of such employee, former 
     employee, or annuitant) who makes an election to correct a 
     retirement coverage error under this title, that the Office 
     determines to be excess as a result of such election.
       (b) Additional Employee Retirement Deductions To Be Paid by 
     Agency.--If a correction in a retirement coverage error 
     results in an increase in employee deductions under section 
     8334 or 8422 of title 5, United States Code, that cannot be 
     fully paid by a reallocation of otherwise available amounts 
     previously deducted from the employee's pay as employment 
     taxes or retirement deductions, the employing agency--
       (1) shall pay the required additional amount into the 
     CSRDF; and
       (2) shall not seek repayment of that amount from the 
     employee, former employee, annuitant, or survivor.

     SEC. 2207. CSRS COVERAGE DETERMINATIONS TO BE APPROVED BY 
                   OPM.

       No agency shall place an individual under CSRS coverage 
     unless--
       (1) the individual has been employed with CSRS coverage 
     within the preceding 365 days; or
       (2) the Office has agreed in writing that the agency's 
     coverage determination is correct.

     SEC. 2208. DISCRETIONARY ACTIONS BY DIRECTOR.

       (a) In General.--The Director of the Office of Personnel 
     Management may--
       (1) extend the deadlines for making elections under this 
     title in circumstances involving an individual's inability to 
     make a timely election due to a cause beyond the individual's 
     control;
       (2) provide for the reimbursement of necessary and 
     reasonable expenses incurred by an individual with respect to 
     settlement of a claim for losses resulting from a retirement 
     coverage error, including attorney's fees, court costs, and 
     other actual expenses;
       (3) compensate an individual for monetary losses that are a 
     direct and proximate result of a retirement coverage error, 
     excluding claimed losses relating to forgone contributions 
     and earnings under the Thrift Savings Plan under subchapter 
     III of chapter 84 of title 5, United States Code, and all 
     other investment opportunities; and
       (4) waive payments required due to correction of a 
     retirement coverage error under this title.
       (b) Similar Actions.--In exercising the authority under 
     this section, the Director shall, to the extent practicable, 
     provide for similar actions in situations involving similar 
     circumstances.
       (c) Judicial Review.--Actions taken under this section are 
     final and conclusive, and are not subject to administrative 
     or judicial review.
       (d) Regulations.--The Office of Personnel Management shall 
     prescribe regulations regarding the process and criteria used 
     in exercising the authority under this section.
       (e) Report.--The Office of Personnel Management shall, not 
     later than 180 days after the date of enactment of this Act, 
     and annually thereafter for each year in which the authority 
     provided in this section is used, submit a report to each 
     House of Congress on the operation of this section.

     SEC. 2209. REGULATIONS.

       (a) In General.--In addition to the regulations 
     specifically authorized in this title, the Office may 
     prescribe such other regulations as are necessary for the 
     administration of this title.
       (b) Former Spouse.--The regulations prescribed under this 
     title shall provide for protection of the rights of a former 
     spouse with entitlement to an apportionment of benefits or to 
     survivor benefits based on the service of the employee.

                      Subtitle C--Other Provisions

     SEC. 2301. PROVISIONS TO AUTHORIZE CONTINUED CONFORMITY OF 
                   OTHER FEDERAL RETIREMENT SYSTEMS.

       (a) Foreign Service.--Sections 827 and 851 of the Foreign 
     Service Act of 1980 (22 U.S.C. 4067 and 4071)  shall apply 
     with respect to this title in the same manner as if this 
     title were part of--
       (1) the Civil Service Retirement System, to the extent this 
     title relates to the Civil Service Retirement System; and
       (2) the Federal Employees' Retirement System, to the extent 
     this title relates to the Federal Employees' Retirement 
     System.
       (b) Central Intelligence Agency.--Sections 292 and 301 of 
     the Central Intelligence Agency Retirement Act (50 U.S.C. 
     2141 and 2151) shall apply with respect to this title in the 
     same manner as if this title were part of--
       (1) the Civil Service Retirement System, to the extent this 
     title relates to the Civil Service Retirement System; and
       (2) the Federal Employees' Retirement System, to the extent 
     this title relates to the Federal Employees' Retirement 
     System.

     SEC. 2302. AUTHORIZATION OF PAYMENTS.

       All payments authorized or required by this title to be 
     paid from the Civil Service Retirement and Disability Fund, 
     together with administrative expenses incurred by the Office 
     in administering this title, shall be deemed to have been 
     authorized to be paid from that Fund, which is appropriated 
     for the payment thereof.

     SEC. 2303. INDIVIDUAL RIGHT OF ACTION PRESERVED FOR AMOUNTS 
                   NOT OTHERWISE PROVIDED FOR UNDER THIS TITLE.

       Nothing in this title shall preclude an individual from 
     bringing a claim against the Government of the United States 
     which such individual may have under section 1346(b) or 
     chapter 171 of title 28, United States Code, or any other 
     provision of law (except to the extent the claim is for any 
     amounts otherwise provided for under this title).

                       Subtitle D--Effective Date

     SEC. 2401. EFFECTIVE DATE.

       Except as otherwise provided in this title, this title 
     shall take effect on the date of enactment of this Act.

  Ms. MIKULSKI. Mr. President, I rise today in strong support of final 
passage of H.R. 4040, The Long-Term Care Security Act. As the lead 
Democratic sponsor of the Senate companion to this bill, S. 2420, I 
believe this is an important part of our down-payment on finding 
solutions to the exploding problem of long-term care.
  Without long-term care coverage, no family has real security against 
the costs of chronic illness or disability. The Long-Term Care Security 
Act H.R. 4040 (S. 2420), does 4 things:

[[Page S7582]]

  1. Enables federal and military workers, retirees and their families 
to purchase long-term care insurance at group rates--projected to be 15 
percent to 20 percent below the private market.
  2. Creates a model that private employers can use to establish their 
own long-term care insurance program.
  3. Provides help to those who practice self-help by offering 
employees the option to better prepare for their retirement.
  4. Reduces the reliance on federal programs, like Medicaid, so the 
American taxpayer benefits. Federal workers also benefit because they 
are paying lower premiums than they would get in the private market.
  I am a strong supporter of The Long-Term Care Security Act because it 
gives people choices, flexibility and security. Faced with a sick 
parent or spouse, most Americans currently do not have a lot of 
choices. They may choose, or be forced, to spend down their assets in 
order to qualify for Medicaid. They, or a spouse, may quit their job to 
do some of the caregiving themselves. Or, families may be forced to 
make the difficult choice of putting a child through college, or paying 
for long-term care for a parent. This legislation gives people better, 
more informed choices.
  It also provides people with flexibility because beneficiaries will 
have different types of settings where they can receive care. They may 
choose to be cared for in the home by a family caregiver--or they may 
need a higher level of care that nursing homes and home health care 
services provide. Different plan reimbursement options will ensure 
maximum flexibility that meet the unique health care needs of the 
beneficiary.
  Long-term care insurance also provides families with some security. 
Family members will not be burdened by trying to figure out how to 
finance health care needs--and beneficiaries will be able to make 
informed decisions about their future.
  Some of us have faced the challenge of having a family member who 
needed long-term care. It is emotionally and financially difficult. 
But, imagine if you are a secretary working at the Social Security 
Administration, or a custodial worker here in the Senate. And a family 
member gets Alzheimers, or Parkinsons, or has some other illness that 
requires long-term health care. Your paycheck probably isn't big enough 
to cover the cost of home health visits, or a nursing home stay. So 
where do you go? Medicare doesn't cover long-term care so that is not 
an option. Should you quit your job so you can take care of your 
parent? But then what if you have a family of your own that you need to 
support? Or, what if you are trying to put a child through college?
  Consider if you are a 61 year old employee at NASA and you are 
diagnosed with cancer. You might be able to retire, but the federal 
employees health benefits program does not cover long-term care--even 
for retirees. You may not have family to provide care and your pension 
probably isn't large enough to finance the high costs of long-term 
care. Where do you go?
  Many Americans are currently facing these difficult decisions. 
Consider that:
  At least 5.8 million Americans aged 65 or older currently need long-
term care.
  As many as six out of 10 Americans have experienced a long-term care 
need.
  41 percent of women in caregiver roles quit their jobs or take family 
medical leave to care for a frail older parent or parent-in-law.
  80 percent of all long-term care services are provided by family and 
friends.
  These statistics represent the enormous financial and emotional costs 
associated with long-term care. This legislation is an essential step 
in providing opportunities for federal workers to plan ahead for 
retirement so they can take responsibility for their future long-term 
care needs.
  Since my first days in Congress, I have been fighting to help people 
afford the burdens of long-term care. Eleven years ago, I introduced 
legislation now known as Spousal Anti-Impoverishment. My bill changed 
the cruel rules of government that forced elderly couples to go 
bankrupt before they could get any help in paying for nursing home 
care.
  Through the Older Americans Act, seniors have easier access to 
information and referrals they need to make good choices about long-
term care. I am also working hard to create a National Family 
Caregivers Program so that families can access comprehensive 
information when faced with the dizzying array of choices in addressing 
the long-term care needs of a family member.
  It is clear that we have a long-term care problem. The Office of 
Personnel Management estimates that 96,000 federal employees will be 
retiring in the year 2001. Providing federal employees with a long-term 
care insurance benefit is a down payment on a solution.
  I am starting with federal employees for two reasons. As our nation's 
largest employer, the federal government can be a model for employers 
around the country whose workforce will be facing the same long-term 
care needs. Starting with the nation's largest employer also raises 
awareness and education about long-term care options.
  I am a strong supporter of our federal employees. I am proud that so 
many of them live, work, and retire in Maryland. They work hard in the 
service of our country. And I work hard for them. Whether it's fighting 
for fair COLAs, lower health care premiums, or to prevent unwise 
schemes to privatize important services our federal workforce provide, 
they can count on me.
  One of my principles is ``promises made should be promises kept.'' 
Federal employees and retirees have made a commitment to devote their 
careers to public service. In return, our government made certain 
promises to them. One important promise made was the promise of health 
insurance. The lack of long-term care for federal workers has been a 
big gap in this important promise to our federal workers. This 
legislation will close that gap and provide our federal workers and 
retirees with comprehensive health insurance.
  I reiterate my commitment to finding long-term solutions to the long-
term care problem. I am proud that this bipartisan bill takes an 
important step forward in helping all Americans to prepare for the 
challenges facing our aging population.
  I would like to thank Senator Cleland, Senator Grassley, Senator 
Akaka, Senator Cochran, Senator Lieberman and Senator Thompson for all 
of their hard work in coming to a bipartisan consensus on how best to 
provide federal and military employees, retirees, and their families 
with the opportunity to purchase long-term care insurance. 
Additionally, many Senate staff worked very hard in developing this 
compromise: Nanci Langley, Hope Hegstrom, Michael Loesch, Tamara Jones, 
Judy White, Larry Novey, and Dan Blair. And I would like to thank 
Cynthia Brock-Smith and Frank Titus at the Office of Personnel 
Management.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the 
committee substitute be agreed to, and the bill be considered read the 
third time.
  I further ask that H.R. 4040 be discharged from the Governmental 
Affairs Committee and the Senate proceed to its consideration. I 
further ask consent that all after the enacting clause be stricken and 
the text of S. 2420, as amended, be inserted in lieu thereof. I further 
ask consent that the bill be read the third time and passed, the motion 
to reconsider be laid upon the table, the amendment to the title be 
agreed to, and that any statements relating to the bill be printed in 
the Record. I finally ask consent that S. 2420 be placed back on the 
calendar.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (H.R. 4040), as amended, was read the third time and passed.
  The title was amended so as to read:

       A bill to amend title 5, United States Code, to provide for 
     the establishment of a program under which long-term care 
     insurance is made available to Federal employees, members of 
     the uniformed services, and civilian and military retirees, 
     provide for the correction of retirement coverage errors 
     under chapters 83 and 84 of such title, and for other 
     purposes.

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