[Federal Register Volume 68, Number 198 (Tuesday, October 14, 2003)]
[Rules and Regulations]
[Pages 59081-59082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-25945]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 198 / Tuesday, October 14, 2003 / 
Rules and Regulations  

[[Page 59081]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 870

RIN 3206-AJ46


Federal Employees' Group Life Insurance Program: Removal of 
Premiums and Age Bands From Regulations

AGENCY: Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is issuing a final 
rule to remove the premiums and age bands from the Federal Employees' 
Group Life Insurance (FEGLI) regulations. This allows OPM to make 
necessary premium changes on a more timely basis.

EFFECTIVE DATE: November 13, 2003.

FOR FURTHER INFORMATION CONTACT: Karen Leibach, (202) 606-0004.

SUPPLEMENTARY INFORMATION: On April 9, 2003, OPM published a proposed 
rule in the Federal Register (68 FR 17315) to remove the premiums and 
age bands from the FEGLI regulations. OPM will announce future premium 
changes in a Federal Register notice and will maintain the rates on the 
FEGLI Web site (www.opm.gov/insure/life). This will simplify the 
process for making premium changes when necessary and allow for changes 
to be made in a more timely manner.
    We received no comments on the proposed regulatory change.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because the regulation 
only affects life insurance benefits of Federal employees and retirees.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 12866.

List of Subjects in 5 CFR Part 870

    Administrative practice and procedure, Government employees, 
Hostages, Iraq, Kuwait, Lebanon, Life insurance, Retirement.

Office of Personnel Management.
Kay Coles James,
Director.


0
Accordingly, OPM is amending 5 CFR part 870 as follows:

PART 870--FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM

0
1. The authority citation for part 870 is revised to read as follows:

    Authority: 5 U.S.C. 8716; subpart J also issued under sec. 599C, 
Pub. L. 101-513, 104 Stat. 2064, as amended; Sec.  870.302(a)(3)(ii) 
also issued under sec. 153, Pub. L. 104-134, 110 Stat. 1321; Sec.  
870.302(a)(3) also issued under sections 11202(f), 11232(e), and 
11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251 and sec. 7(e), 
Pub. L. 105-274, 112 Stat. 2419.

Subpart D--Cost of Insurance

0
2. In Sec.  870.401, revise paragraphs (a), (b)(1), and (d) to read as 
follows:


Sec.  870.401  Withholdings and contributions for Basic insurance.

    (a)(1) The cost of Basic insurance is shared between the insured 
individual and the Government. The employee pays two-thirds of the 
cost, and the Government pays one-third.
    (2) When OPM makes any adjustment to the Basic life insurance 
premium, it will issue a public notice in the Federal Register.
    (b)(1) During each pay period in which an insured employee is in 
pay status for any part of the period, the employee's share of the 
premium must be withheld from the employee's biweekly pay. The amount 
withheld from the pay of an employee who is paid on other than a 
biweekly basis must be computed and adjusted to the nearest one-tenth 
of one cent.
* * * * *
    (d)(1) For an annuitant or compensationer who elects to continue 
Basic insurance and chooses the maximum reduction of 75 percent after 
age 65 under Sec.  870.702(a)(2), the annuitant's share of the premium 
is withheld monthly and the compensationer's share is withheld every 4 
weeks. These withholdings stop the month after the month in which the 
annuitant or compensationer reaches age 65. There are no withholdings 
from individuals who retired or began receiving compensation before 
January 1, 1990, and who elected the 75 percent reduction. For the 
purpose of this paragraph, an individual who separates from service 
after meeting the requirements for an immediate annuity under 5 U.S.C. 
8412(g) is considered to retire on the day before the annuity begins.
    (2) An annuitant or compensationer who elects to continue Basic 
insurance and chooses either the reduction election of 50 percent or 
the election of no reduction after age 65 under Sec.  870.702(a)(3) or 
(4) pays an additional premium for the 50 percent or no reduction 
election. This additional premium is withheld for each $1,000 of the 
BIA. At age 65, the Basic premium will stop, but the annuitant or 
compensationer must continue to pay the additional premium for either 
the 50 percent or the no reduction election.
* * * * *

0
3. Revise Sec.  870.402 to read as follows:


Sec.  870.402  Withholdings for Optional insurance.

    (a)(1) The insured individual pays the full cost of all Optional 
insurance. There is no Government contribution toward the cost of any 
Optional insurance.
    (2) Optional insurance premiums are based on 5-year age bands 
beginning at age 35. The last age band for Option A is age 60+. The 
last age band for Options B and C is 80+. For the purpose of this 
subpart, effective April 24, 1999, an individual is considered to reach 
the next age band the 1st day of the pay period following the pay 
period in which his/her birthday occurs.
    (3) When OPM makes any adjustment to the Optional life insurance 
premiums, it will issue a public notice in the Federal Register.
    (b) During each pay period in any part of which an insured employee 
is in pay status, the employing agency must withhold the full cost of 
Optional insurance from his/her pay.
    (c)(1) Subject to the provisions for reemployed annuitants in Sec.  
870.707, the

[[Page 59082]]

full cost of Optional insurance must be withheld from the annuity of an 
annuitant the compensation of a compensationer.
    (2) The withholdings for Option A stop the month after the month in 
which an annuitant or compensationer reaches age 65.
    (3) For an annuitant or compensationer who elects Full Reduction 
for any Option B or Option C multiples under Sec.  870.705, the 
withholdings for those multiples stop the month after the month in 
which he/she reaches age 65.
    (4) For an annuitant or compensationer who elects No Reduction for 
any Option B or Option C multiples, the withholdings for those 
multiples continue, as long as he/she remains insured.
    (d)(1) For Option A and Option C, the amount withheld from pay, 
annuity, or compensation paid on other than a biweekly basis must be 
computed and adjusted to the nearest cent.
    (2) For Option B, the amount withheld from pay, annuity, or 
compensation paid on other than a biweekly basis must be computed and 
adjusted to the nearest one-tenth of 1 cent.
    (e) If an employee's annual pay is paid during a period shorter 
than 52 work weeks, the employing office must determine the amount to 
withhold. To do this, it converts the biweekly cost to an annual cost 
and prorates it over the number of installments of pay regularly paid 
during the year.
    (f) When an agency withholds less than or none of the proper amount 
of Optional life insurance deductions from an individual's pay, 
annuity, or compensation, the agency must submit an amount equal to the 
uncollected deductions required under 5 U.S.C. 8714a, 8714b, and 8714c 
to OPM for deposit in the Employees' Life Insurance Fund.

0
4. In Sec.  870.404, revise paragraph (d) to read as follows:


Sec.  870.404  Withholdings and contributions provisions that apply to 
both Basic and Optional insurance.

* * * * *
    (d) The deposit described in Sec. Sec.  870.401(f) and 870.402(f) 
must be made no later than 60 calendar days after the date the 
employing office determines the amount of the underdeduction that has 
occurred, regardless of whether or when the underdeduction is recovered 
by the agency. The agency must determine whether to waive collection of 
the overpayment of pay, in accordance with 5 U.S.C. 5584, as 
implemented by 4 CFR chapter I, subchapter G. However, if the agency 
involved is excluded from the provisions of 5 U.S.C. 5584, it may use 
any applicable authority to waive the collection.
* * * * *

0
5. In Sec.  870.801, revise paragraph (e) to read as follows:


Sec.  870.801  Order of precedence and payment of benefits.

* * * * *
    (e) Upon the death of an insured family member, Option C benefits 
are paid to the employee, annuitant, or compensationer responsible for 
withholdings under Sec.  870.402(a), except as provided in paragraph 
(f) of this section.
* * * * *
[FR Doc. 03-25945 Filed 10-10-03; 8:45 am]
BILLING CODE 6325-50-U