[Federal Register Volume 75, Number 190 (Friday, October 1, 2010)]
[Rules and Regulations]
[Pages 60573-60586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24493]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Rules
and Regulations
[[Page 60573]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 870
RIN 3206-AG63
Federal Employees' Group Life Insurance Program: Miscellaneous
Changes, Clarifications, and Corrections
AGENCY: U.S. Office of Personnel Management.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Office of Personnel Management (OPM) is adopting as
final changes to the Federal Employees' Group Life Insurance (FEGLI)
Program regulations to provide for the new election opportunities for
certain civilian and Defense Department employees deployed in support
of a contingency operation required by Public Law 110-417; to provide
for the continuation of coverage opportunities for Federal employees
called to active duty required by Public Law 110-181; and to update the
regulations with other changes, clarifications, and corrections.
DATES: Effective October 1, 2010.
FOR FURTHER INFORMATION CONTACT: Ronald Brown, Policy Analyst, at (202)
606-0004 or e-mail: [email protected].
SUPPLEMENTARY INFORMATION: On December 31, 2009, OPM published proposed
regulations (74 FR 69288) with miscellaneous changes, clarifications,
and corrections. We have identified an additional correction in section
870.506(g)(2) which stated ``an election of Optional elect insurance
must be made within 60 days after the date of notification of
deployment in support of a contingency operation.'' The word ``elect''
has been removed so that section correctly states ``an election of
Optional insurance must be made within 60 days of notification of
deployment in support of a contingency operation.'' These final
regulations reflect that change. Only one comment was received on the
proposed rulemaking. The commenter requested we hold a FEGLI open
season. We will evaluate the options for an open season and will make
information available to Federal employees when we decide to hold one.
Accordingly, we are adopting the December 31, 2009, proposed
regulations with one correction.
The final changes, clarifications, and corrections are:
Changes
(1) Public Law 106-398 amended 5 U.S.C. 8702 to allow Department of
Defense (DoD) employees who are designated as ``emergency essential''
under 10 U.S.C. 1580 to elect Basic insurance within 60 days of being
so designated. Section 1103 of Public Law 110-417, the Duncan Hunter
National Defense Authorization Act for Fiscal Year 2009, which became
effective on October 14, 2008, further amended chapter 87 of title 5,
U.S. Code, to allow ``emergency essential'' DoD employees, as well as
civilian employees deployed in support of a contingency operation, to
elect Basic insurance, Option A (Standard) coverage and Option B
(Additional) coverage up to a maximum of five (5) multiples. We are
amending the regulations to include these election opportunities. These
changes can be found in Sec. 870.503(e) and (f) and Sec. 870.506(f)
and (g).
(2) Public Law 110-279, enacted July 17, 2008, provides for certain
Federal employee benefits to be continued for certain employees of the
Senate Restaurants after the operations of the Senate Restaurants are
contracted to be performed by a private business concern. The law
provides that a Senate Restaurants employee, who is an employee of the
Architect of the Capitol on the date of enactment and who accepts
employment by the private business concern as part of the transition,
may elect to continue coverage under certain Federal employee benefits
programs during continuous employment with the business concern. Former
Senate Restaurants employees who have FEGLI coverage as of the date of
transfer may continue their coverage, if they also elected to continue
their retirement coverage under either chapter 83 or 84 of title 5,
U.S. Code. These individuals will continue to be eligible for FEGLI
during continuous employment with the private contractor unless the
employees opt out of the FEGLI program. We are revising the FEGLI
regulations to address coverage for these individuals. These changes
can be found in Sec. 870.601(a) and Sec. 870.602(b).
(3) Section 1102 of Public Law 110-181, the National Defense
Authorization Act for Fiscal Year 2008, enacted January 28, 2008,
amended 5 U.S.C. 8706 to authorize the continuation of FEGLI coverage
for up to 24 months for Federal employees called to active duty. FEGLI
coverage is free for the first 12 months, but employees must pay the
full cost (Government and employee share) of the premiums for the
additional 12 months. We are amending the regulations to include this
election opportunity. These changes can be found in Sec.
870.601(d)(3)(iii).
(4) Public Law 110-177, the Court Security Improvement Act of 2007,
enacted January 7, 2008, deems certain categories of judicial officers
to be considered as judges of the United States under section 8701 of
title 5, United States Code. The law requires magistrate judges retired
under section 377 of title 28, United States Code, to be considered
Federal judges under the FEGLI law. Public Law 111-8, the Omnibus
Appropriations Act of 2009, enacted March 9, 2009, further amended the
FEGLI law, by identifying additional judges who should continue to be
treated as employees following retirement. This law requires bankruptcy
judges and magistrate judges retired under section 377 of title 28,
U.S. Code, and judges retired under section 373 of title 28, to be
considered Federal judges under the FEGLI law. In addition, we
identified additional judges who also should continue to be treated as
employees following retirement (DC judges and Tax Court judges). We are
changing the regulations to add these judges. These changes can be
found in Sec. 870.703(e)(1).
(5) Currently, with a change in family circumstances an employee
must already have Basic insurance and may elect only Option B and
Option C. The number of multiples of Option B that such an employee may
elect with a change in family circumstances is limited. We are
eliminating the limitations on the coverage an employee
[[Page 60574]]
may elect, so that an employee making an election based on a change in
family circumstances, may elect Basic insurance and any and all
Optional insurance, including up to the maximum number of multiples
available of Option B and Option C. These changes can be found in Sec.
870.503(b)(3) and Sec. 870.506(a).
(6) Newly eligible employees must be in pay and duty status before
Optional insurance can become effective. The six-month belated election
opportunity allows Optional insurance to become effective retroactive
to the pay period following the one in which the employee became
eligible, but it does not require the employee to be in pay and duty
status at that time. We are changing the regulations to apply the same
pay and duty status requirements for belated elections that are
required for elections made on a timely basis. These changes can be
found in Sec. 870.503 and Sec. 870.506.
(7) We are making a change to provide that no one but the insured
individual has the right to convert coverage when insurance terminates,
unless the insured individual has assigned his or her insurance, with
the exception that an individual having power of attorney may convert
on behalf of the insured. In addition, a family member may convert
Option C coverage. These changes can be found in Sec. 870.603(a)(1).
(8) We are changing the time frame for making an initial election
of Optional insurance from 31 days to 60 calendar days after the
employee becomes eligible. We are also extending the time frame for
electing coverage by providing satisfactory medical information from 31
days to 60 calendar days after OFEGLI's (Office of Federal Employees'
Group Life Insurance) approval. These changes will make these election
time frames consistent with other election opportunities for Federal
benefits. These changes can be found in Sec. 870.504 (a)(1) and Sec.
870.506(c).
(9) When an employee who elected a partial living benefit dies, the
post-election BIA (Basic Insurance Amount) is multiplied by the extra
benefit age factor in effect at the time that OFEGLI received the
living benefit application. We are changing this computation to use the
age factor in effect nine months from the date OFEGLI received the
living benefit application to be consistent with the age factor used to
compute the amount of the living benefit. These changes can be found in
Sec. 870.203.
(10) Public Law 108-445, The Department of Veterans Affairs (VA)
Health Care Personnel Enhancement Act of 2004, provided for the payment
of market pay, in addition to base pay, for physicians and dentists
employed by the VA. Accordingly, in addition to base pay, market pay
must be used to determine the annual rate of pay described in Sec.
870.204 for these individuals. Public Law 96-330, currently cited in
Sec. 870.204(a)(2)(x), relating to the treatment of bonuses for
physicians and dentists employed by the VA, is no longer in effect. We
are revising Sec. 870.204 to include market pay in the determination
of annual pay for these individuals.
(11) In situations of concurrent employment, the amount of Basic
insurance and Option B insurance is based on the combined salaries.
However, if an employee accepts a temporary position while in nonpay
status from a covered position, the amount of insurance is based on
whichever salary is higher. We are eliminating this exception, so that
this situation will be treated the same as other instances of
concurrent employment. These changes can be found in Sec. 870.204(g).
(12) Currently, the earliest that coverage elected as a result of
providing satisfactory medical information can become effective is the
day after the date OFEGLI approves the employee's request for coverage.
We are changing the regulations to allow Basic insurance to become
effective on the date of OFEGLI's approval if the employee is in pay
and duty status. We are also allowing Option A and Option B coverage to
become effective on the date of OFEGLI's approval if the employing
office receives the employee's election on or before that date and the
employee is in pay and duty status. These changes can be found in Sec.
870.503 and Sec. 870.506.
(13) We are changing the regulations to treat reemployed
compensationers the same as reemployed annuitants. When a
compensationer returns to work under conditions that allow him or her
to continue receiving compensation, Basic insurance (and Options A and
C) held as a compensationer are suspended and the insured obtains
coverage as an employee. If the reemployed compensationer dies in
service, OFEGLI would pay Basic insurance benefits based on whichever
amount is higher: The suspended compensationer coverage or the coverage
through reemployment. As with reemployed annuitants, Option B would
remain with the individual's compensation, unless the employee elects
to have it through reemployment. If a reemployed compensationer stops
working and continues to receive compensation, he or she could continue
the FEGLI acquired through reemployment if the individual meets the 5-
year/all-opportunity requirement and has been reemployed for the length
of time required for a reemployed annuitant to earn a supplemental
annuity (1 year for full-time employment). These changes can be found
in Sec. 870.707.
(14) Public Law 106-522, 114 Stat. 2440, enacted November 22, 2000,
changed the entitlement to Federal employee benefits for the District
of Columbia (DC) Offender Supervision Trustee and employees of the
Trustee. Previously these employees were treated as Federal employees
for purposes of Federal employee retirement and insurance programs only
if they transferred to the DC government within three days of
separating from Federal service. Public Law 106-522 gave these
employees retroactive entitlement to be treated as Federal employees on
the date of their appointment or the date their sub-organizations
transferred to the Trustee's office, whichever is later. We are
reflecting this change in the regulations. These changes can be found
in Sec. 870.302(a)(3).
(15) Public Law 105-311, the Federal Employees Life Insurance
Improvement Act, 112 Stat. 2950, enacted October 30, 1998, amended
chapter 87 of title 5, U.S. Code, to allow retiring employees to elect
either No Reduction or Full Reduction for their Option B and Option C
coverage. This election was to be made at the time of retirement, the
same as the election for Basic insurance. Implementing this provision
required programming changes to the electronic records system for
annuitants to allow for ``mixed'' elections, i.e., electing reductions
for some coverage, but not for other coverage. While these system
changes were being made, annuitants were required to elect either No
Reduction or Full Reduction for Option B and Option C coverage at the
time of retirement. Then, shortly before the annuitant's 65th birthday,
the insured was given a second opportunity to make another election,
this time being allowed to choose No Reduction for some multiples and
Full Reduction for others. We are eliminating the opportunity for a
second election at age 65. There are several reasons for this change:
(i) The law states the election must be made at the time of retirement;
(ii) administering the second election opportunity at age 65 is an
ongoing cost to the Program; (iii) the 2nd election may be confusing to
some annuitants, since the election for the Basic insurance reduction
is made at the time of retirement without a second opportunity at age
65; and (iv) the mailing itself is problematic with regard to
individuals who are paying their
[[Page 60575]]
premiums directly, as described in Sec. 870.405, and individuals who
have assigned their coverage. Individuals who have retired since this
statutory provision became effective (April 24, 1999) and who have not
yet turned 65 will be given the opportunity to make their ``final''
election. These changes can be found in Sec. 870.705(d).
(16) We are eliminating the requirement for designated
beneficiaries of assignees to notify the appropriate employing office
of any change in address, since we do not require any other designated
beneficiaries to make such a notification. The requirement will still
apply to assignees themselves. These changes can be found in Sec.
870.910.
(17) The current regulations regarding reconsiderations require the
insured individual to provide his or her Social Security Number when
filing a request for reconsideration. We are eliminating this
requirement. Annuitants and compensationers may be identified by their
retirement or compensation claim numbers. Agencies are able to identify
employees by their names, addresses, and dates of birth. These changes
can be found in Sec. 870.105.
(18) Beginning April 24, 1999 and continuing until April 24, 2002,
eligible employees could elect portability for Option B coverage that
would otherwise terminate. The 3-year portability demonstration project
has expired and employees are no longer able to elect portability. We
are removing subpart L and all references to portability from the
regulations, including the definitions of ``Portability Office'' and
``ported coverage'' from Sec. 870.101.
(19) The current regulations specify that only the insured
individual may elect a living benefit and no one can elect a living
benefit on his or her behalf. We are changing the regulations to allow
another person with a power of attorney to apply for a living benefit
on the insured individual's behalf. These changes can be found in Sec.
870.1103.
Clarifications
(1) The regulations state that when incontestability (allowing
erroneous coverage to remain in effect under certain conditions)
applies, if the individual does not want the erroneous coverage, he or
she may cancel the coverage on a prospective basis; there is no refund
of premiums. We are clarifying the regulations to state that if the
erroneous coverage is Option C, and there are no eligible family
members, the cancellation is retroactive to the end of the pay period
in which the individual last had any eligible family members. In this
case, the revision also provides for a refund of the Option C premiums
for this period of erroneous coverage. We are also clarifying the
regulations to provide that an annuitant or compensationer cannot
enroll for life insurance coverage after retirement and any erroneous
enrollments must be corrected. These changes can be found in Sec.
870.104.
(2) We are clarifying the regulations to better describe the ``on
or after'' provision for the effective date of coverage. Most elections
require that the employee be in pay and duty status before coverage can
become effective. In these instances, the coverage becomes effective
the day the employing office receives the election, if the employee is
in pay and duty status on that date. If the employee is not in pay and
duty status on the date the employing office receives the election, the
coverage becomes effective the next date that the employee is in pay
and duty status. These changes are found throughout the regulations
where effective dates are discussed.
(3) We are clarifying the computation of premium pay and
availability pay to state that the employee's annual rate of basic pay
is multiplied by the applicable percentage factor to determine pay for
FEGLI purposes. These changes can be found in Sec. 870.204(g).
(4) We are adding some definitions for clarity, including
definitions of ``covered position,'' ``beneficiary,'' ``acquisition of
an eligible child,'' and ``accidental death and dismemberment.'' We are
also clarifying the definition of ``court order.'' These changes can be
found in Sec. 870.101.
(5) We are clarifying the requirements for continuing FEGLI during
an extended period of non-pay for the special non-pay situations
discussed in Sec. 870.508 to require that all such elections for
continuing coverage must be made in writing.
Corrections
(1) We are correcting the regulations to state that premiums are
based on the amount of insurance last in force for an individual during
the pay period, rather than the amount in force on the last day of the
pay period. In most instances this is the same thing; however, if an
individual dies or separates during a pay period, the amount of
insurance in force on the last day of the pay period is $0. In these
instances, the amount of withholding from the final pay must be based
on the amount of insurance on the date of death or separation. This
change can be found in Sec. 870.401(b).
(2) In Sec. 870.701(c), Eligibility for life insurance, there is
an incorrect reference at the end to Sec. 870.702(a)(2). That
reference should be to Sec. 870.703(a)(2). The regulations have been
changed to reflect this correction.
(3) In Sec. 870.707(e)(2), Reemployed annuitants and
compensationers, there is an incorrect reference at the end to Sec.
870.702. That reference should be to Sec. 870.703. The regulations
have been changed to reflect this correction.
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.
U.S. Office of Personnel Management.
John Berry,
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 5 CFR part 870 is revised to read as
follows:
Authority: 5 U.S.C. 8716; Subpart J also issued under section
599C of Pub. L. 101-513, 104 Stat. 2064, as amended; Sec.
870.302(a)(3)(ii) also issued under section 153 of 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 section 7(e) of Pub. L. 105-274, 112 Stat. 2419; Sec.
870.302(a)(3) also issued under section 145 of Pub. L. 106-522, 114
Stat. 2472; Secs. 870.302(b)(8), 870.601(a), and 870.602(b) also
issued under Pub. L. 110-279, 122 Stat. 2604; Subpart E also issued
under 5 U.S.C. 8702(c); Sec. 870.601(d)(3) also issued under 5
U.S.C. 8706(d); Sec. 870.703(e)(1) also issued under section 502 of
Pub. L. 110-177, 121 Stat. 2542; Sec. 870.705 also issued under 5
U.S.C. 8714b(c) and 8714c(c); Public Law 104-106, 110 Stat. 521;
Subpart A--Administration and General Provisions
0
2. Section 870.101 is amended as follows:
0
a. Remove the definitions of ``Portability Office'' and ``ported
coverage'';
0
b. Add the following definitions of ``accidental death and
dismemberment'',
[[Page 60576]]
``acquisition of an eligible child'', ``beneficiary'', and ``covered
position''; and
0
c. Revise the definition of ``court order''.
The additions and revision read as follows:
Sec. 870.101 Definitions.
Accidental death and dismemberment refers to the insured's death or
loss of a hand, a foot, or vision in one eye that results directly
from, and occurs within one year of, a bodily injury caused solely
through violent, external, and accidental means.
Acquisition of an eligible child occurs when:
(1) A child is born to the insured;
(2) The insured adopts a child;
(3) The insured acquires a foster child;
(4) The insured's stepchild or recognized natural child moves in
with the insured;
(5) An otherwise eligible child's marriage is dissolved by divorce
or annulment, or his or her spouse dies;
(6) The insured gains custody of an eligible child.
* * * * *
Beneficiary means the individual, corporation, trust, or other
entity that receives FEGLI benefits when an insured individual dies.
* * * * *
Court order means:
(1) A court decree of divorce, annulment, or legal separation; or
(2) A court-approved property settlement agreement relating to a
court decree of divorce, annulment, or legal separation--that requires
benefits to be paid to a specific person or persons and is received in
the employing office before the insured dies.
Covered position means a position in which an employee is not
excluded from FEGLI eligibility by law or regulation.
* * * * *
0
3. Sections 870.104 and 870.105 are revised to read as follows:
Sec. 870.104 Incontestability.
(a) If an individual erroneously becomes insured, the coverage will
remain in effect if at least 2 years pass before the error is
discovered, and if the individual has paid applicable premiums during
that time. This applies to errors discovered on or after October 30,
1998, and applies only to employees, not retirees or compensationers.
(b) If an employee is erroneously allowed to continue insurance
into retirement or while receiving compensation, the coverage will
remain in effect if at least 2 years pass before the error is
discovered, and if the annuitant or compensationer has paid applicable
premiums during that time. This applies to such errors discovered on or
after October 30, 1998.
(c) If an individual is erroneously enrolled in life insurance on
or after the date he or she retires or begins receiving compensation,
the coverage cannot remain in effect even if 2 years pass and the
individual paid applicable premiums.
(d) If an individual who is allowed to continue erroneous coverage
under this section does not want the coverage, he or she may cancel the
coverage on a prospective basis, effective at the end of the pay period
in which the waiver is properly filed. There is no refund of premiums.
Exception: If an employee obtained Option C erroneously and did not
have any eligible family members, that coverage may be cancelled
retroactively and the insured will obtain a refund of the erroneous
Option C premiums.
Sec. 870.105 Initial decision and reconsideration.
(a) An individual may ask his or her agency or retirement system to
reconsider its initial decision denying:
(1) Life insurance coverage;
(2) The opportunity to change coverage;
(3) The opportunity to designate a beneficiary; or
(4) The opportunity to assign insurance.
(b) An employing office's decision is an initial decision when the
employing office gives it in writing and informs the individual of the
right to an independent level of review (reconsideration) by the
appropriate agency or retirement system.
(c) A request for reconsideration must be made in writing and must
include the following:
(1) The employee's (or annuitant's) name, address, date of birth;
(2) The reason(s) for the request; and
(3) The retirement claim number (Civil Service Annuity Claim
Number) or compensation number, if applicable.
(d) A request for reconsideration must be made within 31 calendar
days from the date of the initial decision (60 calendar days if
overseas). This time limit may be extended when the individual shows
that he or she was not notified of the time limit and was not otherwise
aware of it or that he or she was unable, due to reasons beyond the
individual's control, to make the request within the time limit.
(e) The reconsideration must take place at or above the level at
which the initial decision was made.
(f) After reconsideration, the agency or retirement system must
issue a final decision to the insured individual. This decision must be
in writing and must fully state the findings.
Subpart B--Types and Amounts of Insurance
0
4. In Sec. 870.202, paragraph (a)(1) is revised to read as follows:
Sec. 870.202 Basic insurance amount (BIA).
(a)(1) An employee's Basic insurance amount (BIA) is either:
(i) The employee's annual rate of basic pay, rounded to the next
higher thousand, plus $2,000; or
(ii) $10,000; whichever is higher, unless the employee has elected
a Living Benefit under subpart K of this part. Effective for pay
periods beginning on or after October 30, 1998, there is no maximum
BIA. Note: If an employee's pay is ``capped'' by law, the amount of
the Basic insurance is based on the capped amount, which is the amount
the employee is actually being paid. It is not based on the amount the
employee's pay would have been without the pay cap.
* * * * *
0
5. Section 870.203 is revised to read as follows:
Sec. 870.203 Post-election BIA.
(a) The BIA of an individual who elects a Living Benefit under
subpart K of this part is the amount of insurance left after the
effective date of the Living Benefit election. This amount is the
individual's post-election BIA.
(1) The post-election BIA of an individual who elects a full Living
Benefit is 0.
(2) If an employee elects a partial Living Benefit, the employee
still has some Basic insurance. OFEGLI determines this amount by
computing the BIA as of the date it receives the completed Living
Benefit application and reducing the amount by a percentage. This
percentage represents the amount of the employee's partial Living
Benefit payment, compared to the amount the employee could have
received if he or she had elected a full Living Benefit. The amount
that is left is rounded up or down to the nearest multiple of $1,000.
(If the amount is midway between multiples, it is rounded up to the
next higher multiple.)
(b) The post-election BIA cannot change after the effective date of
the Living Benefit election.
(c) If an employee elected a partial Living Benefit and that
employee is
[[Page 60577]]
under age 45 at the time of death, OFEGLI will multiply the post-
election BIA by the appropriate factor, as specified in Sec.
870.202(c), in effect on the date 9 months after the date OFEGLI
received the completed Living Benefit application.
0
6. In Sec. 870.204, paragraphs (a)(2)(x) and (g) are revised to read
as follows:
Sec. 870.204 Annual rates of pay.
(a) * * *
(2) * * *
(x) Market pay for physicians and dentists of the Department of
Veterans Affairs under 38 U.S.C. 7431; and
* * * * *
(g)(1) Except as provided in paragraphs (g)(2) and (3) of this
section, if an employee legally serves in more than one position at the
same time, and at least one of those positions entitles the employee to
life insurance coverage, the annual pay for life insurance purposes is
the sum of the annual rate of basic pay fixed by law or regulation for
each position.
(2) Paragraph (g)(1) of this section does not apply to--
(i) An employee of the Postal Service who works on a part-time
flexible schedule; or
(ii) A temporary, intermittent decennial census worker.
(3) If an employee's annual pay includes premium pay or
availability pay under paragraphs (e), (f), or (g) of this section, the
annual pay is determined by multiplying the employee's annual rate of
basic pay by the applicable percentage factor.
0
7. In section 870.205, paragraph (b)(1) is revised to read as follows:
Sec. 870.205 Amount of Optional insurance.
* * * * *
(b)(1) Option B coverage comes in 1, 2, 3, 4, or 5 multiples of an
employee's annual pay (after the pay has been rounded to the next
higher thousand, if not already an even thousand). Effective for pay
periods beginning on or after October 30, 1998, there is no maximum
amount for each multiple. Note: If an employee's pay is ``capped'' by
law, the amount of the Option B insurance is based on the capped
amount, which is the amount the employee is actually being paid. It is
not based on the amount the employee's pay would have been without the
pay cap.
* * * * *
0
8. Section 870.206 is revised to read as follows:
Sec. 870.206 Accidental death and dismemberment.
(a)(1) Accidental death and dismemberment coverage is an automatic
part of Basic and Option A insurance for employees.
(2) There is no accidental death and dismemberment coverage with
Option B or Option C.
(3) Individuals who are insured as annuitants or compensationers do
not have accidental death and dismemberment coverage.
(b)(1) Under Basic insurance, accidental death benefits are equal
to the BIA, but without the age factor described in Sec. 870.202(c).
(2) Under Option A, accidental death benefits are equal to the
amount of Option A.
(c)(1) Under Basic insurance, accidental dismemberment benefits for
the loss of a hand, foot, or the vision in one eye are equal to one-
half the BIA. For loss of 2 or more of these in a single accident,
benefits are equal to the BIA.
(2) Under Option A, accidental dismemberment benefits for the loss
of a hand, foot, or the vision in one eye are equal to one-half the
amount of Option A. For loss of 2 or more of these in a single
accident, benefits are equal to the amount of Option A.
(3) Accidental dismemberment benefits are paid to the employee.
(4) Accidental death benefits are paid to the employee's
beneficiaries.
Subpart C--Eligibility
0
9. Section 870.302 is revised to read as follows:
Sec. 870.302 Exclusions.
(a) The following individuals are excluded from life insurance
coverage by law:
(1) An employee of a corporation supervised by the Farm Credit
Administration, if private interests elect or appoint a member of the
board of directors.
(2) An individual who is not a citizen or national of the United
States and whose permanent duty station is outside the United States.
Exception: an individual who met the definition of employee on
September 30, 1979, by service in an Executive agency, the United
States Postal Service, or the Smithsonian Institution in the area which
was then known as the Canal Zone.
(3) An individual first employed by the government of the District
of Columbia on or after October 1, 1987. Exceptions:
(i) An employee of St. Elizabeths Hospital, who accepts employment
with the District of Columbia government following Federal employment
without a break in service, as provided in section 6 of Public Law 98-
621 (98 Stat. 3379);
(ii) An employee of the District of Columbia Financial
Responsibility and Management Assistance Authority (Authority), who
makes an election under the Technical Corrections to Financial
Responsibility and Management Assistance Act (section 153 of Pub. L.
104-134 (110 Stat. 1321)) to be considered a Federal employee for life
insurance and other benefits purposes; employees of the Authority who
are former Federal employees are subject to the provisions of
Sec. Sec. 870.503(d) and 870.705 of this part;
(iii) The Corrections Trustee or an employee of that Trustee who
accepts employment with the District of Columbia government within 3
days after separating from the Federal Government.
(iv) The Pretrial Services, Parole, Adult Probation and Offender
Supervision Trustee or an employee of that Trustee;
(v) Effective October 1, 1997, a judicial or nonjudicial employee
of the District of Columbia Courts, as provided by Public Law 105-33
(111 Stat. 251); and
(vi) Effective April 1, 1999, an employee of the Public Defender
Service of the District of Columbia, as provided by Public Law 105-274
(112 Stat. 2419).
(4) A teacher in a Department of Defense dependents school
overseas, if employed by the Federal Government in a nonteaching
position during the recess period between school years.
(b) The following employees are also excluded from life insurance
coverage:
(1) An employee serving under an appointment limited to 1 year or
less. Exceptions:
(i) An employee whose full-time or part-time temporary appointment
has a regular tour of duty and follows employment in a position in
which the employee was insured, with no break in service or with a
break in service of no more than 3 days;
(ii) An acting postmaster;
(iii) A Presidential appointee appointed to fill an unexpired term;
and
(iv) Certain employees who receive provisional appointments as
defined in Sec. 316.403 of this chapter.
(2) An employee who is employed for an uncertain or purely
temporary period, who is employed for brief periods at intervals, or
who is expected to work less than 6 months in each year. Exception: an
employee who is employed under an OPM-approved career-related work-
study program
[[Page 60578]]
under Schedule B lasting at least 1 year and who is expected to be in
pay status for at least one-third of the total period of time from the
date of the first appointment to the completion of the work-study
program.
(3) An intermittent employee (a non-full-time employee without a
regularly-scheduled tour of duty). Exception: an employee whose
intermittent appointment follows, with no break in service or with a
break in service of no more than 3 days, employment in a position in
which he or she was insured and to which he or she is expected to
return.
(4) An employee whose pay, on an annual basis, is $12 a year or
less.
(5) A beneficiary or patient employee in a Government hospital or
home.
(6) An employee paid on a contract or fee basis. Exception: an
employee who is a United States citizen, who is appointed by a contract
between the employee and the Federal employing authority which requires
his or her personal service, and who is paid on the basis of units of
time.
(7) An employee paid on a piecework basis. Exception: an employee
whose work schedule provides for full-time or part-time service with a
regularly-scheduled tour of duty.
(8) A Senate restaurant employee, except a former Senate restaurant
employee who had life insurance coverage on the date of transfer to a
private contractor on or after July 17, 2008, and who elected to
continue such coverage and to continue coverage under either chapter 83
or 84 of title 5, United States Code.
(c) OPM makes the final determination regarding the applicability
of the provisions of this section to a specific employee or group of
employees.
Subpart D--Cost of Insurance
0
10. In section 870.401, paragraph (b)(3) is revised to read as follows:
Sec. 870.401 Withholdings and contributions for Basic insurance.
* * * * *
(b) * * *
(3) The amount withheld from the pay of an insured employee whose
BIA changes during a pay period is based on the BIA last in force
during the pay period
* * *
0
11. In section 870.404, paragraph (a) is revised to read as follows:
Sec. 870.404 Withholdings and contributions provisions that apply to
both Basic and Optional insurance.
(a) Withholdings (and Government contributions, when applicable)
are based on the amount of insurance last in force on an employee
during the pay period.
* * * * *
0
12. In section 870.405, paragraphs (c)(2), (g)(1), and (g)(5) are
revised to read as follows:
Sec. 870.405 Direct premium payments.
* * * * *
(c) * * *
(2) Within 31 calendar days of receiving the notice (60 days for
individuals living overseas), the insured individual (or assignee) must
return the notice to the employing office or retirement system,
choosing either to terminate some or all of the insurance or to make
direct premium payments. An employee, annuitant, or compensationer is
considered to receive a mailed notice 15 days after the date of the
notice.
* * * * *
(g)(1) If an individual on direct pay fails to make the required
premium payment on time, the employing office or retirement system must
notify the individual. The individual must make the payment within 31
calendar days after receiving the notice (60 days if living overseas).
An individual is considered to have received a mailed notice 15 days
after the date of the notice, 30 days if living overseas.
* * * * *
(5) If, for reasons beyond his or her control, an insured
individual is unable to pay within 30 days of receiving the past due
notice (45 days if living overseas), he or she may request
reinstatement of coverage by writing to the employing office or
retirement system within 60 days from the date of cancellation. The
individual must provide proof that the inability to pay within the time
limit was for reasons beyond his or her control. The employing office
or retirement system will decide if the individual is eligible for
reinstatement of coverage. If the employing office or retirement system
approves the request, the coverage is reinstated back to the date of
cancellation, and the individual must pay the back premiums.
Subpart E--Coverage
0
13. Sections 870.503 and 870.504 are revised to read as follows:
Sec. 870.503 Basic insurance: Canceling a waiver.
(a) An annuitant or compensationer who has filed a waiver of Basic
insurance cannot cancel the waiver.
(b) An employee who has filed a waiver of Basic insurance may
cancel the waiver and become insured if:
(1) The employee makes an election during an open enrollment period
as described in Sec. 870.507;
(2) At least 1 year has passed since the effective date of the
waiver, and the employee provides satisfactory medical evidence of
insurability; or
(3) The employee has a change in family circumstances (marriage or
divorce, a spouse's death, or acquisition of an eligible child) and
files an election as provided in paragraph (b)(3(i), (b)(3)(ii), or
(b)(3)(iii) of this section. Except as provided in paragraph
(b)(3)(iii), the effective date of Basic insurance elected under this
paragraph (b)(3) is the 1st day the employee actually enters on duty in
a pay status on or after the day the employing office receives the
election.
(i) An employee must file an election under this paragraph with the
employing office, in a manner designated by OPM, along with proof of
the event, no later than 60 calendar days following the date of the
change in family circumstances that permits the election; the employee
may also file the election before the event and provide proof no later
than 60 calendar days following the event.
(ii) An employee making an election under this paragraph based on
acquisition of an eligible foster child must file the election with the
employing office no later than 60 calendar days after completing the
required certification.
(iii) Within 6 months after an employee becomes eligible to make an
election of Basic insurance due to a change in family circumstances, an
employing office may determine that the employee was unable, for
reasons beyond his or her control, to elect Basic insurance within the
time limit. In this case, the employee must elect Basic insurance
within 60 calendar days after he or she is notified of the
determination. The insurance is retroactive to the 1st day of the first
pay period beginning after the date the individual became eligible, if
the employee was in pay and duty status that day. If the employee was
not in pay and duty status that day, the coverage becomes effective the
1st day after the date the employee returned to pay and duty status.
The individual must pay the full cost of the Basic insurance from
[[Page 60579]]
that date for the time that he or she is in pay status.
(c) OFEGLI reviews the employee's request and determines whether
the employee complied with paragraph (b)(2) of this section. If the
employee complied, then OFEGLI approves the Request for Insurance. The
Basic insurance is effective on the date of OFEGLI's approval if the
employee is in pay and duty status on that date. If the employee is not
in pay and duty status on the date of OFEGLI's approval, the Basic
insurance is effective the first day the employee returns to pay and
duty status, as long as it is within 60 calendar days after OFEGLI's
approval. If the employee is not in pay and duty status within 60
calendar days after OFEGLI's approval, the approval is revoked
automatically.
(d) When an employee who has been separated from service for at
least 180 days is reinstated on or after April 1, 1981, a previous
waiver of Basic insurance is automatically cancelled. Unless the
employee files a new waiver, Basic insurance becomes effective on the
1st day he or she actually enters on duty in pay status in a position
in which he or she is eligible for coverage. Exception: For employees
who waived Basic insurance after February 28, 1981, separated, and
returned to Federal service before December 9, 1983, the waiver
remained in effect; these employees were permitted to elect Basic
insurance by applying to their employing office before March 7, 1984.
(e)(1) An employee of the Department of Defense who is designated
as an ``emergency essential employee'' under section 1580 of title 10,
United States Code, may cancel a waiver of Basic insurance without
providing satisfactory medical information.
(2) An election of Basic insurance under paragraph (e)(1) of this
section must be made within 60 days of being designated ``emergency
essential.'' Basic insurance is effective on the date the employing
office receives the election, if the employee is in pay and duty status
on that date. If the employee is not in pay and duty status on the day
the employing office receives the election, the coverage becomes
effective on the date the employee returns to pay and duty status.
(f)(1) A civilian employee who is eligible for Basic insurance
coverage and is deployed in support of a contingency operation as
defined by section 101(a)(13) of title 10, United States Code, may
cancel a waiver of Basic Insurance without providing satisfactory
medical information.
(2) An election of Basic insurance under paragraph (f)(1) of this
section must be made within 60 days after the date of notification of
deployment in support of a contingency operation. Basic insurance is
effective on the date the employing office receives the election, if
the employee is in pay and duty status on that date. If the employee is
not in pay and duty status on the day the employing office receives the
election, the coverage becomes effective on the date the employee
returns to pay and duty status.
Sec. 870.504 Optional insurance: Election.
(a)(1) Each employee must elect or waive Option A, Option B, and
Option C coverage, in a manner designated by OPM, within 60 days after
becoming eligible unless, during earlier employment, he or she filed an
election or waiver that remains in effect. The 60-day time limit for
Option B or Option C begins on the 1st day after February 28, 1981, on
which an individual is an employee as defined in Sec. 870.101.
(2) An employee of the District of Columbia Financial
Responsibility and Management Assistance Authority who elects to be
considered a Federal employee under section 153 of Public Law 104-134
(110 Stat. 1321) must elect or waive Option A, Option B, and Option C
coverage within 31 days after the later of:
(i) The date his or her employment with the Authority begins, or
(ii) The date the Authority receives his or her election to be
considered a Federal employee.
(3) Within 6 months after an employee becomes eligible, an
employing office may determine that the employee was unable, for
reasons beyond his or her control, to elect any type of Optional
insurance within the time limit. In this case, the employee must elect
or waive that type of Optional insurance within 60 days after being
notified of the determination. The insurance is retroactive to the 1st
day of the 1st pay period beginning after the date the individual
became eligible (or after April 1, 1981, whichever is later), if the
employee was in pay and duty status that day. If the employee was not
in pay and duty status that day, the coverage becomes effective the 1st
day after the date the employee returned to pay and duty status. The
individual must pay the full cost of the Optional insurance from that
date for the time that he or she is in pay status (or retired or
receiving compensation with unreduced Optional insurance).
(b) Any employee who does not file a Life Insurance Election with
his or her employing office, in a manner designated by OPM,
specifically electing any type of Optional insurance, is considered to
have waived it and does not have that type of Optional insurance.
(c) For the purpose of having Option A as an employee, an election
of this insurance filed on or before February 28, 1981, is considered
to have been cancelled effective at the end of the pay period which
included March 31, 1981, unless the employee did not actually enter on
duty in pay status during the 1st pay period that began on or after
April 1, 1981. In that case, the election is considered to have been
cancelled on the 1st day after the end of the next pay period in which
the employee actually entered on duty in pay status. In order to have
Option A as an employee after the date of this cancellation, an
employee must specifically elect the coverage by filing the Life
Insurance Election with his or her employing office, subject to Sec.
870.504(a) or 870.506(b).
(d) Optional insurance is effective the 1st day an employee
actually enters on duty in pay status on or after the day the employing
office receives the election. If the employee is not in pay and duty
status on the date the employing office receives the election, the
coverage becomes effective the next date that the employee is in pay
and duty status.
(e) For an employee whose Optional insurance stopped for a reason
other than a waiver, the insurance is reinstated on the 1st day he or
she actually enters on duty in pay status in a position in which he or
she again becomes eligible.
0
14. Sections 870.506, 870.507, and 870.508 are revised to read as
follows:
Sec. 870.506 Optional insurance: Canceling a waiver.
(a) When there is a change in family circumstances (see Sec.
870.503(b)(3)). (1) An employee may cancel a waiver of Options A, B,
and C due to a change in family circumstances as provided in paragraphs
(a)(2) through (6) of this section.
(2) An employee who has waived Options A and B coverage may elect
coverage, and an employee who has fewer than 5 multiples of Option B
may increase the number of multiples, upon his or her marriage or
divorce, upon a spouse's death, or upon acquisition of an eligible
child.
(3) An employee electing or increasing Option B coverage may elect
any number of multiples, as long as the total number of multiples does
not exceed 5.
(4)(i) An employee who has waived Option C coverage may elect it,
and an employee who has fewer than 5 multiples of Option C may increase
the
[[Page 60580]]
number of multiples, upon his or her marriage or acquisition of an
eligible child. An employee may also elect or increase Option C
coverage upon divorce or death of a spouse, if the employee has any
eligible children.
(ii) An employee electing or increasing Option C coverage may elect
any number of multiples, as long as the total number of multiples does
not exceed 5.
(5)(i) Except as stated in paragraph (a)(5)(iii) of this section,
the employee must file an election under paragraph (a)(2) or (a)(4) of
this section with the employing office, in a manner designated by OPM,
along with proof of the event, no later than 60 calendar days following
the date of the event that permits the election; the employee may also
file the election before the event and provide proof no later than 60
calendar days following the event.
(ii) An employee making an election under paragraph (a)(4)(i) of
this section following the acquisition of an eligible foster child must
file the election with the employing office no later than 60 calendar
days after completing the required certification.
(iii) In the case of an employee who had a change in family
circumstances between October 30, 1998, and April 23, 1999, an election
under this section must have been made on or before June 23, 1999.
(iv) Within 6 months after an employee becomes eligible to make an
election due to a change in family circumstances, an employing office
may determine that the employee was unable, for reasons beyond his or
her control, to elect or increase Optional insurance within the time
limit. In this case, the employee must elect or increase Optional
insurance within 60 calendar days after he or she is notified of the
determination. The insurance is retroactive to the 1st day of the first
pay period beginning after the date the individual became eligible if
the employee was in pay and duty status that day. If the employee was
not in pay and duty status that day, the coverage becomes effective the
1st day after that date the employee returned to pay and duty status.
The individual must pay the full cost of the Optional insurance from
that date for the time that he or she is in pay status.
(6)(i) The effective date of Options A and B insurance elected
under paragraph (a)(1) of this section is the 1st day the employee
actually enters on duty in pay status on or after the day the employing
office receives the election.
(ii) Except as provided in paragraphs (a)(5)(iii) and (a)(6)(iv) of
this section, the effective date of Option C coverage elected because
of marriage, divorce, death of a spouse, or acquisition of an eligible
child is the day the employing office receives the election, or the
date of the event, whichever is later. Exception: Coverage elected
under paragraph (a)(5)(iii) of this section was effective April 24,
1999.
(iii) The effective date of Option C coverage elected because of
the acquisition of a foster child is the date the employing office
receives the election or the date the employee completes the
certification, whichever is later.
(iv) If the employee does not elect Basic insurance and Option C
together (and did not have Basic insurance before), then Option C
becomes effective the same day as his or her Basic insurance becomes
effective.
(b) When there is no change in family circumstances. (1) An
employee who has waived Option A or Option B coverage may cancel the
waiver and elect coverage if:
(i) The employee makes an election during an open enrollment
period; or
(ii) At least 1 year has passed since the effective date of the
waiver, and the employee provides satisfactory medical evidence of
insurability.
(2) An employee who has Option B coverage of fewer than five
multiples of annual pay may increase the number of multiples if at
least 1 year has passed since the effective date of his or her last
election of fewer than five multiples (including a reduction in the
number of multiples), and the employee provides satisfactory medical
evidence of insurability.
(3) A waiver of Option C may be cancelled only if there is a change
in family circumstances or during an open enrollment period.
(c) OFEGLI reviews the employee's request and determines whether
the employee complied with paragraphs (b)(1)(ii) and (b)(2) of this
section. If the employee complied, then OFEGLI approves the Request for
Insurance. The Option A and B insurance is effective on the date of
OFEGLI's approval, if the employee is in pay and duty status on that
date. If the employee is not in pay and duty status on the date of
OFEGLI's approval, the insurance is effective the first day the
employee returns to pay and duty status, as long as it is within 60
calendar days of OFEGLI's approval. If the employee is not in pay and
duty status within 60 calendar days after OFEGLI's approval, the
approval is revoked automatically.
(d) If an employee waived Option A insurance on or before February
28, 1981, the waiver was automatically cancelled effective on the 1st
day the employee entered on duty in pay status on or after April 1,
1981. Option A coverage was effective on the date of the waiver's
cancellation, if the employee filed an election of Option A during the
March 1, 1981, through March 31, 1981, open enrollment period. If the
employee did not file the election with his or her employing office
during the March 1981 open enrollment period, the employee is
considered to have waived Option A on March 31, 1981.
(e) When an employee who has been separated from service for at
least 180 days is reinstated on or after April 1, 1981, a previous
waiver of Optional insurance is automatically cancelled, as follows:
(1) An employee who returned to service between April 1, 1981, and
December 8, 1983, after a 180-day break in service was permitted to
elect any form of Optional insurance by applying to his or her
employing office before March 7, 1984.
(2) An employee who returns to service after December 8, 1983,
following a 180-day break in service may elect any form of Optional
insurance by applying to his or her employing office within 60 calendar
days after reinstatement. Coverage is effective on the 1st day the
employee actually enters on duty in pay status in a position in which
he or she is eligible for insurance on or after the date the employing
office receives the election. If the employee does not file a Life
Insurance Election in a manner designated by OPM within the 60-day
period, the employee has whatever Optional insurance coverage he or she
had immediately before separating from Federal service and is
considered to have waived any other Optional insurance. However, an
employee who fails to file an election during the 60-day period due to
reasons beyond his or her control may enroll belatedly under the
conditions stated in Sec. 870.504(a)(3).
(f)(1) An employee of the Department of Defense who is designated
as ``emergency essential'' under section 1580 of title 10, United
States Code, may cancel a waiver of Option A and Option B insurance.
(2) An election of Option A or Option B insurance under paragraph
(f)(1) must be made within 60 days of being designated ``emergency
essential.'' Optional insurance is effective on the date the employing
office receives the election, if the employee is in pay and duty status
on that date. If the employee is not in pay and duty status on the day
the employing office receives the election, the coverage becomes
effective on the date the employee returns to pay and duty status.
[[Page 60581]]
(g)(1) A civilian employee who is eligible for life insurance
coverage and who is deployed in support of a contingency operation as
defined by section 101(a)(13) of title 10, United States Code, may
cancel a waiver of Option A and/or Option B insurance.
(2) An election of Optional insurance under paragraph (g)(1) of
this section must be made within 60 days after the date of notification
of deployment in support of a contingency operation. Optional insurance
is effective on the date the employing office receives the election, if
the employee is in pay and duty status on that date. If the employee is
not in pay and duty status on the day the employing office receives the
election, the coverage becomes effective on the date the employee
returns to pay and duty status.
(h) An annuitant or compensationer is not eligible to cancel a
waiver of any type of Optional insurance or to increase multiples of
Option B under this section.
Sec. 870.507 Open enrollment periods.
(a) There are no regularly scheduled open enrollment periods for
life insurance. Open enrollment periods are held only when specifically
scheduled by OPM.
(b) During an open enrollment period, unless OPM announces
otherwise, eligible employees may cancel their existing waivers of
Basic and/or Optional insurance by electing the insurance in a manner
designated by OPM.
(c)(1) OPM sets the effective date for all insurance elected during
an open enrollment period. The newly elected insurance is effective on
the 1st day of the 1st pay period that begins on or after the OPM-
established date and that follows a pay period during which the
employee was in pay and duty status for at least 32 hours, unless OPM
announces otherwise.
(2) A part-time employee must be in pay and duty status for one-
half the regularly-scheduled tour of duty shown on his or her current
Standard Form 50 for newly-elected coverage to become effective, unless
OPM announces otherwise.
(3) An employee who has no regularly-scheduled tour of duty or who
is employed on an intermittent basis must be in pay and duty status for
one-half the hours customarily worked before newly-elected coverage can
become effective, unless OPM announces otherwise. For the purpose of
this paragraph, an employing office may determine the number of hours
customarily worked by averaging the number of hours worked in the most
recent calendar year quarter prior to the start of the open enrollment
period.
(d) Within 6 months after an open enrollment period ends, an
employing office may determine that an employee was unable, for reasons
beyond his or her control, to cancel an existing waiver by electing to
be insured during the open enrollment period. An election under this
paragraph must be submitted within 60 days after being notified of the
determination. Coverage is retroactive to the first pay period that
begins on or after the effective date set by OPM and that follows a pay
period during which the employee was in pay and duty status for at
least 32 hours, unless OPM announces otherwise. If the employee does
not file an election within this 60-day time limit, he or she will be
considered to have waived coverage.
Sec. 870.508 Nonpay status.
(a) An employee who is in nonpay status is entitled to continue
life insurance for up to 12 months. No premium payments are required,
unless the employee is receiving compensation.
(b) If an insured employee who is entitled to free insurance while
in nonpay status accepts a temporary appointment to a position in which
he or she would normally be excluded from insurance coverage, the
insurance continues. The amount of Basic insurance (and Option B
coverage if the employee has it) is based on the combined salaries of
the two positions. Withholdings are made from the employee's pay in the
temporary position.
(c) If an insured employee goes on leave without pay (LWOP) to
serve as a full-time officer or employee of an employee organization,
he or she may elect in writing to continue life insurance within 60
days after the beginning of the LWOP. The insurance continues for the
length of the appointment, even if the LWOP lasts longer than 12
months. The employee must pay to the employing office the full cost of
Basic and Optional insurance starting with the beginning of the nonpay
status; the employee is not entitled to 12 months of free coverage.
There is no Government contribution for these employees.
(d) If an insured employee goes on LWOP while assigned to a State
government, local government, or institution of higher education, the
employee may elect in writing to continue the life insurance for the
length of the assignment, even if the LWOP lasts longer than 12 months.
The employee must pay his or her premiums to the Federal agency on a
current basis starting with the beginning of the nonpay status; the
employee is not entitled to 12 months of free coverage. The agency must
continue to pay its contribution as long as the employee makes his or
her payments.
Subpart F--Termination and Conversion
15. Sections 870.601, 870.602, and 870.603 are revised to read as
follows:
Sec. 870.601 Termination of Basic insurance.
(a) Except as otherwise provided in this section or Sec. 870.701,
the Basic insurance of an insured employee stops on the date the
employee separates from service, subject to a 31-day extension of
coverage. Exception: If the employee was employed by the Architect of
the Capitol as a Senate Restaurants employee the day before the food
services operations of the Senate Restaurants were transferred to a
private business concern and the employee accepted employment by the
business concern and elected to continue his or her Federal retirement
benefits and FEGLI coverage, the employee continues to be eligible for
FEGLI coverage as long as he or she remains employed by the business
concern or its successor.
(b) The Basic insurance of an employee who separates from service
after meeting the requirement for an immediate annuity under Sec.
842.204(a)(1) of this chapter and who postpones receiving the annuity,
as provided by Sec. 842.204(c) of this chapter (an MRA+10 annuity),
stops on the date he or she separates from service, subject to a 31-day
extension of coverage.
(c) The Basic insurance of an insured employee who moves without a
break in service to a position in which he or she is excluded from life
insurance stops on the last day of employment in the former position,
subject to a 31-day extension of coverage. Exception: If the position
is excluded by regulation (not by law), and the employee does not have
a break in service of more than three days, the Basic insurance
continues.
(d)(1) Except as provided in Sec. 870.701, the Basic insurance of
an insured employee who is in nonpay status stops on the date the
employee completes 12 months in nonpay status, subject to a 31-day
extension of coverage. The 12 months' nonpay status may be broken by
periods of less than 4 consecutive months in pay status. If an employee
has at least 4 consecutive months in pay status after a period of
nonpay status, he or she is entitled to begin the 12 months'
continuation of Basic insurance
[[Page 60582]]
again. If an employee has used up his or her 12 months' continuation in
nonpay status and returns to duty for less than 4 consecutive months,
his or her Basic insurance stops on the 32nd day after the last day of
the last pay period in pay status.
(2) For the purpose of paragraph (d)(1) of this section, 4
consecutive months in pay status means any 4-month period during which
the employee is in pay status for at least part of each pay period.
(3)(i) For the purpose of paragraph (d)(1) of this section, an
individual who is entitled to benefits under part 353 of this chapter
(USERRA--Uniformed Services Employment and Reemployment Act of 1994),
who separates to go on military duty instead of going into a nonpay
status, is treated as an employee in nonpay status for life insurance
purposes.
(ii) Basic insurance continues free for 12 months or until 90 days
after military service ends, whichever comes first.
(iii) Effective January 28, 2008, an employee who enters on active
duty, or active duty for training in one of the uniformed services for
more than 30 days, may continue enrollment for an additional 12 months,
for a total of up to 24 months.
(A) Each agency must notify its employees of the opportunity to
elect to continue coverage for the additional 12 months.
(B) An employee wanting coverage for the additional 12 months must
elect it prior to the end of the first 12 months in nonpay status, in a
manner designated by the employing agency.
(C) Insurance continues free for the first 12 months; however, an
employee must pay both the employee and agency share of premiums to the
agency on a current basis for Basic coverage, and must pay the entire
cost (there is no agency share) for any Optional insurance for the
additional 12 months of coverage elected.
(D) For an employee who does not elect to continue coverage for an
additional 12 months, coverage terminates at the end of the first 12
months in nonpay status subject to the 31-day extension of coverage and
conversion rights as provided in Sec. 870.603 of this part.
(e) Except for employees, annuitants, and compensationers who elect
direct payment as provided in Sec. 870.405 of this part, Basic
insurance stops, subject to a 31-day extension of coverage, at the end
of the pay period in which the employing office or retirement system
determines that an individual's periodic pay, annuity, or compensation,
after all other deductions, is not enough to cover the full cost of
Basic insurance.
Sec. 870.602 Termination of Optional insurance.
(a) The Optional insurance of an insured employee stops when his or
her Basic insurance stops, subject to the same 31-day extension of
coverage.
(b) The Optional insurance of an employee who separates from
service after meeting the requirement for an immediate annuity under
Sec. 842.204(a)(1) of this chapter and who postpones receiving the
annuity, as provided by Sec. 842.204(c) of this chapter (an MRA+10
annuity), stops on the date he or she separates from service, subject
to a 31-day extension of coverage. Exception: If the employee was
employed by the Architect of the Capitol as a Senate Restaurants
employee the day before the food services operations of the Senate
Restaurants were transferred to a private business concern and the
employee accepted employment with the business concern and elected to
continue his or her Federal retirement benefits and FEGLI coverage, the
employee continues to be eligible for FEGLI coverage as long as he or
she remains employed by the business concern or its successor.
(c)(1) If an insured employee is not eligible to continue Optional
coverage as an annuitant or compensationer as provided by Sec.
870.701, the Optional insurance stops on the date that his or her Basic
insurance is continued or reinstated under Sec. 870.701, subject to a
31-day extension of coverage.
(d) If, at the time of an individual's election of Basic insurance
during receipt of annuity or compensation, he or she elects no Basic
life insurance as provided by Sec. 870.702(a)(1), the Optional
insurance stops at the end of the month in which the election is
received in OPM, subject to a 31-day extension of coverage.
(e) Except for employees, annuitants, and compensationers who elect
direct payment as provided in Sec. 870.405, Optional insurance stops,
subject to a 31-day extension of coverage, at the end of the pay period
in which the employing office or retirement system determines that an
individual's periodic pay, annuity, or compensation, after all other
deductions, is not enough to cover the full cost of the Optional
insurance. If an individual has more than one type of Optional
insurance and his or her pay, annuity, or compensation is sufficient to
cover some but not all of the insurance, the multiples of Option C
terminate first, followed by Option A, and then the multiples of Option
B.
Sec. 870.603 Conversion of Basic and Optional insurance.
(a)(1) When group coverage terminates for any reason other than
voluntary cancellation, an employee may apply to convert all or any
part of his or her Basic and Optional insurance to an individual
policy; no medical examination is required. The premiums for the
individual policy are based on the employee's age and class of risk. An
employee is eligible to convert the policy only if he or she does not
return, within 3 calendar days from the terminating event, to a
position covered under the group plan. Exception: If an employee is
unable to convert, a person having power of attorney for that employee
may convert on his or her behalf. If insurance has been assigned under
subpart I of this part, it is the assignee(s), not the employee, who
has (have) the right to convert.
(2) The employing agency must notify the employee/assignee(s) of
the loss of coverage and the right to convert to an individual policy
either before or immediately after the event causing the loss of
coverage.
(3) The employee/assignee(s) must submit the request for conversion
information to OFEGLI. OFEGLI must receive the request for conversion
within 31 calendar days of the date on the conversion notification the
employee receives from the employing agency (60 days if overseas) or
within 60 calendar days after the date of the terminating event (90
days, if overseas), whichever is earlier.
(4) If the employee does not request conversion information within
the specified time period as described in paragraph (a)(3) of this
section, the employee is considered to have refused coverage unless
OFEGLI determines the failure was for reasons beyond the employee's
control, as described in paragraph (a)(5) of this section.
(5) When an agency fails to provide the notification required in
paragraph (a)(2) of this section, or the employee/assignee fails to
request conversion information within the time limit set in paragraph
(a)(3) of this section for reasons beyond his or her control, the
employee may make a belated request by writing to OFEGLI. The employee/
assignee must make the request within 6 months after becoming eligible
to convert the insurance. The employee/assignee must show that he or
she was not notified of the loss of coverage and the right to convert
and was not otherwise aware of it or that he or she was unable to
convert to an individual policy for reasons beyond his or her control.
OFEGLI will determine if the employee/assignee is eligible to convert.
[[Page 60583]]
If the request is approved, the employee must convert within 31
calendar days of that determination.
(b) The individual conversion policy is effective the day after the
group coverage ends. The employee/assignee must pay the premiums for
any period retroactive to that date.
(c) The 31-day extension of coverage provided under this subpart
does not depend upon timely notification of the right to convert to an
individual policy. The extension cannot be continued beyond 31 days.
(d) Family members may convert Option C coverage (and name
beneficiaries of their choice) if:
(1) The employee dies; or
(2) The insurance stops under circumstances that allow the employee
to convert Option C coverage but the employee does not convert.
(e) If an employee with Option C coverage dies, the employing
office must send a conversion notice to the family members at the
employee's last address on file.
(f) Family members must submit the request for conversion
information to OFEGLI. OFEGLI must receive the request for conversion
within 31 calendar days of the date on the conversion notification the
employee receives from his or her employing agency (60 days if
overseas) or within 60 calendar days after the date of the terminating
event (90 days, if overseas), whichever is earlier. There is no
extension to these time limits. Family members are considered to have
refused coverage if they do not request conversion within these time
limits.
(g) The family members' conversion policy is effective at the end
of the employee's 31-day extension of coverage.
Subpart G--Annuitants and Compensationers
0
16. Section 870.701(c) is revised to read as follows:
Sec. 870.701 Eligibility for life insurance.
* * * * *
(c) An individual who meets the requirements of paragraph (a) or
(b) of this section or Sec. 870.706 for continuation or reinstatement
of life insurance must complete an election, in a manner designated by
OPM, at the time entitlement is established. For the election to be
valid, OPM must receive the election before OPM has made a final
decision on the individual's application for annuity or supplemental
annuity or an individual's request to continue life insurance as a
compensationer. If there is no valid election, OPM considers the
individual to have chosen the option described in Sec. 870.703(a)(2).
0
17. Section 870.702(b)(2) is revised to read as follows:
Sec. 870.702 Amount of Basic insurance.
* * * * *
(b) * * *
(2)(i) For an annuitant or compensationer who elected a partial
Living Benefit as an employee, the amount of Basic insurance he or she
can continue is the post-election BIA, as described in Sec.
870.203(a)(2).
(ii) If an employee elected a partial Living Benefit and that
employee is under age 45 at the time of death, OFEGLI will multiply the
post-election BIA by the appropriate factor, as specified in Sec.
870.202(c), that was in effect on the date that is nine months after
the date OFEGLI received the completed Living Benefit application.
0
18. Section 870.703 is revised to read as follows:
Sec. 870.703 Election of Basic insurance.
(a) An individual who makes an election under Sec. 870.701(c) and
who has not elected a Living Benefit must select one of the options in
paragraphs (a)(1) through (4) of this section. No one else can make
this election on the individual's behalf.
(1) Termination of the insurance. The individual's insurance stops
upon conversion to an individual policy as provided under Sec.
870.603. If the individual does not convert to an individual policy,
insurance stops at the end of the month in which OPM or the employing
office receives the election;
(2) Continuation or reinstatement of Basic insurance with a maximum
reduction of 75 percent during retirement. Premiums are withheld from
annuity or compensation (except as provided under Sec. 870.401(d)(1)).
The amount of Basic Life insurance in force reduces by 2 percent of the
BIA each month until the maximum reduction is reached. This reduction
starts at the beginning of the 2nd month after the date the insurance
would otherwise have stopped or the date of the insured's 65th
birthday, whichever is later;
(3) Continuation or reinstatement of Basic insurance with a maximum
reduction of 50 percent during retirement. Premiums are withheld from
annuity or compensation. The amount of Basic insurance in force reduces
by 1 percent of the BIA each month until the maximum reduction is
reached. This reduction starts at the beginning of the 2nd month after
the date the insurance would otherwise have stopped or the date of the
insured's 65th birthday, whichever is later; or
(4) Continuation or reinstatement of Basic insurance with no
reduction after age 65. Premiums are withheld from annuity or
compensation.
(b)(1) Unless an employee has elected a partial Living Benefit
under subpart K of this part or an individual has assigned the
insurance under subpart I of this part, an insured individual may
cancel an election under paragraph (a)(3) or (a)(4) of this section at
any time. The amount of Basic insurance automatically switches to the
amount that would have been in force if the individual had originally
elected the 75 percent reduction. This revised amount is effective at
the end of the month in which OPM receives the request to cancel the
previous election. There is no refund of premiums.
(2) If an individual files a waiver of insurance, the coverage
stops without a 31-day extension of coverage or conversion right.
Coverage ceases at the end of the month in which OPM received the
waiver.
(c) Unless he/she chooses to terminate his/her insurance, an
employee who has elected a partial Living Benefit must choose the no
reduction election under paragraph (a)(4) of this section. The employee
cannot later change to the 75 percent reduction.
(d) If an employee has assigned his or her insurance, he/she cannot
cancel an election under paragraph (a)(3) or (a)(4) of this section.
Only the assignee(s) may cancel this election. Exception: If the
employee elected a partial Living Benefit before assigning the
remainder of his or her insurance, the assignee(s) cannot cancel the
election under paragraph (a)(4) of this section.
(e)(1) For purposes of this part, a judge who retires under one of
the following provisions is considered to be an employee after
retirement:
(i) 28 U.S.C. 371(a) or (b);
(ii) 28 U.S.C. 372(a);
(iii) 28 U.S.C. 377;
(iv) 26 U.S.C. 7447;
(v) 11 DC Code 776;
(vi) Section 7447 of the Internal Revenue Code;
(2) The insurance of a judge described in paragraph (e)(1) of this
section does not reduce after age 65. Basic insurance continues without
interruption or reduction. Exception: If the insured is a judge
eligible for compensation, and chooses to receive compensation instead
of annuity, he or she must select an option described in paragraph (a)
of this section.
0
19. Sections 870.704 and 870.705 are revised to read as follows:
[[Page 60584]]
Sec. 870.704 Amount of Option A.
(a) The amount of Option A coverage an annuitant or compensationer
can continue is $10,000.
(b) An annuitant's or compensationer's Option A coverage reduces by
2 percent of the original amount each month up to a maximum reduction
of 75 percent. This reduction starts at the beginning of the 2nd month
after the date the insurance would otherwise have stopped or the
beginning of the 2nd month after the date of the insured's 65th
birthday, whichever is later.
(c) Paragraph (b) of this section does not apply to a judge who
retires under one of the provisions listed in Sec. 870.703(e)(1). For
purposes of this part, such a judge is considered to be an employee
after retirement, and Option A insurance continues without interruption
or reduction. Exception: If the judge is eligible for compensation and
chooses to receive compensation instead of annuity, paragraph (b) of
this section applies.
Sec. 870.705 Amount and election of Option B and Option C.
(a) The number of multiples of Option B and Option C coverage an
annuitant or compensationer can continue is the highest number of
multiples in force during the applicable period of service required to
continue Option B and Option C.
(b)(1)(i) At the time an employee retires or becomes insured as a
compensationer, he or she must elect the number of allowable multiples
he or she wishes to continue during retirement or while receiving
compensation.
(ii) An employee who elects to continue fewer multiples than the
number for which he or she is eligible is considered to have cancelled
the multiples that are not continued.
(iii) An employee separating for retirement and an employee
becoming insured as a compensationer on or after April 24, 1999, must
choose the level of post-age-65 reduction he or she wants. There are
two choices: Full Reduction and No Reduction. The election may be made
only by the employee and must be made in the manner that OPM
designates. The employee may make different elections for Option B and
for Option C. He or she may choose Full Reduction for some multiples of
an Option and No Reduction for other multiples of the same Option.
Failure to make an election for Option B or for Option C will be
considered to be an election of Full Reduction for all multiples of
that Option.
(iv) For purposes of this part, a judge who retires under one of
the provisions listed in Sec. 870.703(e)(1) is considered to be an
employee after retirement. The insurance of such a judge does not
reduce after age 65. Exception: If the judge is eligible for
compensation and chooses to receive compensation instead of annuity,
the post-65 reductions and elections apply.
(2)(i) Prior to reaching age 65, an annuitant or compensationer can
change from No Reduction to Full Reduction at any time. Exception: If
the individual has assigned his or her insurance as provided in subpart
I of this part, only the assignee can change from No Reduction to Full
Reduction for the Option B coverage.
(3)(i) After reaching age 65, an annuitant or compensationer can
change from No Reduction to Full Reduction at any time. Exception: If
the individual has assigned his or her insurance as provided in subpart
I of this part, only the assignee can change from No Reduction to Full
Reduction for the Option B coverage. If an individual age 65 or over
changes to Full Reduction, the amount of insurance in force is computed
as if he or she had elected Full Reduction initially. There is no
refund of premiums.
(ii) After reaching age 65, an annuitant or compensationer cannot
change from Full Reduction to No Reduction.
(c)(1) For each multiple of Option B and/or Option C for which an
individual elects Full Reduction, the coverage reduces by 2 percent of
the original amount each month. This reduction starts at the beginning
of the 2nd month after the date the insurance would otherwise have
stopped or the beginning of the 2nd month after the insured's 65th
birthday, whichever is later. At 12:00 noon on the day before the 50th
reduction, the insurance stops, with no extension of coverage or
conversion right.
(2) For each multiple of Option B and/or Option C for which an
individual elects No Reduction, the coverage in force does not reduce.
After age 65 the annuitant or compensationer continues to pay premiums
appropriate to his or her age.
(d)(1) An employee who was already retired or insured as a
compensationer on April 24, 1999, and who had Option B, was given an
opportunity to make an election for Option B.
(i) Each such annuitant or compensationer who was under age 65 on
April 24, 1999, was notified of the option to elect No Reduction. The
retirement system will send the individual an election notice before
his or her 65th birthday.
(ii) Each such annuitant or compensationer who was age 65 or older
on April 24, 1999, and who still had some Option B coverage remaining,
was given the opportunity to stop further reductions. The individual
had until October 24, 1999, to make the No Reduction election. The
amount of Option B coverage retained was the amount in effect on April
24, 1999. Each annuitant or compensationer who elected No Reduction was
required to pay premiums retroactive to April 24, 1999.
(2) An employee who was already retired or insured as a
compensationer on April 24, 1999, could not elect No Reduction for
Option C.
0
20. Section 870.707 is revised to read as follows:
Sec. 870.707 Reemployed annuitants and compensationers.
(a)(1) If an insured annuitant or compensationer is appointed to a
position in which he or she is eligible for insurance, the amount of
his or her Basic life insurance as a annuitant or compensationer (and
any applicable withholdings) is suspended on the day before the 1st day
in pay status under the appointment, unless the reemployed annuitant or
compensationer waives all insurance coverage as an employee. The Basic
insurance benefit payable upon the death of a reemployed annuitant or
compensationer who has Basic insurance in force as an employee, cannot
be less than the benefit that would have been payable if the individual
had not been reemployed.
(2) Except as provided in paragraph (b) of this section, the Basic
insurance obtained as an employee stops with no 31-day extension of
coverage or conversion right, on the date reemployment terminates. Any
suspended Basic insurance (and any applicable withholdings) is
reinstated on the day following termination of the reemployment.
(b) Basic insurance obtained during reemployment can be continued
after the reemployment terminates if the individual:
(1) Qualifies for a supplemental annuity or receives a new
retirement right (or if a compensationer, he or she worked an amount of
time equivalent to that required for an annuitant to qualify for a
supplemental annuity);
(2) Has had Basic insurance as an employee for at least 5 years of
service immediately before separation from reemployment or for the full
period(s) during which such coverage was
[[Page 60585]]
available to the individual, whichever is less; and
(3) Does not convert to nongroup insurance when Basic insurance as
an employee would otherwise terminate.
(c) If the Basic insurance obtained during reemployment is
continued as provided in paragraph (b) of this section, any suspended
Basic life insurance stops, with no 31-day extension of coverage or
conversion right.
(d)(1) An annuitant or compensationer appointed to a position in
which he or she is eligible for Basic insurance is also eligible for
Optional insurance as an employee, unless he or she has on file an
uncancelled waiver of Basic or Optional insurance.
(2) If the individual has Option A or C as an annuitant, that
insurance (and applicable withholdings) is suspended on the day before
his or her 1st day in pay status under the appointment. Unless he or
she waives Option A or C (or waives Basic insurance), the individual
obtains Option A or C as an employee.
(3) If the individual has Option B as an annuitant or
compensationer, that insurance (and applicable withholdings) continues
as if the individual were not reemployed, unless:
(i) The individual files with his/her employing office an election
of Option B, in a manner designated by OPM, within 60 calendar days
after the date of reemployment. In this case Option B (and applicable
withholdings) as an annuitant or compensationer is suspended on the
date that Option B as an employee becomes effective; or
(ii) The individual waives Basic insurance.
(4) The Option B benefit payable upon the death of a reemployed
annuitant or compensationer is the amount in effect as an annuitant or
compensationer, unless the individual elected to have Option B as an
employee.
(5) Except as provided in paragraph (e) of this section, the
Optional insurance obtained as an employee stops, with no 31-day
extension or conversion right, on the date reemployment terminates. The
amount of suspended Optional insurance that remains in force after
applicable monthly reductions after age 65 (and corresponding
withholdings) is reinstated on the day after reemployment terminates.
(e) Optional life insurance obtained during reemployment may be
continued after the reemployment terminates if the annuitant:
(1) Qualifies for a supplemental annuity or receives a new
retirement right (or if a compensationer, he or she worked an amount of
time equivalent to that required for an annuitant to qualify for a
supplemental annuity);
(2) Continues Basic life insurance under Sec. 870.703(a)(2), (3),
or (4); and
(3) Has had Optional insurance as an employee for at least the 5
years of service immediately before separation from reemployment or for
the full period(s) of service during which it was available to him or
her, whichever is less.
(f) If Optional insurance obtained during reemployment is continued
as provided in paragraph (e) of this section, any suspended Optional
insurance stops, with no 31-day extension of coverage or conversion
right.
(g) If a reemployed annuitant or compensationer waives life
insurance as an employee, the waiver also cancels his or her life
insurance as an annuitant or compensationer.
Subpart H--Order of Precedence and Designation of Beneficiary
0
21. Section 870.801(a) and (d) are revised to read as follows:
Sec. 870.801 Order of precedence and payment of benefits.
(a) Except as provided in paragraph (d) of this section and Sec.
870.802(g)(2), benefits are paid according to the order of precedence
stated in 5 U.S.C. 8705(a), as follows:
(1) To the designated beneficiary (or beneficiaries);
(2) If none, to the widow(er);
(3) If none, to the child, or children in equal shares, with the
share of any deceased child going to his or her children;
(4) If none, to the parents in equal shares or the entire amount to
the surviving parent;
(5) If none, to the executor or administrator of the estate;
(6) If none, to the next of kin according to the laws of the State
in which the insured individual legally resided.
* * * * *
(d)(1) If there is a court order in effect naming a specific person
or persons to receive life insurance benefits upon the death of an
insured individual, Basic insurance and Option A and Option B insurance
will be paid to the person or persons named in the court order, instead
of according to the order of precedence.
(2) To qualify a person for such payment, a certified copy of the
court order must be received by the appropriate office on or after July
22, 1998, and before the death of the insured.
(3)(i) For an employee, the appropriate office is the employing
agency.
(ii) For an annuitant, the appropriate office is OPM.
(iii) For a compensationer during the first 12 months of nonpay
status, the appropriate office is the employing agency.
(iv) For a compensationer after separation or the completion of 12
months in nonpay status, the appropriate office is OPM.
(4) If, within the applicable time frames, the appropriate office
receives conflicting court orders entitling different persons to the
same insurance, benefits will be paid based on whichever court order
was issued first.
* * * * *
0
22. Section 870.802(b) and (g)(1) are revised to read as follows:
Sec. 870.802 Designation of beneficiary.
* * * * *
(b) A designation of beneficiary must be in writing, signed by the
insured individual, and witnessed and signed by 2 people. The completed
designation of beneficiary form may be submitted to the appropriate
office via appropriate methods approved by the employing office. The
appropriate office must receive the designation before the death of the
insured.
(1) For an employee, the appropriate office is the employing
office.
(2) For an annuitant or compensationer, the appropriate office is
OPM.
* * * * *
(g)(1) A designation of beneficiary is automatically cancelled 31
days after the individual stops being insured.
* * * * *
Subpart I--Assignments of Life Insurance
0
23. Section 870.902 is revised to read as follows:
Sec. 870.902 Making an assignment.
(a) To assign insurance, an insured individual must complete an
approved assignment form. Only the insured individual may make an
assignment; no one may assign insurance on behalf of an insured
individual.
(b) The assignment form must be in writing, signed by the insured
individual, and witnessed and signed by 2 people. The completed
assignment form, indicating the intent to irrevocably assign all
ownership of the insurance, must be received by the appropriate office.
(1) For an employee, the appropriate office is the employing
office.
[[Page 60586]]
(2) For an annuitant or compensationer, the appropriate office is
OPM.
0
24. Section 870.907(c) is revised to read as follows:
Sec. 870.907 Termination and conversion.
* * * * *
(c) An assignment terminates 31 days after the insurance
terminates, unless the insured individual is reemployed in or returns
to a position in which he or she is entitled to coverage under this
part within 31 days after the insurance terminates. If the individual
returns to Federal service, Basic insurance and any Option A and/or
Option B insurance acquired through returning to service is subject to
the existing assignment.
0
25. Section 870.910 is revised to read as follows:
Sec. 870.910 Notification of current addresses.
Each assignee must keep the office where the assignment is filed
informed of his/her current address.
Subpart K--Living Benefits
0
26. Section 870.1103 is revised to read as follows:
Sec. 870.1103 Election procedures.
(a) The insured individual must request information on Living
Benefits and an application form directly from OFEGLI.
(b)(1) The insured individual must complete the first part of the
application and have his or her physician complete the second part. The
completed application must be submitted directly to OFEGLI.
(2) Another person may apply for a Living Benefit on the insured
individual's behalf if all of the following conditions are met:
(i) The insured's physician must certify that the insured
individual is physically or mentally incapable of making an election;
(ii) The applicant must have power of attorney or a court order
authorizing him or her to elect a Living Benefit on the insured
individual's behalf;
(iii) The applicant must place his or her own signature on the
application and attach it to a true and correct copy of the power of
attorney or court order authorizing the applicant to make the election
on the insured individual's behalf; and
(iv) The applicant must either be the insured individual's sole
beneficiary or attach a true and correct copy of each beneficiary's
written and signed consent.
(c)(1) OFEGLI reviews the application, obtains certification from
the insured's employing office regarding the amount of insurance and
the absence of an assignment, and determines whether the individual
meets the requirements to elect a Living Benefit.
(2) If OFEGLI needs additional information, it will contact the
insured or the insured's physician.
(3) Under certain circumstances, OFEGLI may require a medical
examination before making a decision. In these cases, OFEGLI is
financially responsible for the cost of the medical examination.
(d)(1) If the application is approved, OFEGLI sends the insured a
check or makes an electronic funds transfer to the insured's account
for the Living Benefit payment and an explanation of benefits.
(i) Until the check has been cashed or deposited, or before the
electronic funds transfer has been received, the individual may change
his or her mind about electing a Living Benefit; if this happens, the
individual must mark the check ``void'' and return it to OFEGLI.
(ii) Once the insured individual has cashed or deposited the
payment, the Living Benefit election becomes effective and cannot be
revoked; OFEGLI then sends explanations of benefits to the insured's
employing office, so it can make the necessary changes in withholdings
and deductions.
(2) If the application is not approved, OFEGLI will notify the
insured individual and the employing office. The decision is not
subject to administrative review; however, the individual may submit
additional medical information or reapply at a later date if future
circumstances warrant.
Subpart L [Removed and Reserved]
0
27. Subpart L, consisting of Sec. Sec. 870.1201 through 870.1208, is
removed and reserved.
[FR Doc. 2010-24493 Filed 9-30-10; 8:45 am]
BILLING CODE 6325-39-P