[Federal Register: April 9, 2003 (Volume 68, Number 68)]
[Proposed Rules]
[Page 17315-17316]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ap03-20]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 17315]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 870
RIN: 3206-AJ46
Federal Employees' Group Life Insurance Program: Removal of
Premiums and Age Bands From Regulations
AGENCY: Office of Personnel Management.
ACTION: Proposed rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing proposed
regulations to remove the premium rates and age bands under the Federal
Employees' Group Life Insurance (FEGLI) Program from regulation. The
information will be maintained on the FEGLI Web site at http://www.opm.gov/insure/life.
Future rate and age band changes will be
announced in the Federal Register.
DATES: Submit comments on or before June 9, 2003.
ADDRESSES: Send written comments to Abby L. Block, Special Advisor for
Employee and Family Support, Strategic Human Resources Policy Division,
Office of Personnel Management, Washington, DC 20415-3666; or deliver
to OPM, Room 3425, 1900 E Street NW., Washington, DC; or FAX to (202)
606-0633.
FOR FURTHER INFORMATION CONTACT: Karen Leibach, (202) 606-0004.
SUPPLEMENTARY INFORMATION: OPM is removing the premiums and age bands
from the regulations to streamline the process used by OPM to adjust
premium rates based on mortality and claims experiences, and actuarial
determinations. The premiums in the FEGLI Program represent actuarial
estimates of premium income necessary to pay future expected benefits
costs. The rates for all coverage categories are specific to the
experience of the FEGLI group and are not based on mortality rates
within the general population. Actuarial analysis of changing mortality
rates and Program changes, if any, make periodic premium adjustments
necessary. OPM needs a simplified process to ensure that premium income
can pay the future expected benefit costs in the FEGLI Program.
When OPM determines rate changes are needed, we will announce them
in a public notice in the Federal Register. We also will issue guidance
to all agencies for the purpose of counseling employees and we will
notify affected annuitants directly. We will update the FEGLI Program
Booklet when necessary to reflect changes and maintain the Booklet and
premium rates on the FEGLI Web site www.opm.gov/insure/life.
Although members of the public will no longer have the opportunity
to comment on changes through the formal regulatory process, they can
continue as always to comment through emails and letters to OPM. Almost
all the comments we receive regarding premium and age band changes are
in response to these types of notification, rather than formal
responses to regulations. We will accept and reply to comments from
members of the public as always. Publishing these changes in the
Federal Register will allow OPM to implement them in a more timely and
efficient manner.
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.
Kay Coles James,
Director.
Accordingly, OPM is proposing to amend 5 CFR part 870 as follows:
PART 870--FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM
1. The authority citation for part 870 is revised to read as
follows:
Authority: 5 U.S.C. 8716; subpart J also issued under sec. 599C,
Pub. L. 101-513, 104 Stat. 2064, as amended; Sec. 870.302(a)(3)(ii)
also issued under sec. 153, Pub. L. 104-134, 110 Stat. 1321; Sec.
870.302(a)(3) also issued under sections 11202(f), 11232(e), and
11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251 and section 7(e),
Pub. L. 105-274, 112 Stat. 2419.
Subpart D--Cost of Insurance
2. In Sec. 870.401, paragraphs (a), (b)(1), and (d) are revised to
read as follows:
Sec. 870.401 Withholdings and contributions for Basic insurance.
(a)(1) The cost of Basic insurance is shared between the insured
individual and the Government. The employee pays two thirds of the
cost, and the Government pays one-third.
(2) When OPM makes any adjustment to the Basic life insurance
premium, we will issue a public notice in the Federal Register.
(b)(1) During each pay period in which an insured employee is in
pay status for any part of the period, the employee's share of the
premium must be withheld from the employee's biweekly pay. The amount
withheld from the pay of an employee who is paid on other than a
biweekly basis must be prorated and adjusted to the nearest one-tenth
of one cent.
* * * * *
(d)(1) For an annuitant or compensationer who elects to continue
Basic insurance and chooses the maximum reduction of 75 percent after
age 65, under Sec. 870.702(a)(2), the annuitant's share of the premium
is withheld monthly and the compensationer's share is withheld every
four weeks. These withholdings stop the month after the month in which
the annuitant or compensationer reaches age 65. There are no
withholdings from individuals who retired or began receiving
compensation before January 1, 1990, and who elected the 75 percent
reduction. For the purpose of this paragraph, an individual who
separates from service after meeting the requirements for an immediate
annuity under 5 U.S.C. 8412 (g) is considered to retire on the day
before the annuity begins.
[[Page 17316]]
(2) An annuitant or compensationer who elects to continue Basic
insurance and chooses either the reduction election of 50 percent or
the no reduction after age 65, under Sec. 870.702(a)(3) or Sec.
870.702(a)(4), pays an additional premium for the 50 percent or no
reduction election. This additional premium is withheld for each $1,000
of the BIA. At age 65, the Basic premium will stop, but the annuitant
or compensationer must continue to pay the additional premium for
either the 50 percent or the no reduction election.
* * * * *
3. Revise Sec. 870.402 to read as follows:
Sec. 870.402 Withholdings for Optional insurance.
(a)(1) The insured individual pays the full cost of all Optional
insurance. There is no Government contribution toward the cost of any
Optional insurance.
(2) Optional insurance premiums are based on 5-year age bands
beginning at age 35. The last age band for Option A is age 60+. The
last age band for Options B and C is 80+. For the purpose of this
subpart, effective April 24, 1999, an individual is considered to reach
the next age band the 1st day of the pay period following the pay
period in which his/her birthday occurs.
(3) When OPM makes any adjustment to the Optional life insurance
premiums, we will issue a public notice in the Federal Register.
(b) During each pay period in any part of which an insured employee
is in pay status, the employing agency must withhold the full cost of
Optional insurance from his/her pay.
(c)(1) Subject to the provisions for reemployed annuitants in Sec.
870.707, the full cost of Optional insurance must be withheld from the
annuity of an annuitant and the compensation of a compensationer.
(2) The withholdings for Option A stop the month after the month in
which an annuitant or compensationer reaches age 65.
(3) For an annuitant or compensationer who elects Full Reduction
for any Option B or Option C multiples, the withholdings for those
multiples stop the month after the month in which he/she reaches age
65.
(4) For an annuitant or compensationer who elects No Reduction for
any Option B or Option C multiples, the withholdings for those
multiples continue, as long as he/she remains insured.
(d)(1) For Option A and Option C, the amount withheld from pay,
annuity, or compensation paid on other than a biweekly basis must be
prorated and adjusted to the nearest cent.
(2) For Option B, the amount withheld from pay, annuity, or
compensation paid on other than a biweekly basis must be prorated and
adjusted to the nearest one-tenth of 1 cent.
(e) If an employee's annual pay is paid during a period shorter
than 52 work weeks, the employing office must determine the amount to
withhold. To do this, it converts the biweekly cost to an annual cost
and prorates it over the number of installments of pay regularly paid
during the year.
(f) When an agency withholds less than or none of the proper amount
of Optional life insurance deductions from an individual's pay, annuity
or compensation, the agency must submit an amount equal to the
uncollected deductions required under 5 U.S.C. 8714a, 8714b, 8714c to
OPM for deposit in the Employees' Life Insurance Fund.
4. In Sec. 870.404, paragraph (d) is revised to read as follows:
Sec. 870.404 Withholdings and contributions provisions that apply to
both Basic and Optional insurance.
* * * * *
(d) The deposit described in Sec. Sec. 870.401(f) and 870.402(f)
must be made no later than 60 calendar days after the date the
employing office determines the amount of the underdeduction that has
occurred, regardless of whether or when the underdeduction is recovered
by the agency. The agency must determine whether to waive collection of
the overpayment of pay, in accordance with 5 U.S.C. 5584, as
implemented by 4 CFR chapter I, subchapter G. However, if the agency
involved is excluded from the provisions of 5 U.S.C. 5584, it may use
any applicable authority to waive the collection.
* * * * *
5. In Sec. 870.801, paragraph (e) is revised to read as follows:
Sec. 870.801 Order of precedence and payment of benefits.
* * * * *
(e) Upon the death of an insured family member, Option C benefits
are paid to the employee, annuitant or compensationer responsible for
withholdings under Sec. 870.402(a), except as provided in paragraph
(f) of this section.
* * * * *
[FR Doc. 03-8610 Filed 4-8-03; 8:45 am]
BILLING CODE 6325-50-P