[Federal Register Volume 64, Number 80 (Tuesday, April 27, 1999)]
[Rules and Regulations]
[Pages 22543-22544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10595]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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Federal Register / Vol. 64, No. 80 / Tuesday, April 27, 1999 / Rules
and Regulations
[[Page 22543]]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR PART 870
RIN 3206-AI54
Federal Employees--Group Life Insurance Program: New Premiums
AGENCY: Office of Personnel Management.
ACTION: Interim regulations with request for comments.
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SUMMARY: The Office of Personnel Management is issuing interim
regulations as a result of the Federal Employees Life Insurance
Improvement Act, enacted October 30, 1998, to expand the number of age
bands in the Federal Employees' Group Life Insurance (FEGLI) Program,
to implement new premium rates for all coverage categories, and to
change the current birthday rule effective date for Optional insurance
when an employee, annuitant, or compensationer moves from one premium-
rated age band to another for Optional insurance. The purpose of these
regulations is to publish the new changes within the time frame
prescribed by law.
DATES: Interim regulations are effective April 24, 1999. Comments must
be received on or before May 27, 1999.
ADDRESSES: Send written comments to Abby L. Block, Chief, Insurance
Policy and Information Division, Office of Insurance Programs,
Retirement and Insurance Service, Office of Personnel Management, P.O.
Box 57, Washington, DC 20044; delivered to OPM, Room 3425, 1900 E
Street NW, Washington, DC; or FAX to (202) 606-0633.
FOR FURTHER INFORMATION CONTACT: Sharon Neuner, (202) 606-0004.
SUPPLEMENTARY INFORMATION: The Federal Employees Life Insurance
Improvement Act increases the options available under the FEGLI Program
to provide greater choice of coverage and to continue coverage that
would otherwise terminate. This has necessitated an expansion of the
number of age bands and a change in the premium rates for all coverage
categories. Additionally, the interim regulations change the current
birthday rule effective date for Optional insurance when an employee,
annuitant, or compensationer moves from one premium-rated age band to
another for Optional insurance.
The standard age band of ``60 and over'' has been divided into
three new age bands of 60-64, 65-69, and 70 and over for Option C
insurance. Option C (Family) insurance new age bands are necessary to
accommodate changes provided under the law, which allow for the
election of unreduced Option C at retirement by continuing to pay
premiums after age 65. Currently, an individual is considered to have
reached age 35, 40, 45, 50, 55, or 60 on the first day of the first pay
period beginning on or after the January 1 following his/her
corresponding birthday. Effective April 24, 1999, the date for age-
banded premium rate changes as a result of a birthday will be the first
day of the pay period following the pay period in which the birthday
occurs. For enrollees whose birthday occurs between January 1 and April
23, 1999, the effective date of the age-banded change will be the first
pay period beginning on or after April 24, 1999. (For retirees, any
changes in premium levels will be reflected in their June 1, 1999,
annuity payments.)
The last premium change for Basic coverage and for some age
categories for Option A (Standard), B, and C insurances was on the
first pay period beginning on or after January 1, 1993. Actuarial
analyses indicate the Federal Employees' Group Life Insurance Program
continues to experience changes relevant to premiums, including
improved mortality. This has resulted in a decrease in the Basic
premium rate.
The reduction in Option A rates is due to improved morbidity. The
reduction in Option B and C premium rates for enrollees in most age-
bands under age 60 is primarily due to the change in the birthday rule,
which will move enrollees into new age bands sooner.
As prescribed by law, there are increased coverage options under
Option C which allow employees to elect coverage up to five times the
current amount. The premium for Option C coverage will equal the
premium rate for one multiple times the number of multiples selected.
The new age bands and premium rates for 65-69 and 70 and over will go
into effect on the first day of the pay period beginning on or after
April 24, 2000.
Legislative changes eliminated the maximums on Basic and Option B.
The elimination of the maximum for Basic and Option B means that the
available amount of Option A coverage will be $10,000 for all eligible
employees.
As provided by law, an open enrollment period, effective April 24,
1999 through June 30, 1999, will be offered to employees. Employees
will be given the chance to review their insurance needs and, if
needed, either add to their coverage or enroll in FEGLI if they have
previously waived some or all coverage. Proposed regulations will be
published in the near future which expand on and clarify other changes
in the Federal Employees' Group Life Insurance Program as a result of
Pub. L. 105-311.
Finally, OPM is assessing the need for new age bands and increased
premiums associated with retirees' new option of continuing unreduced
Option B coverage beyond age 65. Since retirees and employees are
covered by the same premium rates, this new option has the potential
for significantly increasing the premiums that employees age 65 and
over now pay. For example, rates could double for employees age 70 and
over. Given this potential impact, OPM will not determine new age bands
and premium rates until all alternatives have been thoroughly explored
and the earliest that any increase would be effective is April 24,
2001. Any increases resulting from these changes would be phased in
over a three-year period starting on that date.
Waiver of Notice of Proposed Rulemaking
Pursuant to section 553(b)(3)(B) of title 5 of the U.S. Code, I
find that good cause exists for waiving the general notice of proposed
rulemaking. This notice is being waived in order to implement required
legislation within the time specified by law and in time for open
enrollment decision making,
[[Page 22544]]
which will be held from April 24 to June 30, 1999. Waiver of the notice
of proposed rulemaking will provide agencies with sufficient advanced
notice to implement systems modifications required by these interim
regulations.
Executive Order 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Order 12866.
Regulatory Flexibility Act
I certify that these regulations will not have a significant
economic impact on a substantial number of small entities because they
affect Federal employees and annuitants only.
List of Subjects in 5 CFR Part 870
Administrative practice and procedure, Government employees,
Hostages, Iraq, Kuwait, Lebanon, Life insurance, Retirement.
Office of Personnel Management.
Janice R. Lachance,
Director.
Accordingly, OPM is amending 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. 1979, Sec. 870.302 also issued under
secs. 11202(f), 11232(e), and 11246 (b) and (c) Pub. L. 105-33, 111
Stat. 251 and sec. 7(e), Pub. L. 105-274, 112 Stat. 2419;
Sec. 870.401 and 870.402 also issued under Pub. L. 105-311, 112
Stat. 2950.
Subpart D--Cost of Insurance
Sec. 870.401 Withholdings and contributions for Basic insurance.
2. In Sec. 870.401, paragraphs (b)(1) and (d) are revised to read
as follows:
* * * * *
(b)(1) During each pay period in which an insured employee is in
pay status for any part of the period, $0.1550 must be withheld from
the employee's biweekly pay for each $1,000 of the employee's BIA. 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 who elects to continue Basic insurance and
chooses the maximum reduction of 75 percent after age 65, under
Sec. 870.702(a)(2), the amount withheld monthly is $0.3358 for each
$1,000 of the BIA. For a compensationer who makes this election, the
amount withheld weekly is $0.0775 for each $1,000. These withholdings
stop the month after the month in which the annuitant reaches age 65.
There are no withholdings from individuals who retired or began
receiving compensation before January 1, 1990, and who elected the 75
percent reduction. For the purpose of this paragraph, an individual who
separates from service after meeting the requirements for an immediate
annuity under 5 U.S.C. 8412(g) is considered to retire on the day
before the annuity begins.
(2) For an annuitant who elects to continue Basic insurance and
chooses the maximum reduction of 50 percent after age 65 under
Sec. 870.702(a)(3), the amount withheld monthly is $0.9258 for each
$1,000 of the BIA until the month after the month in which the
annuitant reaches age 65; the amount is then reduced to $0.59 for each
$1,000. For a compensationer who makes this election, the amount
withheld weekly is $0.2175 for each $1,000 of the BIA until age 65; the
amount is then reduced to $0.14 for each $1,000.
(3) For an annuitant who elects to continue Basic insurance and
chooses no reduction after age 65 under Sec. 870.702(a)(4), the amount
withheld monthly is $2.3758 for each $1,000 of the BIA until the month
after the month in which the annuitant reaches age 65; the amount is
then reduced to $2.04 for each $1,000. For a compensationer who makes
this election, the amount withheld weekly is $0.5475 for each $1,000 of
the BIA until age 65; the amount is then reduced to $0.47 for each
$1,000.
Sec. 870.402 Withholdings for Optional insurance.
3. In Sec. 870.402, the tables in paragraphs (d)(1) and (e)(1) are
revised and paragraphs (f)(1) and (g) are revised to read as follows:
(d)(1) * * *
For persons under age 35....................................... $0.30
For persons ages 35 through 39................................. .40
For persons ages 40 through 44................................. .60
For persons ages 45 through 49................................. .90
For persons ages 50 through 54................................. 1.40
For persons ages 55 through 59................................. 2.70
For persons ages 60 and over................................... 6.00
* * * * *
(e)(1) * * *
For persons under age 35....................................... $0.03
For persons ages 35 through 39................................. .04
For persons ages 40 through 44................................. .06
For persons ages 45 through 49................................. .10
For persons ages 50 through 54................................. .15
For persons ages 55 through 59................................. .31
For persons ages 60 and over................................... .70
* * * * *
(f)(1) The biweekly cost of Option C for one multiple of coverage
is based on the age of the employee, annuitant, or compensationer.
Table 1 shows the age bands and associated cost up through age 59,
effective the first day of the pay period beginning on or after April
24, 1999. The age bands 60-64, 65-69 and 70 and over, the applicable
premium rates, and effective dates are shown in Table 2.
Table 1.
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For persons under age 35....................................... $0.27
For persons ages 35 through 39................................. .34
For persons ages 40 through 44................................. .46
For persons ages 45 through 49................................. .60
For persons ages 50 through 54................................. .90
For persons ages 55 through 59................................. 1.45
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Table 2.--Effective Date
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First pay period on or after 4/24/99 4/24/2000
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For persons ages 60 through 64................ 2.60 2.60
For persons ages 65 through 69................ 2.60 3.00
For persons ages 70 and over.................. 2.60 3.40
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* * * * *
(g) For the purpose of this subpart, effective April 24, 1999, an
individual is considered to reach age 35, 40, 45, 50, 55, 60, 65, or 70
on the first day of the pay period following the pay period in which
his/her birthday occurs.
* * * * *
[FR Doc. 99-10595 Filed 4-23-99; 12:21 pm]
BILLING CODE 6325-01-P
