Late last week, President Clinton signed into law the Federal Employees Life Insurance Improvement Act, which could provide new life insurance opportunities for federal workers.
The bill, H.R. 2675, directs the Office of Personnel Management to present to Congress legislation offering federal employees group universal life insurance, group variable life insurance and additional voluntary accidental and dismemberment insurance policies. The legislation must be accompanied by a report detailing the policies proposed and an estimate of the cost to the government of each policy.
Rep. John Mica, R-Fla., who sponsored the bill, said it will expand employees' insurance planning ability.
"If the federal government is to deliver the quality of services our overburdened taxpayers deserve, it must be competitive with the private sector to attract and to maintain a quality workforce," he said. "Benefits must provide good value to federal employees."
The bill also allows retirees who are enrolled in additional optional life insurance to continue paying premiums after age 65 to avoid having coverage automatically phased out. If they choose not to pay the premiums, the amount of additional optional insurance will be phased out at a rate of 2 percent per month for 50 months.
Under the bill, federal employees enrolled in the basic and optional life insurance policies will not be restricted to a maximum amount of coverage. Previously, employees could pay for optional insurance in amounts equal to one, two, three, four or five times their annual basic pay. For basic coverage, employees were capped at level two of the Executive Pay Schedule ($139,000).
The bill also allows foster children to be included under family life insurance coverage and calls for a life insurance open season within six months.
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