President Clinton Friday signed into law the Federal Employees Life Insurance Improvement Act, which has the potential to provide new life insurance coverage 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 federal employees' insurance planning ability.
"If the federal government is to deliver the quality of services our overburdened taxpyaers deserve, it must be competitive with the private sector to attract and to maintain a quality work force," 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 phased out. The amount of additional optional insurance will be reduced each month by 2 percent for 50 months. Under previous law, federal annuitants' optional insurance coverage reduced automatically after age 65.
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 an amount 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 6 months.