
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 5USC8706]

 
             TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
 
                           PART III--EMPLOYEES
 
                   Subpart G--Insurance and Annuities
 
                       CHAPTER 87--LIFE INSURANCE
 
Sec. 8706. Termination of insurance; assignment of ownership

    (a) A policy purchased under this chapter shall contain a provision, 
approved by the Office of Personnel Management, to the effect that 
insurance of an employee stops on his separation from the service or 12 
months after discontinuance of his pay, whichever is earlier, subject to 
a provision for temporary extension of life insurance coverage and for 
conversion to an individual policy of life insurance under conditions 
approved by the Office. Justices and judges of the United States 
described in section 8701(a)(5)(ii) and (iii) of this chapter are deemed 
to continue in active employment for purposes of this chapter.
    (b)(1) In the case of any employee who retires on an immediate 
annuity and has been insured under this chapter throughout--
        (A) the 5 years of service immediately preceding the date of the 
    employee's retirement, or
        (B) the full period or periods of service during which the 
    employee was entitled to be insured, if fewer than 5 years,

life insurance, without accidental death and dismemberment insurance, 
may be continued, under conditions determined by the Office.
    (2) In the case of any employee who becomes entitled to receive 
compensation under subchapter I of chapter 81 of this title because of 
disease or injury to the employee and has been insured under this 
chapter throughout--
        (A) the 5 years of service immediately preceding the date the 
    employee becomes entitled to compensation, or
        (B) the full period or periods of service during which the 
    employee was entitled to be insured, if fewer than 5 years,

life insurance, without accidental death and dismemberment insurance, 
may be continued, under conditions determined by the Office, during the 
period the employee is receiving compensation and is held by the 
Secretary of Labor or the Secretary's delegate to be unable to return to 
duty.
    (3) The amount of life insurance continued under paragraph (1) or 
(2) of this subsection shall be continued, with or without reduction, at 
the end of each full calendar month after the date the employee becomes 
65 years of age and is retired or is receiving compensation for disease 
or injury, in accordance with the employee's written election at the 
time eligibility to continue insurance during retirement or receipt of 
compensation arises, as follows:
        (A) the employee may elect to have the deductions required by 
    section 8707 of this title withheld from annuity or compensation, 
    and the employee's life insurance shall be reduced each month by 2 
    percent of the face value until 25 percent of the amount of life 
    insurance in force before the first reduction remains; or
        (B) in addition to any deductions which would be required if the 
    insurance were continued as provided under subparagraph (A) of this 
    paragraph, the employee may elect continuous withholdings from 
    annuity or compensation in amounts determined by the Office, and the 
    employee's life insurance coverage shall be either continued without 
    reduction or reduced each month by no more than 1 percent of its 
    face value until no less than 50 percent of the amount of insurance 
    in force before the first reduction remains.

    (4) If an employee elects to continue insurance under subparagraph 
(B) of paragraph (3) of this subsection at the time eligibility to 
continue insurance during retirement or receipt of compensation for 
disease or injury arises, the individual may later cancel that election 
and life insurance coverage shall continue as if the individual had 
originally elected coverage under subparagraph (A) of paragraph (3) of 
this subsection.
    (c) Notwithstanding subsections (a) and (b) of this section, an 
employee who enters on approved leave without pay to serve as a full-
time officer or employee of an organization composed primarily of 
employees as defined by section 8701(a) of this title, within 60 days 
after entering on that leave without pay, may elect to continue his 
insurance and arrange to pay currently into the Employees' Life 
Insurance Fund, through his employing agency, both employee and agency 
contributions from the beginning of leave without pay. The employing 
agency shall forward the premium payments to the Fund. If the employee 
does not so elect, his insurance will continue during nonpay status and 
stop as provided by subsection (a) of this section.
    (d) If the insurance of an employee stops because of separation from 
the service or suspension without pay, and the separation or suspension 
is thereafter officially found to have been erroneous, the employee is 
deemed to have been insured during the period of erroneous separation or 
suspension. Deductions otherwise required by section 8707 of this 
chapter shall not be withheld from any backpay awarded for the period of 
separation or suspension unless death or accidental dismemberment of the 
employee occurs during such period.
    (e)(1) Under regulations prescribed by the Office, each policy 
purchased under this chapter shall provide that an insured employee or 
former employee may make an irrevocable assignment of the employee's or 
former employee's incidents of ownership in the policy.
    (2) A court decree of divorce, annulment, or legal separation, or 
the terms of a court-approved property settlement agreement incident to 
any court decree of divorce, annulment, or legal separation, may direct 
that an insured employee or former employee make an irrevocable 
assignment of the employee's or former employee's incidents of ownership 
in insurance under this chapter (if there is no previous assignment) to 
the person specified in the court order or court-approved property 
settlement agreement.
    (f) If the insurance of a former employee receiving a disability 
annuity under section 8337 of this title stops because of the 
termination of such annuity, and such annuity is thereafter restored 
under the second or third sentence of subsection (e) of such section, 
such former employee may, under regulations prescribed by the Office, 
elect to resume the insurance coverage which was so stopped.
    (g) The insurance of an employee under a policy purchased under 
section 8709 shall not be invalidated based on a finding that the 
employee erroneously became insured, or erroneously continued insurance 
upon retirement or entitlement to compensation under subchapter I of 
chapter 81 of this title, if such finding occurs after the erroneous 
insurance and applicable withholdings have been in force for 2 years 
during the employee's lifetime.

(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 595; Pub. L. 90-83, Sec. 1(92), 
Sept. 11, 1967, 81 Stat. 219; Pub. L. 92-529, Oct. 21, 1972, 86 Stat. 
1050; Pub. L. 95-454, title IX, Sec. 906(a)(2), (3), Oct. 13, 1978, 92 
Stat. 1224; Pub. L. 95-583, Sec. 1(a), Nov. 2, 1978, 92 Stat. 2481; Pub. 
L. 96-427, Sec. 3(a), Oct. 10, 1980, 94 Stat. 1832; Pub. L. 98-353, 
title II, Secs. 206, 208, July 10, 1984, 98 Stat. 351, as amended by 
Pub. L. 99-336, Sec. 7(1), June 19, 1986, 100 Stat. 639; Pub. L. 99-53, 
Sec. 3(b), June 17, 1985, 99 Stat. 95; Pub. L. 99-335, title II, 
Sec. 207(k)(2), June 6, 1986, 100 Stat. 597; Pub. L. 99-336, Sec. 7(1), 
June 19, 1986, 100 Stat. 639; Pub. L. 102-378, Sec. 2(74), Oct. 2, 1992, 
106 Stat. 1355; Pub. L. 103-336, Sec. 4, Oct. 3, 1994, 108 Stat. 2662; 
Pub. L. 105-205, Sec. 2, July 22, 1998, 112 Stat. 683; Pub. L. 105-311, 
Sec. 5, Oct. 30, 1998, 112 Stat. 2951.)

                      Historical and Revision Notes
                                1966 Act
------------------------------------------------------------------------
                                                    Revised Statutes and
     Derivation                U.S. Code             Statutes at Large
------------------------------------------------------------------------
(a)-(c)............  5 U.S.C. 2095.                Aug. 17, 1954, ch.
                                                    752, Sec.  6, 68
                                                    Stat. 739.
                                                   Aug. 11, 1955, ch.
                                                    794, Sec.  2(a), 69
                                                    Stat. 677.
                     ............................  May 28, 1956, ch.
                                                    328, Sec.  1, 70
                                                    Stat. 213.
                     ............................  Sept. 23, 1959, Pub.
                                                    L. 86-377, Sec.
                                                    4(c), 73 Stat. 701.
(d)................  5 U.S.C. 2091(c).             Aug. 1, 1956, ch.
                                                    837, Sec.  501(c)(1)
                                                    (less applicability
                                                    to Sec.  2(b)), 70
                                                    Stat. 882.
------------------------------------------------------------------------

    In subsection (b), the words ``armed forces'' are coextensive with 
and substituted for ``Army, Navy, Air Force, and Marine Corps, or Coast 
Guard of the United States'' in view of the definition of ``armed 
forces'' in section 2101.
    In subsection (c), the word ``only'' is supplied for clarity and for 
consistency with subsection (b). The words ``under conditions determined 
by the Commission, without cost to him'' are coextensive with and 
substituted for ``as provided in subsection (b) of this section''.
    In subsection (d), the first sentence of former section 2091(c) is 
omitted as unnecessary as the definition of ``employee'' in section 8701 
precludes acquisition of coverage by a member of a uniformed service. 
The words ``section 101 of title 38'' are substituted for ``section 1101 
of title 38'' on authority of section 5(a) of the Act of Sept. 2, 1958, 
Pub. L. 85-857, 72 Stat. 1262.
    Standard changes are made to conform with the definitions applicable 
and the style of this title as outlined in the preface to the report.

                                1967 Act
------------------------------------------------------------------------
                                                    Source (Statutes at
 Section of title 5       Source (U.S. Code)               Large)
------------------------------------------------------------------------
8706(e)............  5 App.: 2095(d).              July 18, 1966, Pub.
                                                    L. 89-504, Sec.
                                                    406(a), 80 Stat.
                                                    298.
------------------------------------------------------------------------

    The words ``subsections (a)-(c) of this section'' are substituted 
for ``the foregoing'' to reflect the codification of former 5 U.S.C. 
2095. The word ``officer'' is omitted as included in ``employee.'' The 
words ``as defined by section 8701(a) of this title'' are substituted 
for ``as defined in section 2 of the Act'' to reflect the codification 
of that section in 5 U.S.C. 8701(a). The words ``Employees' Life 
Insurance Fund'' and ``Fund'' are substituted for ``fund'' and ``fund 
established by section 5 of this Act'', respectively.


                               Amendments

    1998--Subsec. (e). Pub. L. 105-205 designated existing provisions as 
par. (1) and added par. (2).
    Subsec. (g). Pub. L. 105-311 added subsec. (g).
    1994--Subsec. (e). Pub. L. 103-336 substituted ``employee or former 
employee'' for ``Federal judge'', ``employee's or former employee's'' 
for ``judge's'', and ``purchased'' for ``purchase''.
    1992--Subsecs. (f), (g). Pub. L. 102-378 redesignated subsec. (g) as 
(f).
    1986--Subsec. (a). Pub. L. 98-353, Sec. 206, as amended generally by 
Pub. L. 99-336, Sec. 7(1), inserted sentence which deemed justices and 
judges described in section 8701(a)(5)(ii) and (iii) of this chapter to 
continue in active employment for purposes of this chapter.
    Subsecs. (c) to (f). Pub. L. 99-335 struck out subsec. (c) and 
redesignated subsecs. (d) to (f) as (c) to (e), respectively. Former 
subsec. (c) provided that insurance granted an employee stops, except 
for a 31-day extension of life insurance coverage, on the day 
immediately before his entry on active duty or active duty for training 
unless the period is covered by military leave with pay but does not 
stop during a period of inactive duty training and defined ``active 
duty'', ``active duty for training'', and ``inactive duty training'' as 
having the meanings given them by section 101 of title 38.
    1985--Subsec. (g). Pub. L. 99-53 added subsec. (g).
    1984--Pub. L. 98-353, Sec. 208(b), inserted ``; assignment of 
ownership'' in section catchline.
    Subsec. (f). Pub. L. 98-353, Sec. 208(a), added subsec. (f).
    1980--Subsec. (b). Pub. L. 96-427 added subsec. (b) and struck out 
former subsec. (b) which read as follows:
    ``(1) If on the date the insurance would otherwise stop the employee 
retires on an immediate annuity and has been insured under this chapter 
throughout--
        ``(A) the 5 years of service immediately preceding such date, or
        ``(B) the full period or periods of service during which the 
    employee was entitled to be insured, if less than 5 years,
life insurance only may be continued, without cost to the employee, 
under conditions determined by the Office.
    ``(2) If on the date the insurance would otherwise stop the employee 
is receiving compensation under subchapter I of chapter 81 of this title 
because of disease or injury to the employee and has been insured under 
this chapter throughout--
        ``(A) the 5 years of service immediately preceding such date, or
        ``(B) the full period or periods of service during which the 
    employee was entitled to be insured, if less than 5 years,
life insurance only may be continued, without cost to the employee, 
under conditions determined by the Office, during the period the 
employee is receiving compensation for work injuries and is held by the 
Secretary of Labor or his delegate to be unable to return to duty.
    ``(3) The amount of life insurance continued under paragraph (1) or 
paragraph (2) of this subsection shall be reduced by 2 percent at the 
end of each full calendar month after the date the employee becomes 65 
years of age and is retired or is receiving such compensation for 
disease or injury. The Office shall prescribe minimum amounts, not less 
than 25 percent of the amount of life insurance in force before the 
first reduction, to which the insurance may be reduced.''
    1978--Subsec. (a). Pub. L. 95-454 substituted ``Office of Personnel 
Management'' and ``Office'' for ``Civil Service Commission'' and 
``Commission'', respectively.
    Subsec. (b). Pub. L. 95-583, Sec. 1(a)(1), added subsec. (b) and 
struck out former subsec. (b) which read as follows: ``If on the date 
the insurance would otherwise stop the employee retires on an immediate 
annuity and--
        ``(1) his retirement is for disability; or
        ``(2) he has completed 12 years of creditable service as 
    determined by the Commission;

his life insurance only may be continued, without cost to him, under 
conditions determined by the Commission. Periods of honorable, active 
service in the armed forces shall be credited toward the required 12 
years if the employee has completed at least 5 years of civilian 
service. The amount of life insurance continued under this subsection 
shall be reduced by 2 percent at the end of each full calendar month 
after the date the employee becomes 65 years of age or retires, 
whichever is later. The Commission may prescribe minimum amounts, not 
less than 25 percent of the amount of life insurance in force before the 
first reduction, to which the insurance may be reduced.''
    Pub. L. 95-454, which substituted ``Office'' for ``Commission'', was 
executed to text of subsec. (b) as amended by Pub. L. 95-583. See 
Effective Date of 1978 Amendments note below.
    Subsec. (c). Pub. L. 95-583, Sec. 1(a)(1), (2), struck out ``If on 
the date the insurance would otherwise stop the employee is receiving 
benefits under subchapter I of chapter 81 of this title because of 
disease or injury to himself, his life insurance only may be continued, 
without cost to him, under conditions determined by the Commission while 
he is receiving the benefits and is held by the Department of Labor to 
be unable to return to duty.'' and redesignated subsec. (d) as (c).
    Subsec. (d). Pub. L. 95-583, Sec. 1(a)(2), (3), redesignated subsec. 
(e) as (d) and substituted reference to ``subsections (a) and (b) of 
this section'' for ``subsections (a)-(c) of this section''. Former 
subsec. (d) redesignated (c).
    Subsecs. (e), (f). Pub. L. 95-583, Sec. 1(a)(2), redesignated 
subsecs. (e) and (f) as (d) and (e), respectively.
    1972--Subsec. (f). Pub. L. 92-529 added subsec. (f).


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-311 effective in any case in which a 
finding of erroneous insurance coverage is made on or after Oct. 30, 
1998, see section 11(c) of Pub. L. 105-311, set out as a note under 
section 8701 of this title.


                    Effective Date of 1986 Amendments

    Section 207 of Pub. L. 98-353, as amended generally by Pub. L. 99-
336, Sec. 7(2), provided that: ``The amendments to chapter 87 of title 
5, United States Code, made by section 206 of this Act [which, as 
amended generally by Pub. L. 99-336, Sec. 7(1), amended this section and 
sections 8714a to 8714c of this title] shall apply in the case of any 
justice or judge who is retired under section 371(a) or 371(b) or 372(a) 
of title 28, United States Code. The amendments apply to those who 
retire on or after January 1, 1982.''
    Amendment by Pub. L. 99-335 effective Jan. 1, 1987, see section 
702(a) of Pub. L. 99-335, set out as an Effective Date note under 
section 8401 of this title.


                    Effective Date of 1984 Amendment

    Section 209 of Pub. L. 98-353 provided that:
    ``(a) Except as provided in subsection (b), the amendments made by 
this Act to section 8706 of title 5, United States Code, shall apply to 
policies purchased by judges after the date of enactment of this Act 
[July 10, 1984].
    ``(b) If a company which issued a policy which is in effect on the 
date of the enactment of this Act agrees, the amendments made by this 
Act [probably should be `made by this Act to section 8706 of title 5'] 
shall apply to such policy.''


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-427 applicable only in case of an employee 
who retires or becomes entitled to receive compensation for work injury 
on or after 180th day following Oct. 10, 1980, or any earlier date that 
Office of Personnel Management may prescribe which is at least 60 days 
after Oct. 10, 1980, see section 10(c) of Pub. L. 96-427, set out as a 
note under section 8701 of this title.


                    Effective Date of 1978 Amendments

    Section 3 of Pub. L. 95-583 provided that: ``The amendments made by 
this Act [amending this section and sections 8705, 8714a, and 8901 of 
this title] shall take effect on the date of the enactment of this Act 
[Nov. 2, 1978].''
    Amendment by Pub. L. 95-454 effective 90 days after Oct. 13, 1978, 
see section 907 of Pub. L. 95-454, set out as a note under section 1101 
of this title.


          Insurance Coverage for Restored Disability Annuitants

    Section 3(c) of Pub. L. 99-53 provided that:
    ``(1) The amendments made by this section [amending this section and 
section 8908 of this title] shall apply with respect to any individual 
whose disability annuity is or was restored under section 8337(e) of 
title 5, United States Code, after December 31, 1983.
    ``(2)(A) The Office of Personnel Management shall notify each 
individual under subparagraph (B) of any rights which such individual 
may have under section 8706(g) or section 8908(c) of title 5, United 
States Code, as amended by this section, including any procedures or 
deadlines which may apply with respect to the exercise of those rights.
    ``(B) Notification under this paragraph shall be provided to any 
individual who, as of the 90th day after the date of enactment of this 
Act [June 17, 1985], is receiving a disability annuity which was 
restored to such individual under section 8337(e) of title 5, United 
States Code, after December 31, 1983.
    ``(3)(A) Nothing in this section shall be construed to authorize--
        ``(i) coverage under chapter 87 of title 5, United States Code, 
    in the case of any individual who makes an election under section 
    8706(g) of such title (as amended by this Act), for any period 
    before the date of such election; or
        ``(ii) coverage under chapter 89 of title 5, United States Code, 
    in the case of any individual who becomes enrolled in a health 
    benefits plan under section 8908(c) of such title (as amended by 
    this Act), for any period before the date as of which such 
    individual becomes so enrolled.
    ``(B) This paragraph applies with respect to any individual 
receiving a disability annuity which is or was restored under section 
8337(e) of title 5, United States Code, after December 31, 1983, and 
before the expiration of the 90-day period beginning on the date of 
enactment of this Act [June 17, 1985].''


 Election of Life Insurance or Health Benefits During Period of Service 
 as Officer or Employee of an Employee Organization; Contributions Into 
  Employees Life Insurance Fund or Employees Health Benefits Fund, Non-
                          Election; Regulations

    Pub. L. 89-504, title IV, Sec. 406(c), July 18, 1966, 80 Stat. 298, 
provided that: ``An officer or employee who is on approved leave without 
pay and serving as a full-time officer or employee of an organization 
composed primarily of employees, as defined in section 2 of the Federal 
Employees' Group Life Insurance Act of 1954, as amended (5 U.S.C. 2091) 
[section 8701 of this title] or section 2 of the Federal Employees 
Health Benefits Act of 1959, as amended (5 U.S.C. 3001) [section 8901 of 
this title] as the case may be, may, within sixty days after the date of 
enactment of this Act [July 18, 1966], file with his employing agency an 
election (1) to continue any insurance status or health benefits 
enrollment, or both, that he has on the date of enactment of this Act 
[July 18, 1966], (2) to reacquire any insurance status or health 
benefits enrollment, or both, which he may have lost while on leave 
without pay, or (3) to acquire as insured status or enroll in a health 
benefits plan, or both, if he was never previously eligible to do so, by 
arranging to pay currently and continuously into the employees' life 
insurance fund and the employees' health benefits fund, as appropriate, 
through his employing agency, both employee and agency contributions. 
The employing agency shall forward such payments to the employees' life 
insurance fund and the employees' health benefits fund, as appropriate. 
If he does not so elect, his insurance status and health benefits 
enrollment will continue and terminate as for other employees in nonpay 
status, or he will remain ineligible for insurance and health benefits, 
as the case may be, as though this paragraph had not been enacted. The 
United States Civil Service Commission is authorized to issue 
regulations to carry out the purposes of this paragraph.''
    [Provision effective July 18, 1966, see section 410(1) of Pub. L. 
89-504.]

                  Section Referred to in Other Sections

    This section is referred to in sections 8705, 8707, 8708, 8714a, 
8714b, 8714d of this title.
