Subpart H-[Reserved]

Subpart I-Order of Precedence and Designation of Beneficiary

§ 870.901 Designation of beneficiary.

(a) The designation of beneficiary shall be in writing, signed, and witnessed, and received in the employing office (or, in the case of (1) a retired employee and (2) an employee whose regular life insurance is continued while he is receiving compensation for work injury under subchapter I of chapter 81 of title 5, United States Code and who is held by the Department of Labor to be unable to return to duty, in OPM) before the death of the designator.

(b) A change or cancellation of beneficiary in a last will or testament, or in any other document not witnessed and filed as required by this part, shall not have any force or effect.

(c) A witness to a designation of beneficiary is ineligible to receive payment as a beneficiary.

(d) Any person, firm, corporation, or legal entity (except an agency of the Federal or District of Columbia Governments) may be named as beneficiary.

(e) A change of beneficiary may be made at any time and without the knowledge or consent of the previous beneficiary, and this right cannot be waived or restricted.

(f) A designation of beneficiary is automatically canceled (1) on the day the employee transfers (except by mass transfer) to another agency, or (2) 31 days after the employee stops being insured.

§ 871.101 Actions on the policy.

Optional life and accidental death and dismemberment benefits (referred to in this part as “optional insurance") shall be payable in accordance with an amendment to the policy purchased by OPM from the Metropolitan Life Insurance Co., 1 Madison Avenue, New York, N.Y. 10010, pursuant to section 8709 of title 5, United States Code, to provide group insurance coverage (referred to in this part as "regular insurance"). Actions at law or in equity to recover on the policy, in which there is not alleged any breach of any obligations undertaken by the United States, should be brought against the insurance company.

§ 871.102 Payment of benefits; designations of beneficiary.

Optional insurance in force on a person at the date of his death shall be paid, on receipt of a valid claim, in the same order of precedence and under the same conditions as are applicable to regular insurance. A designation of beneficiary for regular insurance is also a designation of beneficiary for optional insurance unless the insured person specifies otherwise in his designation.

days after he is advised of that determination. Optional insurance in that case is retroactive to the first day of the first pay period beginning after the date the person became eligible, or after February 14, 1968, whichever is later, and the person shall pay the full cost thereof from that date for the time that he is in a pay status or retired and under age 65.

(c) A person who does not file an Election, Declination, or Waiver of Life Insurance Coverage with his employing office (which, for a retired em

or omission.

The Associate Director for Compensation may order correction of an error, mistake, or omission upon a showing satisfactory to the Associate Director that it would be against equity and good conscience not to do So.

[35 FR 15897, Oct. 9, 1970]

Subpart B-Coverage

§ 871.201 Eligibility.

Each employee, as defined in section 8701 of title 5, United States Code, who is insured for regular insurance and for whom an uncanceled declination of optional insurance is not in effect is eligible to elect the optional insurance, if his periodic pay, after all other deductions, is sufficient to cover the full cost thereof.

§ 871.202 Election or declination.

(a) Except as otherwise provided in paragraph (b) of this section, each employee shall, on the form entitled Election, Declination, or Waiver of Life Insurance Coverage, elect or decline the optional insurance within 31 days after becoming eligible, unless during earlier employment he filed an election or declination which remains in effect.

(b) On a determination by an employing office, within 6 months after a person becomes eligible, that he was unable, for cause beyond his control to elect or decline the optional insurance within the prescribed time limit regulation, the employee shall elect or decline the optional insurance within 31

his retirement system, and, for an employee or former employee in receipt of compensation for work injury under subchapter I of chapter 81 of title 5, United States Code, is the Department of Labor) and who dies or suffers dismemberment does not have the optional insurance.

§ 871.203 Effective date of insurance.

(a) The effective date of an election of optional insurance is the first day an employee actually enters on duty in a pay status on or after the day the election is received in his employing office.

(b) An election of optional insurance remains in effect until canceled as provided in § 871.204. For an employee whose optional insurance has stopped for a reason other than declination or waiver, optional insurance is reinstated on the first day he actually enters on duty in a pay status in a position in which he again becomes eligible.

§ 871.204 Declination.

(a) An insured person may at any time cancel his optional insurance by filing with his employing office a declination of optional insurance or a waiver of regular insurance coverage.

(b) A cancellation of optional insurance becomes effective and optional insurance stops at the end of the pay period in which the declination or waiver is received in the employing office.

(c) A declination of optional insurance remains in effect until it is canceled as provided in § 871.205.

§ 871.205 Cancellation of declination.

(a) An employee who has declined the optional insurance may elect it if (1) he is under age 50, (2) at least 1 year has elapsed since the effective date of his last declination or waiver, and (3) he furnishes satisfactory evidence of insurability.

(b) The effective date of the optional insurance for an employee who has complied with paragraph (a) of this section is the first day he actually enters on duty in a pay status, on or after the day his election is received in his employing office following the approval of his Request for Insurance by the Office of Federal Employees Group Life Insurance. This approval is revoked automatically and the optional insurance does not become effective if the employee fails to submit his election or meet the pay and duty status requirement within 31 days following the date of the approval.

(c) An employee who has declined the optional insurance may elect it by filing Standard Form 176, completed to show that he wants both optional and regular insurance, with his employing office during the period March 1 to March 31, 1970. The effective date of the optional insurance in such case is the first day the employee actually enters on duty in a pay status on or after April 1, 1970.

(d) Notwithstanding paragraphs (a) and (b) and (c) of this section, the declination of optional life insurance coverage of an employee who is or becomes a member of the Postal Career Executive Service on or about June 2, 1979, is automatically and permanently cancelled and he or she is insured for optional life insurance on the first day he or she enters on duty in a pay status on or after June 2, 1979.

[33 FR 12508, Sept. 4, 1968, as amended at 34 FR 19543, Dec. 11, 1969; 44 FR 70450, Dec. 7, 1979]

§ 871.206 Reconsideration.

(a) Who may file. An individual or annuitant may request OPM to reconsider an agency decision or an initial decision of OPM denying optional life insurance coverage.

(b) Agency decision. A request for reconsideration of an agency decision

must be filed within 30 calendar days from the date of the written decision stating the right to reconsideration by OPM. The time limit may be extended as provided in paragraph (e) of this section. OPM may, in its discretion, issue a final decision under paragraph (f) of this section in lien of a reconsideration decision.

(c) Initial OPM decision. An OPM decision shall not be considered an initial decision as used in § 871.206(a) above unless rendered by OPM in writing and unless such decision states the right to reconsideration.

(d) Reconsideration. A request for reconsideration must be made in writing, must include the claimant's name, address, date of birth, claim number (if applicable), name of carrier and reasons for the request.

(e) Time limit. A request for reconsideration of an initial decision must be filed within 30 calendar days from the date of the initial decision. OPM may extend the time limit for filing when the individual shows that he/ she was not notified of the time limit and was not otherwise aware of it, or that he/she was prevented by circumstances beyond his/her control from making the request within the time limit.

(f) Final decision. After reconsideration, OPM shall issue a final decision which shall be in writing and shall fully set forth the findings and conclusions of OPM.

[44 FR 37894, June 29, 1979]

§ 871.207 Reopening.

(a) Time limit. Within 30 calendar days after receipt of the final reconsideration decision an agency or an employee may request the Associate Director for Compensation to reopen any previous decision by his/her representative for reconsideration. The Associate Director may reopen the decision on his/her own motion or when the party requesting reopening submits written argument or evidence which tends to establish that:

(1) New and material evidence is available that was not readily available when the reconsideration decision was made:

(2) The reconsideration decision involves an erroneous interpretation of

law or regulation, or a misapplication of established policy; or

(3) The reconsideration decision is of a precedential nature involving new or unreviewed policy considerations that may have effect beyond the case at hand.

(b) How to file. A request to reopen a reconsideration decision must be in writing, must include the individual's narne, address, date of birth and claim number and must state the basis for the request.

(c) Associate Director for Compensation decision. When the Associate Director has reopened a reconsideration decision, he/she shall review the record of the proceedings and all written representations. He/she shall issue a written decision and send copies thereof to the parties and to the employee's representative. The decision of the Associate Director shall be final.

[44 FR 37895, June 29, 1979]

Subpart C-Amount of Insurance

§ 871.301 Amount of employee's insur

ance.

The amount of an employee's optional insurance is $10,000, except that an employee whose annual rate of pay (as defined in § 870.302 of this chapter) exceeds the sum of (a) the annual rate of pay for positions at Level II of the Executive Schedule under section 5313 of title 5, United States Code, plus (b) $10,000, may elect optional insurance in an amount which, when added to the amount of his regular insurance, does not at any time exceed his annual rate of pay.

Subpart D-Withholdings

§ 871.401 Withholdings.

(a) During any period in any part of which an insured employee is in a pay status there shall be withheld from his pay the full cost of his optional insurance as specified in paragraph (c) of this section.

(b) For any period before the first of the month following his 65th birthday during which an insured retired eployee (or employee or former employee in receipt of compensation for work

The amount withheld from the pay of a person paid on other than a biweekly period or insured for more than $10,000 shall be determined at a proportionate rate, adjusted to the nearest cent.

(d) For the purposes of this section, a person is deemed to attain 35, 40, 45, 50, 55, or 60 years of age on the first day of his first pay period beginning on or after January 1 (April 1 in 1970) of the year following the one in which his corresponding birthday occurs. Any withholding change scheduled for January 1, 1970, under this section as in effect before April 1970, shall not become effective.

(e) The amount withheld from the pay of an insured employee whose annual pay is paid during a period shorter than 52 workweeks is the sum obtained by converting the biweekly rate for his age group to an annual rate and prorating the annual rate over the number of installments of pay regularly paid during the year.

(f) Notwithstanding paragraphs (a), (b), (c), (d) and (e) of this section, the United States Postal Service contributes the full cost of optional life insurance, that is, the sum of the amounts otherwise to be withheld and contributed under paragraphs (a), (b), (c), (d), and (e) of this section, for each period in which a member of the Postal Career Executive Service is insured.

(39 U.S.C. 1005(f))

[33 FR 12508, Sept. 4, 1968, as amended at 34 FR 19543, Dec. 11, 1969; 43 FR 32736, July 28, 1978; 44 FR 70450, Dec. 7, 1979]

Subpart E-Termination and Conversion

§ 871.501 Termination and conversion of insurance.

(a) The optional insurance of an insured employee stops when his regular insurance stops as provided in

§ 870.501 of this chapter subject to a 31-day extension of optional life insurance coverage.

(b) If, because of a declination or waiver, an insured employee has not had the optional insurance during the full period or periods of service during which it was available to him, his optional insurance stops, subject to a 31day extension of optional life insurance coverage, on the date preceding the date his regular insurance is continued or reinstated under the provisions of § 870.601 (during retirement) or § 870.701 (while in receipt of compensation) of this chapter.

(c) The optional insurance of an insured person who remains in a pay status stops, subject to a 31-day extension of optional life insurance coverage, at the end of the pay period in which it is determined that his periodic pay, compensation for work injury, or annuity, after all other deductions, is insufficient to cover the full cost of the optional insurance.

(d) During the 31-day extension of optional life insurance coverage under this section, a person may, upon application and without medical examination, convert all or any part of his optional life insurance to an individual policy of life insurance at rates applicable to his attained age and class of risk unless, within 3 calendar days after the date his optional insurance stopped, he returns to a position wherein he is not excluded from coverage.

Subpart F-Retired Employees and Employees Compensation

§ 871.601 Amount of insurance.

A reduction in the amount of a retired employee's optional life insur

ance begins at the same time and continues at the same rate and to the same extent as his regular insurance. Optional life insurance which is continued while an employee or former employee is in receipt of compensation for work injury (referred to in this part as "compensation") continues at the full amount without reduction.

§ 871.602 Termination of annuity or compensation.

If the annuity or compensation for work injury paid to an insured person is terminated, or if the Department of Labor finds that an insured person receiving compensation for work injury is able to return to duty, optional life insurance held as a retired employee or person receiving compensation stops, with no 31-day extension of coverage or right of conversion, on the date of that termination or finding.

§ 871.603 Waiver or suspension of annuity or compensation.

(a) Except as provided in paragraph (b) of this section, when annuity or compensation for work injury is waived or suspended, optional life insurance continues. When payment of annuity or compensation is resumed, the employing office shall withhold the full cost of the insurance for the period of waiver or suspension during which the person is under age 65.

(b) If suspension of annuity or compensation is because of reemployment, the reemploying office shall withhold the full cost of the insurance currently and the optional life insurance continues during reemployment.

§ 871.604 Reemployed retired employees.

(a) (1) A retired employee appointed to a position wherein he is not excluded from regular insurance by law or regulation is eligible for optional insurance as an employee. If he has optional life insurance as a retired employee, that insurance (and any withholdings therefor) is suspended on the day preceding his first day in a pay status under the appointment and, unless he files with his employing office a declination of optional insurance (or waiver of regular insurance), he acquires optional insurance as an employee.