B-121758, NOVEMBER 26, 1954, 34 COMP. GEN. 257

B-121758: Nov 26, 1954

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FEDERAL EMPLOYEE'S GROUP LIFE INSURANCE - RIGHT TO REFUND OF PREMIUMS AN EMPLOYEE WHO WHILE IN AN ANNUAL LEAVE STATUS WAS AUTOMATICALLY COVERED UNDER THE FEDERAL EMPLOYEE'S GROUP LIFE INSURANCE PROGRAM FOR TWO PAY PERIODS AND ON HIS RETURN WAIVED COVERAGE MAY NOT BE REFUNDED ANY DEDUCTIONS UNDER THE CIVIL SERVICE COMMISSION REGULATIONS WHICH PERMITTED REFUNDS ONLY IN THE CASES OF WAIVERS RECEIVED BY THE EMPLOYING AGENCY PRIOR TO THE END OF THE FIRST PAY PERIOD OF COVERAGE. 1954: REFERENCE IS MADE TO LETTER OF OCTOBER 8. 68 STAT. 736: IS AN INSURANCE REFUND. IF THE ANSWER TO QUESTION NO. 1 IS IN THE AFFIRMATIVE. IF AN EMPLOYEE WHO DID NOT DESIRE INSURANCE COVERAGE AND WAS NOT INFORMED OFFICIALLY OF THE INSURANCE PROGRAM REQUIREMENTS BECAUSE HE WAS ABSENT FROM HIS PERMANENT DUTY STATION ON THE EFFECTIVE DATE OF THE INSURANCE (1AUGUST 29.

B-121758, NOVEMBER 26, 1954, 34 COMP. GEN. 257

FEDERAL EMPLOYEE'S GROUP LIFE INSURANCE - RIGHT TO REFUND OF PREMIUMS AN EMPLOYEE WHO WHILE IN AN ANNUAL LEAVE STATUS WAS AUTOMATICALLY COVERED UNDER THE FEDERAL EMPLOYEE'S GROUP LIFE INSURANCE PROGRAM FOR TWO PAY PERIODS AND ON HIS RETURN WAIVED COVERAGE MAY NOT BE REFUNDED ANY DEDUCTIONS UNDER THE CIVIL SERVICE COMMISSION REGULATIONS WHICH PERMITTED REFUNDS ONLY IN THE CASES OF WAIVERS RECEIVED BY THE EMPLOYING AGENCY PRIOR TO THE END OF THE FIRST PAY PERIOD OF COVERAGE.

ACTING COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF STATE, NOVEMBER 26, 1954:

REFERENCE IS MADE TO LETTER OF OCTOBER 8, 1954, SIGNED FOR YOU BY THE ASSISTANT SECRETARY OF STATE, PRESENTING FOR DECISION THE FOLLOWING QUESTIONS ARISING UNDER THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954, PUBLIC LAW 598, APPROVED AUGUST 17, 1954, 68 STAT. 736:

IS AN INSURANCE REFUND, OR ADJUSTMENT ON A SUBSEQUENT PAYROLL, PROPER FOR MR. THOMAS F. WATERMAN IN THE AMOUNT OF $3.50 REPRESENTING THE INSURANCE DEDUCTION MADE FROM HIS SALARY FOR THE TWO PAY PERIODS ENDED SEPTEMBER 11, 1954, AND SEPTEMBER 25, 1954, RESPECTIVELY?

IF THE ANSWER TO QUESTION NO. 1 IS IN THE AFFIRMATIVE, AND IF AN EMPLOYEE WHO DID NOT DESIRE INSURANCE COVERAGE AND WAS NOT INFORMED OFFICIALLY OF THE INSURANCE PROGRAM REQUIREMENTS BECAUSE HE WAS ABSENT FROM HIS PERMANENT DUTY STATION ON THE EFFECTIVE DATE OF THE INSURANCE (1AUGUST 29, 1954), HOW SOON AFTER HIS RECEIPT OF OFFICIAL NOTIFICATION OF THE INSURANCE COVERAGE MUST HE FILE A WAIVER AND CLAIM REFUND OF HIS INSURANCE DEDUCTIONS?

IT IS STATED IN THE LETTER THAT MR. WATERMAN WAS ON ANNUAL LEAVE FROM AUGUST 2 THROUGH SEPTEMBER 13, 1954, INCLUSIVE, AND WAS NOT PRESENT WHEN EMPLOYEES ON DUTY WERE INFORMED, ON AUGUST 26, 1954, IN A MEMORANDUM FROM THE ACTING ASSISTANT SECRETARY FOR PERSONNEL AND ADMINISTRATION ADDRESSED TO ALL DEPARTMENT OF STATE EMPLOYEES THAT ALL ELIGIBLE EMPLOYEES ON THE PAYROLL WOULD BE INSURED EFFECTIVE AS OF AUGUST 29, 1954, UNLESS BEFORE SEPTEMBER 1, 1954, THEY HAD FILED A STANDARD FORM 53, WAIVER OF LIFE INSURANCE COVERAGE. MR. WATERMAN WAS AUTOMATICALLY COVERED BY THE INSURANCE IN THE AMOUNT OF $7,000 EFFECTIVE WITH THE PAY PERIOD BEGINNING AUGUST 29, 1954, AND DEDUCTIONS IN THE AMOUNT OF $1.75 EACH FOR THAT PAY PERIOD AND THE PERIOD ENDING SEPTEMBER 25, 1954, WERE MADE FROM HIS SALARY. MR. WATERMAN EXECUTED A STANDARD FORM 53 ON SEPTEMBER 23, 1954, WHICH WAS RECEIVED BY THE OFFICE OF FINANCE ON SEPTEMBER 24, 1954, AND INSERTED THEREON A CLAIM FOR REFUND OF THE TWO SALARY DEDUCTIONS OF $1.75 EACH.

THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954 PROVIDES, IN PERTINENT PART, AS FOLLOWS:

SEC. 5. (A) DURING ANY PERIOD IN WHICH AN EMPLOYEE UNDER AGE SIXTY-FIVE IS INSURED UNDER A POLICY OF INSURANCE PURCHASED BY THE COMMISSION AS AUTHORIZED IN SECTION 7 OF THIS ACT, THERE SHALL BE WITHHELD FROM EACH SALARY PAYMENT OF SUCH EMPLOYEE, AS HIS SHARE OF THE COST OF HIS GROUP LIFE AND ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE, AN AMOUNT DETERMINED BY THE COMMISSION, BUT NOT TO EXCEED THE RATE OF 25 CENTS BIWEEKLY FOR EACH $1,000 OF HIS GROUP LIFE INSURANCE: PROVIDED, THAT AN EMPLOYEE WHO IS PAID ON OTHER THAN A BIWEEKLY BASIS SHALL HAVE AN AMOUNT SO WITHHELD, DETERMINED AT A PROPORTIONATE RATE,WHICH RATE SHALL BE ADJUSTED TO THE NEAREST CENT.

ANY POLICY OF INSURANCE PURCHASED BY THE COMMISSION AS AUTHORIZED IN SECTION 7 OF THIS ACT SHALL PROVIDE THAT ALL EMPLOYEES ELIGIBLE UNDER THE TERMS OF THIS ACT WILL BE AUTOMATICALLY INSURED THEREUNDER COMMENCING ON THE DATE THEY FIRST BECOME SO ELIGIBLE:PROVIDED, THAT ANY EMPLOYEE DESIRING NOT TO BE SO INSURED SHALL, ON AN APPROPRIATE FORM TO BE PRESCRIBED BY THE COMMISSION, GIVE WRITTEN NOTICE TO HIS EMPLOYING OFFICE THAT HE DESIRED NOT TO BE INSURED. IF SUCH NOTICE IS RECEIVED BEFORE THE EMPLOYEE SHALL HAVE BECOME INSURED UNDER SUCH POLICY, HE SHALL NOT BE SO INSURED; IF IT IS RECEIVED AFTER HE SHALL HAVE BECOME INSURED, HIS INSURANCE UNDER THE POLICY WILL CEASE EFFECTIVE WITH THE END OF THE PAY PERIOD DURING WHICH THE NOTICE IS RECEIVED BY THE EMPLOYING OFFICE.

SEC. 11. (A) EXCEPT AS OTHERWISE PROVIDED HEREIN, THE COMMISSION IS HEREBY AUTHORIZED TO PROMULGATE SUCH REGULATIONS AS MAY BE NECESSARY AND PROPER TO GIVE EFFECT TO THE INTENT, PURPOSES, AND PROVISIONS OF THIS ACT.

SEC. 15. THE INSURANCE PROVIDED BY THIS ACT AND THE WITHHOLDINGS AND CONTRIBUTIONS FOR THAT PURPOSE SHALL BECOME EFFECTIVE WHEN DIRECTED BY THE COMMISSION.

THE REGULATIONS ISSUED BY THE UNITED STATES CIVIL SERVICE COMMISSION, PUBLISHED IN 19 F.R. 5463 ( DI) ON AUGUST 27, 1954, PROVIDE, IN PERTINENT PART, AS FOLLOWS:

SEC. 37.3 EFFECTIVE DATES OF INSURANCE COVERAGE. (A) THE INSURANCE SHALL BE EFFECTIVE ON THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGINS AFTER AUGUST 28, 1954: * * *

(B) AN EMPLOYEE ON THE ROLL OF HIS EMPLOYING OFFICE THE DAY BEFORE THE EFFECTIVE DATE PROVIDED FOR IN PARAGRAPH (A) OF THIS SECTION, AND WHO IS IN A PAY STATUS OR IS IN A NON-PAY STATUS WHICH HAS NOT EXTENDED CONTINUOUSLY FOR 12 MONTHS, SHALL BE INSURED ON SUCH EFFECTIVE DATE UNLESS BEFORE THAT DATE HE FILES WITH HIS EMPLOYING OFFICER A " WAIVER OF LIFE INSURANCE COVERAGE.'

SEC. 37.5 CESSATION AND CONVERSION OF INSURANCE COVERAGE. (A) AN INSURED EMPLOYEE MAY AT ANY TIME CANCEL HIS INSURANCE BY FILING WITH HIS EMPLOYING OFFICE A " WAIVER OF LIFE INSURANCE COVERAGE.' SUCH WAIVER SHALL BE EFFECTIVE AND SUCH EMPLOYEE'S INSURANCE SHALL CEASE AT THE END OF THE PAY PERIOD IN WHICH THE WAIVER IS RECEIVED IN THE EMPLOYING OFFICE.

SINCE AN EARLY EFFECTIVE DATE FOR THE INSURANCE PLAN WAS ESTABLISHED PRIOR TO WORKING OUT ALL OF THE DETAILS WITH THE RESULTANT LIMITED TIME FOR EXECUTIVE OF THE STANDARD FORM 53, THE CHAIRMAN OF THE CIVIL SERVICE COMMISSION ISSUED A CIRCULAR LETTER DATED AUGUST 25, 1954, TO THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES, PROVIDING, IN PART:

IN THE EVENT AN ELIGIBLE EMPLOYEE DOES NOT HAVE A REASONABLE OPPORTUNITY TO WAIVE LIFE INSURANCE COVERAGE, AND SUCH WAIVER IS RECEIVED IN YOUR AGENCY BEFORE THE END OF THE FIRST PAY PERIOD IN WHICH COVERAGE IS EFFECTIVE INSURANCE DEDUCTIONS SHALL NOT BE MADE FOR SUCH PAY PERIOD, AND IF INADVERTENTLY MADE WILL BE CONSIDERED ERRONEOUS AND SUBJECT TO REFUND OR ADJUSTMENT ON A SUBSEQUENT PAYROLL.

IN ORDER THAT THE CIVIL SERVICE COMMISSION MIGHT HAVE AN OPPORTUNITY TO CONSIDER THE ISSUANCE OF ANOTHER CIRCULAR LETTER PERMITTING REFUNDS OR ADJUSTMENTS ON SUBSEQUENT PAYROLLS IN CASES SIMILAR TO THE ONE INVOLVED IN YOUR LETTER, A COPY OF YOUR LETTER WAS FORWARDED TO THE COMMISSION BY OFFICE LETTER OF OCTOBER 25, 1954, B-121758, REQUESTING ADVICE WHETHER ANY FURTHER REGULATIONS OR INSTRUCTIONS IN THIS RESPECT WOULD BE ISSUED. THE CHAIRMAN OF THE COMMISSION STATED IN HIS REPLY OF NOVEMBER 5, 1954, AS FOLLOWS:

THE COMMISSION DOES NOT PROPOSE TO ISSUE ANY INSTRUCTIONS PERMITTING ADJUSTMENT WITH RESPECT TO SUBSEQUENT PAY PERIODS. IT IS BELIEVED THAT THE COMMISSION'S LETTER TO DEPARTMENT AND AGENCY HEADS DATED AUGUST 19TH, TEN DAYS BEFORE THE EARLIEST EFFECTIVE DATE, AND THE FULL PAY PERIOD AFTER THE EFFECTIVE DATE, TOGETHER WITH THE CONSTRUCTIVE NOTICE PRESUMED BY ENACTMENT OF THE ACT, CONSTITUTED A REASONABLE OPPORTUNITY TO WAIVE COVERAGE. ALSO, ACQUIESCENCE IN THIS PROPOSAL COULD ONLY BE USED AS JUSTIFICATION FOR EXTENSION INTO STILL LATER PAY PERIODS FOR WHICH SIMILAR FACTS AND ARGUMENTS MIGHT EXIST.

CLEARLY, THE INSURANCE FUND IS REQUIRED TO ASSUME LIABILITY FOR THE DEATH OF EMPLOYEES NOT WAIVING COVERAGE. IN OTHER WORDS, WHERE ANY SUCH EMPLOYEE WHO INTENDED TO FILE A WAIVER DIED BEFORE DOING SO, THE BENEFICIARY OR OTHER ENTITLED SURVIVOR WILL RECEIVE THE INSURANCE. ANY FURTHER EXTENSION OF THE PERIOD DURING WHICH EMPLOYEES WHO FINALLY WAIVE MAY BE RELIEVED OR WITHHOLDING WILL PROPORTIONATELY INCREASE THIS LIABILITY, A RESULT CERTAINLY NEVER INTENDED BY CONGRESS.

THERE CAN BE NO QUESTION BUT THAT THE CITED REGULATIONS ISSUED UNDER THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954 PERMIT REFUND OF INSURANCE DEDUCTIONS ONLY TO EMPLOYEES FROM WHOM A STANDARD FORM 53, WAIVER OF LIFE INSURANCE COVERAGE, WAS RECEIVED IN THE EMPLOYING AGENCY BEFORE THE END OF THE FIRST PAY PERIOD IN WHICH THE COVERAGE WAS EFFECTIVE. OTHERWISE, THE INSURANCE CEASES AT THE END OF THE PAY PERIOD IN WHICH THE WAIVER IS RECEIVED IN THE EMPLOYING OFFICE AND DEDUCTIONS ARE REQUIRED TO BE MADE FOR EACH PAY PERIOD THE EMPLOYEE HAD INSURANCE COVERAGE. I HAVE NO ALTERNATIVE BUT TO REGARD THE REGULATIONS AS CONTROLLING ON THE QUESTIONS PRESENTED.

MR. WATERMAN'S WAIVER WAS RECEIVED BY THE OFFICE OF FINANCE ON SEPTEMBER 24, 1954, WHICH WAS DURING THE SECOND PAY PERIOD IN WHICH THE INSURANCE COVERAGE WAS EFFECTIVE. HIS INSURANCE CEASED ON SEPTEMBER 25, 1954, THE END OF THAT SECOND PAY PERIOD, AND THE DEDUCTION OF $1.75 FOR EACH OF THOSE FIRST TWO PAY PERIODS APPEARS PROPER.

ACCORDINGLY, YOUR FIRST QUESTION IS ANSWERED IN THE NEGATIVE, THEREBY RENDERING UNNECESSARY ANY CONSIDERATION TO YOUR SECOND QUESTION.