B-161401, AUG. 15, 1967

B-161401: Aug 15, 1967

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EMPLOYEE WHO AT TIME OF PROBATIONARY APPOINTMENT WHEN SHE WAS INELIGIBLE FOR LIFE INSURANCE SIGNED A COVERAGE WAIVER AND WHO DID NOT SIGN ANOTHER WAIVER AT TIME OF CHANGE TO PERMANENT APPOINTMENT NOR TAKE ACTION TO CANCEL IT MAY HAVE THE WAIVER CONSIDERED VALID BECAUSE NO DEDUCTIONS WERE MADE. OLNEY: THERE IS BEFORE OUR OFFICE A QUESTION OF THE INDEBTEDNESS OF MRS. REPRESENTING FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PREMIUMS WHICH WERE NOT DEDUCTED FROM HER SALARY FOR THE PERIOD SEPTEMBER 17. THIS MATTER WAS THE SUBJECT OF A LETTER DATED MARCH 29. AT THAT TIME SHE WAS NOT ELIGIBLE FOR COVERAGE UNDER THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954. AT THAT TIME SHE WAS NOT ASKED TO SIGN ANY ADDITIONAL WAIVER OF LIFE INSURANCE COVERAGE.

B-161401, AUG. 15, 1967

EMPLOYEES - LIFE INSURANCE - WAIVER DECISION TO ADMINISTRATIVE OFFICE OF U.S. COURTS RE INDEBTEDNESS OF FORMER PROBATION OFFICE EMPLOYEE FOR FEDERAL EMPLOYEES GROUP LIFE INSURANCE PREMIUMS NOT DEDUCTED FROM SALARY. EMPLOYEE WHO AT TIME OF PROBATIONARY APPOINTMENT WHEN SHE WAS INELIGIBLE FOR LIFE INSURANCE SIGNED A COVERAGE WAIVER AND WHO DID NOT SIGN ANOTHER WAIVER AT TIME OF CHANGE TO PERMANENT APPOINTMENT NOR TAKE ACTION TO CANCEL IT MAY HAVE THE WAIVER CONSIDERED VALID BECAUSE NO DEDUCTIONS WERE MADE, THEREFORE, THE INDEBTEDNESS SHOULD BE CANCELLED AND ANY PORTION WITHHELD REFUNDED TO EMPLOYEE.

TO MR. OLNEY:

THERE IS BEFORE OUR OFFICE A QUESTION OF THE INDEBTEDNESS OF MRS. PAULETTE STONE, A FORMER EMPLOYEE OF THE U.S. PROBATION OFFICE, DETROIT, MICHIGAN, REPRESENTING FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PREMIUMS WHICH WERE NOT DEDUCTED FROM HER SALARY FOR THE PERIOD SEPTEMBER 17, 1962, THROUGH APRIL 24, 1966, EXCEPT FOR A PERIOD OF LEAVE WITHOUT PAY DURING THIS TIME.

THIS MATTER WAS THE SUBJECT OF A LETTER DATED MARCH 29, 1967, FROM MR. PETER J. DISPENZIRIE, CHIEF AUDITOR OF YOUR OFFICE TO THE COMMISSIONER OF NARCOTICS.

THE INFORMATION OF RECORD SHOWS THAT ON JULY 23, 1962, MRS. STONE ACCEPTED A TEMPORARY APPOINTMENT IN THE U.S. PROBATION OFFICE, DETROIT, MICHIGAN. AT THAT TIME SHE WAS NOT ELIGIBLE FOR COVERAGE UNDER THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954, 68 STAT. 736, 5 U.S.C. 2091 (1958 ED.), HOWEVER, SHE DID SIGN STANDARD FORM 53, WAIVER OF LIFE INSURANCE COVERAGE. SHE BECAME ELIGIBLE FOR COVERAGE UNDER THE GROUP LIFE INSURANCE ACT ON SEPTEMBER 17, 1962, WHEN SHE RECEIVED A PERMANENT APPOINTMENT. AT THAT TIME SHE WAS NOT ASKED TO SIGN ANY ADDITIONAL WAIVER OF LIFE INSURANCE COVERAGE. IT WAS NOT UNTIL SOMETIME IN 1966 WHEN MRS. STONE APPLIED FOR GROUP LIFE INSURANCE THAT IT WAS ADMINISTRATIVELY DETERMINED THAT SHE WAS ALREADY COVERED BY SUCH LIFE INSURANCE HAVING BECOME SUBJECT THERETO UPON HER PERMANENT APPOINTMENT ON SEPTEMBER 17, 1962. THIS WAS BASED UPON THE PREMISE THAT THE PRIOR WAIVER WAS INVALID AND THAT THE EMPLOYEE SHOULD HAVE FILED AN ADDITIONAL WAIVER WHEN SHE RECEIVED A PERMANENT APPOINTMENT IF SHE DID NOT DESIRE TO BE COVERED BY THE LIFE INSURANCE. MRS. STONE SAYS THAT IF DEDUCTIONS HAD BEEN MADE FROM HER SALARY FOR GROUP LIFE INSURANCE PREMIUMS IN 1962 SHE WOULD HAVE TAKEN THE NECESSARY ACTION TO HAVE IT STOPPED.

5 CFR 37.3 (C) (1) (REVISED AS OF JANUARY 1, 1961) IN EFFECT AT THE TIME OF MRS. STONE'S APPOINTMENT PROVIDED THAT:

"AN EMPLOYEE APPOINTED, OR TRANSFERRED FROM A POSITION WHEREIN HE IS NOT INSURED, SHALL BE INSURED AT THE TIME HE ACTUALLY ENTERS ON DUTY ON HIS FIRST DAY IN A PAY STATUS UNLESS ON OR BEFORE THAT DAY HE FILES WITH HIS EMPLOYING OFFICE A -WAIVER OF LIFE INSURANCE COVERAGE,- OR HAD PREVIOUSLY FILED SUCH WAIVER WHICH REMAINS UNCANCELLED.'

THE ABOVE REGULATION RECOGNIZES THAT A WAIVER OF LIFE INSURANCE COVERAGE MAY BE SIGNED BY AN EMPLOYEE PRIOR TO BECOMING ELIGIBLE FOR SUCH COVERAGE. IN THIS CASE, MRS. STONE FILED A WAIVER PRIOR TO THE DATE OF HER PERMANENT APPOINTMENT AND DID NOT TAKE ANY ACTION TO CANCEL IT UNTIL 1966. THE AGENCY AS WELL AS THE EMPLOYEE APPARENTLY CONSIDERED THAT THE WAIVER WAS VALID BECAUSE NO DEDUCTIONS HAD BEEN MADE FROM HER SALARY FOR LIFE INSURANCE PREMIUMS. UNDER THE CIRCUMSTANCES WE ARE OF THE OPINION THAT MRS. STONE WAS NOT COVERED BY THE GROUP LIFE INSURANCE AND WOULD NOT BE LIABLE FOR THE PREMIUMS DURING THE PERIOD HERE IN QUESTION.

THEREFORE, THE INDEBTEDNESS SHOULD BE CANCELLED AND ANY AMOUNTS PAID BY MRS. STONE OR WITHHELD FROM FUNDS OTHERWISE DUE HER IN SATISFACTION OF THE INDEBTEDNESS SHOULD BE REFUNDED TO HER.