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Employee's Entitlement to Refund of Life Insurance Premiums

B-203344 Aug 03, 1981
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Highlights

An agency requested a decision regarding an employee's entitlement to a refund of life insurance premiums for more than a 12-year period. The employee had become ineligible for life insurance coverage because of a change in employment status from a full-time employee to an intermittent employee. The employee's pay deductions for life insurance premiums, however, were not terminated at that time. The question was asked whether the employee was entitled to reimbursements for premiums erroneously deducted from her salary for the period involved. In a claim submitted to GAO, the employee stated that she had been assured by the agency personnel office that she would be reimbursed the total amount of the premiums paid plus accumulated interest on the amount. Federal regulations specifically exclude intermittent employees from life insurance coverage. GAO has held that, where an individual is ineligible for life insurance coverage and, therefore, could not receive any insurance benefits, that individual is entitled to a reimbursement of premiums paid for that portion of the individual's claim which is not barred by a 6-year statute of limitations. Only that portion of the claim which accrued within 6 years prior to the date on which GAO first received the employee's claim could be considered. Interest may be assessed against the Government only under express statutory or contractual authorization. The Federal Group Life Insurance Act does not provide an express authorization of interest against the Government. Accordingly, there was no basis to award the employee interest in this case. The Government cannot be bound by unauthorized statements of its agents or employees; thus, the employee was entitled only to reimbursement for erroneous premiums deducted 6 years prior to the date GAO received the employee's claim.

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