Problems in Administering the Servicemen's Group Life Insurance Program in the Ready Reserve

FPCD-80-45: Published: May 1, 1980. Publicly Released: May 20, 1980.

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The Veterans Administration (VA) and the uniformed services have had problems administering the Servicemen's Group Life Insurance Program and determining the eligibility of some reservists since the Veterans' Insurance Act extended the coverage to members of the Ready Reserve. A large number of reservist are receiving free insurance coverage at the expense of other members because the law has no provision to cancel coverage for members who do not pay their premiums.

Although the program is financially sound, some of the services are not forwarding premiums to the VA for members who are not making payments as they are legally required to do. The law requires the services to deduct sufficient funds from their appropriations to pay the premiums for all participation in the Ready Reserve and forward the fund to VA. Although the present program has been in effect for 6 years, there is still some doubt and confusion in determining eligibility for some members in the Ready Reserve. The law does not stipulate whether members in a nonpay status are required to perform scheduled periods of inactive duty training. The services have expressed concern about the lack of an obligation to members scheduled for training.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should revise the Veterans Insurance Act to terminate insurance coverage for members that fail to pay their premiums and delete the provision of the law requiring the services to forward funds from their appropriations to cover all reservists participating in the program.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator of Veterans Affairs should submit to the House Committee on Veterans' Affairs his recommendations concerning: an appropriate grace period for paying premiums before insurance coverage is canceled; the possibility of raising the insurance benefits ceiling; the clarification of whether new enlistees awaiting basic training should be eligible for Servicemen's Group Life Insurance and the clarification of whether individuals scheduled to perform inactive duty training should also be obligated to perform and complete the training to maintain eligibility. The secretaries of the military departments and the Secretary of Transportation should evaluate the adequacy of their accounting and administrative procedures for billing and collecting premiums from nonpay-status reservists participating in the program.

    Agency Affected:


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