[Code of Federal Regulations]
[Title 5, Volume 2]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR870.401]

[Page 396]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
          CHAPTER I--OFFICE OF PERSONNEL MANAGEMENT (CONTINUED)
 
PART 870_FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM--Table of Contents
 
                       Subpart D_Cost of Insurance
 
Sec. 870.401  Withholdings and contributions for Basic insurance.


    (a)(1) The cost of Basic insurance is shared between the insured 
individual and the Government. The employee pays two-thirds of the cost, 
and the Government pays one-third.
    (2) When OPM makes any adjustment to the Basic life insurance 
premium, it will issue a public notice in the Federal Register.
    (b)(1) During each pay period in which an insured employee is in pay 
status for any part of the period, the employee's share of the premium 
must be withheld from the employee's biweekly pay. The amount withheld 
from the pay of an employee who is paid on other than a biweekly basis 
must be computed and adjusted to the nearest one-tenth of one cent.
    (2) The amount withheld from the pay of an insured employee whose 
annual pay is paid during a period shorter than 52 work weeks is the 
amount obtained by converting the biweekly rate to an annual rate and 
prorating the annual rate over the number of installments of pay 
regularly paid during the year.
    (3) The amount withheld from the pay of an insured employee whose 
BIA changes during a pay period is based on the BIA in force at the end 
of the pay period.
    (c) For each pay period in which an employee is insured, the 
employing agency must contribute an amount equal to one-half the amount 
withheld from the employee's pay. This agency contribution must come 
from the appropriation or fund that is used for the payment of the 
employee's pay. For an elected official, the contribution must come from 
the appropriation or fund that is available for payment of other 
salaries in the same office.
    (d)(1) For an annuitant or compensationer who elects to continue 
Basic insurance and chooses the maximum reduction of 75 percent after 
age 65 under Sec. 870.702(a)(2), the annuitant's share of the premium 
is withheld monthly and the compensationer's share is withheld every 4 
weeks. These withholdings stop the month after the month in which the 
annuitant or compensationer reaches age 65. There are no withholdings 
from individuals who retired or began receiving compensation before 
January 1, 1990, and who elected the 75 percent reduction. For the 
purpose of this paragraph, an individual who separates from service 
after meeting the requirements for an immediate annuity under 5 U.S.C. 
8412(g) is considered to retire on the day before the annuity begins.
    (2) An annuitant or compensationer who elects to continue Basic 
insurance and chooses either the reduction election of 50 percent or the 
election of no reduction after age 65 under Sec. 870.702(a)(3) or (4) 
pays an additional premium for the 50 percent or no reduction election. 
This additional premium is withheld for each $1,000 of the BIA. At age 
65, the Basic premium will stop, but the annuitant or compensationer 
must continue to pay the additional premium for either the 50 percent or 
the no reduction election.
    (e)(1) For each period in which an annuitant or compensationer is 
insured, OPM must contribute an amount equal to one-half the amount that 
would be withheld under paragraph (d)(1) of this section. Exception: for 
USPS employees who become annuitants or compensationers after December 
31, 1989, the Postal Service pays the Government contributions.
    (2) The Government contribution is the same amount whether the 
individual elects a maximum 75 percent reduction, a maximum 50 percent 
reduction, or no reduction.
    (3) The Government contribution stops the month after the month in 
which the individual reaches age 65.
    (f) When an agency withholds less than or none of the proper amount 
of Basic life insurance deductions from an individual's pay, annuity, or 
compensation, the agency must submit an amount equal to the sum of the 
uncollected deduction and any applicable agency contributions required 
under 5 U.S.C. 8708 to OPM for deposit in the Employees' Life Insurance 
Fund.

[62 FR 48731, Sept. 17, 1997, as amended at 64 FR 22544, Apr. 27, 1999; 
68 FR 59081, Oct. 14, 2003]

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