Federal Employee Short-Term Disability Insurance Act of 2026
- Bill Number
- H.R. 8731
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Status
- Introduced
- Latest Action
- 2026-05-11: Referred to the House Committee on Oversight and Government Reform.
- Last Updated
- 2026-05-15T03:53:29Z
AI-Generated Summary
Summary of H.R. 8731 – Federal Employee Short-Term Disability Insurance Act of 2026
Purpose
This bill creates a voluntary insurance program for federal employees to protect against loss of pay due to:
- Short-term non-work-related injury or disability.
- Leave to care for a family member.
- Leave for the birth of a child.
- Leave to arrange adoption or foster care.
Key Provisions
- Program Creation: Adds Chapter 88 to Title 5 of the U.S. Code, establishing a new short-term disability insurance program administered by the Director of the Office of Personnel Management (OPM).
- Eligibility and Coverage: Available to most federal employees, including those at the U.S. Postal Service and Postal Regulatory Commission. Coverage applies only to non-work-related issues and excludes cases caused by employee misconduct, self-harm intent, or intoxication.
- Contracting: OPM contracts with licensed insurance carriers (without competitive bidding requirements) for policies lasting 3–7 years. Contracts must detail benefits, premiums, enrollment periods, and dispute resolution procedures, including internal reviews and independent third-party options.
- Benefits:
- Up to 12 months of benefits per qualifying event, starting after a chosen waiting period (8, 31, 91, or 181 days).
- Payment equals the lesser of 70% of the employee's annual basic pay (excluding bonuses) or 70% of the GS-15 maximum rate.
- Benefits offset other income sources like workers' compensation or disability retirement.
- No preexisting condition exclusions or higher premiums for such conditions.
- Incentives required for return-to-work.
- Premiums: Employees pay 100% of costs through payroll withholding. OPM uses the Employees' Life Insurance Fund for initial setup costs, with later reimbursement from carriers. A new administrative account covers ongoing OPM expenses.
- Other Rules: State, local, or tribal laws on disability insurance are preempted. No subrogation or reimbursement laws apply unless adopted by OPM. Cost accounting standards do not apply to these contracts.
Significant Changes to Existing Law
- Introduces a new chapter in Title 5 for non-work-related short-term disability insurance, filling a gap not covered by existing federal workers' compensation (Chapter 81) or other programs.
- Amends Title 39 to include the new chapter for Postal Service employees.
- Updates the table of contents in Title 5, Part III, Subpart G.
- The program applies to contracts effective in the first calendar year starting more than 18 months after enactment.
Potential Impacts
- Government Agencies: OPM gains new administrative duties, including contracting, oversight, record-keeping, and periodic plan reviews. Other agencies must maintain records and provide reports. Initial costs are covered by the Employees' Life Insurance Fund before carrier reimbursement.
- Citizens/Employees: Provides a voluntary, employee-funded option for income protection during qualifying leaves, with flexibility in waiting periods but higher costs for shorter ones. Coverage ends upon separation from federal service or non-payment of premiums.
- International Relations: No provisions address or affect international matters.
Main Stakeholders Affected
- Federal civilian employees and Postal Service/Regulatory Commission personnel.
- The Director and Office of Personnel Management.
- Insurance carriers selected for contracts.
- Federal agencies required to support administration and reporting.
Notable Legal, Constitutional, or Political Implications
- Establishes federal court jurisdiction (district courts and Court of Federal Claims) for disputes after exhausting required administrative remedies.
- Includes strong federal preemption over state and local insurance laws.
- Limits third-party reviewers from altering contract terms.
- Emphasizes voluntary participation and full employee funding, with provisions for later enrollment subject to underwriting.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Del. Norton, Eleanor Holmes [D-DC-At Large]
Recent Actions
- 2026-05-11: Referred to the House Committee on Oversight and Government Reform.
- 2026-05-11: Sponsor introductory remarks on measure. (CR E423)
- 2026-05-11: Introduced in House
- 2026-05-11: Introduced in House
Bill Versions
- Federal Employee Short-Term Disability Insurance Act of 2026 — issued 2026-05-11 — PDF (15 pages)