GOVERNMENT EMPLOYEES HEALTH ASSOCIATION
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP80-01826R000700180003-7
Release Decision:
RIPPUB
Original Classification:
S
Document Page Count:
5
Document Creation Date:
December 9, 2016
Document Release Date:
September 12, 2000
Sequence Number:
3
Case Number:
Publication Date:
June 11, 1956
Content Type:
MF
File:
Attachment | Size |
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CIA-RDP80-01826R000700180003-7.pdf | 288.55 KB |
Body:
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OGC HAS REVIEWED.
U June 1956
MEMORANDUM FOR: Chairman, CIA Career Council
SUBJECT: Government Employees Health Association
1. The Government Employees Health Association (GEHA) was
established for the sole purpose of providing payment of sickness,
accident, life, or other insurance benefits to its members. The
Constitution provides that any employee of the Central Intelligence
Agency may become a member and any person who is eligible for
membership must make application therefor and the Board of
Directors is authorized to accept or reject any such application
and its actions shall be final,
2. The present GEHA insurance program was the result of an
exhaustive survey and report by an Insurance Task Force in the
summer of 1954. Two new plans, one for group life and one for
group health insurance, were developed and contracts were
negotiated with the underwriting companies. These plans are
considered satisfactory both in the benefits and the premium rates.
The latter were fixed on the basis of Agency actuarial statistics
available at the time.
3. The two main problems which the Task Force sought to
surmount were the security aspects of settling cases arising in
connection with covert operations under normal commercial policies
and the fact that claims resulting from hazardous duty would be
subject to contest by commercial companies. The GEHA program
was specifically designed to cover both these p ms In the
announcement of the program to the Agency in t
was stated that the Agency has developed these insurance programs
in order to provide employees with better benefits and to avoid the
following problems:
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"(1) Commercial insurance companies have become somewhat
cautious about selling insurance to Agency employees because
of the possibility of hazardous duty. As a result. some
companies will insure Agency employees only for limited
amounts and usually under conditions which preclude the
payment of benefits as the result of hazards sometimes found
in overseas areas.
"(2) Because of security considerations, it is sometimes
difficult to release sufficient information to insurance companies
so that under their policies they can appropriately pay claims.
It should also be noted that the whole insurance study was undertaken
at the direction of the Career Service Board in connection with the
decision of that Board not to recommend a hazardous duty pay program.
The report of the Executive Secretary of 8 May 1953 to the Career
Service Board, paragraph 2.g.. specifically states. "There is no
question that there are risks and hazards connected with certain
activities conducted by CIA. The policy decision taken by the Board
was that these risks should be covered by insurance if possible
rather than by incentive or hazardous duty pay. "
4. GEHA as presently established is a nonprofit organization
made upestire1vof Agency personnel. The administration of its program
is effected by the Insurance and Claims Branch, Employee Services
Division, Office of Personnel. Notice rovides that
insurance may be purchased by members of GEHA for staff employees,
staff agents, or contract employees, or who are civilian or military
personnel detailed to the Agency. It appears quite clear, therefore,
that while GEHA is in corporate form, it is an Agency facility which
must be fully responsive to Agency policies and requirements. This
special relationship has justified the utilization of official Agency funds
for direct support of GEHA on administrative costs. The Directors
of GEHA are technically elected by the members for one-year terms.
Nominations of candidates for Directors are dispensed with and in
practice Directors are nominated by senior Agency officials.
5. A recent resolution (Tab A) of the Board of Directors has raised
a question whether the policies reflected therein are clearly consistent
with policies and requirements of the Agency. The facts are as follows,
although the question is one of general application. For a special
2
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project of the highest priority and of the greatest intelligence
importance a group of people were needed for highly hazardous
missions. The required qualifications did not exist within the
Agency and it was necessary to recruit this group from volunteers
without the Agency. From the start it was contemplated that on
completion of their missions, the individuals would be returned to
their prior status, both because that has been their present wish
and because their special capabilities would not readily be absorbed
in normal activities of this Agency. Long consideration was given
to the method of employment and the relative merits of employment
by contract appointment were studied at length. It was eventually
recommended and the Director approved that they be given staff
appointments for the special purposes of this project. One of the
elements in this recommendation was that staff employment would
qualify them for the Federal Employees Group Life Insurance
Program, the so-called Eisenhower Program. In view of the nature
of their missions, it was deemed of the greatest importance that
this group be provided with all the benefits in the event of death
that might be afforded by the Agency. Outright grants by the Agency
were considered, but in view of a recently received ruling, it was
determined that this would impair the rights of their dependents
under the Federal Employees Compensation Act. Consequently, it
was determined that the best protection would be for them to have
the coverage supplied by the GEHA life insurance programs, and
the first members of this group became members of GEHA.
6. One member of the group has been killed in an accident with
resulting settlement under the GEHA plan. Thereupon the Directors
of GEHA, not previously aware of this particular situation, met and
came to the conclusion that this group were not "true" employees
under their concept of the application of GEHA and should not, therefore,
be eligible for membership because of the extra-hazardous nature of
their duties and their relatively temporary status with the Agency.
The Board further expressed the desire that extra-hazardous situations
of this nature be underwritten out of official funds. On being informed
of this action by the Board, the General Counsel reported to the
Deputy Director (Support) a query of the propriety of the Board's
action and whether that action was consistent with Agency policy.
On 7 June, the Deputy Director (Support) and the General Counsel
met with the Directors of GEHA to determine what issues might exist.
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The arguments put forth by the Board of Directors were that they
had an over-all responsibility to the members of GEHA to obtain
for them the lowest premiums and best benefits under the program
and that the actuarial statistics on which the premiums were based
did not contain any activity similar to this special program now in
question, that extra-hazardous duties had not been contemplated in
the formulation of the GEHA program and so should be underwritten
out of official funds, and that in negotiations with United Benefit
Life Insurance Company the company had not been put on notice that
such groups engaged in extra-hazardous missions might come under
the coverage of the program. The Deputy Director (Support) and the
General Counsel responded that the program was designed to enable
the Agency to carry out its missions in the most effective manner
and that this mission necessarily included hazardous and extra-
hazardous missions, that the contracts and premiums were negotiated
on statistics available at that time but no one could foretell what
the experience of the Agency would be in future years, that employees
should not be categorized by groups but should be afforded the full
support of the Agency, and that this present special group was exactly the
type for which the GEHA program would serve its most useful purpose.
Furthermore, the insurance company representatives had, according
to the information available to the General Counsel, been fully aware
that certain persons or groups might be engaged in hazardous activities.
The Deputy Director (Support) took the general position that a resolution
such as that adopted by the Board might have a severely detrimental
long-term result. As an argument against allowing membership by
this special group under consideration, members of the Board pointed
out that they had been resisting pressure to allow membership for
contract employees as the Board had considered them not within the
contemplation of the program although the Agency notice specifically
provides for them.
7. No agreement was reached at the meeting, and the Deputy
Director (Support) asked the Board to report their conclusion after
further consideration of the arguments. The Board later reported
that it stood behind its resolutions unless means were found by which
the Agency would underwrite any loss by death under this particular
project. General Counsel is studying the possibilities of such under-
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err'
writing by the Agency, but the technical answer is not controlling
on the issue here presented. It is recommended that the Career
Council call a special session to meet with the members of the
GEHA Board or their representatives to consider whether or not
the policies now adopted by the GEHA Board are in accordance with
the understanding and intent of the Career Council and with the
policies and requirements of the Agency, and if not what action is
required to resolve the inconsistencies.
LAWRENCE R. HOUSTON
General Counsel
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