The act is officially named the “Federal Employee Short-Term Disability Insurance Act of 2024”.

The purpose of this Act is to provide Federal employees with optional insurance to protect them if they lose their pay due to short-term injury or disability, taking care of a family member, the birth of their child, or adopting or fostering a child.

The bill proposes adding Chapter 88 to Title 5 of the United States Code, establishing a program for non-work related short-term disability insurance for federal employees, including those of the Postal Service. It outlines definitions, insurance availability, contracting procedures, benefits, premiums, preemption of state laws, and administration, which would require eligible employees to cover full premiums and describes conditions where benefits cease, like misconduct or intoxication.

In this section, several terms are defined for use in the chapter. It explains who the "Director" is, what qualifies someone as an "employee," what "injury or disability" means for an employee, defines "member of family," explains what a "carrier" is in terms of insurance, and states that "State" includes the District of Columbia.

The section describes a program set up by the Director to provide insurance for certain injuries and leave situations, like caring for a new child or adopting, which are not already covered by existing laws. However, insurance is not available if the injury is due to the employee's misconduct, intentional harm, or intoxication, and any insurance contracts must be fully insured.

The section outlines the Director's authority to contract with carriers for disability insurance policies without competitive bidding, emphasizing contractor qualifications, price, and reasonable competition. It specifies contract terms, including benefits, premiums, and duration, and requires carriers to offer certain dispute resolution procedures, with contract terms lasting between 3 to 7 years.

The section outlines the rules for employee benefits, stating that benefit plans must avoid discrimination based on preexisting conditions and provide incentives for returning to work. Employees can receive benefits for up to 12 months for specific personal or family circumstances, with the amount capped at 70% of their salary or a government pay scale limit, and can choose from various waiting periods before benefits begin, influencing the premium cost.

Each person who gets insurance under this plan must pay the full premium, which will be deducted from their wages. The insurance company must keep track of all funds received separately. An account is set up to cover administrative costs, with the insurance company reimbursing specific expenses and contributing annually to cover ongoing costs. The plan allows for underwriting standards if someone wants to enroll after their first chance.

The section explains that any contract under this chapter overrides state and local laws about disability insurance coverage. It also states that no state or local taxes can be placed on the insurance premiums, but insurance companies can still be taxed on their profits from these policies. Additionally, state laws about reimbursement or subrogation do not apply unless specifically approved by the Director.

The section outlines that contracts must require carriers to provide reports needed by the Director to fulfill their duties. Federal agencies are also required to maintain records and provide information as the Director requests, and the Director must regularly evaluate each plan to ensure it remains competitive.

The district courts of the United States and the United States Court of Federal Claims share the power to hear civil cases against the U.S. government under this chapter, but only after all necessary administrative steps have been completed, and as long as there isn't another resolution process that bars court review.

The section outlines the responsibilities of the Director, who must establish regulations to implement the program and work with other agencies. It also specifies that the Director must determine how time spent receiving benefits affects things like pay raises and job rights. The carrier is required to conduct enrollment and educational activities as directed by the Director.

The section states that the rules for cost accounting, which are usually set according to a specific part of U.S. law, do not apply to insurance contracts mentioned in this chapter.