THE GOVERNMENT EMPLOYEES' HEALTH ASSOCIATION, INC. IN RE PROJECT AQUATONE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70-00241R000200090009-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: May 24, 2001
• Sequence Number: 9
• Publication Date: June 21, 1956
• Content Type: MF

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21 June 1956
*OGC Has Reviewed*
MEMORANDUM FOR: CIA Career Council
SUBJECT . The Government Employees'
Health Association, Inc. in Re
Project AQUATONE
1. The Board of Directors of the Government Employees'
Health Association, Inc. (GEHA) considers the Board's
essential function to be that of establishing and maintaining
acceptable and desirable forms of health and life insurance for
regular employees of the Agency in a manner consistent with
the Agency's security requirements and at the lowest possible
costs.
2. Prior to the establishment of the GEHA insurance
program in 1948, Agency personnel experienced difficulty in
procuring life insurance policies through outside commercial
insurance companies and in most instances these companies
would not underwrite the policies on CIA employees unless the
Agency could advise the company that the proposed insured
would not be serving in a hazardous position with this Agency.
3. The War Agencies Employees' Protective Association
plan was established during World War II in order to provide
life insurance protection to civilian employees of the Government
who would be serving in hazardous positions overseas. It is
generally understood that WAEPA intended to insure against a
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extra hazardous risk since this program was designed and
established to fill a wartime need.
4. On the other hand, following the recommendation of
the Insurance Task Force, GEHA negotiated a life insurance
contract with 25X1A5a1
which was effective I August 1954 for the purpose of providing
new life insurance on a completely secure basis. While
detailed discussions were not held as to how hazardous a risk
the normal CIA employee would be considered, it was understood
by-that since our regular staff employees might be called
upon to render services outside of the United States in connection
with the intelligence activities of the Unied States Government that
there would be some risks above that understood in terms of the
normal Government employee under this program. These risks
were assumed by the underwriter to be fairly intermittent in
nature and would not apply to all individuals being insured under
this program. The Board in its administration of this program
has been guided by Agency policy as to the general nature of
duties of staff employees and the normal hazards resulting
therefrom. In this regard it has been consistentlyheld that
staff employees acquire by virtue of their duties, experience
and training, a considerable amount of sensitive information,
and such employees should not be assigned to hazardous illegal
or para-military duties whereby they may be captured or held in
the status of prisoners of war and subsequently brainwashed.
Under this policy, a reasonable pattern of risk experience can
be visualized and anticipated, but the insurance program did
not envision the extra hazardous duty of the special group.
5. The premium rate and the possibility of dividends
under the- plan are directly related to our experience
in death claims processed under this plan. It follows then that
should. GEHA experience a high mortality rate among its policy-
holders that any surplus which might otherwise be accumulated
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and returned to the policyholders in the form of a dividend,
premium holiday or reduced premium rate for a specified
period of time would not be forthcoming. In addition, should
the experience rating be so high as to consume any possible
surplus and result in a net loss to would then
have to increase the premium rate for all policyholders
or possibly not renew the existing contract. The chances for
non-renewal of this contract would be greatly increased if
- were aware that GEHA were covering short term
personnel recruited for extra hazardous projects not
contemplated under the original negotiations. Since it is a
function of this Board to procure and maintain the necessary
insurance coverage for the bulk of regular Agency personnel
at the lowest possible rate, the Board should assure that the
inclusion of any special group or groups of individuals in an
extra hazardous project does not jeopardize the maintenance
of an insurance program for the vast majority of regular
Agency employees. It is the firm opinion of this Board that
the inclusion of an extra hazardous occupational group, such
as the special grow of a ointed employees to project
AQUATONE, in the program would jeopardize the
program which has been established over a. period of years
for the bulk of regular Agency employees. In addition, the
Board has been mindful of the fact that Agency employees have
been encouraged to and have readily accepted the GEHA
insurance programs in lieu of attempting to obtain public
insurance. Any action which might cause a sharp increase in
premiums or cancellations of these policies will have serious
personal repercussions on our employees and many employees
may experience considerable difficulty in replacing this
insurance.
6. Inasmuch as 17 members of the AQUATONE group
have acquired coverage through, this Board will
include the balance of approximately 11 additional members
t- r
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25X1A5a1
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of this project. However, the Board strongly urges the
adoption of the following recommendation: that the Career
Council recommend to the Director that where payment of
a death claim due to operational activities is required for this
special group of persons engaged 1n this project, this payment
be provided through operational funds of the Agency which may
be transmitted through the Government Employees' Health
Association in settlement of any such obligation. Deathclaims
on any of these individuals resulting from causes. other than
extra. hazardous will not require Agency reimbursement.
Chairman of the Board..
: CIA-RDP70-00241 R000200090009-7
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