[Federal Register Volume 59, Number 89 (Tuesday, May 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11165]


[[Page Unknown]]

[Federal Register: May 10, 1994]


                                                    VOL. 59, NO. 89

                                              Tuesday, May 10, 1994

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AF74

 

Federal Employees Health Benefits Program: Miscellaneous Changes

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: These regulations propose a number of changes to the Federal 
Employees Health Benefits (FEHB) Program. The changes would improve the 
administration of the FEHB Program and result in better service to 
enrollees.

DATES: We must receive comments on or before July 11, 1994.

ADDRESSES: Send written comments to Lucretia F. Myers, Assistant 
Director for Insurance Programs, Retirement and Insurance Group, Office 
of Personnel Management, P.O. Box 707, Washington, DC 20044, or deliver 
to OPM, room 3415, 1900 E Street NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT:
Robert G. Iadicicco, (202) 606-0191.

SUPPLEMENTARY INFORMATION: These regulations would enhance the 
administration of the Federal Employees Health Benefits (FEHB) Program 
and improve service to enrollees by:
    1. Clarifying that the last day of Open Season will be the Monday 
of the second full workweek in December, instead of the Friday of the 
first full workweek in December. This clarification is necessary 
because the second full workweek in November includes the Veterans Day 
holiday.
    2. Giving retirement system staff the discretion to allow retirees 
to make FEHB coverage changes by other methods, such as telephone 
requests. Current policy requires retirees to fill out registration 
forms to make coverage changes. Allowing retirees to request FEHB 
coverage changes by telephone would result in the coverage changes 
taking effect sooner by eliminating the time spent requesting, 
completing, and returning a form. Retirees must still provide proof, 
satisfactory to the retirement system staff, that they meet the 
requirements to make the coverage change.
    The ability to use methods other than a registration form to make 
FEHB coverage changes is limited to retirees because of two significant 
distinctions between retirees and employees. The first distinction is 
that the vast majority of retirees cannot quickly obtain and then 
submit registration forms because of the limited number of retirement 
system worksites. For example, retirees in the Civil Service Retirement 
System or the Federal Employees Retirement System who do not live near 
worksites in either Washington, DC or Boyers, Pennsylvania must wait 
for the registration form to be mailed to them and then wait for the 
completed form to be returned to the retirement system staff before the 
change in coverage can become effective. In comparison, most employees 
can easily obtain and submit registration forms to the office 
responsible for their health benefits actions because the office is 
located near the employee's worksite.
    The second distinction is that employees must complete and sign 
registration forms to document their FEHB coverage during the course of 
their Federal employment. Retirement systems staff use the completed 
registration forms to determine whether the employee was covered by an 
FEHB plan during his or her last 5 years of employment. The employee 
must meet the 5 year requirement to continue his or her FEHB coverage 
into retirement. In contrast, once the retirement system staff 
determines a retiree meets the 5 year requirement and can continue his 
or her FEHB coverage into retirement there is no longer a need to 
document the retiree's FEHB coverage through signed registration forms.
    3. Allowing a legally separated employee or annuitant covered as a 
family member under his or her spouse's FEHB enrollment to enroll in 
FEHB for self only or self and family coverage.
    Current policy allows dual enrollment only to ensure all family 
members have FEHB coverage. For example, if two employees who are 
married to each other both have children from prior marriages who do 
not live with them, then both employees need to enroll for self and 
family coverage to provide FEHB coverage for all their children.
    Under this regulation most couples who are legally separated will 
decide not to have two self and family enrollments because one self and 
family enrollment covers both spouses and all of their eligible 
children and is less expensive. However, in a limited number of cases, 
circumstances will lead the covered spouse to enroll for FEHB coverage 
in his or here own right. One example is when separation resulted in 
the covered spouse moving out of the service area of a comprehensive 
medical plan and the spouse carrying the enrollment refused to switch 
to a different plan. The covered spouse would find it very difficult to 
obtain covered health care. Another example is when the spouse finds it 
very difficult to obtain reimbursement for medical payments under a 
fee-for-service plan, because reimbursements are sent to the spouse 
carrying the enrollment.
    The proposed regulations would not allow dual coverage. Each 
enrollee would have to notify the insurance carrier of the names of 
family members covered under his or her enrollment that are not covered 
under the other enrollment.
    4. Extending to certain employees the option of reinstating FEHB 
coverage upon retirement. This option would be available to employees 
whose employing office terminated their FEHB enrollment because they 
entered on duty in a uniformed service, and who retire on an immediate 
annuity from their Federal civilian position while on such duty. The 
individual must make the request for reinstatement to the retirement 
system within 60 days after his or her retirement. If the individual 
does not exercise this option, the retirement system will automatically 
reinstate the FEHB enrollment on the day the person separates from the 
uniformed service. In either case, reinstatement will only take place 
if the Federal retiree meets the 5-year requirement for continuing FEHB 
coverage into retirement. Currently, retirement systems can reinstate 
the FEHB enrollment only on the day the person separates from the 
uniformed service.
    5. Permitting retirees, whose entire annuity or compensation has 
been waived or suspended, to pay FEHB premiums directly to the 
retirement system or the Office of Workers' Compensation Programs 
(OWCP) for any period of waiver or suspension which is 3 months or 
more. Currently, a retiree's FEHB coverage terminates when the period 
of the waiver or suspension exceeds 3 months. The retirement system or 
OWCP automatically reinstates FEHB coverage on a prospective basis when 
annuity or compensation payments resume. The proposed rule provides 
better service to retirees by allowing them to continue their FEHB 
coverage when their annuity or compensation is waived or suspended for 
more than 3 months.
    6. Establishing a requirement that agencies counsel employees 
entering leave without pay status, or whose pay is insufficient to 
cover their FEHB premium payments, of the options of continuing or 
terminating their FEHB coverage, and if continuing, of paying premiums 
directly on a current basis or incurring a debt to be withheld from 
future salary. These regulations are intended to ensure employees are 
fully aware of these alternatives. Furthermore, because the regulations 
establish a procedure under which the employee voluntarily arranges to 
have the debt recovered from salary in a specified amount after 
returning to duty or after salary increases to cover the amount of the 
health benefits contributions, the involuntary offset provisions of 5 
U.S.C. 5514 and subpart K of 5 CFR part 550 do not apply.
    7. Deleting the sentence in section 890.701 that lists the States 
determined to be ``medically underserved areas'' effective January 1, 
1988, because the list is out of date. Since 1988, the list of States 
determined to be ``medically underserved areas'' for each contract year 
have been published on an annual basis in a notice in the Federal 
Register.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
primarily affect Federal employees, annuitants, and former spouses.

List of Subjects in 5 CFR Part 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Reporting and 
recordkeeping requirements, Retirement.

U.S. Office of Personnel Management.
Lorraine A. Green,
Deputy Director.

    Accordingly, OPM proposes to amend 5 CFR part 890 as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

    1. The authority citation for part 890 is revised to read as 
follows:

    Authority: 5 U.S.C. 8913; sec. 890.803 also issued under 50 
U.S.C. 403p, 22 U.S.C. 4069c and 4069c-1; subpart L also issued 
under sec. 599C of Pub. L. 101-513, 104 Stat. 2064, as amended.

    2. In Sec. 890.101, the definition of Register is revised to read 
as follows:


Sec. 890.101  Definitions; time computations.

* * * * *
    Register means to file with the employing office a properly 
completed health benefits registration form, either electing to be 
enrolled in a health benefits plan or electing not to be enrolled. 
Retirement systems may accept alternative means, such as telephone 
requests, in substitution of a properly completed health benefits 
registration form. Register to enroll means to register an election to 
be enrolled. Enrolled means a valid registration form has been accepted 
by the employing office, or an alternative method has been accepted by 
the retirement system, and the enrollment in a health benefits plan 
approved by OPM under this part has not been terminated or cancelled.


Sec. 890.301  [Amended]

    3. In Sec. 890.301, paragraph (c) is amended by removing 
``Sec. 890.304(a)(4)'' and adding in its place ``Sec. 890.304(a)(5)''; 
paragraph (d)(1) introductory text is amended by removing ``through the 
Friday of the first full work-week in December'' and adding in its 
place ``through the Monday of the second full workweek in December''.
    4. In Sec. 890.302, paragraph (a)(2) is revised, and paragraph 
(a)(3)(i) is amended by adding the words ``or legally separated'' after 
the word ``divorced'', to read as follows:


Sec. 890.302  Coverage of family members.

    (a) * * *
    (2) Dual enrollment--spouse. (i) To protect the interests of the 
children, an employee or annuitant may enroll in his or her own right 
in a self and family enrollment even though is or her spouse also has a 
self and family enrollment. Generally, such dual enrollments are 
permitted only where two employees or annuitants are married, each with 
children from prior marriages who do not live with them, or are legally 
separated, with each spouse retaining custody of his or her own 
children by a prior marriage. To ensure that no person receives 
benefits under more than one enrollment, each enrollee must tell the 
insurance carrier which family members are covered under his or her 
enrollment. These individuals are not covered under the other 
enrollment.
    (ii) To protect the interests of legally separated Federal 
employees, annuitants and their children, a legally separated employee 
or annuitant may enroll in his or her own right in a self only or self 
and family enrollment even though his or her spouse also has a self and 
family enrollment. To ensure that no person receives benefits under 
more than one enrollment, each enrollee must tell the insurance carrier 
which family members are covered under his or her enrollment. These 
individuals are not covered under the other enrollment.
* * * * *
    5. In Sec. 890.305, paragraph (b) is revised to read as follows:


Sec. 890.305  Reinstatement of enrollment after military service.

* * * * *
    (b) An employee whose employing office terminates his or her 
enrollment because his or her order to enter on duty in a uniformed 
service is for a period longer than 30 days, and who retires on an 
immediate annuity from his or her Federal civilian position while on 
such duty, may reinstate his or her enrollment by asking to do so 
within 60 days after retirement. In the absence of such a request, the 
retirement system automatically reinstates the enrollment on the day 
the person separates from the uniformed service. For the retirement 
system to reinstate the enrollment, the individual must have been 
covered under this part since his or her first opportunity or for the 5 
years of civilian service (excluding the period of uniformed service) 
immediately preceding the civilian retirement, whichever is shorter.
    6. Section 890.307 is revised to read as follows:


Sec. 890.307  Waiver or suspension of annuity or compensation.

    (a) Except as provided in paragraphs (b) and (f) of this section, 
when annuity or compensation is entirely waived or suspended, the 
annuitant's enrollment continues for not more than 3 months (not more 
than 12 weeks for annuitants whose compensation under subchapter I of 
chapter 81 of title 5, United States Code, is paid each 4 weeks). If 
the waiver or suspension continues beyond this period, the employing 
office will notify the annuitant in writing that the employing office 
will terminate the enrollment effective at the end of the period, 
subject to the temporary extension of coverage for conversion, unless 
the annuitant elects to make payment of the premium directly to the 
employing office during the period of waiver. If the annuitant elects 
to have the enrollment terminated, the employing office automatically 
reinstates the enrollment on a prospective basis when the annuitant 
again receives payment of annuity or compensation. The employing office 
will make the withholding for the period of suspension or waiver during 
which enrollment was continued (i.e., 3 months or less).
    (b) If the annuitant elects to pay premiums directly, he or she 
must send to the employing office his or her share of the subscription 
charge for the enrollment for every pay period during which the 
enrollment continues, exclusive of the 31-day temporary extension of 
coverage for conversion provided in Sec. 890.401. The annuitant must 
pay after each pay period he or she is covered in accordance with a 
schedule established by the employing office. If the employing office 
does not receive payment by the date due, the employing office will 
notify the annuitant by certified mail return receipt requested that 
coverage will continue only if payment is made within 15 days after 
receipt of the notice. The employing office will terminate the 
enrollment of an annuitant who fails to pay within the specified time 
frame. The employing office will automatically reinstate the enrollment 
on a prospective basis when payment of annuity or compensation resumes.
    (c) If the annuitant is prevented by circumstances beyond his or 
her control from paying within 15 days after receipt of the notice, he 
or she may request reinstatement of coverage by writing to the 
employing office. The annuitant must file the request within 30 
calendar days from the date of termination, and must include supporting 
documentation. The employing office will determine if the annuitant is 
eligible for reinstatement of coverage; and, when the determination is 
affirmative, reinstate the coverage of the annuitant retroactive to the 
date of termination. If the determination is negative, the annuitant 
may request a review of the decision as provided in Sec. 890.104.
    (d) Termination of enrollment for failure to pay premiums within 
the time frame established in accordance with paragraph (b) of this 
section is retroactive to the end of the last period for which the 
employing office timely received payment.
    (e) The employing office will submit all direct premium payments 
along with its regular health benefits premiums to OPM in accordance 
with procedures established by that office.
    (f) If suspension of annuity or compensation is because of 
reemployment, the reemploying office must make the withholding 
currently and enrollment continues during reemployment.
    7. In Sec. 890.502, the heading, paragraphs (a), (b), (c), and (d) 
are revised; paragraphs (e), (f), and (g) are removed; and paragraph 
(h) is redesignated as paragraph (e), to read as follows:


Sec. 890.502  Employee withholdings and contributions and direct 
payment of premiums.

    (a) Employee and annuitant withholdings and contributions. (1) 
Except as provided in paragraph (a)(2) of this section, an employee or 
annuitant is responsible for payment of the employee share of the cost 
of enrollment for every pay period during which the enrollment 
continues. An employee or annuitant incurs an indebtedness due the 
United States in the amount of the proper employee withholding required 
for each pay period that health benefits withholdings or direct premium 
payments are not made but during which the enrollment continues.
    (2) An individual is not required to pay withholdings for the 
period between the end of the pay period in which he or she separates 
from service and the commencing date of an immediate annuity, if later.
    (3) Temporary employees who are eligible to enroll under 5 U.S.C. 
8906a must pay the full subscription charges including both the 
employee share and the Government contribution. Employees with 
provisional appointments under Sec. 316.403 are not considered eligible 
for coverage under 5 U.S.C. 8906a for the purpose of this paragraph.
    (4) The employing office must determine the withholding for 
employees whose annual pay is paid during a period shorter than 52 
workweeks on an annual basis and prorate the withholding over the 
number of installments of pay regularly paid during the year.
    (5) The employing office must make the withholding required from 
enrolled survivor annuitants in the following order. First, withhold 
from the annuity of a surviving spouse, if any. If that annuity is less 
than the withholding required, the employing office must make the 
withholding to the extent necessary from the annuity of the children, 
if any, in the following order. First, withhold from the annuity of the 
youngest child, and if necessary, then from the annuity of the next 
older child, in succession, until the withholding is satisfied.
    (6) Surviving spouses in receipt of a basic employee death benefit 
under 5 U.S.C. 8442(b)(1)(A) and annuitants whose health benefits 
premiums exceed the amount of their annuities may pay their portion of 
the health benefits premium directly to the retirement system acting as 
their employing office in accordance with procedures set out in 
paragraph (d) of this section.
    (b) Procedures when employee enters LWOP status or pay is 
insufficient to cover premium. (1) The employing office must counsel 
employees concerning the health benefits options available to them when 
the premium payments cannot be made either because the employees will 
be entering leave-without-pay status or because the employees' pay is 
insufficient to cover the premiums.
    (2) Employees must elect in writing either to continue health 
benefits coverage or terminate it. If they elect to continue coverage, 
they must--
    (i) Agree to pay the premium directly to the agency on a current 
basis, or
    (ii) Agree to have the accrued premiums deducted from salary in a 
specified amount upon returning to employment, or upon pay becoming 
sufficient to cover the premiums.
    (3) If an employee does not return to work or the employing office 
cannot recover the debt in full from salary, it may recover the debt 
from whatever other sources it normally has available for recovery of a 
debt to the United States.
    (c) Procedures when an agency under withholds. (1) An agency that 
withholds less than or none of the proper health benefits contributions 
from an individual's pay, annuity, or compensation must submit an 
amount equal to the sum of the uncollected deductions and any 
applicable agency contributions required under section 8906 of title 5, 
United States Code, to OPM for deposit in the Employees Health Benefits 
Fund.
    (2) The agency must make the deposit to OPM described in paragraph 
(c)(1) of this section as soon as possible, but no later than 60 
calendar days after the date the employing office determines the amount 
of the underdeduction that has occurred, regardless of whether or when 
the agency recovers the underdeduction. A subsequent agency 
determination whether to waive collection of the overpayment of pay 
caused by failure to properly withhold employee health benefits 
contributions shall be made in accordance with 5 U.S.C. 5584 as 
implemented by 4 CFR chapter I, subchapter G, unless the agency 
involved is excluded from application of 5 U.S.C. 5584, in which case 
any applicable authority to waive the collection may be used.
    (d) Direct premium payments for annuitants. (1) If an annuity, 
excluding an annuity under Subchapter III of Chapter 84 (Thrift Savings 
Plan), is too low to cover the health benefits premium due or if a 
surviving spouse receives a basic employee death benefit, the 
retirement system will provide information to the annuitant regarding 
the available plans and notify him or her in writing of the opportunity 
to either: register to be enrolled in any plan in which the enrollee's 
share of the premium is not in excess of the annuity; or make payment 
of the premium directly to the retirement system.
    (2) The retirement system must establish a method for accepting 
direct payment for health benefits premiums from surviving spouses who 
have received or are currently receiving basic employee death benefits 
as well as from annuitants whose annuities are too low to cover their 
health premiums. The annuitant must continue to make direct payment of 
the health benefits premium even if the annuity increases to the extent 
that it covers the premium.
    (3) The surviving spouse or annuitant must pay to the retirement 
system his or her share of the premium for the enrollment for every pay 
period during which the enrollment continues, exclusive of the 31-day 
temporary extension of coverage for conversion provided in 
Sec. 890.401. The surviving spouse or annuitant must pay after each pay 
period in which he or she is covered in accordance with a schedule 
established by the retirement system. If the retirement system does not 
receive payment by the date due, the retirement system will notify the 
surviving spouse or annuitant by certified mail return receipt 
requested that coverage will continue only if payment is made within 15 
days after receipt of the notice. The retirement system will terminate 
the enrollment of a surviving spouse or annuitant who fails to pay 
within the specified time frame. A surviving spouse or annuitant whose 
enrollment is terminated because of nonpayment of premium may not 
reenroll or reinstate coverage, except as provided in paragraph (d)(4) 
of this section.
    (4) If the surviving spouse or annuitant is prevented by 
circumstances beyond his or her control from paying within 15 days 
after receipt of the notice, he or she may request reinstatement of 
coverage by writing to the retirement system. The surviving spouse or 
annuitant must file the request within 30 calendar days from the date 
of termination, and must include supporting documentation. The 
retirement system will determine if the surviving spouse or annuitant 
is eligible for reinstatement of coverage; and, when the determination 
is affirmative, reinstate the coverage of the surviving spouse or 
annuitant retroactive to the date of termination. If the determination 
is negative, the individual may request a review of the decision as 
provided in Sec. 890.104.
    (5) Termination of enrollment for failure to pay premiums within 
the time frame established in accordance with paragraph (d)(3) of this 
section is retroactive to the end of the last pay period for which 
payment has been timely received.
    (6) The retirement system will submit all direct premium payments 
along with its regular health benefits premiums to OPM in accordance 
with procedures established by that office.
* * * * *


Sec. 890.701  [Amended]

    8. Section 890.701 is amended by removing the last sentence of the 
definition of Medically underserved area.


Sec. 890.808  [Amended]

    9. In Sec. 890.808, paragraph (a) is amended by removing 
``Sec. 890.805(d)'' and adding in its place ``Sec. 890.805(b)'' and by 
removing ``Sec. 890.805(e)'' and adding in its place 
``Sec. 890.805(c)''.
[FR Doc. 94-11165 Filed 5-9-94; 8:45 am]
BILLING CODE 6325-01-M