[Federal Register Volume 59, Number 225 (Wednesday, November 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28929]


[[Page Unknown]]

[Federal Register: November 23, 1994]


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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890

RIN 3206-AF74

 

Federal Employees Health Benefits Program; Miscellaneous Changes

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations which implement a number of miscellaneous changes to the 
Federal Employees Health Benefits (FEHB) Program. The changes will 
improve the administration of the FEHB Program and result in better 
service to enrollees.

EFFECTIVE DATE: December 23, 1994.

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

SUPPLEMENTARY INFORMATION: On May 10, 1994, OPM issued proposed 
regulations in the Federal Register (59 FR 24062) to clarify the last 
day of Open Season; give Federal retirement systems staffs the 
discretion to allow annuitants to make FEHB coverage changes by other 
methods, such as telephone requests; allow legally separated employees 
and annuitants covered as family members under their spouses' FEHB 
enrollment to enroll in FEHB for self only or self and family coverage; 
extend to employees whose FEHB enrollment terminated when 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 option of 
reinstating FEHB coverage upon retirement; permit annuitants, whose 
entire annuity or compensation has been waived or suspended, to pay 
FEHB premiums directly to their retirement system or the Office of 
Workers' Compensation Programs for any period of wavier or suspension 
which is three months or more; require agencies to counsel employees 
entering leave without pay (LWOP) 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 final regulations cover all of the changes in the proposed 
regulations except the requirement that agencies counsel employees 
entering LWOP or whose pay is insufficient to cover their FEHB premium 
payments. We will issue separate interim regulations on that change.
    We received comments from two FEHB plans, two Federal agencies, and 
one retiree organization. One commenter agreed that the proposed 
changes will result in better service to enrollees and considered the 
change to allow annuitants to make FEHB coverage changes by telephone 
especially significant. The commenter recommended that retirement 
systems establish a dedicated telephone number, or a system that will 
record FEHB coverage change requests. OPM is doing this and more. OPM's 
Office of Retirement Programs (ORP) administers the Civil Service 
Retirement System and the Federal Employees Retirement System. ORP's 
Retirement Information Office (RIO) phone system at (202) 606-0500 will 
have a voice mail box dedicated to recording FEHB coverage change 
requests. RIO staff will either make the coverage change requested or 
call the annuitant to obtain additional information required before 
making the change. In addition, ORP will not limit annuitants to 
calling RIO to request a coverage change. At first, both RIO and ORP's 
Insurance Services Branch will be authorized to take the calls and make 
the changes. Eventually, all staff in ORP will accept requests and 
process coverage changes.
    The commenter also recommended that other retirement systems allow 
their annuitants to make FEHB coverage changes by telephone and follow 
the OPM ``model'' in order to minimize the confusion that would occur 
if other retirement systems used a different model. Our intention is to 
give retirement systems the discretion to accept alternatives to a 
properly completed health benefits registration form (SF 2809), but not 
require the retirement systems to do so. Our reasoning is that it is 
the responsibility of each retirement system to determine how to best 
serve their annuitants. OPM has determined that our annuitants are best 
served by allowing them to make FEHB coverage by telephone. Other 
retirement systems may decide, based on their current capabilities or 
other factors, not to allow telephone requests. Of course, we are more 
than willing to share our knowledge and procedures with other 
retirement systems who want to follow our ``model.''
    Three commenters expressed concern that allowing telephone requests 
increases the possibility of unauthorized coverage changes by someone 
other than the annuitant, and will result in misunderstandings between 
the annuitant and OPM. Two commenters suggested that the retirement 
system send a notice of the coverage change to the annuitant. OPM 
agrees with this suggestion and is revising the regulations to require 
the retirement system to promptly give annuitants written notification 
of the change in coverage. ORP already follows this requirement by 
automatically generating notices of FEHB changes to provide annuitants 
with an early opportunity to reverse erroneous or unauthorized changes.
    One commenter suggested as an alternative to telephone requests we 
allow annuitants to submit a written request to OPM at a post office 
box number specifically designated for health benefits requests or to 
fax their requests. OPM already has a post office box number 
specifically designated for health benefits requests. In contrast to a 
telephone call, a post office box does not eliminate the time is takes 
for the request to be delivered to OPM. The faxing of requests does 
save time, but most annuitants do not have convenient, inexpensive 
access to a fax machine. However, under these regulations retirement 
systems have the authority to accept faxed requests for coverage 
changes and OPM will do so.
    One commenter was concerned that telephone requests would not be 
processed by retirement system staff because of the lack of a written 
document. The commenter suggested allowing changes by letter because it 
would provide written documentation of the request. We agree that a 
retirement system must be confident that telephone requests will be 
processed and be processed accurately before the retirement system 
accepts telephone requests. We are confident that ORP will accurately 
process telephone requests for three reasons. First, ORP staff already 
have a great deal of experience handling telephone requests for other 
changes, such as changes of address. Second, ORP staff already have 
developed procedures to follow when they handle telephone requests for 
FEHB coverage changes. Third, in the rare case the telephone request is 
incorrectly processed or not processed at all, the annuitant will soon 
become aware of the error through the retirement system's notice of the 
coverage change, or the lack of notice and the health benefits 
enrollment data included in their next monthly annuity payment 
statement.
    Two commenters stated that it is extremely important for the 
retirement system to obtain all the pertinent information from the 
annuitant and accurately communicate the information to the FEHB plans. 
One of the commenters stressed that accurate communication of dependent 
information is especially important. The other commenter recommended 
that the retirement system staff person complete a SF 2809 while taking 
the request. We agree that when taking a telephone request the 
retirement system staff needs to collect and communicate to the FEHB 
plans the same information they provide for all other coverage changes. 
Therefore, we are revising the proposed regulations by specifying that 
alternative methods of making FEHB coverage changes, such as telephone 
requests, must transmit to the health benefit plans the information 
they require before accepting an enrollment. Because OPM uses a more 
advanced method to transmit information to the plans, there is no need 
for OPM staff to prepare a SF 2809 when taking a telephone request. 
However, for retirement systems who use the SF 2809 to transmit 
information to the plans, filling out the SF 2809 when taking the 
telephone request is a practice that should be strongly considered.
    One commenter stated that allowing OPM retirement system staff to 
make coverage changes based on telephone requests may cause problems in 
tracking coverage changes. We are confident tracking problems will not 
occur because ORP has had for many years an on-line tracking system to 
record all coverage changes. The tracking system creates an FEHB change 
history file for each annuitant.
    One commenter responded to our statement in the supplementary 
information section of the proposed regulations that most employees 
work near the office responsible for their FEHB actions by noting a 
significant percentage of their agency's employees work at remote 
sites. The commenter believes that there are other agencies with 
similar workforces and requested OPM to make this logistical situation 
an important consideration in its future policy and program planning. 
OPM has always been aware that certain agencies, because of their 
mission, have a significant percentage of employees at remote 
locations. We are also keenly aware of the need to increase the 
efficiency of Federal personnel operations through automation. 
Consequently, we are considering a regulatory change that would allow 
agencies to automate their FEHB enrollment processing and invite all 
interested agencies to contact us.
    One commenter concurred with the change allowing a legally 
separated employee or annuitant covered as a family member under his or 
her spouses' FEHB enrollment to enroll in FEHB for self only or self 
and family coverage. The commenter also asked whether this change means 
an employee with a self and family enrollment can drop the coverage of 
their separated spouse, if the spouse is ineligible to enroll or 
decides not to enroll for FEHB coverage. An employee may switch to self 
only coverage at any time and in that way drop the coverage of their 
separated spouse. However, unless a separated spouse has his or her own 
enrollment, he or she remains covered under the employee's self and 
family enrollment.
    We received three comments discussing the fact that while the 
regulations would allow the dual enrollment of legally separated 
employees or annuitants, they did not allow a person to be covered and 
receive benefits under more than one enrollment. The regulations 
require each enrollee 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.
    One commenter wanted to know the employing office's responsibility 
for ensuring that the employee notifies the insurance carrier of 
covered family members. An employing office, when it becomes aware or 
strongly suspects that both members of a legally separated couple are 
enrolled or enrolling in the FEHB Program and at least one has a self 
and family enrollment, is responsible for informing the employee that 
he or she must notify the insurance carrier of the family members 
covered under the enrollment that are not covered under the other 
enrollment.
    One commenter strongly recommended that employing offices should 
include the carrier code and the family members covered under the 
enrollments of both legally separated spouses in the remarks section of 
the SF 2809. The commenter believes this will assist the FEHB carriers 
to contact other carriers when necessary. We think this is a good idea 
and recommend offices that send the SF 2809 to carriers follow this 
practice whenever possible and offices that do not send the SF 2809 
find another method to send carriers this information.
    One commenter was concerned about the employing office's 
responsibility in cases where a person is covered and receives benefits 
under more than one enrollment because the employee did not notify the 
carrier. Carriers will contact employing offices directly to resolve 
any dual coverage cases they discover. Employing offices are 
responsible for assisting carriers in resolving these cases. Employing 
offices are also responsible for informing carriers when they become 
aware a person is being covered and receiving benefits under more than 
one enrollment.

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, Hostages, Iraq, 
Kuwait, Lebanon, Reporting and recordkeeping requirements, Retirement.

U.S. Office of Personnel Management.
James B. King,
Director.

    Accordingly, OPM is amending 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 methods, such as telephone 
requests, in substitution of a properly completed health benefits 
registration form. Alternative methods must transmit to the health 
benefits plans the information they require before accepting an 
enrollment. In addition, for enrollments and cancellations to be valid, 
the signature of the requesting individual must be on the request, or 
on a form from the retirement system to the requesting individual 
giving notice of the enrollment or cancellation. For changes of 
enrollment, the signature of the requesting individual is not required 
but the retirement system must promptly give to the requesting 
individual written notice of the change of enrollment. 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) 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 his 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 waiver or suspension 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 pay 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 OPM.
    (f) If suspension of annuity or compensation is because of 
reemployment, the reemploying office must make the withholding 
currently and enrollment continues during reemployment.


Sec. 890.701  [Amended]

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


Sec. 890.808  [Amended]

    8. 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. 94-28929 Filed 11-22-94; 8:45 am]
BILLING CODE 6325-01-M