[Federal Register Volume 59, Number 250 (Friday, December 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-32141]
[[Page Unknown]]
[Federal Register: December 30, 1994]
-----------------------------------------------------------------------
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AG33
Federal Employees Health Benefits Program: Procedures for Direct
Payment of Premiums
AGENCY: Office of Personnel Management.
ACTION: Interim regulations with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Office of Personnel Management (OPM) is issuing interim
regulations to eliminate the requirement for the use of certified mail,
return receipt requested, when notifying certain enrollees that their
enrollment in the Federal Employees Health Benefits (FEHB) Program will
be terminated due to nonpayment of premiums unless the payment is
received within 15 days. The purpose of these interim regulations is to
reduce the cost of administering the FEHB enrollments of enrollees who
make payments directly rather than through payroll or annuity
deductions.
DATES: These interim regulations are effective January 30, 1995.
Comments must be received on or before February 28, 1995.
ADDRESSES: Send written comments to Lucretia F. Myers, Assistant
Director for Insurance Programs, Retirement and Insurance Group, Office
of Personnel Management, P.O. Box 57, Washington, DC 20044; or deliver
to OPM, Room 4351, 1900 E Street NW., Washington, DC; or FAX to (202)
606-0633.
FOR FURTHER INFORMATION CONTACT:
Margaret Sears (202) 606-0191.
SUPPLEMENTARY INFORMATION: Most individuals enrolled under the FEHB
Program pay their share of the premiums through withholding from pay or
annuity. However, in some cases enrollees may make direct payments.
These include: (1) certain annuitants and compensationers (individuals
who are entitled to compensation from the Office of Workers'
Compensation Programs based on a job-related injury or disease) whose
annuity or compensation has been waived or suspended; (2) former
spouses whose enrollment is based on a qualifying court order under
subpart H of 5 CFR part 890 governing FEHB; and (3) former employees,
former spouses, and children enrolled under the Temporary Continuation
of Coverage (TCC) provisions.
The current regulations governing these direct pay situations
require that if the employing office does not receive the payment by
the due date, it must notify the enrollee by certified mail, return
receipt requested, that continuation of coverage rests upon payment
being made within 15 days after receipt of the notice. (The regulations
affecting former spouses with qualifying court orders and TCC enrollees
allow 45 days for enrollees living overseas.) The TCC regulations
further provide that, if the return receipt is not received,
termination occurs 60 days after the date of the notice (90 days for
overseas enrollees). All terminations are retroactive to the last day
for which the enrollee made payment. Enrollments terminated for
nonpayment of premiums cannot be reinstated unless the enrollee shows
that he or she was prevented by circumstances beyond his or her control
from making the payment on time.
The purpose of the return receipt was to make certain that the
enrollee was aware that the employing office had not received the
payment and the consequences of nonpayment. Because of the high cost of
certified mail, return receipt requested, ($2.29 per notice) OPM has
reevaluated the need for this requirement and has determined that the
value of the return receipt does not justify the cost. The absence of
subsequent payments during the 60- to 90-day delay before termination
of the enrollment makes it clear that the initial failure to make the
payment was not a simple oversight or loss of the payment in the mail.
We believe that the interim regulations will be much more
convenient for enrollees. Under current regulations someone must sign
for the notice. If no one is at home when the letter carrier arrives to
deliver the return-receipt-requested letter, the enrollee must go to
the post office to sign for it. Under the interim regulations, the
letter will be left in the enrollee's mailbox and the enrollee will
have the necessary information without making a trip to the post
office.
Most enrollees who stop paying their premiums do so because they no
longer need the coverage. In these cases, the current regulations allow
the agency to terminate the enrollment as early as 15 days after the
enrollee received the nonreceipt notice, but there is no real benefit
to the enrollee, who no longer wants the coverage.
For other enrollees, a missed payment does not reflect an intent to
stop paying the premiums. They may have overlooked making the payment
or their payment may have been lost in the mail. In these cases, the
nonpayment notice serves as a reminder or lets them know that their
check was lost. If they do not receive the nonpayment notice, their
intent to continue their coverage will be shown when they make the
following month's payment. In addition, there has been a high incidence
of late receipt of payment, with the result that nonreceipt notices
cross in the mail with the incoming check. In these cases, the return
receipt notices serve neither as a benefit to the enrollee nor as a
means of allowing prompt termination of an enrollment.
Another group of enrollees stop making their payments because of
the cost or out of neglect. Such enrollees generally continue to miss
payments until their enrollment terminates retroactively. Some of them
then find they need medical services, but they have no health coverage.
Some continued to obtain medical services even though they were not
paying their premiums and their carriers are now asking for repayment
of claims paid or payment for services rendered. When this happens, the
enrollee may ask to have their coverage reinstated. They may have their
coverage reinstated if they can show that they were prevented from
paying their premiums on time due to a cause beyond their control.
Under current regulations, if the agency does not receive the
signed return receipt, it must wait 60 to 90 days before terminating
the enrollment. Under the interim regulations, agencies must, in all
cases, wait 60 to 90 days before terminating the enrollment. This means
that the enrollee must miss two or three more payments before the
agency can act to terminate. While it is possible that a single
instance of nonreceipt of the payment represents a check lost in the
mail, it is unlikely that three or four consecutive payments would be
similarly lost. Therefore, instead of allowing termination based on a
single instance of nonpayment, the interim regulations allow
termination only if there is a sequence of missing payments. A former
enrollee who wants to have an enrollment reinstated after it has been
terminated for nonpayment must show that the nonpayment was due to a
cause beyond his or her control. If the former enrollee did not receive
the notice and can show that the sequence of missing payments was due
to a cause beyond his or her control, the employing agency can allow
the reinstatement upon payment of all premiums due. Causes beyond an
enrollee's control include physical or mental incapacity; disasters
such as floods, hurricanes or fires; or circumstances causing the
enrollee to be out of contact with his or her home for an extended
period. Each request for reinstatement must be considered on its own
merits.
If the agency's initial decision is to deny the request, the agency
must offer the enrollee the right to reconsideration of the initial
decision at a higher level or by a different office than the one making
the initial decision.
The Department of Agriculture's National Finance Center (NFC)
administers the TCC accounts and accounts of former spouses with
qualifying court orders for most Federal agencies. NFC issues 2,500 to
3,000 nonpayment notices each month. Therefore, these interim
regulations will result in annual savings of $60,000 to $70,000 for the
NFC accounts alone.
The interim regulations eliminate the requirement for sending the
nonpayment notice by certified mail, return receipt requested. In
addition, they clarify that there must be a delay of 60 days (90 days
for overseas enrollees) before employing offices take action to
terminate enrollments for nonpayment of premiums. These interim
regulations do not address similar requirements in Sec. 890.502 related
to employees on leave without pay and annuitants because that section
is being revised and published separately. The revision will include
the elimination of the requirement for certified mail, return receipt
requested.
Waiver of Notice of Proposed Rulemaking
Pursuant to section 553(b)(3)(B) of title 5 of the U.S. Code, I
find that good cause exists for waiving the general notice of
rulemaking because these interim regulations will result in immediate
cost savings without adversely affecting FEHB enrollees.
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 individuals enrolled under the Federal Employees
Health Benefits Program.
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.
Lorraine A. Green,
Deputy 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 continues 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. 890.307 paragraph (b) is revised to read as follows:
Sec. 890.307 Waiver or suspension of annuity or compensation.
* * * * *
(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 must
notify the annuitant in writing that continuation of coverage depends
upon payment being made within 15 days (45 days for annuitants residing
overseas) after receipt of the notice. If no further payments are made,
the employing office terminates the enrollment 60 days after the date
of the notice (90 days for annuitants residing overseas). The employing
office automatically reinstates enrollment on a prospective basis when
payment of annuity or compensation resumes.
* * * * *
3. In Sec. 890.808 paragraph (d)(1) is revised to read as follows:
Sec. 890.808 Employing office responsibilities.
* * * * *
(d) * * * (1) The former spouse must remit to the employing office
the full 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
Secs. 890.401 and 890.807(a)(2). Payment must be made after the pay
period in which the former spouse is covered in accordance with a
schedule established by the employing office (see definition of pay
period under Sec. 890.101(a)). If the employing office does not receive
payment by the due date the employing office must notify the former
spouse in writing that continuation of coverage depends upon payment
being made within 15 days (45 days for enrollees residing overseas)
after receipt of the notice. If no subsequent payments are made, the
employing office terminates the enrollment 60 days (90 days for
enrollees residing overseas) after the date of the notice. Termination
for nonpayment of premium is considered a voluntary cancellation under
Sec. 890.807(d). A former spouse whose enrollment is terminated because
of nonpayment of premium may not reenroll or reinstate coverage except
as provided in paragraph (d)(2) of this section.
* * * * *
4. In Sec. 890.1109, paragraph (c) is revised to read as follow:
Sec. 890.1109 Premium payments.
* * * * *
(c) The enrollee must make the payment after the pay period during
which he or she is covered in accordance with a schedule established by
the employing office. If the employing office does not receive the
payment by the date due, the employing office must notify the enrollee
in writing that continuation of coverage depends upon payment being
made within 15 days (45 days for enrollees residing overseas) after
receipt of the notice. If no subsequent payments are made, the
employing office terminates the enrollment 60 days (90 days for
enrollees residing overseas) after the date of the notice. An enrollee
whose coverage terminates because of nonpayment may not reenroll or
reinstate coverage except as provided under paragraph (d) of this
section.
* * * * *
[FR Doc. 94-32141 Filed 12-29-94; 2:16 pm]
BILLING CODE 6325-01-M