[Federal Register Volume 61, Number 141 (Monday, July 22, 1996)]
[Rules and Regulations]
[Pages 37807-37810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18515]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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Federal Register / Vol. 61, No. 141 / Monday, July 22, 1996 / Rules
and Regulations
[[Page 37807]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AG66
Federal Employees Health Benefits Program: Payment of Premiums
for Periods of Leave Without Pay or Insufficient Pay
AGENCY: Office of Personnel Management.
ACTION: Interim rule with request for comments.
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SUMMARY: The Office of Personnel Management is issuing an interim
regulation to require Federal agencies to provide employees entering
leave without pay (LWOP) status, or whose pay is insufficient to cover
their FEHB premium payments, written notice of their opportunity to
continue their FEHB coverage. Employees who want to continue their
enrollment must sign a form agreeing to pay their premiums directly to
their agency on a current basis, or to incur a debt to be withheld from
their future salary. The purpose of this interim regulation is to
ensure that employees who are entering LWOP status, or whose pay is
insufficient to pay their FEHB premiums, are fully informed when they
decide whether or not to continue their FEHB coverage.
DATES: This interim regulation is effective August 21, 1996. We must
receive comments on or before September 20, 1996.
ADDRESSES: Send written comments to Lucretia F. Myers, Assistant
Director for Insurance Programs, Retirement and Insurance Service,
Office of Personnel Management, P.O. Box 57, Washington, DC 20044; or
deliver to OPM, Room 3451, 1900 E Street NW., Washington, DC; or FAX to
(202) 606-0633.
FOR FURTHER INFORMATION CONTACT: Robert G. Iadicicco, (202) 606-0004.
SUPPLEMENTARY INFORMATION: On May 10, 1994, OPM issued a regulation in
the Federal Register [59 FR 24062] that proposed a number of changes to
the Federal Employees Health Benefits (FEHB) Program that would result
in better service to enrollees. One of the changes proposed
establishing a requirement that agencies inform employees entering
leave without pay status (LWOP), (or any other type of nonpay status,
except periods of nonpay resulting from a lapse of appropriations), or
receiving pay 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. The proposal intended to
ensure employees are fully aware of these alternatives. Furthermore,
because the proposal would 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
would not apply.
On November 23, 1994, OPM issued a regulation in the Federal
Register (59 FR 60294) that put into effect all of the changes proposed
in the May 10, 1994, regulation except the requirement that agencies
inform employees entering LWOP status, or receiving pay insufficient to
cover their FEHB premium payments, of the options of continuing or
terminating their FEHB coverage. This interim regulation covers the
requirement.
We received comments from two Federal agencies and one retiree
organization. One commenter agreed that employees need to be advised of
the options they have to continue FEHB coverage while they are in LWOP
status or when their pay is insufficient, but had a concern. Their
concern was that the proposal did not clearly state what would happen
to the FEHB enrollment of employees who go on LWOP status or whose pay
is insufficient if they did not elect in writing to continue or
terminate their FEHB enrollment.
We have addressed this concern by amending the proposal to require
employing offices to provide employees with a written notice of the
options of continuing or terminating their FEHB coverage. The
enrollments of employees who do not return a signed form to their
employing office within 31 days after the day they receive the notice
are terminated. The termination is retroactive to the end of the last
pay period in which the premium was withheld from pay.
The employees and covered family members, if any, are entitled to
the 31-day temporary extension of coverage and may convert to an
individual contract for health benefits. In addition, employees who are
prevented by circumstances beyond their control from timely returning a
signed form to the employing office may request the employing office to
reinstate their coverage. Therefore, employees who through no fault of
their own are not able to return a signed form to the employing office
within 31 days are protected by the temporary extension of coverage and
their right to request reinstatement of their coverage. Employees who
terminate their enrollment may enroll upon their return to pay status.
One commenter agreed that the change should resolve some of the
past problems and clarify agency and employee responsibilities, but
that continued monitoring by OPM and agency staff of operating
personnel offices' administration of the FEHB enrollment procedures for
employees in LWOP status will be required. We agree continued
monitoring is still required, and note that it is the responsibility of
agencies' staff to monitor their employing offices' procedures for
employees who enter LWOP status to ensure employees receive the
information required by this regulation.
One commenter disagreed with OPM's statement that the involuntary
offset provisions of 5 U.S.C. 5514 and subpart K of 5 CFR part 550
would not apply under this regulation. The involuntary offset
provisions require agencies to follow due process procedures such as
giving employees written notice and an opportunity for a hearing before
collecting debts from their pay. Section 550.1102(b) of subpart K of 5
CFR part 550 states, ``This subpart and 5 U.S.C. 5514 apply in
recovering certain debts by administrative offset, except where the
employee consents to the recovery, from
[[Page 37808]]
the current pay account of an employee.'' (emphasis added). Because
this regulation requires employees entering LWOP status or receiving
pay insufficient to cover their FEHB premiums to consent in writing to
the recovery of the debt they are incurring by continuing their FEHB
coverage, the involuntary offset provisions of 5 U.S.C. 5514 and
subpart K of 5 CFR part 550 do not apply.
On December 30, 1994, and June 1, 1995, OPM issued interim and
final regulations in the Federal Register (59 FR 67605 and 60 FR
28511), respectively, that eliminated the requirement for the use of
certified mail, return receipt requested, when notifying certain
enrollees that their enrollment in the FEHB Program will be terminated
due to nonpayment of premiums unless the payment is received within 15
days. This interim regulation further amends 5 CFR 890.502 to eliminate
the requirement for the use of certified mail, return receipt
requested, for the following circumstances: (1) Annuitants whose FEHB
premiums exceed the amount of their annuities; (2) surviving spouses in
receipt of a lump-sum basic employee death benefit under the Federal
Employees Retirement System; and (3) employees in LWOP status in excess
of 365 days.
On June 17, 1994, and December 27, 1994, OPM issued proposed and
final regulations in the Federal Register (59 FR 31171 and 59 FR 66434)
that delegated from OPM to Federal agencies the authority to reconsider
disputes over coverage and enrollment issues in the Federal Employees'
Group Life Insurance and the FEHB Programs and to make retroactive as
well as prospective corrections of errors. This interim regulation
amends 5 CFR 890.502, 890.808, and 890.1109 to conform with the
delegation of authority to Federal agencies.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because it primarily
affects 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 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.
Sec. 890.301 [Amended]
2. In Sec. 890.301, paragraph (c) is amended by removing
``Sec. 890.304(a)(5)'' and adding in its place
``Sec. 890.304(a)(1)(v)''.
3. In Sec. 890.502, paragraphs (a), (b), (c), (d), and (e) are
revised; paragraphs (f) and (h) are removed, and paragraph (g) is
redesignated as paragraph (f), to read as follows:
Sec. 890.502 Employee and annuitant withholdings and contributions
and direct payment of premiums.
(a) Employee and annuitant withholdings and contributions. (1)
Except as provided in paragraphs (a)(2) and (g) of this section, an
employee or annuitant is responsible for payment of the employee or
annuitant 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
or annuitant 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
(a)(3).
(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. As soon as the employing office is aware
of an employee whose premium payments cannot be made because the
employee will be entering or has entered leave without pay status, (or
any other type of nonpay status, except periods of nonpay resulting
from a lapse of appropriations), or the employee's pay is insufficient
to cover the premiums, the employing office must inform the employee of
the available health benefits options.
(1) The employing office must provide the employee written notice
of the options and consequences as described in paragraphs (b)(2) (i)
and (ii) of this section. If the employing office cannot give the
notice required by this paragraph (b)(1) to the employee directly, it
must send the notice by first class mail. A notice that is mailed is
deemed to be received 5 days after the date of the notice.
(2) The employee must elect in writing either to continue health
benefits coverage or terminate it. The employee may continue his or her
health benefits coverage by choosing one of the options listed in this
paragraph (b)(2) and returning the signed form to the employing office
within 31 days from the day he or she receives the notice (45 days for
an employee residing overseas). When an employee mails the signed form,
the date of the postmark is deemed to be the date the notice is
returned to the employing office. If an employee elects
[[Page 37809]]
to continue coverage, he or she must elect in writing either to--
(i) Agree to pay the premium directly to the agency on a current
basis. The employee must agree that if he or she does not pay the
premiums, upon returning to employment or upon pay becoming sufficient
to cover the premiums, the employing office will deduct, in addition to
the current pay period's premiums, an amount equal to the premiums for
a pay period during which the employee was in LWOP status. The
employing office will continue using this method to deduct the accrued
unpaid premiums from salary until the debt is recovered in full. The
employee must also agree that if he or she does not return to work or
the employing office cannot recover the debt in full from salary, the
employing office may recover the debt from whatever other sources it
normally has available for recovery of a debt to the United States, or
(ii) Agree upon returning to employment or upon pay becoming
sufficient to cover the premiums, the employing office will deduct, in
addition to the current pay period's premiums, an amount equal to the
premiums for a pay period during which the employee was in LWOP status.
The employing office will continue using this method to deduct the
accrued unpaid premiums from salary until the debt is recovered in
full. The employee must also agree that if he or she does not return to
work or the employing office cannot recover the debt in full from
salary, the employing office may recover the debt from whatever other
sources it normally has available for recovery of a debt to the United
States.
(3) Except as provided under paragraph (b)(4) of this section, if
the employee does not return the signed form within 31 days after the
day he or she receives the notice (45 days for employees residing
overseas) the employing office terminates the enrollment according to
paragraph (b)(5) of this section. The employing office must give the
employee written notification of the termination.
(4) If the employee is prevented by circumstances beyond his or her
control from returning a signed form to the employing office within the
time frame under paragraph (b)(2) of this section, he or she may
request reinstatement of coverage by writing to the employing office.
The employee must describe the circumstances that prevented timely
notice and file the request within 30 calendar days from the date the
employing office gives the employee notification of the termination.
The employing office determines if the employee is eligible for
reinstatement of coverage. If the determination is affirmative, the
employing office reinstates the coverage of the employee retroactive to
the date of termination. If the determination is negative, the employee
may request a review of the decision from the employing agency as
provided under Sec. 890.104.
(5) Terminations of enrollment under paragraphs (b)(2) and (3) of
this section are retroactive to the end of the last pay period in which
the premium was withheld from pay. The employee and covered family
members, if any, are entitled to the temporary extension of coverage
for conversion and may convert to an individual contract for health
benefits. An employee whose coverage is terminated may enroll upon his
or her return to duty in a pay status in a position in which the
employee is eligible for coverage under this part.
(c) Procedures when an agency underwithholds. (1) An agency that
withholds less than the proper health benefits contributions from an
individual's pay, annuity, or compensation must submit an amount equal
to the sum of the uncollected contributions 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 must provide information to the annuitant or
surviving spouse regarding the available plans and notify him or her in
writing of the opportunity to either: enroll 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 or surviving spouse 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 annuitant or surviving spouse 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 annuitant or surviving spouse 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 must notify the
annuitant or surviving spouse in writing that continuation of coverage
depends upon payment being made within 15 days (45 days for annuitants
or surviving spouses residing overseas) after receipt of the notice. If
no subsequent payments are made, the retirement system terminates the
enrollment 60 days (90 days for annuitants or surviving spouses
residing overseas) after the date of the notice. An annuitant or
surviving spouse whose enrollment terminates because of nonpayment of
premium may not reenroll or reinstate coverage, except as provided in
paragraph (d)(4) of this section.
(4) If the annuitant or surviving spouse 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 annuitant or
surviving spouse must describe the circumstances that prevented timely
notice and file the request within 30 calendar days from the date of
termination. The retirement system determines whether the surviving
spouse or annuitant is eligible for reinstatement of coverage. If the
determination is affirmative, the retirement system reinstates the
coverage of the surviving spouse or annuitant retroactive to the date
of termination. If the determination is negative, the surviving spouse
or
[[Page 37810]]
annuitant may request a review of the decision from the retirement
system as provided under 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.
(e) Direct payment of premiums during periods of LWOP status in
excess of 365 days. (1) An employee who is granted leave without pay
under subpart L of part 630 of this chapter which exceeds the 365 days
of continued coverage under Sec. 890.303(e) must pay the employee
contributions directly to the employing office on a current basis.
(2) Payment must be made after the pay period in which the employee
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 employee in writing that
continuation of coverage depends upon payment being made within 15 days
(45 days for employees 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.
(3) If the employee was prevented by circumstances beyond his or
her control from making payment within the time frame specified in
paragraph (e)(2) of this section, he or she may request reinstatement
of the coverage by writing to the employing office. The employee must
describe the circumstances that prevented timely notice and file the
request within 30 calendar days from the date of termination.
(4) The employing office determines whether the employee is
eligible for reinstatement of coverage. If the determination is
affirmative, the employing office reinstates the coverage of the
employee retroactive to the date of termination. If the determination
is negative, the employee may request a review of the decision from the
employing agency as provided under Sec. 890.104.
(5) An employee whose coverage is terminated under paragraph (e)(2)
of this section may enroll upon his or her return to duty in a pay
status in a position in which the employee is eligible for coverage
under this part.
* * * * *
4. In Sec. 890.808, the last sentence of paragraph (d)(2) is
revised to read as follows:
Sec. 890.808 Employing office responsibilities.
* * * * *
(d) * * *
(2) * * * If the determination is negative, the individual may
request a review of the decision from the employing agency as provided
under Sec. 890.104.
* * * * *
5. In Sec. 890.1109, the last sentence of paragraph (d)(2) is
revised to read as follows:
Sec. 890.1109 Premium payments
* * * * *
(d) * * *
(2) * * * If the determination is negative, the individual may
request a review of the decision from the employing agency as provided
under Sec. 890.104.
[FR Doc. 96-18515 Filed 7-19-96; 8:45 am]
BILLING CODE 6325-01-P