[Federal Register Volume 64, Number 62 (Thursday, April 1, 1999)]
[Rules and Regulations]
[Page 15633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8011]



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 Rules and Regulations
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  Federal Register / Vol. 64, No. 62 / Thursday, April 1, 1999 / Rules 
and Regulations  

[[Page 15633]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AI33


Federal Employees Health Benefits Program: Contributions and 
Withholdings

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations under the Federal Employees Health Benefits (FEHB) law that 
specify procedures for OPM's annual determination of the weighted 
average of subscription charges, for self only and for self and family 
FEHB enrollments respectively. The determinations are a requirement 
under recent amendments to the FEHB law that authorize a new method for 
adjusting Government contributions toward health plan enrollment 
charges. Effective with the FEHB contract year that begins in January 
1999, the Government contribution generally amounts to 72 percent of 
the weighted average of subscription charges in effect for self only 
and for self and family enrollments respectively.

DATES: This final regulation is effective May 3, 1999.

FOR FURTHER INFORMATION CONTACT:
Bonnie R. Rose (202) 606-0004.

SUPPLEMENTARY INFORMATION: On August 28, 1998, OPM published interim 
regulations in the Federal Register (63 FR 45933) that amended 5 CFR 
890.501, in paragraphs (a) and (b), to provide for the administration 
of a new Government contribution formula under the Federal Employees 
Health Benefits (FEHB) law.
    The Balanced Budget Act of 1997, approved on August 5, 1997 (Pub. 
L. 105-33, sec. 7002, 111 Stat. 662), amended the FEHB law to authorize 
a new Government contribution formula effective on the first day of the 
contract year that begins in January 1999. In place of the ``Big-6'' 
formula, which evolved under FEHB law during the early 1970's, the new 
formula bases Government contributions on the program-wide weighted 
average costs, for self only and for self and family enrollments, 
respectively.
    The Big-6 formula provided a Government contribution for eligible 
enrollees in any FEHB plan or option equal to the lesser of: (1) 60 
percent of the simple average of self only or self and family 
enrollment charges for the highest level of benefits offered under six 
large plans described in law, or (2) 75 percent of charges for the 
particular plan an individual elects to enroll in. The intent of the 
new FEHB contribution formula, which is referred to as the ``Fair 
Share'' formula, is to maintain a consistent level of Government 
contributions, as a percent of the total program costs, regardless of 
the configuration of participating health plans or FEHB enrollment 
patterns.
    The Fair Share formula requires a determination by the Office of 
Personnel Management (OPM) in advance of each contract year of the 
weighted average of subscription charges that will be in effect during 
the year under all FEHB plans, for self only and for self and family 
types of enrollment, respectively. For employees and annuitants 
generally, the law provides a Government contribution equal to the 
lesser of: (1) 72 percent of the amount OPM determines is the program-
wide weighted average of subscription charges for the type of 
enrollment the individual selects, or (2) 75 percent of the 
subscription charge for a particular plan (5 U.S.C. 8906 (a) and (b)).
    The FEHB law, as amended, is very clear regarding the methodology 
for determining the program-wide weighted average of subscription 
charges in cases where health plans continue participation from year to 
year. OPM's regulations explain how we intend to treat individual plans 
for purposes of determining the program-wide weighted average of 
subscription charges when the conditions of a plan's FEHB participation 
change from one year to the next, including cases in which plans enter 
the FEHB Program, cease participation, or merge with another FEHB plan, 
and cases in which a health maintenance organization alters its 
previous rating structure.
    Also, the interim regulation deleted outdated provisions in 
paragraph 5 CFR 890.501(b), and the reference to paragraph (b) in 5 CFR 
890.501(a), which reflected FEHB law prior to 1974 amendments to the 
Government contribution formula (Pub. L. 93-246, section 1, 88 Stat. 
3).
    We received no comments on the interim rule.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because the 
regulations only affect Federal Government contributions toward 
enrollment costs under the Federal Employees Health Benefits Program.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 12866.

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.

    Office of Personnel Management.
Janice R. Lachance,
Director.

    Accordingly, under authority of 5 U.S.C. 8913, OPM is adopting its 
interim regulation amending 5 CFR part 890 as published on August 28, 
1998 (63 FR 45933), as a final rule without change.

[FR Doc. 99-8011 Filed 3-31-99; 8:45 am]
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