[Federal Register Volume 69, Number 184 (Thursday, September 23, 2004)]
[Rules and Regulations]
[Pages 56927-56929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21304]



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  Federal Register / Vol. 69, No. 184 / Thursday, September 23, 2004 / 
Rules and Regulations  

[[Page 56927]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 890 and 892

RIN 3206-AJ34


Federal Employees Health Benefits Children's Equity

AGENCY: Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations to implement the Federal Employees Health Benefits 
Children's Equity Act of 2000, which was enacted October 30, 2000. This 
law mandates the enrollment of a Federal employee for self and family 
coverage in the Federal Employees Health Benefits (FEHB) Program, if 
the employee is subject to a court or administrative order requiring 
him or her to provide health benefits for his or her child or children 
and the employee does not provide documentation of compliance with the 
order.

DATES: Effective Date: October 25, 2004.

FOR FURTHER INFORMATION CONTACT: Nataya Battle (202) 606-0004, or e-
mail to [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On October 1, 2003, OPM issued interim regulations in the Federal 
Register (68 FR 56523) to mandate compliance with court or 
administrative orders requiring Federal employees to provide health 
benefits for their children. The interim regulations were effective on 
October 31, 2003, and are located at parts 890 and 892.
    On October 30, 2000, the Federal Employees Health Benefits 
Children's Equity Act of 2000 (Pub. L. 106-394, 114 Stat. 1629) was 
enacted. This law mandates compliance with court or administrative 
orders requiring Federal employees to provide health benefits for their 
children.
    Before the enactment of Pub. L. 106-394, a court or State 
administrative agency could issue an order for an individual to provide 
health benefits for his or her child or children; however, there was 
nothing in the FEHB law to require compliance. While the issuance of 
such an order was an event that allowed an employee to enroll or to 
change from self only to self and family, the enrollment was voluntary 
on the employee's part.
    The law now makes compliance with the court or administrative order 
mandatory. A Federal employee subject to such an order must enroll for 
self and family coverage in a health plan that provides full benefits 
in the area where the children live or provide documentation to the 
agency that he or she has obtained other health benefits for the 
children. If the employee does not do so, the agency will enroll the 
employee involuntarily as follows: (1) If the employee has no FEHB 
coverage, the agency will enroll him or her for self and family 
coverage in the option of the Blue Cross and Blue Shield Service 
Benefit Plan that provides the lower level of coverage; (2) if the 
employee has a self only enrollment in a fee-for-service plan or in an 
HMO that serves the area where the children live, the agency will 
change his or her enrollment to self and family in the same option of 
the same plan; (3) if the employee is enrolled in an HMO that does not 
serve the area where the children live, the agency will change his or 
her enrollment to self and family in the lower option of the Blue Cross 
and Blue Shield Service Benefit Plan.
    As long as the court or administrative order is in effect, and the 
employee has at least one child identified in the order who is still 
eligible under the FEHB Program, the employee may not cancel his or her 
enrollment, change to self only, or change to a plan that does not 
serve the area in which the child or children live, unless he or she 
provides documentation that he or she has other coverage for the 
children. If the court or administrative order is still in effect at 
the time the employee retires, and if at least one child is still 
eligible for FEHB, the employee must continue FEHB into retirement (if 
eligible) and may not make any of these changes after retirement for as 
long as the order remains in effect and the child continues to be 
eligible under 5 U.S.C. 8901(5).
    If such an employee goes into a nonpay status, or if his or her 
salary becomes insufficient to make the premium withholdings, he or she 
may not choose to terminate the enrollment. Instead, the employee must 
continue the coverage and either make direct premium payments or incur 
a debt to the Government. (By law, an employee's enrollment still 
terminates after 1 year in nonpay status.) If the annuity of an 
employee who remained subject to such a court or administrative order 
upon retirement becomes insufficient to make the premium withholdings, 
the annuitant may not choose to terminate the enrollment. Instead, he 
or she must continue the coverage and make direct premium payments for 
as long as the order remains in effect and the child continues to be 
eligible under 5 U.S.C. 8901(5).
    OPM received comments from one Federal agency, three State 
agencies, and one independent organization. Several of the comments 
addressed the same issue concerning mandating that the National Medical 
Support Notice (NMSN) be accepted as an administrative order for 
medical support orders. OPM has addressed this issue in a Benefits 
Administration Letter instructing agencies to recognize the NMSN as an 
administrative order and to respond to the questions therein. Two 
comments suggested establishing an interagency procedure to determine 
health coverage requirements, including requesting copies of policies. 
The Public Law requires employees to provide evidence of full health 
benefits coverage and services in the location in which the child 
resides. It is not the intent of OPM to require agencies to analyze 
that coverage to compare benefits. One comment addressed the need for 
edits in the National Finance Center (NFC) system to prevent affected 
employees from making unlawful changes in their enrollment. The NFC has 
had these edits in place for nearly two years. One comment addressed 
the need to extend health care coverage to all eligible children of 
non-custodial parents and to assure that the coverage covers siblings 
that may live in different geographical locations. Custodial parents 
must look

[[Page 56928]]

to the court system or administrative agency to issue an order for an 
individual to be required to provide health benefits for his or her 
children. This regulation stipulates that the health coverage provided 
must cover all eligible children wherever they may live. Another 
suggestion was that employees who allow their alternate health benefits 
coverage to lapse should then lose the option to provide alternate 
coverage and be restricted to enrollment in the FEHB Program only. We 
do not believe the final regulations needs to impose such a 
restriction. OPM is not aware that lapses in coverage occur with any 
frequency. In addition, it is clearly the intent of the law that 
employees be allowed to provide alternate coverage.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because the regulation 
will only affect health benefits of certain Federal employees and 
retirees.

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

5 CFR Part 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Military personnel, Reporting and recordkeeping 
requirements, Retirement.

5 CFR Part 892

    Administrative practice and procedure, Government employees, Health 
insurance, Taxes, Wages.

Office of Personnel Management.
Kay Coles James,
Director.

0
Accordingly, the interim rule amending 5 CFR parts 890 and 892, which 
was published at 68 FR 56523 on October 1, 2003, is adopted with only 
minor editorial changes for greater clarity as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

0
1. The authority citation for part 890 is revised to read as follows:

    Authority: 5 U.S.C. 8913; Sec. 890.303 also issued under 50 
U.S.C. 403(p), 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. 890.102 also issued under sections 11202(f), 11232(e), and 
11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251; and section 721 
of Pub. L. 105-261, 112 Stat. 2061 unless otherwise noted.


0
2. In Sec. 890.301 revise paragraphs (e)(1)(ii), (f)(3) and (g)(4)(i) 
to read as follows:


Sec. 890.301  Opportunities for employees who are not participants in 
premium conversion to enroll or change enrollment; effective dates.

* * * * *
    (e) * * *
    (1) * * *
    (ii) An employee who is subject to a court or administrative order 
as discussed in Sec. 890.301(g)(3) may not make this change as long as 
the court or administrative order is still in effect and the employee 
has at least one child identified in the order who is still eligible 
under the FEHB Program, unless the employee provides documentation to 
the agency that he or she has other coverage for the child(ren).
* * * * *
    (f) * * *
    (3) With one exception, during an open season, an eligible employee 
may enroll and an enrolled employee may change his or her existing 
enrollment from self only to self and family, may change from one plan 
or option to another, or may make any combination of these changes. 
Exception: An employee who is subject to a court or administrative 
order as discussed in Sec. 890.301(g)(3) may not cancel his or her 
enrollment, change to self only, or change to a comprehensive medical 
plan that does not serve the area where his or her child or children 
live as long as the court or administrative order is still in effect 
and the employee has at least one child identified in the order who is 
still eligible under the FEHB Program, unless the employee provides 
documentation to the agency that he or she has other coverage for the 
child(ren).
* * * * *
    (g) * * *
    (4) * * *
    (i) If the court or administrative order requires an earlier 
effective date, the effective date will be the 1st day of the pay 
period that includes that date. Effective dates may not be retroactive 
to a date more than 2 years earlier, or prior to October 30, 2000.
* * * * *

0
3. In Sec. 890.304 revise paragraph (d)(1) to read as follows:


Sec. 890.304  Termination of enrollment.

* * * * *
    (d) Cancellation or suspension. (1)(i) An employee who participates 
in health insurance premium conversion as provided in part 892 of this 
chapter may cancel his or her enrollment only during an open season or 
because of and consistent with a qualifying life event defined in 
Sec. 892.101 of this chapter.
    (ii) Subject to the provisions of paragraph (d)(iii) of this 
section, an enrollee who does not participate in premium conversion may 
cancel his or her enrollment at any time by filing an appropriate 
request with the employing office. The cancellation is effective at the 
end of the last day of the pay period in which the employing office 
receives the appropriate request canceling the enrollment.
    (iii) An employee who is subject to a court or administrative order 
as discussed in Sec. 890.301(g)(3), or an annuitant who was subject to 
such a court or administrative order at the time of his or her 
retirement, may not cancel or suspend his or her enrollment as long as 
the court or administrative order is still in effect and the enrollee 
has at least one child identified in the order who is still eligible 
under the FEHB Program, unless the employee or annuitant provides 
documentation to the agency that he or she has other coverage for the 
child or children.
* * * * *

0
4. In Sec. 890.306 revise paragraphs (e)(1) and (f)(1)(i) to read as 
follows:


Sec. 890.306  When can annuitants or survivor annuitants change 
enrollment and what are the effective dates?

* * * * *
    (e) Enrollment change to self only. (1) With one exception, an 
annuitant may change the enrollment from self and family to self only 
at any time. Exception: An annuitant who, as an employee, was subject 
to a court or administrative order as discussed in Sec. 890.301(g)(3) 
at the time he or she retired may not change to self only after 
retirement as long as the court or administrative order is still in 
effect and the annuitant has at least one child identified in the order 
who is still eligible under the FEHB Program, unless the annuitant 
provides documentation to the retirement system that he or she has 
other coverage for the child or children.
* * * * *
    (f) * * *
    (1) * * *
    (i) With one exception, an enrolled annuitant may change the 
enrollment from self only to self and family, may change from one plan 
or option to another, or may make any combination of these changes. 
Exception: An annuitant who, as an employee, was

[[Page 56929]]

subject to a court or administrative order as discussed in 
Sec. 890.301(g)(3) at the time he or she retired may not cancel or 
suspend his or her enrollment, change to self only, or change to a 
comprehensive medical plan that does not serve the area where his or 
her children live after retirement as long as the court or 
administrative order is still in effect and the annuitant has at least 
one child identified in the order who is still eligible under the FEHB 
Program, unless the annuitant provides documentation to the retirement 
system that he or she has other coverage for the child or children.
* * * * *

0
5. In Sec. 890.502 revise the second sentence in paragraph (b)(2) and 
revise paragraph (b)(4)(ii) to read as follows:


Sec. 890.502  Employee withholdings and contributions.

* * * * *
    (b) * * *
    (2) * * * Exception: An employee who is subject to a court or 
administrative order as discussed in Sec. 890.301(g)(3) may not elect 
to terminate his or her enrollment as long as the court/administrative 
order is still in effect and the employee has at least one child 
identified in the order who is still eligible under the FEHB Program, 
unless the employee provides documentation that he or she has other 
coverage for the child or children. * * *
* * * * *
    (4) * * *
    (ii) If the employee is subject to a court or administrative order 
as discussed in Sec. 890.301(g)(3), the coverage may not terminate. If 
the employee does not return the signed form, the coverage will 
continue and the employee will incur a debt to the Government as 
discussed in paragraphs (b)(2)(i) and (b)(2)(ii) of this section.
* * * * *

PART 892--FEDERAL FLEXIBLE BENEFITS PLAN: PRE-TAX PAYMENT OF HEALTH 
BENEFITS PREMIUMS

0
6. The authority citation for part 892 continues to read as follows:

    Authority: 5 U.S.C. 8913; 26 U.S.C. 125.


0
7. Revise Sec. 892.207 to read as follows:


Sec. 892.207  Can I make changes to my FEHB enrollment while I am 
participating in premium conversion?

    (a) Subject to the exceptions described in paragraphs (b) and (c) 
of this section, you can make changes to your FEHB enrollment for the 
same reasons and with the same effective dates listed in Sec. 890.301 
of this chapter.
    (b) However, if you are participating in premium conversion there 
are two exceptions: you must have a qualifying life event to change 
from self and family enrollment to self only enrollment or to drop FEHB 
coverage entirely. (See Sec. 892.209 and Sec. 892.210.) Your change in 
enrollment must be consistent with and correspond to your qualifying 
life event as described in Sec. 892.101. These limitations apply only 
to changes you may wish to make outside open season.
    (c) If you are subject to a court or administrative order as 
discussed in Sec. 890.301(g)(3) of this chapter, your employing agency 
can limit a change to your enrollment as long as the court or 
administrative order is still in effect and you have at least one child 
identified in the order who is still eligible under the FEHB Program, 
unless you provide documentation to your agency that you have other 
coverage for your child or children. See also Sec. 892.208 and 
Sec. 892.209.

0
8. Add a new paragraph (c) to Sec. 892.208 to read as follows:


Sec. 892.208  Can I change my enrollment from self and family to self 
only at any time?

* * * * *
    (c) If you are subject to a court or administrative order as 
discussed in Sec. 890.301(g)(3) of this chapter, you may not change 
your enrollment to self only as long as the court or administrative 
order is still in effect and you have at least one child identified in 
the order who is still eligible under the FEHB Program, unless you 
provide documentation to your agency that you have other coverage for 
your child or children. See also Sec. 892.207 and Sec. 892.209.

0
9. Revise paragraph (c) to Sec. 892.209 to read as follows:


Sec. 892.209  Can I cancel FEHB coverage at any time?

* * * * *
    (c) If you are subject to a court or administrative order as 
discussed in Sec. 890.301(g)(3) of this chapter, you may not cancel 
your coverage as long as the court or administrative order is still in 
effect and you have at least one child identified in the order who is 
still eligible under the FEHB Program, unless you provide documentation 
to your agency that you have other coverage for your child or children.

[FR Doc. 04-21304 Filed 9-22-04; 8:45 am]
BILLING CODE 6325-39-P