[Federal Register Volume 70, Number 111 (Friday, June 10, 2005)]
[Rules and Regulations]
[Pages 33797-33798]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-11578]



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 Rules and Regulations
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  Federal Register / Vol. 70, No. 111 / Friday, June 10, 2005 / Rules 
and Regulations  

[[Page 33797]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AK04


Changes in Health Benefits Enrollment

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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

SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations on changes in health benefits enrollment for annuitants or 
survivor annuitants when a carrier terminates participation in the 
Federal Employees Health Benefits (FEHB) Program. We are amending the 
regulations to give OPM the authority to enroll annuitants in whichever 
option of the Blue Cross Blue Shield (BC/BS) Service Benefit Plan it 
determines will most closely approximate the terminated plan.

EFFECTIVE DATE: July 11, 2005.

FOR FURTHER INFORMATION CONTACT: Nataya Battle, (202) 606-1874, or e-
mail to [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On February 9, 2004, OPM published proposed regulations in the 
Federal Register (69 FR 5935-5936) on changes in health benefits 
enrollment for annuitants or survivor annuitants when a carrier 
terminates participation in the FEHB Program. Effective August 18, 
1997, OPM amended 5 CFR 890.306(l)(4) to authorize OPM to enroll an 
annuitant in the standard option of the Service Benefit Plan when the 
annuitants' health plan terminates participation in whole or in part in 
the FEHB Program and the annuitant fails to elect to change to another 
participating health plan. At that time, the BC/BS Service Benefit Plan 
offered the high option and the standard option. The standard option 
was the lower level of benefits with a lower premium cost. Beginning 
with the January 1, 2002, contract year, the BC/BS Service Benefit Plan 
merged the high option coverage into the standard option coverage and 
added a basic option. The standard option is now the highest level of 
coverage offered with the more costly premium rate.
    In the existing regulation, an annuitant who does not elect to 
change health plans is deemed to have enrolled in the standard option, 
or if the plan he or she was enrolled in had two options, he or she is 
deemed to have enrolled in the same option previously enrolled in 
(either high or low), if the annuity is sufficient to pay the high 
option premium. The annuitant may not change to another health plan 
until the next open season.
    The more costly premium rate may not be affordable for many 
annuitants. Amending this regulation will allow OPM the flexibility to 
consider the premium rate and the benefits that the annuitant was 
receiving under his or her terminated health plan, and enroll the 
annuitant in the option of the BC/BS Service Benefit Plan that most 
closely approximates the terminated plan. In addition, this amendment 
will give the annuitant the opportunity to change the option or to 
change to another health plan of his or her choice retroactively within 
90 days of the date OPM sent notification that he or she has been 
deemed enrolled in a particular option of the BC/BS Service Benefit 
Plan.
    On February 9, 2004, OPM issued proposed regulations at 69 FR 5935-
5936 and requested comments by April 9, 2004. OPM received comments 
from NARFE. NARFE contends that the benefit structure of the BC/BS 
Service Benefit Plan basic option is not suitable for annuitants who 
have Medicare because the basic option does not have a mail service 
prescription drug benefit and co-payments are based on a supply of up 
to 34-days as opposed to a 90-day supply under the standard option. In 
addition, NARFE contends that the basic option does not have a skilled 
nursing facility benefit in conjunction with Medicare, as does the 
standard option. OPM's response to these contentions is that annuitants 
who are deemed enrolled in the BC/BS Service Benefit Plan basic option 
will have been previously enrolled in a health plan that is similar to 
the basic option. NARFE also requests that annuitants be allowed up to 
90-days to elect to enroll in a new health plan. OPM has agreed to 
amend the regulation to allow all annuitants up to 90-days to elect to 
enroll in a new plan to accommodate the annuitants who do not realize 
that there has been a change in the amount of their health insurance 
premiums until they receive their February annuity check.

Regulatory Flexibility Act

    OPM has determined 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 
retirees.

Executive Order 12866, Regulatory Review

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

Federalism

    We have examined this rule in accordance with Executive Order 
13132, Federalism, and have determined that this rule will not have any 
negative impact on the rights, roles, and responsibilities of State, 
local, or tribal governments.

List of Subjects in 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.

U.S. Office of Personnel Management.
Dan G. Blair,
Acting Director.

0
Accordingly, OPM is amending 5 CFR part 890 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; 890.303 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.  890.102 
also issued under sections 11202(f), 11232(e), 11246(b) and (c) of 
Pub. L. 105-33, 111 Stat. 251; and section

[[Page 33798]]

721 of Pub. L. 105-261, 112 Stat. 2061 unless otherwise noted.

0
2. In Sec.  890.306 revise paragraphs (l)(4)(ii), (iii), and (iv) and 
(q)(1)(ii) to read as follows:


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

* * * * *
    (l) * * *
    (4) * * *
    (ii) If a plan discontinues all of its existing options, an 
annuitant who does not change his or her enrollment is deemed to have 
enrolled in the option of the Blue Cross and Blue Shield Service 
Benefit Plan that OPM determines most closely approximates the 
terminated plan, except when the annuity is insufficient to pay the 
withholdings, then paragraph (q) of this section applies.
    (iii) If a plan has two options, and one option of the plan is 
discontinued, an annuitant who does not change the enrollment is 
considered to be enrolled in the remaining option of the plan, except 
when the annuity is insufficient to pay the withholdings, then 
paragraph (q) of this section applies.
    (iv) After an involuntary enrollment under paragraph (l)(4)(ii) or 
(iii) of this section becomes effective, the annuitant may change the 
enrollment to the other option of the Blue Cross and Blue Shield 
Service Benefit Plan or to another health plan of his or her choice 
retroactively within 90-days after OPM advises the annuitant of the new 
enrollment;
* * * * *
    (q) * * *
    (1) * * *
    (ii) Enroll in any plan in which the annuitant's share of the 
premium is less than the amount of annuity. If the annuitant elects to 
change to a lower cost enrollment, the change takes effect immediately 
upon loss of coverage under the prior enrollment. The exemptions from 
debt collection procedures that are provided under Sec.  831.1305(d)(2) 
and Sec.  845.205(d)(2) of this chapter apply to elections under this 
paragraph (q)(1)(ii).
* * * * *
[FR Doc. 05-11578 Filed 6-9-05; 8:45 am]
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