[Federal Register Volume 71, Number 72 (Friday, April 14, 2006)]
[Proposed Rules]
[Pages 19459-19460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3585]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 71, No. 72 / Friday, April 14, 2006 / 
Proposed Rules  

[[Page 19459]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 875

RIN 3206-AK99


Federal Long Term Care Insurance Program: Miscellaneous Changes, 
Corrections, and Clarifications

AGENCY: Office of Personnel Management.

ACTION:  Proposed regulations.

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SUMMARY: The Office of Personnel Management (OPM) is issuing proposed 
regulations to amend the Federal Long Term Care Insurance Program 
(FLTCIP) regulations. The proposed regulations will make miscellaneous 
changes, corrections, and clarifications to the FLTCIP regulations.

DATES: OPM must receive comments on or before June 13, 2006.

ADDRESSES: Send written comments to Anne S. Easton, Manager, Insurance 
Group, Center for Employee and Family Support Policy, Strategic Human 
Resources Policy Division, Office of Personnel Management, 1900 E 
Street, NW., Washington, DC 20415; or deliver to OPM, Room 3425, 1900 E 
Street, NW., or FAX to (202) 606-0633.

FOR FURTHER INFORMATION CONTACT: Anne Easton at (202) 606-0770.

SUPPLEMENTARY INFORMATION: The final FLTCIP regulations were published 
in the Federal Register May 27, 2005 (70 FR 30605). In those 
regulations OPM replaced references to ``Federal civilian and Postal 
employees and members of the uniformed services'' with ``active 
workforce member'' in several places. We are making a similar change in 
2 additional places: Sec. Sec.  875.405 and 875.410. We are also 
correcting an incorrect section reference in Sec.  875.209 of the 
previously published regulations.
    Section 875.408 of the FLTCIP regulations discusses 
incontestability, a provision that allows coverage based on an 
erroneous application to continue under certain circumstances. The 
FLTCIP contractor often doesn't learn that coverage is based on an 
erroneous application until someone files a claim, and the contractor 
becomes aware that the information on the individual's application 
differed from what is shown in that individual's medical records. If 
the erroneous coverage has been in effect less than 2 years, or if the 
application contained knowingly false or misleading information, the 
contractor may rescind (void) the coverage and refund the individual's 
premiums. Section 875.104 of the FLTCIP regulations contains procedures 
for resolving disputes concerning eligibility for benefits and payment 
of claims. These proposed regulations clarify that the claims dispute 
procedures apply only to persons who have valid coverage under the 
Program. They do not apply to individuals whose erroneous coverage has 
been rescinded.

Executive Order 12866, Regulatory Review

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

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
affect only enrollees in the Federal Long Term Care Insurance Program.

List of Subjects in 5 CFR Part 875

    Administrative practices and procedures, Employee benefit plans, 
Government contracts, Government employees, Health insurance, Military 
personnel, Organization and functions, Retirement.

Office of Personnel Management.
Linda M. Springer,
Director.
    Accordingly, OPM proposes to amend 5 CFR part 875, as follows:

PART 875--FEDERAL LONG TERM CARE INSURANCE PROGRAM

    1. The authority citation for 5 CFR part 875 continues to read as 
follows:


    Authority: 5 U.S.C. 9008.

    2. In Sec.  875.104 add paragraph (f) to read as follows:


Sec.  875.104  What are the steps required to resolve a dispute 
involving benefit eligibility or payment of a claim?

* * * * *
    (f) The procedures described in paragraphs (a), (b), (c), (d), and 
(e) of this section apply only if you have valid coverage under the 
FLTCIP. If the Carrier determines that your coverage was based on an 
erroneous application and voids the coverage as described in Sec.  
875.408 of this part, these provisions do not apply. The Carrier will 
provide you with information on your review rights in its rescission 
letter (letter voiding your coverage).
    3. In Sec.  875.209 revise the last sentence of paragraph (b) to 
read as follows:


Sec.  875.209  How do I demonstrate that I am eligible to apply for 
coverage?

* * * * *
    (b) * * * The incontestability provisions in Sec.  875.408 do not 
apply to this section.
    (4) In Sec.  875.405 revise the first sentence of paragraph (a)(1) 
to read as follows:


Sec.  875.405  If I marry, may my new spouse apply for coverage?

    (a)(1) If you are an active workforce member and you have married, 
your spouse is eligible to submit an application for coverage under 
this section within 60 days from the date of your marriage and will be 
subject to the underwriting requirements in force for the spouses of 
active workforce members during the most recent open season. * * *
* * * * *
    5. In Sec.  875.408 revise paragraph (a) to read as follows:


Sec.  875.408  What is the significance of incontestability?

    (a) Incontestability means coverage issued based on an erroneous 
application may remain in effect. Such coverage will not remain in 
effect under any of the following conditions:
    (1) If your coverage has been in force for less than 6 months, the 
Carrier may void your coverage upon a showing that information on your 
signed application that was material to your approval for coverage is 
different from what is shown in your medical records.
    (2) If your coverage has been in force for at least 6 months but 
less than 2 years, the Carrier may void your coverage upon a showing 
that information on your signed application that was material to your 
approval for coverage is different from what is shown in your medical 
records and pertains to

[[Page 19460]]

the condition for which benefits are sought.
    (3) After your coverage has been in effect for 2 years, the Carrier 
may void your coverage only upon a showing that you knowingly and 
intentionally made a false or misleading statement or omitted 
information in your signed application for coverage regarding your 
health status that was material to your approval for coverage.
    (4) If your coverage is voided, as described in paragraph (a)(1), 
(a)(2), or (a)(3) of this section, no claims will be paid. In addition, 
the provisions of Sec.  875.104 relating to the procedures for 
resolving a dispute involving benefits eligibility or claims denials do 
not apply to your situation. You may request a review by the Carrier if 
you believe that your coverage was voided in error. You must submit 
your request in writing to the Carrier within 30 days of the date of 
this rescission letter (letter voiding your coverage).
    6. In Sec.  875.410 revise the first sentence to read as follows:


Sec.  875.410  May I continue my coverage when I leave Federal or 
military service?

    If you are an active workforce member, your coverage will 
automatically continue when you leave active service, as long as the 
Carrier continues to receive the required premium when due. * * *

[FR Doc. 06-3585 Filed 4-13-06; 8:45 am]
BILLING CODE 6325-39-M