[Federal Register Volume 71, Number 116 (Friday, June 16, 2006)]
[Proposed Rules]
[Pages 34849-34852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9418]


 ========================================================================
 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. 116 / Friday, June 16, 2006 / 
Proposed Rules  

[[Page 34849]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AG66


Federal Employees Health Benefits: Payment of Premiums for 
Periods of Leave Without Pay or Insufficient Pay

AGENCY: Office of Personnel Management

ACTION: Proposed rule with request for comment.

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SUMMARY: The Office of Personnel Management (OPM) is issuing proposed 
regulations to rewrite certain sections of the Federal regulations in 
plain language. These regulations require Federal agencies to provide 
employees entering leave without pay (LWOP) status, or whose pay is 
insufficient to cover their Federal Employees Health Benefits (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 proposed regulation is to rewrite the 
existing regulations 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: Comments must be received on or before August 15, 2006.

ADDRESSES: This document is available for viewing at 
www.regulations.gov and at the U.S. Office of Personnel Management, 
1900 E Street, NW., Washington, DC 20415. Send all comments to Anne 
Easton, Manager, Insurance Policy, U.S. Office of Personnel Management, 
1900 E Street, NW., Room 3400, Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Michael Kaszynski, Policy Analyst, at 
202.606.0004.

SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is 
issuing proposed regulations to rewrite 5 CFR 890.502 in plain 
language. OPM issued an interim regulation containing most of these 
substantive changes on July 22, 1996, at 61 FR 37807. This regulation 
is an up-dated plain language version of 61 FR 37807. The following is 
a chronological history for the legislation and regulations that have 
contributed to the development of this proposed regulation.
    On May 10, 1994, OPM issued a proposed 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 proposed changes established a 
requirement that agencies inform employees entering leave without pay 
(LWOP) status (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 proposed regulation intended to ensure 
employees were fully aware of these alternatives. Furthermore, because 
the proposed regulation established a procedure under which the 
employee voluntarily arranged 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 did 
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. The interim regulation published on 
July 22, 1996, at 61 FR 37807 put into effect these changes. 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. 
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). In 
those regulations, OPM delegated 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. On October 1, 
2003 and September 23, 2004, OPM issued proposed and final regulations 
in the Federal Register (68 FR 56523 and 69 FR 56927 respectively) 
mandating compliance with court orders requiring Federal employees to 
provide health benefits for their children as required by the Federal 
Employees Health Benefits Children's Equity Act of 2000 (Pub. L. 106-
394).

Collection of Information Requirement

    The proposed rule does not impose information collection and 
recordkeeping requirements that meet the definition of the Paperwork 
Reduction Act of 1995's term ``collection of information'' which means 
obtaining, causing to be obtained, soliciting, or requiring the 
disclosure to third parties or the public, of facts or opinions by or 
for an agency, regardless of form or format, calling for either answers 
to identical questions posed to, or identical reporting or 
recordkeeping requirements imposed on ten or more persons, other than 
agencies, instrumentalities, or employees of the United States; or 
answers to questions posed to agencies, instrumentalities, or employees 
of the United States which are to be used for general statistical 
purposes. Consequently, it need not be reviewed by the Office of 
Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

[[Page 34850]]

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires agencies to analyze 
options for regulatory relief of small businesses. For purposes of the 
RFA, small entities include small businesses, nonprofit organizations, 
and government agencies with revenues of $11.5 million or less in any 
one year. This rulemaking affects FEHB Program enrollment practices 
which do not impact the dollar threshold. Therefore, I certify that 
this regulation will not have a significant economic impact on a 
substantial number of small entities.

Regulatory Impact Analysis

    We have examined the impact of this final rule as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review), 
the RFA (September 16, 1980, Pub. L. 96-354), section 1102(b) of the 
Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4), and Executive Order 13132. Executive Order 12866 (as amended by 
Executive Order 13258, which merely assigns responsibility of duties) 
directs agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). A regulatory impact analysis (RIA) must be 
prepared for major rules with economically significant effects ($100 
million or more in any one year). This rule is not considered a major 
rule, as defined in section 804(2) of title 5, United States Code, 
because we estimate it will only affect Federal Government employment 
offices. Any resulting economic impact would not be expected to exceed 
the dollar threshold.

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 professionals, Hostages, Iraq, 
Kuwait, Lebanon, Military Personnel, Reporting and recordkeeping 
requirements, Retirement.

    Office of Personnel Management.
Linda M. Springer,
Director..
    For the reasons set forth in the preamble, OPM is proposing to 
amend 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.  890.102 also issued under sections 11202(f), 11232(e), 
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.

    2. In Sec.  890.502 paragraphs (a), (b), (c), (d) and (e) are 
revised to read as follows:


Sec.  890.502  Withholdings, Contributions, LWOP, Premiums, and Direct 
Premium Payment.

    (a) Employee and annuitant withholdings and contributions. (1) 
Employees and annuitants are responsible for paying the enrollee share 
of the cost of enrollment for every pay period during which they are 
enrolled. An employee or annuitant incurs a debt to the United States 
in the amount of the proper employee or annuitant withholding required 
for each pay period during which they are enrolled if the appropriate 
health benefits withholdings or direct premium payments are not made.
    (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 of this chapter are not 
considered eligible for coverage under 5 U.S.C. 8906a for the purpose 
of this paragraph.
    (4) The employing office must calculate 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 there is one. If that 
annuity is less than the amount required, withhold to the extent 
necessary from the annuity of the youngest child, and if necessary, 
from the annuity of the next older child, in succession, until the 
withholding is met.
    (6) Surviving spouses who have a basic employee death benefit under 
5 U.S.C. 8442(b)(1)(A) and annuitants whose health benefits premiums 
are more than the amount of their annuities may pay their portion of 
the health benefits premium directly to the retirement system acting as 
their employing office, as described in paragraph (d) of this section.
    (b) Procedures when an employee enters a leave without pay (LWOP) 
status or pay is insufficient to cover premium. The employing office 
must tell the employee about available health benefits choices as soon 
as it becomes aware that an employee's premium payments cannot be made 
because he or she will be or is already in a leave without pay (LWOP) 
status or any other type of nonpay status. (This does not apply when 
nonpay is as a result of a lapse of appropriations.) The employing 
office must also tell the employee about available choices when an 
employee's pay is not enough to cover the premiums.
    (1) The employing office must give the employee written notice of 
the choices and consequences as described in paragraphs (b)(2)(i) and 
(ii) of this section and will send a letter by first-class mail if it 
cannot give it to the employee directly. If it mails the notice, it is 
deemed to be received within 5 days.
    (2) The employee must elect in writing to either continue health 
benefits coverage or terminate it. (Exception: An employee who is 
subject to a court or administrative order as discussed in Sec.  
890.301(g)(3) cannot 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(ren).) The employee may 
continue coverage by choosing one of the following ways to pay and 
returning the signed form to the employing office within 31 days after 
he or she receives the notice (45 days for an employee residing 
overseas). When an employee mails the signed form, its postmark will be 
used as the date the form is returned to the employing office. If an 
employee elects to continue coverage, he or she must elect in writing 
one of the following:

[[Page 34851]]

    (i) Pay the premium directly to the agency and keep the payments 
current. The employee must also agree that if he or she does not pay 
the premiums currently, the employing office will recover the amount of 
accrued unpaid premiums as a debt under paragraph (b)(2)(ii) of this 
section.
    (ii) If the employee does not wish to pay the premium directly to 
the agency and keep payments current, he or she may agree that 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 a leave without pay (LWOP) status or 
pay was not enough to cover premiums. 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 Federal Government.
    (3) If the employee does not return the signed form within the time 
period described in paragraph (b)(2) of this section, the employing 
office will terminate the enrollment and notify the employee in writing 
of the termination.
    (4)(i) If the employee is prevented by circumstances beyond his or 
her control from returning a signed form to the employing office within 
the time period described in paragraph (b)(2) of this section, he or 
she may write to the employing office and request reinstatement of the 
enrollment. The employee must describe the circumstances that prevented 
him or her from returning the form. The request for reinstatement must 
be made within 30 calendar days from the date the employing office 
gives the employee notice of the termination. The employing office will 
determine if the employee is eligible for reinstatement of coverage. 
When the determination is affirmative, the employing office will 
reinstate 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 (see Sec.  890.104).
    (ii) If the employee is subject to a court or administrative order 
as discussed in Sec.  890.301(g)(3), the coverage cannot terminate. If 
the employee does not return the signed form, the coverage will 
continue and the employee will incur a debt to the Federal Government 
as discussed in paragraphs (b)(2)(i) and (b)(2)(ii) of this section.
    (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 pay status in a position in which the employee 
is eligible for coverage under this part.
    (c) Procedures when agency under-withholds premiums. (1) An agency 
that withholds less than the amount due for health benefits 
contributions from an individual's pay, annuity, or compensation must 
submit an amount equal to the uncollected employee contributions and 
any applicable agency contributions to OPM for deposit in the Employees 
Health Benefits Fund.
    (2) The agency must make the deposit to OPM as soon as possible, 
but no later than 60 calendar days after it determines the amount of an 
under-deduction that has occurred, regardless of whether or when the 
agency recovers the under-deduction. A subsequent agency decision on 
whether to waive collection of the overpayment of pay caused by failure 
to properly withhold employee health benefits contributions will be 
made under 5 U.S.C. 5584 as implemented by 4 CFR chapter I, subchapter 
G, unless the agency involved is excluded from 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, or if a 
surviving spouse receives a basic employee death benefit, the 
retirement system must provide written information to the annuitant or 
surviving spouse. The information must describe the health benefits 
plans available, and include the opportunity to either (i) enroll in a 
health benefits plan in which the enrollee's share of the premium is 
less than the annuity amount or (ii) pay the premium directly to the 
retirement system.
    (2) The retirement system must accept direct payment for health 
benefits premiums in these circumstances. The annuitant or surviving 
spouse must continue direct payment of the premium even if the annuity 
increases to the extent that it covers the premium.
    (3) The annuitant or surviving spouse must pay the retirement 
system his or her share of the premium for the enrollment for every pay 
period during which the enrollment continues, except for the 31-day 
temporary extension of coverage. The individual must make the payment 
after each pay period in which he or she is covered using a schedule 
set up by the retirement system. If the retirement system does not 
receive payment by the due date, it must notify the individual in 
writing that continued coverage depends upon payment being made within 
15 days (45 days for annuitants or surviving spouses residing overseas) 
after the notice is received. If no subsequent payments are made, the 
retirement system terminates the enrollment 60 days after the date of 
the notice (90 days for annuitants or surviving spouses residing 
overseas). An annuitant or surviving spouse whose enrollment terminated 
due to nonpayment of premium may not reenroll or reinstate coverage 
unless there are circumstances beyond his or her control 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 the premium within 
15 days after receiving the notice, he or she may ask the retirement 
system to reinstate the enrollment by writing the retirement system. 
The individual must describe the circumstances and send the request 
within 30 calendar days from the termination date. The retirement 
system will determine if the annuitant or surviving spouse is eligible 
for reinstatement of coverage. When the determination is affirmative, 
the retirement system will reinstate the coverage retroactive to the 
date of termination. If the determination is negative, then the 
individual may request a review of the decision from the retirement 
system, as described in Sec.  890.104.
    (5) Termination of enrollment for failure to pay premiums within 
the time frame described in paragraph (d)(3) of this section is 
retroactive to the end of the last pay period for which payment was 
timely received.
    (6) The retirement system will submit all direct premium payments 
along with its regular health benefits premiums to OPM according to 
procedures established by OPM.
    (e) Procedures for direct payment of premiums during LWOP after 365 
days. (1) An employee who is granted leave without pay (LWOP) under 
subpart L of part 630 of this chapter (Family and

[[Page 34852]]

Medical Leave) after 365 days of continued coverage under Sec.  
890.303(e) must pay the employee contributions directly to the 
employing office and keep payments current.
    (2) The employee must make payments after the pay period in which 
the employee is covered according to a schedule set up by the employing 
office. If the employing office does not receive the payment by the 
date due, it must notify the employee in writing that continued 
coverage depends upon payment being made within 15 days (45 days for 
employees residing overseas) after the notice is received. If no 
subsequent payments are made, the employing office terminates the 
enrollment 60 days after the date of the notice (90 days for enrollees 
residing overseas).
    (3) If the enrollee was prevented by circumstances beyond his or 
her control from making payment within the timeframe in paragraph 
(e)(2) of this section, he or she may ask the employing office to 
reinstate the enrollment by writing to the employing office. The 
employee must file the request within 30 calendar days from the date of 
termination and must include supporting documentation.
    (4) The employing office determines whether the employee is 
eligible for reinstatement of coverage. When the determination is 
affirmative, the employing office will reinstate the coverage of the 
employee retroactive to the date of termination. If the determination 
is negative, the employee may request the employing agency to review 
the decision as provided under Sec.  890.104.
    (5) An employee whose coverage is terminated under paragraph (e)(2) 
of this section may enroll if he or she returns to duty in a pay status 
in a position in which the employee is eligible for coverage under this 
part.
* * * * *
[FR Doc. E6-9418 Filed 6-15-06; 8:45 am]
BILLING CODE 6329-39-P