[Federal Register Volume 71, Number 119 (Wednesday, June 21, 2006)]
[Rules and Regulations]
[Pages 35527-35537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5490]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[DoD-2006-OS-0022]
RIN 0720-AA99


Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); TRICARE Reserve Select for Members of the Selected Reserve

AGENCY: Office of the Secretary, DoD.

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule revises requirements and procedures 
for TRICARE Reserve Select pursuant to section 701 of the National 
Defense Authorization Act for FY 2006 (NDAA-06). TRICARE Reserve Select 
is the premium-based medical coverage program first made available in 
April 2005 for purchase by members of the Selected Reserve who fulfill 
the statutory qualification of having served on active duty in support 
of a contingency operation among other qualifications. By adding two 
new tiers of premium sharing by the government (50% and 85% member 
portion) to the existing premium tier (28% member portion), this 
interim final rule expands availability of TRICARE Reserve Select to 
include all Selected Reservists pursuant to section 702 of NDAA-06.

DATES: This rule is effective July 21, 2006. Submit comments on or 
before August 21, 2006. Coverage established during the one-time 
special open season described herein will be available no later than 
October 1, 2006.

ADDRESSES: You may submit comments, identified by docket number and or 
RIN number and title, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Federal Docket Management System Office, 1160 
Defense Pentagon, Washington, DC 20301-1160.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Information Number (RIN) for this 
Federal Register document. The general policy for comments and other 
submissions from members of the public is to make these submissions 
available for public viewing on the Internet at http://regulations.gov 
as they are received without change, including any personal identifiers 
or contact information.

FOR FURTHER INFORMATION CONTACT: Jody Donehoo, TRICARE Management 
Activity, TRICARE Operations, telephone (703) 681-0039.
    Questions regarding payment of specific claims under the TRICARE 
allowable charge method should be addressed to the appropriate TRICARE 
contractor.

SUPPLEMENTARY INFORMATION:

I. Introduction and Background

    An interim final rule was published in the Federal Register on 
March 16, 2005 (70 FR 12798-12805), that addressed three provisions of 
the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 
2005 (NDAA-05) (Pub. L. 108-375). That interim final rule established 
requirements and procedures to make permanent two provisions of the 
NDAA-05. Section 706 of the NDAA-05 made permanent the temporary 
revisions to the Transitional Assistance Management Program (TAMP), 
enacted in section 704 of the National Defense Authorization Act for 
Fiscal Year 2004 (NDAA-04) (Pub.L. 18-136) and section 1117 of the 
Emergency Supplemental Appropriations Act for the Reconstruction of 
Iraq and Afghanistan, 2004 (Emergency Supplemental) (Pub. L.108-106). 
Section 703 of the NDAA-05 made permanent the earlier TRICARE 
eligibility for certain reserve component members authorized by section 
703 of the NDAA-04 and section 1116 of the Emergency Supplemental. A 
separate final rule will be issued for the requirements established by 
sections 703 and 706 of the NDAA for FY05.
    The interim final rule published on March 16, 2005, also 
established requirements and procedures for implementation of TRICARE 
Reserve Select, the program authorized by section 701 of the NDAA-05 
for premium-based medical coverage for certain members of the Selected 
Reserve and their family members. Before a final rule could be issued 
subsequent to the interim final rule published in the Federal Register 
on March 16, 2005 (70 FR 12798-12805), for the TRICARE Reserve Select 
program, it became evident that subsequent legislation would likely 
amend the statutory provisions in section 701 of the NDAA-05 
implemented in the interim final rule.
    Therefore, this interim rule contains the provisions of the former 
interim rule on the TRICARE Reserve Select program (70 FR 12798-12805) 
and addresses two provisions of the National Defense Authorization Act 
for Fiscal Year 2006 (NDAA-06) (Pub. L. 109-163). First, section 701 of 
the NDAA-06 contains several provisions to enhance the TRICARE Reserve 
Select program implemented in fulfillment of section 701 of the NDAA-
05. Second, section 702 of the NDAA-06 expands the TRICARE Reserve 
Select program to make it available to all members of the Selected 
Reserve of the Ready Reserve by providing the statutory basis to 
establish two tiers of premium sharing subject to a number of 
additional specific statutory requirements, which are outlined in this 
regulation. These two tiers are in addition to the premium sharing tier 
established by section 701 of the NDAA-05.
    The law authorizing the TRICARE Reserve Select program uses the 
term ``eligibility'' to identify conditions under which a Reserve 
component member may purchase coverage. For purposes of program 
administration, the terms ``qualifying'' or ``qualified'' shall 
generally be used in lieu of such terms as ``eligibility'' or 
``eligible'' to refer to a Reserve component member who meets the 
program requirements allowing purchase of TRICARE Reserve Select 
coverage.
    This interim rule introduces certain terminology for TRICARE 
Reserve Select intended to reflect critical elements that distinguish 
it from other long-established TRICARE health programs. For instance, 
the effective date of eligibility for TRICARE has long been understood 
to mean that the eligible individual may obtain care under the military 
health system as of that date. However, that is not what it means in 
the context of TRICARE Reserve Select. To avoid the inevitable 
misunderstanding, this rule uses 239 the term ``qualify'' to mean that 
the member's reserve component has validated that the member has 
satisfied all the ``qualifications'' that must be met before the member 
is authorized to purchase coverage under a particular tier. Only then 
may the member purchase coverage by taking further action to submit a 
completed application along with payment of a one month premium. The 
term ``coverage'' indicates the benefit of TRICARE covering claims 
submitted by TRICARE authorized providers, hospitals, and

[[Page 35528]]

suppliers for payment of covered services, supplies, and equipment.

II. TRICARE Reserve Select Program

    A. Establishment of the TRICARE Reserve Select Program (paragraph 
199.24(a)). This paragraph describes the nature, purpose, statutory 
basis, scope, and major features of TRICARE Reserve Select, a premium-
based medical coverage program that was made available worldwide to 
certain members of the Selected Reserve and their family members. 
TRICARE Reserve Select is authorized by 10 U.S.C. 1076b and 10 U.S.C. 
1076d.
    The major features of the program include the following. TRICARE 
Reserve Select coverage is available for purchase by any Selected 
Reserve member if the member fulfills all of the statutory 
qualifications for one of the three premium tiers. The percentage of 
the total amount of the premium that members pay in each of the three 
premium tiers is prescribed by law: 28% for Tier 1,50% for Tier 2, and 
85% for Tier 3. Within each tier there is one premium rate for self-
only coverage and one premium rate for self and family coverage. 
Additionally, TRICARE rules apply unless otherwise specified; certain 
special TRICARE programs are not part of TRICARE Reserve Select, 
including the Extended Health Care Option (ECHO) program, the Special 
Supplemental Food Program (also known as the Women, Infants, and 
Children--Overseas Program), and the Supplemental 240 Health Care 
Program, except when referred by a Medical Treatment Facility (MTF) 
provider for incidental consults and the MTF provider maintains 
clinical control over the episode of care. The TRICARE Dental Program 
is already available under 10 USC 1076a to all members of the Selected 
Reserve and their family members whether or not they purchase TRICARE 
Reserve Select coverage.
    Under TRICARE Reserve Select, Selected Reserve members who fulfill 
all of the statutory qualifications for one of the three premium tiers 
may purchase either the self-only type of coverage or the self and 
family type of coverage by submitting a completed application form 
along with the appropriate monthly premium at the time of enrollment. 
When their coverage becomes effective, TRICARE Reserve Select 
beneficiaries receive the TRICARE Standard (and Extra) benefit. TRICARE 
Reserve Select features the deductible and cost share provisions of the 
TRICARE Standard (and Extra) plan for active duty family members (ADFM) 
for both the member and covered family members.
    B. TRICARE Reserve Select premium tiers (paragraph 199.24(b)). 
Members are charged premiums for coverage under TRICARE Reserve Select 
that represent a portion of the total amount that the Assistant 
Secretary of Defense, Health Affairs (ASD(HA)) determines on an 
appropriate actuarial basis as being appropriate for coverage under the 
TRICARE Standard benefit for the TRICARE Reserve Select eligible 
population.
    Members may qualify for one of three tiers of premium sharing with 
the Department of Defense. The first tier was established by section 
701 of the NDAA-05 as 28% of the total cost of the premium and 
implemented in accordance with regulation issued March 16,2005, (70 FR 
12798-12805).
    Selected Reserve members who qualify to purchase TRICARE Reserve 
Select coverage in Tier 1 shall pay 28% of the total cost of the 
premium. In the event of the death of a member of the Selected Reserve 
who is covered by TRICARE Reserve Select at the time of death, the 
premium amount shall be at the self-only rate if there is only one 
surviving family member to be covered by TRICARE Reserve Select and at 
the self and family rate if there are two or more survivors to be 
covered by TRICARE Reserve Select.
    The NDAA-06 added two more tiers of premium sharing for members who 
may qualify as specified in paragraph 199.24(c). Selected Reserve 
members who qualify to purchase TRICARE Reserve Select coverage in Tier 
2 shall pay 50% of the total cost of the premium. Selected Reserve 
members who qualify to purchase TRICARE Reserve Select coverage in Tier 
3 shall pay 85% of the total cost of the premium.
    Annual rates for the first year TRICARE Reserve Select was offered 
(calendar year 2005) were based on the annual premiums for the Blue 
Cross and Blue Shield Standard Service Benefit Plan under the Federal 
Employees Health Benefits Program, a nationwide plan closely resembling 
TRICARE Standard (and Extra) coverage, with an adjustment based on 
estimated differences in covered populations, as determined by the 
ASD(HA).
    Based on an analysis of demographic differences between Blue Cross 
and Blue Shield participants and beneficiaries eligible for TRICARE 
Reserve Select, the adjustment amount in calendar year 2005 represented 
a 32% reduction from the Blue Cross and Blue Shield annual premium for 
self-only coverage and represented an 8% reduction from the Blue Cross 
and Blue Shield annual premium for self and family coverage. (The 
difference in the percentage reductions between self-only and self and 
family premiums is due to the disproportionately high number of high 
cost, single, elderly retiree federal employees covered by Blue Cross 
and Blue Shield self-only coverage).
    Premiums are to be paid monthly, except as otherwise established as 
part of the administrative implementation of TRICARE Reserve Select. 
Monthly premium rates are established and updated annually to maintain 
an appropriate relationship with the annual changes in Blue Cross and 
Blue Shield premiums, or by other adjustment methodology determined to 
be appropriate by the ASD(HA).
    Separate rates will be established and updated annually for each of 
the two types of coverage, self-only and self and family, within each 
of the three tiers on a calendar year basis and are effective on the 
first of January each year. The monthly rate for each month of a 
calendar year is one-twelfth of the annual rate for that calendar year.
    In addition to these annual premium changes, premium adjustments 
may also be made prospectively for any calendar year to reflect any 
significant program changes or any actual experience in the costs of 
administering the TRICARE Reserve Select Program.
    For calendar year 2005, the total annual premium for self-only 
coverage was $3,214 and the total annual premium for self and family 
coverage was $9,985. The member's portion of the annual premium for 
self-only coverage under TRICARE Reserve Select in Tier 1 was $900 ($75 
monthly). The member's portion of the annual premium for self and 
family coverage under TRICARE Reserve Select in Tier 1 was $2,796 ($233 
monthly).
    For calendar year 2006, the total annual premium for self-only 
coverage increased 8.5% to $3,487 (rounded to the nearest dollar) and 
the total annual premium (Tier 1) for self and family coverage 
increased 8.5% to $10,834 (rounded to the nearest dollar). The 8.5% 
increase mirrors the increase in Blue Cross and Blue Shield rates in 
the Federal Employee Health Benefits program.
    (a) For calendar year 2006, the member's portion in Tier 1 is 28% 
of the annual premium. Self-only coverage is $972 ($81 monthly). Self 
and family coverage is $3,036 ($253 monthly).
    (b) For calendar year 2006, the member's portion in Tier 2 is 50% 
of the annual premium. Self-only coverage is $1,743.48 ($145.29 
monthly). Self and family coverage is $5,417.04 ($451.42 monthly).

[[Page 35529]]

    (b) For calendar year 2006, the member's portion in Tier 3 is 85% 
of the annual premium. Self-only coverage is $2,964.00 ($247.00 
monthly). Self and family coverage is $9,208.92 ($767.41 monthly).
    C. Eligibility for qualifying to purchase TRICARE Reserve Select 
coverage (paragraph I99.24(c)). This paragraph defines the statutory 
conditions for each of the three tiers within which members of a 
Reserve component may qualify to purchase TRICARE Reserve Select 
coverage. The Reserve components of the Armed Forces have the 
responsibility to determine and validate a member's qualifications to 
purchase TRICARE Reserve Select coverage and to identify the premium 
tier for which they qualify.
    Section 701 of NDAA-05 established two distinct statutory basis for 
qualifying to purchase TRICARE Reserve Select coverage under Tier 1. 
The first statutory basis for Tier 1 established that a member or 
former member of a Reserve component of the Armed Forces who was 
released from active duty on or before April 26, 2005, qualifies to 
purchase TRICARE Reserve Select coverage in Tier 1 if the member meets 
all of the following conditions:
    (a) Was called or ordered to active duty for a period of more than 
30 days on or after September 11, 2001 under a provision of law 
referred to in 10 U.S.C. 101(a)(13)(B);
    (b) Served continuously on active duty for 90 days or more pursuant 
to such call or order to active duty (unless such continuous service on 
active duty is less than 90 days solely due to an injury, illness, or 
disease incurred or aggravated while deployed, as provided in 10 U.S.C. 
1076d(b)(2)(A));
    (c) Was released from active duty on or before April 26, 2005;
    (d) Executed a service agreement with his or her Reserve component 
prior to purchasing TRICARE Reserve Select coverage, but no later than 
October 28, 2005, to serve continuously in the Selected Reserve for a 
period of 1 or more years; and,
    (e) Is in a Selected Reserve status on the first day of coverage 
for TRICARE Reserve Select and maintains continued membership in the 
Selected Reserve.
    This temporary opportunity for Tier 1 (until October 28, 2005) 
applied to current members of the Selected Reserve, and also to former 
members who served in support of a contingency after September 11, 
2001, who rejoined the Selected Reserve, and who entered into a service 
agreement for continued service.
    In conformance with section 701(b)(2)(B) of the NDAA-05, the 
Department took steps to notify reservists released from active duty on 
or before April 26, 2005, who could potentially qualify for TRICARE 
Reserve Select and provided them information on the opportunity and 
procedures for entering into a service agreement together with a clear 
explanation of the benefits that the member is eligible to receive 
under TRICARE Reserve Select as a result of entering into such service 
agreement. Specifically, the Department delivered this information to 
all potentially eligible members (376,800) through a mass mailing 
conducted from April 22, 2005, to May 12, 2005.
    The second statutory basis for Tier 1 established that a member or 
former member of a Reserve component of the Armed Forces who was 
released from active duty after April 26, 2005, qualifies to purchase 
TRICARE Reserve Select coverage in Tier 1 if the member meets all of 
the following conditions:
    (a) Is called or ordered to active duty for a period of more than 
30 days on or after September 11, 2001 under a provision of law 
referred to in 10 U.S.C. 101(a)(13)(B);
    (b) Serves continuously on active duty for 90 days or more in 
support of a contingency operation on or after September 11, 2001 
(unless such continuous service on active duty is less than 90 days 
solely due to an injury, illness, or disease incurred or aggravated 
while deployed, as provided in 10 U.S.C. 1076d(b)(2)(A)); and
    (c) Is released from active duty after April 26, 2005;
    (d) Executed a service agreement with his or her Reserve component 
to serve continuously in the Selected Reserve for a period of 1 or more 
years on or before the date of release from active duty if released 
from active duty before January 6, 2006, or not later than 90 days 
after release from active duty if released from active duty on or after 
January 6, 2006, except in the case of a member of the Individual Ready 
Reserve described in below, with the effective date of the Service 
agreement coinciding with the 246 TRS coverage begin date
    (e) If not already a member of the Selected Reserve, the member 
shall be in the Selected Reserve on the first day of coverage for 
TRICARE Reserve Select and shall maintain continued membership in the 
Selected Reserve. A member of the Individual Ready Reserve released 
from active duty on or after January 6, 2006, who is unable to find a 
position in the Selected Reserve and who qualifies TRICARE Reserve 
Select coverage, except for membership in the Selected Reserve, has one 
year from the expiration of the member's entitlements to care and 
benefits following a qualifying period of active duty to execute a 
service agreement with his or her Reserve component and become a member 
of the Selected Reserve. A member of the Selected Reserve released from 
active duty on or after January 6, 2006, who loses his or her position 
in the Selected Reserve before the end of the Transitional Assistance 
Management Program (TAMP) shall have one year from the expiration of 
TAMP period to execute a service agreement with his or her Reserve 
component and again become a member of the Selected Reserve. This 
opportunity for Tier I coverage is now permanent under the statute.
    The statutory basis for Tier 2 established that a member who is a 
member of a Reserve component of the Armed Services qualifies to 
purchase TRICARE Reserve. Select coverage in Tier 2 if the member meets 
all of the following conditions:
    (a) Executes a service agreement to serve continuously in the 
Selected Reserve for a period of time that extends through the period 
of coverage; and
    (b) Maintains continued membership in the Selected Reserve as 
determined by the member's Reserve component; and
    (c) Submits certification in accordance with procedures established 
by the Under Secretary of Defense for Personnel and Readiness that is 
appropriate to substantiate the Reserve component member's assertion 
that the member is one of the following:

--an eligible unemployment compensation recipient;
--either employed by an employer that does not offer a health benefits 
plan to anyone working for the employer, or is in a category of 
employees (based on hours, duties, employment agreement, or such other 
characteristic, but not membership in the Selected Reserve) to which 
the member's employer does not offer a health benefits plan;
--self-employed (where income earned from such self-employment is the 
member's primary source of annual income, as reported to the IRS, other 
than service in the Selected Reserve).

    Further, the member shall submit certification appropriate to 
substantiate the member's assertion of qualifying for Tier 2 in 
accordance with procedures established by the Under Secretary of 
Defense for Personnel and Readiness. Documentation required to support 
the certifications includes supplementation covering the full period of 
qualification. In the event that documentation fails to support 
qualification or continued qualification or the condition of

[[Page 35530]]

qualification otherwise ceases to exist and the member fails to report 
such event to the TRICARE contractor servicing the member's coverage, 
the member's coverage under Tier 2 will terminate, effective on the 
date the required condition ceased to exist. In that case, the member 
may elect coverage in Tier 3 and will be responsible for the additional 
premiums required for Tier 3, effective from that date.
    The statutory basis for Tier 3 established that a member who is a 
member of a Reserve component of the Armed Services qualifies to 
purchase TRICARE Reserve 248 Select coverage in Tier 3 if the member 
meets all of the following conditions.
    (a) Executes a service agreement to serve continuously in the 
Selected Reserve for a period of time that extends through the period 
of coverage;
    (b) Maintains continued membership in the Selected Reserve: and
    (c) Does not qualify for either Tier 1 or Tier 2.
    D. TRICARE Reserve Select enrollment procedures (paragraph 
199.24(d)). To purchase TRICARE Reserve Select coverage, Reserve 
component members qualified under paragraph 199.24(c) must complete and 
submit the applicable TRICARE enrollment application, along with an 
initial payment of the monthly premium share required under paragraph 
199.24(b) to the appropriate TRICARE contractor in accordance with 
deadlines and other procedures established by the ASD(HA) for receipt 
not later than 30 days prior to the start of the period of coverage as 
it has been determined. A member may purchase one of two types of 
coverage: self-only coverage or self and family coverage.
    For qualified members, the decision to purchase TRICARE Reserve 
Select coverage in Tier I is a one-time opportunity. If not purchased 
within the prescribed time limit, if coverage is taken for a period 
less than the maximum period of eligibility, or if coverage is 
terminated for any reason, coverage may not be initiated or extended 
later, nor may any period of qualification be saved to be used later.
    Members qualified under Tier I based upon qualifying active duty 
that ended on or before April 26, 2005 are required to submit the 
required application and premium 249 payment as soon as practicable 
after entering into a Service Agreement with their respective Reserve 
component. Members qualified under Tier I based upon qualifying active 
duty that ended after April 26, 2005 are required to submit the proper 
application and premium payment for receipt by the appropriate TRICARE 
contractor not later than 30 days before the last day of qualifying 
active duty or the last day of coverage under the Transition Assistance 
Management Program, whichever is later, unless the otherwise qualified 
member is a member of the Individual Ready Reserve at that time. In 
that case, the member shall submit the required application and premium 
payment as soon as practicable after entering into a Service Agreement 
with his or her respective Reserve component.
    Thus, for example, if a member served for one year in support of a 
contingency operation, the member may purchase Tier I coverage for the 
next four years if the member agrees to continue service in the 
Selected Reserve for four years. However, if that member elects to 
continue service in the Selected Reserve for only two years, the member 
will qualify for only two years of TRICARE Reserve Select coverage 
under the Tier 1 premium rate. This two-year coverage period based on 
the qualifying period of active duty cannot be extended later, even if 
the member later extends Selected Reserve service for two more years. 
The only way to extend TRICARE Reserve Select coverage under the Tier 1 
premium rate beyond the period determined when the one-time choice is 
made is by qualifying again through another period of active duty 
service in support of a contingency operation.
    Open Season is the time period during which a member who qualifies 
for coverage in Tier 2 or Tier 3 may purchase new coverage, renew 
existing coverage with or without 250 a change in type of coverage, or 
terminate coverage. One open season will be offered each year in 
accordance with procedures established by the ASD(HA). A one-time 
special open season will be offered in 2006 for members to purchase 
coverage and coverage will be available no later than October 1, 2006. 
Before a member's coverage may be renewed during open season, the 
service agreement must be valid through December 31st of the renewed 
year of coverage and all other qualifications under Tier 2 or Tier 3 
must be validated by the member's Reserve component. Actions requested 
during an open season will take effect January 1st of the year 
following the open season. Existing Coverage that is not renewed during 
open season will be terminated no later than December 31st of that 
year. Upon assignment to the Selected Reserves, members who qualify for 
coverage under either Tier 2 Or Tier 3 may purchase coverage in 
accordance with deadlines and other procedures established by the 
ASD(HA). Members may request certain changes to their TRICARE Reserve 
Select Coverage in connection with certain events called qualifying 
life events in accordance with deadlines and other procedures 
established by the ASD(HA). The first type of qualifying life event is 
associated with changes in immediate family composition and it is the 
responsibility of the member to provide his or her personnel office 
with the necessary evidence required to substantiate the change in 
immediate family composition. Personnel will update the Defense 
Enrollment Eligibility Reporting System (DEERS) in the usual manner, 
which will then notify the appropriate TRICARE contractor who will take 
appropriate action upon receipt of a proper application. The second 
type of qualifying life event is associated with changes in family 
employment or health coverage status.
    If a member who is covered under Tier I experiences a qualifying 
life event, the only action a member may request is a change in type of 
coverage. The member may request termination of coverage at any time; 
however, they will not be allowed to purchase coverage again under Tier 
1, unless the member qualifies again for Tier 1 coverage after the date 
of termination for Tier 1 coverage. If a member who is covered under 
either Tier 2 or Tier 3 experiences a qualifying life event, the member 
may apply to purchase coverage, request changes in type of coverage, or 
terminate coverage. Otherwise, a member who is covered under either 
Tier 2 or Tier 3 may not request to terminate coverage outside of open 
season.
    A member of a Reserve component who qualifies to purchase coverage 
may elect self-only or self and family coverage. Immediate family 
members of the Reserve component member, as defined in Sec. Sec.  
199.3(b)(2)(i) (except former spouses) and 199.3(b)(2)(ii) of this 
part, may be included in such family coverage. After purchasing 
coverage under Tier 1, members may change type of coverage only in 
conjunction with a qualifying life event. After purchasing coverage 
under Tiers 2 and 3, members may change type of coverage either during 
an open season or in conjunction with a qualifying life event.
    The period of coverage for members who qualify under Tier 1 is 
equal to either the number of whole years covered by the executed 
service agreement, or to one year in the case of a member who is 
otherwise eligible but does not serve continuously on active duty for 
90 days because of an injury,

[[Page 35531]]

illness, or disease incurred or aggravated while deployed.
    The period of coverage for members released from active duty on or 
before April 26, 2005 begins on the date that is the later of the 
expiration of TAMP benefits or the 252 effective date of the service 
agreement, but in no case later than October 28, 2005.
    The period of coverage for members released from active duty after 
April 26, 2005, begins on the first day following the date their TAMP 
benefits period ends under section 199.3(e) of this part; or the date 
that a member of the Individual Ready Reserve finds and occupies a 
position in the Selected Reserve, up to one year after expiration of 
TAMP benefits. The enrollment in TRICARE Reserve Select must be 
accomplished within 60 days of assignment to the Selected Reserve. When 
coverage is terminated or the member is otherwise disenrolled, a member 
may not purchase coverage in Tier 1 again unless recalled to active 
duty and the member qualifies again for this tier.
    If a member of the Selected Reserves dies while in a period of 
coverage under Tier 1, the family member(s) may purchase new or 
continue TRICARE Reserve Select Tier 1 coverage for up to six months 
beyond the date of the member's death upon payment of monthly premiums. 
The premium amount shall be at the member only rate if there is only 
one surviving family member to be covered by TRICARE Reserve Select and 
at the member and family rate if there are two or more survivors to be 
covered.
    The maximum duration for any period of coverage purchased by 
members who qualify for TRICARE Reserve Select under either Tier 2 or 
Tier 3 is one year and will coincide with the calendar year. The period 
of coverage begins in accordance with procedures established by the 
ASD(HA) and ends December 31st of the same year in which the current 
period of coverage began.
    The period of coverage for members who purchase coverage in either 
Tier 2 or Tier 3 during the annual open season begins January 1st of 
the year immediately following the open season and ends December 31st 
of that same year.
    The period of coverage for members who purchase coverage in either 
Tier 2 or Tier 3 as a result of assignment to the Selected Reserve or 
as a result of a qualifying life event described below begins in 
accordance with procedures established by the ASD(HA) and ends December 
31st of the same year that coverage begins.
    Coverage will terminate whenever a member ceases to meet the 
qualifications for the particular tier under which coverage was 
purchased or a request for termination is received in accordance with 
established procedures. However, unless the member's Reserve component 
terminates the member's service in the Selected Reserve, the service 
agreement remains in force and the end date is unchanged. Termination 
of coverage for the member will result in termination of coverage for 
the member's family members in TRICARE Reserve Select, except for 
qualified survivors of Reserve component members covered by TRICARE 
Reserve Select under Tier 1 at the time of death. Failure to make a 
premium payment in a timely manner will result in termination of 
coverage for the member and any covered family members and denial of 
claims for services received after the effective date of termination. 
Members whose coverage under Tier 1 terminates will not be allowed to 
purchase coverage again under Tier 1, unless the member qualifies again 
for Tier 1 coverage after the date of termination. Members whose 
coverage under any of the three tiers terminates may purchase coverage 
again under either Tier 2 or Tier 3 if they qualify during the annual 
open season, or in connection with a qualifying life event.
    Effective January 6, 2006, with enactment of section 701 of the 
NDAA-06, the rules changed with regard to the TRICARE Reserve Select 
Tier 1 period of coverage when a member serves on active duty. Before 
January 6, 2006, when a member covered by TRICARE Reserve Select serves 
on active duty for a period of more than 30 days and receives other 
TRICARE coverage, TRICARE Reserve Select coverage is superseded 
[italics added] for the member and any covered family members, but the 
period of coverage continues to run. During any period in which TRICARE 
Reserve Select coverage is superseded, no premium payments for TRICARE 
Reserve Select are due. If applicable, this other TRICARE coverage 
includes early TRICARE coverage based on delayed-effective-date orders 
under Sec.  199.3(b)(5) of this part and TAMP benefits under Sec.  
199.3(e) of this part. If the original end date of TRICARE Reserve 
Select coverage has not been reached by the time the other TRICARE 
coverage terminates, TRICARE Reserve Select coverage will resume with 
the same type of coverage in effect on the date coverage was suspended. 
Coverage will continue until the original end date of coverage or until 
coverage is otherwise terminated. In addition, TRICARE Reserve Select 
coverage is also superseded by a new period of coverage established as 
a result of re-qualifying through another period of active duty service 
in support of a contingency operation under Sec.  199.24(c) of this 
part.
    On or after January 6, 2006, when a member covered by TRICARE 
Reserve Select under Tier 1 serves on active duty under orders for a 
period of more than 30 days and receives other TRICARE coverage, 
TRICARE Reserve Select Tier 1 coverage is suspended [italics added] for 
the member and any covered family members and the period of coverage 
stops. During any period in which TRICARE Reserve Select coverage is 
suspended, no premium payments for TRICARE Reserve Select are due. If 
applicable, this other TRICARE coverage includes early TRICARE coverage 
based on delayed-effective-date orders under Sec.  199.3(b)(5) of this 
part and TAMP benefits under Sec.  199.3(e) of this part. The end date 
of the TRICARE Reserve Select Tier 1 period of coverage will be 
extended for a period of time equal to the period of time that TRICARE 
Reserve Select coverage was suspended. TRICARE Reserve Select Tier 1 
coverage will continue until the adjusted end date, or until coverage 
is otherwise terminated. In addition, the end date of the TRICARE 
Reserve Select Tier 1 period of coverage will be extended for a period 
of time equal to any new period of coverage established as a result of 
re-qualifying through another period of active duty service in support 
of a contingency operation under Sec.  199.24(c) of this part and all 
other qualifications are met.
    E. Relationship to Continued Health Care Benefits Program (CHCBP) 
(paragraph 199.24(e)). This paragraph addresses the relationship 
between TRICARE Reserve Select and the CHCBP. CHCBP is a program that 
(among other things) allows members released from active duty to 
purchase continued health care coverage through TRICARE. Coverage under 
TRICARE Reserve Select counts as coverage under a health benefit plan 
for purposes of individuals qualifying for the Continued Health Care 
Benefits Program (CHCBP) under Sec.  199.20(d)(1)(ii)(B) or Sec.  
199.20(d)(1)(iii)(B) of this part. Some members and family members will 
be eligible for Tier 1 of TRICARE Reserve Select, and may also be 
eligible for CHCBP at the time of release from active duty.
    This paragraph of the regulation provides that if a member 
purchases TRICARE Reserve Select coverage that is later terminated, the 
member or the

[[Page 35532]]

covered family members may then purchase CHCBP coverage for whatever 
period is remaining of the original 18 month eligibility. For example, 
in the case that TRICARE Reserve Select Tier 1 coverage that is 
terminated because of transfer or discharge from the Selected Reserve 
(such as through a reduction in force or base closure) of a member is 
within 18 months of release from active duty, the member could choose 
to continue health care coverage under CHCBP for the remainder of the 
period at the applicable CHCBP premiums. Eligibility and coverage for 
TRICARE Reserve Select under either Tier 2 or Tier 3 has no effect on 
eligibility for the CHCBP.
    F. Preemption of State laws (paragraph 199.24(f)). This paragraph 
explains that the preemptions of State and local laws established for 
the TRICARE program also apply to TRICARE Reserve Select. Any State or 
local law or regulation pertaining to health insurance, prepaid health 
plans, or other health care delivery, administration, and financing 
methods is preempted and does not apply in connection with TRICARE 
Reserve Select.
    This includes State and local laws imposing premium taxes on health 
insurance carriers, underwriters or other plan managers, or similar 
taxes on such entities. Preemption does not apply to taxes, fees, or 
other payments on net income or profit realized by such entities in the 
conduct of business relating to DoD health services contracts, if those 
taxes, fees or other payments are applicable to a broad range of 
business activity. For the purposes of assessing the effect of Federal 
preemption of State and local taxes and fees in connection with DoD 
health services contracts, interpretations shall be consistent with 
those applicable to the Federal Employees Health Benefits Program under 
5 U.S.C. 8909(f).
    G. Administration (paragraph 199.24(g)). This paragraph provides 
that the ASD(HA) may establish other rules and procedures necessary for 
the effective administration of TRICARE Reserve Select.

III. Regulatory Procedures

    Executive Order 12866 requires certain regulatory assessments for 
any significant regulatory action that would result in an annual effect 
on the economy of $100 million or more, or have other substantial 
impacts. The Congressional Review Act establishes certain procedures 
for major rules, defined as those with similar major impacts. The 
Regulatory Flexibility Act (RFA) requires that each Federal agency 
prepare, and make available for public comment, a regulatory 
flexibility analysis when the agency issues a regulation that would 
have significant impact on a substantial number of small entities. This 
interim final rule is not subject to any of those requirements because 
it would not have any of these substantial impacts. Any substantial 
impacts associated with implementation of TRICARE Reserve Select are 
already determined by statute and are outside any discretionary action 
of DoD or effect of this regulation.
    This rule, however, does address novel policy issues relating to 
implementation of a new medical benefits program for members of the 
armed forces. Thus, this rule has been reviewed by the Office of 
Management and Budget under E.O. 12866.
    We are in the process of determining whether the interim final rule 
imposes ``collection of information'' requirements on the public within 
the meaning of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3511). If the determination is in the affirmative, we will promptly 
submit these to the Office of Management and Budget for review and 
approval in accordance with the Paperwork Reduction Act.
    We have examined the impact(s) of the final rule under Executive 
Order 13132 and it does not have policies that have federalism 
implications that would have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government, therefore, consultation with State and local 
officials is not required.

List of Subjects in 32 CFR Part 199

    Claims, handicapped, health insurance, and military personnel.

0
Accordingly, 32 CFR Part 199 is amended as follows:

PART 199--[AMENDED]

0
1. The authority citation for part 199 continues to read as follows:

    Authority: 5 U.S.C. 301; 10 U.S.C. chapter 55.


0
2. Section 199.2(b) is amended by revising the definition of ``TRICARE 
Reserve Select'' to read as follows:


Sec.  199.2  Definitions.

* * * * *
    (b) * * *
    TRICARE Reserve Select. The program established under 10 U.S.C. 
1076d and 32 CFR 199.24.
* * * * *


0
3. Section 199.24 is revised to read as follows:


Sec.  199.24  TRICARE Reserve Select.

    (a) Establishment. TRICARE Reserve Select is established for the 
purpose of offering TRICARE Standard and Extra health coverage to 
qualified members of the Selected Reserve and their immediate family 
members.
    (1) Purpose. TRICARE Reserve Select is a premium-based health plan 
that will be available to members of the Selected Reserve and their 
immediate family members as specified in paragraph (c) of this section.
    (2) Statutory Authority. TRICARE Reserve Select is authorized by 10 
U.S.C. 1076b and 1076d.
    (3) Scope of the Program. TRICARE Reserve Select is applicable in 
the 50 United States, the District of Columbia, Puerto Rico, and, to 
the extent practicable, other areas where members of the Selected 
Reserve serve. In locations other than the 50 states of the United 
States and the District of Columbia, the Assistant Secretary of Defense 
may authorize modifications to the program rules and procedures as may 
be appropriate to the area involved.
    (4) Terminology. Certain terminology is introduced for TRICARE 
Reserve Select intended to reflect critical elements that distinguish 
it from other long-established TRICARE health programs. For instance, 
the effective date of eligibility for TRICARE has long been understood 
to mean that the eligible individual may obtain care under the military 
health system as of that date. However, that is not what it means in 
the context of TRICARE Reserve Select. To avoid the inevitable 
misunderstanding, this regulation uses the term ``qualify'' to mean 
that the member's reserve component has validated that the member has 
satisfied all the ``qualifications'' that must be met before the member 
is authorized to purchase coverage under a particular premium tier. 
Only then may the member purchase coverage by taking further action to 
submit a completed application along with payment of a one month 
premium. The term ``coverage'' indicates the benefit of TRICARE 
covering claims submitted for payment of covered services, supplies, 
and equipment furnished by TRICARE authorized providers, hospitals, and 
suppliers.
    (5) Major Features of TRICARE Reserve Select. The major features of 
the program include the following:
    (i) TRICARE rules applicable. (A) Unless specified in this section 
or otherwise prescribed by the ASD(HA),

[[Page 35533]]

provisions of 32 CFR Part 199 apply to TRICARE Reserve Select.
    (B) Certain special programs established in 32 CFR Part 199 are not 
available to members covered under TRICARE Reserve Select. These 
include the Extended Health Care Option Program (see Sec.  199.5), and 
the Special Supplemental Food Program (see Sec.  199.23), and the 
Supplemental Health Care Program (see Sec.  199.16) except when 
referred by a Medical Treatment Facility (MTF) provider for incidental 
consults and the MTF provider maintains clinical control over the 
episode of care. The TRICARE Dental Program (see Sec.  199.13) is 
independent of this program and is otherwise available to all members 
of the Selected Reserve and their eligible family members whether or 
not they purchase TRICARE Reserve Select coverage.
    (ii) Premium Tiers. TRICARE Reserve Select coverage is available 
for 261 purchase by any Selected Reserve member if the member fulfills 
all of the statutory qualifications for one of the three premium tiers. 
The percentage of the total amount of the premium that members pay in 
each of the three premium tiers is prescribed by law: 28% for Tier 1, 
50% for Tier 2, and 85% for Tier 3. Within each tier there is one 
premium rate for self-only coverage and one premium rate for self and 
family coverage.
    (iii) Enrollment system. Under TRICARE Reserve Select, Reserve 
component members who have been validated as fulfilling all of the 
statutory qualifications for one of the three premium tiers may 
purchase either the self-only type of coverage or the self and family 
type of coverage by submitting a completed application form along with 
the appropriate monthly premium at the time of enrollment. Rules and 
procedures for purchasing coverage and paying applicable premiums are 
prescribed in this section.
    (iv) Benefits. When their coverage becomes effective, TRICARE 
Reserve Select beneficiaries receive the TRICARE Standard (and Extra) 
benefit including access to military treatment facility services and 
pharmacies, as described in Sec.  199.17 of this part. TRICARE Reserve 
Select coverage features the deductible and cost share provisions of 
the TRICARE Standard (and Extra) plan for active duty family members 
for both the member and the member's covered family members. The 
TRICARE Standard (and Extra) plan is described in section Sec.  199.17 
of this part.
    (b) TRICARE Reserve Select premium tiers. A member of the Selected 
Reserve covered under TRICARE Reserve Select shall be required to pay a 
portion of the total amount that the ASD(HA) determines on an 
appropriate actuarial basis as being appropriate for that coverage. The 
member's monthly share of the premium is one-twelfth of the annual 
portion. The particular share of the premium to be paid by the member 
is determined by the particular tier for which a member qualifies as 
established in paragraphs (c)(2) of this section. The member's share of 
the premium is to be paid monthly, except as otherwise provided through 
administrative implementation, pursuant to procedures established by 
the ASD(HA).
    (1) Member's Share of the Total Premium. (i) Tier 1. Selected 
Reserve members who qualify to purchase TRICARE Reserve Select coverage 
under paragraph (c)(2)(i) of this section shall pay 28% of the total 
cost of the premium as determined above. In the event of the death of a 
member of the Selected Reserve who is covered by TRICARE Reserve Select 
at the time of death, the premium amount shall be at the self-only rate 
if there is only one surviving family member to be covered by TRICARE 
Reserve Select and at the self and family rate if there are two or more 
survivors to be covered by TRICARE Reserve Select.
    (ii) Tier 2. Selected Reserve members who qualify to purchase 
TRICARE Reserve Select coverage under paragraph (c)(2)(ii) of this 
section shall pay 50% of the total cost of the premium as determined 
paragraph (c) of this section.
    (iii) Tier 3. Selected Reserve members who qualify to purchase 
TRICARE Reserve Select coverage under paragraph (c)(2)(iii) of this 
section shall pay 85% of the total cost of the premium as determined 
paragraph (c) of this section.
    (2) Annual establishment of rates. (i) TRICARE Reserve Select 
monthly premium rates shall be established and updated annually on a 
calendar year basis by the ASD(HA) for each of the two types of 
coverage, self-only and self and family as described in paragraphs 
(d)(2) of this section, within each of the premium tiers.
    (ii) Annual rates for the first year TRICARE Reserve Select was 
offered (calendar year 2005) were based on the annual premiums for the 
Blue Cross and Blue Shield Standard Service Benefit Plan under the 
Federal Employees Health Benefits Program, a nationwide plan closely 
resembling TRICARE Standard (and Extra) coverage, with adjustments 
based on estimated differences in covered populations, as determined by 
the ASD(HA).
    (A) For calendar year 2005, the total annual premium for self-only 
coverage was $3,214 and the total annual premium for self and family 
coverage was $9,985. The member's portion of the annual premium for 
self-only coverage under TRICARE Reserve Select in Tier 1 was $900 ($75 
monthly). The member's portion of the annual premium for self and 
family coverage under TRICARE Reserve Select in Tier 1 was $2,796 ($233 
monthly).
    (B) For calendar year 2006, the total annual premium for self-only 
coverage is $3,487 and the total annual premium for self and family 
coverage is $10,834 (rounded to the nearest dollar).
    (1) In Tier 1, the member's portion is 28% of the annual premium. 
Self-only coverage is $972 ($81 monthly). Self and family coverage is 
$3,036 ($253 monthly).
    (2) In Tier 2, the member's portion is 50% of the annual premium. 
Self-only coverage is $1,743.48 ($145.29 monthly). Self and family 
coverage is $5,417.04 ($451.42 monthly).
    (3) In Tier 3, the member's portion is 85% of the annual premium. 
Self-only coverage is $2,964.00 ($247.00 monthly). Self and family 
coverage is $9,208.92 ($767.41 monthly).
    (3) Premium adjustments. In addition to the determinations 
described in paragraph (b)(2)(i) of this section, premium adjustments 
may be made prospectively for any calendar year to reflect any 
significant program changes or any actual experience in the costs of 
administering the TRICARE Reserve Select Program.
    (c) Eligibility for (qualifying to purchase) TRICARE Reserve Select 
coverage. (1) General--The law authorizing the TRICARE Reserve Select 
program uses the term ``eligibility'' to identify conditions under 
which a Reserve component member may purchase coverage. For purposes of 
program administration, the terms ``qualifying'' or ``qualified'' shall 
generally be used in lieu of such terms as ``eligibility'' or 
``eligible'' to refer to a Reserve component member who meets the 
program requirements allowing purchase of TRICARE Reserve Select 
coverage.
    (2) Reserve component members who meet the qualifications defined 
in paragraphs (c)(2)(i), (c)(2)(ii), or (c)(2)(iii), and have their 
qualifications validated under procedures in paragraph (c)(2)(iv) of 
this section may purchase TRICARE Reserve Select coverage as defined in 
this section. The Reserve components of the Armed Forces have the 
responsibility to determine and validate a member's qualifications to 
purchase TRICARE

[[Page 35534]]

 Reserve Select coverage and identify the premium tier for which the 
member qualifies.
    (i) Tier 1. (A) Members released from active duty on or before 
April 26, 2005. A member or former member of a Reserve component of the 
Armed Forces who was released from active duty on or before April 26, 
2005, qualifies to purchase TRICARE Reserve Select coverage in Tier 1 
if the member meets all of the following conditions:
    (1) Was called or ordered to active duty for a period of more than 
30 days on or after September 11, 2001 under a provision of law 
referred to in 10 U.S.C. 101(a)(13)(B);
    (2) Served continuously on active duty for 90 days or more pursuant 
to such call or order to active duty (unless such continuous service on 
active duty is less than 90 days solely due to an injury, illness, or 
disease incurred or aggravated while deployed, as provided in 10 U.S.C. 
1076d(b)(2)(A);
    (3) Was released from active duty on or before April 26, 2005;
    (4) Executed a service agreement with his or her Reserve component 
to serve continuously in the Selected Reserve for a period of 1 or more 
years prior to purchasing TRICARE Reserve Select coverage, but no later 
than October 28, 2005; and
    (5) Is in a Selected Reserve status on the first day of coverage 
for TRICARE Reserve Select and maintains continued membership in the 
Selected Reserve.
    (B) Members released from active duty after April 26, 2005. A 
member released from active duty after April 26, 2005, who is a member 
of a Reserve component of the Armed Forces qualifies to purchase 
TRICARE Reserve Select coverage in Tier 1 if the member meets all of 
the following conditions:
    (1) Is called or ordered to active duty for a period of more than 
30 days on or after September 11, 2001 under a provision of law 
referred to in 10 U.S.C. 101(a)(13)(B);
    (2) Serves continuously on active duty for 90 days or more pursuant 
to such call or order to active duty (unless such continuous service on 
active duty is less than 90 days solely due to an injury, illness, or 
disease incurred or aggravated while deployed, as provided in 10 U.S.C. 
1076d(b(2)(A));
    (3) Is released from active duty after April 26, 2005;
    (4) Executed a service agreement with his or her Reserve component 
to serve continuously in the Selected Reserve for a period of 1 or more 
years on or before the date of release from active duty if released 
from active duty before January 6, 2006, or not later than 90 days 
after release from active duty if released from active duty on or after 
January 6, 2006, except in the case of a member of the Individual Ready 
Reserve described in paragraph (c)(2)(i)(B)(5) of this section, with 
the effective date of the Service agreement coinciding with the TRS 
coverage begin date; and
    (5) If not already a member of the Selected Reserve, the member 
shall be in the Selected Reserve on the first day of coverage for 
TRICARE Reserve Select and shall maintain continued membership in the 
Selected Reserve. A member of the Individual Ready Reserve released 
from active duty on or after January 6, 2006, who is unable to find a 
position in the Selected Reserve and qualifies for TRICARE Reserve 
Select coverage, except for membership in the Selected Reserve, has one 
year from the expiration of the member's entitlements to care and 
benefits following a qualifying period of active duty to execute a 
service agreement with his or her Reserve component and become a member 
of the Selected Reserve. A member of the Selected Reserve released from 
active duty on or after January 6, 2006, who loses his or her position 
in the Selected Reserve before the end of the Transitional Assistance 
Management Program (TAMP) shall have one year from the expiration of 
TAMP period to execute a service agreement with his or her Reserve 
component and again become a member of the Selected Reserve.
    (ii) Tier 2. A member who is a member of a Reserve component of the 
Armed Forces qualifies to purchase TRICARE Reserve Select coverage in 
Tier 2 if the member meets all of the following conditions:
    (A) Executes a service agreement with his or her Reserve component 
to serve continuously in the Selected Reserve for a period of time that 
extends through the period of coverage;
    (B) Maintains continued membership in the Selected Reserve; and
    (C) Submits certification in accordance with procedures established 
by the Under Secretary of Defense for Personnel and Readiness that is 
appropriate to substantiate the Reserve component member's assertion 
that the member is one of the following:
    (1) An eligible unemployment compensation recipient. This is a 
member who, with respect to any month, is determined eligible for any 
day of such month for unemployment compensation under State law (as 
defined in section 205(9) of the Federal-State Extended Unemployment 
Compensation Act of 1970), including Federal unemployment compensation 
laws administered through the State;
    (2) An employee ineligible for health care benefits under an 
employer-sponsored health benefits plan. A Reserve component member 
shall be considered ineligible for health care benefits under an 
employer-sponsored health benefits plan only if the member is an 
employee and either:
    (i) Is employed by an employer that does not offer a health 
benefits plan to anyone working for the employer; or
    (ii) Is in a category of employees to which the member's employer 
does not offer a health benefits plan, if such category is designated 
by the employer based on hours, duties, employment agreement, or such 
other characteristic, other than membership in the Selected Reserve, as 
the regulations administering this section prescribe (such as part-time 
employees).
    (3) Self-employed. A Reserve component member shall be considered 
to be self-employed if the income earned from such self-employment is 
the member's primary source of annual income, as reported to the IRS, 
other than service in the Selected Reserve.
    (iii) Tier 3. A member who is a member of a Reserve component of 
the Armed Forces qualifies to purchase TRICARE Reserve Select coverage 
in Tier 3 if the member meets all of the following conditions:
    (A) Executes a service agreement with his or her Reserve component 
to serve continuously in the Selected Reserve for a period of time that 
extends through the period of coverage;
    (B) Maintains continued membership in the Selected Reserve; and
    (C) Does not qualify under paragraphs (c)(2)(i) or (c)(2)(ii).
    (iv) Procedures validating qualifications for TRS coverage. (A) The 
Reserve components are responsible for determining the member's Reserve 
category, details of potentially qualifying active duty periods, 
periods of obligation, and other military personnel matters that are 
pertinent to validating the member's qualifications and identification 
of the premium tier for which a member may purchase coverage. An 
executed service agreement does not guarantee Selected Reserve status 
for the full time period covered by the service agreement. Further, the 
member shall submit certification appropriate to substantiate the 
member's assertion of qualifying under paragraph (c)(2)(ii) of this 
section in accordance with procedures established by the Under 
Secretary of Defense for Personnel and Readiness.
    (B) Documentation required to support the certifications referred 
to in paragraph (c)(2)(ii)(C) of this section includes supplementation 
covering the

[[Page 35535]]

full period of qualification. In the event that documentation fails to 
support qualification or continued qualification or the condition of 
qualification otherwise ceases to exist and the member fails to report 
such event to the TRICARE contractor servicing the member's coverage, 
the member's coverage under Tier 2 will terminate, effective on the 
date the required condition ceased to exist. In that case, the member's 
coverage will be in Tier 3 and the member will be responsible for the 
additional premiums required for Tier 3, effective from that date.
    (d) TRICARE Reserve Select enrollment procedures.
    (1) Application procedures. To purchase TRICARE Reserve Select 
coverage, qualified Reserve component members must complete and submit 
the applicable TRICARE enrollment application, along with an initial 
payment of the appropriate monthly premium share required by paragraph 
(b)(3) of this section to the appropriate TRICARE contractor in 
accordance with deadlines and other procedures established by the 
ASD(HA).
    (i) Tier 1. For qualified members, the decision to purchase TRICARE 
Reserve Select coverage in Tier 1 is a one-time opportunity. If not 
purchased in a timely manner, if coverage is taken for a period less 
than the maximum period of qualification, or if coverage is terminated 
for any reason, coverage may not be initiated or extended later, nor 
may any period of qualification be saved to be used later. Members 
qualified under paragraph (c)(2)(i)(A) of this section are required to 
submit the required application and premium payment as soon as 
practicable after entering into a Service Agreement with their 
respective Reserve component. Members qualified under paragraph 
(c)(2)(i)(B) of this section are required to submit the required 
application and premium payment for receipt by the appropriate TRICARE 
contractor not later than 30 days before the last day of qualifying 
active duty or the last day of coverage under the Transition Assistance 
Management Program, whichever is later, unless the otherwise qualified 
member is a member of the Individual Ready Reserve at that time. In 
that case, the member shall submit the required application and premium 
payment as soon as practicable after entering into a Service Agreement 
with his or her respective Reserve component.
    (ii) Open Season for Tiers 2 and 3. Open Season is the time period 
during which a member who qualifies for coverage under either paragraph 
(c)(2)(ii) or paragraph (c)(2)(iii) of this section may purchase new 
coverage, renew existing coverage with or without a change in type of 
coverage, or terminate coverage. One open season will be offered each 
year in accordance with procedures established by the ASD(HA). Before a 
member's coverage may be renewed, the service agreement must be valid 
through December 31st of the renewed year of coverage and all other 
qualifications under either paragraph (c)(2)(ii) or paragraph 
(c)(2)(iii) of this section must be validated by the member's Reserve 
component. Actions requested during an open season will take effect 
January 1st of the year following the open season. Existing coverage 
that is not renewed will be terminated no later than December 31st of 
that year. A one-time special open season will be offered in 2006 for 
members to purchase coverage.
    (iii) New Selected Reservists. Upon assignment to the Selected 
Reserves, members who qualify for coverage under either paragraph 
(c)(2)(ii) or paragraph (c)(2)(iii) of this section may purchase 
coverage in accordance with deadlines and other procedures established 
by the ASD(HA).
    (iv) Qualifying Life Events. TRS members may request certain 
changes to their TRS coverage in connection with certain events called 
qualifying life events in accordance with deadlines and other 
procedures established by the ASD(HA). The first type of qualifying 
life event is associated with changes in immediate family composition. 
The second type of qualifying life event is associated with changes in 
family employment or health coverage status. If a member who is covered 
under Tier 1 experiences a qualifying life event, the only action a 
member may request is a change in type of coverage. (The member may 
request termination of coverage at any time; however, the member will 
not be allowed to purchase coverage again under Tier 1, unless he or 
she qualifies again after the date of termination for Tier 1 coverage). 
If a member who is covered under either Tier 2 or Tier 3 experiences a 
qualifying life event, the member may apply to purchase coverage, 
request changes in type of coverage, or terminate coverage.
    (2) Type of coverage. A member of a Reserve component who qualifies 
to purchase coverage under paragraph 272(c) of this section may elect 
self-only or self and family coverage. Immediate family members as 
defined in Sec. Sec.  199.3(b)(2)(i) (except former spouses) and 199.3 
(b)(2)(ii) of this part may be included in such family coverage.
    (i) Tier 1. After purchasing coverage, members who qualified under 
paragraph (c)(2)(i)(A) or (c)(2)(i)(B) of this section may change type 
of coverage only in conjunction with a qualifying life event described 
in paragraph (d)(1)(iv) of this section. The change will become 
effective in accordance with procedures established by the ASD(HA).
    (ii) Tiers 2 and 3. After purchasing coverage, members who 
qualified under either paragraph (c)(2)(ii) or paragraph (c)(2)(iii) of 
this section may change type of coverage either during an open season 
described in paragraph (d)(1)(ii) of this section or in conjunction 
with a qualifying life event described in paragraph (d)(1)(iv) of this 
section. The change will become effective in accordance with procedures 
established by the ASD(HA).
    (3) Period of coverage.
    (i) Tier 1. (A) The period of coverage for members who qualify 
under (c)(2)(i) of this section shall be equal to the lesser of--
    (1) one year, in the case of a member who otherwise qualifies but 
does not serve continuously on active duty for 90 days because of an 
injury, illness, or disease incurred or aggravated while deployed;
    (2) one year for each consecutive period of 90 days of continuous 
active duty described in paragraph (c)(2)(i)(A)(1) or (c)(2)(i)(B)(1); 
or
    (3) the number of whole years for which the member agrees under 
paragraph (c)(2)(i)(A)(4) or (c)(2)(i)(B)(4) to continue to serve in 
the Selected Reserve after the coverage begins.
    (B) The number of years established by the service agreement that 
was entered into prior to beginning coverage in TRICARE Reserve Select 
under paragraph (c)(2)(i)(A)(4) or (c)(2)(i)(B)(4) of this section may 
not later be changed, even if that number of years was fewer than the 
maximum number of years that the member could have established in the 
service agreement. The number of years of coverage may only be changed 
if the member is recalled to active duty and qualifies again for a new 
period of coverage under paragraph (c)(2)(i) of this section. When 
coverage is terminated for any reason, a member may not purchase 
coverage again under paragraph (c)(2)(i)(B) unless recalled to active 
duty and the member qualifies again for a new period of coverage under 
paragraph (c) of this section.
    (C) The period of coverage for members who qualify under paragraph 
(c)(2)(i)(A) of this section begins on the date that is the later of 
the expiration of TAMP benefits under Sec.  199.3(e) of this part or 
the effective date of the service agreement referred to in paragraph 
(c)(2)(i)(A)(4) of this section, but in no

[[Page 35536]]

case later than October 28, 2005. The period of coverage for members 
who qualify under (c)(2)(i)(B) of this section begins the later of the 
day after the last day of active duty; the day after the expiration of 
TAMP benefits under Sec.  19(e) of this part; or the date that a member 
of the Individual Ready Reserve finds and occupies a position in the 
Selected Reserve, up to one year after either the last day of active 
duty or the expiration of TAMP benefits, whichever is later.
    (D) If a member of the Selected Reserves dies while in a period of 
TRICARE Reserve Select coverage under Tier 1, the family member(s) may 
purchase new or continuing TRICARE Reserve Select coverage under Tier 1 
for up to six months beyond the date of the member's death upon payment 
of monthly premiums. The premium amount payable shall be as determined 
in accordance with paragraph (b)(1)(i) of this section.
    (ii) Tiers 2 and 3. The maximum duration for any period of coverage 
purchased by members who qualify for TRICARE Reserve Select under 
either paragraph (c)(2)(ii) or paragraph (c)(2)(iii) is one year and 
will coincide with the calendar year. The period of coverage begins in 
accordance with procedures established by the ASD(HA) and ends December 
31st of the same year in which the current period of coverage began.
    (4) Enrollment processing. Following validation, upon receipt of a 
completed TRICARE Reserve Select application, along with an initial 
payment of the appropriate monthly premium share required by paragraph 
(b) of this section, the appropriate TRICARE contractor will process 
enrollment actions into DEERS in accordance with deadlines and other 
procedures established by the ASD(HA).
    (5) Termination. Coverage will terminate whenever a member ceases 
to meet any of the qualifications for the particular tier under which 
coverage was purchased or a request for termination for Tier 1 coverage 
is received in accordance with procedures established by the ASD(HA). 
However, unless the member's Reserve component terminates the member's 
service in the Selected Reserve, the service agreement described in 
paragraph (c) of this section remains in force and the end date is 
unchanged. Termination of coverage for the member will result in 
termination of coverage for the member's family members in TRICARE 
Reserve Select, except as described in paragraphs (d)(3)(i)(D). The 
termination will become effective in accordance with procedures 
established by the ASD(HA).
    (i) Tier 1. Members whose coverage under Tier 1 terminates will not 
be allowed to purchase coverage again under Tier 1, unless the member 
qualifies again for Tier 1 coverage under (c)(2)(i)(B) of this section 
after the date of termination. However, the member may qualify for 
coverage under conditions identified either in paragraphs (c)(2)(ii) or 
(c)(2)(iii) of this section.
    (A) Members who qualify under paragraph (c)(2)(i) of this section 
may request to terminate coverage at any time.
    (B) Coverage shall terminate for members who no longer qualify for 
TRICARE Reserve Select as specified in paragraph (c) of this section, 
including when the member's service in the Selected Reserve terminates.
    (C) Coverage may terminate for members who fail to make a premium 
payment in accordance with procedures established by the ASD(HA).
    (D) Coverage for survivors as described in paragraph (d)(3)(i)(D) 
shall terminate six months after the date of death of the covered 
Reserve component member.
    (ii) Tiers 2 and 3. (A) Members who qualify under either paragraph 
(c)(2) or paragraph (c)(3) in this section may request to terminate 
coverage only during an open season by notifying the appropriate 
TRICARE office.
    (B) Coverage shall terminate for members who no longer qualify for 
TRICARE Reserve Select as specified under either paragraph (c)(2) or 
paragraph (c)(3) of this section, including when the member's service 
in the Selected Reserve terminates. However, members whose coverage 
under Tier 2 terminates may be able to purchase continued coverage 
under Tier 3 outside of open season if they qualify under paragraph 
(c)(2)(iii).
    (C) Coverage may terminate for members who fail to make a premium 
payment in accordance with procedures established by the ASD(HA).
    (D) During the month that a Reserve component member qualified for 
coverage under paragraph (c)(2)(ii) of this section ceases to qualify, 
the Reserve component member must submit a request to terminate 
coverage under Tier 2. Failure to do so will result with the member 
being retroactively enrolled in Tier 3 as of the date the member no 
longer qualified for Tier 2. Such member will be responsible for the 
payment of Tier 3 premiums.
    (6) Effect of Other TRICARE Benefits on TRICARE Reserve Select. 
During any period in which members covered by TRICARE Reserve Select 
receive full TRICARE medical benefits (except the certain special 
programs listed in paragraph (a)(5)(i)(B) of this section), no premium 
payments for TRICARE Reserve Select are due.
    (i) Tier 1. (A) Before January 6, 2006, when a member who was 
covered by TRICARE Reserve Select under Tier 1 serves on active duty 
for a period of more than 30 days and either is released from active 
duty or whose TAMP benefits under Sec.  199.3(e) of this part end 
before January 6, 2006, receives other TRICARE benefits; TRICARE 
Reserve Select coverage is superseded for the member and any covered 
family members, but the period of coverage continues to run and the end 
date of coverage remains unchanged. If applicable, such TRICARE 
coverage includes early TRICARE benefits based on delayed-effective-
date orders under Sec.  199.3(b)(5) of this part. If the original end 
date of TRICARE Reserve Select coverage has not been reached by the 
time the other TRICARE benefits terminate, TRICARE Reserve Select 
coverage will resume with the same type of coverage in effect on the 
date coverage was suspended. TRICARE Reserve Select coverage will 
continue until the original end date of coverage or until coverage is 
otherwise terminated. The service agreement in effect as described in 
paragraphs (c)(2)(i)(A)(4) or (c)(2)(i)(B)(4) of this section remains 
in force and the end date is unchanged. In addition, TRICARE Reserve 
Select coverage is also superseded by a new period of coverage 
established as a result of qualifying again under paragraph 
(c)(2)(1)(B) of this section.
    (B) On or after January 6, 2006, when a member who was covered by 
TRICARE Reserve Select under Tier 1 serves on active duty for a period 
of more than 30 days and either is released from active duty or whose 
TAMP benefits under Sec.  199.3(e) of this part end on or after January 
6, 2006, receives other TRICARE benefits; TRICARE Reserve Select 
coverage is suspended for the member and any covered family members. If 
such coverage was in effect on January 6, 2006, the effective date of 
the suspension is January 6, 2006. If applicable, such TRICARE coverage 
includes early TRICARE coverage based on delayed-effective-date orders 
under Sec.  199.3(b)(5) of this part and TAMP benefits under Sec.  
199.3(e) of this part. The end date of the TRICARE Reserve Select 
period of coverage will be extended for a period of time equal to the 
period of time that TRS coverage was suspended. TRICARE Reserve Select 
coverage will continue until the

[[Page 35537]]

adjusted end date, or until coverage is otherwise terminated. The 
service agreement in effect as described in paragraphs (c)(2)(i)(A)(4) 
or (c)(2)(i)(B)(4) of this section remains in force and the end date is 
unchanged. In addition, the end date of the TRICARE Reserve Select 
period of coverage will be extended for a period of time equal to any 
new period of coverage established as a result of qualifying again 
under paragraph (c)(2)(i)(B) of this section.
    (ii) Tiers 2 and 3. When a member covered by TRICARE Reserve Select 
under either Tier 2 or Tier 3 receives other TRICARE coverage, TRICARE 
Reserve Select coverage is superseded for the member and any covered 
family members, but the period of coverage continues to run and the end 
date of coverage remains unchanged. The service agreement described in 
paragraphs (c)(2)(ii) and (c)(2)(iii) of this section remains in force 
and the end data remains unchanged.
    (7) Periodic revision. Periodically, certain features, rules or 
procedures of TRICARE Reserve Select may be revised. If such revisions 
will have a significant effect on members' costs or access to care, 
members may be given the opportunity to change their type of coverage 
or terminate coverage coincident with the revisions.
    (e) Relationship to Continued Health Care Benefits Program. 
Coverage under TRICARE Reserve Select counts as coverage under a health 
benefit plan for purposes of individuals qualifying for the Continued 
Health Care Benefits Program (CHCBP) under Sec.  199.20(d)(1)(ii)(B) or 
Sec.  199.2(d)(1)(iii)(B) of this part.
    (1) Tier 1. If at the time a member who qualifies under (c)(2)(i) 
of this section purchases coverage in TRICARE Reserve Select, or 
resumes TRICARE Reserve Select coverage after a period in which 
coverage was superseded under paragraph (d)(6)(i)(A) or suspended under 
paragraph (d)(6)(i)(B) of this section, the member was also eligible to 
enroll in the Continued Health Care Benefits Program (CHCBP) under 
Sec.  199.20(d)(1)(i) of this part (except to the extent eligibility in 
CHCBP was affected by enrollment in TRICARE Reserve Select), enrollment 
in TRICARE Reserve Select will be deemed to also constitute preliminary 
enrollment in CHCBP. If for any reason the member's coverage under 
TRICARE Reserve Select terminates before the date that is 18 months 
after discharge or release from the most recent period of active duty 
upon which CHCBP eligibility was based, the member or the member's 
family members eligible to be included in CHCBP coverage may, within 30 
days of the effective date of the termination of TRICARE Reserve Select 
coverage, begin CHCBP coverage by following the applicable procedures 
to purchase CHCBP coverage. The period of coverage will be as provided 
in 199.20(d)(6) of the part.
    (2) Tiers 2 and 3. Coverage for TRICARE Reserve Select under either 
paragraph (c)(2)(ii) or paragraph (c)(2)(iii) of this section has no 
effect on eligibility for the CHCBP.
    (f) Preemption of State laws. (1) Pursuant to 10 U.S.C. 1103, the 
Department of Defense has determined that in the administration of 
chapter 55 of title 10, U.S. Code, preemption of State and local laws 
relating to health insurance, prepaid health plans, or other health 
care delivery or financing methods is necessary to achieve important 
Federal interests, including but not limited to the assurance of 
uniform national health programs for military families and the 
operation of such programs at the lowest possible cost to the 
Department of Defense, that have a direct and substantial effect on the 
conduct of military affairs and national security policy of the United 
States. This determination is applicable to contracts that implement 
this section.
    (2) Based on the determination set forth in paragraph (f)(1) of 
this section, any State or local law or regulation pertaining to health 
insurance, prepaid health plans, or other health care delivery, 
administration, and financing methods is preempted and does not apply 
in connection with TRICARE Reserve Select. Any such law, or regulation 
pursuant to such law, is without any force or effect, and State or 
local governments have no legal authority to enforce them in relation 
to TRICARE Reserve Select. (However, the Department of Defense may, by 
contract, establish legal obligations on the part of DoD contractors to 
conform with requirements similar to or identical to requirements of 
State or local laws or regulations with respect to TRICARE Reserve 
Select).
    (3) The preemption of State and local laws set forth in paragraph 
(f)(2) of this section includes State and local laws imposing premium 
taxes on health insurance carriers or underwriters or other plan 
managers, or similar taxes on such entities. Such laws are laws 
relating to health insurance, prepaid health plans, or other health 
care delivery or financing methods, within the meaning of 10 U.S.C. 
1103. Preemption, however, does not apply to taxes, fees, or other 
payments on net income or profit realized by such entities in the 
conduct of business relating to DoD health services contracts, if those 
taxes, fees or other payments are applicable to a broad range of 
business activity. For the purposes of assessing the effect of Federal 
preemption of State and local taxes and fees in connection with DoD 
health services contracts, interpretations shall be consistent with 
those applicable to the Federal Employees Health Benefits Program under 
5 U.S.C. 8909(f).
    (g) Administration. The ASD(HA) may establish other rules and 
procedures for the effective administration of TRICARE Reserve Select, 
and may authorize exceptions to requirements of this section, if 
permitted by law, based on extraordinary circumstances.

    Dated: June 13, 2006.
L.M. Bynum,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 06-5490 Filed 6-20-06; 8:45 am]
BILLING CODE 5001-06-M