[Federal Register Volume 72, Number 10 (Wednesday, January 17, 2007)]
[Rules and Regulations]
[Pages 1911-1912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-533]



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 Rules and Regulations
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 to and codified in the Code of Federal Regulations, which is published 
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  Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / 
Rules and Regulations  

[[Page 1911]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AK95


Federal Employees Health Benefits Program: Discontinuance of 
Health Plan in an Emergency

AGENCY: Office of Personnel Management.

ACTION: Final Regulation.

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

SUMMARY: The Office of Personnel Management (OPM) is issuing a final 
rule to amend the Federal Employees Health Benefits (FEHB) regulations 
regarding discontinuance of a health plan to include situations in 
which a health plan becomes incapacitated, either temporarily or 
permanently, as the result of a disaster.

EFFECTIVE DATE: February 16, 2007.

FOR FURTHER INFORMATION CONTACT: For further information contact Edward 
M. DeHarde, Center for Employee and Family Support Policy, Strategic 
Human Resources Policy Division, Office of Personnel Management, 1900 E 
Street, NW., Washington, DC 20415; or call him at 202-606-0004.

SUPPLEMENTARY INFORMATION: OPM currently has regulations dealing with 
the discontinuance of a health plan in whole or part. The regulations 
apply when a plan goes out of business or withdraws from the FEHB 
Program. Enrollees in such plans are notified that they need to change 
plans. The regulations also allow the automatic transfer of the 
enrollment of annuitants who do not change plans.
    In light of the devastation wrought by Hurricane Katrina, OPM has 
expanded the discontinuation of a health plan to include situations in 
which a plan becomes incapable of providing services, either on a 
permanent or temporary basis, because of a disaster. In such a 
situation enrollees are now allowed to change health plans. However, 
depending on the nature of the disaster, it may not be possible to 
locate enrollees to notify them of the need to change health plans. To 
ensure there is no loss of coverage, any enrollee who is not able to 
make a change in these circumstances will be transferred automatically 
to the standard option of the nationwide Blue Cross and Blue Shield 
Service Benefit Plan. To the extent practical, OPM will work together 
with carriers and agencies to notify affected individual employees, and 
OPM will make general notification or announcement on its Web site.
    Invoking the provisions of these final regulations will be at OPM's 
discretion. OPM will provide whatever notification is feasible, if a 
disaster necessitates enrollment changes under these provisions.
    It should be noted that, although one of the regulatory sections 
being amended, Sec.  890.301, refers to employees who do not 
participate in premium conversion, under the premium conversion 
regulations at Sec.  892.207 these provisions would also apply to 
employees who do participate in premium conversion.
    A proposed rule was published to amend 5 CFR part 890 in the 
Federal Register at 71 FR 11287, March 7, 2006. OPM requested comments 
by May 8, 2006. We received one comment by that date, from an FEHB 
Program carrier. The issues raised by this commenter are discussed 
below.
    The commenter suggested the regulations are unfair to affected 
carriers as it could force them to incur lost revenue; the commenter 
indicated that the proposed regulations do not define terms such as 
incapacitated, discontinuance, and disaster; the commenter suggested 
that the regulations do not provide a clear process for OPM to make 
determinations, enforce rules or communicate with members and plans; 
and the commenter suggested that the regulations give overly broad 
discretion to OPM.
    The intent of the regulations is that Federal employees can receive 
coverage for services in the event of a disaster, even if the 
employee's health plan is incapable of providing coverage. The 
regulations do not affect any health plan that could still provide 
benefit coverage to affected enrollees. Loss of coverage due to the 
discontinuation of a health plan is a longstanding part of FEHB Program 
regulations. The proposed rule adds discontinuation due to disaster to 
the list of possible causes for the discontinuation of a health plan.
    Under existing regulations, annuitants who do not change health 
plans when a plan is discontinued are deemed to have enrolled in the 
nationwide Blue Cross and Blue Shield Service Benefit Plan; however, 
employees who do not change health plans are deemed to have cancelled 
their coverage. Under the new rule, employees receive the same 
protection as annuitants when their health plan is discontinued due to 
disaster. This will ensure that no enrollee loses coverage because of a 
disaster. The rule requires wide latitude in its application since no 
one can accurately predict disaster or its aftermath. OPM is committed 
to protecting the health and safety of the Federal workforce. 
Therefore, for the reasons supplied in the proposed rule, we are 
adopting the proposed rule as the final rule without change.

Regulatory Flexibility Act

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

Executive Order 12866, Regulatory Review

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

Lists of Subjects in 5 CFR Part 890

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

    U.S. Office of Personnel Management.
Linda M. Springer,
Director.

0
Accordingly, OPM is amending part 890 of title 5, Code of Federal 
Regulations as follows:

[[Page 1912]]

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

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

    Authority: 5 U.S.C. 8913; Sec.  890.303 also issued under 50 
U.S.C. 403p, 22 U.S.C. 4069c and 4069c-1; subpart L also issued 
under sec. 599 C of Pub. L 101-513, 104 Stat. 2064, as amended; 
Sec.  890.102 also issued under sections 11202(f), 11232(e), and 
11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251; and section 721 
of Pub. L. 105-261, 112 Stat. 2061 unless otherwise noted.


0
2. In Sec.  890.301 add new paragraph (i)(4)(iv) to read as follows:


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

* * * * *
    (i) * * *
    (4) * * *
    (iv) If the discontinuance of the plan, whether permanent or 
temporary, is due to a disaster, an employee must change the enrollment 
within 60 days of the disaster, as announced by OPM. If an employee 
does not change the enrollment within the time frame announced by OPM, 
the employee will be considered to be enrolled in the standard option 
of the Blue Cross and Blue Shield Service Benefit Plan. The effective 
date of enrollment changes under this provision will be set by OPM when 
it makes the announcement allowing such changes.
* * * * *

0
3. In Sec.  890.306 add new paragraph (1)(4)(v) to read as follows:


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

* * * * *
    (1) * * *
    (4) * * *
    (v) If the discontinuance of the plan, whether permanent or 
temporary, is due to a disaster, an annuitant must change the 
enrollment within 60 days of the disaster, as announced by OPM. If an 
annuitant does not change the enrollment within the time frame 
announced by OPM, the annuitant will be considered to be enrolled in 
the standard option of the Blue Cross and Blue Shield Service Benefit 
Plan. The effective date of enrollment changes under this provision 
will be set by OPM when it makes the announcement allowing such 
changes.
* * * * *

0
4. In Sec.  890.806 add new paragraph (j)(4)(iv) to read as follows:


Sec.  890.806  When can former spouses change enrollment or reenroll 
and what are the effective dates?

* * * * *
    (j) * * *
    (4) * * *
    (iv) If the discontinuance of the plan, whether permanent or 
temporary, is due to a disaster, the former spouse must change the 
enrollment within 60 days of the disaster, as announced by OPM. If the 
former spouse does not change the enrollment within the time frame 
announced by OPM, the former spouse will be considered to be enrolled 
in the standard option of the Blue Cross and Blue Shield Service 
Benefit Plan. The effective date of enrollment changes under this 
provision will be set by OPM when it makes the announcement allowing 
such changes.
* * * * *

0
5. In Sec.  890.1108 add new paragraph (h)(4)(iv) to read as follows:


Sec.  890.1108  Opportunities to change enrollment; effective dates.

* * * * *
    (h) * * *
    (4) * * *
    (iv) If the discontinuance of the plan, whether permanent or 
temporary, is due to a disaster, the enrollee must change the 
enrollment within 60 days of the disaster, as announced by OPM. If the 
enrollee does not change the enrollment within the time frame announced 
by OPM, the enrollee will be considered to be enrolled in the standard 
option of the Blue Cross and Blue Shield Service Benefit Plan. The 
effective date of enrollment changes under this provision will be set 
by OPM when it makes the announcement allowing such changes.
* * * * *

 [FR Doc. E7-533 Filed 1-16-07; 8:45 am]
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