[Federal Register Volume 72, Number 160 (Monday, August 20, 2007)]
[Rules and Regulations]
[Pages 46380-46386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16300]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[DOD-2006-HA-0207]
RIN 0720-AB15


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 and restructures eligibility to include all 
Selected Reservists, except for those individuals either enrolled or 
eligible to enroll in a health benefit plan under Chapter 89 of Title 
5, United States Code. The rule is being published as an interim final 
rule with comment period in order to comply with statutory effective 
dates.

DATES: Effective Date: This rule is effective October 1, 2007. Submit 
comments on or before September 19, 2007.

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

    A previous interim final rule was published in the Federal Register 
on March 16, 2005, (70 FR 12798-12805) that established requirements 
and procedures to implement TRICARE Reserve Select under section 701 of 
the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 
2005 (NDAA-05) (Pub. L. 108-375). Section 701 of NDAA-05 authorized 
premium-based medical coverage for certain members of the Selected 
Reserve and their family members. By April 2005, Selected Reserve 
members who served on active duty in support of a contingency operation 
and fulfilled other statutory qualifications could purchase TRICARE 
Reserve Select coverage for periods proportional to their period of 
active duty.
    A second interim final rule was published in the Federal Register 
on June 21, 2006, (71 FR 35527-35537). That interim final rule revised 
requirements and procedures for TRICARE Reserve Select pursuant to 
sections 701 and 702 of the National Defense Authorization Act for 
Fiscal Year 2006 (NDAA-06) (Pub. L. 109-163). Section 701 enhanced the 
existing TRICARE Reserve Select program. Section 702 added two new 
tiers of premium sharing by the government (50 percent and 85 percent 
member portion) to the existing premium tier (28 percent member 
portion), making TRICARE Reserve Select available to all Selected 
Reservists.
    Before a final rule could be issued subsequent to the interim final 
rule published in the Federal Register on June 21, 2006, (71 FR 35527-
35537) for the TRICARE Reserve Select program, Section 706 of the NDAA-
07 amended the statutory provisions in sections 701 and 702 of the 
NDAA-06 which were implemented in the interim final rule.
    Therefore, this interim rule addresses provisions of the National 
Defense Authorization Act for Fiscal Year 2007 (NDAA-07) (Pub. L. 109-
364). First, section 706 of the NDAA-07 expands the availability of the 
28 percent premium tier to all Selected Reservists with one exception. 
Those individuals either enrolled or eligible to enroll in a

[[Page 46381]]

health benefit plan under Chapter 89 of Title 5, United States Code are 
specifically excepted from eligibility under this legislation. Second, 
this section eliminates fixed length periods of coverage. Third, this 
section eliminates the 50 percent and 85 percent premium tiers to 
reflect the repeal of Section 1076b of Title 10, United States Code, in 
its entirety.
    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.
    The latter interim rule (June 21, 2006) introduced 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 the term 
``qualify'' to mean that the member has satisfied all the 
``qualifications'' that must be met before the member is authorized to 
purchase coverage. Only then may the member purchase coverage by 
submitting a completed request in the appropriate format along with 
payment of the applicable one month premium. The term ``coverage'' 
indicates the benefit of TRICARE covering claims submitted by TRICARE 
authorized providers, hospitals, and 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. 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. The amount of the premium that members pay is 
prescribed by the Secretary of Defense as one premium for member-only 
coverage and a second premium for member and family coverage. The 
statute eliminates the former tiered premium rate structure of TRICARE 
Reserve Select. Additionally, TRICARE rules apply unless otherwise 
specified; certain special TRICARE programs are not part of TRICARE 
Reserve Select, including the Extended Care Health Option (ECHO) 
program, the Special Supplemental Food Program (also known as the 
Women, Infants, and Children--Overseas Program), and the Supplemental 
Health Care Program, except when referred by a Military 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 U.S.C. 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 may purchase either the member-only 
type of coverage or the member and family type of coverage by 
submitting a completed request in the appropriate format along with 
payment of the applicable 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 premiums (paragraph 199.24(b)). Members 
are charged premiums for coverage under TRICARE Reserve Select that 
represent 28 percent of the total annual premium 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 (and Extra) benefit for the TRICARE Reserve Select 
eligible population. Premiums are to be paid monthly, except as 
otherwise established as part of the administrative implementation of 
TRICARE Reserve Select.
    Annual rates for the first year TRICARE Reserve Select was offered 
(2005) were based on the calendar year 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 members and beneficiaries eligible for TRICARE Reserve 
Select, the adjustment amount in calendar year 2005 represented a 32 
percent reduction from the Blue Cross and Blue Shield annual premium 
for member-only coverage and represented an 8 percent reduction from 
the Blue Cross and Blue Shield annual premium for member and family 
coverage. (The difference in the percentage reductions between member-
only and member 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 member-only coverage).
    TRICARE Reserve Select monthly premium rates are established and 
updated annually, on a calendar year basis, 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) for each of the two types of coverage, 
member-only coverage and member and family coverage, on a calendar year 
basis. 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.
    A surviving family member of a Reserve Component service member who 
qualified for TRICARE Reserve Select coverage as described in paragraph 
(c)(3) of this section will pay premium rates as follows. 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.
    C. Eligibility for qualifying to purchase TRICARE Reserve Select 
coverage (paragraph 199.24(c)). This paragraph defines the statutory 
conditions under which members of a Reserve component may qualify to 
purchase TRICARE Reserve Select coverage. Section 706 of NDAA-07 
restructures the availability of the 28 percent premium tier by 
requiring only two qualifying conditions.

[[Page 46382]]

    The qualifying condition to be ``a member of the Selected Reserve 
of the Ready Reserve of a reserve component of the armed forces,'' 
remains in force while all of the other former qualifying conditions 
are eliminated. The member's Service personnel office is responsible 
for keeping the Defense Enrollment Eligibility Reporting System (DEERS) 
current with eligibility data.
    One exclusionary qualifying condition is added that excludes ``a 
member who is enrolled, or is eligible to enroll, in a health benefits 
plan under chapter 89 of title 5 U.S.C,'' from purchasing TRICARE 
Reserve Select coverage.
    If a member of the Selected Reserve dies while in a period of 
TRICARE Reserve Select coverage, the family member(s) may purchase new 
or continue existing TRICARE Reserve Select coverage for up to six 
months beyond the date of the member's death upon payment of monthly 
premiums.

    D. Procedures (paragraph 199.24(d)).

--Purchasing Coverage. A qualified member, including surviving family 
members, may purchase one of two types of coverage: member-only 
coverage or member and family coverage. Immediate family members of the 
Reserve component member, as defined in section 199.3(b)(2)(i) (except 
former spouses) and 199.3 (b)(2)(ii) of this Part, may be included in 
such family coverage. To purchase either type of TRICARE Reserve Select 
coverage for effective dates of coverage described below, Reserve 
component members qualified under paragraph 199.24(c) must complete and 
submit a request in the appropriate format, 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).
--Continuation Coverage. Deadlines and other procedures may be 
established for a qualified member to purchase TRICARE Reserve Select 
coverage with an effective date immediately following the date of 
termination of coverage under another TRICARE program in which the 
member is the sponsor.
--Qualifying Life Event. Deadlines and other procedures may be 
established for a qualified member to purchase TRICARE Reserve Select 
coverage on the occasion of a qualifying life event that changes the 
immediate family composition (e.g., birth, adoption, divorce, etc.) 
that is eligible for coverage under TRICARE Reserve Select. The 
effective date for TRICARE Reserve Select coverage will be the date of 
the qualifying life event. 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 officials will update DEERS in the usual manner. The 
appropriate TRICARE contractor will then take appropriate action upon 
receipt of the completed request in the appropriate format along with 
payment of the applicable monthly premium.
--Open Enrollment. Deadlines and other procedures may be established 
for a qualified member to purchase TRICARE Reserve Select coverage at 
any time. The effective date of coverage will coincide with the first 
day of a month.
--Survivor coverage under TRICARE Reserve Select. Deadlines and other 
procedures may be established for a surviving family member of a 
Reserve Component service member who qualified for TRICARE Reserve 
Select coverage as described in paragraph (c)(3) of this section to 
purchase new TRICARE Reserve Select coverage or continue existing 
TRICARE Reserve Select coverage for up to six months beyond the date of 
the member's death. The effective date of coverage will be the day 
following the date of the member's death.
--Changing type of coverage. TRICARE Reserve Select members may request 
to change type of coverage during open enrollment or on the occasion of 
a qualifying life event that changes immediate family composition as 
described above by submitting a completed request in the appropriate 
format.
--Termination. 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 at the time of death.
--Coverage will terminate whenever a member ceases to meet the 
qualifications for the program or a request for termination in the 
appropriate format is received in accordance with established 
procedures.
--Coverage may terminate for members who gain coverage under another 
TRICARE program in which the member is the sponsor.
--Failure to make a premium payment in a timely manner may result in 
termination of coverage for the member and any covered family members 
and will result in denial of claims for services received after the 
effective date of termination.
--The member may request termination of coverage at any time by 
submitting a completed request in the appropriate format in accordance 
with established deadlines and procedures. Members whose coverage under 
TRICARE Reserve Select terminates upon their request or for failure to 
pay premiums will not be allowed to purchase coverage again under 
TRICARE Reserve Select for a period of one year following the effective 
date of termination.
--Coverage for survivors as described herein shall terminate six months 
after the date of death of the covered Reserve component member.
--Processing. Upon receipt of a completed request in the appropriate 
format the appropriate TRICARE contractor will process enrollment 
actions into DEERS in accordance with deadlines and other procedures 
established by the ASD(HA).
--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.

    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 section 199.20(d)(1)(ii)(B) or section 
199.20(d)(1)(iii)(B) of this Part. Some members and family members will 
be eligible for 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 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 coverage that is 
terminated because of

[[Page 46383]]

transfer or discharge of a member from the Selected Reserve (such as 
through a reduction in force or base closure) 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.
    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.
    This rule will not impose additional information collection 
requirements on the public under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501-3511).
    We have examined the impact(s) of the interim 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.
    This rule is being published as an interim final rule with comment 
period contrary to the normal procedure of soliciting public comment 
under a proposed rule first, in order to comply with the requirements 
of the John Warner National Defense Authorization Act for Fiscal Year 
2007, Public Law 109-364, section 706, which was enacted on January 6, 
2007. This section provides in pertinent part that ``The Secretary of 
Defense shall ensure that health care under TRICARE Standard is 
provided under section 1076d of title 10, United States Code, as 
amended by this section beginning not later than October 1, 2007.'' In 
order to comply with the statutorily mandated start date, this rule is 
being published as an interim final rule, with an effective date of 
October, 1, 2007. Public comments are welcome and will be considered 
before publication of the final rule.

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 Sec.  199.24 of this Part.

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 is available for purchase by members of the Selected Reserve and 
certain survivors of Selected Reserve members as specified in paragraph 
(c) of this section.
    (2) Statutory Authority. TRICARE Reserve Select is authorized by 10 
U.S.C. 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 
(Health Affairs) 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 has satisfied all the ``qualifications'' that must be 
met before the member is authorized to purchase coverage. Only then may 
the member purchase coverage by submitting a completed request in the 
appropriate format along with payment of the applicable one month 
premium. The term ``coverage'' indicates the benefit of TRICARE 
Standard or Extra covering claims submitted for payment of covered 
services, supplies, and equipment furnished by TRICARE authorized 
providers, hospitals, and suppliers.

[[Page 46384]]

    (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), 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 Care Health Option Program (see Sec.  199.5), the 
Special Supplemental Food Program (see Sec.  199.23), and the 
Supplemental Health Care Program (see Sec.  199.16) except when 
referred by a Military 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) Premiums. TRICARE Reserve Select coverage is available for 
purchase by any Selected Reserve member if the member fulfills all of 
the statutory qualifications. A member of the Selected Reserve covered 
under TRICARE Reserve Select shall pay 28 percent of the total amount 
that the ASD(HA) determines on an appropriate actuarial basis as being 
appropriate for that coverage. There is one premium rate for member-
only coverage and one premium rate for member and family coverage.
    (iii) Procedures. Under TRICARE Reserve Select, Reserve component 
members who fulfilled all of the statutory qualifications may purchase 
either the member-only type of coverage or the member and family type 
of coverage by submitting a completed request in the appropriate format 
along with payment of the applicable one month premium. 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 Sec.  199.17 of this 
Part.
    (b) TRICARE Reserve Select premiums. Members are charged premiums 
for coverage under TRICARE Reserve Select that represent 28 percent of 
the total annual premium 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 (and Extra) benefit for the TRICARE Reserve Select eligible 
population. Premiums are to be paid monthly, except as otherwise 
provided through administrative implementation, pursuant to procedures 
established by the ASD(HA).
    (1) Annual establishment of rates. (i) TRICARE Reserve Select 
monthly premium rates shall be established and updated annually on a 
calendar year basis to maintain an appropriate relationship with the 
annual changes in 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, or by other adjustment methodology determined to be 
appropriate by the ASD(HA) for each of the two types of coverage, 
member-only and member and family as described in paragraphs (d)(2) of 
this section.
    (ii) Annual rates for the first year TRICARE Reserve Select was 
offered (calendar year 2005) were based on the Federal Blue Cross and 
Blue Shield annual premiums, with adjustments based on estimated 
differences in covered populations, as determined by the ASD(HA).
    (2) Premium adjustments. In addition to the determinations 
described in paragraph (b)(1) 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.
    (3) Survivor coverage under TRICARE Reserve Select. A surviving 
family member of a Reserve Component service member who qualified for 
TRICARE Reserve Select coverage as described in paragraph (c)(3) of 
this section will pay premium rates as follows. 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.
    (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. The member's Service personnel office is responsible for 
keeping DEERS current with eligibility data.
    (2) Member Purchase. A member who is a member of a Reserve 
component of the Armed Forces qualifies to purchase TRICARE Reserve 
Select coverage if the member meets both the following conditions:
    (i) Is a member of the Selected Reserve of the Ready Reserve.
    (ii) Is not enrolled in, or eligible to enroll in, a health 
benefits plan under Chapter 89 of Title 5, U.S.C.
    (3) Survivor coverage under TRICARE Reserve Select. If a member of 
the Selected Reserve dies while in a period of TRICARE Reserve Select 
coverage, the family member(s) may purchase new or continue existing 
TRICARE Reserve Select coverage for up to six months beyond the date of 
the member's death.
    (d) Procedures--(1) Purchasing Coverage. A qualified member may 
purchase one of two types of coverage: member-only coverage or member 
and family coverage. Immediate family members of the Reserve component 
member, as defined in Sec.  199.3(b)(2)(i) (except former spouses) and 
Sec.  199.3 (b)(2)(ii) of this Part, may be included in such family 
coverage. To purchase either type of TRICARE Reserve Select coverage 
for effective dates of coverage described below, Reserve component 
members qualified under Sec.  199.24(c) must submit a request in the 
appropriate format, along with an initial payment of the applicable 
monthly premium required by paragraph (b) of this section to the 
appropriate TRICARE contractor in accordance with deadlines and other 
procedures established by the ASD(HA).
    (i) Continuation Coverage. Deadlines and other procedures may be 
established for a qualified member to purchase TRICARE Reserve Select 
coverage with an effective date immediately following the date of 
termination of coverage under another TRICARE program in which the 
member is the sponsor.
    (ii) Qualifying Life Event. Deadlines and other procedures may be 
established for a qualified member to purchase TRICARE Reserve Select

[[Page 46385]]

coverage on the occasion of a qualifying life event that changes the 
immediate family composition (e.g., birth, adoption, divorce, etc.) 
that is eligible for coverage under TRICARE Reserve Select. The 
effective date for TRICARE Reserve Select coverage will be the date of 
the qualifying life event. 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 officials will update DEERS in the usual manner. The 
appropriate TRICARE contractor will then take appropriate action upon 
receipt of the completed request in the appropriate format along with 
payment of the applicable one month premium.
    (iii) Open Enrollment. Deadlines and other procedures may be 
established for a qualified member to purchase TRICARE Reserve Select 
coverage at any time. The effective date of coverage will coincide with 
the first day of a month.
    (iv) Survivor coverage under TRICARE Reserve Select. Deadlines and 
other procedures may be established for a surviving family member of a 
Reserve Component service member who qualified for TRICARE Reserve 
Select coverage as described in paragraph (c)(3) of this section to 
purchase new TRICARE Reserve Select coverage or continue existing 
TRICARE Reserve Select coverage for up to six months beyond the date of 
the member's death. The effective date of coverage will be the day 
following the date of the member's death.
    (2) Changing type of coverage. TRICARE Reserve Select members may 
request to change type of coverage during open enrollment or on the 
occasion of a qualifying life event that changes immediate family 
composition as described in paragraph (d)(1)(ii) of this section by 
submitting a completed request in the appropriate format.
    (3) Termination. 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)(1)(iv) of this 
section. The termination will become effective in accordance with 
procedures established by the ASD(HA). Members whose coverage under 
TRICARE Reserve Select terminates under paragraph (d)(3)(iii) or (iv) 
of this section will not be allowed to purchase coverage again under 
TRICARE Reserve Select for a period of one year following the effective 
the date of termination.
    (i) 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.
    (ii) Coverage may terminate for members who gain coverage under 
another TRICARE program in which the member is the sponsor.
    (iii) Coverage may terminate for members who fail to make a premium 
payment in accordance with procedures established by the ASD(HA).
    (iv) Members may request termination of coverage at any time by 
submitting a completed request in the appropriate format in accordance 
with established deadlines and procedures.
    (v) Coverage for survivors as described in paragraph (d)(1)(iv) of 
this section shall terminate six months after the date of death of the 
covered Reserve component member.
    (4) Processing. Upon receipt of a completed request in the 
appropriate format, the appropriate TRICARE contractor will process 
enrollment actions into DEERS in accordance with deadlines and other 
procedures established by the ASD(HA).
    (5) 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 section 199.20(d)(1)(ii)(B) 
or section 199.20(d)(1)(iii)(B) of this Part. If at the time a member 
who qualifies under paragraph (c) of this section purchases coverage in 
TRICARE Reserve Select, and the member was also eligible to enroll in 
the Continued Health Care Benefits Program (CHCBP) under section 
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 Sec.  199.20(d)(6) of this Part.
    (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

[[Page 46386]]

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: August 14, 2007.
L.M. Bynum,
OSD Federal Register Liaison Officer, Department of Defense.
 [FR Doc. E7-16300 Filed 8-17-07; 8:45 am]
BILLING CODE 5001-06-P