[Federal Register Volume 76, Number 81 (Wednesday, April 27, 2011)]
[Rules and Regulations]
[Pages 23479-23485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10241]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[Docket ID: DOD-2011-HA-0029; RIN 0720-AB48]


Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); TRICARE Young Adult

AGENCY: Office of the Secretary, DoD.

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule implements Section 702 of the Ike 
Skelton National Defense Authorization Act for Fiscal Year 2011 (NDAA 
for FY11). It establishes the TRICARE Young Adult (TYA) program to 
provide an extended medical coverage opportunity to most unmarried 
children under the age of 26 of uniformed services sponsors. The 
TRICARE Young

[[Page 23480]]

Adult program is a premium-based program.

DATES: This interim final rule is effective April 27, 2011. Written 
comments received at the address indicated below by June 27, 2011 will 
be considered and addressed in the final rule.

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 dependents 
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: Mark Ellis, TRICARE Management 
Activity, TRICARE Policy and Operations Directorate, 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

    The purpose of this interim final rule is to establish the TRICARE 
Young Adult program implementing Section 702 of the Ike Skelton NDAA 
for FY 2011 (Pub. L. 111-383) to provide medical coverage to unmarried 
children under the age of 26 who no longer meet the age requirements 
for TRICARE eligibility (age 21, or 23 if enrolled in a full-time 
course of study at an institution of higher learning approved by the 
Secretary of Defense), and who are not eligible for medical coverage 
from an eligible employer-sponsored plan (as defined in section 
5000A(f)(2) of the Internal Revenue Code of 1986). If qualified, they 
can purchase TRICARE Standard/Extra or TRICARE Prime benefits coverage. 
The particular TRICARE plan available depends on the military sponsor's 
eligibility and the availability of the TRICARE plan in the dependent's 
geographic location.

 II. Provisions of the Rule Regarding the TRICARE Young Adult Program

    A. Establishment of the TRICARE Young Adult Program (paragraph 
199.26(a)). This paragraph describes the nature, purpose, statutory 
basis, scope, and major features of TRICARE Young Adult, a full cost, 
premium-based medical coverage program made available for purchase 
worldwide. TYA is similar to young adult coverage under the Patient 
Protection and Affordable Care Act, but reflects a number of 
differences between TRICARE and typical civilian health care plans. 
Among these is that TYA is a full cost premium based program; it is 
limited to unmarried dependent children; and the dependent child must 
not be eligible for medical coverage from an eligible employer-
sponsored plan (an exclusion that does not expire on January 1, 2014, 
but is permanent). TRICARE Young Adult is codified in Title 10, United 
States Code, Section 1110b.
    The major features of the program include making coverage available 
for purchase at a premium which will represent the full cost, including 
reasonable administrative costs, as determined on an appropriate 
actuarial basis for coverage. There will be various premiums depending 
on whether the dependent's sponsor is active duty, retired or eligible 
under another plan such as TRICARE Reserve Select or TRICARE Retired 
Reserve, and the adult dependent's health coverage--TRICARE Standard 
or, for those eligible and where available, TRICARE Prime. The rules 
and procedures otherwise outlined in Part 199 of 32 CFR relating to the 
operation and administration of the TRICARE program based on the 
sponsor's status and health coverage plan will apply for cost-shares, 
deductibles, and catastrophic caps upon purchasing TRICARE Young Adult 
coverage. Young adult dependents of members on active duty for more 
than 30 days are eligible for benefits under the TRICARE ECHO program 
under section 199.5 of this Part.
    The TRICARE Dental Program (Sec.  199.13 of this Part) and the 
TRICARE Retiree Dental Program (Sec.  199.22 of this Part) are not 
included as part of TYA.
    Under TRICARE Young Adult, qualified young adult dependents may 
purchase individual TRICARE coverage by submitting a completed request 
in the appropriate format along with an initial payment of the 
applicable premium at the time of enrollment. When coverage becomes 
effective, a TRICARE Young Adult purchaser receives the TRICARE 
benefits according to the rules governing the TRICARE program that the 
enrollee qualified for and selected based on the uniformed services 
sponsor's status (active duty, retired, Selected Reserve, or Retired 
Reserve) and the availability of a desired plan in his or her 
geographic location. The rules and procedures otherwise outlined in the 
TRICARE Regulation (Part 199) relating to the operation and 
administration of the TRICARE programs will apply for cost-shares, 
deductibles, and catastrophic caps upon purchasing TRICARE Young Adult 
coverage. The young adult dependent's cost-shares, deductibles, and 
catastrophic caps will be based on the sponsor's status (active duty, 
retired, Selected Reserve, or Retired Reserve) and whether the 
dependent has purchased TRICARE Standard/Extra or Prime coverage. 
TRICARE Young Adult dependents are provided access priority for care in 
military treatment facilities based on their uniformed services 
sponsor's status and the selection of health plan.
    The Continued Health Care Benefits Program (see Sec.  199.20) shall 
be made available to all young adult dependents after aging out of the 
TRICARE Young Adult program or who otherwise lose their eligibility for 
the TRICARE Young Adult program.
    B. Qualifications for TYA coverage (paragraph 199.26(b)). This 
paragraph defines the statutory conditions under which unmarried 
children qualify as young adult dependents under the TRICARE Young 
Adult program. To qualify as a young adult dependent, the dependent 
must be under the age of 26, not be otherwise eligible for another 
TRICARE program, and not be eligible for medical coverage from an 
eligible employer-sponsored plan (as defined in section 5000A(f)(2) of 
the Internal Revenue Code of 1986). The dependents' sponsor is 
responsible for keeping the Defense Enrollment Eligibility Reporting 
System (DEERS) current with eligibility data through the sponsor's 
Service personnel office. Using information from the DEERS, the managed 
care support contractors have the responsibility to validate a 
dependent's qualifications to purchase TRICARE Young Adult coverage.
    C. TRICARE Young Adult premiums (paragraph 199.26(c)). Qualified 
young adult dependents are charged premiums for coverage under TRICARE 
Young Adult that represent the full cost of providing TRICARE benefits 
under this program, including the reasonable costs of administration of 
the program. The total annual premium amounts shall be determined by 
the Assistant Secretary of Defense for Health Affairs (ASD(HA)) using 
an appropriate actuarial basis and

[[Page 23481]]

are established and updated annually, on a calendar year basis, by the 
ASD(HA) for qualified young adult dependents.

            TRICARE Young Adult Premiums--Calendar Year 2011
------------------------------------------------------------------------
                                                               Monthly
                      TRICARE program                          premium
------------------------------------------------------------------------
TRICARE Standard/Extra Plans...............................         $186
TRICARE Prime Plans........................................          213
------------------------------------------------------------------------

    A premium shall be charged for each individual qualified young 
adult dependent regardless of whether a sponsoring member has more than 
one young adult dependent child who qualifies or purchases coverage 
under the TRICARE Young Adult program. The cost shares for TRICARE 
Standard/Extra or Prime programs in which the adult child is enrolled 
shall be based on the status of the dependent's sponsor. Because of the 
differences in cost-shares among the programs and status of the 
sponsor, there will be a different premium for TRICARE Standard and 
TRICARE Prime. Premiums are to be paid monthly. The monthly rate for 
each month of a calendar year is one-twelfth of the annual rate for 
that calendar year.
    The appropriate actuarial basis used for calculating premium rates 
shall be one that most closely approximates the actual cost of 
providing care to the same demographic population as those enrolled in 
TRICARE Young Adult as determined by the ASD(HA). TRICARE Young Adult 
premiums shall be based on the actual costs of providing benefits to 
TRICARE Young Adult dependents during the preceding years if the 
population of Young Adult dependents enrolled in TRICARE Young Adult is 
large enough during those preceding years to be considered actuarially 
appropriate. Until such time that actual costs from those preceding 
years become available, TRICARE Young Adult premiums shall be based on 
the actual costs during the preceding calendar years for providing 
benefits to the population of dependents over the age 21 up to age of 
26 in order to make the underlying group actuarially appropriate. An 
adjustment may be applied to cover overhead costs for administration of 
the program by the government. Additionally, premium adjustments may be 
made to cover the prospective costs of any significant program changes.
    D. Procedures (paragraph 199.26(d)). The Director, TRICARE 
Management Activity (TMA) will establish procedures for administration 
of TYA. These will include procedures to purchase individual coverage, 
such as a request in an approved format, along with an initial payment 
of the applicable premium. Applicants must also certify that they meet 
the statutory qualifications to purchase coverage under this program. 
Additional procedures will be established for a qualified young adult 
dependent to purchase TRICARE Young Adult coverage with an effective 
date immediately following the last effective date of coverage under 
which they previously qualified in another TRICARE program.
    There will be open enrollment so that a qualified young adult 
dependent may purchase TRICARE Young Adult coverage at any time. The 
effective date of coverage for TRICARE Standard will coincide with the 
first day of a month after the date the application and required 
payment is received. The effective date of coverage for TRICARE Prime 
will be first day of the second month after the month in which 
application and required payment is received. There will be a limited 
period for retroactive coverage. A qualified young adult dependent may 
elect to start coverage under the TRICARE Standard plan effective with 
the statutory start date of January 1, 2011, if the dependent was 
eligible as of that date. If retroactive coverage is elected then 
retroactive premiums must be paid back to the statutory start date of 
January 1, 2011. If no retroactive coverage is elected or the 
retroactive premiums are not paid within the time prescribed, then 
coverage will not be retroactive and coverage will apply only 
prospectively beginning on the first day of the month after the date of 
the application. There shall be no retroactive coverage offered under 
any TRICARE Prime plan. No purchase of retroactive coverage may take 
place after September 30, 2011.
    With respect to termination of coverage, a loss of eligibility or 
entitlement for medical benefits of the sponsor will result in 
termination of coverage for the dependent's TRICARE Young Adult 
coverage on the same date as the sponsor, unless otherwise authorized. 
Upon the death of an active duty sponsor, young adult age dependents 
may purchase TYA coverage up to the age of 26. If a Selected Reserve 
(Sel Res) or Retired Reserve member ends TRICARE Reserve Select (TRS) 
or TRICARE Retired Reserve (TRR) coverage, respectively, eligibility 
for the young adult dependent to purchase coverage under TRICARE Young 
Adult also ends. If a Sel Res sponsor dies while enrolled in TRS, the 
otherwise eligible adult age dependent can purchase TYA coverage up to 
6 months after the death of the sponsor. If a Retired Reserve sponsor 
dies while enrolled in TRR, the otherwise eligible young adult 
dependent may continue to purchase TYA coverage until the date on which 
the deceased sponsor would have turned age 60. If the Retired Reserve 
sponsor was not enrolled in TRR at the time of death, there is no 
eligibility to purchase TYA coverage until the sponsor would have 
turned age 60. At that point, the young adult dependent qualifies as a 
dependent of a deceased retired sponsor and can purchase coverage up to 
the age of 26.
    Coverage will terminate whenever a dependent ceases to meet the 
qualifications for the program. Claims will be denied effective with 
the termination date. In addition, covered dependents may terminate 
coverage at any time by submitting a completed request in the 
appropriate format. Dependents whose coverage under TRICARE Young Adult 
terminates for failure to pay premiums in accordance with program 
requirements will not be allowed to purchase coverage again under 
TRICARE Young Adult for a period of one year following the date of 
their coverage termination. This ineligibility period shall be known as 
a ``lockout'' period. A request for a waiver of the ``lockout'' period 
may be granted by the Director, TRICARE Management Activity, based on 
extraordinary circumstances beyond the control of the adult dependent 
which resulted in inability to make payments in accordance with program 
requirements. The Director may allow a 90-day grace period for payment 
to be made. However, if payment is not made by the 90th day, then 
coverage will be deemed to have terminated as of the last day of the 
month in which an appropriate payment was made and no claims may be 
paid for care rendered after the date of termination. Upon termination 
of eligibility to purchase TYA coverage, qualified dependents may 
purchase coverage under the Continued Health Care Benefit Program for 
up to 36 months except if locked out of TYA. Upon application and 
payment of appropriate premiums, a young adult dependent who has 
already purchased coverage under any of the plans offered under TYA may 
change to another TRICARE program for which the dependent is eligible. 
Eligibility is based on the sponsor's status and the dependent's 
geographic location.
    E. Preemption of State laws (paragraph 199.26(e)). This paragraph 
provides that the preemptions of State and local laws established for 
the TRICARE program also apply to

[[Page 23482]]

TRICARE Young Adult. 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 Young Adult.
    F. Administration (paragraph 199.26(f)). This paragraph provides 
that the Director, TRICARE Management Activity, may establish other 
administrative processes and procedures necessary for the effective 
administration of TRICARE Young Adult.

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 will not have an impact on the economy greater than 
$100 million annually. Further, it will not have a major impact as that 
term is used under the Congressional Review Act nor will have a 
significant impact on a substantial number of small entities. This 
rule, however, does address novel policy issues relating to 
implementation of a new medical benefits program for certain dependents 
of the uniformed services. Thus, this rule has been reviewed by the 
Office of Management and Budget under E.O. 12866.

Paperwork Reduction Act of 1995

    Section III of this interim final rule contains information 
collection requirements. DoD has submitted the following proposal to 
OMB under the provisions of the Paperwork Reduction Act (44 U.S.C. 
Chapter 35). Comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of DoD, including whether the information will have 
practical utility; (b) the accuracy of the estimate of the burden of 
the proposed information collection; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the information collection on respondents, 
including the use of automated collection techniques or other forms of 
information technology.
    Title: TRICARE Young Adult Application.
    Type of Request: Revision.
    Number of Respondents: 60,000.
    Responses per Respondent: Estimated responses are on average two 
per respondent during the term of their TRICARE Young Adult coverage. 
Respondents will complete the application upon applying for, changing, 
or terminating their TRICARE Young Adult coverage. Not all respondents 
will change their coverage, and others may choose to let their coverage 
lapse or stop paying premiums instead of submitting a termination 
request.
    Annual Responses: 120,000.
    Average Burden Per Response: The public reporting burden for this 
collection of information is estimated to average 15 minutes per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Annual Burden Hours: 30,000 hours.
    Needs and Uses: To evaluate eligibility of young adult dependents 
applying for extended dependent coverage under the TRICARE Young Adult 
program (10 U.S.C. 1110b).
    Affected Public: Young adult dependents applying for, changing, or 
terminating their extended medical coverage under the TRICARE Young 
Adult program.
    Frequency: Whenever the respondent wishes to apply for extended 
dependent coverage under the TRICARE Young Adult program, when the 
respondent wishes to change their coverage under the TRICARE Young 
Adult program, or when the respondent wishes to terminate their 
coverage under the TRICARE Young Adult program.
    Respondent's Obligation: Required to obtain or retain benefits. 
Young adult dependents wishing to purchase extended dependent coverage 
will complete the application to apply for, change, or terminate 
medical coverage under the TRICARE Young Adult program. Respondents 
will complete the requested information. Disclosure is voluntary; 
however, failure to provide the information will result in the denial 
of the application.

OMB Desk Officer

    Written comments and recommendations on the proposed information 
collection should be sent to Ms. Jasmeet Seehra at the Office of 
Management and Budget, DoD Desk Officer, Room 10102, New Executive 
Office Building, Washington, DC 20503, with a copy to the TRICARE 
Management Activity, 5111 Leesburg Pike, Suite 810A, Falls, Church, VA 
22041. Comments can be received from 30 to 60 days after the date of 
this notice, but comments to OMB will be most useful if received by OMB 
within 30 days after the date of this notice.
    You may also submit comments, identified by docket number and 
title, by the following method:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    Instructions: All submissions received must include the agency 
name, docket number and title 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://www.regulations.gov as they are received without 
change, including any personal identifiers or contact information.
    To request more information on this proposed information collection 
or to obtain a copy of the proposal and associated collection 
instruments, please write to TRICARE Management Activity, 5111 Leesburg 
Pike, Suite 810A, Falls Church, VA 22041, Mark Ellis, (703) 681-0039.

Additional Regulatory Procedures

    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. The preemption provisions in the rule 
conform to law and long-established TRICARE policy. Therefore, 
consultation with State and local officials is not required.
    This rule is being published as an interim final rule with comment 
period as an exception to our standard practice of first soliciting 
public comment under a proposed rule, in order to comply with the 
requirements of the Ike Skelton National Defense Authorization Act for 
Fiscal Year 2011, Public Law 111-383, Section 702, which was enacted on 
January 7, 2011. This section provides ``the amendments by this section 
shall take effect on January 1, 2011. The Secretary of Defense shall 
prescribe an interim final rule with respect to such amendments, 
effective not later than January 1, 2011.'' In order to provide 
coverage as soon as possible consistent

[[Page 23483]]

with statutory requirement, and as proscribed by the provision, the 
ASD(HA) has determined that following the standard practice is 
unnecessary, impractical, and contrary to the public interest. 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.

    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 adding in alphabetical order the 
definition of ``TRICARE Young Adult'' to read as follows:


Sec.  199.2  Definitions.

* * * * *
    (b) * * *
    TRICARE Young Adult. The program authorized by and described in 
Sec.  199.26 of this part.
* * * * *

0
3. Section 199.26 is added to read as follows:


Sec.  199.26  TRICARE Young Adult.

    (a) Establishment. The TRICARE Young Adult (TYA) program offers the 
medical benefits provided under the TRICARE programs to qualified 
unmarried adult children who do not otherwise have eligibility for 
medical coverage under a TRICARE program at age 21 (23 if enrolled in a 
full-time course of study at an institution of higher learning approved 
by the Secretary of Defense) and are under age 26.
    (1) Purpose. As specified in paragraph (c) of this section, TRICARE 
Young Adult is a premium-based health plan that is available for 
purchase by any qualified adult child as that term is defined in 
paragraph (b) of this section. The TRICARE Young Adult program allows a 
qualified adult child to purchase TRICARE coverage.
    (2) Statutory authority. TRICARE Young Adult is authorized by 10 
U.S.C. 1110b.
    (3) Scope of the program. TRICARE Young Adult is geographically 
applicable to the same extent as specified in section 199.1(b)(1) of 
this part.
    (4) Major features of TRICARE Young Adult. (i) TRICARE rules 
applicable.
    (A) Unless specified in this section or otherwise prescribed by the 
ASD (HA), provisions of this Part apply to TRICARE Young Adult.
    (B) The TRICARE Dental Program (Sec.  199.13 of this part) and the 
TRICARE Retiree Dental Program (Sec.  199.22 of this part) are not 
covered under TRICARE Young Adult.
    (C) TRICARE Standard is available to all TYA-eligible young adult 
dependents. TYA enrollees in TRICARE Standard may use TRICARE Extra 
(under Sec.  199.17(e) of this Part).
    (D) TRICARE Prime is available to TYA-eligible young adult 
dependents of sponsors to the same extent it is available to those 
sponsors' dependents who do not exceed the age requirements of Sec.  
199.3 of this part, provided that TRICARE Prime is available in the 
geographic location where the TYA enrollee resides. This applies to 
TYA-eligible:
    (1) Dependents of sponsors on active duty for more than 30 days or 
covered by TAMP (under Sec.  199.3(e));
    (2) Dependents of sponsors who are retired members eligible for 
TRICARE Prime; and
    (3) Survivors of members who died while on active duty for more 
than 30 days or while receiving retired or retainer pay.
    (ii) Premiums. TRICARE Young Adult coverage is a premium based 
program that an eligible young adult dependent may purchase. There is 
only individual coverage, and a premium shall be charged for each 
dependent even if there is more than one qualified dependent in the 
military sponsor's family that qualifies for TRICARE Young Adult 
coverage. Dependents qualifying for TRICARE Young Adult status can 
purchase individual TRICARE Standard or Prime coverage (as applicable) 
according to the rules governing the TRICARE program for which they are 
qualified on the basis of their military sponsor's status (active duty, 
retired, Selected Reserve, or Retired Reserve) and the availability of 
a desired plan in their geographic location. Premiums shall be 
determined in accordance with paragraph (c) of this section.
    (iii) Procedures. Under TRICARE Young Adult, qualified dependents 
under paragraph (b) of this section may purchase individual TRICARE 
coverage by submitting a completed request in the appropriate format 
along with an initial payment of the applicable premium. Procedures for 
purchasing coverage and paying applicable premiums are prescribed in 
paragraph (d) of this section.
    (iv) Benefits. When their TRICARE coverage becomes effective, 
qualified beneficiaries receive the benefit of the TRICARE program that 
they selected, including, if applicable, access to military treatment 
facilities and pharmacies. TRICARE Young Adult coverage features the 
per service cost share, deductible and catastrophic cap provisions 
based on program selected, i.e., the TRICARE Standard/Extra program or 
the TRICARE Prime program, as well as the status of their military 
sponsor. Access to military treatment facilities under the system of 
access priorities in section 199.17(d)(1) of this Part is also based on 
the program selected as well as the status of the military sponsor. 
Premiums are not credited to deductibles or catastrophic caps.
    (v) Transition period. During fiscal year 2011, the TYA program 
will include only TRICARE Standard program coverage.
    (b) Eligibility for TRICARE Young Adult coverage.--(1) Young adult 
dependent. A young adult dependent qualifies to purchase TRICARE Young 
Adult coverage if the dependent meets the following criteria:
    (i) Would be a dependent child under section 199.3 of this Part but 
for exceeding the age limit under that section; and
    (ii) Is a dependent under the age of 26; and
    (iii) Is not enrolled, or eligible to enroll, for medical coverage 
in an eligible employer-sponsored health plan as defined in section 
5000A(f)(2) of the Internal Revenue Code of 1986; and
    (iv) Is not otherwise eligible under section 199.3 of this Part; 
and
    (v) Is not a member of the uniformed services.
    (2) The dependents' sponsor is responsible for keeping the Defense 
Enrollment Eligibility Reporting System (DEERS) current with 
eligibility data through the sponsor's Service personnel office. Using 
information from the DEERS, the managed care support contractors have 
the responsibility to validate a dependent's qualifications to purchase 
TRICARE Young Adult coverage.
    (c) TRICARE Young Adult premiums. Qualified young adult dependents 
are charged premiums for coverage under TRICARE Young Adult that 
represent the full cost of the program, including reasonable 
administrative costs, as determined by the ASD(HA) utilizing an 
appropriate actuarial basis for the provision of TRICARE benefits for 
the TYA-eligible beneficiary population. Separate premiums shall be 
established for TRICARE Standard and Prime plans.

[[Page 23484]]

There may also be separate premiums based on the uniformed services 
sponsor's status. Premiums are to be paid monthly. The monthly rate for 
each month of a calendar year is one-twelfth of the annual rate for 
that calendar year.
    (1) Annual establishment of rates. --(i) TRICARE Young Adult 
monthly premium rates shall be established and updated annually on a 
calendar year basis by the ASD(HA) for TRICARE Young Adult individual 
coverage.
    (ii) The appropriate actuarial basis used for calculating premium 
rates shall be one that most closely approximates the actual cost of 
providing care to a similar demographic population (based on age and 
health plans) as those enrolled in TRICARE Young Adult, as determined 
by the ASD(HA). TRICARE Young Adult premiums shall be based on the 
actual costs of providing benefits to TYA dependents during the 
preceding years if the population of TYA enrollees is large enough 
during those preceding years to be considered actuarially appropriate. 
Until such time that actual costs from those preceding years become 
available, TRICARE Young Adult premiums shall be based on the actual 
costs during the preceding calendar years for providing benefits to the 
population of similarly aged dependents to make the underlying group 
actuarially appropriate. An adjustment may be applied to cover overhead 
costs for administration of the program.
    (2) Premium adjustments. In addition to the determinations 
described in paragraph (c)(1) of this section, premium adjustments may 
be made prospectively for any calendar year to reflect any significant 
program changes mandated by legislative enactment, including but not 
limited to significant new programs or benefits.
    (d) Procedures. The Director, TRICARE Management Activity (TMA), 
may establish procedures for the following.
    (1) Purchasing coverage. Procedures may be established for a 
qualified dependent to purchase individual coverage. To purchase 
TRICARE Young Adult coverage for effective dates of coverage described 
below, qualified dependents must submit a request in the appropriate 
format, along with an initial payment of the applicable premium 
required by paragraph (c) of this section in accordance with 
established procedures.
    (i) Continuation coverage. Procedures may be established by the 
Director, TRICARE Management Activity for a qualified dependent to 
purchase TRICARE Young Adult coverage with an effective date 
immediately following the date of termination of coverage under another 
TRICARE program. Application for continuation coverage must be made 
within 30 days of the date of termination of coverage under another 
TRICARE program.
    (ii) Open enrollment. Procedures may be established for a qualified 
dependent to purchase TRICARE Young Adult coverage at any time. The 
effective date of coverage will coincide with the first day of a month.
    (iii) Retroactive coverage. A qualified young adult dependent may 
elect retroactive TRICARE Standard coverage effective as of January 1, 
2011 if dependent was eligible as of that date. In the case of a young 
adult dependent who was not eligible as of January 1, 2011, but became 
eligible after that date but prior to the date of enrollment, the young 
adult dependent may elect retroactive TRICARE Standard coverage 
effective as of the date of eligibility. If retroactive coverage is 
elected, retroactive premiums must be paid for the time period between 
initial eligibility and the date of the election. If no retroactive 
coverage is elected or the retroactive premiums are not paid within the 
time prescribed, coverage will not be retroactive and coverage will 
apply only prospectively under the procedures set forth for open 
enrollment. No purchase of retroactive coverage may take place after 
September 30, 2011. Coverage under TRICARE Prime may not be made 
retroactively.
    (2) Termination of coverage. (i) Loss of eligibility or entitlement 
for coverage by the sponsor will result in termination of the 
dependent's TRICARE Young Adult coverage unless otherwise specified. 
The effective date of the sponsor's loss of eligibility for care will 
also be the effective date of termination of benefits under the TYA 
program unless specified otherwise.
    (A) Active Duty Military Sponsor. TYA coverage ends effective the 
date of military sponsor's separation from military service. Upon the 
death of an active duty sponsor, dependents eligible for Transitional 
Survivor coverage may purchase TYA coverage up to the age of 26.
    (B) Selected Reserve (Sel Res) Sponsor. Sel Res sponsors must be 
currently enrolled in TRICARE Reserve Select (TRS) before a young adult 
dependent is eligible to purchase TYA. If TRS coverage is terminated by 
the sponsor, TYA coverage ends effective the same termination date as 
the sponsor. If the Sel Res sponsor dies while enrolled in TRS, the 
young adult dependent is eligible to purchase TYA coverage for six 
months after the date of death of the Sel Res sponsor, if otherwise 
eligible.
    (C) Retired Reserve Sponsor. Retired Reserve members not yet 
eligible for retired or retainer pay must be enrolled in TRICARE 
Retired Reserve (TRR) to establish TYA eligibility for their young 
adult dependents. If TRR coverage is terminated by the sponsor, the TYA 
coverage for the young adult dependent ends effective the same date as 
the sponsor's termination of coverage under TRR. If the retired reserve 
sponsor dies while enrolled in TRR, the young adult dependent may 
continue to purchase TYA coverage until the date on which the deceased 
member would have attained age 60, as long as otherwise eligible. If 
the Retired Reserve member dies and is not enrolled in TRR, there is no 
eligibility for TYA coverage until the sponsor would have reached age 
60. On the date the military sponsor would have reached 60, a young 
adult dependent who otherwise qualifies for TYA qualifies as a 
dependent of a deceased retired sponsor and can purchase TYA coverage.
    (ii) Failure of a young adult dependent to maintain the eligibility 
qualifications in paragraph (b) of this section shall result in the 
termination of coverage under the TYA program. The effective date of 
termination shall be the date upon which the adult young dependent 
failed to meet any of the perquisite qualifications. If a subsequent 
change in circumstances re-establishes eligibility (such as losing 
eligibility for an eligible employer-sponsored plan), the young adult 
dependent may re-enroll for coverage under the TYA program.
    (iii) Termination of coverage results in denial of claims for 
services with a date of service after the effective date of 
termination.
    (iv) Covered dependents may request termination of coverage at any 
time by submitting a completed request in the appropriate format in 
accordance with established procedures.
    (3) Lockout. Dependents whose coverage under TRICARE Young Adult 
terminates for failure to pay premiums will not be allowed to purchase 
coverage again under TYA for a period of one year following the 
effective date of termination. Dependents who are terminated for 
failure to pay may request a waiver of the lockout from the Director, 
TRICARE Management Activity if extraordinary circumstances, as 
determined by the Director, prevented the dependent from being able to 
pay the premium. The Director may also provide a grace period not to 
exceed 90 days after the end of the month during which the last full

[[Page 23485]]

premium was paid, during which a young adult dependent who would 
otherwise be subject to a lockout may be reinstated by the payment of 
all unpaid premiums. After 90 days, any waiver of a lockout by the 
Director shall allow the young adult dependent to re-enroll but not to 
receive retroactive coverage.
    (4) Eligibility for the Continued Health Care Benefit Program. Upon 
termination of eligibility to purchase TYA coverage, dependents may 
purchase coverage for up to 36 months through the Continued Health Care 
Benefit Program under section 199.20 of this Part unless locked out of 
TYA.
    (5) Changing Coverage. Upon application and payment of appropriate 
premiums, qualified dependents already enrolled in and who are current 
in their premium payments may elect to change to another TRICARE 
program for which the qualified dependent is eligible based on the 
sponsor's eligibility and the geographic location of the qualified 
young adult dependent. The Director, TMA shall establish administrative 
processes for this change in program enrollment; however, no change 
shall be effective until the applicable premium has been paid.
    (e) Preemption of State Laws.--The preemption provisions of Sec.  
199.17(a)(7) of this part are applicable to the TYA program.
    (f) Administration. The Director, TRICARE Management Activity, may 
establish other processes, policies and procedures for the effective 
administration of TRICARE Young Adult and may authorize exceptions to 
requirements of this section, if permitted by law, based on 
extraordinary circumstances.

    Dated: April 22, 2011.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2011-10241 Filed 4-25-11; 11:15 am]
BILLING CODE 5001-06-P