[Federal Register Volume 77, Number 140 (Friday, July 20, 2012)]
[Proposed Rules]
[Pages 42914-42918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17537]



  Federal Register / Vol. 77, No. 140 / Friday, July 20, 2012 / 
Proposed Rules  

[[Page 42914]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 890, 892, 894

RIN 3206-AM55


Federal Employees Health Benefits Program and Federal Employees 
Dental and Vision Insurance Program: Expanding Coverage of Children 
Federal Flexible Benefits Plan: Pre-Tax Payment of Health Benefits 
Premiums

AGENCY: Office of Personnel Management.

ACTION: Proposed rule with request for comments.

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SUMMARY: The United States Office of Personnel Management (OPM) is 
issuing a proposed rule to amend the Federal Employees Health Benefits 
Program (FEHB) regulations regarding coverage for children up to age 26 
and for children of the same-sex domestic partners of FEHB enrollees. 
The regulations also allow children of same-sex domestic partners to be 
covered family members under the Federal Employees Dental and Vision 
Insurance Program (FEDVIP).

DATES: OPM must receive comments on or before September 18, 2012.

ADDRESSES: Send written comments to Marguerite Martel, Senior Policy 
Analyst, Planning and Policy Analysis, U.S. Office of Personnel 
Management, Room 3415, 1900 E Street NW., Washington, DC; or fax to 
(202) 606-4640 Attn: Marguerite Martel. You may also submit comments 
using the Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.

FOR FURTHER INFORMATION CONTACT: Marguerite Martel; at 
[email protected] or (202) 606-0004.

SUPPLEMENTARY INFORMATION: This proposed rule is intended to (1) Bring 
FEHB rules into compliance with changes to health insurance coverage 
for children under the Patient Protection and Affordable Care Act, 
Public Law 111-148, as amended by the Health Care and Education 
Reconciliation Act, Public Law 111-152 (the Affordable Care Act); (2) 
extend FEHB and FEDVIP benefits to children of same-sex domestic 
partners of Federal employees consistent with Presidential Memoranda 
issued on June 17, 2009 and June 2, 2010; (3) make other non-
substantive, technical conforming amendments to the Federal Employees 
Dental and Vision Program (FEDVIP) rules, which reference current FEHB 
rules that would be amended by this proposed rule; and (4) update the 
Federal Flexible Benefits Plan: Pre-Tax Payment of Health Benefits 
Premiums (Part 892) rules to reflect the above-referenced changes 
required by the Affordable Care Act and to implement changes in 
connection with the extension of FEHB coverage to children of same-sex 
domestic partners of Federal employees.
    Section 2714(a) of the Public Health Service Act, which was added 
by section 1001 of the Affordable Care Act, requires group health plans 
and health insurance issuers offering group or individual health 
insurance coverage that provides dependent coverage of children to 
``continue to make such coverage available for an adult child until the 
child turns 26 years of age.'' Pursuant to this law, OPM issued 
guidance to FEHB carriers in Carrier Letter No. 2010-18 and to agency 
benefit officers in Benefits Administration Letter No. 10-201. In these 
guidance documents, OPM explained that the Affordable Care Act and its 
implementing regulations allow married children to be covered; remove 
dependency requirements; remove residency requirements; and do not 
require a child to be a student or to have prior or current insurance 
coverage in order to be placed on their parent's enrollment under the 
FEHB Program. This proposed rule updates FEHB regulations to align with 
current program policy by extending coverage to children up to 26 years 
of age, regardless of their marital status, dependency, residency, 
student status, or lack of insurance coverage with limited exceptions 
permitted under guidance issued under the Affordable Care Act. This 
proposed rule also updates Part 892 to reflect coverage of children up 
to age 26 as described above.
    The rule also makes technical conforming changes to FEDVIP 
regulations, which reference current FEHB rules that are affected by 
this proposed rule. The changes required by the Affordable Care Act do 
not apply to FEDVIP as stand-alone dental and vision insurance, and 
therefore this regulation does not extend coverage of children to age 
26 or eliminate dependency and residency restrictions under FEDVIP.
    The rule also clarifies and updates FEHB rules governing dual 
enrollments. These changes are not meant to affect the substance of 
current rules prohibiting dual enrollments, but rather to clarify and 
update the rules in light of the Affordable Care Act's elimination of 
residency and dependency restrictions for children.
    The proposed rule also would extend FEHB and FEDVIP eligibility to 
the children of an enrollee's same-sex domestic partner. This change is 
being proposed to implement President Obama's memoranda on domestic 
partner benefits. On June 17, 2009, President Obama issued the 
Presidential Memorandum on Federal Benefits and Non-Discrimination 
requesting that the Director of OPM extend certain benefits to 
qualified same-sex domestic partners of Federal employees. OPM then 
determined that it could expand eligibility to apply for coverage under 
the Federal Long Term Care Insurance Program (FLTCIP) to same-sex 
domestic partners of Federal employees and annuitants, and issued 
published regulations (75 FR 30267-30268) to do so.
    That memorandum also requested that heads of executive departments 
and agencies conduct a review of the benefits provided by their 
respective departments and agencies to determine what authority they 
have to extend such benefits to same-sex domestic partners of Federal 
employees, annuitants and their families. The results of that review 
were reported to the Director of OPM, who, in consultation with the 
United States Department of Justice, made recommendations to the 
President to provide benefits to the same-sex domestic partners of 
Federal Government employees. Subsequently, President Obama issued a 
Presidential Memorandum on June 2, 2010 requesting agencies to 
implement the recommended regulatory and administrative actions 
expanding benefits for same-sex domestic partners of Federal employees 
and their families.
    Executive Order 13563, Improving Regulation and Regulatory Review, 
sets out a series of requirements that must be followed, to the extent 
permitted by law, in issuing regulations. That Executive Order states 
that ``[w]here appropriate and permitted by law, each agency may 
consider (and discuss qualitatively) values that are difficult or 
impossible to quantify, including equity, human dignity, fairness, and 
distributive impacts.'' Such values are relevant here. In particular, 
this regulation would protect human dignity, and promote equity and 
fairness by ensuring equal access to these benefits for LGBT Federal 
employees.
    Since OPM made its recommendations to the President, the Agency has 
determined that coverage under the FEHB and FEDVIP Programs may be 
extended to children of the same-sex domestic partners of Federal 
employees and annuitants through a regulation defining the term 
``stepchild''

[[Page 42915]]

as that term is used in 5 U.S.C. 8901 and cross-referenced in 5 U.S.C. 
8951 and 5 U.S.C. 8981. This regulatory action is necessary to 
implement fully the Presidential Memoranda cited above and is 
consistent with OPM's policy determination that extension of coverage 
is appropriate. Accordingly, this proposed rule extends FEHB and FEDVIP 
coverage to children of same-sex domestic partners of enrolled 
employees and annuitants.
    The rule adds a definition of ``stepchild'' to Parts 890 and 894 to 
denote the child of an enrollee's spouse or same-sex domestic partner. 
In order to maintain consistency across the Federal benefits programs, 
the definitions of domestic partner and domestic partnership mirror 
those found at 5 CFR 875.213 governing the FLTCIP.
    The rule would amend FEHB regulations to provide that if the 
enrollee does not establish that the child of an enrollee's same-sex 
domestic partner qualifies for favorable tax treatment under applicable 
tax laws, then the enrollee will be taxed on the fair market value of 
any FEHB coverage provided to the child. The rule would also amend 
Parts 892 and 894 to provide that income will be separately imputed to 
the enrollee in the amount of that portion of the amount allotted for 
pre-tax treatment that is attributable to coverage of the child of an 
enrollee's same sex domestic partner where the enrollee has not 
established that the child is entitled to favorable tax treatment under 
applicable tax laws and that such income will be taxed accordingly.
    This proposed rule also amends Part 892 rules to provide that for 
purposes of determining whether a qualifying life event has occurred, 
the child of an employee's same-sex domestic partner as described in 
Part 890 will be treated as being covered by the qualifying life event 
rules set forth in Treasury Regulations at 26 CFR 1.125-4 even if the 
child is not covered by such rules by virtue of not being a dependent 
under the Internal Revenue Code. This would permit an employee 
receiving premium conversion to make mid-plan year FEHB enrollment and 
Part 892 election changes in connection with events related to the 
child of a same-sex domestic partner who does not qualify as a 
dependent under the Internal Revenue Code under the same terms and 
conditions as children covered by such rules. For instance, an employee 
receiving premium conversion under a FEHB self and family enrollment 
covering only the employee and the child of a same-sex domestic partner 
who did not qualify as a dependent under the Internal Revenue Code 
would be able to switch from a self and family enrollment to a self 
only enrollment during a plan year if the child reached age 26 during 
the year.
    In addition to generally seeking comments on this proposed rule, we 
are specifically soliciting comments on how, in the case of the 
provision of FEHB coverage to the child of a same-sex domestic partner 
who does not qualify for favorable tax treatment under the Internal 
Revenue Code, the fair market value of that coverage might be 
calculated for different types of plan coverage, including, for 
example, a high deductible health plan with a health reimbursement 
arrangement.

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 adds additional groups to the list of groups eligible for coverage 
under FEHB.

Executive Order 12866, Regulatory Review

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

Federalism

    We have examined this rule in accordance with Executive Order 
13132, Federalism, and have determined that this rule will not have any 
negative impact on the rights, roles and responsibilities of State, 
local, or tribal governments.

List of Subjects

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.

5 CFR Part 892

    Administrative practice and procedure, Government employees, Health 
insurance, Taxes, Wages.

5 CFR Part 894

    Administrative practice and procedure, Government employees, Health 
insurance, Taxes, Wages.


U.S. Office of Personnel Management.
John Berry,
Director.

    Accordingly, OPM is proposing to amend title 5, Code of Federal 
Regulations as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

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

    Authority:  5 U.S.C. 8913; Sec. 890.301 also issued under Sec. 
311 of Pub. L. 111-03, 123 Stat. 64; Sec. 890.111 also issued under 
section 1622(b) of Pub. L. 104-106, 110 Stat. 521; Sec. 890.112 also 
issued under section 1 of Pub. L. 110-279, 122 Stat. 2604; 5 U.S.C. 
8913; Sec. 890.803 also issued under 50 U.S.C. 403p, 22 U.S.C. 4069c 
and 4069c-1; subpart L also issued under Sec. 599C of Pub. L. 101-
513, 104 Stat. 2064, as amended; Sec. 890.102 also issued under 
sections 11202(f), 11232(e), 11246(b) and (c) of Pub. L. 105-33, 111 
Stat. 251; and section 721 of Pub. L. 105-261, 112 Stat. 2061.

    2. Section 890.302 is revised to read as follows:


Sec.  890.302  Coverage of family members.

    (a)(1) An enrollment for self and family includes all family 
members who are eligible to be covered by the enrollment. Except as 
provided in paragraph (a)(2) of this section, no employee, former 
employee, annuitant, child, or former spouse may enroll or be covered 
as a family member if he or she is covered under another person's self 
and family enrollment in the FEHB Program.
    (2) Dual enrollment. A dual enrollment exists when an individual is 
covered under more than one FEHB Program enrollment. Dual enrollments 
are prohibited except when an eligible individual would otherwise not 
have access to coverage and the dual enrollment has been authorized by 
the employing office.
    (i) An individual who is a covered family member under the self and 
family enrollment of another FEHB enrollee may not enroll in his or her 
own right, even though otherwise eligible to enroll.
    (ii) Exception. An individual described in paragraph (a)(2)(i) of 
this section may enroll if he or she or his or her eligible family 
members would otherwise not have access to coverage, in which case the 
individual may enroll in his or her own right for self only or self and 
family coverage, as appropriate. However, an eligible individual is 
entitled to receive benefits under only one enrollment regardless of 
whether he or she qualifies as a family member under a spouse's or 
parent's enrollment. To ensure that no person receives benefits under 
more than one enrollment, each enrollee must promptly notify the 
insurance carrier as to which persons will be covered under his or her 
enrollment. These individuals are not covered under the other

[[Page 42916]]

enrollment. Examples include but are not limited to:
    (A) To protect the interests of married or legally separated 
Federal employees, annuitants and their children, an employee or 
annuitant may enroll in his or her own right in a self only or self and 
family enrollment, as appropriate, even though his or her spouse also 
has a self and family enrollment if the employee, annuitant or his or 
her children live apart from the spouse and would otherwise not have 
access to coverage due to a service area restriction and the spouse 
refuses to change health plans.
    (B) When an employee who is under age 26 and covered under a 
parent's self and family enrollment acquires an eligible family member, 
the employee may elect to enroll for self and family coverage.
    (iii) Children are entitled to receive benefits under only one 
enrollment regardless of whether the children qualify as family members 
under the enrollment of both parents or of a parent and a stepparent 
and regardless of whether the parents are married, unmarried, divorced, 
legally separated, or in a domestic partnership. To ensure that no 
person receives benefits under more than one enrollment, each enrollee 
must promptly notify the insurance carrier as to which family members 
will be covered under his or her enrollment. These individuals are not 
covered under the other enrollment.
    (b)(1) A child is considered to be a family member eligible to be 
covered by the enrollment of an enrolled employee or annuitant or a 
former employee or child enrolled under Sec.  890.1103 of this part if 
he or she is--
    (i) A child born within marriage;
    (ii) A recognized natural child;
    (iii) An adopted child;
    (iv) A stepchild; or
    (v) A foster child who lives with the enrollee in a regular parent-
child relationship.
    (2) Meaning of stepchild. For purposes of this part, the term 
``stepchild'' refers to the child of an enrollee's spouse or domestic 
partner.
    (3) Meaning of domestic partner. For purposes of this part, the 
term ``domestic partner'' is a person in a domestic partnership with an 
employee, annuitant, former employee or child enrolled under Sec.  
890.1103 of this part.
    (4) Meaning of domestic partnership. For purposes of this part, the 
term ``domestic partnership'' is defined as a committed relationship 
between two adults, of the same sex, in which the partners--
    (i) Are each other's sole domestic partner and intend to remain so 
indefinitely;
    (ii) Maintain a common residence, and intend to continue to do so 
(or would maintain a common residence but for an assignment abroad or 
other employment-related, financial, or similar obstacle);
    (iii) Are at least 18 years of age and mentally competent to 
consent to a contract;
    (iv) Share responsibility for a significant measure of each other's 
financial obligations;
    (v) Are not married or joined in a civil union to anyone else;
    (vi) Are not a domestic partner of anyone else;
    (vii) Are not related in a way that, if they were of opposite sex, 
would prohibit legal marriage in the U.S. jurisdiction in which the 
domestic partnership was formed;
    (viii) Provide documentation demonstrating fulfillment of the 
requirements of (i) through (vii) as prescribed by OPM; and
    (ix) Certify that they understand that willful falsification of the 
documentation described in subparagraph (viii) of this section may lead 
to disciplinary action and the recovery of the cost of benefits 
received related to such falsification and may constitute a criminal 
violation under 18 U.S.C. 1001.
    (5) Termination of Domestic Partnership. An enrollee must notify 
the employing office within seven calendar days in the event that any 
of the conditions listed in (i) through (vii) of this subsection are no 
longer met, in which case a domestic partnership will be deemed 
terminated.
    (6) Tax Issues. The fair market value of coverage provided to a 
stepchild who is the child of a domestic partner will be taxed in 
accordance with applicable tax laws unless the enrollee establishes 
that the stepchild qualifies for favorable tax treatment in accordance 
with guidance issued by OPM.
    (c) Child incapable of self-support. When an individual's 
enrollment for self and family includes a child who has become 26 years 
of age and is incapable of self-support, the employing office must 
require such enrollee to submit a physician's certificate verifying the 
child's disability. The certificate must--
    (1) State that the child is incapable of self-support because of a 
physical or mental disability that existed before the child became 26 
years of age and that can be expected to continue for more than 1 year;
    (2) Include a statement of the name of the child, the nature of the 
disability, the period of time it has existed, and its probable future 
course and duration; and,
    (3) Be signed by the physician and show the physician's office 
address. The employing office must require the enrollee to submit the 
certificate on or before the date the child becomes 26 years of age. 
However, the employing office may accept otherwise satisfactory 
evidence of incapacity that is not timely filed.
    (d) Renewal of certificates of incapacity. The employing office 
must require an enrollee who has submitted a certificate of incapacity 
to renew that certificate on the expiration of the minimum period of 
disability certified.
    (e) Determination of incapacity. (1) Except as provided in 
paragraph (e)(2) of this section, the employing office shall make 
determinations of incapacity.
    (2) Either the employing office or the carrier may make a 
determination of incapacity if a medical condition, as specified by 
OPM, exists that would cause a child to be incapable of self-support 
during adulthood.
    3. Section 890.804 is revised to read as follows:


Sec.  890.804  Coverage.

    (a) Type of enrollment. A former spouse who meets the requirements 
of Sec.  890.803 may elect coverage for self alone or for self and 
family. A family enrollment covers only the former spouse and any child 
of both the former spouse and the employee, former employee or employee 
annuitant, provided such child is not otherwise covered by a health 
plan under this part. A child must be under age 26 or incapable of 
self-support because of a mental or physical disability existing before 
age 26. No person may be covered by two enrollments.
    (b) Child. A child is considered to be the child of the former 
spouse or the employee, former employee, or employee annuitant if he or 
she is--
    (i) A child born within marriage or
    (ii) An adopted child.
    (c) Child incapable of self-support. When a former spouse enrolls 
for a family enrollment which includes a child who has become 26 years 
of age and is incapable of self-support, the employing office shall 
determine such child's eligibility in accordance with Sec.  890.302(c), 
(d), and (e).
    4. In Sec.  890.1102, revise the definition of ``Qualifying event'' 
to read as follows:


Sec.  890.1102  Definitions.

* * * * *
    Qualifying event means any of the following events that qualify an 
individual for temporary continuation of coverage under subpart K of 
this part:

[[Page 42917]]

    (1) A separation from Government service.
    (2) A divorce or annulment.
    (3) A change in circumstances that causes an individual to become 
ineligible to be considered a child who is a covered family member 
under this part.
* * * * *
    5. In Sec.  890.1103, revise paragraphs (a) introductory text and 
(a)(2) to read as follows:


Sec.  890.1103  Eligibility.

    (a) Except as provided by paragraph (b) of this section, 
individuals described by this section are eligible to elect temporary 
continuation of coverage under this subpart. Eligible individuals are 
as follows:
* * * * *
    (2) Individuals whose coverage as children under the family 
enrollment of an employee, former employee, or annuitant ends because 
they cease meeting the requirements for being considered covered family 
members. For the purpose of this section, children who are enrolled 
under this part as survivors of deceased employees or annuitants are 
considered to be children under a family enrollment of an employee or 
annuitant at the time of the qualifying event.
* * * * *
    6. In Sec.  890.1104, revise paragraphs (b)(2) and (3) to read as 
follows:


Sec.  890.1104  Notification by agency.

* * * * *
    (b) * * *
    (2) If the notice described in paragraph (b)(1) of this section is 
received by the employing office within 60 days after the date on which 
the child ceased meeting the requirements for being considered a 
covered family member, the employing office must notify the child of 
his or her rights under this subpart within 14 days after receiving the 
notice.
    (3) This paragraph does not preclude the employing office from 
notifying the child of his or her rights based on oral or written 
notification by the child, another family member, or any other source 
that the child no longer meets the requirements for being considered a 
covered family member.
* * * * *
    5. In Sec.  890.1107, revise paragraphs (b)(1) and (2) to read as 
follows:


Sec.  890.1107  Length of temporary continuation of coverage.

* * * * *
    (b)(1) Except as provided in paragraph (b)(2) of this section, in 
the case of individuals who are eligible for continued coverage under 
Sec.  890.1103(a)(2) of this part, the temporary continuation of 
coverage ends on the date that is 36 months after the date the 
individual first ceases to meet the requirements for being considered a 
child who is a covered family member, unless it is terminated earlier 
under the provisions of Sec.  890.1110.
    (2) The temporary continuation of coverage ends on the date that is 
36 months after the date of the separation from service on which the 
former employee's continuation of coverage is based, unless it is 
terminated earlier under the provisions of Sec.  890.1110, in the case 
of individuals who--
    (i) Are eligible for continued coverage under Sec.  890.1103(a)(2); 
and
    (ii) As of the day before ceasing to meet the requirements for 
being considered children who are covered family members, were covered 
family members of a former employee receiving continued coverage under 
this subpart; and
    (iii) Cease meeting the requirements for being considered children 
who are covered family members before the end of the 18-month period 
specified in paragraph (a) of this section.
* * * * *


Sec.  890.1202  [Amended]

    6. In Sec.  890.1202, remove the words ``unmarried'' and 
``dependent'' from the definition of ``covered family members''.


Sec.  890.1203  [Amended]

    7. In Sec.  890.1203, in paragraph (b), remove the word 
``dependent'' each time it appears.

PART 892--FEDERAL FLEXIBLE BENEFITS PLAN: PRE-TAX PAYMENTS OF 
HEALTH BENEFITS PREMIUMS PROGRAM

    8. The authority citation for part 892 continues to read as 
follows:

    Authority:  5 U.S.C 8913; 5 U.S.C. 1103(a)(7); 26 U.S.C. 125; 
Sec. 892.101 also issued under sec. 311 of Pub. L. 111-3, 123 Stat. 
64.

    9. In Sec.  892.101, the definition of ``Dependent'' and the 
introductory text and paragraph (1)(iii) of the definition of 
``Qualifying life event'' are revised to read as follows:


Sec.  892.101  Definitions.

* * * * *
    Dependent means a family member who is both eligible for coverage 
under the FEHB Program and either a dependent as defined in section 152 
of the Internal Revenue Code or a child as defined in section 152(f)(1) 
of the Internal Revenue Code who is under age 27 as of the end of the 
employee's taxable year.
* * * * *
    Qualifying life event means an event that may permit changes to 
your FEHB enrollment as well as changes to your premium conversion 
election as described in Treasury regulations at 26 CFR 1.125-4. For 
purposes of determining whether a qualifying life event has occurred 
under this part, a stepchild who is the child of an employee's domestic 
partner as defined in Part 890 shall be treated as though the child 
were a dependent within the meaning of 26 CFR 1.125-4 even if the child 
does not so qualify under such Treasury regulations. Such events 
include the following:
* * * * *
    (iii) Last dependent child loses coverage, for example, the child 
reaches age 26, disabled child becomes capable of self support, child 
acquires other coverage by court order; and
* * * * *
    10. In Sec.  892.102, add two sentences to the end of the section 
to read as follows:


Sec.  892.102  What is premium conversion and how does it work?

    * * * There is one exception, however. If your FEHB enrollment 
covers a stepchild who is the child of a domestic partner as defined in 
part 890 of this chapter, and that stepchild does not qualify for 
favorable tax treatment under applicable tax laws, then the portion of 
the allotted amount described above that represents the employee's 
contribution toward the fair market value of FEHB coverage provided to 
the child will be separately imputed to the employee as income and 
subject to applicable taxes.


Sec.  892.208  [Amended]

    11. In Sec.  892.208(b), the number ``22'' is removed and the 
number ``26'' is added in its place.

PART 894--FEDERAL EMPLOYEES DENTAL AND VISION INSURANCE PROGRAM

    12. The authority citation for part 894 continues to read as 
follows:

    Authority:  5 U.S.C. 8962; 5 U.S.C. 8992; subpart C also issued 
under sec. 1 of Pub. L. 110-279, 122 Stat. 2604.

    13. In Sec.  894.101, the definition of ``Acquiring an eligible 
child'' is revised and definitions for ``Domestic partner,'' ``Domestic 
partnership,'' and ``Stepchild'' are added to read as follows:

[[Page 42918]]

Sec.  894.101  Definitions.

* * * * *
    Acquiring an eligible child means one of the following:
    (1) Birth of a child;
    (2) Adoption of a child;
    (3) Acquisition of a foster child as described in Sec.  
890.101(a)(8) of this chapter;
    (4) Acquisition of a stepchild who lives with the enrollee in a 
regular parent-child relationship;
    (5) Establishment of a recognized natural child;
    (6) Residence change of the enrollee's stepchild or recognized 
natural child who moves in with the enrollee; and
    (7) An otherwise eligible child becoming unmarried due to divorce 
or annulment of marriage, or death.
* * * * *
    Domestic partner means a person in a domestic partnership with an 
employee or annuitant.
    Domestic partnership means a committed relationship between two 
adults, of the same sex, in which the partners--
    (1) Are each other's sole domestic partner and intend to remain so 
indefinitely;
    (2) Maintain a common residence, and intend to continue to do so 
(or would maintain a common residence but for an assignment abroad or 
other employment-related, financial, or similar obstacle);
    (3) Are at least 18 years of age and mentally competent to consent 
to a contract;
    (4) Share responsibility for a significant measure of each other's 
financial obligations;
    (5) Are not married or joined in a civil union to anyone else;
    (6) Are not a domestic partner of anyone else;
    (7) Are not related in a way that, if they were of opposite sex, 
would prohibit legal marriage in the U.S. jurisdiction in which the 
domestic partnership was formed;
    (8) Provide documentation demonstrating fulfillment of the 
requirements of (i) through (vii) as prescribed by OPM; and
    (9) Certify that they understand that willful falsification of the 
documentation described in subparagraph (viii) of this section may lead 
to disciplinary action and the recovery of the cost of benefits 
received related to such falsification and may constitute a criminal 
violation under 18 U.S.C. 1001.
    (10) Termination of Domestic Partnership. An enrollee must notify 
the employing office within seven calendar days in the event that any 
of the conditions listed in paragraphs (1) through (7) of this 
definition are no longer met, in which case a domestic partnership will 
be deemed terminated.
* * * * *
    Stepchild means the child of an enrollee's spouse or domestic 
partner.
* * * * *
    14. Add Sec.  894.308 to subpart C to read as follows:


Sec.  894.308  How do I establish the dependency of my recognized 
natural child?

    (a) Dependency is established for a recognized natural child who 
lives with the enrollee in a regular parent-child relationship, a 
recognized natural child for whom a judicial determination of support 
has been obtained, or a recognized natural child to whose support the 
enrollee makes regular and substantial contributions.
    (b) The following are examples of proof of regular and substantial 
support. More than one of the following proofs may be required to show 
support of a recognized natural child who does not live with the 
enrollee in a regular parent-child relationship and for whom a judicial 
determination of support has not been obtained:
    (1) Evidence of eligibility as a dependent child for benefits under 
other State or Federal programs;
    (2) Proof of inclusion of the child as a dependent on the 
enrollee's income tax returns;
    (3) Canceled checks, money orders, or receipts for periodic 
payments from the enrollee for or on behalf of the child.
    (4) Evidence of goods or services which show regular and 
substantial contributions of considerable value;
    (5) Any other evidence which OPM shall find to be sufficient proof 
of support or of paternity or maternity.
    15. In Sec.  894.403, add a sentence to the end of paragraph (a) to 
read as follows:


Sec.  894.403  Are FEDVIP premiums paid on a pre-tax basis?

    (a) * * * However, if your enrollment covers a stepchild who is the 
child of a domestic partner as defined in Sec.  894.101, and that 
stepchild does not qualify for favorable tax treatment under applicable 
tax laws, the allotted amount of premium that represents the fair 
market value of the FEDVIP coverage provided to the stepchild will be 
separately imputed to the employee as income and subject to applicable 
taxes.
* * * * *
[FR Doc. 2012-17537 Filed 7-19-12; 8:45 am]
BILLING CODE 6325-63-P