[Federal Register Volume 83, Number 15 (Tuesday, January 23, 2018)]
[Rules and Regulations]
[Pages 3059-3062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-01174]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
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  Federal Register / Vol. 83, No. 15 / Tuesday, January 23, 2018 / 
Rules and Regulations  

[[Page 3059]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AN09


Federal Employees Health Benefits Program: Removal of Eligible 
and Ineligible Individuals From Existing Enrollments

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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

SUMMARY: The United States Office of Personnel Management (OPM) is 
issuing a final rule amending Federal Employees Health Benefits (FEHB) 
Program regulations to provide a process for removal of certain 
identified individuals who are found not to be eligible as family 
members from FEHB enrollments. This process would apply to individuals 
for whom there is a failure to provide adequate documentation of 
eligibility when requested. This action also amends Federal Employees 
Health Benefits (FEHB) Program regulations to allow certain eligible 
family members to be removed from existing self and family or self plus 
one enrollments.

DATES: This rule is effective February 22, 2018.

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

SUPPLEMENTARY INFORMATION: 

Authority for This Rulemaking

    The Federal Employees Health Benefits (FEHB) Program is 
administered by the Office of Personnel Management (OPM) in accordance 
with Title 5, Chapter 89 of the United States Code and our implementing 
regulations at title 5, part 890 of the Code of Federal Regulations. 
The statute establishes the basic rules for benefits, enrollment, and 
participation. OPM contracts with health benefits plans to provide 
coverage under the statute. OPM is authorized to prescribe regulations 
to govern the time, manner and conditions under which an employee can 
enroll in a health benefits plan under the FEHB Program and the 
beginning and end dates of coverage for annuitants and family members.

I. Background

    The Federal Employees Health Benefits (FEHB) Program provides 
health insurance to about 8.2 million Federal employees, retirees, and 
their dependents each year. It is the largest employer-sponsored health 
insurance program in the country providing more than $53 billion in 
health care benefits annually. Coverage options available to eligible 
individuals include self only, self plus one or self and family 
coverage in an approved health benefits plan. Eligible family members 
include the spouse of an employee or annuitant and a child under 26 
years of age, including adopted children, stepchildren or foster 
children or a child regardless of age who is incapable of self-support 
because of mental or physical disability which existed before age 26.
    On December 1, 2016, OPM published a proposed rule (81 FR 86902) to 
1) provide that proof of family member eligibility may be required for 
coverage under an FEHB Program self plus one or self and family 
enrollment and 2) to establish the circumstances under which 
individuals covered under an existing self plus one or self and family 
FEHB enrollment will be removed from such enrollment and the processes 
for removal, where the enrollee does not provide adequate documentation 
of eligibility. Previously, under 5 CFR 890.302, all eligible family 
members are covered under a self and family enrollment. The regulations 
did not address the removal of an erroneously-covered ineligible 
individual from an existing self plus one or self and family 
enrollment.
    On the same date, the Office of Personnel Management (OPM) 
published a Notice of Proposed Rulemaking (NPRM) (81 FR 86898) allowing 
certain eligible family members to be removed from self plus one and 
self and family enrollments in limited circumstances. This would change 
the current provision at 5 CFR 890.302, which provides that all family 
members that are eligible according to the FEHB Act (5 U.S.C. 8901) are 
automatically covered under a self and family enrollment.
    This regulation merges and finalizes these two proposed 
regulations. The proposed regulations were published separately, but 
have now been merged for regulatory efficiency as both proposed 
regulations address title 5, Code of Federal Regulations, Sec. Sec.  
890.302, Coverage of Family Members, and 890.308, Disenrollment.
    Both proposed regulations had 60-day comment periods. The 
regulations concerning ineligible family members received four 
comments: One from an interested citizen, one from an agency HR 
employee and one from a trade group representing FEHB Program plans 
with one duplicate comment. Two of the comments were supportive of the 
proposed rule and none objected to the proposed regulation. The 
proposed rule concerning eligible family members received three 
comments: one from an interested citizen, one from an agency HR 
employee and one from a trade group representing FEHB Program plans. 
Two of the comments were supportive of the proposed rules and none 
objected to the change in policy.

II. Responses to Comments

Ineligible Family Member Regulation

    One commenter requested that OPM specify whether a submission of a 
reconsideration request delays the effective date of the initial 
removal. The provisions added in Sec.  890.308(e) and (f) mirror the 
processes outlined in Sec.  890.308(a) for disenrollment of employees. 
That provision does not provide a delayed effective date for 
reconsideration and so we are not adding one to this section. If an 
enrollee or the removed individual seeks reconsideration and the agency 
or OPM finds the family member to be eligible, the family member will 
receive retroactive coverage.
    One commenter asked whether OPM is now requesting that agencies to 
track family members. This regulation does not require agencies to 
track family members, but forthcoming sub-regulatory guidance may 
require agencies to collect proof of eligibility in certain 
circumstances. The regulations amend Sec.  890.302 to provide that 
proof of family member eligibility must be provided upon request by a 
carrier, employing office, or OPM.

[[Page 3060]]

    Two commenters asked how an FEHB Program carrier would be aware of 
an initial determination of ineligibility under proposed Sec.  
890.308(f)(1) and requested further guidance on all required methods of 
notification to FEHB Program carriers. Section 890.308(f)(1) states 
that the employing office or OPM, as applicable, will direct the 
carrier to remove the individual if proof of eligibility is not 
provided by the enrollee. OPM will publish a Benefits Administration 
Letter (available at https://www.opm.gov/healthcare-insurance/healthcare/reference-materials/#url=BALs) and a Carrier Letter 
(available at https://www.opm.gov/healthcare-insurance/healthcare/carriers/#url=Carrier-Letters) following the publication of this 
regulation to carriers and to agencies providing a specific process to 
notify carriers and/or employing offices of any coverage changes 
effectuated under this regulation. One commenter further added that the 
carrier should receive the reasoning behind the removal of the 
individual. Accordingly, the final rule provides that the employing 
office or OPM shall provide a copy of the letter sent to the enrollee 
concerning removal under Sec.  890.308(f)(1) to the carrier.
    One commenter suggested that OPM add an effective date for a 
removal under Sec.  890.308(f)(3) and (e)(3) where fraud or intentional 
misrepresentation are found. OPM has updated the final regulation to 
specify that if fraud or intentional misrepresentation of material fact 
is found, the effective date of the removal is the date of loss of 
eligibility.
    One commenter suggested that OPM add examples to Sec.  890.308(g) 
to clarify how temporary continuation of coverage (TCC), conversion and 
extension of coverage rules will operate under the regulations. An 
example has been added to clarify that an individual will not be 
eligible to receive TCC, conversion or an extension of coverage unless 
the removal is effectuated within the time limit currently required 
under existing regulations.

Removal of Eligible Family Members From Existing Enrollment Regulation

    One commenter asked who will be responsible for collecting 
documentation and determining proof of eligibility status and whether 
that information will need to be forwarded to FEHB Program carriers. 
The proposed rule provided and the final rule maintains that employing 
offices will be responsible for collecting documentation and 
determining proof of eligibility status and that the information will 
be sent to FEHB Program carriers. Two commenters asked that OPM specify 
how this information should be provided to carriers and how it should 
be maintained and tracked. OPM plans to publish a Benefits 
Administration Letter and a Carrier Letter to employing offices and 
FEHB Program carriers following the publication of this regulation 
including a process for agencies to inform carriers of changes in 
covered family members and documentation that needs to be collected to 
effectuate a change.
    One commenter requested that OPM change the proposed effective date 
of removals. The proposed rule makes the removal effective on the first 
day of the pay period following a notarized request received from the 
family member at issue and on the first day of the second pay period 
following a request to remove a child received from the enrollee. The 
commenter requested that the effective date be the first day of the 
third pay period for enrollees who pay premiums bi-weekly and the 
second pay period for enrollees who pay premiums monthly as the 
effective date for either type of family member removal. OPM agrees 
that this avoids unnecessary benefit overpayments and ensures that a 
family member has sufficient time to obtain replacement health benefits 
coverage. The final rule makes this change.
    We have also made minor, non-substantive editorial changes to the 
regulation for editorial consistency and to improve clarity. In 
addition, we have updated the regulation to clarify that either the 
enrollee or the removed individual can provide proof of eligibility or 
request reconsideration of the initial decision.

Expected Impact of Changes Based on the Rule

    The FEHB Program currently has a total of 262 health plan options 
for employees to choose from for their health benefits coverage. 
Historically, about 18,000 of FEHB participants switch health care 
plans in any given year. There are approximately 4 million family 
members covered under FEHB Program. While this rule may lower costs to 
the FEHB Program by reducing the number of eligible and ineligible 
family members, OPM does not have data available to calculate specific 
rates. However, OPM has found anecdotal evidence which estimates 
between 1-3 percent of spouses and 4-12 percent of children in 
commercial health plans are ineligible for coverage. So, we anticipate 
this rule will not have widespread applicability across the Program.

Executive Order Requirements

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``significant regulatory 
action,'' under Executive Order 12866.
    This final rule is not subject to the requirements of E.O. 13771 
(82 FR 9339, February 3, 2017) because it is related to agency 
organization, management, or personnel.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities.

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.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35; see 5 
CFR part 1320) requires that the U.S. Office of Management and Budget 
(OMB) approve all collections of information by a Federal agency from 
the public before they can be implemented. Respondents are not required 
to respond to any collection of information unless it displays a 
current valid OMB control number. OPM is not proposing any additional 
collections in this rule. This rule involves an OMB approved collection 
of information subject to the PRA--OMB No. 3206-0160, Health Benefits 
Election Form. The public reporting burden for this collection is 
estimated to average 30 minutes per response, including time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. The total burden hour estimate for this form 
is 9,000 hours. The systems of record notice for this collection is: 
OPM/Central 1 Civil Service Retirement and Insurance Records, available 
at https://www.opm.gov/information-management/privacy-policy/sorn/opm-

[[Page 3061]]

sorn-central-1-civil-service-retirement-and-insurance-records.pdf.

List of Subjects on 5 CFR Part 890

    Administrative practice and procedure, Government employees, Health 
insurance.

U.S. Office of Personnel Management.
Kathleen M. McGettigan,
Acting Director.

    For the reasons set forth in the preamble, OPM amends 5 CFR part 
890 as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

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

    Authority: 5 U.S.C. 8913; Sec. 890.301 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 101, 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; Pub. L. 111-148, as 
amended by Pub. L. 111-152.


0
2. Revise Sec.  890.302(a)(1) to read as follows:


Sec.  890.302  Coverage of family members.

    (a)(1) Enrollment. An enrollment for self plus one includes the 
enrollee and one eligible family member. An enrollment for self and 
family includes all family members who are eligible to be covered by 
the enrollment except as provided in Sec.  890.308(h). Proof of family 
member eligibility may be required, and must be provided upon request, 
to the carrier, the employing office or OPM. 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 already covered under another person's self plus 
one or self and family enrollment in the FEHB Program.
* * * * *

0
3. Amend Sec.  890.308 by:
0
a. Revising the section heading;
0
b. Adding headings to paragraphs (a), (b), (c), and (d); and
0
c. Adding paragraphs (e), (f), (g), and (h).
    The revisions and additions read as follows:


Sec.  890.308  Disenrollment and removal from enrollment.

    (a) Carrier disenrollment: Enrollment reconciliation. ***
    (b) Carrier disenrollment: Death of enrollee. ***
    (c) Carrier disenrollment: Child survivor annuitant. ***
    (d) Carrier disenrollment: Separation from Federal employment. ***
    (e) Carrier removal from enrollment: Ineligible individuals. (1) A 
carrier may request verification of eligibility from the enrollee at 
any time of an individual who is covered as a family member of the 
enrollee in accordance with Sec.  890.302. To verify eligibility, the 
carrier shall send the enrollee a request for appropriate documentation 
of the individual's relationship to the enrollee with a copy to the 
enrollee's employing office of record. The request shall contain a 
written notice that the individual will no longer be covered 60 
calendar days after the date of the notice unless the enrollee or the 
employing office provides appropriate documentation as requested. If 
the carrier does not receive the requested documentation within the 
specified time frame or if based on the documentation provided the 
individual is found not to be eligible, the carrier shall remove the 
individual from the enrollment and shall provide written notice of 
removal to the enrollee, with a copy to the employing office, including 
an explanation of the process for seeking reconsideration. The carrier 
may extend the time limit to provide appropriate documentation if the 
enrollee or the removed individual shows to the carrier that he or she 
was prevented by circumstances beyond his or her control from providing 
timely documentation.
    (2) Appropriate documentation includes, but is not limited to, 
copies of birth certificates, marriage certificates, and, if 
applicable, other proof including that the individual lives with the 
enrollee and the enrollee is the individual's primary source of 
financial support.
    (3) The effective date of a removal shall be prospective unless the 
record shows that the enrollee or the removed individual has committed 
fraud or made an intentional misrepresentation of material fact as 
prohibited by the terms of the plan. If fraud or intentional 
misrepresentation of material fact is found, the effective date of the 
removal is the date of loss of eligibility.
    (4) A request for reconsideration of the carrier's initial decision 
must be filed by the enrollee or the removed individual with the 
enrollee's employing office within 60 calendar days after the date of 
the carrier's initial decision. The employing office must notify the 
carrier when a request for reconsideration of the decision to remove 
the individual from the enrollment is made. The time limit for filing 
may be extended if the enrollee or the removed shows that he or she was 
not notified of the time limit and was not otherwise aware of it, or 
that he or she was prevented by circumstances beyond his or her control 
from making the request within the time limit. The request for 
reconsideration must be made in writing and must include the enrollee's 
name, address, Social Security Number or other personal identification 
number, individual's name, the name of the enrollee's carrier, 
reason(s) for the request, and, if applicable, the enrollee's 
retirement claim number.
    (5) The employing office must issue a written notice of its final 
decision to the enrollee, and notify the carrier of the decision, 
within 30 days of receipt of the request for reconsideration. The 
notice must fully set forth the findings and conclusions on which the 
decision was based.
    (6) If an enrollee or the removed individual provides acceptable 
proof of eligibility of an individual subsequent to removal, coverage 
under the enrollment shall be reinstated retroactively so that there is 
no gap in coverage, as appropriate.
    (f) Employing office and OPM removal from enrollment: Ineligible 
individuals. (1) An enrollee's employing office or OPM may request 
verification of eligibility from the enrollee at any time of an 
individual who is covered as a family member of the enrollee in 
accordance with Sec.  890.302. To verify eligibility, the employing 
office or OPM shall send the enrollee a request for appropriate 
documentation of the individual's relationship to the enrollee. The 
request shall contain a written notice that the individual will no 
longer be covered 60 calendar days after the date of the notice unless 
the enrollee provides appropriate documentation as requested. If the 
employing office or OPM, as applicable, does not receive the requested 
documentation within the specified time frame or if based on the 
documentation provided the individual is found not to be eligible, the 
employing office or OPM, as applicable, shall direct the carrier to 
remove the individual from the enrollment and the employing office or 
OPM, as applicable, shall provide written notice of the removal to the 
enrollee, with a copy to the carrier, including an explanation of the 
process for seeking reconsideration. The time limit to provide 
appropriate documentation may be extended if the enrollee or the 
removed individual shows to the employing office or OPM, as 
appropriate, that he or she was

[[Page 3062]]

prevented by circumstances beyond his or her control from providing 
timely documentation.
    (2) Appropriate documentation includes, but is not limited to, 
copies of birth certificates, marriage certificates, and, if 
applicable, other proof including that the individual lives with the 
enrollee and that the enrollee is the individual's primary source of 
financial support.
    (3) The effective date of the removal shall be prospective unless 
the record shows that the enrollee or the removed individual has 
committed fraud or made an intentional misrepresentation of material 
fact as prohibited by the terms of the plan. If fraud or intentional 
misrepresentation of material fact is found, the effective date of the 
removal is the date of loss of eligibility.
    (4) The enrollee or the removed individual may request 
reconsideration of an employing office or OPM's decision to remove the 
individual from the enrollment within 60 days of an employing office or 
OPM's initial decision. The enrollee or the removed individual may 
request reconsideration of an employing office decision to the 
employing office or an OPM decision to OPM. The employing office or 
OPM, as applicable, must notify the carrier when a request for 
reconsideration of the decision to remove the individual from the 
enrollment is made. The time limit for filing may be extended if the 
enrollee or the removed individual shows that he or she was not 
notified of the time limit and was not otherwise aware of it, or that 
he or she was prevented by circumstances beyond his or her control from 
making the request within the time limit. The request for 
reconsideration must be made in writing and must include the enrollee's 
name, address, Social Security Number or other personal identification 
number, the individual's name, the name of the enrollee's carrier, 
reason(s) for the request, and, if applicable, the enrollee's 
retirement claim number.
    (5) The employing office or OPM, as applicable, must issue a 
written notice of its final decision to the enrollee, and notify the 
carrier of the decision within 30 days of receipt of the request for 
reconsideration. The notice must fully set forth the findings and 
conclusions on which the decision was based.
    (6) If an enrollee or the removed individual provides acceptable 
proof of eligibility of an individual subsequent to removal, coverage 
under the enrollment shall be reinstated retroactively so that there is 
no gap in coverage, as appropriate.
    (g) Temporary extension of coverage, conversion and/or temporary 
continuation of coverage. If an individual is removed from an 
enrollment pursuant to paragraph (e) or (f) of this section, the 
individual may be eligible for a 31-day temporary extension of 
coverage, conversion and/or temporary continuation of coverage in 
accordance with Sec.  890.401 and subparts H and K of this part. Any 
opportunity to enroll under Sec.  890.401 and subparts H and K shall 
not extend beyond the date that opportunity would have ended if the 
individual had been removed on the date of loss of eligibility.
    (1) Example. An enrollee and his spouse divorce on May 4, 2017. The 
enrollee does not remove the former spouse from the enrollee's self and 
family enrollment, so the former spouse is receiving coverage but is 
not eligible. In this example, the former spouse is not eligible to 
receive an annuity listed in Sec.  890.805(2). If the employing office 
later discovers the divorce, and removes the spouse from the enrollment 
on June 20, 2018, the former spouse is not eligible for a 31-day 
extension of coverage, conversion and/or temporary continuation of 
coverage because the regulatory window for election of 60 days outlined 
in Sec.  890.805(1) has passed. The sixty-day window began on the final 
date of the divorce, May 4, 2017 and ended on July 3, 2017.
    (2) [Reserved]
    (h) Removal from enrollment: Eligible family members. (1) An 
eligible family member may be removed from a self plus one or a self 
and family enrollment if a request is submitted to the enrollee's 
employing office for approval at any time during the plan year in the 
following circumstances:
    (i) In the case of a spouse, if the enrollee and his or her spouse 
provide a notarized request for removal.
    (ii) In the case of a child who has reached the age of majority in 
the child's state of residence (the enrollee's state of residence if 
the child's is not known), if the enrollee provides proof that the 
child is no longer his or her dependent as described under Sec.  
890.302(b). The enrollee shall also provide the last known contact 
information for the child.
    (iii) In the case of a child who has reached the age of majority in 
the child's state of residence, if the child provides a notarized 
request for removal to the employing office.
    (2) For removals under paragraph (h)(1) of this section the 
effective date is the first day of the third pay period following the 
date the request is approved by the employing office for employees who 
pay bi-weekly and the second pay period following the date that the 
request is approved by the employing office for enrollees who pay 
premiums monthly.
    (3) The family member's removal under this paragraph (h) is 
considered a cancellation under Sec.  890.304(d) and removed family 
members are not eligible for temporary extension of coverage and 
conversion under Sec.  890.401 or temporary continuation of coverage 
under Sec.  809.1103.
    (4) If an eligible family member is removed under this paragraph 
(h), he or she may only regain coverage under the applicable self plus 
one or self and family enrollment if requested by the enrollee during 
the annual open season or within 60 days of the family member losing 
other health insurance coverage. The enrollee must also provide written 
consent to reinstatement of coverage from the family member and 
demonstrate eligibility of the spouse or child as a family member to 
the employing office.
    (5) If an employing office approves a request for removal, the 
employing office must notify the enrollee and the carrier of the 
removal immediately. For removals under paragraph (h)(1)(ii) of this 
section, the employing office must also immediately notify the child of 
the removal using the last known contact provided by the enrollee.

[FR Doc. 2018-01174 Filed 1-22-18; 8:45 am]
 BILLING CODE 6325-63-P