[Federal Register Volume 83, Number 82 (Friday, April 27, 2018)]
[Rules and Regulations]
[Pages 18421-18422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08854]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 8

RIN 2900-AQ03


Eligibility for Supplemental Service-Disabled Veterans' Insurance

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA), in this final rule, 
amends its regulations governing the Service-Disabled Veterans' 
Insurance (S-DVI) program in order to explain that a person who was 
granted S-DVI as of the date of death is not eligible for supplemental 
S-DVI because the insured's total disability did not begin after the 
date of the insured's application for insurance and while the insurance 
was in force under premium-paying conditions.

DATES: This rule is effective May 29, 2018.

FOR FURTHER INFORMATION CONTACT: Paul Weaver, Department of Veterans 
Affairs Insurance Center (310/290B), 5000 Wissahickon Avenue, 
Philadelphia, PA 19144, (215) 842-2000, ext. 4263 (this is not a toll-
free number).

SUPPLEMENTARY INFORMATION: On August 23, 2017, VA published a proposed 
rule in the Federal Register (82 FR 39974). VA provided a 60-day 
comment period on the proposed rule, which ended on October 23, 2017. 
VA received comments from five individuals. The commenters stated that 
they believed the proposed rule would unnecessarily restrict 
eligibility for supplemental S-DVI; eliminate insurance coverage for 
veterans; and is contrary to the congressional intent of the 
supplemental S-DVI legislation. We address their contentions below.

A. Insurance Coverage

    One commenter stated that the rule would eliminate insurance 
coverage for many veterans. The regulation does not eliminate insurance 
coverage for insured veterans or those eligible to be insured under 
supplemental S-DVI. Rather, the rule clarifies VA's longstanding 
practice, which is dictated by 38 U.S.C. 1912(a) and 1922A(a), by 
explaining which veterans are ineligible for supplemental S-DVI 
consistent with the governing statutes. See Martin v. Shinseki, 26 Vet. 
App. 451 (2014). Therefore, VA will not make any changes based on this 
comment.

B. Eligibility for Supplemental S-DVI

    Four commenters stated that the rule would restrict eligibility for 
supplemental S-DVI. Two of the commenters stated that the rule makes a 
blanket assessment that a mentally incompetent veteran is ineligible 
for supplemental S-DVI based on the assumption that the veteran would 
not have applied for the coverage. Another commenter stated that the 
rule discriminates against veterans who are incapable of applying for 
supplemental S-DVI prior to their date of death.
    The rule is not based upon any assumption nor does it discriminate 
against certain veterans. As VA explained in the proposed rule, under 
38 U.S.C. 1922A(a), a S-DVI insured is not entitled to supplemental S-
DVI unless the insured qualifies for waiver of premiums under 38 U.S.C. 
1912(a), and a veteran granted insurance under 38 U.S.C. 1922(b) cannot 
qualify for a waiver of premiums under Sec.  1912(a) because the 
insured's total disability does not begin after the date of the 
insured's application for insurance and while the insurance is in force 
under premium-paying conditions. See 82 FR 39975. While section 1922(b) 
grants S-DVI posthumously, Congress did not include provisions in 
section 1922A to grant supplemental S-DVI to the survivors of veterans 
who were unable to apply for the insurance prior to death. See Martin, 
26 Vet. App. at 458-59. VA will not make any changes based on these 
comments.
    Two commenters stated that VA should revise the rule to prevent 
abuses rather than to eliminate eligibility for Supplemental S-DVI for 
all veterans granted S-DVI under section 1922(b). Both commenters 
stated that the point of the Martin decision was to prevent abuse of 
the system. We see no reference in the court's decision for prevention 
of abuse. Rather, the court's holdings are based on the plain language 
of the statutes. See 26 Vet. App. 458-49. Any VA rule that is 
inconsistent with the statutes would be invalid. We therefore decline 
to make any changes to the rule on this basis.

[[Page 18422]]

C. Congressional Intent

    One of the commenters suggested that the rule makes numerous 
veterans ineligible for supplemental S-DVI, which is inconsistent with 
the intent of Congress and VA. The Veterans Court found that the 
language of 38 U.S.C. 1912(a) and 1922A(a) is plain, 26 Vet. App. at 
458, and therefore the literal language is the ``sole evidence of the 
ultimate legislative intent.'' See Caminetti v. United States, 242 U.S. 
470, 490 (1917). Sections 1912(a) and 1922A(a) unambiguously provide 
that supplemental S-DVI is only available to a person insured under S-
DVI who qualifies for a waiver of premiums under section 1912, which 
requires that an insured's total disability have begun after the date 
of the insured's application for insurance and while the insurance is 
in force under premium-paying conditions. The court did not disregard 
the limiting language of the statutes and neither may VA. Therefore, VA 
will not make any changes based on this comment.
    Based on the rationale set forth in the Federal Register, VA adopts 
the proposed rule, without change, as a final rule.

Executive Orders 12866, 13563, and 13771

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by the Office 
of Management and Budget (OMB), as ``any regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this final regulatory action have been examined and it 
has been determined not to be a significant regulatory action under 
Executive Order 12866. VA's impact analysis can be found as a 
supporting document at http://www.regulations.gov, usually within 48 
hours after the rulemaking document is published. Additionally, a copy 
of the rulemaking and its impact analysis are available on VA's website 
at http://www.va.gov/orpm by following the link for ``VA Regulations 
Published.'' This rule is not an Executive Order 13771 regulatory 
action because the rule is not significant under Executive Order 12866.

Paperwork Reduction Act

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).

Regulatory Flexibility Act

    The Secretary hereby certifies that the adoption of this final rule 
would not have a significant economic impact on a substantial number of 
small entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601-612. This final rule would directly affect only individuals 
and would not directly affect any small entities. Therefore, pursuant 
to 5 U.S.C. 605(b), this final rule is exempt from the initial and 
final regulatory flexibility analysis requirements of sections 603 and 
604.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any 1 year. This final rule would have no such effect on 
State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
program affected by this document is 64.103, Life Insurance for 
Veterans.

List of Subjects in 38 CFR Part 8

    Life insurance, Veterans.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Jacquelyn 
Hayes-Byrd, Deputy Chief of Staff, Department of Veterans Affairs, 
approved this document on March 20, 2018, for publication.

    Dated: April 23, 2018.
Jeffrey M. Martin,
Impact Analyst, Office of Regulation Policy & Management, Office of the 
Secretary, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR part 8 as set forth below:

PART 8--NATIONAL SERVICE LIFE INSURANCE

0
1. The authority citation for part 8 continues to read as follows:

    Authority:  38 U.S.C. 501(a), 1901-1929, 1981, 1988, unless 
otherwise noted.

0
2. Add Sec.  8.34 to read as follows:


Sec.  8.34  Ineligibility for insurance under 38 U.S.C. 1922A 
(supplemental Service-Disabled Veterans' Insurance) if person insured 
under 38 U.S.C. 1922(b).

    A person who is granted Service-Disabled Veterans' Insurance under 
38 U.S.C. 1922(b) is not eligible for supplemental Service-Disabled 
Veterans' Insurance under 38 U.S.C. 1922A.

[FR Doc. 2018-08854 Filed 4-26-18; 8:45 am]
 BILLING CODE 8320-01-P