[Federal Register Volume 85, Number 229 (Friday, November 27, 2020)]
[Rules and Regulations]
[Pages 75857-75860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25585]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 9
RIN 2900-AQ37
Servicemembers' Group Life Insurance--Family Servicemembers'
Group Life Insurance: Member Married to Member
AGENCY: Department of Veterans Affairs.
ACTION: Final rule.
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SUMMARY: The Department of Veterans Affairs (VA) is amending its
regulations governing Servicemembers' Group Life Insurance (SGLI) and
Family Servicemembers' Group Life Insurance (FSGLI) to allow a SGLI-
covered member (member) who marries another SGLI-eligible member
(member spouse) after January 1, 2013, or a member whose spouse becomes
a member spouse after January 1, 2013, to receive FSGLI coverage on a
member spouse at the maximum statutory amount or a lesser amount, or to
increase existing FSGLI coverage on a member spouse. A member married
to a member may elect or increase FSGLI coverage for a member spouse,
without a requirement to show good health, within 240 days of: The
member's marriage to another member, the member's spouse entering
service, or the member's spouse separating from service. If a member
does not elect or increase FSGLI coverage within this 240-day ``no
[[Page 75858]]
health'' period, then the member can still receive or increase FSGLI
coverage by applying for such coverage and submitting proof of the
member spouse's good health. The final rulemaking also states that
FSGLI coverage that is in force at the time a spouse or child enters
service will continue and the member is not required to elect or
reapply for such coverage. Additionally, VA is making a technical
amendment to the amendatory language.
DATES: This rule is effective December 28, 2020.
FOR FURTHER INFORMATION CONTACT: Paul Weaver, Department of Veterans
Affairs Insurance Service (310/290B), 5000 Wissahickon Avenue,
Philadelphia, PA 19144, (215) 842-2000, ext. 4263. (This is not a toll-
free number.)
SUPPLEMENTARY INFORMATION:
On February 11, 2020, VA published in the Federal Register (85 FR
7683) a proposed rule to amend its regulations governing the
application process for FSGLI coverage for member spouses of SGLI-
covered members. Interested persons were invited to submit written
comments on or before April 13, 2020. VA received one comment
concerning the submission of proof of good health for former member
spouses. The commenter recommended that VA revise the rulemaking to
allow a member to elect FSGLI coverage on a member spouse without
submitting proof of good health for 120 days following a marriage or a
former member spouse's separation from service. The commenter suggested
that this grace period would minimize adverse selection and bring
parity to FSGLI eligibility requirements for civilian and member
spouses and is consistent with Congressional intent to avoid creating
FSGLI debts for members who do not want FSGLI coverage on member
spouses. Based on internal agency reconsideration of the proposed
regulation and the comment received, VA is making the following
revisions.
I. FSGLI Coverage for Member Spouses
Section 1969(g)(2)(B) of title 38, U.S.C., requires VA to manage
FSGLI according to sound actuarial principles, and VA explained in the
proposed rulemaking that this requires limiting the risk of adverse
selection of FSGLI applicants. VA has determined that removing the
proposed requirement for members to submit proof of their member
spouse's good health for 240 days following a member's marriage to
another member or a member's spouse entering service is consistent with
sound actuarial principles. If a member does not elect or increase
coverage on a member spouse within the 240-day period, then the member
will have the opportunity to receive FSGLI coverage by applying for
such coverage and submitting proof of their member spouse's good
health. Although the commenter recommended a 120-day ``no health''
period for a member to elect FSGLI without submitting proof of their
member spouse's good health, VA has determined that a 240-day ``no
health'' period is more appropriate since it would allow for greater
participation in FSGLI and would remain consistent with sound actuarial
principles. This change is reflected in new Sec. 9.24(a).
II. FSGLI Coverage for Former Member Spouses
VA is also amending our proposed rulemaking to allow a member, upon
election, to initiate FSGLI coverage at the maximum statutory amount or
a lesser amount, or to increase existing FSGLI coverage, on a former
member spouse. A member will only be required to submit proof of good
health when more than 240 days have passed following the former member
spouse's separation from service. If a member does not elect FSGLI at
the maximum statutory amount or a lesser amount, or increase existing
FSGLI coverage, within 240 days following their former member spouse's
separation from service, then the member will have the opportunity to
apply for FSGLI or to increase existing FSGLI coverage by submitting
proof of their former member spouse's good health. Although the
commenter recommended a 120-day ``no health'' period for a member to
elect or increase FSGLI without submitting proof of their former member
spouse's good health, VA has determined that a 240-day ``no health''
period is more appropriate because it would allow for greater
participation in FSGLI and would remain consistent with sound actuarial
principles. We also note that the 240-day period is consistent with 38
CFR 9.2(c), which allows a former member to apply for Veterans' Group
Life Insurance within 240 days after separating from service without
submitting proof of good health. This change is reflected in new Sec.
9.24(c).
III. Technical Amendments to 38 CFR Part 9
VA is making two technical amendments to the amendatory language in
this final rule. In the proposed rulemaking, we proposed to create a
new paragraph (f) in current 38 CFR 9.2 and to create a new 38 CFR 9.3.
In this final rule, we are creating a new paragraph (g) because
paragraph (f) was recently added by 85 FR 35562, Extension of Veterans'
Group Life Insurance (VGLI) Application Period in Response to the
COVID-19 Public Health Emergency (June 11, 2020) (interim final rule).
We are clarifying that paragraph (g) applies to member spouses eligible
for coverage under 38 U.S.C. 1967(a)(1)(A)(ii) as well as (C)(ii). We
are also clarifying that Sec. 9.2(g)(2) refers to a member-spouse
covered under 38 U.S.C. 1967(a)(1)(A)(i) and who was also eligible for
coverage under 38 U.S.C. 1967(a)(1)(A)(ii) or (C)(ii) but who was not
so insured or was insured at a reduced amount by reason of the member's
election pursuant to 38 U.S.C. 1967(a)(2)(B) or (a)(3)(B). We are also
moving proposed Sec. 9.3 to new 38 CFR 9.24 for purposes of minimizing
disruption to the other regulations in part 9. We are clarifying that
this section applies to member spouses eligible for coverage under 38
U.S.C. 1967(a)(1)(A)(ii) as well as (C)(ii). New Sec. 9.2(g) and new
Sec. 9.24 reflect the changes discussed above.
For the reasons discussed above, VA is adopting the proposed rule
as a final rule with the above-noted changes.
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.
The Office of Information and Regulatory Affairs has determined that
this rule is not 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 From FY 2004 Through Fiscal Year to Date.''
This rule is not an Executive Order 13771 regulatory action because
this rule is not significant under Executive Order 12866.
[[Page 75859]]
Regulatory Flexibility Act
The Secretary hereby certifies that this final rule will 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. There are no small entities involved with processing and/or
determining eligibility for SGLI and FSGLI. Therefore, pursuant to 5
U.S.C. 605(b), the initial and final regulatory flexibility analysis
requirements of 5 U.S.C. 603 and 604 do not apply.
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 one year. This final rule will have no such effect on
State, local, and tribal governments, or on the private sector.
Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a major rule, as defined by 5 U.S.C. 804(2).
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).
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 9
Life insurance, Military personnel, 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. Brooks D.
Tucker, Assistant Secretary for Congressional and Legislative Affairs,
Performing the Delegable Duties of the Chief of Staff, Department of
Veterans Affairs, approved this document on November 16, 2020, for
publication.
Luvenia Potts,
Regulation Development Coordinator, Office of Regulation Policy &
Management, Office of the Secretary, Department of Veterans Affairs.
For the reasons stated in the preamble, VA proposes to amend 38 CFR
part 9 as set forth below:
PART 9--SERVICEMEMBERS' GROUP LIFE INSURANCE AND VETERANS' GROUP
LIFE INSURANCE
0
1. The authority citation for part 9 continues to read as follows:
Authority: 38 U.S.C. 501, 1965-1980A, unless otherwise noted.
0
2. Section 9.2 is amended by adding paragraph (g) to read as follows:
Sec. 9.2 Effective date; applications.
* * * * *
(g) Except as provided in Sec. 9.24, the effective date of
enrollment, re-enrollment, or an increase in coverage under 38 U.S.C.
1967(a)(1) shall be the date the uniformed service receives an
application and proof of the insurable spouse's good health:
(1) For an insurable spouse who was eligible for coverage under 38
U.S.C. 1967(a)(1)(A)(ii) or (C)(ii) but was not so insured or was
insured at a reduced rate and who became a member; and
(2) For a member-spouse covered under 38 U.S.C. 1967(a)(1)(A)(i)
and who was also eligible for coverage under 38 U.S.C.
1967(a)(1)(A)(ii) or (C)(ii) but who was not so insured or was insured
at a reduced amount by reason of an election made by a member.
0
3. Add Sec. 9.24 to read as follows:
Sec. 9.24 Insurable dependents who become eligible members, and
eligible members who marry eligible members.
(a) A Servicemembers' Group Life Insurance-covered member (member)
who marries another Servicemembers' Group Life Insurance eligible
member (member spouse) after January 1, 2013, or is married to a person
who becomes a Servicemembers' Group Life Insurance eligible member
after January 1, 2013, shall receive Family Servicemembers' Group Life
Insurance spousal coverage at the statutory maximum amount or a lesser
amount, or receive increased existing spousal coverage on their member
spouse, upon an election of such coverage if made within 240 days
following the member's marriage to another member, or the member's
spouse entering service, without having to provide proof of the member
spouse's good health. If a member does not elect coverage for a member
spouse within 240 days following the member's marriage to another
member, or the member's spouse entering service, then the member may
still receive spousal coverage at the statutory maximum amount or a
lesser amount, or increase existing spousal coverage, by applying and
submitting proof of the member spouse's good health.
(b) A spouse shall remain eligible to be covered by any existing
Family Servicemembers' Group Life Insurance spousal coverage without
the member electing such coverage or applying for such coverage with
proof of the member spouse's good health in a case where the spouse is
enrolled in coverage under 38 U.S.C. 1967(a)(1)(A)(ii) or (C)(ii) prior
to becoming a member married to another member.
(c) A member's spouse who was insured under the member's Family
Servicemembers' Group Life Insurance at the time the spouse separates
from service will continue to be covered under the spousal Family
Servicemembers' Group Life Insurance carried while in service, and the
member will not need to elect such coverage. If a member seeks to
enroll a former member spouse who did not have such spousal insurance
coverage when the former member spouse separates from service, or seeks
to increase existing spousal coverage on their former member spouse,
the member shall receive such spousal coverage on their former member
spouse, upon an election of such coverage if made within 240 days
following the former member spouse's separation from service, without
having to provide proof of the former member spouse's good health. If a
member does not elect coverage for a former member spouse within 240
days following the former member spouse's separation from service, then
the member may still receive spousal coverage at the statutory maximum
amount or a lesser amount, or increase existing spousal coverage, by
applying and submitting proof of the former member spouse's good
health.
(d) After January 1, 2013, an insurable child who is a member at
the time a parent's Servicemembers' Group Life Insurance coverage
commences is not eligible for automatic dependent coverage under 38
U.S.C. 1967(a)(1)(A)(ii) or (C)(ii). Dependent coverage in effect for
an insurable child prior to becoming a member shall remain in effect so
long as the child remains an insurable dependent. If an insurable child
was not covered prior to becoming a member, the child cannot be covered
under 38 U.S.C.
[[Page 75860]]
1967(a)(1)(A)(ii) or (C)(ii) after the child becomes a member.
[FR Doc. 2020-25585 Filed 11-25-20; 8:45 am]
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