[Federal Register Volume 87, Number 146 (Monday, August 1, 2022)]
[Rules and Regulations]
[Pages 46884-46886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16332]



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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[[Docket ID: DOD-2020-HA-0091]
RIN 0720-AB84


Enrollment Fee and Cost Sharing Under TRICARE Prime and Select 
for Retirees and Their Dependents

AGENCY: Department of Defense.

ACTION: Interim final rule.

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SUMMARY: This interim final rule (IFR) accompanies the in-progress 
implementation of section 702 of the National Defense Authorization Act 
for Fiscal Year 2020 (NDAA-2020) as an administrative measure not 
intended to affect or grant rights. The law mandates that retirees and 
their dependents pay TRICARE premiums via allotment from military 
retired/retainer pay to the maximum extent practicable instead of 
credit card or electronic funds transfer (EFT), applicable to health 
care coverage beginning on or after January 1, 2021. In conforming the 
regulation to the mandatory statutory changes, this IFR improves 
TRICARE by reflecting the simplification and automation of premium fee 
collection.

DATES: This rule is effective August 1, 2022. Comments must be received 
by September 30, 2022.

ADDRESSES: You may submit comments, identified by docket number and/or 
Regulation Identifier Number (RIN) number and title, by any of the 
following methods:
     Federal Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Department of Defense, Office of the Assistant to 
the Secretary of Defense for Privacy, Civil Liberties, and 
Transparency, Regulatory Directorate, 4800 Mark Center Drive, Attn: 
Mailbox 24, Suite 08D09, Alexandria, VA 22350-1700.
    Instructions: All submissions received must include the agency name 
and docket number or RIN 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.

FOR FURTHER INFORMATION CONTACT: Ms. Zelly Zim, Defense Health Agency, 
TRICARE Health Plan, (703) 275-6221, [email protected].

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Purpose of the Rule

    This rule is required as a ``housekeeping matter'' to support the 
in-progress implementation of section 702 of NDAA-2020. In implementing 
section 702 of NDAA-2020, this rule advances two major components of 
the Military Health System's aims: better care and lower cost. The 
objective of better care is advanced by reducing the recurring 
administrative hurdle of credit card and electronic funds transfer 
(EFT) draft payments by pulling these premiums directly from monthly 
retired/retainer pay. These consistent payments, now conditioned (to 
the maximum extent practicable) on a recurring government process, 
ensure consistent access to care. The goal of lower cost is achieved by 
direct monetary savings to the government.

B. Interim Final Rule Justification

    This rule must be issued prior to receiving public comment in order 
to comply with statutory mandates regarding effective dates of changes 
to TRICARE. The implementation date dictated by NDAA-2020 intended this 
regulation be in place no later than TRICARE Open Season for calendar 
year (CY) 2021 (November 9, 2020 through December 14, 2020) to 
correspond implementation no earlier than January 1, 2021. 
Beneficiaries will receive letters and electronic communication from 
their private sector care contractors in conjunction with DHA Strategic 
Communication (STRATCOM) before any changes are requested to their 
payment methods. In view of these statutory effective dates, the 
Department finds obtaining public comment in advance of implementing 
this rule is impracticable, unnecessary, and contrary to the public 
interest. Nonetheless, DoD invites public comments on this rule and is 
committed to considering all comments and issuing a final rule as soon 
as practicable.

C. Summary of Major Provisions

    The rule amends the current regulation to conform it to the amended 
law, as written, that designates payment options for retirees and their 
dependents. The major provisions of the IFR are:
    (1) That premiums must be paid through allotment (i.e., withheld 
from a retiree's retired/retainer pay), to the maximum extent 
practicable, by members and former members of the uniformed services, 
or a dependent thereof, eligible for medical care and dental care under 
section 1074(b) or 1076 of Title 10, chapter 55. This is to streamline 
payments, reduce fees from other payment methods, and ensure continued 
delivery of care.
    (2) That when payment through allotment is not practicable, 
premiums shall be paid in a frequency and method determined by the 
Secretary.
    (3) That the payment of enrollment fees or premiums by allotment 
should be implemented and apply to health care coverage beginning on or 
after January 1, 2021.
    This rule only amends the Code of Federal Regulations (CFR) 
language to reflect these provisions.

D. Legal Authority for This Program

    The statutory authority for this IFR is the Public Law 116-92, 
NDAA-20 Section 702, ``TRICARE Payment Options for Retirees and Their 
Dependents.''
    The regulatory authority for this IFR is promulgated in 32 CFR 
199.17, ``TRICARE program,'' which dictates enrollment fees to begin 
for TRICARE Select Group A on January 1, 2021 and can be found at 
https://www.govinfo.gov/app/details/CRPT-114hrpt537/CRPT-114hrpt537. 
The legal authority for this rule also includes 10 U.S.C. chapter 55, 
``Medical and Dental Care,'' which covers the entire program of medical 
and dental care for uniformed services members, former members and 
their dependents. Chapter 55 can be accessed via https://uscode.house.gov.

II. Regulatory History

    This rule, title 32 CFR 199.17(o)(3), was codified in 1998 
implementing 10 U.S.C. 1097a(c), ``TRICARE Prime: automatic 
enrollments,'' where payment by allotment for retirees and their 
beneficiaries was listed as voluntary. Under 10 U.S.C. 1097a(c) fees 
could also be paid from a financial institution through EFT. Title 32 
CFR 199.17(o)(3) was most recently updated on February 15, 2019 (84 FR 
4326) by a final rule that continued to implement the statutory options 
for voluntary allotments or EFT payments of installment payments of 
enrollment fees under 10 U.S.C. 1097a(c); which options have been 
eliminated by Section 702(b)(1) of NDAA-2020.

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III. Regulatory Analysis

A. Regulatory Planning and Review

a. Executive Orders
Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches to maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distribute 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 non-significant under these 
Executive Orders and accordingly has not been reviewed by the Office of 
Management and Budget (OMB).
b. Summary
    The rule amends the current regulation to conform to Section 702 of 
NDAA-2020 (as codified in 10 U.S.C. 1097a) that outlines payment 
options for retirees and their dependents by mandating payment withheld 
from retired/retainer pay where feasible, rather than allowing payment 
method and frequency to be voluntary. According to NDAA-2020, 
enrollment fees or premiums for this population must be paid in this 
manner beginning on or after January 1, 2021. The changes made by this 
rule are housekeeping edits for 32 CFR, and the statutory execution has 
been initiated.
c. Affected Population
    This rulemaking action will apply to an estimated 611,734 
beneficiaries: a member or former member of the Uniformed Services, or 
their dependents, eligible for medical and dental care under sections 
1074(b) or 1076 of 10 U.S.C. chapter 55. These specific beneficiaries 
will be required to pay enrollment or premiums for their healthcare and 
must do so by allotment to the maximum extent practicable, as specified 
by the new payment options provisions. They will be required to access 
https://tricare.mil to receive specific instructions from their private 
sector care TRICARE contractor on allotment set up. These updates must 
be made no later than the end of the TRICARE open enrollment period 
before the allotments are to take effect, with specific cutoff dates to 
be messaged by their private sector care contractor. The affected 
population will receive notification of this change and the actions 
needed to be in compliance via letters and electronic correspondence 
managed jointly by DHA Strategic Communication (STRATCOM) and their 
private sector care contractors. If beneficiaries targeted by this rule 
already pay their enrollment fees or premiums by allotment, no further 
action needs to be taken to be in compliance.
d. Costs
    It is determined that this rulemaking action will have a cost 
saving to both the government and the private sector. As it currently 
stands, the Government reimburses the TRICARE contractors approximately 
3 million dollars annually on $169,423,439.34 in transactions (TRICARE 
enrollment fees and premiums costs) due to credit card and electronic 
funds transfer (EFT) processing fees charged by credit card companies 
and banking institutions. The 3 million dollar cost savings is all from 
government costs (processing fees). The private sector costs for 
implementing this rule only applies to those currently paying by credit 
card or EFT, and this cost is in the form of beneficiary time: initial 
action must be taken to set up the allotment process and it must be 
done in time to ensure the first allotted payment is received prior to 
January 1 of the enrollment year. Approximately 872,886 beneficiaries 
would need to undergo this process, which equates to approximately 
332,469 separate households. These numbers are based on the fact that 
about 40 percent of enrolled retiree beneficiaries currently pay by 
credit card or EFT.
    The remaining 60 percent of enrolled retiree beneficiaries already 
pay by allotment. Anticipating the transaction to take 15 minutes, and 
using $9.14/hour (national average of minimum wages effective January 
1, 2020) as the value of a beneficiary's time, switching to payment by 
allotment would cost each beneficiary household $2.29. The time 
estimate of 15 minutes is drawn from 2019 data on the length of 
enrollment phone calls for a pool of 1.5 million beneficiaries. Thus, 
the total private cost of implementing this rule is $761,354 (which is 
$2.29 per household). However, by paying enrollment fees or premiums by 
allotment, the likelihood of breaks in coverage and additional fees due 
to transaction failures is drastically reduced for the beneficiary. For 
example, in CY 2018, approximately 2,850 TRICARE Prime plans terminated 
in the East Region for failure to pay retiree enrollment fees due to 
EFT or debit/credit card issues. Considering parallel trends seen in 
the West Region, it can be inferred that the one-time $2.29 (time) 
private cost of complying with this interim final rule is preferable to 
loss of coverage or termination.
    Time constraints to implement this rule is a public cost to the 
TRICARE private sector care contractors, yet this burden is monetarily 
covered by the administrative cost of this rule, which acknowledges the 
fact that the systems need to set up allotments for beneficiaries are 
already in place and must be expanded to prepare for an influx of 
beneficiary calls and allotment arrangements.
e. Benefits
    Having enrollment fees or premiums from retirees and their 
dependents paid via allotment increases access to care by preventing 
gaps in coverage, ensuring beneficiaries receive the care for which 
they are entitled and guaranteeing the government is doing everything 
possible to provide the health care entitlement. In this case, gaps in 
coverage are caused by late or missed payments, which are more likely 
when beneficiaries pay TRICARE enrollment fees or premiums by credit 
card or EFT without these methods being automated. It is estimated that 
about 40 percent of retired beneficiaries pay by credit card or EFT, 
and the projected private benefit would be directly to them. On the 
private side, The TRICARE contractors also benefit from the rulemaking 
action through the streamlined management of fees. The automated 
systems to be used to implement this rule are already in use for 
approximately 60 percent of the retiree-beneficiary population.
f. Alternatives
Baseline: No Action
    Not implementing this rule would be in direct violation of the law 
set forth in NDAA-2020 requiring payment by allotment for beneficiaries 
covered by 10 U.S.C. 1074(b) or 1076 beginning on or after January 1, 
2021. System changes, contract updates, and beneficiary notifications 
supporting the law are already in place. The result of taking no action 
would be continued cost to the government in the form of credit card 
and EFT fees, with a significant increase to the projected cost due to 
the approximately 500,000 additional households from which enrollment 
fees were collected as of January 1, 2021 (due to the start of TRICARE 
Select Group A enrollment fee collection). Taking no action fails to 
mitigate the EFT and credit card-related

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costs and complexities for this additional group of beneficiaries that 
largely have never paid an enrollment fee for their TRICARE coverage 
before and the need to re-evaluate and cancel all changes already in 
place to support the statutory requirements of payment by allotment. 
Cost to beneficiaries would be the possible loss of coverage and 
related fees as a result of missed payments. For the East Region in CY 
2018, approximately 2,850 TRICARE Prime plans terminated for failure to 
pay retiree enrollment fees were attributable to EFT or debit/credit 
card issues. Similar numbers were experienced in the West Region, and 
these numbers can be expected to increase with the additional 
enrollment fees that began January 1, 2021. Thus, there is no benefit 
to taking no action and the Department has no discretion to counter the 
laws requiring this rulemaking action.
Alternative Actions
    No alternative courses of action are applicable and legally 
suitable. The statue is self-implementing and the rulemaking only 
effects the effective date that the regulation conforms with the law. 
The Agency has no authority to postpone implementation of mandatory 
statue.

B. Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    The Office of the Assistant Secretary of Defense for Health Affairs 
certifies that this interim final rule is not subject to the Regulatory 
Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, 
have a significant economic impact on a substantial number of small 
entities. Therefore, the Regulatory Flexibility Act, as amended, does 
not require us to prepare a regulatory flexibility analysis.

C. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. DoD will submit a report containing this 
rule and other required information to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States. A 
major rule cannot take effect until 60 days after it is published in 
the Federal Register. This interim final rule is not a ``major rule'' 
as defined by 5 U.S.C. 804(2).

D. Sec. 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1532) requires agencies to assess anticipated costs and benefits 
before issuing any rule whose mandates require spending in any 1 year 
of $100 million in 1995 dollars, updated annually for inflation. This 
interim final rule will not mandate any requirements for State, local, 
or tribal governments, nor will affect private sector costs.
    E. Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. 
Chapter 35) It has been determined that this rule does not impose 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act of 1995. Existing information collection requirements of the 
TRICARE program will be utilized, using a DD Form 2896-1, Reserve 
Component Health Coverage Request Form. This enrollment form, 
accessible through the Beneficiary Web Enrollment (BWE) website, does 
not meet information collection requirements and thus not targeted by 
the Paperwork Reduction Act or governed by an OMB license.

F. Executive Order 13132, ``Federalism''

    Executive Order 13132 establishes certain requirements an agency 
must meet when it promulgates an interim final rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This interim final rule will not have a substantial 
effect on State and local governments.

G. Executive Order 13175, ``Consultation and Coordination With Indian 
Tribal Governments''

    Executive Order 13175 establishes certain requirements that an 
agency must meet when it promulgates an interim final rule (and 
subsequent final rule) that imposes substantial direct compliance costs 
on one or more Indian tribes, preempts tribal law, or effects the 
distribution of power and responsibilities between the federal 
government and Indian tribes. This interim final rule will not have a 
substantial effect on Indian tribal governments.

List of Subjects in 32 CFR Part 199

    Administrative practice and procedure, Claims, Dental health, 
Fraud, Health care, Health insurance, and Military personnel.
    Accordingly 32 CFR part 199 is amended to read as follows:

PART 199--CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED 
SERVICES (CHAMPUS)

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

    Authority: 5 U.S.C. 301; 10 U.S.C. chapter 55.


0
2. Amend Sec.  199.17 by revising paragraph (l)(2)(i)(A) to read as 
follows:


Sec.  199.17  TRICARE program.

* * * * *
    (l) * * *
    (2) * * *
    (i) * * *
    (A) The enrollment fee in calendar years 2018 through 2020 is zero 
and the catastrophic cap is as provided in 10 U.S.C. 1079 or 1086. The 
enrollment fee and catastrophic cap in 2021 and thereafter for certain 
beneficiaries in the retired category is as provided in 10 U.S.C. 
1075(e), except the enrollment fee and catastrophic cap adjustment 
shall not apply to survivors of active duty deceased sponsors and 
medically retired Uniformed Services members and their dependents. 
Payment of TRICARE premiums and enrollment fees will be withheld from 
the retired, retainer or equivalent pay of these beneficiaries in the 
retired category to the maximum extent practicable upon complete 
implementation of this rule and thereafter. Appropriate processes to 
require and manage these allotments, to include frequency and method, 
as well as alternatives when allotments are not practicable, shall be 
determined by the Director, DHA. An exception may be made for certain 
survivors of active duty deceased sponsors and medically retired 
Uniformed Services members and their dependents, for which the 
enrollment fee and catastrophic cap adjustments shall not apply.
* * * * *

    Dated: July 26, 2022.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2022-16332 Filed 7-29-22; 8:45 am]
BILLING CODE 5001-06-P