Federal Employees Health Benefits Program; Miscellaneous Changes

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AF74

Federal Employees Health Benefits Program; Miscellaneous Changes

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final

regulations which implement a number of miscellaneous changes to the

Federal Employees Health Benefits (FEHB) Program. The changes will

improve the administration of the FEHB Program and result in better

service to enrollees.

EFFECTIVE DATE: December 23, 1994.

FOR FURTHER INFORMATION CONTACT: Robert G. Iadicicco, (202) 606-0191.

SUPPLEMENTARY INFORMATION: On May 10, 1994, OPM issued proposed

regulations in the Federal Register (59 FR 24062) to clarify the last

day of Open Season; give Federal retirement systems staffs the

discretion to allow annuitants to make FEHB coverage changes by other

methods, such as telephone requests; allow legally separated employees

and annuitants covered as family members under their spouses' FEHB

enrollment to enroll in FEHB for self only or self and family coverage;

extend to employees whose FEHB enrollment terminated when they entered

on duty in a uniformed service and who retire on an immediate annuity

from their Federal civilian position while on such duty the option of

reinstating FEHB coverage upon retirement; permit annuitants, whose

entire annuity or compensation has been waived or suspended, to pay

FEHB premiums directly to their retirement system or the Office of

Workers' Compensation Programs for any period of wavier or suspension

which is three months or more; require agencies to counsel employees

entering leave without pay (LWOP) status, or whose pay is insufficient

to cover their FEHB premium payments, of the options of continuing or

terminating their FEHB coverage, and if continuing, of paying premiums

directly on a current basis or incurring a debt to be withheld from

future salary.

These final regulations cover all of the changes in the proposed

regulations except the requirement that agencies counsel employees

entering LWOP or whose pay is insufficient to cover their FEHB premium

payments. We will issue separate interim regulations on that change.

We received comments from two FEHB plans, two Federal agencies, and

one retiree organization. One commenter agreed that the proposed

changes will result in better service to enrollees and considered the

change to allow annuitants to make FEHB coverage changes by telephone

especially significant. The commenter recommended that retirement

systems establish a dedicated telephone number, or a system that will

record FEHB coverage change requests. OPM is doing this and more. OPM's

Office of Retirement Programs (ORP) administers the Civil Service

Retirement System and the Federal Employees Retirement System. ORP's

Retirement Information Office (RIO) phone system at (202) 606-0500 will

have a voice mail box dedicated to recording FEHB coverage change

requests. RIO staff will either make the coverage change requested or

call the annuitant to obtain additional information required before

making the change. In addition, ORP will not limit annuitants to

calling RIO to request a coverage change. At first, both RIO and ORP's

Insurance Services Branch will be authorized to take the calls and make

the changes. Eventually, all staff in ORP will accept requests and

process coverage changes.

The commenter also recommended that other retirement systems allow

their annuitants to make FEHB coverage changes by telephone and follow

the OPM ``model'' in order to minimize the confusion that would occur

if other retirement systems used a different model. Our intention is to

give retirement systems the discretion to accept alternatives to a

properly completed health benefits registration form (SF 2809), but not

require the retirement systems to do so. Our reasoning is that it is

the responsibility of each retirement system to determine how to best

serve their annuitants. OPM has determined that our annuitants are best

served by allowing them to make FEHB coverage by telephone. Other

retirement systems may decide, based on their current capabilities or

other factors, not to allow telephone requests. Of course, we are more

than willing to share our knowledge and procedures with other

retirement systems who want to follow our ``model.''

Three commenters expressed concern that allowing telephone requests

increases the possibility of unauthorized coverage changes by someone

other than the annuitant, and will result in misunderstandings between

the annuitant and OPM. Two commenters suggested that the retirement

system send a notice of the coverage change to the annuitant. OPM

agrees with this suggestion and is revising the regulations to require

the retirement system to promptly give annuitants written notification

of the change in coverage. ORP already follows this requirement by

automatically generating notices of FEHB changes to provide annuitants

with an early opportunity to reverse erroneous or unauthorized changes.

One commenter suggested as an alternative to telephone requests we

allow annuitants to submit a written request to OPM at a post office

box number specifically designated for health benefits requests or to

fax their requests. OPM already has a post office box number

specifically designated for health benefits requests. In contrast to a

telephone call, a post office box does not eliminate the time is takes

for the request to be delivered to OPM. The faxing of requests does

save time, but most annuitants do not have convenient, inexpensive

access to a fax machine. However, under these regulations retirement

systems have the authority to accept faxed requests for coverage

changes and OPM will do so.

One commenter was concerned that telephone requests would not be

processed by retirement system staff because of the lack of a written

document. The commenter suggested allowing changes by letter because it

would provide written documentation of the request. We agree that a

retirement system must be confident that telephone requests will be

processed and be processed accurately before the retirement system

accepts telephone requests. We are confident that ORP will accurately

process telephone requests for three reasons. First, ORP staff already

have a great deal of experience handling telephone requests for other

changes, such as changes of address. Second, ORP staff already have

developed procedures to follow when they handle telephone requests for

FEHB coverage changes. Third, in the rare case the telephone request is

incorrectly processed or not processed at all, the annuitant will soon

become aware of the error through the retirement system's notice of the

coverage change, or the lack of notice and the health benefits

enrollment data included in their next monthly annuity payment

statement.

Two commenters stated that it is extremely important for the

retirement system to obtain all the pertinent information from the

annuitant and accurately communicate the information to the FEHB plans.

One of the commenters stressed that accurate communication of dependent

information is especially important. The other commenter recommended

that the retirement system staff person complete a SF 2809 while taking

the request. We agree that when taking a telephone request the

retirement system staff needs to collect and communicate to the FEHB

plans the same information they provide for all other coverage changes.

Therefore, we are revising the proposed regulations by specifying that

alternative methods of making FEHB coverage changes, such as telephone

requests, must transmit to the health benefit plans the information

they require before accepting an enrollment. Because OPM uses a more

advanced method to transmit information to the plans, there is no need

for OPM staff to prepare a SF 2809 when taking a telephone request.

However, for retirement systems who use the SF 2809 to transmit

information to the plans, filling out the SF 2809 when taking the

telephone request is a practice that should be strongly considered.

One commenter stated that allowing OPM retirement system staff to

make coverage changes based on telephone requests may cause problems in

tracking coverage changes. We are confident tracking problems will not

occur because ORP has had for many years an on-line tracking system to

record all coverage changes. The tracking system creates an FEHB change

history file for each annuitant.

One commenter responded to our statement in the supplementary

information section of the proposed regulations that most employees

work near the office responsible for their FEHB actions by noting a

significant percentage of their agency's employees work at remote

sites. The commenter believes that there are other agencies with

similar workforces and requested OPM to make this logistical situation

an important consideration in its future policy and program planning.

OPM has always been aware that certain agencies, because of their

mission, have a significant percentage of employees at remote

locations. We are also keenly aware of the need to increase the

efficiency of Federal personnel operations through automation.

Consequently, we are considering a regulatory change that would allow

agencies to automate their FEHB enrollment processing and invite all

interested agencies to contact us.

One commenter concurred with the change allowing a legally

separated employee or annuitant covered as a family member under his or

her spouses' FEHB enrollment to enroll in FEHB for self only or self

and family coverage. The commenter also asked whether this change means

an employee with a self and family enrollment can drop the coverage of

their separated spouse, if the spouse is ineligible to enroll or

decides not to enroll for FEHB coverage. An employee may switch to self

only coverage at any time and in that way drop the coverage of their

separated spouse. However, unless a separated spouse has his or her own

enrollment, he or she remains covered under the employee's self and

family enrollment.

We received three comments discussing the fact that while the

regulations would allow the dual enrollment of legally separated

employees or annuitants, they did not allow a person to be covered and

receive benefits under more than one enrollment. The regulations

require each enrollee to notify the insurance carrier of the names of

family members covered under his or her enrollment that are not covered

under the other enrollment.

One commenter wanted to know the employing office's responsibility

for ensuring that the employee notifies the insurance carrier of

covered family members. An employing office, when it becomes aware or

strongly suspects that both members of a legally separated couple are

enrolled or enrolling in the FEHB Program and at least one has a self

and family enrollment, is responsible for informing the employee that

he or she must notify the insurance carrier of the family members

covered under the enrollment that are not covered under the other

enrollment.

One commenter strongly recommended that employing offices should

include the carrier code and the family members covered under the

enrollments of both legally separated spouses in the remarks section of

the SF 2809. The commenter believes this will assist the FEHB carriers

to contact other carriers when necessary. We think this is a good idea

and recommend offices that send the SF 2809 to carriers follow this

practice whenever possible and offices that do not send the SF 2809

find another method to send carriers this information.

One commenter was concerned about the employing office's

responsibility in cases where a person is covered and receives benefits

under more than one enrollment because the employee did not notify the

carrier. Carriers will contact employing offices directly to resolve

any dual coverage cases they discover. Employing offices are

responsible for assisting carriers in resolving these cases. Employing

offices are also responsible for informing carriers when they become

aware a person is being covered and receiving benefits under more than

one enrollment.

Regulatory Flexibility Act

I certify that these regulations will not have a significant

economic impact on a substantial number of small entities because they

primarily affect Federal employees, annuitants, and former spouses.

List of Subjects in 5 CFR Part 890

Administrative practice and procedure, Government employees, Health

facilities, Health insurance, Health Professions, Hostages, Iraq,

Kuwait, Lebanon, Reporting and recordkeeping requirements, Retirement.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM is amending 5 CFR part 890 as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

1. The authority citation for part 890 is revised to read as

follows:

Authority: 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.

2. In Sec. 890.101, the definition of Register is revised to read

as follows:

Sec. 890.101 Definitions; time computations.

* * * * *

Register means to file with the employing office a properly

completed health benefits registration form, either electing to be

enrolled in a health benefits plan or electing not to be enrolled.

Retirement systems may accept alternative methods, such as telephone

requests, in substitution of a properly completed health benefits

registration form. Alternative methods must transmit to the health

benefits plans the information they require before accepting an

enrollment. In addition, for enrollments and cancellations to be valid,

the signature of the requesting individual must be on the request, or

on a form from the retirement system to the requesting individual

giving notice of the enrollment or cancellation. For changes of

enrollment, the signature of the requesting individual is not required

but the retirement system must promptly give to the requesting

individual written notice of the change of enrollment. Register to

enroll means to register an election to be enrolled. Enrolled means a

valid registration form has been accepted by the employing office, or

an alternative method has been accepted by the retirement system, and

the enrollment in a health benefits plan approved by OPM under this

part has not been terminated or cancelled.

* * * * *

Sec. 890.301 [Amended]

3. In Sec. 890.301, paragraph (c) is amended by removing

``Sec. 890.304(a)(4)'' and adding in its place ``Sec. 890.304(a)(5)'';

paragraph (d)(1) is amended by removing ``through the Friday of the

first full work-week in December'' and adding in its place ``through

the Monday of the second full workweek in December''.

4. In Sec. 890.302, paragraph (a)(2) is revised, and paragraph

(a)(3)(i) is amended by adding the words ``or legally separated'' after

the word ``divorced'', to read as follows.

Sec. 890.302 Coverage of family members.

(a)* * *

(2) Dual enrollment--spouse. (i) To protect the interests of the

children, an employee or annuitant may enroll in his or her own right

in a self and family enrollment even though his or her spouse also has

a self and family enrollment. Generally, such dual enrollments are

permitted only where two employees or annuitants are married, each with

children from prior marriages who do not live with them, or are legally

separated, with each spouse retaining custody of his or her own

children by a prior marriage. To ensure that no person receives

benefits under more than one enrollment, each enrollee must tell the

insurance carrier which family members are covered under his or her

enrollment. These individuals are not covered under the other

enrollment.

(ii) To protect the interests of legally separated Federal

employees, annuitants and their children, a legally separated employee

or annuitant may enroll in his or her own right in a self only or self

and family enrollment even though his or her spouse also has a self and

family enrollment. To ensure that no person receives benefits under

more than one enrollment, each enrollee must tell the insurance carrier

which family members are covered under his or her enrollment. These

individuals are not covered under the other enrollment.

* * * * *

5. In Sec. 890.305, paragraph (b) is revised to read as follows:

Sec. 890.305 Reinstatement of enrollment after military service.

* * * * *

(b) An employee whose employing office terminates his or her

enrollment because his or her order to enter on duty in a uniformed

service is for a period longer than 30 days, and who retires on an

immediate annuity from his or her Federal civilian position while on

such duty, may reinstate his or her enrollment by asking to do so

within 60 days after retirement. In the absence of such a request, the

retirement system automatically reinstates the enrollment on the day

the person separates from the uniformed service. For the retirement

system to reinstate the enrollment, the individual must have been

covered under this part since his or her first opportunity or for the 5

years of civilian service (excluding the period of uniformed service)

immediately preceding the civilian retirement, whichever is shorter.

6. Section 890.307 is revised to read as follows:

Sec. 890.307 Waiver or suspension of annuity or compensation.

(a) Except as provided in paragraphs (b) and (f) of this section,

when annuity or compensation is entirely waived or suspended, the

annuitant's enrollment continues for not more than 3 months (not more

than 12 weeks for annuitants whose compensation under subchapter I of

chapter 81 of title 5, United States Code, is paid each 4 weeks). If

the waiver or suspension continues beyond this period, the employing

office will notify the annuitant in writing that the employing office

will terminate the enrollment effective at the end of the period,

subject to the temporary extension of coverage for conversion, unless

the annuitant elects to make payment of the premium directly to the

employing office during the period of waiver. If the annuitant elects

to have the enrollment terminated, the employing office automatically

reinstates the enrollment on a prospective basis when the annuitant

again receives payment of annuity or compensation. The employing office

will make the withholding for the period of waiver or suspension during

which enrollment was continued (i.e., 3 months or less).

(b) If the annuitant elects to pay premiums directly, he or she

must send to the employing office his or her share of the subscription

charge for the enrollment for every pay period during which the

enrollment continues, exclusive of the 31-day temporary extension of

coverage for conversion provided in Sec. 890.401. The annuitant must

pay after each pay period he or she is covered in accordance with a

schedule established by the employing office. If the employing office

does not receive payment by the date due, the employing office will

notify the annuitant by certified mail return receipt requested that

coverage will continue only if payment is made within 15 days after

receipt of the notice. The employing office will terminate the

enrollment of an annuitant who fails to pay within the specified time

frame. The employing office will automatically reinstate the enrollment

on a prospective basis when payment of annuity or compensation resumes.

(c) If the annuitant is prevented by circumstances beyond his or

her control from paying within 15 days after receipt of the notice, he

or she may request reinstatement of coverage by writing to the

employing office. The annuitant must file the request within 30

calendar days from the date of termination, and must include supporting

documentation. The employing office will determine if the annuitant is

eligible for reinstatement of coverage; and, when the determination is

affirmative, reinstate the coverage of the annuitant retroactive to the

date of termination. If the determination is negative, the annuitant

may request a review of the decision as provided in Sec. 890.104.

(d) Termination of enrollment for failure to pay premiums within

the time frame established in accordance with paragraph (b) of this

section is retroactive to the end of the last pay period for which the

employing office timely received payment.

(e) The employing office will submit all direct premium payments

along with its regular health benefits premiums to OPM in accordance

with procedures established by OPM.

(f) If suspension of annuity or compensation is because of

reemployment, the reemploying office must make the withholding

currently and enrollment continues during reemployment.

Sec. 890.701 [Amended]

7. Section 890.701 is amended by removing the last sentence of the

definition of Medically underserved area.

Sec. 890.808 [Amended]

8. In Sec. 890.808, paragraph (a) is amended by removing

``Sec. 890.805(d)'' and adding in its place ``Sec. 890.805(b)'' and by

removing ``Sec. 890.805(e)'' and adding in its place

``Sec. 890.805(c)''.

[FR Doc. 94-28929 Filed 11-22-94; 8:45 am]

BILLING CODE 6325-01-M