Federal Employees Health Benefits Program: Disenrollment

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AH61

Federal Employees Health Benefits Program: Disenrollment

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is proposing

regulations that are consistent with existing administrative procedures

requiring employing offices to provide information about enrollees in

the Federal Employees Health Benefits (FEHB) Program to the carriers of

the FEHB plans in which they are enrolled. Carriers are also required

to use the information provided by employing offices to reconcile their

enrollment records. The proposed regulations would also regularize the

conditions that would allow carriers to disenroll individuals when

their employing office of record does not show them as enrolled in the

carrier's plan and the carrier is otherwise unable to verify the

enrollment. The purpose of these proposed regulations is to facilitate

reconciliation of carrier and employing office enrollment records,

especially in cases where the carrier has not previously received a

notice showing an enrollment no longer is valid.

DATES: Comments must be received on or before December 29, 1997.

ADDRESSES: Send written comments to Frank D. Titus, Assistant Director

for Insurance Programs, Retirement and Insurance Service, Office of

Personnel Management, P.O. Box 57, Washington, DC 20044; or deliver to

OPM, Room 3425, 1900 E Street NW., Washington, DC; or FAX to (202) 606-

0633.

FOR FURTHER INFORMATION CONTACT: Margaret Sears (202) 606-0004.

SUPPLEMENTARY INFORMATION: The proposed regulations are consistent with

existing procedures that require employing offices to report to each

carrier on a quarterly basis the names and certain other data about

employees and other individuals serviced through its payroll office(s)

who are enrolled in the carrier's plan. OPM would specify the format

and the information to be contained in the report, such as the

individual's Social Security Number and the amount of withholdings and

contributions for that individual. Carriers would use the information

to reconcile their enrollment records.

Currently, when the carrier receives a quarterly report, it is

required by contract to compare the enrollees listed with its own

record of enrollees for that payroll office. If the carrier records

show an enrollee that is not listed by the payroll office, the carrier

contacts the payroll office for an explanation. The payroll office

provides documentation to resolve the discrepancy or gives the reason

the employee is no longer in the plan or no longer on the payroll (for

example, the employee canceled the enrollment, separated from Federal

service, retired, changed plans, or transferred to a different agency)

and the effective date of the change.

The proposed regulations would adopt as regulatory requirements the

current administrative quarterly reporting requirement and the

requirement for carriers to use the information to reconcile their

enrollment records. If the payroll office of record with the carrier is

unable to provide information about the enrollment, the proposed

regulations would give the carrier the authority to disenroll the

individual, after giving him or her the opportunity to respond.

Carriers do not currently have the authority to disenroll individuals.

The proposed regulations also provide an administrative procedure

for notifying the enrollee of the disenrollment. Under these procedures

the carrier would be required to notify the enrollee that the employing

agency of record did not show him or her as enrolled. The enrollee

would have 31 days after the date of the notice to provide

documentation showing that he or she was enrolled in the plan. If the

enrollee did not provide such documentation within the required time

frame, the carrier would disenroll him or her without further notice.

Under the proposed regulations the employee or annuitant could ask

his or her employing office or retirement system to reconsider the

carrier's decision to disenroll the enrollee. The employing office

would be required to notify both the enrollee and the carrier of its

determination, fully explaining its findings and conclusions.

We expect that few individuals would reach the end of this process

without their actual enrollment status becoming clear. However, in the

event that an individual was disenrolled under the proposed regulations

and it is later discovered that another provision of the regulations

should have been applied to the individual's circumstances, the

disenrollment under this regulation would become void and the

enrollment would be reinstated retroactively to the date of the

disenrollment. For example, if it later became clear that the

individual's enrollment should have continued because he or she retired

under circumstances allowing continued enrollment, the disenrollment

would become void.

The proposed regulations would allow a carrier to end a self only

enrollment upon receipt of reliable information that the enrollee had

died. A carrier may learn of the death of an enrollee when it processes

the claim for hospital or physician costs incurred at the time of

death. It may also learn of an enrollee's death when correspondence is

returned by the Postal Service with the notation that the addressee is

deceased. These would be considered reliable sources. Since proof of

death is not required, the carrier would send notification of its

action to the enrollee so that the enrollee, if still living, could so

inform the carrier. The discovery that the report of death was in error

would void the disenrollment.

The proposed regulations would allow a carrier to disenroll a child

survivor annuitant when the child becomes age 22, unless the carrier

has information indicating that the child is eligible for continued

coverage because the child is incapable of self support due to a

physical or mental disability. The proposed regulations include an

administrative procedure under which the child can ask the retirement

system to reconsider the carrier's decision to disenroll the child. The

carrier is also required to provide the child with notice of his or her

conversion right and possible eligibility for temporary continuation of

coverage.

[[Page 63283]]

Finally, the proposed regulations allow the carrier to disenroll a

former employee who notifies the carrier that he or she has separated

from Federal employment under circumstances that do not entitle him or

her to an immediate annuity. The carrier would be required to send the

individual a written notice prescribed or approved by OPM.

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 administrative procedures for Federal agencies and

health benefit carriers that participate in the FEHB Program.

Executive Order 12866, Regulatory Review

This rule has been reviewed by the Office of Management and Budget

in accordance with Executive Order 12866.

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.

Office of Personnel Management.

Janice R. Lachance,

Acting Director.

Accordingly, OPM proposes to amend 5 CFR part 890 as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

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

follows:

Authority: 5 U.S.C. 8913; Sec. 890.102(f) also issued under sec.

153 of Pub. L. 104-134; 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 subpart A, Sec. 890.110 is added to read as follows:

Sec. 890.110 Enrollment reconciliation.

(a) Each employing office must report to each carrier on a

quarterly basis the names of the individuals who are enrolled in the

carrier's plan in a format and containing such information as required

by OPM.

(b) The carrier must compare the data provided with its own

enrollment records. When the carrier finds in its aggregate enrollment

records individuals whose names do not appear in the report from the

employing office of record, the carrier must request the employing

office to provide the documentation necessary to resolve the

discrepancy.

3. In subpart C, Sec. 890.308 is added to read as follows:

Sec. 890.308 Disenrollment.

(a)(1) Except as otherwise provided in this section, a carrier that

cannot reconcile its record of an individual's enrollment with agency

enrollment records must provide written notice to the individual that

the employing office of record does not show him or her as enrolled in

the carrier's plan and that he or she will be disenrolled 31 days after

the date of the notice unless the enrollee provides appropriate

documentation to resolve the discrepancy. Appropriate documentation

includes, but is not limited to, a copy of the Standard Form 2809

(basic enrollment document), the Standard Form 2810 transferring the

enrollment into the gaining employing office (or the equivalent

electronic submission), copies of earnings and leave statements or

annuity statements showing withholdings for the health benefits plan,

or a document or other credible information from the enrollee's

employing office stating that the employee is entitled to continued

enrollment in the plan and that the premiums are being paid.

(2) If the carrier does not receive documentation required under

paragraph (a)(1) of this section within the specified time frame, the

carrier must disenroll the individual, without further notice.

(3) The enrollee may request his or her employing office to

reconsider the carrier's decision to disenroll the individual. 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, name of carrier, reason(s) for the request, and,

if applicable, retirement claim number.

(4) A request for reconsideration of the carrier's decision must be

filed within 60 calendar days after the date of the carrier's

disenrollment notice. The time limit on filing may be extended when the

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.

(5) After reconsideration, the employing office must issue a

written notice of its final decision to the individual and the carrier.

The notice must fully set forth the findings and conclusions on which

the decision was based.

(6) If, at any time after the disenrollment has occurred, the

employing office or OPM determines that another provision of this part

applies to the individual's enrollment or the carrier discovers or

receives appropriate documentation showing that another section of this

part applies to the individual's enrollment, the disenrollment under

paragraph (a)(2) of this section is void and coverage is reinstated

retroactively.

(b) When a carrier receives, from any reliable source, information

of the death of an enrollee with a self only enrollment, the carrier

may take action to disenroll the individual on the date set forth in

Sec. 890.304(a)(1)(iv) or Sec. 890.304(b)(4) of this part, as

appropriate. The carrier must attempt to notify the affected individual

or a family member of the disenrollment. If, at any time after the

disenrollment has occurred, the employing office or OPM determines that

another provision of this part applies to the individual's enrollment

or the carrier discovers or receives appropriate documentation showing

that another section of this part applies to the individual's

enrollment, the disenrollment under this paragraph (b) is void and

coverage is reinstated retroactively.

(c)(1) When a child survivor annuitant covered under a self only

enrollment reaches age 22, the carrier may take action to disenroll the

individual effective with the date set forth in Sec. 890.304(c)(1)

unless records with the carrier indicate that the child is incapable of

self support due to a physical or mental disability. The carrier must

provide the enrollee with a written notice of disenrollment prescribed

or approved by OPM.

(2) The child survivor enrollee may request the retirement system

to reconsider the carrier's decision to disenroll the individual. The

request for reconsideration must be made in writing and include the

enrollee's name, address, Social Security Number or other identifier,

name of carrier, reason(s) for the request, and the survivor annuity

claim number.

(3) A request for reconsideration of the carrier's decision must be

filed with the retirement system within 30 calendar days from the date

of the carrier's disenrollment notice. The time limit on filing may be

extended when the 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.

(4) After reconsideration, the retirement system must issue a

written

[[Page 63284]]

notice of its final decision to the individual and provide a copy to

the carrier. The notice must fully set forth the findings and

conclusions on which the decision was based.

(5) If, at any time after the disenrollment has occurred, the

employing office or OPM determines that another provision of this part

applies to the individual's enrollment or the carrier discovers or

receives appropriate documentation showing that another section of this

part applies to the individual's enrollment, the disenrollment under

paragraph (c)(1) of this section is void and coverage is reinstated

retroactively.

(d) When an enrollee notifies the carrier that he or she has

separated from Federal employment and is no longer eligible for

enrollment, the carrier must disenroll the individual, subject to the

31-day temporary extension of coverage and conversion right under

Sec. 890.401, on the last day of the pay period in which the separation

occurred, if known, otherwise the carrier must disenroll the employee

on the date the employee provides as the date of separation. The

carrier must notify the enrollee of his or her right to convert to a

nongroup contract with the carrier and possible eligibility to enroll

under the temporary continuation of coverage provisions as set forth in

subpart K of this part based on the termination of enrollment as

provided under Sec. 890.304(a)(1)(i).

[FR Doc. 97-31166 Filed 11-26-97; 8:45 am]

BILLING CODE 6325-01-P