Federal Employees Health Benefits Program: Effective Dates

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AI37

Federal Employees Health Benefits Program: Effective Dates

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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

regulations to change the existing Federal Employees Health Benefits

(FEHB) Program regulations concerning the effective date for new

enrollments made by employees during the annual open season. These

regulations would also change the effective date of open season changes

in enrollment made by employees, annuitants, former spouses and

individuals enrolled under the temporary continuation of coverage (TCC)

provisions of FEHB law. The proposed regulations would standardize the

effective date of most of these new enrollments or changes in

enrollment. This would make it easier for employing offices and health

plan carriers to administer the Program and reduce the potential for

error in determining effective dates.

DATES: Comments must be received on or before September 30, 1998.

ADDRESSES: Send written comments to Abby L. Block, Chief, Insurance

Policy and Information Division, 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: Jay D. Fritz (202) 606-0004.

SUPPLEMENTARY INFORMATION: The effective date of new enrollments by

employees during the annual open season is specified in current

regulations as the first day of the first pay period that begins in the

next following year and which follows a pay period during any part of

which the employee is in a pay status. For open season changes in

enrollment by employees, annuitants, former spouses and individuals

enrolled under TCC, the effective date is the first day of the first

pay period that begins in January of the next following year. Under

current regulations, the effective date for employee enrollments and

changes in enrollment may be different each year based on which day in

January is the first day of the pay period.

These proposed regulations would adopt January 1st as the effective

date for all open season new enrollments for employees in a pay status.

For employees in a non-pay status, an open season new enrollment must

continue to be effective on the first day of the first pay period that

begins in the next year which follows a pay period during any part of

which the employee is in a pay status. The effective date for these

employees cannot be regulated as January 1st since they may not meet

the requirement of being in a pay status prior to the January 1st

effective date.

These regulations would also adopt January 1st as the effective

date for all open season changes in enrollment for employees,

regardless of whether or not they are in a pay status, and for

annuitants, former spouses, and individuals on TCC.

We believe standardization of the effective date of new enrollments

and changes in enrollment made during the annual open season would be

consistent with the effective date of benefits changes under our

contracts with participating carriers, and would simplify

administration of the FEHB Program. With the effective date always

being January 1st, there is less chance of employing offices making

errors in either determining the effective date or forwarding an

incorrect effective date to the health benefits carriers. Recordkeeping

by the carriers would be simplified, resulting in less chance of error

in entering data into their enrollment systems.

The regulations would also bring a measure of uniformity to the

Program as all enrollees would have the same effective date for their

open season transactions regardless of their pay period. Under current

regulations, the Federal agencies that operate with a pay period

different from that used by most other agencies have different

effective dates. This regulatory change would make it easier for

enrollees since they would always know that they are covered by their

new plan beginning January 1st.

These proposed regulations do not affect government contributions

or employee withholdings for health insurance premiums. Any change in

the contributions or withholdings brought about by a new enrollment or

change in enrollment made during the open season will continue to be

effective beginning on the first day of the first pay period that

begins in January of the next year. We are not requiring that employing

offices prorate withholdings and contributions when the January 1st

effective date is not at the beginning of a pay period as this would

create an administrative burden for both the employing offices and the

carriers.

Under current regulations, when an individual makes an open season

change from a plan with a deductible any covered expenses incurred from

January 1st to the effective date of the open season change count

towards the losing carrier's prior year deductible. Enrolled

individuals and their family members are eligible for reimbursement by

the losing carrier for covered expenses incurred during the current

year if the prior year's deductible or family limit on deductibles had

previously been met. Since these proposed regulations make January 1st

the effective date for all open season changes in enrollment, this

provision is no longer necessary. We are therefore removing the

provision for deductible carryover (Sec. 890.201(a)(10)) from the

current regulations.

Reduction of Comment Period for Proposed Rulemaking

I have determined that the comment period will be thirty days

because OPM must receive public comments on this new initiative as soon

as possible in order to analyze them, work with interested parties, and

publish a final regulation prior to the beginning of the 1999 Contract

Year.

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

[[Page 46181]]

agencies and health benefits 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.

U.S. Office of Personnel Management.

Janice R. Lachance,

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. 890.803 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;

Sec. 890.102 also issued under sections 11202(f), 11232(e), and

11246 (b) and (c) of Pub. L. 105-33, 111 Stat. 251.

Sec. 890.201 [Amended]

2. In Sec. 890.201, paragraph (a)(10) is removed and paragraph

(a)(11) is redesignated as paragraph (a)(10).

3. In Sec. 890.301, paragraph (f)(4) is revised to read as follows:

Sec. 890.301 Opportunities for employees to enroll or change

enrollment; effective dates.

* * * * *

(f) * * *

(4)(i) An open season new enrollment for an employee in a pay

status takes effect on the first day of January of the next year.

(ii) An open season new enrollment for an employee in a non-pay

status takes effect on the first day of the first pay period that

begins in the next year and which follows a pay period during any part

of which the employee is in a pay status.

(iii) An open season change of enrollment takes effect on the first

day of January of the next year.

* * * * *

4. In Sec. 890.306, paragraph (f)(2) is revised to read as follows:

Sec. 890.306 Opportunities for annuitants to change enrollment or to

reenroll; effective dates.

* * * * *

(f) * * *

(2) An open season reenrollment or change of enrollment takes

effect on the first day of January of the next year.

* * * * *

5. In Sec. 890.806, paragraph (f)(2) is revised to read as follows:

Sec. 890.806 Opportunities for former spouses to enroll and change

enrollment; effective dates of enrollment.

* * * * *

(f) * * *

(2) An open season reenrollment or change of enrollment takes

effect on the first day of January of the next year.

* * * * *

6. In Sec. 890.1108, paragraph (e)(2) is revised to read as

follows:

Sec. 890.1108 Opportunities to change enrollment; effective dates.

* * * * *

(e) * * *

(2) An open season change of enrollment takes effect on the first

day of January of the next year.

* * * * *

[FR Doc. 98-23335 Filed 8-28-98; 8:45 am]

BILLING CODE 6325-01-P