80_FR_29301 80 FR 29203 - Federal Employees Health Benefits Program; Subrogation and Reimbursement Recovery

80 FR 29203 - Federal Employees Health Benefits Program; Subrogation and Reimbursement Recovery

OFFICE OF PERSONNEL MANAGEMENT

Federal Register Volume 80, Issue 98 (May 21, 2015)

Page Range29203-29205
FR Document2015-12378

The United States Office of Personnel Management (OPM) is issuing a final rule to amend the Federal Employees Health Benefits (FEHB) Program regulations to reaffirm the conditional nature of FEHB Program benefits and benefit payments under the plan's coverage as subject to a carrier's entitlement to subrogation and reimbursement recovery, and therefore, that such entitlement falls within the preemptive scope of the FEHA Act. FEHB contracts and brochures must include, and in practice already include, a provision incorporating the carrier's subrogation and reimbursement rights, and FEHB plan brochures must contain an explanation of the carrier's subrogation and reimbursement policy.

Federal Register, Volume 80 Issue 98 (Thursday, May 21, 2015)
[Federal Register Volume 80, Number 98 (Thursday, May 21, 2015)]
[Rules and Regulations]
[Pages 29203-29205]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-12378]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

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Federal Register / Vol. 80, No. 98 / Thursday, May 21, 2015 / Rules 
and Regulations

[[Page 29203]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AN14


Federal Employees Health Benefits Program; Subrogation and 
Reimbursement Recovery

AGENCY: Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The United States Office of Personnel Management (OPM) is 
issuing a final rule to amend the Federal Employees Health Benefits 
(FEHB) Program regulations to reaffirm the conditional nature of FEHB 
Program benefits and benefit payments under the plan's coverage as 
subject to a carrier's entitlement to subrogation and reimbursement 
recovery, and therefore, that such entitlement falls within the 
preemptive scope of the FEHA Act. FEHB contracts and brochures must 
include, and in practice already include, a provision incorporating the 
carrier's subrogation and reimbursement rights, and FEHB plan brochures 
must contain an explanation of the carrier's subrogation and 
reimbursement policy.

DATES: This final rule is effective June 22, 2015.

FOR FURTHER INFORMATION CONTACT: Marguerite Martel, Senior Policy 
Analyst at (202) 606-0004.

SUPPLEMENTARY INFORMATION: The FEHB Act, as codified at 5 U.S.C. 
8902(m)(1), provides: ``The terms of any contract under this chapter 
which relate to the nature, provision, or extent of coverage or 
benefits (including payments with respect to benefits) shall supersede 
and preempt any State or local law, or any regulation issued 
thereunder, which relates to health insurance or plans.'' This final 
regulation reaffirms that a covered individual's entitlement to FEHB 
benefits and benefit payments is conditioned upon, and limited by, a 
carrier's entitlement to subrogation and reimbursement recoveries 
pursuant to a subrogation or reimbursement clause in the FEHB contract. 
This final regulation also reaffirms that a FEHB carrier's rights and 
responsibilities pertaining to subrogation and reimbursement relate to 
the nature, provision and extent of coverage or benefits and benefit 
payments provided under title 5, United States Code Chapter 89, and 
therefore are effective notwithstanding any state or local law or 
regulation relating to health insurance or plans. Some state courts 
have interpreted ambiguity in Section 8902(m)(1) to reach a contrary 
result and thereby to allow state laws to prevent or limit subrogation 
or reimbursement rights under FEHB contracts. In this final rule, OPM 
is exercising its rulemaking authority under 5 U.S.C. 8913 to ensure 
that carriers enjoy the full subrogation and reimbursement rights 
provided for under their contracts.
    The interpretation of Section 8902(m)(1) promulgated herein 
comports with longstanding Federal policy and furthers Congress's goals 
of reducing health care costs and enabling uniform, nationwide 
application of FEHB contracts. The FEHB program insures approximately 
8.2 million federal employees, annuitants, and their families, a 
significant proportion of whom are covered through nationwide fee-for-
service plans with uniform rates. The government pays on average 
approximately 70% of Federal employees' plan premiums. 5 U.S.C. 
8906(b), (f). The government's share of FEHB premiums in 2014 was 
approximately $33 billion, a figure that tends to increase each year. 
OPM estimates that FEHB carriers were reimbursed by approximately $126 
million in subrogation recoveries in that year. Subrogation recoveries 
translate to premium cost savings for the federal government and FEHB 
enrollees.
    OPM proposed this amendment in a notice of proposed rulemaking on 
January 7, 2015 (80 FR 931). The proposed rule had a 30 day comment 
period during which OPM received 3 comments.
    Responses to comments on the proposed rule:
    OPM received comments from an association of FEHB carriers, a trade 
association serving subrogation and recovery professionals, and a 
provider of subrogation and recovery services. The comments all 
expressed support for the regulation and suggested some changes to 
clarify the language in the proposed rule.
    All commenters suggested edits to the proposed definitions of 
``subrogation'' and ``reimbursement'' at 5 CFR 890.101 to more 
completely reflect the universe of FEHB Program plan recoveries. All 
three commenters expressed concern with the reference to ``a 
responsible third party'' in the definitions, indicating that the use 
of this phrase has been interpreted to foreclose ``first party'' claims 
for subrogation and recoveries, such as uninsured and underinsured 
motorist coverage, and recommended adding other insurance including 
workers' compensation insurance, to the definition to be consistent 
with entitlements listed in the proposed Sec.  890.106(c)(2) and (f). 
OPM agrees that the definitions of subrogation and reimbursement should 
include first party claims. In addition, commenters noted that Sec.  
890.106(b) and (f) should be updated to reflect this change. The 
definitions at Sec.  890.101 and other corresponding sections have been 
updated accordingly as necessary.
    The commenters also suggested additional specific changes to the 
proposed definition of ``reimbursement.'' Two of the commenters noted 
that the definition of reimbursement should address the situation of 
both illness and injury. OPM has revised the definition of 
reimbursement to accept this change. One commenter suggested that the 
final rule clarify that the right of reimbursement is cumulative with 
and not exclusive of the right of subrogation. OPM has incorporated 
this clarification. Two commenters suggested that the definition should 
reflect that a covered individual need not have actually received a 
recovery payment so long as the covered individual is entitled to 
receive a payment. OPM does not agree that the right of reimbursement 
is sufficiently broad to require an individual to reimburse the carrier 
in a circumstance where the individual has not actually received a 
recovery, and rejects this change. One commenter indicated that the 
right of reimbursement is specific to a recovery from an individual who 
has received a

[[Page 29204]]

third party payment while the right of subrogation permits a carrier to 
recover directly from other sources. OPM agrees with this comment and 
has clarified the definition of ``subrogation'' accordingly.
    One commenter suggested that Sec.  890.106(b) be amended to align 
the regulation and FEHB carrier contract requirements. OPM has revised 
this section to refer to contractual requirements.
    One commenter noted that Sec.  890.106(f) should be clarified to 
ensure that the carrier has a subrogation right to recover directly 
from a responsible insurer all amounts available to or on behalf of the 
covered individual. We have clarified the provision accordingly.
    Two commenters noted that proposed Sec.  890.106(b) and (h) did not 
clearly reflect OPM's intention for this regulation to apply to 
existing contracts. We agree and are slightly revising the language of 
paragraphs (b) and (h) to be clearer. Paragraph (h) formalizes OPM's 
longstanding interpretation of what Section 8902(m)(1) has meant since 
Congress enacted it in 1978. This interpretation applies to all FEHBA 
contracts. Paragraph (b)(1) in the final rule likewise formalizes OPM's 
longstanding interpretation of subrogation and reimbursement clauses in 
carrier contracts as constituting a condition of and a limitation on 
the nature of benefits or benefits payments and on the provision of 
benefit payments. See Carrier Letter 2012-18. FEHBA contracts that 
contain subrogation and reimbursement clauses condition benefits and 
benefit payments on giving the carrier a right to pursue subrogation 
and reimbursement and therefore are directly related to benefits, 
benefit payments, and coverage within the meaning of Section 
8902(m)(1). The interpretations in paragraphs (b)(1) and (h) together 
clarify and ensure that carriers enjoy full subrogation and 
reimbursement rights notwithstanding any state law to the contrary, and 
they apply in any pending or future case.
    To clarify further the relationship among subrogation, 
reimbursement, benefits, and coverage, we are also in paragraph (b)(2) 
requiring carrier contracts that contain subrogation and reimbursement 
clauses to contain language specifying that benefits and benefit 
payments are extended to a covered individual on the condition that the 
carrier may pursue and receive subrogation and reimbursement. This 
substantive requirement, unlike the interpretation discussed above, 
will govern any benefit payment made under any carrier contract entered 
into after this regulation goes into effect.
    OPM is issuing this final rule with changes to Sec. Sec.  
890.101(a) and 890.106(b) and (f) as described above.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because the regulation 
because the regulation only affects health insurance benefits of 
Federal employees and annuitants. Executive Order 12866.

Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Orders 13563 and 12866.

Federalism

    We have examined this rule in accordance with Executive Order 
13132, Federalism, and have determined that this rule restates existing 
rights, roles and responsibilities of State, local, or tribal 
governments.

List of Subjects in 5 CFR Parts 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Military personnel, Reporting and recordkeeping 
requirements, Retirement.

U.S. Office of Personnel Management.
Katherine Archuleta,
Director.

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

0
1. The authority citation for part 890 continues to read as follows:

    Authority:  5 U.S.C. 8913. Sec. 890.301 also issued under sec. 
311 of Pub. L. 111-03, 123 Stat. 64; Sec. 890.111 also issued under 
section 1622(b) of Pub. L. 104-106, 110 Stat. 521; Sec. 890.112 also 
issued under section 1 of Pub. L. 110-279, 122 Stat. 2604; 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), 11246 (b) and (c) of Pub. L. 105-33, 
111 Stat. 251; and section 721 of Pub. L. 105-261, 112 Stat. 2061.

0
2. In Sec.  890.101, in paragraph (a), add definitions in alphabetical 
order for ``reimbursement'' and ``subrogation'' to read as follows:

Sec.  890.101  Definitions; time computations.

    (a) * * *
    Reimbursement means a carrier's pursuit of a recovery if a covered 
individual has suffered an illness or injury and has received, in 
connection with that illness or injury, a payment from any party that 
may be liable, any applicable insurance policy, or a workers' 
compensation program or insurance policy, and the terms of the 
carrier's health benefits plan require the covered individual, as a 
result of such payment, to reimburse the carrier out of the payment to 
the extent of the benefits initially paid or provided. The right of 
reimbursement is cumulative with and not exclusive of the right of 
subrogation.
* * * * *
    Subrogation means a carrier's pursuit of a recovery from any party 
that may be liable, any applicable insurance policy, or a workers' 
compensation program or insurance policy, as successor to the rights of 
a covered individual who suffered an illness or injury and has obtained 
benefits from that carrier's health benefits plan.
* * * * *


0
3. Section 890.106 is revised to read as follows:


Sec.  890.106  Carrier entitlement to pursue subrogation and 
reimbursement recoveries.

    (a) All health benefit plan contracts shall provide that the 
Federal Employees Health Benefits (FEHB) carrier is entitled to pursue 
subrogation and reimbursement recoveries, and shall have a policy to 
pursue such recoveries in accordance with the terms of this section.
    (b)(1) Any FEHB carriers' right to pursue and receive subrogation 
and reimbursement recoveries constitutes a condition of and a 
limitation on the nature of benefits or benefit payments and on the 
provision of benefits under the plan's coverage.
    (2) Any health benefits plan contract that contains a subrogation 
or reimbursement clause shall provide that benefits and benefit 
payments are extended to a covered individual on the condition that the 
FEHB carrier may pursue and receive subrogation and reimbursement 
recoveries pursuant to the contract.
    (c) Contracts shall provide that the FEHB carriers' rights to 
pursue and receive subrogation or reimbursement recoveries arise upon 
the occurrence of the following:
    (1) The covered individual has received benefits or benefit 
payments as a result of an illness or injury; and
    (2) The covered individual has accrued a right of action against a 
third party for causing that illness or injury; or has received a 
judgment, settlement or other recovery on the basis of that illness or 
injury; or is entitled to receive compensation or recovery on the basis 
of the illness or injury, including from

[[Page 29205]]

insurers of individual (non-group) policies of liability insurance that 
are issued to and in the name of the enrollee or a covered family 
member.
    (d) A FEHB carrier's exercise of its right to pursue and receive 
subrogation or reimbursement recoveries does not give rise to a claim 
within the meaning of 5 CFR 890.101 and is therefore not subject to the 
disputed claims process set forth at 5 CFR 890.105.
    (e) Any subrogation or reimbursement recovery on the part of a FEHB 
carrier shall be effectuated against the recovery first (before any of 
the rights of any other parties are effectuated) and is not impacted by 
how the judgment, settlement, or other recovery is characterized, 
designated, or apportioned.
    (f) Pursuant to a subrogation or reimbursement clause, the FEHB 
carrier may recover directly from any party that may be liable, or from 
the covered individual, or from any applicable insurance policy, or a 
workers' compensation program or insurance policy, all amounts 
available to or received by or on behalf of the covered individual by 
judgment, settlement, or other recovery, to the extent of the amount of 
benefits that have been paid or provided by the carrier.
    (g) Any contract must contain a provision incorporating the 
carrier's subrogation and reimbursement rights as a condition of and a 
limitation on the nature of benefits or benefit payments and on the 
provision of benefits under the plan's coverage. The corresponding 
health benefits plan brochure must contain an explanation of the 
carrier's subrogation and reimbursement policy.
    (h) A carrier's rights and responsibilities pertaining to 
subrogation and reimbursement under any FEHB contract relate to the 
nature, provision, and extent of coverage or benefits (including 
payments with respect to benefits) within the meaning of 5 U.S.C. 
8902(m)(1). These rights and responsibilities are therefore effective 
notwithstanding any state or local law, or any regulation issued 
thereunder, which relates to health insurance or plans.

[FR Doc. 2015-12378 Filed 5-20-15; 8:45 am]
 BILLING CODE 6325-63-P



                                                                                                                                                                                                29203

                                                Rules and Regulations                                                                                         Federal Register
                                                                                                                                                              Vol. 80, No. 98

                                                                                                                                                              Thursday, May 21, 2015



                                                This section of the FEDERAL REGISTER                    FEHB benefits and benefit payments is                 association serving subrogation and
                                                contains regulatory documents having general            conditioned upon, and limited by, a                   recovery professionals, and a provider
                                                applicability and legal effect, most of which           carrier’s entitlement to subrogation and              of subrogation and recovery services.
                                                are keyed to and codified in the Code of                reimbursement recoveries pursuant to a                The comments all expressed support for
                                                Federal Regulations, which is published under           subrogation or reimbursement clause in                the regulation and suggested some
                                                50 titles pursuant to 44 U.S.C. 1510.
                                                                                                        the FEHB contract. This final regulation              changes to clarify the language in the
                                                The Code of Federal Regulations is sold by              also reaffirms that a FEHB carrier’s                  proposed rule.
                                                the Superintendent of Documents. Prices of              rights and responsibilities pertaining to                All commenters suggested edits to the
                                                new books are listed in the first FEDERAL               subrogation and reimbursement relate to               proposed definitions of ‘‘subrogation’’
                                                REGISTER issue of each week.                            the nature, provision and extent of                   and ‘‘reimbursement’’ at 5 CFR 890.101
                                                                                                        coverage or benefits and benefit                      to more completely reflect the universe
                                                                                                        payments provided under title 5, United               of FEHB Program plan recoveries. All
                                                OFFICE OF PERSONNEL                                     States Code Chapter 89, and therefore                 three commenters expressed concern
                                                MANAGEMENT                                              are effective notwithstanding any state               with the reference to ‘‘a responsible
                                                                                                        or local law or regulation relating to                third party’’ in the definitions,
                                                5 CFR Part 890                                          health insurance or plans. Some state                 indicating that the use of this phrase has
                                                RIN 3206–AN14                                           courts have interpreted ambiguity in                  been interpreted to foreclose ‘‘first
                                                                                                        Section 8902(m)(1) to reach a contrary                party’’ claims for subrogation and
                                                Federal Employees Health Benefits                       result and thereby to allow state laws to             recoveries, such as uninsured and
                                                Program; Subrogation and                                prevent or limit subrogation or                       underinsured motorist coverage, and
                                                Reimbursement Recovery                                  reimbursement rights under FEHB                       recommended adding other insurance
                                                                                                        contracts. In this final rule, OPM is                 including workers’ compensation
                                                AGENCY:  Office of Personnel
                                                                                                        exercising its rulemaking authority                   insurance, to the definition to be
                                                Management.
                                                                                                        under 5 U.S.C. 8913 to ensure that                    consistent with entitlements listed in
                                                ACTION: Final rule.                                     carriers enjoy the full subrogation and               the proposed § 890.106(c)(2) and (f).
                                                SUMMARY:   The United States Office of                  reimbursement rights provided for                     OPM agrees that the definitions of
                                                Personnel Management (OPM) is issuing                   under their contracts.                                subrogation and reimbursement should
                                                a final rule to amend the Federal                          The interpretation of Section                      include first party claims. In addition,
                                                Employees Health Benefits (FEHB)                        8902(m)(1) promulgated herein                         commenters noted that § 890.106(b) and
                                                Program regulations to reaffirm the                     comports with longstanding Federal                    (f) should be updated to reflect this
                                                conditional nature of FEHB Program                      policy and furthers Congress’s goals of               change. The definitions at § 890.101 and
                                                benefits and benefit payments under the                 reducing health care costs and enabling               other corresponding sections have been
                                                plan’s coverage as subject to a carrier’s               uniform, nationwide application of                    updated accordingly as necessary.
                                                entitlement to subrogation and                          FEHB contracts. The FEHB program                         The commenters also suggested
                                                reimbursement recovery, and therefore,                  insures approximately 8.2 million                     additional specific changes to the
                                                that such entitlement falls within the                  federal employees, annuitants, and their              proposed definition of
                                                preemptive scope of the FEHA Act.                       families, a significant proportion of                 ‘‘reimbursement.’’ Two of the
                                                FEHB contracts and brochures must                       whom are covered through nationwide                   commenters noted that the definition of
                                                include, and in practice already include,               fee-for-service plans with uniform rates.             reimbursement should address the
                                                a provision incorporating the carrier’s                 The government pays on average                        situation of both illness and injury.
                                                subrogation and reimbursement rights,                   approximately 70% of Federal                          OPM has revised the definition of
                                                and FEHB plan brochures must contain                    employees’ plan premiums. 5 U.S.C.                    reimbursement to accept this change.
                                                an explanation of the carrier’s                         8906(b), (f). The government’s share of               One commenter suggested that the final
                                                subrogation and reimbursement policy.                   FEHB premiums in 2014 was                             rule clarify that the right of
                                                                                                        approximately $33 billion, a figure that              reimbursement is cumulative with and
                                                DATES: This final rule is effective June
                                                                                                        tends to increase each year. OPM                      not exclusive of the right of subrogation.
                                                22, 2015.                                               estimates that FEHB carriers were                     OPM has incorporated this clarification.
                                                FOR FURTHER INFORMATION CONTACT:                        reimbursed by approximately $126                      Two commenters suggested that the
                                                Marguerite Martel, Senior Policy                        million in subrogation recoveries in that             definition should reflect that a covered
                                                Analyst at (202) 606–0004.                              year. Subrogation recoveries translate to             individual need not have actually
                                                SUPPLEMENTARY INFORMATION: The FEHB                     premium cost savings for the federal                  received a recovery payment so long as
                                                Act, as codified at 5 U.S.C. 8902(m)(1),                government and FEHB enrollees.                        the covered individual is entitled to
                                                provides: ‘‘The terms of any contract                      OPM proposed this amendment in a                   receive a payment. OPM does not agree
                                                under this chapter which relate to the                  notice of proposed rulemaking on                      that the right of reimbursement is
                                                nature, provision, or extent of coverage                January 7, 2015 (80 FR 931). The                      sufficiently broad to require an
mstockstill on DSK4VPTVN1PROD with RULES




                                                or benefits (including payments with                    proposed rule had a 30 day comment                    individual to reimburse the carrier in a
                                                respect to benefits) shall supersede and                period during which OPM received 3                    circumstance where the individual has
                                                preempt any State or local law, or any                  comments.                                             not actually received a recovery, and
                                                regulation issued thereunder, which                        Responses to comments on the                       rejects this change. One commenter
                                                relates to health insurance or plans.’’                 proposed rule:                                        indicated that the right of
                                                This final regulation reaffirms that a                     OPM received comments from an                      reimbursement is specific to a recovery
                                                covered individual’s entitlement to                     association of FEHB carriers, a trade                 from an individual who has received a


                                           VerDate Sep<11>2014   15:34 May 20, 2015   Jkt 235001   PO 00000   Frm 00001   Fmt 4700   Sfmt 4700   E:\FR\FM\21MYR1.SGM   21MYR1


                                                29204               Federal Register / Vol. 80, No. 98 / Thursday, May 21, 2015 / Rules and Regulations

                                                third party payment while the right of                    OPM is issuing this final rule with                 with that illness or injury, a payment
                                                subrogation permits a carrier to recover                changes to §§ 890.101(a) and 890.106(b)               from any party that may be liable, any
                                                directly from other sources. OPM agrees                 and (f) as described above.                           applicable insurance policy, or a
                                                with this comment and has clarified the                                                                       workers’ compensation program or
                                                                                                        Regulatory Flexibility Act
                                                definition of ‘‘subrogation’’ accordingly.                                                                    insurance policy, and the terms of the
                                                   One commenter suggested that                            I certify that this regulation will not            carrier’s health benefits plan require the
                                                § 890.106(b) be amended to align the                    have a significant economic impact on                 covered individual, as a result of such
                                                regulation and FEHB carrier contract                    a substantial number of small entities                payment, to reimburse the carrier out of
                                                requirements. OPM has revised this                      because the regulation because the                    the payment to the extent of the benefits
                                                section to refer to contractual                         regulation only affects health insurance              initially paid or provided. The right of
                                                requirements.                                           benefits of Federal employees and                     reimbursement is cumulative with and
                                                   One commenter noted that                             annuitants. Executive Order 12866.                    not exclusive of the right of subrogation.
                                                § 890.106(f) should be clarified to
                                                                                                        Regulatory Review                                     *     *     *     *     *
                                                ensure that the carrier has a subrogation                                                                        Subrogation means a carrier’s pursuit
                                                right to recover directly from a                          This rule has been reviewed by the                  of a recovery from any party that may
                                                responsible insurer all amounts                         Office of Management and Budget in                    be liable, any applicable insurance
                                                available to or on behalf of the covered                accordance with Executive Orders                      policy, or a workers’ compensation
                                                individual. We have clarified the                       13563 and 12866.                                      program or insurance policy, as
                                                provision accordingly.                                                                                        successor to the rights of a covered
                                                   Two commenters noted that proposed                   Federalism
                                                                                                                                                              individual who suffered an illness or
                                                § 890.106(b) and (h) did not clearly                       We have examined this rule in
                                                                                                                                                              injury and has obtained benefits from
                                                reflect OPM’s intention for this                        accordance with Executive Order 13132,
                                                regulation to apply to existing contracts.                                                                    that carrier’s health benefits plan.
                                                                                                        Federalism, and have determined that
                                                We agree and are slightly revising the                  this rule restates existing rights, roles             *     *     *     *     *
                                                language of paragraphs (b) and (h) to be                and responsibilities of State, local, or              ■ 3. Section 890.106 is revised to read
                                                clearer. Paragraph (h) formalizes OPM’s                 tribal governments.                                   as follows:
                                                longstanding interpretation of what
                                                Section 8902(m)(1) has meant since                      List of Subjects in 5 CFR Parts 890                   § 890.106 Carrier entitlement to pursue
                                                Congress enacted it in 1978. This                         Administrative practice and                         subrogation and reimbursement recoveries.
                                                interpretation applies to all FEHBA                     procedure, Government employees,                         (a) All health benefit plan contracts
                                                contracts. Paragraph (b)(1) in the final                Health facilities, Health insurance,                  shall provide that the Federal
                                                rule likewise formalizes OPM’s                          Health professions, Hostages, Iraq,                   Employees Health Benefits (FEHB)
                                                longstanding interpretation of                          Kuwait, Lebanon, Military personnel,                  carrier is entitled to pursue subrogation
                                                subrogation and reimbursement clauses                   Reporting and recordkeeping                           and reimbursement recoveries, and shall
                                                in carrier contracts as constituting a                  requirements, Retirement.                             have a policy to pursue such recoveries
                                                condition of and a limitation on the                    U.S. Office of Personnel Management.                  in accordance with the terms of this
                                                nature of benefits or benefits payments                                                                       section.
                                                                                                        Katherine Archuleta,
                                                and on the provision of benefit                                                                                  (b)(1) Any FEHB carriers’ right to
                                                payments. See Carrier Letter 2012–18.                   Director.                                             pursue and receive subrogation and
                                                FEHBA contracts that contain                            PART 890—FEDERAL EMPLOYEES                            reimbursement recoveries constitutes a
                                                subrogation and reimbursement clauses                                                                         condition of and a limitation on the
                                                                                                        HEALTH BENEFITS PROGRAM
                                                condition benefits and benefit payments                                                                       nature of benefits or benefit payments
                                                on giving the carrier a right to pursue                 ■ 1. The authority citation for part 890              and on the provision of benefits under
                                                subrogation and reimbursement and                       continues to read as follows:                         the plan’s coverage.
                                                therefore are directly related to benefits,                                                                      (2) Any health benefits plan contract
                                                                                                          Authority: 5 U.S.C. 8913. Sec. 890.301
                                                benefit payments, and coverage within                                                                         that contains a subrogation or
                                                                                                        also issued under sec. 311 of Pub. L. 111–03,
                                                the meaning of Section 8902(m)(1). The                  123 Stat. 64; Sec. 890.111 also issued under          reimbursement clause shall provide that
                                                interpretations in paragraphs (b)(1) and                section 1622(b) of Pub. L. 104–106, 110 Stat.         benefits and benefit payments are
                                                (h) together clarify and ensure that                    521; Sec. 890.112 also issued under section           extended to a covered individual on the
                                                carriers enjoy full subrogation and                     1 of Pub. L. 110–279, 122 Stat. 2604; 5 U.S.C.        condition that the FEHB carrier may
                                                reimbursement rights notwithstanding                    8913; Sec. 890.803 also issued under 50               pursue and receive subrogation and
                                                any state law to the contrary, and they                 U.S.C. 403p, 22 U.S.C. 4069c and 4069c–1;             reimbursement recoveries pursuant to
                                                apply in any pending or future case.                    subpart L also issued under sec. 599C of Pub.         the contract.
                                                   To clarify further the relationship                  L. 101–513, 104 Stat. 2064, as amended; Sec.             (c) Contracts shall provide that the
                                                among subrogation, reimbursement,                       890.102 also issued under sections 11202(f),          FEHB carriers’ rights to pursue and
                                                benefits, and coverage, we are also in                  11232(e), 11246 (b) and (c) of Pub. L. 105–
                                                                                                        33, 111 Stat. 251; and section 721 of Pub. L.
                                                                                                                                                              receive subrogation or reimbursement
                                                paragraph (b)(2) requiring carrier                      105–261, 112 Stat. 2061.                              recoveries arise upon the occurrence of
                                                contracts that contain subrogation and                                                                        the following:
                                                reimbursement clauses to contain                        ■  2. In § 890.101, in paragraph (a), add                (1) The covered individual has
                                                language specifying that benefits and                   definitions in alphabetical order for                 received benefits or benefit payments as
                                                benefit payments are extended to a                      ‘‘reimbursement’’ and ‘‘subrogation’’ to              a result of an illness or injury; and
                                                covered individual on the condition that                read as follows:                                         (2) The covered individual has
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                                                the carrier may pursue and receive                                                                            accrued a right of action against a third
                                                subrogation and reimbursement. This                     § 890.101    Definitions; time computations.          party for causing that illness or injury;
                                                substantive requirement, unlike the                       (a) * * *                                           or has received a judgment, settlement
                                                interpretation discussed above, will                      Reimbursement means a carrier’s                     or other recovery on the basis of that
                                                govern any benefit payment made under                   pursuit of a recovery if a covered                    illness or injury; or is entitled to receive
                                                any carrier contract entered into after                 individual has suffered an illness or                 compensation or recovery on the basis
                                                this regulation goes into effect.                       injury and has received, in connection                of the illness or injury, including from


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                                                                    Federal Register / Vol. 80, No. 98 / Thursday, May 21, 2015 / Rules and Regulations                                               29205

                                                insurers of individual (non-group)                      DEPARTMENT OF TRANSPORTATION                          Reason for Withdrawal
                                                policies of liability insurance that are                                                                        The FAA is withdrawing Special
                                                issued to and in the name of the                        Federal Aviation Administration                       Condition No. 23–246–SC because
                                                enrollee or a covered family member.                                                                          Cirrus Design Corporation elected to
                                                                                                        14 CFR Part 23                                        revise the model SF50 certification basis
                                                   (d) A FEHB carrier’s exercise of its
                                                right to pursue and receive subrogation                 [Docket No. CE306; Special Conditions No.             to amendment 23–62.
                                                or reimbursement recoveries does not                    23–246–SC]                                              The authority citation for this Special
                                                give rise to a claim within the meaning                                                                       Condition withdrawal is 49 U.S.C.
                                                                                                        Special Conditions: Cirrus Design                     106(g), 40113 and 44701; 14 CFR 21.16
                                                of 5 CFR 890.101 and is therefore not                   Corporation Model SF50 airplane; Full
                                                subject to the disputed claims process                                                                        and 21.17; and 14 CFR 11.38 and 11.19.
                                                                                                        Authority Digital Engine Control
                                                set forth at 5 CFR 890.105.                             (FADEC) System; Withdrawal                            Conclusion
                                                   (e) Any subrogation or reimbursement                                                                         Withdrawal of this special condition
                                                recovery on the part of a FEHB carrier                  AGENCY:  Federal Aviation                             does not preclude the FAA from issuing
                                                shall be effectuated against the recovery               Administration (FAA), DOT.                            another document on the subject matter
                                                first (before any of the rights of any                  ACTION: Final special conditions;                     in the future or committing the agency
                                                other parties are effectuated) and is not               withdrawal.                                           to any future course of action.
                                                impacted by how the judgment,                           SUMMARY:  The FAA is withdrawing a                      Issued in Kansas City, Missouri on May 11,
                                                settlement, or other recovery is                        previously published document                         2015.
                                                characterized, designated, or                           granting special conditions for the                   Earl Lawrence,
                                                apportioned.                                            Cirrus Design Corporation model SF50                  Manager, Small Airplane Directorate, Aircraft
                                                   (f) Pursuant to a subrogation or                     airplane. We are withdrawing Special                  Certification Service.
                                                reimbursement clause, the FEHB carrier                  Condition No. 23–246–SC through                       [FR Doc. 2015–12262 Filed 5–20–15; 8:45 am]
                                                may recover directly from any party that                mutual agreement with Cirrus Design                   BILLING CODE 4910–13–P

                                                may be liable, or from the covered                      Corporation.
                                                individual, or from any applicable                      DATES:  Effective May 21, 2015, the                   DEPARTMENT OF TRANSPORTATION
                                                insurance policy, or a workers’                         special condition published on April 20,
                                                compensation program or insurance                       2010 (75 FR 20518) is withdrawn.                      Federal Aviation Administration
                                                policy, all amounts available to or                     FOR FURTHER INFORMATION CONTACT: Jeff
                                                received by or on behalf of the covered                 Pretz, Federal Aviation Administration,               14 CFR Part 39
                                                individual by judgment, settlement, or                  Small Airplane Directorate, Aircraft                  [Docket No. FAA–2015–1570; Directorate
                                                other recovery, to the extent of the                    Certification Service, 901 Locust, Room               Identifier 2014–SW–054–AD; Amendment
                                                amount of benefits that have been paid                  301, Kansas City, MO 64106; telephone                 39–18161; AD 2015–10–05]
                                                or provided by the carrier.                             (816) 329–3239; facsimile (816) 329–
                                                                                                        4090, email jeff.pretz@faa.gov.                       RIN 2120–AA64
                                                   (g) Any contract must contain a
                                                provision incorporating the carrier’s                   SUPPLEMENTARY INFORMATION:                            Airworthiness Directives; Airbus
                                                subrogation and reimbursement rights                    Background                                            Helicopters (Previously Eurocopter
                                                as a condition of and a limitation on the                                                                     France) Helicopters
                                                nature of benefits or benefit payments                    On September 9, 2008, Cirrus Design
                                                                                                        Corporation applied for a type                        AGENCY:  Federal Aviation
                                                and on the provision of benefits under
                                                                                                        certificate for their new model SF50                  Administration (FAA), Department of
                                                the plan’s coverage. The corresponding                                                                        Transportation (DOT).
                                                                                                        aircraft. Under the provisions of 14 CFR
                                                health benefits plan brochure must
                                                                                                        part 21, § 21.17, Cirrus Design                       ACTION: Final rule; request for
                                                contain an explanation of the carrier’s                 Corporation must show that the model                  comments.
                                                subrogation and reimbursement policy.                   SF50 meets the applicable provisions of
                                                   (h) A carrier’s rights and                           part 23, as amended by amendments                     SUMMARY:     We are adopting a new
                                                responsibilities pertaining to                          23–1 through 23–59.                                   airworthiness directive (AD) for Airbus
                                                subrogation and reimbursement under                       On April 20, 2010, the FAA published                Helicopters (previously Eurocopter
                                                any FEHB contract relate to the nature,                 Special Condition No. 23–246–SC for                   France) Model AS365N3, EC155B, and
                                                provision, and extent of coverage or                    the Cirrus Design Corporation model                   EC155B1 helicopters with an external
                                                                                                        SF50 airplane. The Cirrus SF50 is a low-              life raft in the footsteps with certain
                                                benefits (including payments with
                                                                                                        wing, five-plus-two-place (2 children),               part-numbered junction units. This AD
                                                respect to benefits) within the meaning
                                                                                                        single-engine turbofan-powered aircraft.              requires inspecting the junction units of
                                                of 5 U.S.C. 8902(m)(1). These rights and
                                                                                                        The airplane engine is controlled by an               the external life raft deployment system
                                                responsibilities are therefore effective                                                                      for corrosion, removing any corrosion,
                                                notwithstanding any state or local law,                 Electronic Engine Control (EEC), also
                                                                                                        known as a Full Authority Digital                     and performing certain measurements to
                                                or any regulation issued thereunder,                                                                          determine whether the junction unit
                                                which relates to health insurance or                    Engine Control (FADEC).
                                                                                                          On December 11, 2012 Cirrus Design                  must be replaced. This AD is prompted
                                                plans.                                                                                                        by failure of a life raft deployment test
                                                                                                        Corporation elected to adjust the
                                                [FR Doc. 2015–12378 Filed 5–20–15; 8:45 am]
                                                                                                        certification basis of the SF50 to include            and corrosion damage inside the left-
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                                                BILLING CODE 6325–63–P                                  14 CFR part 23 through amendment 62.                  hand junction unit. These actions are
                                                                                                        Special Condition No. 23–246–SC is                    intended to prevent failure of an
                                                                                                        therefore being withdrawn. It no longer               external life raft to deploy preventing
                                                                                                        reflects the appropriate part 23                      evacuation of passengers during an
                                                                                                        amendment level of the aircraft and the               emergency.
                                                                                                        basic Special Condition requirement for               DATES: This AD becomes effective June
                                                                                                        EEC equipped aircraft has been revised.               5, 2015.


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Document Created: 2018-10-24 10:26:22
Document Modified: 2018-10-24 10:26:22
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis final rule is effective June 22, 2015.
ContactMarguerite Martel, Senior Policy Analyst at (202) 606-0004.
FR Citation80 FR 29203 
RIN Number3206-AN14
CFR AssociatedAdministrative Practice and Procedure; Government Employees; Health Facilities; Health Insurance; Health Professions; Hostages; Iraq; Kuwait; Lebanon; Military Personnel; Reporting and Recordkeeping Requirements and Retirement

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