80 FR 65881 - Federal Employees Health Benefits Program: Enrollment Options Following the Termination of a Plan or Plan Option

OFFICE OF PERSONNEL MANAGEMENT

Federal Register Volume 80, Issue 208 (October 28, 2015)

The U.S. Office of Personnel Management (OPM) is issuing a final rule to amend the Federal Employees Health Benefits (FEHB) Program regulations regarding enrollment options following the termination of a plan or plan option.

[Federal Register Volume 80, Number 208 (Wednesday, October 28, 2015)]
[Rules and Regulations]
[Pages 65881-65883]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-27378]



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Rules and Regulations
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Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / 
Rules and Regulations

[[Page 65881]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AN07


Federal Employees Health Benefits Program: Enrollment Options 
Following the Termination of a Plan or Plan Option

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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

SUMMARY: The U.S. Office of Personnel Management (OPM) is issuing a 
final rule to amend the Federal Employees Health Benefits (FEHB) 
Program regulations regarding enrollment options following the 
termination of a plan or plan option.

DATES: This rule is effective January 1, 2016.

FOR FURTHER INFORMATION CONTACT: Chelsea Ruediger at 
[email protected] or (202) 606-0004.

SUPPLEMENTARY INFORMATION: The U.S. Office of Personnel Management 
(OPM) issued a Notice of Proposed Rulemaking on January 7, 2015 to 
amend Title 5 of the Code of Federal Regulations Part 890 to update 
enrollment options following the termination of a plan or plan option 
in the Federal Employees Health Benefits (FEHB) Program. During the 
public comment period on the proposed rule, OPM received five comments 
including three from FEHB health plan carriers and two from citizens. 
These comments are summarized and addressed below.
    One commenter asked if an annuitant who fails to make a health plan 
enrollment election following a plan or plan option termination and is 
involuntarily enrolled into the lowest cost nationwide plan will have 
an opportunity to change his or her enrollment before the next annual 
Open Season. The final rule provides belated enrollment opportunities 
for annuitants who, for reasons beyond their control, were unable to 
make an enrollment election during the allowed time following the 
termination of a plan or plan option.
    One commenter requested information about a specific FEHB plan and 
whether or not it would leave the FEHB Program. The specific answer to 
that question is outside the scope of this final regulation. Each year 
in advance of the annual Open Season, OPM announces any plans and plan 
options that intend to leave the Program. If a plan or plan option 
leaves the Program mid-plan year, OPM will make a timely announcement. 
The carrier will also notify its enrollees.
    One commenter asked for clarification concerning the enrollment 
type (self only, self plus one, or self and family) of automatic 
enrollments into the lowest-cost nationwide plan. Though it is not 
specifically addressed in this final regulation, OPM will follow 
current standard procedures for enrollments to be of the enrollment 
type that the enrollee carried before the plan or plan option 
terminated.
    One commenter asked that the final rule include provisions to 
automatically enroll enrollees into the lowest-cost plan available with 
the same carrier. In the event that an entire plan is terminated from 
the FEHB Program, this is not possible. However, in the event of a plan 
option termination, the final rule does include provisions to 
automatically enroll enrollees into the lowest-cost remaining available 
option of their current plan that is not a High Deductible Health Plan 
(HDHP).
    One carrier requested that OPM identify the lowest-cost nationwide 
plan available for each enrollment type: Self only, self plus one and 
self and family. Another requested that OPM consider identifying 
lowest-cost local plans as the default plans for automatic enrollments 
following a plan or plan option termination. This commenter asserted 
that local plans may be better equipped to provide access to care for 
enrollees living in their service area. OPM declines to adopt these 
suggestions. OPM's intent in this regulation is to ensure that all 
enrollees with terminating plans have adequate access to affordable 
health insurance coverage while maintaining a procedure that is 
reasonable to administer and communicate. Enrollees will have 
opportunities to change plans according to existing rules if they feel 
a better plan would meet their needs.
    One commenter suggested that OPM clarify whether or not a plan that 
normally requires a membership or association fee would be considered 
as the lowest-cost nationwide plan if that plan agreed to waive the fee 
for any individuals who are automatically enrolled following a plan or 
plan option termination. OPM declines to make this change as no 
supporting comments were received for this suggestion.
    One commenter suggested that OPM include an additional criterion 
for selecting the lowest-cost nationwide plan to address actual 
capability to assume the risk for an influx of new enrollees. 
Nationwide FEHB plans have adequate networks and system capabilities to 
accommodate enrollees in any region of the U.S.
    One commenter asked that OPM define nationwide plan as ``any plan 
that provides coverage in all fifty states for which any employee and 
annuitant is eligible'' in the final rule. The final rule is not 
amended to adopt this definition. Health benefits plans with which OPM 
may contract are defined in 5 U.S.C. 8903.
    One commenter requested that OPM hold any remaining contingency 
reserve funds in an account earmarked for the lowest-cost nationwide 
plan. The commenter suggested that if the account accrued to a certain 
amount, OPM could use the balance to reduce the administrative load. 
OPM declines to make this change. Currently, OPM does not have the 
legal authority to create an additional contingency reserve for the 
lowest-cost nationwide plan nor to use excess funds at the end of a 
year to reduce administrative costs. 890.503(c)(5) allows carriers to 
request special transfers from their contingency reserves for 
``unexpected claims experience and variations from expected community 
rates.''
    One commenter suggested that OPM reserve the right to change the 
plan to be used for automatic enrollments following the termination of 
a plan or plan option in the event that the selected plan is unable to 
accommodate new enrollees. Sec.  890.301(n) has been updated in the 
final rule to allow OPM, at its sole discretion, to designate an

[[Page 65882]]

alternate plan for automatic enrollments.
    In order to maintain consistency among program participants, OPM 
has updated Sec.  890.306(l)(4)(iv) to clarify that annuitants who wish 
to change their enrollment following an involuntary enrollment due to a 
plan or plan option termination may do so prospectively, rather than 
retroactively, within 90-days after OPM advises the annuitant of the 
new enrollment.

Paperwork Reduction Act (PRA)

    OPM has reviewed this proposed rule for PRA implications and have 
determined that it does not apply to this action.

Regulatory Impact Analysis

    OPM has examined the impact of this proposed rule as required by 
Executive Order 12866 and Executive Order 13563, which directs agencies 
to assess all costs and benefits of available regulatory alternatives 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public, health, and safety effects, distributive impacts, and equity). 
A regulatory impact analysis must be prepared for major rules with 
economically significant effects of $100 million or more in any one 
year. After completing this analysis, OPM has determined that this rule 
is not considered a major rule.

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 
only impacts options available for FEHB enrollees when the plan or plan 
option in which they are enrolled terminates.

Executive Order 12866, Regulatory Review

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

Federalism

    We have examined this rule in accordance with Executive Order 
13132, Federalism, and have determined that this rule will not have any 
negative impact on the rights, roles, and responsibilities of State, 
local, or tribal governments.

List of Subjects in 5 CFR Part 890

    Administration and general provisions; Health benefits plans; 
Enrollment, Temporary extension of coverage and conversion; 
Contributions and withholdings; Transfers from retired FEHB Program; 
Benefits in medically underserved areas; Benefits for former spouses; 
Limit on inpatient hospital charges, physician charges, and FEHB 
benefit payments; Administrative sanctions imposed against health care 
providers; Temporary continuation of coverage; Benefits for United 
States hostages in Iraq and Kuwait and United States hostages captured 
in Lebanon; Department of Defense Federal Employees Health Benefits 
Program demonstration project; Administrative practice and procedure, 
Employee benefit plans, Government employees, Reporting and 
recordkeeping requirements, Retirement.

U.S. Office of Personnel Management.
Beth F. Cobert,
Acting Director.

    Accordingly, OPM is amending title 5, Code of Federal Regulations 
as follows:

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. Amend Sec.  890.301 by revising paragraphs (i)(4)(ii) through (iv) 
and adding paragraphs (i)(4)(v) and (n) to read as follows:


Sec.  890.301  Opportunities for employees who are not participants in 
premium conversion to enroll or change enrollment; effective dates.

* * * * *
    (i) * * *
    (4) * * *
    (ii) If the whole plan is discontinued, an employee who does not 
change the enrollment within the time set in (i)(4)(i) of this section 
will be enrolled in the lowest-cost nationwide plan option, as defined 
in paragraph (n) of this section;
    (iii) If one or more options of a plan are discontinued, an 
employee who does not change the enrollment will be enrolled in the 
remaining option of the plan, or in the case of a plan with two or more 
options remaining, the lowest-cost remaining option that is not a High 
Deductible Health Plan (HDHP).
    (iv) If the discontinuance of the plan, whether permanent or 
temporary, is due to a disaster, an employee must change the enrollment 
within 60 days of the disaster, as announced by OPM. If an employee 
does not change the enrollment within the time frame announced by OPM, 
the employee will be enrolled in the lowest-cost nationwide plan 
option, as defined in paragraph (n) of this section. The effective date 
of enrollment changes under this provision will be set by OPM when it 
makes the announcement allowing such changes;
    (v) An employee who is unable, for causes beyond his or her 
control, to make an enrollment change within the 60 days following a 
disaster and is, as a result, enrolled in the lowest-cost nationwide 
plan as defined in paragraph (n) of this section, may request a belated 
enrollment into the plan of his or her choice subject to the 
requirements of paragraph (c) of this section;
* * * * *
    (n) OPM will annually determine the lowest-cost nationwide plan 
option calculated based on the enrollee share of the cost of a self 
only enrollment. The plan option identified may not be a High 
Deductible Health Plan (HDHP) or an option from a health benefits plan 
that charges an association or membership fee. OPM reserves the right 
to designate an alternate plan for automatic enrollments if OPM 
determines circumstances dictate this.

0
3. Amend Sec.  890.306 by revising paragraphs (l)(4)(ii) through (v) 
and adding paragraph (l)(4)(vi) to read as follows:


Sec.  890.306  When can annuitants or survivor annuitants change 
enrollment or reenroll and what are the effective dates?

* * * * *
    (l) * * *
    (4) * * *
    (ii) If a plan discontinues all of its existing options, an 
annuitant who does not change his or her enrollment is deemed to have 
enrolled in the lowest-cost nationwide plan option, as defined in Sec.  
890.301(n); except when the annuity is insufficient to pay the 
withholdings, then paragraph (q) of this section applies.
    (iii) If one or more options of a plan are discontinued, an 
annuitant who does not change the enrollment will be enrolled in the 
remaining option of the plan, or in the case of a plan with two or more 
options remaining, the lowest-cost remaining option that is not a High 
Deductible Health Plan (HDHP). In the event that the annuity is 
insufficient to pay the withholdings, then paragraph (q) of this 
section applies;

[[Page 65883]]

    (iv) After an involuntary enrollment under paragraph (l)(4)(ii) or 
(iii) of this section becomes effective, the annuitant may change the 
enrollment to another option of the plan into which he or she was 
enrolled or another health plan of his or her choice prospectively 
within 90-days after OPM advises the annuitant of the new enrollment;
    (v) If the discontinuance of the plan, whether permanent or 
temporary, is due to a disaster, an annuitant must change the 
enrollment within 60 days of the disaster, as announced by OPM. If an 
annuitant does not change the enrollment within the time frame 
announced by OPM, the annuitant will be enrolled in the lowest-cost 
nationwide plan option, as defined in Sec.  890.301(n). The effective 
date of enrollment changes under this provision will be set by OPM when 
it makes the announcement allowing such changes;
    (vi) An annuitant who is unable, for causes beyond his or her 
control, to make an enrollment change within the 60 days following a 
disaster and is, as a result, enrolled in the lowest-cost nationwide 
plan as defined in Sec.  890.301(n), may request a belated enrollment 
into the plan of his or her choice subject to the requirements of 
paragraph (c) of this section.
* * * * *

0
4. Amend Sec.  890.806 by revising paragraphs (j)(4)(ii) through (iv) 
and adding paragraph (j)(4)(v) to read as follows:


Sec.  890.806  When can former spouses change enrollment or reenroll 
and what are the effective dates?

* * * * *
    (j) * * *
    (4) * * *
    (ii) If the whole plan is discontinued, a former spouse who does 
not change the enrollment within the time set will be enrolled in the 
lowest-cost nationwide plan option, as defined in Sec.  890.301(n);
    (iii) If one or more options of a plan are discontinued, a former 
spouse who does not change the enrollment will be enrolled in the 
remaining option of the plan, or in the case of a plan with two or more 
options remaining, the lowest-cost remaining option that is not a High 
Deductible Health Plan (HDHP);
    (iv) If the discontinuance of the plan, whether permanent or 
temporary, is due to a disaster, the former spouse must change the 
enrollment within 60 days of the disaster, as announced by OPM. If a 
former spouse does not change the enrollment within the time frame 
announced by OPM, the former spouse will be enrolled in the lowest-cost 
nationwide plan option, as defined in Sec.  890.301(n) of this section. 
The effective date of enrollment changes under this provision will be 
set by OPM when it makes the announcement allowing such changes;
    (v) A former spouse who is unable, for causes beyond his or her 
control, to make an enrollment change within the 60 days following a 
disaster and is, as a result, enrolled in the lowest-cost nationwide 
plan as defined in Sec.  890.301(n), may request a belated enrollment 
into the plan of his or her choice subject to the requirements of 
paragraph (c) of this section.
* * * * *

0
5. Amend Sec.  890.1108 by revising paragraphs (h)(4)(ii) through (iv) 
and adding paragraph (h)(4)(v) to read as follows:


Sec.  890.1108  Opportunities to change enrollment; effective dates.

* * * * *
    (h) * * *
    (4) * * *
    (ii) If the whole plan is discontinued, an enrollee who does not 
change the enrollment within the time set will be enrolled in the 
lowest-cost nationwide plan option, as defined in Sec.  890.301(n);
    (iii) If one or more options of a plan are discontinued, an 
enrollee who does not change the enrollment will enrolled in the 
remaining option of the plan, or in the case of a plan with two or more 
options remaining, the lowest-cost remaining option that is not a High 
Deductible Health Plan (HDHP);
    (iv) If the discontinuance of the plan, whether permanent or 
temporary, is due to a disaster, the enrollee must change the 
enrollment within 60 days of the disaster, as announced by OPM. If the 
enrollee does not change the enrollment within the time frame announced 
by OPM, the enrollee will be enrolled in the lowest-cost nationwide 
plan option, as defined in Sec.  890.301(n). The effective date of 
enrollment changes under this provision will be set by OPM when it 
makes the announcement allowing such changes;
    (v) An enrollee who is unable, for causes beyond his or her 
control, to make an enrollment change within the 60 days following a 
disaster and is, as a result, enrolled in the lowest-cost nationwide 
plan as defined in Sec.  890.301(n), may request a belated enrollment 
into the plan of his or her choice subject to the requirements of 
paragraph (c) of this section.
* * * * *
[FR Doc. 2015-27378 Filed 10-27-15; 8:45 am]
BILLING CODE 6325-63-P