06-459. Federal Employees Health Benefits Acquisition Regulation: Technical Amendments

AGENCY:

Office of Personnel Management.

ACTION:

Final rule.

SUMMARY:

The Office of Personnel Management (OPM) is issuing this final regulation to make minor technical amendments to the Federal Employees Health Benefits Acquisition Regulation (FEHBAR).

DATES:

Effective February 21, 2006.

ADDRESSES:

This document is available for viewing at http://www.regulations.gov and at the U.S. Office of Personnel Management, 1900 E Street, NW., Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT:

Michael Kaszynski, Policy Analyst, at 202-606-0004 or e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

The primary purpose of this rulemaking is to make technical amendments to the large provider regulation which was published on June 1, 2005. We are changing certain contract provision effective dates. We have eliminated the reference to the Truth in Negotiations Act in FEHBAR 1652.204-74. We have revised FEHBAR 1644.170 to show that carriers must follow commercially reasonable procurement procedures that comply, when required, with the Federal Acquisition Regulations' policies and procedures relating to competition and contract pricing for the acquisition of both commercial and noncommercial items. The intent of the clause is to require carriers to abide by FAR competition and contract pricing policies when they subcontract so that the carrier will be able to provide the Contracting officer with information sufficient to enable the Contracting officer to effectively carry out his or her duties under the FAR and the FEHBAR when he or she evaluates subcontracts and determines whether to consent. The regulation also clarifies that carriers should ensure that the public accounting firms with which they contract for audits of FEHB accounts are registered with the Public Company Accounting Oversight Board (PCAOB).

Collection of Information Requirement

This rulemaking makes minor technical amendments to the Federal Employees Health Benefits Acquisition Regulations. The rule does not impose information collection and recordkeeping requirements that meet the definition of the Paperwork Reduction Act of 1995's term “collection of information” which means obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties or the public, of facts or opinions by or for an agency, regardless of form or format, calling for either answers to identical questions posed to, or identical reporting or recordkeeping requirements imposed on ten or more persons, other than agencies, instrumentalities, or employees of the United States; or answers to questions posed to agencies, instrumentalities, or employees of the United States which are to be used for general statistical purposes. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies with revenues of $11.5 million or less in any one year. This rulemaking affects FEHB Program carriers and their contractual arrangements which exceed the dollar threshold. Therefore, I certify that this regulation will not have a significant economic impact on a substantial number of small entities.

Regulatory Impact Analysis

We have examined the impact of this final rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the RFA (September 16, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995, (Pub. L. 104-4), and Executive Order 13132. Executive Order 12866 (as amended by Executive Order 13258, which merely assigns responsibility of duties) 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 (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year). This rule is not considered a major rule, as defined in title 5, United States Code, Section 804(2), because we estimate its impact will only affect FEHB carriers and some of their contractual arrangements. Any resulting economic impact would not be expected to exceed the dollar threshold.

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 48 CFR Parts 1631, 1644 and 1652

• Government employees
• Government procurement
• Health insurance
• Reporting and recordkeeping requirements

U.S. Office of Personnel Management.

Linda M. Springer,

Director.

Accordingly, OPM is amending chapter 16 of title 48, CFR, as follows:

CHAPTER 16—OFFICE OF PERSONNEL MANAGEMENT FEDERAL EMPLOYEES HEALTH BENEFITS ACQUISITION REGULATION

1. The authority citation for 48 CFR parts 1631, 1644 and 1652 continues to read as follows:

Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.

Subchapter E—General Contracting Requirements

PART 1631—CONTRACT COST PRINCIPLES AND PROCEDURES

Subpart 1631.2—Contracts With Commercial Organizations

2. A new 1631.205-82 is added to subpart 1631.2 to read as follows:

1631.205-82

Audits.

Carriers should ensure that the public accounting firms with which they contract for audits of FEHB accounts are registered with the Public Company Accounting Oversight Board (PCAOB).

Subchapter G—Contract Management

PART 1644—SUBCONTRACTING POLICIES AND PROCEDURES

Subpart 1644.1—General

3. Paragraph (a) of section 1644.170 is revised to read as follows:

1644.170

Policy for FEHB Program subcontracting.

(a) General policy. Carriers must follow commercially reasonable procurement procedures that comply, when required, with the Federal Acquisition Regulations (FAR) policies and procedures relating to competition and contract pricing for the acquisition of both commercial and noncommercial items.

* * * * *

Subchapter H—Clauses and Forms

PART 1652—CONTRACT CLAUSES

Subpart 1652.2—Texts of FEHB Clauses

4. The clause heading and the last sentence in clause 1652.204-70 is amended to read as follows.

1652.204-70

Contractor records retention.

* * * * *

Contractor Records Retention (JUL 2005)

* * * * *

* * * This clause is effective prospectively as of the 2005 contract year.

(End of Clause)

5. Section 1652.204-74(a)(1) and the heading of the clause are revised to read as follows:

1652.204-74

Large Provider Agreements.

* * * * *

Large Provider Agreements (OCT 2005)

(a) Notification and Information Requirements. (1) The experience-rated Carrier must provide notice to the contracting officer of its intent to enter into or to make a significant modification of a Large Provider Agreement:

(i) Not less than 60 days before entering into any Large Provider Agreement; and

(ii) Not less than 60 days before exercising a renewal or other option, or significant modification to a Large Provider Agreement, when such action would result in total costs to the FEHB Program of an additional 20 percent or more above the existing contract. However, if a carrier is exercising a simple renewal or other option contemplated by a Large Provider Agreement that OPM previously reviewed, and there are no significant changes, then a statement to the effect that the renewal or other option is being exercised along with the dollar amount is sufficient notice.

* * * * *

6. The clause heading in 1652.222-70 is revised to read as follows.

* * * * *

1652.222-70

Notice of Significant Events.

* * * * *

Notice of Significant Events (JUL 2005)

* * * * *

7. The clause heading in 1652.244-70 is revised to read as follows.

1652.244-70

Subcontracts.

* * * * *

Subcontracts (JUL 2005)

* * * * *

8. The clause heading in 1652.246-70 is revised to read as follows.

1652.246-70

FEHB Inspection.

* * * * *

FEHB Inspection (JUL 2005)

* * * * *