03-31768. Federal Employees Health Benefits Program: Effective Dates

AGENCY:

Office of Personnel Management.

ACTION:

Notice of withdrawal of proposed rulemaking.

SUMMARY:

The Office of Personnel Management (OPM) is withdrawing its proposal to revise the regulations on adopting January 1 as the effective date for all annual open season enrollment changes and new enrollments in the Federal Employees Health Benefits Program (FEHB) which was published August 31, 1998, FR Doc. 98-23335. The regulation would have changed the existing FEHB regulations concerning the effective date from the 1st day of the first pay period in the new calendar year. This regulation would have concurrently changed 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 regulation would have standardized the effective date of most of these new enrollments or changes in enrollment and made it consistent with the beginning of health benefits offered by FEHB plans, which are based on the calendar year. The intent of the regulation was to make it easier for employing offices and health plan carriers to administer the Program and reduce the potential for errors in determining effective dates.

The comment period for the proposed regulation ended September 30, 1998. OPM received comments from agencies that their automated payroll systems were not functionally capable of pro-rating employees' premium shares on other than a pay period basis. January 1 typically falls in the middle of a bi-weekly pay period, the most prevalent pay period used by Federal agencies. Therefore, most agencies would be required to accurately allocate the pro rata premiums to employees' pay on a timely basis. Some agencies reported that they simply would be unable to pro-rate premiums from January 1 to the beginning of the first pay period in the calendar year. Since 1998, OPM has subsequently raised this issue with agencies with similar responses.

OPM is responsible for the Administration's new e-Payroll initiative, part of the President's Management Agenda. This initiative is designed to modernize the Government's payroll system. OPM has selected four payroll service providers to replace the current 22 providers for the Federal government's 1.8 million employees. Under the e-Payroll initiative plan, the four providers will begin government-wide processing in September 2004. Once these new systems are in place, we will reconsider the status of this proposed FEHB rulemaking.

FOR FURTHER INFORMATION CONTACT:

Anne Easton on [phone].

Office of Personnel Management.

Kay Coles James,

Director.