[Federal Register Volume 59, Number 116 (Friday, June 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14820]
[[Page Unknown]]
[Federal Register: June 17, 1994]
VOL. 59, NO. 116
Friday, June 17, 1994
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 870, 871, 872, 873, 874, and 890
RIN 3206-AF94
Federal Employees' Group Life Insurance and Federal Employees
Health Benefits Programs; Reconsideration of Employing Office
Enrollment Decisions
AGENCY: Office of Personnel Management.
ACTION: Proposed regulations with request for comments.
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SUMMARY: In keeping with the Administration's initiative to reinvent
Government, the Office of Personnel Management (OPM) is issuing
proposed regulations to improve the administrative process used by the
Federal Employees' Group Life Insurance (FEGLI) and Federal Employees
Health Benefits (FEHB) programs in resolving disputes between Federal
employees and agencies over coverage and enrollment issues. The purpose
of the proposed regulations is to improve the performance of the
Government by delegating to Federal agencies the authority to
reconsider disputes over coverage and enrollment issues in these two
programs and to make retroactive as well as prospective corrections of
errors. The proposed regulations would result in more efficient
Government operations and improved service to individuals seeking
benefits under the programs.
DATES: Comments must be received on or before August 16, 1994.
ADDRESSES: Written comments may be sent to Lucretia F. Myers, Assistant
Director for Insurance Programs, Retirement and Insurance Group, Office
of Personnel Management, P.O. Box 57, Washington, DC 20044, or
delivered to OPM, Room 3415, 1900 E Street, NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Margaret Sears, (202) 606-0191.
SUPPLEMENTARY INFORMATION: Under the FEGLI law, eligible employees are
automatically insured under Basic Life insurance (generally equal to
their annual pay, rounded to the next thousand, plus $2,000), unless
they waive coverage. In addition, employees with Basic Life coverage
may elect coverage under one or more of the 3 types of optional
insurance available. (Standard Optional offers an additional $10,000 of
insurance. Additional Optional offers insurance in an amount of one,
two, three, four, or five times annual pay rounded to the next
thousand. Family Optional offers $5,000 insurance for the spouse and
$2,500 for each child.) OPM's regulations prescribe the circumstances
under which employees cancel waivers of Basic Life, elect optional
coverage, increase optional coverage, or drop coverage.
Under the FEHB Program, eligible employees may enroll in FEHB when
they are first hired. They may enroll or change enrollment during open
season, when their family status changes, or at other times prescribed
by OPM's regulations. The FEHB law also provides for enrollment by
certain former employees, former spouses, and children when they lose
regular FEHB coverage because of separation from service or loss of
family member status. The specific conditions of their enrollment and
opportunities to change enrollment are controlled by OPM's regulations.
Employees (and family members who are eligible to enroll in FEHB)
make changes in their life insurance coverage and health benefits
enrollment through the employee's personnel office. These
administrative actions are normally conducted entirely between the
agency and the individual, based on FEGLI and FEHB law and regulations.
However, occasions arise when individuals challenge the agency's denial
of their request for coverage, to change their FEHB enrollment or FEGLI
coverage, or to change their FEGB enrollment or FEGLI optional coverage
retroactively. (Because Basic Life insurance coverage is mandatory
under FEGLI law unless the employee waives it, an agency that
erroneously denies Basic Life to an employee must restore it
retroactively when the error is discovered.) Under OPM's regulations,
elections of optional life insurance coverage and FEHB enrollment or
enrollment changes are generally effective prospectively unless a
specific statutory or regulatory provision requires or allows the
agency to make a retroactive change. Errors that consist of allowing an
employee to elect life insurance coverage under circumstances not
prescribed by law or regulation are corrected retroactively, including
errors that are not discovered until after the death of an insured
employee.) The current process used to resolve disputes between
individuals and agencies over coverage or enrollment determinations is
described in 5 CFR Secs. 870.205, 871.206, 872.206, 873.206, 874.305,
and 890.104.
Under these current procedures, employees, children, or former
spouses who are denied coverage or enrollment, the opportunity to
change coverage or enrollment, or, in most cases, to have a change made
retroactively by a Federal agency must write to the Office of Personnel
Management within 30 days after the agency's written denial if they
believe the agency's decision was incorrect and want to have it
reviewed. OPM reviews the agency's denial to determine if it complies
with the applicable law and regulations. Since agencies currently do
not have the regulatory authority to make retroactive changes in most
cases, they must deny most such requests. Therefore, most requests for
a retroactive change must come to OPM for review before the retroactive
change can be made. (Basic life insurance is an exception. Under the
FEGLI law, employees are automatically covered for Basic Life
insurance; therefore, agencies must correct failures to withhold
retroactively.) In addition, OPM has the authority, by regulation, to
order corrections of errors, mistakes, or omissions based on its
determination that it would be against equity and good conscience not
to do so.
In 1992, OPM received 283 requests for reconsideration and upheld
the agency's decision in 39 percent of the cases. OPM overturned 38
percent of agency decisions and returned 23 percent to the agency
because the individual failed to follow proper administrative
procedures. As of August 30, 1993, there has been a 50 percent increase
in requests for reconsideration over the 1992 figures.
In many of these cases, the issue was (or included) a request that
the coverage or change in coverage be made retroactive to some earlier
date. Out of 94 requests from employees involving retroactive coverage,
we allowed 70 and denied 24. Although an agency has all the necessary
information at its disposal and knows whether a retroactive correction
is appropriate, it lacks the authority under current regulations to
make corrections retroactively. It can accept the employee's request to
enroll or change enrollment, but only on a prospective basis. The
agency must deny the employee's request for a retroactive change.
Therefore, the employees write to OPM to have the decision reviewed. If
appropriate, OPM can then order the agency to make the retroactive
correction.
As part of OPM's ongoing efforts to improve efficiency, and in
keeping with the Administration's initiative to streamline Government
operations, OPM is issuing proposed regulations that would delegate to
Federal agencies the authority to correct coverage and enrollment
errors retroactively. In addition, the proposed regulations would
transfer the reconsideration (review) process for the FEGLI and FEHB
programs from OPM to the agencies. Under the proposed regulations,
Federal agencies (or retirement systems, if applicable) would make the
initial decisions at the employing office level and would provide for
reconsideration at a higher, or otherwise independent, level of review.
The reconsideration could, at each agency's discretion, be made at a
higher level within the employing office or at the same level elsewhere
in the agency. The proposed regulations set forth only the most basic
elements necessary to meet due process requirements. For the most part,
agencies would be free to use existing administrative review procedures
that include these basic elements or to create administrative
procedures specific to this purpose. The agency's decision based on its
reconsideration of the initial decision would be final. (FEGLI and FEHB
decisions are not appealable to the Merit Systems Protection Board.)
Current regulations regarding employee withholdings and Government
contributions would continue to apply. That is, when agencies make
retroactive changes, the agency must pay into the respective trust fund
an amount equal to any withholdings and contributions due from the
effective date of the change. The agency may collect the amount of the
withholdings due from the employee or may waive collection under
existing law and regulations.
With the authority to make retroactive changes conferred by the
proposed regulations, the agencies could correct errors promptly,
review initial decisions on request, and give the individual a
thorough, written explanation of the final decision. Thus, we believe
that the Government would operate more efficiently and employees, their
children, and their former spouses would be better served under these
regulations.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because it merely
amends administrative procedures currently performed by OPM and Federal
agencies.
List of Subjects
5 CFR Part 870
Administrative practice and procedure, Government employees,
Hostages, Iraq, Kuwait, Lebanon, Life insurance, Retirement.
5 CFR Parts 871, 872, and 873
Administrative practice and procedure, Government employees, Life
insurance, Retirement.
5 CFR Part 874
Government employees, Life insurance, Retirement.
5 CFR Part 890
Administrative practice and procedure, Government employees, Health
facilities, Health insurance, Health professions, Hostages, Iraq,
Kuwait, Lebanon, Reports and recordkeeping requirements, Retirement.
U.S. Office of Personnel Management.
James B. King,
Director.
Accordingly, OPM proposes to amend 5 CFR parts 870, 871, 872, 873,
874, and 890 as follows:
PART 870--FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM
1. The authority citation for part 870 continues to read as
follows:
Authority: 5 U.S.C. 8716; Sec. 870.202(c) also issued under 5
U.S.C. 7701(b)(2); subpart J is also issued under section 599C of
Pub. L. 101-513, 104 Stat. 2064, as amended.
2. In subpart A, Sec. 870.102 is revised, Sec. 870.103 is
redesignated as Sec. 870.104, a new Sec. 870.103 is added, and newly
redesignated Sec. 870.104 is amended by revising the introductory test
of the definition of Employing Office and by adding paragraph (d) to
the definition of Employee Office to read as follows:
Sec. 870.102 Correction of errors.
(a) The employing office may make corrections of administrative
errors as to coverage or changes in coverage any time. Retroactive
corrections of coverage are subject to the provisions of
Sec. 870.401(h).
(b) OPM may order correction of an error upon a showing
satisfactory to OPM that it would be against equity and good conscience
not to do so.
Sec. 870.103 Initial decision and reconsideration.
(a) Who may file. (1) An employee may request his or her agency to
reconsider an employing office's initial decision denying insurance
coverage or the opportunity to change coverage.
(2) An annuitant may request his or her retirement system to
reconsider its initial decision affecting insurance coverage.
(3) A judge may request his or her agency, or retirement system if
applicable, to reconsider an employing office's initial decision that
denies an entitlement related to assignments under 5 U.S.C. 8706(e) of
this chapter.
(b) Initial employing office decision. An employing office's
decision is considered an initial decision as used in paragraph (a) of
this section when rendered by the employing office in writing and
stating the right to an independent level of review (reconsideration)
by the appropriate agency or retirement system. However, an initial
decision rendered at the highest level of review available within OPM
is not subject to reconsideration.
(c) Reconsideration. (1) A request for reconsideration must be made
in writing, must include the claimant's name, address, date of birth,
Social Security number, reasons for the request, and, if applicable,
retirement claim number.
(2) The reconsideration review must be made at or above the level
at which the initial decision was rendered.
(d) Time limit. A request for reconsideration of an initial
decision must be filed within 30 calendar days from the date of the
written decision stating the right to a reconsideration. The time limit
on filing may be extended when the individual shows that he or she was
not notified of the time limit and was not otherwise aware of it, or
that he or she was prevented by circumstances beyond his or her control
from making the request within the time limit. An agency or retirement
system decision in response to a request for reconsideration of an
employing office's decision is a final decision as described in
paragraph (e) of this section.
(e) Final decision. After reconsideration, the agency or retirement
system must issue a final decision, which must be in writing and must
fully set forth the findings and conclusions.
Sec. 870.104 Definitions.
* * * * *
Employing office means the office of the agency or retirement
system to which jurisdiction and responsibility for life insurance
actions have been delegated.
* * * * *
(d) For judges of the United States Court of Veterans Appeals, the
employing office is the United States Court of Veterans Appeals.
* * * * *
3. In supart B, Sec. 870.205 is moved.
PART 871--STANDARD OPTIONAL LIFE INSURANCE
1. The authority citation for part 871 continues to read as
follows:
Authority: 5 U.S.C. 8716.
2. In subpart A, Sec. 871.103 is revised to reads as follows:
Sec. 871.103 Correction of errors; initial decision and
reconsideration.
The rules and procedures under Secs. 870.102 and 870.103 are
applicable in this part, subject to the provisions of Sec. 870.401(h)
of this part.
871.104 [Amended]
3. In Sec. 871.104 the reference to ``Sec. 870.103'' is removed and
``Sec. 870.104'' is added in its place.
Sec. 871.206 [Removed]
4. In subpart B, Sec. 871.206 is removed.
PART 872--ADDITIONAL OPTIONAL LIFE INSURANCE
1. The authority citation for part 872 continues to read as
follows:
Authority: 5 U.S.C. 8716.
2. In subpart A, Sec. 872.103 is revised to read as follows:
Sec. 872.103 Correction of errors; initial decision and
reconsideration.
The rules and procedures under Secs. 870.102 and 870.103 are
applicable in this part, subject to the provisions of Sec. 870.401(h)
of this part.
Sec. 872.104 [Amended]
3. In Sec. 872.104 the reference to ``Sec. 870.103'' is removed and
``Sec. 870.104'' is added in its place.
Sec. 872.206 [Removed]
4. In subpart B, Sec. 872.206 is removed.
PART 873--FAMILY OPTIONAL LIFE INSURANCE
1. The authority citation for part 873 continues to read as
follows:
Authority: 5 U.S.C. 8716.
2. In subpart A, Sec. 871.103 is revised to reads as follows:
Sec. 873.103 Corrections of errors; initial decision and
reconsideration.
The rules and procedures under Secs. 870.102 and 870.103 are
applicable in this part, subject to the provisions of Sec. 870.401(e)
of this part.
Sec. 873.104 [Amended]
3. In Sec. 873.104 the reference to ``Sec. 870.103'' is removed and
``Sec. 870.104'' is added in its place.
Sec. 873.206 [Removed]
4. In subpart B, Sec. 873.206 is removed.
PART 874--ASSIGNMENT OF LIFE INSURANCE
1. The authority citation for part 874 continues to read as
follows:
Authority: 5 U.S.C. 8716.
Sec. 874.101 [Amended]
2. In subpart A, Sec. 874.101, the reference to ``Sec. 870.103'' is
removed and ``Sec. 870.104'' is added in its place.
3. In subpart C, Sec. 874.305 is revised to read as follows:
Sec. 874.305 Correction of errors, initial decision and
reconsideration.
The rules and procedures under Secs. 870.102 and 870.103 are
applicable in this part, subject to the provisions of Sec. 874.502 of
this part.
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.
2. In Sec. 890.103, paragraphs (a) and (b) are revised to read as
follows:
Sec. 890.103 Correction of errors.
(a) The employing office may make prospective and retroactive
correction of administrative errors as to enrollment at any time.
Retroactive corrections are subject to withholdings and contributions
under the provisions of Sec. 890.502 of this part.
(b) OPM may order correction of an error upon a showing
satisfactory to OPM that it would be against equity and good conscience
not to do so.
* * * * *
3. Section 890.104 is revised to read as follows:
Sec. 890.104 Initial decision and reconsideration on enrollment.
(a) Who may file. Except as provided under Sec. 890.1112, an
individual may request an agency or retirement system to reconsider an
initial decision of its employing office denying coverage or change of
enrollment.
(b) Initial employing office decision. An employing office's
decision for an individual is considered an initial decision as used in
paragraph (a) of this section when rendered by the employing office in
writing and stating the right to an independent level of review
(reconsideration) by the agency or retirement system. However, an
initial decision rendered at the highest level of review available
within OPM is not subject to reconsideration.
(c) Reconsideration. (1) A request for reconsideration must be made
in writing, must include the claimant's name, address, date of birth,
Social Security number, name of carrier, reasons for the request, and,
if applicable, retirement claim number.
(2) The reconsideration review must be designated at or above the
level at which the initial decision was rendered.
(d) Time limit. A request for reconsideration of an initial
decision must be filed within 30 calendar days from the date of the
written decision stating the right to a reconsideration. The time limit
on filing may be extended when the individual shows that he or she was
not notified of the time limit and was not otherwise aware of it, or
that he or she was prevented by circumstances beyond his or her control
from making the request within the time limit. An agency or retirement
system decision in response to a request for reconsideration of an
employing office's decision is a final decision as described in
paragraph (e) of this section.
(e) Final decision. After reconsideration, the agency or retirement
system must issue a final decision, which must be in writing and must
fully set forth the findings and conclusions.
[FR Doc. 94-14820 Filed 6-16-94; 8:45 am]
BILLING CODE 6325-01-M
