[Federal Register Volume 64, Number 128 (Tuesday, July 6, 1999)]
[Rules and Regulations]
[Pages 36237-36239]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16912]
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Rules and Regulations
Federal Register
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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
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The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 64, No. 128 / Tuesday, July 6, 1999 / Rules
and Regulations
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206 AI63
Federal Employees Health Benefits (FEHB) Program and Department
of Defense (DoD) Demonstration Project
AGENCY: Office of Personnel Management.
ACTION: Interim regulation.
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SUMMARY: OPM is issuing an interim regulation to implement the portion
of the Defense Authorization Act for 1999 that establishes authority
for a demonstration project under which certain Medicare and other
eligible DoD beneficiaries can enroll in health benefit plans in
certain geographic areas under the Federal Employees Health Benefits
(FEHB) Program. The demonstration project will run for a period of
three years from January 1, 2000, through December 31, 2002. This
regulation specifies only the requirements that differ from existing
FEHB Program regulations because of unique aspects of the demonstration
project.
DATES: The effective date of this regulation is July 6, 1999. Comments
must be received on or before September 7, 1999.
ADDRESSES: Comments must be sent to Abby L. Block, Chief, Insurance
Policy and Information Division, OPM, Room 3425, 1900 E Street, NW.,
Washington, DC 20415-0001.
FOR FURTHER INFORMATION CONTACT: Michael W. Kaszynski, (202) 606-0004.
You may submit comments and data by sending electronic mail (E-mail)
to: mwkaszyn@opm.gov.
SUPPLEMENTARY INFORMATION: The purpose of this regulation is to
implement the portion of the Defense Authorization Act for 1999, Public
Law 105-261, that amended chapter 55 of title 10, United States Code,
and chapter 89 of title 5, United States Code, to establish a
demonstration project under which certain Medicare and other eligible
DoD beneficiaries can enroll in health benefit plans under the FEHB
Program. The legislation was signed into law on October 17, 1998. The
demonstration project will run for a period of three years from January
1, 2000, through December 31, 2002. DoD, with OPM concurrence, has
selected eight geographic areas to serve as demonstration areas. The
legislation requires that between 6 and 10 geographic areas be
selected. No more than 66,000 individuals can participate in the
demonstration project at any one time. Beneficiaries who are provided
coverage under the demonstration project will not be eligible to
receive care at a military medical treatment facility or to enroll in a
health care plan under DoD's TRICARE program. Individuals who disenroll
or cancel enrollment from the demonstration project are not eligible to
reenroll in the demonstration project. OPM will establish separate risk
pools for developing demonstration project enrollee premium rates. The
Government contribution for demonstration enrollees will be paid by DoD
and cannot exceed the amount that the Government would have contributed
had the enrollee been enrolled as a regular FEHB enrollee in the same
health benefits plan and level of benefits.
The legislation requires OPM and DoD to jointly produce and submit
two reports to Congress designed to assess the viability of expanding
access to the FEHB Program to certain Medicare and other eligible DoD
beneficiaries permanently. The first report is due by April 1, 2001;
the second is due by December 31, 2002. The reports will focus on
enrollee participation levels, impact on Medicare Part B enrollment,
impact on premium rates and costs as compared to regular FEHB
enrollees, impact on accessibility of care in military treatment
facilities, impact on medical readiness and training in military
treatment facilities, impact on the cost, accessibility, and
availability of prescription drugs for DoD beneficiaries, and
recommendations on eligibility and enrollment.
OPM has determined it necessary to specify certain differences from
existing FEHB Program regulations because of the unique features of the
demonstration project. This regulation amends Part 890 of title 5, Code
of Federal Regulations (CFR) to authorize these differences. Should the
program be extended beyond the three year demonstration project period,
we will regulate to address any necessary changes to these provisions.
Waiver of Notice of Proposed Rule Making
Pursuant to section 553(b)(3)(B) of title 5 of the United States
Code, I find that good cause exists for waiving the general notice of
proposed rulemaking. The notice is being waived because FEHB Program
carriers need the information contained in these regulations now to
define policy parameters and operational requirements for the
demonstration project in order to prepare and submit benefit and rate
proposals. Carriers need sufficient time to implement changes necessary
for enrollments to be effective January 1, 2000, as required by Public
Law 105-261.
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
will only affect health insurance carriers under the Federal Employees
Health Benefits Program.
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 5 CFR Part 890
Administrative practice and procedure, Government employees, Health
facilities, Health insurance, Health professionals, Hostages, Iraq,
Kuwait, Lebanon, Reporting and record keeping requirements, Retirement.
Office of Personnel Management.
Janice R. Lachance,
Director.
For the reasons set forth in the preamble, OPM is amending 5 CFR
Part 890 as follows:
PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM
1. The authority citation for Part 890 is revised to read as
follows:
[[Page 36238]]
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;
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.
PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM
2. A new Subpart M is added to read as follows:
Subpart M--Department of Defense Federal Employees Health Benefits
Program Demonstration Project
Sec.
890.1301 Purpose.
890.1302 Duration.
890.1303 Eligibility.
890.1304 Enrollment.
890.1305 Termination and cancellation.
890.1306 Government premium contributions.
890.1307 Data collection.
890.1308 Carrier participation.
Subpart M--Department of Defense Federal Employees Health Benefits
Program Demonstration Project
Sec. 890.1301 Purpose.
The purpose of this subpart is to implement the portion of the
Defense Authorization Act for 1999, Public Law 105-261, that amended
chapter 55 of title 10, United States Code, and chapter 89 of title 5,
United States Code, to establish a demonstration project under which
certain Medicare and other eligible Department of Defense (DoD)
beneficiaries can enroll in health benefit plans in certain geographic
areas under the Federal Employees Health Benefits (FEHB) Program. The
legislation was signed into law on October 17, 1998. The demonstration
project will run for a period of three years. The legislation requires
the Office of Personnel Management (OPM) and DoD to jointly produce and
submit two reports to Congress designed to assess the viability of
expanding access to the FEHB Program to certain Medicare and other
eligible DoD beneficiaries permanently. OPM is authorizing certain
differences from regular FEHB Program practices in order to ensure the
successful implementation of the demonstration project. This subpart
authorizes those differences.
Sec. 890.1302 Duration.
The demonstration project will run from January 1, 2000, through
December 31, 2002.
Sec. 890.1303 Eligibility.
(a) Eligible enrollees must live within one of the demonstration
areas and meet the definition of an eligible beneficiary in 10 U.S.C.
1108 (b). An eligible beneficiary under this subpart is--
(1) A member or former member of the uniformed services described
in section 1074(b) of title 10, United States Code, who is entitled to
hospital insurance benefits under part A of title XVIII of the Social
Security Act (42 U.S.C. 1395c et seq.);
(2) An individual who is an unremarried former spouse of a member
or former member described in section 1072(2)(F) or section 1072(2)(G)
of title 10, United States Code;
(3) An individual who is--
(i) A dependent of a deceased member or former member described in
section 1076(b) or 1076(a)(2)(B) of title 10, United States Code, or of
a member who died while on active duty for a period of more than 30
days; and
(ii) A ``member of family'' as defined in section 8901(5) of title
5, United States Code; or
(4) An individual who is--
(i) A dependent of a living member or former member described in
section 1076(b)(1) of title 10, United States Code, who is entitled to
hospital insurance benefits under part A of title XVIII of the Social
Security Act, regardless of the member's or former member's eligibility
for such hospital insurance benefits; and
(ii) A ``member of family'' as defined in section 8901(5) of title
5, United States Code.
(b) An eligible beneficiary may enroll in an FEHB plan under
chapter 89 of title 5, United States Code, for self-only coverage or
for self and family coverage. A self and family enrollment will include
coverage of a dependent of the military member or former member who
meets the definition of a ``member of family'' in section 8901(5) of
title 5, United States Code. A self and family enrollment will not
cover a person related to the beneficiary that does not qualify as a
``member of family'' (as defined in section 8901(5) of title 5, United
States Code) of the military member or former member.
(c) A person eligible for coverage under this subpart shall not be
required to satisfy any eligibility criteria specified in chapter 89 of
title 5, United States Code, or in other subparts of this part (except
as provided in paragraphs (a)(3), (a)(4), and (b) of this section) as a
condition for enrollment in health benefit plans offered through the
FEHB Program under the demonstration project.
(d) For purposes of determining whether an individual is a ``member
of family'' under section 8901(5) of title 5, United States Code, for
purposes of paragraph (a)(3) and (a)(4) of this section, a DoD member
or former member described in section 1076(b) or 1076(a)(2)(B) of title
10, United States Code, shall only be deemed to be an employee under
8901(5) of title 5, United States Code, for the purpose of determining
enrollment eligibility of a demonstration project dependent
beneficiary.
(e) A person who is eligible to enroll in the FEHB Program as an
employee as defined in section 8901(1) of title 5, United States Code,
is not eligible to enroll in an FEHB plan under the demonstration
project.
Sec. 890.1304 Enrollment.
(a) The 1999 health benefits open season for demonstration
enrollees will be held concurrent with the open season for regular FEHB
enrollees. Open seasons also will be held during the same period in the
years 2000 and 2001. Eligible beneficiaries will be able to enroll for
coverage, change enrollment tiers (e.g., self-only or self and family),
or change health benefit plans or plan options during these periods.
(b) Demonstration project enrollees are required to pay associate
membership dues if they enroll in open employee organization sponsored
plans that are participating in the demonstration project.
(c) DoD will deny enrollment of eligible beneficiaries when the
total number of beneficiaries and family members enrolled in the
demonstration project reaches 66,000.
(d) Eligible beneficiaries can enroll only in health plans offered
by health benefit carriers who are participating in the demonstration
project.
(e) Beneficiaries and family members enrolled in the demonstration
project are not eligible to obtain services from military treatment
facilities or to enroll in a health care plan under the TRICARE
Program.
(f) An eligible beneficiary enrolled in an FEHB plan under the
demonstration project may change health benefits plans and coverage in
the same manner as any other FEHB Program enrollee, except as provided
for in this subpart.
Sec. 890.1305 Termination and cancellation.
(a) If a DoD enrolled beneficiary moves out of a demonstration
area, the enrollment of the beneficiary and all family members will be
terminated. If a beneficiary moves to an area located within a
demonstration area, he or she will continue to be eligible to
participate in the demonstration project. If the beneficiary was
enrolled prior to the move in an HMO that does not serve the new
demonstration area, the beneficiary will have an opportunity to
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select a new health plan offered by a carrier participating in the
demonstration project in the new area. If the beneficiary was enrolled
in a fee-for-service plan prior to the move and moves to another area
that is within an existing demonstration area, the beneficiary can
maintain his or her current coverage.
(b) If a DoD beneficiary disenrolls, cancels, or terminates
enrollment for any reason, he or she will not be eligible to reenroll
in the demonstration project. Once coverage ends, members have the
right to revert back to all of the benefits to which they were entitled
to under title 10 of the United States Code. Medicare covered members
who had a Medigap policy prior to their enrollment in the demonstration
project are entitled to reinstate that coverage under the conditions
stated in section 1108(l) of title 10 United States Code.
(c) Demonstration project beneficiaries and members of family are
eligible for Temporary Continuation of Coverage (TCC) under the
conditions and for the durations described in subpart K or until the
end of the demonstration project, whichever occurs first. The effective
date of TCC for demonstration project beneficiaries or members of
family will be the day after other coverage under this subpart ends.
Beneficiaries or members of family selecting TCC must enroll in a
health plan offered by a carrier participating in the demonstration
project. If an individual enrolled in DoD TCC moves from a
demonstration project area, coverage ends. Beneficiaries will be
responsible for paying the entire DoD premium rate (OPM's approved net-
to-carrier DoD rate plus 4 percent for contingency and administration
reserves) plus 2 percent of this premium rate for administration of the
program. DoD will make arrangements to collect premiums plus the 2
percent administrative charge from beneficiaries and forward them to
OPM's Health Benefits Fund. OPM will establish procedures for receiving
the 2 percent administrative payment into the Health Benefits Fund and
making this amount available to DoD for administration of the program.
(d) Enrolled demonstration project beneficiaries are not eligible
for the temporary extension of coverage and conversion opportunities
described in subpart D of this part.
Sec. 890.1306 Government premium contributions.
The Secretary of Defense is responsible for the Government
contribution for demonstration project enrolled beneficiaries. The
Government contribution toward demonstration project premium rates will
be determined in accordance with subpart E of this part.
Sec. 890.1307 Data collection.
Carriers will compile, maintain, and when requested by OPM or DoD
report data on their plan's experience necessary to produce reports
containing the following information and analysis:
(a) The number of eligible beneficiaries who elect to participate
in the demonstration project.
(b) The number of eligible beneficiaries who elected to participate
in the demonstration project and did not have Medicare Part B coverage
before electing to participate.
(c) The costs of health benefits charges and the costs (direct and
indirect) of administering the benefits and services provided to
eligible beneficiaries who elect to participate in the demonstration
project as compared to similarly situated enrollees in the FEHB
Program.
(d) Prescription drug costs for demonstration project
beneficiaries.
Sec. 890.1308 Carrier participation.
(a) All carriers who participate in the FEHB Program and provide
benefits to enrollees in the geographic areas selected as demonstration
project areas must participate in the demonstration project, except as
provided for in paragraphs (b), (c), and (d) of this section.
(b) Carriers who have less than 300 FEHB enrollees may, but are not
required to, participate in the demonstration project.
(c) Carriers may, but are not required to, participate in the
demonstration project if their service area overlaps a small portion
(as determined by OPM) of a demonstration project geographic area.
(d) Carriers offering fee-for-service plans with enrollment limited
to specific groups will not participate in the demonstration project.
[FR Doc. 99-16912 Filed 7-2-99; 8:45 am]
BILLING CODE 6325-01-U
