99-16912. Federal Employees Health Benefits (FEHB) Program and Department of Defense (DoD) Demonstration Project  

  • [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
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    Federal Register / Vol. 64, No. 128 / Tuesday, July 6, 1999 / Rules 
    and Regulations
    
    [[Page 36237]]
    
    
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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
    
    [[Page 36239]]
    
    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
    
    
    

Document Information

Effective Date:
7/6/1999
Published:
07/06/1999
Department:
Personnel Management Office
Entry Type:
Rule
Action:
Interim regulation.
Document Number:
99-16912
Dates:
The effective date of this regulation is July 6, 1999. Comments must be received on or before September 7, 1999.
Pages:
36237-36239 (3 pages)
RINs:
3206 AI63
PDF File:
99-16912.pdf
CFR: (9)
5 CFR 890.102
5 CFR 890.1301
5 CFR 890.1302
5 CFR 890.1303
5 CFR 890.1304
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