[Federal Register: June 7, 2004 (Volume 69, Number 109)]
[Rules and Regulations]
[Page 31721-31722]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07jn04-1]
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Rules and Regulations
Federal Register
________________________________________________________________________
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
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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[[Page 31721]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AK48
Federal Employees Health Benefits Program: Modification of Two-
Option Limitation for Health Benefits Plans and Continuation of
Coverage for Annuitants Whose Plan Terminates an Option
AGENCY: Office of Personnel Management.
ACTION: Interim rule with request for comments.
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SUMMARY: The Office of Personnel Management (OPM) is modifying the
prohibition against Federal Employees Health Benefits (FEHB) plans
offering more than 2 options, to allow FEHB plans to offer 2 options
plus a high deductible plan. OPM is also modifying what happens when an
annuitant's health plan terminates an option, and the annuitant doesn't
make a health benefits change.
DATES: Effective June 7, 2004. OPM must receive comments by August 6,
2004.
ADDRESSES: Send written comments to Abby L. Block, Deputy Associate
Director for Employee and Family Support Policy, Strategic Human
Resources Policy Division, Office of Personnel Management, 1900 E
Street NW., Washington, DC 20415; or deliver to OPM, Room 3425, 1900 E
Street NW., Washington, DC; or FAX to (202) 606-0633.
FOR FURTHER INFORMATION CONTACT: Karen Leibach, (202) 606-0004.
SUPPLEMENTARY INFORMATION: Pub. L. 108-173, Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (the Medicare Modernization
Act, 117 Stat. 2006), enacted December 8, 2003, contains a provision
(section 1201) authorizing health savings accounts (HSAs) for
individuals who are not eligible for Medicare and who are in a high
deductible health benefits plan. A high deductible plan, as defined in
U.S. Code 223(c)(2)(A) of the title 26, is a plan with a deductible of
at least $1,000 for individual coverage or $2,000 for family coverage.
Some FEHB plans may be interested in offering eligible enrollees such a
high deductible plan product with an HSA or a health reimbursement
account (HRA) if the enrollee is not eligible for an HSA. An HRA is an
employer-provided accident or health plan, which reimburses employees
for certain medical care expenses incurred by the employee, the
employee's spouse, and dependents. However, many plans participating in
the FEHB Program already offer 2 options, and current regulations do
not permit FEHB plans to offer more than 2 options. Therefore, OPM is
revising its regulations to allow plans participating in the FEHB
Program to offer 2 options plus a high deductible plan.
OPM is also changing slightly what happens when an annuitant's plan
terminates an option, and the annuitant does not make a health benefits
change. Currently, our regulations state that if a plan has 2 options,
and one of the options is discontinued, an annuitant who does not
change health plans is considered to be enrolled in the plan's
remaining option. However, with the introduction of new products, such
as consumer-driven plans and plans with high deductibles, it may not be
in an annuitant's best interests to be ``deemed'' into a plan's
remaining option. We are revising our regulation to state that an
annuitant who doesn't make a health benefits change when his/her plan
terminates an option will be moved into the plan's remaining option if
that option reasonably approximates the terminating option. If the
remaining option does not reasonably approximate the terminating
option, such as the remaining option is a high deductible health plan
or a consumer driven plan, and the annuitant doesn't make a health
benefits change, he/she will be moved into the standard option of the
Blue Cross and Blue Shield Service Benefit Plan.
Waiver of Notice of Proposed Rulemaking
In accordance with Sec. 553(b)(3)(B) of title 5 of the U.S. Code,
I find that good cause exists for waiving the general notice of
proposed rulemaking and the 30-day delay in effectiveness for this
rule. The HSA provision of Pub. L. 108-173 became effective January 1,
2004.
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
only affects health benefits plans and annuitants participating in 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.
U.S. Office of Personnel Management.
Kay Coles James,
Director.
0
Accordingly, OPM is amending 5 CFR part 890 as follows:
PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM
0
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. 403(p), 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), and
11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251; and section 721
of Pub. L. 105-261, 112 Stat. 2061 unless otherwise noted.
0
2. Revise paragraph (b)(3) of Sec. 890.201 to read as follows:
Sec. 890.201 Minimum standards for health benefits plans.
* * * * *
(b) * * *
(3) Have more than two options and a high deductible health plan
(26 U.S.C. 223(c)(2)(A).
[[Page 31722]]
0
3. Revise paragraph (1)(4)(iii) of Sec. 890.306 to read as follows:
Sec. 890.306 When can annuitants or survivor annuitants change
enrollment or reenroll and what are the effective dates?
* * * * *
(1) * * *
(4) * * *
(iii) If a plan has more than one option, and one or more options
of the plan is discontinued, an annuitant who does not change the
enrollment is considered to be enrolled in a remaining option of the
plan. However, if OPM determines that there is no remaining option that
reasonably approximates the terminating option, the annuitant will be
considered to be enrolled in the standard option of the Blue Cross and
Blue Shield Service Benefit Plan.
* * * * *
[FR Doc. 04-12799 Filed 6-2-04; 3:28 pm]
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