[Federal Register: December 30, 2004 (Volume 69, Number 250)]
[Rules and Regulations]
[Page 78295-78296]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30de04-1]
========================================================================
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
week.
========================================================================
[[Page 78295]]
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: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Office of Personnel Management (OPM) is issuing a final
rule modifying the prohibition against Federal Employees Health
Benefits (FEHB) plans offering more than 2 options and 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 December 30, 2004.
FOR FURTHER INFORMATION CONTACT: Karen Leibach, (202) 606-0004.
SUPPLEMENTARY INFORMATION: On June 7, 2004, OPM published an interim
rule in the Federal Register (69 FR 31721) modifying the 2-option
limitation on health plans to allow FEHB plans to offer 2 options plus
a high deductible plan. The regulation also modified what happens when
an annuitant whose plan terminates an option doesn't make a health
benefits change. Such an annuitant will only be transferred to the
plan's remaining option if that option reasonably approximates the
terminating option; otherwise, the annuitant will be transferred to the
standard option of the Blue Cross and Blue Shield Service Benefit Plan.
We received comments from 1 employee union, 1 Federal agency, and 1
FEHB carrier.
One commenter opposed allowing high deductible plans and health
savings accounts (HSAs) in the FEHB Program. This commenter believes
that a high deductible/HSA plan will attract younger healthier
enrollees, leaving older, less healthy people in traditional health
plans, which will drive up premiums. The commenter also believes that
people will move back and forth, moving into traditional plans in years
when they anticipate more medical expenses and moving back into the
high deductible plan after they've had their treatment, again
increasing premiums in the traditional plans. We believe that offering
high deductible/HSA plans is consistent with OPM's overall goal of
providing FEHB enrollees with benefit options that allow greater
personal decision-making and flexibility when choosing health coverage
for themselves and their families. OPM's experience with consumer-
driven health plans has not shown any negative impact on the FEHB
premiums. We believe that people will use the coverage as intended:
spending the accounts for routine health care costs, banking the
difference for future needs, and relying on the insurance portion for a
catastrophic event.
One commenter said agencies would have problems programming their
computer systems to accept an enrollment code ending in something other
than a 1, 2, 4, or 5; the commenter suggested assigning a completely
new enrollment code to any high deductible/HSA plans. The commenter
also suggested that to avoid confusion these plans should be treated as
separate plans, rather than options of existing plans, and should have
separate brochures. These are operational issues outside the scope of
the regulations. We have forwarded the suggestions to the contracting
offices.
One commenter expressed concern that the term ``reasonably
approximate'' wasn't defined, in relation to determining whether an
annuitant in a terminating option should be transferred into a plan's
remaining option or transferred into the standard option of the Blue
Cross and Blue Shield Service Benefit Plan. Whenever a plan
terminates--whether it's the whole plan, an option, or a service area
enrollment code--OPM notifies agencies and retirement systems of the
actions they should take regarding the plan's enrollees. This
regulatory change will not require retirement systems (or agencies) to
make a determination on their own regarding whether a plan's remaining
option reasonably approximates the terminating option. OPM will
continue to provide specific instructions regarding terminations.
One commenter requested that OPM make it clear whether the
regulatory change applies to all plans, including the Blue Cross and
Blue Shield Service Benefit Plan. The commenter believes that the
Service Benefit should be allowed to offer more than 2 options. The
regulation as written could indeed apply to all plans. However, OPM
disagrees with the commenter's interpretation of the FEHB statute
regarding the Service Benefit Plan. Our interpretation is that the
statute limits the Service Benefit Plan to no more than 2 options; the
regulatory change does not negate the statutory provision. If at some
point the language in the law is changed to allow the Service Benefit
Plan to offer more than 2 options, there would be nothing in the
regulatory language to preclude them from doing so.
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 recordkeeping requirements, Retirement.
0
Accordingly, under the authority of 5 U.S.C. 8913, OPM is adopting its
interim regulations under 5 CFR part 890 as published on June 7, 2004
(69 FR 31721), as a final rule without change.
[[Page 78296]]
U.S. Office of Personnel Management.
Kay Coles James,
Director.
[FR Doc. 04-28545 Filed 12-29-04; 8:45 am]
BILLING CODE 6325-39-P