[Federal Register: May 27, 2005 (Volume 70, Number 102)]
[Rules and Regulations]
[Page 30605-30607]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27my05-1]
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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
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 875
RIN 3206-AJ71
Federal Long Term Care Insurance Regulation
AGENCY: Office of Personnel Management.
ACTION: Final rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing the final
regulations that set forth rules for the administration of the Federal
Long Term Care Insurance Program (FLTCIP).
DATES: Effective Date: May 27, 2005.
FOR FURTHER INFORMATION CONTACT: Anne Easton, (202) 606-0770, or
aseaston@opm.gov.
SUPPLEMENTARY INFORMATION: On February 4, 2003, interim regulations (68
FR 5530) governing the Federal Long Term Care Insurance Program
(FLTCIP) became effective. There was a 60-day comment period. Nine
comments were received in all regarding the regulations.
One commenter suggested that OPM revise its regulations to include
information and procedures relating to other Federal statutes and
regulations. OPM declines to do so. These regulations are for the
purpose of providing information and guidance regarding the FLTCIP and
do not purport to address the applicability or inapplicability of other
Federal statutes or regulations to the FLTCIP.
Two commenters suggested that we broaden the definition of
``qualified relative'' to include domestic partners of Federal
employees. We have determined that at this time we are not going to add
any additional groups to those defined in statute.
Five commenters requested that we delete or modify Sec. 875.407,
which states that the Carrier determines the insurability of all
applicants and that the Carrier's decision may not be appealed to OPM.
They state that the insurance underwriting and the Carrier-determined
criteria are not consistent with the intent of the FLTCIP statute.
However, we believe that Congressional intent is clear upon reading of
the statute. Section 9002(e)(3) of title 5, United States Code,
specifically states that ``(n)othing in this chapter shall be
considered to require that long-term care insurance coverage be
guaranteed to an eligible individual.''
Our intent in administering this Program is to offer coverage to
eligible individuals but also to maintain competitive premiums. To
guarantee coverage to all eligible individuals or all members of the
workforce, regardless of their health, would require significantly
higher premiums than are now being charged. This could jeopardize the
viability of the Program as the more healthy individuals may choose to
purchase their coverage elsewhere.
Four commenters requested that OPM enact an appeal process for
insurability decisions made by the Carrier. OPM believes the current
process ensures that individuals with adequate training are able to
conduct the proper review of appeals. In addition, appeals that go
beyond the internal review processes of Long Term Care Partners are
handled by an independent, third party vendor, approved by OPM. We
believe it is in the best interest of the Federal Long Term Care
Insurance Program to leave insurability decisions to trained
underwriters, as we do with the Federal Employees' Group Life Insurance
Program.
One commenter suggested that we change Sec. 875.104(c) to clarify
the enrollee's right to appeal, specifically clarifying that any appeal
of the Carrier's reconsideration decision is to be made directly to the
Carrier and not OPM. We agree that this clarification is helpful, and
are making the change. The same commenter also suggested that we change
the term ``misconduct'' in Sec. 875.210(b) (1) to ``gross
misconduct.'' We decline to do so, since relevant Federal law and
regulations refer to and describe ``misconduct,'' not ``gross
misconduct.''
We are also taking this opportunity to make several minor changes
and clarifications to the regulation.
We are clarifying in Sec. 875.101 the definition of ``Actively at
Work.'' We are broadening paragraph (1)(i) of the definition in two
areas. The interim regulations stated that to be considered actively at
work, you must be reporting for work ``at your usual place of
employment or other location to which Government business requires you
to travel.'' We are clarifying the language to ensure that a day spent
at a telecommuting location counts as reporting for work. Also, the
interim regulations did not specifically state that the requirement to
be reporting for work is met with one-half day of active work, although
this is how the requirement has been administered. The new language
makes this clear.
In addition, we are removing paragraph (1)(iii), which stated that
any type of leave or absence from work does not count as being actively
at work (except that an alternative work schedule's scheduled day off
does count as a day actively at work). This deletion means that an
alternative work schedule's scheduled day off will not count as a day
actively at work. It is treated just as a day on any other type of
leave would be treated; that is, a day not actively at work. However,
to offset this change we are liberalizing the actively at work
requirement in Sec. 875.404(b)(2) to give employees an entire week,
rather than one day, to meet the requirement. With that change,
paragraph (b)(2)(iii) became redundant to paragraph (b)(2)(i); thus we
deleted the entire paragraph for clarity's sake.
When the interim regulations were published, the FLTCIP law
specifically excluded all District of Columbia employees from
participation, even though some are eligible for FEHB coverage. The
regulations made this exclusion clear. However, since that time, Public
Law 108-7 went into effect. Section 138(a) of the law makes employees
and annuitants of the D.C. Courts (and their qualified relatives)
eligible to apply for insurance under the Program and we held an Open
Season for them. We would have changed Sec. 875.201(a)(1) to indicate
that these groups became eligible to apply for insurance under the
Program. However, later in 2003, Congress enacted Public Law 108-136,
the National Defense Authorization Act, which included new provisions
for the Federal Long Term
[[Page 30606]]
Care Insurance Program in section 561 of that law.
Section 561 of that law amends Section 9001(2)(A) of title 5,
United States Code. Three additional groups, and their qualified
relatives, are now eligible to apply for insurance under the Program:
DC Government employees and retirees who were first
employed by the DC Government before October 1, 1987,
Separated Federal employees with title to a deferred
annuity, even if they aren't yet receiving that annuity, and
Retired ``grey'' reservists, even if they are not
receiving retirement pay.
The previous addition (employees and annuitants of the DC Courts) made
by Public Law 108-7 was, in effect, superceded. (However, those DC
Courts individuals hired before October 1, 1987 are added back to the
eligible population by Public Law 108-136.)
Another change occurred in legislation (Pub. L. 107-314) giving the
Secretary of Defense the authority to determine that employees of a
Non-Appropriated Fund (NAF) instrumentality are eligible to apply for
insurance under the Federal Program. In Sec. 875.201(a) we are adding
language to treat eligible NAF employees and retirees the same as
Federal civilian employees or retirees, as the case may be, for this
Part.
Notwithstanding our ability to reflect the addition of groups that
have been added by congressional action this past year, it has become
clear that the regulations do not easily keep up with these legislative
changes. Therefore, Sec. 101, ``workforce member'' is being amended to
make it clear that when a new group is added by law it is not necessary
to amend the regulations to reflect this change. We are changing
applicable references to Federal civilian and Postal employees and
members of the uniformed services throughout the regulations to
``active workforce member.'' This is to reflect the likelihood in the
future of the addition of other groups. The changes in the wording
occur in the table of contents and in Sec. Sec. 101, 201, 204, 206,
211, 404, 405, and 410.
We are changing Sec. 875.208 pertaining to eligibility rules with
respect to qualified relatives of deceased individuals. The adult child
of a Federal civilian survivor annuitant is considered to be a
qualified relative who can apply for coverage, as is the current spouse
of that survivor. But this is not the case for qualified relatives of
the surviving spouse of a deceased member or a deceased retired member
of the uniformed services who is receiving a survivor annuity. Neither
their adult children nor their current spouses are considered qualified
relatives. We are changing the regulation to extend the same
eligibility status to all adult children and current spouses of
surviving spouses receiving an annuity, regardless of whether this is
based on civilian or uniformed service status.
We are also adding a subsection (c) to Sec. 402 to reflect that we
provide an Open Season to employees of newly eligible groups that have
been added to FLTCIP. Traditionally, this is a 60-day period where
there is abbreviated underwriting (equivalent to what was done in 2002
when the Program first became available) for those active workforce
members of the new group.
We are clarifying Sec. 875.403 to state that there are two
exceptions to the requirement for full underwriting outside of an open
season. Those exceptions are described in Sec. 875.206 and Sec.
875.405 and are for new and newly eligible employees and their spouses,
new and newly eligible active members of the uniformed services and
their spouses, and the newly married spouses of eligible employees and
active members of the uniformed services. They can apply with
abbreviated underwriting within 60 days after becoming eligible.
As mentioned previously, we are changing the actively at work
requirement in Sec. 875.404(b) (2). An active workforce member who
submits an abbreviated underwriting application must now be actively at
work at least 1 day during the calendar week immediately before the
week that contains the person's original effective date. Interim
regulations required that the person be actively at work on the
original effective date. If that date fell on a weekend or holiday, the
person had to be actively at work on the last workday before that date
for coverage to become effective. This change will make it easier for
employees to meet the actively at work requirement and should result in
fewer postponements of coverage effective dates.
E.O. 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Order 12866.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because it affects
only Federal, Postal and D.C. Government employees and annuitants,
active members of the uniformed services, retired members of the
uniformed services, their qualified relatives, and the FLTCIP
carrier(s).
List of Subjects in 5 CFR Part 875
Administrative practices and procedures, Employee benefit plans,
Government contracts, Government employees, Health insurance, Military
personnel, Organization and functions, Retirement.
U.S. Office of Personnel Management.
Dan G. Blair,
Acting Director.
0
Accordingly, the interim rule establishing 5 CFR part 875 which was
published at 68 FR 5530 on February 4, 2003, is adopted as a final rule
with the following changes:
PART 875--FEDERAL LONG TERM CARE INSURANCE PROGRAM
0
1. The authority citation for part 875 continues to read as follows:
Authority: 5 U.S.C. 9008.
0
2. Amend Sec. 875.101 by:
0
a. Remove the words ``Federal civilian or Postal employee'' wherever
they appear in the section and add, in their place, the words ``active
workforce member''.
0
b. Revise the definition of Actively at work to read as follows; and
0
c. Revise the definition of Workforce member to read as follows:
Sec. 875.101 Definition.
* * * * *
Actively at work means:
(1) That as an active workforce member other than a member of the
uniformed services you meet all of the following conditions:
(i) You are reporting for work at an approved work location and you
work at least one-half of your regularly scheduled hours for that day;
and
(ii) You are able to perform all the usual and customary duties of
your employment on your regular work schedule.
(2) For a member of the uniformed services, that you are on active
duty and are physically able to perform the duties of your position.
* * * * *
Workforce member means a Federal civilian or Postal employee,
member of the uniformed services, Federal annuitant, retired member of
the uniformed services, or member of any other eligible group, as
defined in section 9001 of title 5, United States Code. An active
workforce member is one who is currently employed or is on active duty.
[[Page 30607]]
0
3. Amend Sec. 875.104 by revising the first sentence of paragraph (c)
to read as follows:
Sec. 875.104 What are the steps required to resolve a dispute
involving benefit eligibility or payment of a claim?
* * * * *
(c) If the Carrier upholds its denial (or does not respond within
60 days), you have the right to appeal its reconsideration decision
directly to the Carrier.* * *
* * * * *
0
4. Amend Sec. 875.201 by adding a new sentence at the end of paragraph
(a)(1) and by adding a new paragraph (a)(3) to read as follows:
Sec. 875.201 Am I eligible as a Federal civilian or Postal Employee?
(a) * * *
(1) * * * There is a related exception, however: D.C. government
employees and retirees who were first employed by the D.C. government
before October 1, 1987 are eligible to apply for coverage.
* * * * *
(3) If you are a Non-Appropriated Fund (NAF) employee or retiree
you are eligible to apply when the Secretary of Defense determines such
eligibility for the NAF instrumentality that employs you, and you will
be treated the same as a Federal civilian employee or retiree (as
applicable) under this Part.
* * * * *
0
5. Amend Sec. 875.202 by revising the last sentence to read as
follows:
Sec. 875.202 Am I eligible as a Federal annuitant?
* * * Separated Federal employees with title to a deferred annuity
may apply for coverage, even if they are not yet receiving that
annuity.
0
6. Amend Sec. 875.205 by adding a paragraph (c) to read as follows:
Sec. 875.205 Am I eligible as a retired member of the uniformed
services?
* * * * *
(c) You are eligible to apply for coverage as a retired (``grey'')
reservist, even if not yet receiving retirement pay.
0
7. Amend Sec. 875.206 by:
0
a. Remove the words ``Federal civilian or Postal employee or member of
the uniformed service'' wherever they appear in the section and add, in
their place, ``active workforce member''; and
0
b. Revise the section title and paragraphs (a) and (c) to read as
follows:
Sec. 875.206 As a new active workforce member when may I apply?
(a) As a new, newly eligible, or returning active workforce member,
you may apply as follows:
(1) If you are a new active workforce member entering a position
that conveys eligibility, you may apply for coverage within 60 days
after becoming eligible.
(2) If you are entering a position that conveys eligibility as an
active workforce member from a position that did not convey
eligibility, you may apply for coverage within 60 days after becoming
eligible.
(3) If you return to active service after a break in service of 180
days or more to a position that conveys eligibility, you may apply for
coverage within 60 days after becoming eligible.
* * * * *
(c) The underwriting requirements that will be required will be
those applicable to active workforce members and their spouses during
the last open season for enrollment before the date of your
application.
* * * * *
0
8. Amend Sec. 875.208 by adding a new sentence at the end of the
paragraph to read as follows:
Sec. 875.208 May I apply as a qualified relative if the person on
whom I am basing my eligibility status has died?
* * * In this case, your adult children and your current spouse are
also considered to be qualified relatives.
0
9. Revise Sec. 875.211 to read as follows:
Sec. 875.211 What happens if my eligibility status changes after I
submit my application?
(a) If you applied as an active workforce member, and separate from
service under the MRA+10 provisions of 5 U.S.C. 8412(g), or retire
after you submit an application for coverage, but before your coverage
becomes effective, you must reapply as an annuitant and submit to full
underwriting requirements.
(b) If you applied as an active workforce member, and otherwise
separate from service, but you are a qualified relative of another
workforce member, you must reapply based on the additional underwriting
requirements specified for that type of qualified relative.
0
10. Amend Sec. 875.402 by adding a new paragraph (c) to read as
follows:
Sec. 875.402 When will open seasons be held?
* * * * *
(c) In situations where new eligibility groups are added to the
Program, and OPM determines that it is appropriate to have an open
season, OPM will provide notice and set the requirements for a special
open season limited to those eligible individuals.
0
11. Amend Sec. 875.403 by adding a new sentence at the end of the
paragraph to read as follows:
Sec. 875.403 May I apply for coverage outside of an open season?
* * * The only exceptions to the full underwriting requirements
outside of an open season are described in Sec. 875.206 and Sec.
875.405.
0
12. Amend Sec. 875.404 by revising paragraph (b) (2) to read as
follows:
Sec. 875.404 What is the effective date of coverage?
* * * * *
(b) * * *
(2) If you are an active workforce member and you are applying for
coverage under abbreviated underwriting, you also must be actively at
work at least 1 day during the calendar week immediately before the
week which contains your coverage effective date for your coverage to
become effective. You must inform the Carrier if you do not meet this
requirement. In the event you do not meet this requirement, the Carrier
will issue you a revised effective date, which will be the 1st day of
the next month. You also must meet the actively at work requirement for
any revised effective date for coverage to become effective, or you
will be issued another revised effective date in the same manner.
[FR Doc. 05-10642 Filed 5-26-05; 8:45 am]
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