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[Federal Register: August 6, 2010 (Volume 75, Number 151)]
[Rules and Regulations]               
[Page 47452-47457]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au10-4]                         

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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[Docket ID: DoD-2010-HA-0068]
RIN 0720-AB39

 
Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); TRICARE Retired Reserve for Members of the Retired Reserve

AGENCY: Office of the Secretary, DoD.

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule establishes requirements and 
procedures for implementation of TRICARE Retired Reserve. This interim 
final rule addresses provisions of the National Defense Authorization 
Act for Fiscal Year 2010 (NDAA-10). The purpose of this interim final 
rule is to establish the TRICARE Retired Reserve program that 
implements section 705 of the NDAA-10. Section 705 allows members of 
the Retired Reserve who are qualified for non-regular retirement, but 
are not yet 60 years of age, to qualify to purchase medical coverage 
equivalent to the TRICARE Standard (and Extra) benefit unless that 
member is either enrolled in, or is eligible to enroll in, a health 
benefit plan under Chapter 89 of Title 5, United States Code, as well 
as certain survivors. The amount of the premium that qualified members 
pay to purchase these benefits will represent the full cost as 
determined on an appropriate actuarial basis for coverage under the 
TRICARE Standard (and Extra) benefit including the cost of the program 
administration. There will be one premium for member-only coverage and 
a separate premium for member and family coverage. The rules and 
procedures otherwise outlined in Part 199 of 32 CFR relating to the 
operation and administration of the TRICARE Standard and Extra programs 
including the required cost-shares, deductibles and catastrophic caps 
for retired members and their dependents will apply to this program. 
The rule is being published as an interim final rule with comment 
period in order to comply with statutory effective dates.

DATES: This rule is effective August 6, 2010. Written comments received 
at the address indicated below by October 5, 2010 will be considered 
and addressed in the final rule.

ADDRESSES: You may submit comments, identified by docket number and/or 
RIN number and title, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Federal Docket Management System Office, 1160 
Defense Pentagon, Washington, DC 20301-1160.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this Federal Register document. The 
general policy for comments and other submissions from members of the 
public is to make these submissions available for public viewing on the 
Internet at http://www.regulations.gov as they are received without 
change, including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT: Jody Donehoo, TRICARE Management 
Activity, TRICARE Policy and Operations, telephone (703) 681-0039.
    Questions regarding payment of specific claims under the TRICARE 
allowable charge method should be addressed to the appropriate TRICARE 
contractor.

SUPPLEMENTARY INFORMATION: 

I. Introduction and Background

    The purpose of this interim final rule is to establish the TRICARE 
Retired Reserve program that implements section 705 of the National 
Defense Authorization Act for Fiscal Year 2010 (NDAA-10) (Pub. L. 111-
84). Section 705 added new section 1076e to Title 10, United States 
Code. Section 1076e allows members of the Retired Reserve who are 
qualified for non-regular retirement, but are not yet 60 years of age, 
as well as certain survivors to qualify to purchase medical coverage 
equivalent to the TRICARE Standard (and Extra) benefit unless that 
member is either enrolled in, or eligible to enroll in, a health 
benefits plan under Chapter 89 of Title 5, United States Code.

II. Provisions of the Rule Regarding the TRICARE Retired Reserve 
Program

    A. Establishment of the TRICARE Retired Reserve Program (paragraph 
199.25(a)). This paragraph describes the nature, purpose, statutory 
basis, scope, and major features of TRICARE Retired Reserve, a premium-
based medical coverage program that was made available for purchase 
worldwide by certain members of the Retired Reserve, their family 
members and their surviving family members. TRICARE Retired Reserve is 
authorized by 10 U.S.C. 1076e.
    The major features of the program include making coverage available 
for purchase by any Retired Reserve member who is qualified for non-
regular

[[Page 47453]]

retirement, but is not yet 60 years of age, unless that member is 
either enrolled in, or eligible to enroll in, a health benefit plan 
under Chapter 89 of Title 5, United States Code, as well as certain 
survivors of Retired Reserve members as specified below. The amount of 
the premium that qualified members and qualified survivors pay is 
prescribed by the Assistant Secretary of Defense for Health Affairs 
(ASD(HA)) and determined using an appropriate actuarial basis. There is 
one premium for member-only coverage and a second premium for member 
and family coverage. Additionally, TRICARE rules outlined in Part 199 
of Title 32 of the CFR relating to the TRICARE Standard and Extra 
programs apply unless otherwise specified. Certain special TRICARE 
programs are not part of TRICARE Retired Reserve including the Extended 
Health Care Option (ECHO) program and the Supplemental Health Care 
Program (see Sec.  199.16) except when referred by a Military Treatment 
Facility (MTF) provider for incidental consults and the MTF provider 
maintains clinical control over the episode of care. The TRICARE 
Retiree Dental Program is already available independently for purchase 
by Retired Reserve members under 10 U.S.C. 1076c as implemented by 32 
CFR 199.22.
    Under TRICARE Retired Reserve, qualified members (or their 
qualified survivors) may purchase either the member-only type of 
coverage or the member and family type of coverage by submitting a 
completed request in the appropriate format along with an initial 
payment of the applicable premium at the time of enrollment. When their 
coverage becomes effective, TRICARE Retired Reserve beneficiaries 
receive the TRICARE Standard (and Extra) benefit. TRICARE Retired 
Reserve features the deductible and cost sharing provisions of the 
TRICARE Standard (and Extra) plan for retired members and dependents of 
retired members. Both the member and the member's covered family 
members are provided access priority for care in military treatment 
facilities on the same basis as retired members and their family 
members who are not enrolled in TRICARE Prime.
    B. Qualifications for TRICARE Retired Reserve coverage (paragraph 
199.25(b)). This paragraph defines the statutory conditions under which 
members of a Reserve component may qualify to purchase TRICARE Retired 
Reserve coverage. The Reserve components of the armed forces have the 
responsibility to determine and validate a member's qualifications to 
purchase TRICARE Retired Reserve coverage. The member's Service 
personnel office is responsible for keeping the Defense Enrollment 
Eligibility Reporting System (DEERS) current with eligibility data.
    A member qualifies to purchase TRICARE Retired Reserve coverage if 
the member meets both of the following conditions:
    (a) is a member of the Retired Reserve of a Reserve component of 
the armed forces who is qualified for a non-regular retirement at age 
60 under chapter 1223 of title 10, U.S.C., but is not age 60; and
    (b) is not enrolled, or eligible to enroll, in a health benefits 
plan under chapter 89 of title 5 U.S.C.
    If a qualified member of the Retired Reserve dies while in a period 
of TRICARE Retired Reserve coverage, the immediate family member(s) of 
such member shall remain qualified to continue existing or purchase new 
TRICARE Retired Reserve coverage until the date on which the deceased 
member of the Retired Reserve would have attained age 60 as long as 
they meet the definition of immediate family member specified below. 
This applies regardless of whether either member-only coverage or 
member and family coverage was in effect on the day of the TRICARE 
Retired Reserve member's death.
    C. TRICARE Retired Reserve premiums (paragraph 199.25(c)). Members 
are charged premiums for coverage under TRICARE Retired Reserve that 
represent the full cost of providing the TRICARE Standard (and Extra) 
benefit under this program. The total annual premium amounts shall be 
determined by the ASD(HA) using an appropriate actuarial basis and are 
established and updated annually, on a calendar year basis, by the 
ASD(HA) for qualified members of the Retired Reserve for each of the 
two types of coverage, member-only coverage and member-and-family 
coverage. Premiums are to be paid monthly. The monthly rate for each 
month of a calendar year is one-twelfth of the annual rate for that 
calendar year.
    A surviving family member of a Retired Reserve member who qualified 
for TRICARE Retired Reserve coverage as described herein will pay 
premium rates at the member-only rate if there is only one surviving 
family member to be covered by TRICARE Retired Reserve and at the 
member and family rate if there are two or more survivors to be 
covered.
    The appropriate actuarial basis used for calculating premium rates 
shall be one that most closely approximates the actual cost of 
providing care to the same demographic population as those enrolled in 
TRICARE Retired Reserve as determined by the ASD(HA). TRICARE Retired 
Reserve premiums shall be based on the actual costs of providing 
benefits to TRICARE Retired Reserve members and their family members 
during the preceding years if the population of Retired Reserve members 
enrolled in TRICARE Retired Reserve is large enough during those 
preceding years to be considered actuarially appropriate. Until such 
time that actual costs from those preceding years become available, 
TRICARE Retired Reserve premiums shall be based on the actual costs 
during the preceding calendar years for providing benefits to the 
population of retired members and their family members in the same age 
categories as the Retired Reserve population in order to make the 
underlying group actuarially appropriate.
    An adjustment may be applied to cover overhead costs for 
administration of the program by the government. Additionally, premium 
adjustments may be made to cover the prospective costs of any 
significant program changes or any actual experience in the costs of 
administering the TRICARE Retired Reserve program.
    A surviving family member of a Retired Reserve member who qualified 
for TRICARE Retired Reserve coverage as described herein will pay 
premium rates at the member-only rate if there is only one surviving 
family member to be covered by TRICARE Retired Reserve and at the 
member and family rate if there are two or more survivors to be 
covered.
    For the portion of calendar year 2010 during which the program is 
in effect, the monthly premium for member-only coverage will be 
$388.31/month (annual premium $4,659.72/year), and the monthly premium 
for member and family coverage will be $976.41/month (annual premium 
$11,716.92/year). The 2010 premiums are based on the actual costs 
during calendar years 2007 and 2008 for providing benefits to the 
population of retired members and their family members in the same age 
categories as the Retired Reserve population in order to make the 
underlying group actuarially appropriate. The historical costs were 
trended forward to 2010 and a two-percent adjustment was applied to 
cover overhead costs for administration of the program by the 
government.
    For calendar year 2011, the monthly premium for member-only 
coverage will be $408.01/month (annual premium $4,896.12/year), and the 
monthly premium for member and family coverage will be $1,020.05/month 
(annual premium $12,240.60/year). The 2011 premiums are based on the 
actual costs during calendar years 2008 and

[[Page 47454]]

2009 for providing benefits to the population of retired members and 
their family members in the same age categories as the Retired Reserve 
population in order to make the underlying group actuarially 
appropriate. The historical costs were trended forward to 2011 and a 
two-percent adjustment was applied to cover overhead costs for 
administration of the program by the government.
    D. Procedures (paragraph 199.25(d)). The Director, TRICARE 
Management Activity (TMA), may establish procedures for the following:

--Purchasing Coverage. Procedures may be established for a qualified 
member, including surviving family members, to purchase one of two 
types of coverage: Member-only coverage or member-and-family coverage. 
Immediate family members of the Retired Reserve member may be included 
in such family coverage. To purchase either type of TRICARE Retired 
Reserve coverage, Retired Reserve members or their survivors qualified 
as above must complete and submit a request in the appropriate format, 
along with an initial payment of the applicable premium required above.
--Continuation Coverage. Procedures may be established for a qualified 
member or qualified survivor to purchase TRICARE Retired Reserve 
coverage with an effective date immediately following the date of 
termination of coverage under another TRICARE program.
--Qualifying Life Event. Procedures may be established for a qualified 
member or qualified survivor to purchase TRICARE Retired Reserve 
coverage on the occasion of a qualifying life event that changes the 
immediate family composition (e.g., birth, death, adoption, divorce, 
etc.). The effective date for TRICARE Retired Reserve coverage will 
coincide with the day of the qualifying life event. It is the 
responsibility of the member to provide personnel officials with the 
necessary evidence required to substantiate the change in immediate 
family composition. Personnel officials will update DEERS in the usual 
manner. Appropriate action will be taken upon receipt of the completed 
request in the appropriate format along with an initial payment of the 
applicable premium in accordance with established procedures.
--Open Enrollment. Procedures may be established for a qualified member 
or qualified survivor to purchase TRICARE Retired Reserve coverage at 
any time. The effective date of coverage will coincide with the first 
day of a month.
--Survivor coverage under TRICARE Retired Reserve. Procedures may be 
established for a surviving family member of a Retired Reserve member 
who qualified for TRICARE Retired Reserve coverage as described above 
to continue existing or to purchase new TRICARE Retired Reserve 
coverage. Procedures similar to those for qualifying life events may be 
established for a qualified surviving family member to purchase new or 
continuing coverage with an effective date coinciding with the day of 
the member's death. Procedures similar to those for open enrollment may 
be established for a qualified surviving family member to purchase new 
coverage at any time with an effective date coinciding with the first 
day of a month.
--Changing type of coverage. Procedures may be established for TRICARE 
Retired Reserve members or qualified survivors to request to change 
type of coverage during open enrollment or on the occasion of a 
qualifying life event that changes immediate family composition as 
described above by submitting a completed request in the appropriate 
format.
--Termination. Termination of coverage for the member will result in 
termination of coverage for the member's family members in TRICARE 
Retired Reserve, except for qualified survivors as described above.
--Coverage will terminate whenever a member (or qualified survivors) 
ceases to meet the qualifications for the program. For purposes of this 
section, the member no longer qualifies for TRICARE Retired Reserve 
when the member has been eligible for more than 60 days for coverage in 
a health benefits plan under Chapter 89 of Title 5, U.S.C. This affords 
the member sufficient time to make arrangements for health coverage and 
avoid any lapses in health coverage. Further, coverage shall terminate 
when the Retired Reserve member attains the age of 60 or, if survivor 
coverage is in effect, when the deceased Retired Reserve member would 
have attained the age of 60.
--Coverage may terminate for members who gain coverage under another 
TRICARE program.
--Failure to make a premium payment in a timely manner in accordance 
with established procedures will result in termination of coverage for 
the member and any covered family members and will result in denial of 
claims for services with a date of service after the effective date of 
termination.
--Procedures may be established for covered members and survivors to 
request termination of coverage at any time by submitting a completed 
request in the appropriate format.
--Members whose coverage under TRICARE Retired Reserve terminates upon 
their request or for failure to pay premiums will not be allowed to 
purchase coverage under TRICARE Retired Reserve to begin again for a 
period of one year following the effective date of termination.
--Processing. Upon receipt of a completed request in the appropriate 
format, the appropriate enrollment actions will be processed into DEERS 
in accordance with established procedures.
--Periodic revision. Periodically, certain features, rules or 
procedures of TRICARE Retired Reserve may be revised. If such revisions 
will have a significant effect on members' or survivors' costs or 
access to care, members or survivors may be given the opportunity to 
change their type of coverage or terminate coverage coincident with the 
revisions.
    E. Preemption of State laws (paragraph 199.25(e)). This paragraph 
explains that the preemptions of State and local laws established for 
the TRICARE program also apply to TRICARE Retired Reserve. Any State or 
local law or regulation pertaining to health insurance, prepaid health 
plans, or other health care delivery, administration, and financing 
methods is preempted and does not apply in connection with TRICARE 
Retired Reserve.
    This includes State and local laws imposing premium taxes on health 
insurance carriers, underwriters or other plan managers, or similar 
taxes on such entities. Preemption does not apply to taxes, fees, or 
other payments on net income or profit realized by such entities in the 
conduct of business relating to DoD health services contracts, if those 
taxes, fees or other payments are applicable to a broad range of 
business activity. For the purposes of assessing the effect of Federal 
preemption of State and local taxes and fees in connection with DoD 
health services contracts, interpretations shall be consistent with 
those applicable to the Federal Employees Health Benefits Program under 
5 U.S.C. 8909(f).
    F. Administration (paragraph 199.25(f)). This paragraph provides 
that the Director, TRICARE Management Activity, may establish other 
rules and

[[Page 47455]]

procedures necessary for the effective administration of TRICARE 
Retired Reserve and may authorize exceptions to requirements of this 
section, if permitted by law, based on extraordinary circumstances.
    G. Terminology. The following terms are applicable to the TRICARE 
Retired Reserve program.

--Coverage. This term means the medical benefits covered under the 
TRICARE Standard or Extra programs as further outlined in other 
sections of part 199 of Title 32 of the Code of Federal Regulations, 
whether delivered in military treatment facilities or purchased from 
civilian sources.
--Immediate family member. This term means spouse (except former 
spouse) as defined in paragraph 199.3(b)(2)(i) of this part, or child 
as defined in paragraph 199.3 (b)(2)(ii).
--Qualified member. This term means a member who has satisfied all the 
criteria that must be met before the member is authorized for TRR 
coverage.
--Qualified survivor. This term means an immediate family member who 
has satisfied all the criteria that must be met before the survivor is 
authorized for TRR coverage.

III. Regulatory Procedures

    Executive Order 12866 requires certain regulatory assessments for 
any significant regulatory action that would result in an annual effect 
on the economy of $100 million or more, or have other substantial 
impacts. The Congressional Review Act establishes certain procedures 
for major rules, defined as those with similar major impacts. The 
Regulatory Flexibility Act (RFA) requires that each Federal agency 
prepare, and make available for public comment, a regulatory 
flexibility analysis when the agency issues a regulation that would 
have significant impact on a substantial number of small entities. This 
interim final rule is not subject to any of those requirements because 
it would not have any of these substantial impacts.
    This rule will not impose additional information collection 
requirements on the public under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501- 3511).
    We have examined the impact(s) of the interim final rule under 
Executive Order 13132 and it does not have policies that have 
federalism implications that would have substantial direct effects on 
the States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. The preemption provisions in the rule 
conform to law and long-established TRICARE policy. Therefore, 
consultation with State and local officials is not required.
    This rule is being published as an interim final rule with comment 
period as an exception to our standard practice of soliciting public 
comment under a proposed rule first, in order to comply with the 
requirements of the National Defense Authorization Act for Fiscal Year 
2010, Public Law 110-417, section 705, which was enacted on October 28, 
2009. This section provides in pertinent part that this provision 
applies ``to coverage for months beginning on or after October 1, 
2009.'' In order to provide coverage as soon possible consistent with 
statutory entitlement, the ASD(HA) has determined that obtaining prior 
public comment is unnecessary, impractical, and contrary to the public 
interest. Public comments are welcome and will be considered before 
publication of the final rule.

List of Subjects in 32 CFR Part 199

    Claims, Handicapped, Health insurance, and Military personnel.

0
Accordingly, 32 CFR part 199 is amended as follows:

PART 199--[AMENDED]

0
1. The authority citation for part 199 continues to read as follows:

    Authority:  5 U.S.C. 301; 10 U.S.C. chapter 55.

0
2. Section 199.2(b) is amended by adding at the appropriate place in 
alphabetical order the definition of ``TRICARE Retired Reserve'' to 
read as follows:

Sec.  199.2  Definitions.

* * * * *
    (b) * * *
    TRICARE Retired Reserve. The program established to allow members 
of the Retired Reserve who are qualified for non-regular retirement, 
but are not yet 60 years of age, as well as certain survivors to 
qualify to purchase medical coverage equivalent to the TRICARE Standard 
(and Extra) benefit unless that member is either enrolled in, or 
eligible to enroll in, a health benefit plan under Chapter 89 of Title 
5, United States Code. The program benefits and requirements are set 
forth in section 25 of this Part.
* * * * *

0
3. Section 199.25 is added as follows:

Sec.  199.25  TRICARE Retired Reserve.

    (a) Establishment. TRICARE Retired Reserve is established for the 
purpose of offering the medical benefits provided under the TRICARE 
Standard and Extra programs to qualified members of the Retired 
Reserve, their immediate family members, and qualified survivors.
    (1) Purpose. As specified in paragraph (c) of this section, TRICARE 
Retired Reserve is a premium-based health plan that is available for 
purchase by any Retired Reserve member who is qualified for non-regular 
retirement, but is not yet 60 years of age, unless that member is 
either enrolled in, or eligible to enroll in, a health benefit plan 
under Chapter 89 of Title 5, United States Code, as well as certain 
survivors of Retired Reserve members.
    (2) Statutory Authority. TRICARE Retired Reserve is authorized by 
10 U.S.C. 1076e.
    (3) Scope of the Program. TRICARE Retired Reserve is geographically 
applicable to the same extent as specified in 32 CFR 199.1(b)(1).
    (4) Major Features of TRICARE Retired Reserve. The major features 
of the program include the following:
    (i) TRICARE rules applicable. (A) Unless specified in this section 
or otherwise prescribed by the ASD (HA), provisions of 32 CFR part 199 
apply to TRICARE Retired Reserve.
    (B) Certain special programs established in 32 CFR part 199 are not 
available to members covered under TRICARE Retired Reserve. These 
include the Extended Health Care Option (ECHO) program and the 
Supplemental Health Care Program (see Sec.  199.16) except when 
referred by a Military Treatment Facility (MTF) provider for incidental 
consults and the MTF provider maintains clinical control over the 
episode of care. The TRICARE Retiree Dental Program (see Sec.  199.13) 
is independent of this program and is otherwise available to all 
members who qualify for the TRICARE Retiree Dental Program whether or 
not they purchase TRICARE Retired Reserve coverage. The Continued 
Health Care Benefits Program (see Sec.  199.13) is also independent of 
this program and is otherwise available to all members who qualify for 
the Continued Health Care Benefits Program.
    (ii) Premiums. TRICARE Retired Reserve coverage is available for 
purchase by any Retired Reserve member if the member fulfills all of 
the statutory qualifications as well as certain survivors. A member of 
the Retired Reserve or qualified survivor covered under TRICARE Retired 
Reserve shall pay the amount equal to the total amount that the ASD(HA) 
determines on an appropriate actuarial basis as being appropriate for 
that coverage. There is one premium rate for member-only coverage and 
one

[[Page 47456]]

premium rate for member and family coverage.
    (iii) Procedures. Under TRICARE Retired Reserve, Retired Reserve 
members (or their survivors) who fulfilled all of the statutory 
qualifications may purchase either the member-only type of coverage or 
the member and family type of coverage by submitting a completed 
request in the appropriate format along with an initial payment of the 
applicable premium. Procedures for purchasing coverage and paying 
applicable premiums are prescribed in this section.
    (iv) Benefits. When their coverage becomes effective, TRICARE 
Retired Reserve beneficiaries receive the TRICARE Standard (and Extra) 
benefit including access to military treatment facilities on a space 
available basis and pharmacies, as described in Sec.  199.17 of this 
part. TRICARE Retired Reserve coverage features the deductible and cost 
share provisions of the TRICARE Standard (and Extra) plan for retired 
members and dependents of retired members. Both the member and the 
member's covered family members are provided access priority for care 
in military treatment facilities on the same basis as retired members 
and their dependents who are not enrolled in TRICARE Prime as described 
in paragraph 199.17(d)(1)(E) of this Part.
    (b) Qualifications for TRICARE Retired Reserve coverage--(1) 
Retired Reserve Member. A Retired Reserve member qualifies to purchase 
TRICARE Retired Reserve coverage if the member meets both the following 
criteria:
    (i) Is a member of a Reserve component of the armed forces who is 
qualified for a non-regular retirement at age 60 under chapter 1223 of 
title 10, U.S.C., but who is not yet age 60 and
    (ii) Is not enrolled in, or eligible to enroll in, a health 
benefits plan under chapter 89 of title 5, U.S.C.
    (2) Retired Reserve Survivor. If a qualified member of the Retired 
Reserves dies while in a period of TRICARE Retired Reserve coverage, 
the immediate family member(s) of such member shall remain qualified to 
purchase new or continue existing TRICARE Retired Reserve coverage 
until the date on which the deceased member of the Retired Reserve 
would have attained age 60 as long as they meet the definition of 
immediate family members specified in paragraph (g)(2) of this section. 
This applies regardless whether either member-only coverage or member 
and family coverage was in effect on the day of the TRICARE Retired 
Reserve member's death.
    (c) TRICARE Retired Reserve premiums. Members are charged premiums 
for coverage under TRICARE Retired Reserve that represent the full cost 
of the program as determined by the ASD(HA) utilizing an appropriate 
actuarial basis for the provision of the benefits provided under the 
TRICARE Standard and Extra programs for the TRICARE Retired Reserve 
eligible beneficiary population. Premiums are to be paid monthly. The 
monthly rate for each month of a calendar year is one-twelfth of the 
annual rate for that calendar year.
    (1) Annual establishment of rates. (i) TRICARE Retired Reserve 
monthly premium rates shall be established and updated annually on a 
calendar year basis by the ASD(HA) for each of the two types of 
coverage, member-only coverage and member-and-family coverage.
    (ii) The appropriate actuarial basis used for calculating premium 
rates shall be one that most closely approximates the actual cost of 
providing care to the same demographic population as those enrolled in 
TRICARE Retired Reserve as determined by the ASD(HA). TRICARE Retired 
Reserve premiums shall be based on the actual costs of providing 
benefits to TRICARE Retired Reserve members and their dependents during 
the preceding years if the population of Retired Reserve members 
enrolled in TRICARE Retired Reserve is large enough during those 
preceding years to be considered actuarially appropriate. Until such 
time that actual costs from those preceding years becomes available, 
TRICARE Retired Reserve premiums shall be based on the actual costs 
during the preceding calendar years for providing benefits to the 
population of retired members and their dependents in the same age 
categories as the retired reserve population in order to make the 
underlying group actuarially appropriate. An adjustment may be applied 
to cover overhead costs for administration of the program by the 
government.
    (2) Premium adjustments. In addition to the determinations 
described in paragraph (c)(1) of this section, premium adjustments may 
be made prospectively for any calendar year to reflect any significant 
program changes or any actual experience in the costs of administering 
the TRICARE Retired Reserve Program.
    (3) Survivor Premiums. A surviving family member of a Retired 
Reserve member who qualified for TRICARE Retired Reserve coverage as 
described herein will pay premium rates at the member-only rate if 
there is only one surviving family member to be covered by TRICARE 
Retired Reserve and at the member-and-family rate if there are two or 
more survivors to be covered.
    (d) Procedures. The Director, TRICARE Management Activity (TMA), 
may establish procedures for the following.
    (1) Purchasing Coverage. Procedures may be established for a 
qualified member to purchase one of two types of coverage: member-only 
coverage or member and family coverage. Immediate family members of the 
Retired Reserve member may be included in such family coverage. To 
purchase either type of TRICARE Retired Reserve coverage for effective 
dates of coverage described below, Retired Reserve members and 
survivors qualified under either paragraph (b)(1) or (b)(2) of this 
section must submit a request in the appropriate format, along with an 
initial payment of the applicable premium required by paragraph (c) of 
this section in accordance with established procedures.
    (i) Continuation Coverage. Procedures may be established for a 
qualified member or qualified survivor to purchase TRICARE Retired 
Reserve coverage with an effective date immediately following the date 
of termination of coverage under another TRICARE program.
    (ii) Qualifying Life Event. Procedures may be established for a 
qualified member or qualified survivor to purchase TRICARE Retired 
Reserve coverage on the occasion of a qualifying life event that 
changes the immediate family composition (e.g., birth, death, adoption, 
divorce, etc.) that is eligible for coverage under TRICARE Retired 
Reserve. The effective date for TRICARE Retired Reserve coverage will 
coincide with the date of the qualifying life event. It is the 
responsibility of the member to provide personnel officials with the 
necessary evidence required to substantiate the change in immediate 
family composition. Personnel officials will update DEERS in the usual 
manner. Appropriate action will be taken upon receipt of the completed 
request in the appropriate format along with an initial payment of the 
applicable premium in accordance with established procedures.
    (iii) Open Enrollment. Procedures may be established for a 
qualified member or qualified survivor to purchase TRICARE Retired 
Reserve coverage at any time. The effective date of coverage will 
coincide with the first day of a month.
    (iv) Survivor coverage under TRICARE Retired Reserve. Procedures 
may be established for a surviving family member of a qualified Retired 
Reserve member who qualified for TRICARE Retired Reserve coverage as 
described in paragraph (b)(2) of this section to

[[Page 47457]]

purchase new TRICARE Retired Reserve coverage or continue existing 
TRICARE Retired Reserve coverage. Procedures similar to those for 
qualifying life events may be established for a qualified surviving 
family member to purchase new or continuing coverage with an effective 
date coinciding with the day of the member's death. Procedures similar 
to those for open enrollment may be established for a qualified 
surviving family member to purchase new coverage at any time with an 
effective date coinciding with the first day of a month.
    (2) Changing type of coverage. Procedures may be established for 
TRICARE Retired Reserve members/survivors to request to change type of 
coverage during open enrollment as described in paragraph (d)(1)(iii) 
of this section or on the occasion of a qualifying life event that 
changes immediate family composition as described in paragraph 
(d)(1)(ii) of this section by submitting a completed request in the 
appropriate format.
    (3) Termination. Termination of coverage for the member will result 
in termination of coverage for the member's family members in TRICARE 
Retired Reserve, except as described in paragraphs (d)(1)(iv) of this 
section. The termination will become effective in accordance with 
established procedures.
    (i) Coverage shall terminate for members or their survivors who no 
longer qualify for TRICARE Retired Reserve as specified in paragraph 
(c) of this section. For purposes of this section, the member or their 
survivor no longer qualifies for TRICARE Retired Reserve when the 
member has been eligible for coverage in a health benefits plan under 
Chapter 89 of Title 5, U.S.C. for more than 60 days. Further, coverage 
shall terminate when the Retired Reserve member attains the age of 60 
or, if survivor coverage is in effect, when the deceased Retired 
Reserve member would have attained the age of 60.
    (ii) Coverage may terminate for members and survivors who gain 
coverage under another TRICARE program.
    (iii) Coverage shall terminate for members and survivors who fail 
to make a premium payment in accordance with established procedures.
    (iv) Procedures may be established for covered members and 
survivors to request termination of coverage at any time by submitting 
a completed request in the appropriate format.
    (v) Members or qualified survivors whose coverage under TRICARE 
Retired Reserve terminates under paragraph (d)(3)(iii) or (d)(3)(iv) of 
this section will not be allowed to purchase coverage under TRICARE 
Retired Reserve to begin again for a period of one year following the 
effective the date of termination.
    (4) Processing. Upon receipt of a completed request in the 
appropriate format, enrollment actions will be processed into DEERS in 
accordance with established procedures.
    (5) Periodic revision. Periodically, certain features, rules or 
procedures of TRICARE Retired Reserve may be revised. If such revisions 
will have a significant effect on members' or survivors' costs or 
access to care, members or survivors may be given the opportunity to 
change their type of coverage or terminate coverage coincident with the 
revisions.
    (e) Preemption of State laws.-- (1) Pursuant to 10 U.S.C. 1103, the 
Department of Defense has determined that in the administration of 
chapter 55 of title 10, U.S. Code, preemption of State and local laws 
relating to health insurance, prepaid health plans, or other health 
care delivery or financing methods is necessary to achieve important 
Federal interests, including but not limited to the assurance of 
uniform national health programs for military families and the 
operation of such programs, at the lowest possible cost to the 
Department of Defense, that have a direct and substantial effect on the 
conduct of military affairs and national security policy of the United 
States. This determination is applicable to contracts that implement 
this section.
    (2) Based on the determination set forth in paragraph (f)(1) of 
this section, any State or local law or regulation pertaining to health 
insurance, prepaid health plans, or other health care delivery, 
administration, and financing methods is preempted and does not apply 
in connection with TRICARE Retired Reserve. Any such law, or regulation 
pursuant to such law, is without any force or effect, and State or 
local governments have no legal authority to enforce them in relation 
to TRICARE Retired Reserve. (However, the Department of Defense may, by 
contract, establish legal obligations on the part of DoD contractors to 
conform with requirements similar to or identical to requirements of 
State or local laws or regulations with respect to TRICARE Retired 
Reserve).
    (3) The preemption of State and local laws set forth in paragraph 
(f)(2) of this section includes State and local laws imposing premium 
taxes on health insurance carriers or underwriters or other plan 
managers, or similar taxes on such entities. Such laws are laws 
relating to health insurance, prepaid health plans, or other health 
care delivery or financing methods, within the meaning of 10 U.S.C. 
1103. Preemption, however, does not apply to taxes, fees, or other 
payments on net income or profit realized by such entities in the 
conduct of business relating to DoD health services contracts, if those 
taxes, fees or other payments are applicable to a broad range of 
business activity. For the purposes of assessing the effect of Federal 
preemption of State and local taxes and fees in connection with DoD 
health services contracts, interpretations shall be consistent with 
those of the Federal Employees Health Benefits Program under 5 U.S.C. 
8909(f).
    (f) Administration. The Director, TRICARE Management Activity, may 
establish other rules and procedures for the effective administration 
of TRICARE Retired Reserve and may authorize exceptions to requirements 
of this section, if permitted by law, based on extraordinary 
circumstances.
    (g) Terminology. The following terms are applicable to the TRICARE 
Retired Reserve program.
    (1) Coverage. This term means the medical benefits covered under 
the TRICARE Standard or Extra programs as further outlined in other 
sections of Part 199 of Title 32 of the Code of Federal Regulations, 
whether delivered in military treatment facilities or purchased from 
civilian sources.
    (2) Immediate family member. This term means spouse (except former 
spouses) as defined in paragraph 199.3(b)(2)(i) of this part, or child 
as defined in paragraph 199.3 (b)(2)(ii).
    (3) Qualified member. This term means a member who has satisfied 
all the criteria that must be met before the member is authorized for 
TRR coverage.
    (4) Qualified survivor. This term means an immediate family member 
who has satisfied all the criteria that must be met before the survivor 
is authorized for TRR coverage.

    Dated: July 26, 2010.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2010-19313 Filed 8-5-10; 8:45 am]
BILLING CODE 5001-06-P
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