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###### Office of Personnel Management

          - 5 CFR Parts 890 and 892
          - RIN 3206-AL95

# AGENCY:

U.S. Office of Personnel Management.

# ACTION:

Final rule.

# SUMMARY:

The U.S. Office of Personnel Management (OPM) is issuing a final regulation to provide for continuation of Federal Employees Health Benefits (FEHB) coverage for certain former Senate Restaurant employees who transferred to employment with a private contractor; to add a new opportunity for eligible employees to enroll in the FEHB, or to change FEHB enrollment status, under provisions of the Children's Health Insurance Program Reauthorization Act of 2009; and to allow eligible FEHB plans to offer three options, without the requirement that one of the options be a high deductible health plan.

# DATES:

Effective December 9, 2010.

# FOR FURTHER INFORMATION CONTACT:

                        Ronald Brown, Policy Analyst, at (202) 606-0004 or                         *e-mail: ronald.brown@opm.gov.*

# SUPPLEMENTARY INFORMATION:

On April 19, 2010, OPM published proposed regulations (75 FR 20314) with miscellaneous changes, clarifications, and corrections. We received several comments requesting that the proposed change to FEHB Open Season dates begin in 2011 rather than in 2010. We received several comments that changing the FEHB Open Season dates to November 1st through November 30th each year may result in employee confusion and additional administrative inconvenience because the Open Season will end immediately after the Thanksgiving holiday weekend, instead of ending the second full work week in December. Additionally, there was one comment that the Open Season could begin or end on a weekend, instead of a week day as is currently the case. We also received a comment that enrollees eligible for Medicare would have less flexibility to make health plan decisions if the FEHB Open Season dates ended in November. Currently, Medicare enrollees have from November 15 to December 31 to make changes in their Medicare coverage. Changing the FEHB Open Season dates would adversely affect this important segment of the FEHB population. Therefore, we have decided not to amend this provision of the FEHB regulations.

One commenter asked that we continue the High Deductible Health Plans (HDHPs), including Health Savings Accounts, within the FEHB. We do not have any plans to discontinue offering HDHPs as a choice under the Program.

We received one comment from an FEHB Plan requesting permission to offer two benefit levels or, alternatively, three options without offering an HDHP. However, the Plan is allowed by Federal law to only offer two levels of benefits. The authority to permit the Plan to offer more than two levels of benefits is a matter for Congress to consider and enact, if it chooses to do so. While we continue to look for ways to ensure that the FEHB offers choice and value, we are unable to permit a carrier any flexibility not allowed by law. We have no administrative authority to permit this change by revised ruling.

## Background

### Senate Restaurants Employees

Public Law 110-279, enacted July 17, 2008, provides for certain Federal employee benefits to be continued for certain employees of the Senate Restaurants after the operations of the Senate Restaurants are contracted to be performed by a private business concern. The law provides that a Senate Restaurants employee, who was an employee of the Architect of the Capitol on the date of enactment and who accepted employment by the private business concern as part of the transition, may elect to continue certain Federal benefits during continuous employment with the business concern. We are revising the FEHB regulations to address coverage for these individuals pursuant to relevant of Public Law 110-279. We are adding § 890.112 to subpart A.

### New Enrollment Opportunities

Public Law 111-3, the Children's Health Insurance Program (CHIP) Reauthorization Act of 2009 (the Act), enacted on February 4, 2009, allows States to subsidize health insurance premium payments for certain low-income children who have access to qualified employer-sponsored health insurance coverage. FEHB-eligible enrollees who meet the criteria for child health assistance are eligible to receive State premium subsidy assistance payments to help them pay for their FEHB plan premiums. Current FEHB Program regulations already allow an eligible enrollee who loses coverage under the FEHB Program or another group health plan, including loss of eligibility or assistance under Medicaid or CHIP, to enroll or change enrollment from self only to self and family within the period beginning 31 days before and ending 60 days after the date of loss of coverage. The Act provides new opportunities for eligible employees to enroll in the FEHB Program or to change enrollment from self only to self and family when the employee or an eligible family member becomes eligible for premium assistance under CHIP. Employees must request the change in enrollment within 60 days after the date the employee or eligible family member is determined to be eligible for assistance. Employees may make these enrollment changes regardless of whether they are covered under premium conversion (pay premiums with pre-tax dollars). We are amending the regulations to reflect this enrollment opportunity. We are adding § 890.301(m).

### Change in Options Offered

                    The current regulations state that an FEHB plan shall not have more than two options and a high deductible health plan. We are revising the regulations to allow employee organization plans and health maintenance organizations to both offer two options and a high deductible health plan or to offer three options, without the requirement that one of the options be a high deductible health plan. These plans are eligible by statute to offer more than two options.                           ( print page 76616)                        This change will provide for more flexibility in contracting with health plans for modern types of benefits. These changes can be found in 890.201(b)(3)(i) and 890.201(b)(3)(ii).                

## Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (PRA) imposes certain requirements on Federal agencies in connection with their conducting or sponsoring any collection of information as defined by the PRA. Certain provisions of this final rulemaking would result in new collection of information requirements within the meaning of the PRA. The Office of Personnel Management (OPM) therefore is revising a health benefits election form, Standard Form 2809.

                    In the future, the OPM intends to publish a 60-day                     **Federal Register**                     Notice including the revised form that ties to this final rulemaking. The information collected in the notice will be submitted to the Office of Management and Budget (OMB) for review. The OMB assigned collection control number for this form is: 3206-0160.                

## 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 insurance benefits of Federal employees and annuitants. Executive Order 12866,

## Regulatory Review

This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.

## Federalism

We have examined this rule in accordance with Executive Order 13132, Federalism, and have determined that this rule will not have any negative impact on the rights, roles, and responsibilities of State, local, or Tribal governments.

# List of Subjects in 5 CFR Parts 890 and 892

      - Administrative practice and procedure
      - Employee benefit plans
      - Government employees
      - Reporting and recordkeeping requirements
      - Retirement

U.S. Office of Personnel Management.

John Berry,

Director.

Accordingly, OPM is amending 5 CFR part 890 and part 892 as follows:

# PART 890—FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

1. The authority citation for part 890 is revised to read as follows: 

Authority:5 U.S.C. 8913; Sec. 890.301 also issued under sec. 311 of Pub. L. 111-03, 123 Stat. 64; Sec. 890.111 also issued under section 1622(b) of Pub. L. 104-106, 110 Stat. 521; Sec. 890.112 also issued under section 1 of Pub. L. 110-279, 122 Stat. 2604; 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.

# Subpart A—Administration and General Provisions

2. Add § 890.112 to subpart A to read as follows: 

§ 890.112 

(a) A Senate Restaurants employee who was an employee of the Architect of the Capitol on July 17, 2008, who accepted employment with the private business concern to which the Senate Restaurants' food service operations were transferred as described in section 1 of Public Law 110-279, and who elected to continue his or her Federal employee retirement benefits is deemed to be an employee for purposes of this part during continuous employment with the private business concern or its successor. The individual shall be entitled to the benefits of, and be subject to all conditions under, the FEHB Program on the same basis as if the individual were an employee of the Federal Government.

(b) Cessation of employment with the private business concern or its successor for any period terminates eligibility for coverage under the FEHB Program as an employee during any subsequent employment by the private business concern.

(c) The private business concern or its successor must make arrangements for the withholding from pay of an individual described by paragraph (a) of this section of an amount equal to the premiums withheld from Federal employees' pay for FEHB coverage and, in accordance with procedures established by OPM, pay into the Employees Health Benefits Fund the amounts deducted from the individual's pay.

(d) The private business concern or its successor shall, in accordance with procedures established by OPM, pay into the Employees Health Benefits Fund amounts equal to any agency contributions required under the FEHB Program.

# Subpart B—Health Benefits Plans

3. Revise § 890.201(b)(3) to read as follows: 

§ 890.201 

* * * * *

(b) * * *

(3)(i) Have more than two options and a high deductible health plan (26 U.S.C. 223(c)(2)(A)) if the plan is described under 5 U.S.C. 8903(1) or (2); or

(ii) Have either more than three options, or more than two options and a high deductible health plan (26 U.S.C. 223(c)(2)(A)) if the plan is described under 5 U.S.C. 8903(3) or (4).

* * * * *

# Subpart C—Enrollment

4. Add a new paragraph (m) to § 890.301 to read as follows: 

§ 890.301 

* * * * *

(m) An employee or eligible family member becomes eligible for premium assistance under Medicaid or a State Children's Health Insurance Program (CHIP). An eligible employee may enroll and an enrolled employee may change his or her enrollment from self only to self and family, from one plan or option to another, or make any combination of these changes when the employee or an eligible family member of the employee becomes eligible for premium assistance under a Medicaid plan or CHIP. An employee must enroll or change his or her enrollment within 60 days after the date the employee or family member is determined to be eligible for assistance.

# PART 892—FEDERAL FLEXIBLE BENEFITS PLAN: PRE-TAX PAYMENT OF HEALTH BENEFITS PREMIUMS

5. The authority citation for part 892 is revised to read as follows: 

Authority:5 U.S.C 8913; 5 U.S.C. 1103(a)(7); 26 U.S.C. 125; Sec. 892.101 also issued under sec. 311 of Pub. L. 111-3, 123 Stat. 64.

# Subpart A—Administration and General Provisions

6. In § 892.101, amend the definition of *qualifying life event*                         by adding a new paragraph (13) to read as follows:                    

§ 892.101 

* * * * *
      ( print page 76617)    
*Qualifying life event * * **

(13) An employee or eligible family member becomes eligible for premium assistance under Medicaid or a State Children's Health Insurance Program (CHIP). An eligible employee may enroll and an enrolled employee may change his or her enrollment from self only to self and family, from one plan or option to another, or make any combination of these changes when the employee or an eligible family member of the employee becomes eligible for premium assistance under a Medicaid plan or a State Children's Health Insurance Program. An employee must enroll or change his or her enrollment within 60 days after the date the employee or family member is determined to be eligible for assistance.

[FR Doc. 2010-30962 Filed 12-8-10; 8:45 am]

BILLING CODE 6325-39-P