I

103D CONGRESS

1ST SESSION H. R. 45

To amend title 5, United States Code, to reform the program under which

health benefits are provided to Federal employees.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. ACKERMAN (for himself and Mrs. MORELLA) introduced the following bill;

which was referred to the Committee on Post Office and Civil Service

A BILL

To amend title 5, United States Code, to reform the program

under which health benefits are provided to Federal employees.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Federal Employees

5 Health Benefits Reform Act of 1993’’.

6 SEC. 2. REVISED PROGRAM.

7 Chapter 89 of title 5, United States Code, is amended

8 to read as follows:

‘‘CHAPTER 89—HEALTH INSURANCE

‘‘Sec.

‘‘8901. Definitions.
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‘‘8902. Eligibility requirements for individual coverage.

‘‘8903. General program description.

‘‘8904. Benefits under the Governmentwide plan.

‘‘8905. Contributions under the Governmentwide plan.

‘‘8906. Utilization review under the Governmentwide plan.

‘‘8907. Administration of the Governmentwide plan.

‘‘8908. Prepayment plans.

‘‘8909. Supplementary plans.

‘‘8910. Contract requirements.

‘‘8911. Automatic coverage; elections of coverage.

‘‘8911a. Continued coverage for certain individuals.

‘‘8911b. Coverage for certain other employees.

‘‘8911c. Coverage of restored employees and survivor or disability annuitants.

‘‘8911d. Double coverage; change in family status.

‘‘8911e. Clarifying provisions.

‘‘8912. Flexible spending plan.

‘‘8913. Federal Employees Health Benefits Board.

‘‘8914. Employees Health Benefits Fund.

‘‘8915. Debarment and other sanctions against providers.

‘‘8916. Open enrollment periods; informational requirements.

‘‘8917. Studies, reports, and audits.

‘‘8918. Jurisdiction of courts.

‘‘8919. Regulations.

‘‘8920. Effect of other statutes.

1 ‘‘§ 8901. Definitions

2 ‘‘For the purpose of this chapter—

3 ‘‘(1) the term ‘employee’ means—

4 ‘‘(A) the President;

5 ‘‘(B) a Member of Congress;

6 ‘‘(C) a Congressional employee;

7 ‘‘(D) an individual first employed by the

8 government of the District of Columbia before

9 October 1, 1987;

10 ‘‘(E) an individual employed by Gallaudet

11 College;

12 ‘‘(F) an individual employed by a county

13 committee established under section 8(b) of the

14 Soil Conservation and Domestic Allotment Act;
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1 ‘‘(G) an individual appointed to a position

2 on the office staff of a former President under

3 section 1(b) of the Act of August 25, 1958;

4 ‘‘(H) an individual appointed to a position

5 on the office staff of a former President or a

6 former Vice President under section 4 of the

7 Presidential Transition Act of 1963 who, imme8 diately before the date of such appointment,

9 was an employee as defined under any other

10 subparagraph of this paragraph; and

11 ‘‘(I) an employee (as defined by section

12 2105) not otherwise specified in any of the pre13 ceding subparagraphs;

14 but does not include—

15 ‘‘(i) an employee of a corporation super16 vised by the Farm Credit Administration if pri17 vate interests elect or appoint a member of the

18 board of directors;

19 ‘‘(ii) an individual who is not a citizen or

20 national of the United States and whose perma21 nent duty station is outside the United States,

22 unless, on September 30, 1979, the individual

23 was an employee for the purpose of this chapter

24 (as then in effect), by reason of service in an

25 Executive agency, the United States Postal
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1 Service, or the Smithsonian Institution in the

2 area which was then known as the Canal Zone;

3 ‘‘(iii) an employee of the Tennessee Valley

4 Authority; or

5 ‘‘(iv) an employee excluded by regulation of

6 the Office of Personnel Management under sec7 tion 8919(b);

8 ‘‘(2) the term ‘Government’ means the Govern9 ment of the United States and the government of

10 the District of Columbia;

11 ‘‘(3) the term ‘annuitant’ means—

12 ‘‘(A) an employee who retires—

13 ‘‘(i) on an immediate annuity under

14 subchapter III of chapter 83, or another

15 retirement system for employees of the

16 Government, after 5 or more years of serv17 ice;

18 ‘‘(ii) under section 8412 or 8414; or

19 ‘‘(iii) for disability under subchapter

20 III of chapter 83, chapter 84, or another

21 retirement system for employees of the

22 Government;

23 ‘‘(B) a family member who receives an im24 mediate annuity as the survivor of an employee

25 (including a family member entitled to an
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1 amount under section 8442(b)(1)(A), whether

2 or not such family member is entitled to an an3 nuity under section 8442(b)(1)(B)) or of a re4 tired employee described by subparagraph (A);

5 ‘‘(C) an employee who receives monthly

6 compensation under subchapter I of chapter 81

7 and who is determined by the Secretary of

8 Labor to be unable to return to duty; and

9 ‘‘(D) a family member who receives month10 ly compensation under subchapter I of chapter

11 81 as the surviving beneficiary of—

12 ‘‘(i) an employee who dies as a result

13 of injury or illness compensable under that

14 subchapter; or

15 ‘‘(ii) a former employee who is sepa16 rated after having completed 5 or more

17 years of service and who dies while receiv18 ing monthly compensation under that sub19 chapter and who has been held by the Sec20 retary to have been unable to return to

21 duty;

22 ‘‘(4) the term ‘service’, as used by paragraph

23 (3), means service which is creditable under sub24 chapter III of chapter 83 or chapter 84;
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1 ‘‘(5) a reference to the family, or members of

2 the family, of an individual shall be considered to be

3 a reference to—

4 ‘‘(A) the spouse of such individual; and

5 ‘‘(B) each child of such individual;

6 ‘‘(6) the term ‘health benefits plan’ means a

7 group insurance policy or contract, medical or hos8 pital service agreement, membership or subscription

9 contract, or similar group arrangements provided by

10 a carrier for the purpose of providing, paying for, or

11 reimbursing expenses for health services;

12 ‘‘(7) the term ‘carrier’ means a voluntary asso13 ciation, corporation, partnership, or other non14 governmental organization which is lawfully engaged

15 in providing, paying for, or reimbursing the cost of,

16 health services under group insurance policies or

17 contracts, medical or hospital service agreements,

18 membership or subscription contracts, or similar

19 group arrangements, in consideration of premiums

20 or other periodic charges payable to the carrier, in21 cluding a health benefits plan duly sponsored or un22 derwritten by an employee organization;

23 ‘‘(8) the term ‘employee organization’ means

24 any association or other organization which satisfies

25 the definition given that term under the provisions
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1 of this chapter (as last in effect before the date of

2 enactment of the Federal Employees Health Bene3 fits Reform Act of 1993);

4 ‘‘(9) the term ‘dependent’, in the case of any

5 child, means that the employee, annuitant, or other

6 enrollee involved is either living with or contributing

7 to the support of such child, as determined in ac8 cordance with regulations prescribed by the Office;

9 ‘‘(10) the term ‘former spouse’ means a former

10 spouse of an employee, former employee, or annu11 itant—

12 ‘‘(A) who has not remarried before age 55

13 after the marriage to the employee, former em14 ployee, or annuitant was dissolved;

15 ‘‘(B) who was enrolled in a basic plan

16 under this chapter (or an approved health bene17 fits plan under this chapter, as previously in ef18 fect) as a family member at any time during

19 the 18-month period before the date of the dis20 solution of the marriage to the employee,

21 former employee, or annuitant; and

22 ‘‘(C)(i) who is receiving any portion of an

23 annuity under section 8345(j) or 8467 or a sur24 vivor annuity under section 8341(h) or 8445

25 (or benefits similar to either of the aforemen-
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1 tioned annuity benefits under a retirement sys2 tem for Government employees other than the

3 Civil Service Retirement System or the Federal

4 Employees’ Retirement System);

5 ‘‘(ii) as to whom a court order or a decree

6 referred to in section 8341(h), 8345(j), 8445,

7 or 8467 (or similar provision of law under any

8 such retirement system other than the Civil

9 Service Retirement System or the Federal Em10 ployees’ Retirement System) has been issued, or

11 for whom an election has been made under sec12 tion 8339(j)(3) or 8417(b) (or similar provision

13 of law); or

14 ‘‘(iii) who is otherwise entitled to an annu15 ity or any portion of an annuity as a former

16 spouse under a retirement system for Govern17 ment employees;

18 except that such term shall not include any such

19 unremarried former spouse of a former employee

20 whose marriage was dissolved after the former em21 ployee’s separation from the service (other than by

22 retirement);

23 ‘‘(11) the term ‘child’ means—

24 ‘‘(A) an unmarried dependent child under

25 22 years of age, including—
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1 ‘‘(i) an adopted child or recognized

2 natural child; and

3 ‘‘(ii) a stepchild or foster child, but

4 only if the child lives with the employee,

5 annuitant, or other enrollee in a regular

6 parent-child relationship;

7 ‘‘(B) an unmarried dependent child, as de8 scribed in subparagraph (A) (except for being

9 22 years of age or older), who is incapable of

10 self-support because of mental or physical dis11 ability which existed before age 22; and

12 ‘‘(C) an unmarried dependent child, as de13 scribed in subparagraph (A) (except for being

14 at least 22 but less than 23 years of age, ex15 cluding any child under subparagraph (B)),

16 who is a student regularly pursuing a full-time

17 course of study or training in residence in a

18 high school, trade school, technical or vocational

19 institute, junior college, college, university, or

20 comparable recognized educational institution;

21 ‘‘(12) the term ‘basic health benefits plan’ or

22 ‘basic plan under this chapter’ means—

23 ‘‘(A) the Governmentwide plan (as de24 scribed in sections 8904 through 8907); and
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1 ‘‘(B) an approved health benefits plan de2 scribed in section 8908;

3 ‘‘(13) the term ‘supplementary health benefits

4 plan’ or ‘supplementary plan under this chapter’

5 means an approved health benefits plan described in

6 section 8909;

7 ‘‘(14) the term ‘enrollee’, as used with respect

8 to a plan, means an individual enrolled in such plan;

9 ‘‘(15) the term ‘covered individual’, as used

10 with respect to a plan, means—

11 ‘‘(A) an enrollee in such plan; and

12 ‘‘(B) each individual covered by such plan

13 as a member of the enrollee’s family;

14 ‘‘(16) the term ‘Board’ means the Federal Em15 ployees Health Benefits Board under section 8913;

16 ‘‘(17) the term ‘Fund’ means the Employees

17 Health Benefits Fund under section 8914;

18 ‘‘(18) the term ‘provider of health care services

19 or supplies’ or ‘provider’ means a physician, hos20 pital, or other individual or entity which furnishes

21 health care services or supplies;

22 ‘‘(19) the term ‘administrative year’ means a

23 fiscal year;

24 ‘‘(20) the term ‘provider-agreement program’

25 means a program under which participating provid-
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1 ers agree to provide health services or supplies to

2 covered individuals under terms and conditions mu3 tually agreed to by the provider and the carrier in4 volved;

5 ‘‘(21) the term ‘exclusive provider-agreement

6 program’, as used with respect to a particular type

7 of benefit, means a program under which payment

8 or reimbursement for health services or supplies re9 lating to that type of benefit are available only if the

10 services or supplies are obtained from a provider

11 participating in the program;

12 ‘‘(22) the term ‘mail order prescription drug

13 program’ means a program under which a prescrip14 tion for not less than a 21-day supply and not more

15 than a 90-day supply of medication may be filled or

16 refilled by mail; and

17 ‘‘(23) the term ‘administrative year deductible’,

18 as used with respect to the Governmentwide plan,

19 means the deductible which applies under section

20 8904(c)(2)(A)(i).

21 ‘‘§ 8902. Eligibility requirements for individual cov22 erage

23 ‘‘An individual’s eligibility for coverage under this

24 chapter shall be determined under sections 8911 through

25 8911e.
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1 ‘‘§ 8903. General program description

2 ‘‘Benefits under this chapter shall be provided

3 under—

4 ‘‘(1) the Governmentwide plan (as described in

5 sections 8904 through 8907);

6 ‘‘(2) group-practice or individual-practice pre7 payment plans (or any combination thereof), as de8 scribed in section 8908; and

9 ‘‘(3) supplementary health benefits plans, as de10 scribed in section 8909.

11 ‘‘§ 8904. Benefits under the Governmentwide plan

12 ‘‘(a) The Governmentwide plan shall offer benefits

13 under a standard option and high option, respectively.

14 ‘‘(b)(1) Under the standard option, the following

15 types of benefits shall be covered to the following extent

16 (subject to any term or condition under this paragraph

17 or subsection (c)):

18 ‘‘(A) Hospital benefits—80 percent (subject to

19 a $200 per admission deductible).

20 ‘‘(B) Surgical-medical benefits—80 percent.

21 ‘‘(C) X-rays and laboratory tests—80 percent.

22 ‘‘(D) Emergency and accidental benefits—100

23 percent.

24 ‘‘(E) Prescribed drugs—75 percent (subject to

25 a $10 copayment per prescription or refill, if ob-
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1 tained through a mail order prescription drug pro2 gram under section 8907(b)(2)(C)(ii)(III)).

3 ‘‘(F) Well-baby benefits—80 percent.

4 ‘‘(G) Mammography—80 percent.

5 ‘‘(2)(A) Benefits under the high option shall be as

6 set forth in subparagraph (B) or (C), as applicable, de7 pending on whether or not they are obtained through a

8 provider-agreement program under section

9 8907(b)(2)(C)(ii)(I).

10 ‘‘(B) If not obtained through such a provider-agree11 ment program, the following types of benefits shall be cov12 ered to the following extent (subject to any term or condi13 tion under this subparagraph or subsection (c)):

14 ‘‘(i) Hospital benefits—90 percent (subject to a

15 $100 per admission deductible).

16 ‘‘(ii) Surgical-medical benefits—85 percent.

17 ‘‘(iii) X-rays and laboratory tests—85 percent.

18 ‘‘(iv) Emergency and accidental benefits—100

19 percent.

20 ‘‘(v) Prescribed drugs—80 percent (subject to a

21 $5 copayment per prescription or refill, if obtained

22 through a mail order prescription drug program

23 under section 8907(b)(2)(C)(ii)(III)).

24 ‘‘(vi) Well-baby benefits—85 percent.

25 ‘‘(vii) Mammography—85 percent.
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1 ‘‘(C) If obtained through such a provider-agreement

2 program, the following types of benefits shall be covered

3 to the following extent (subject to any term or condition

4 under this subparagraph or subsection (c)):

5 ‘‘(i) Hospital benefits—100 percent.

6 ‘‘(ii) Surgical-medical benefits—100 percent.

7 ‘‘(iii) X-rays and laboratory tests—100 percent.

8 ‘‘(iv) Emergency and accidental benefits—100

9 percent.

10 ‘‘(v) Prescribed drugs—85 percent (subject to a

11 $5 copayment per prescription or refill, if obtained

12 through a mail order prescription drug program

13 under section 8907(b)(2)(C)(ii)(III)).

14 ‘‘(vi) Well-baby benefits—100 percent.

15 ‘‘(vii) Mammography—100 percent.

16 ‘‘(3)(A) In addition to the respective benefits de17 scribed in paragraph (1) and paragraph (2) (B) and (C),

18 mental health and substance abuse benefits—

19 ‘‘(i) shall be provided under the standard and

20 high options to the extent set forth in subparagraphs

21 (B) and (C), respectively (subject to clause (ii) and

22 any term or condition under subparagraph (B) or

23 (C) or subsection (c)); and

24 ‘‘(ii) shall not be available except to the extent

25 that the benefit is received through an exclusive pro-
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1 vider-agreement program under section

2 8907(b)(2)(C)(ii)(II).

3 ‘‘(B) Mental health and substance abuse benefits

4 under the standard option shall be as follows:

5 ‘‘(i) Inpatient basis—75 percent (subject to a

6 $200 per admission deductible).

7 ‘‘(ii) Outpatient basis—75 percent (up to 30

8 visits per individual per administrative year).

9 ‘‘(C) Mental health and substance abuse benefits

10 under the high option shall be as follows:

11 ‘‘(i) Inpatient basis—80 percent.

12 ‘‘(ii) Outpatient basis—75 percent (up to 100

13 visits per individual per administrative year, but

14 with any visits beyond 50 in an administrative year

15 subject to a specific determination under section

16 8906 that more than 50 visits are necessary).

17 ‘‘(4) The Federal Employees Health Benefits Board

18 may submit to Congress recommendations for any addi19 tional benefits, or changes in benefits, under the Govern20 mentwide plan which the Board considers appropriate.

21 Any such recommendations—

22 ‘‘(A) shall be consistent with the intent that the

23 same types of benefits shall be covered under both

24 options; and
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1 ‘‘(B) shall include the Board’s estimate of any

2 resulting costs or savings anticipated during each of

3 the first 5 administrative years of their implementa4 tion.

5 ‘‘(c)(1) Subject to paragraph (2), benefits under the

6 Governmentwide plan shall be specifically defined, and

7 shall be subject to such maximums, limitations, exclusions,

8 and other terms or conditions as the Board, in consulta9 tion with the Office of Personnel Management, shall by

10 regulation prescribe.

11 ‘‘(2) Such regulations shall provide that—

12 ‘‘(A)(i) a deductible of $250 per administrative

13 year under the standard option, and $150 per ad14 ministrative year under the high option, must be

15 met by a covered individual before any benefits shall

16 be payable by the plan on such individual’s behalf;

17 except that

18 ‘‘(ii) in the case of a family enrollment, once

19 the deductible is met by any 2 family members, the

20 deductible shall be waived for any other members of

21 the family for the rest of the administrative year;

22 ‘‘(B) any payment made to or on behalf of an

23 individual for a covered charge shall be based on the

24 lesser of—
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1 ‘‘(i) the actual charge for the service or

2 item involved; or

3 ‘‘(ii) the reasonable and customary charge

4 for such service or item, as determined by the

5 Board in consultation with the Office; and

6 ‘‘(C) if, in any administrative year, after the

7 appropriate deductible has been met, total out-of8 pocket expenses (excluding any to the extent that

9 they exceed reasonable and customary levels, as de10 termined under subparagraph (B)(ii)) for the indi11 vidual (or, in the case of a family enrollment, for the

12 family) exceed the catastrophic limit established

13 under paragraph (3) for individual coverage (or, in

14 the case of a family enrollment, for family coverage),

15 the plan shall pay 100 percent of all covered charges

16 incurred by the individual (or, in the case of a fam17 ily enrollment, each covered individual in such fam18 ily).

19 ‘‘(3)(A) Except as provided in subparagraph (B), the

20 catastrophic limit—

21 ‘‘(i) under the standard option shall be—

22 ‘‘(I) $2,000 per administrative year for in23 dividual coverage; and

24 ‘‘(II) $4,000 per administrative year for

25 family coverage; and
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1 ‘‘(ii) under the high option shall be—

2 ‘‘(I) $1,000 per administrative year for in3 dividual coverage; and

4 ‘‘(II) $2,000 per administrative year for

5 family coverage.

6 ‘‘(B)(i) The Office shall prescribe regulations under

7 which, in any case in which the enrollee is an employee,

8 the catastrophic limit under this paragraph shall be estab9 lished using a formula which makes the catastrophic limit

10 commensurate with the rate of basic pay payable to such

11 employee, except that no limit determined under this sub12 paragraph may exceed the catastrophic limit which would

13 otherwise apply under subparagraph (A).

14 ‘‘(ii) In the case of a family enrollment, if the employ15 ee’s spouse is also an employee and such spouse is receiv16 ing a higher rate of basic pay, the formula shall instead

17 use the spouse’s rate of basic pay.

18 ‘‘(4) The following rules apply with respect to a ‘per

19 admission’ deductible under section 8904:

20 ‘‘(A) The per admission deductible shall be in

21 addition to any deductible requirement under para22 graph (2)(A).

23 ‘‘(B) No amount applied toward meeting a per

24 admission deductible may be taken into account for
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1 purposes of meeting an administrative year deduct2 ible.

3 ‘‘(d) A provider shall not be eligible for payments

4 under this section unless it agrees to comply with the re5 quirements of section 8906 (if applicable), relating to utili6 zation review.

7 ‘‘(e) Any amount payable by the Governmentwide

8 plan for any covered charge shall be paid to the provider

9 of the item or service involved, unless the enrollee elects

10 to be reimbursed for such amount instead.

11 ‘‘§ 8905. Contributions under the Governmentwide

12 plan

13 ‘‘(a)(1) The Office of Personnel Management shall

14 determine the enrollment charges for coverage in the Gov15 ernmentwide plan in accordance with this subsection.

16 ‘‘(2)(A) The enrollment charges shall reasonably and

17 equitably reflect—

18 ‘‘(i) the cost of providing benefits under the

19 Governmentwide plan (taking into account any sav20 ings anticipated through any provider-agreement

21 program or any other cost-control or cost-reduction

22 measure under the plan);

23 ‘‘(ii) the cost of administering such plan; and

24 ‘‘(iii) any amounts necessary to maintain an

25 adequate contingency reserve.
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1 Enrollment charges shall be determined on a basis which,

2 in the judgment of the Office, is consistent with the lowest

3 schedule of basic rates generally charged for group health

4 benefit plans issued to large employers. In so determining

5 such charges, costs under clauses (i) and (ii) shall be allo6 cated to each option in a manner which is reasonable and

7 equitable.

8 ‘‘(B) The enrollment charges determined for the first

9 administrative year shall be continued for later adminis10 trative years, except that they may be readjusted for a

11 later year, based on past experience and benefit adjust12 ments taking effect in such later year. Any readjustment

13 in such charges shall be made on a basis which, in the

14 judgment of the Office, is consistent with the general prac15 tice of carriers which issue group health benefit plans to

16 large employers.

17 ‘‘(3) Enrollment charges under this subsection—

18 ‘‘(A) shall be established not later than 6

19 months before the beginning of the administrative

20 year to which they apply;

21 ‘‘(B) shall be established in consultation with

22 the Board; and

23 ‘‘(C) shall, with respect to any administrative

24 year, be effective—
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1 ‘‘(i) for an employee, beginning on the first

2 day of the employee’s first pay period of such

3 administrative year; and

4 ‘‘(ii) for an annuitant, beginning on the

5 first day of the first period of such administra6 tive year for which an annuity payment is

7 made.

8 ‘‘(4) Any enrollment charges established under this

9 subsection shall be published in the Federal Register and

10 the Code of Federal Regulations not later than 5 months

11 before the beginning of the administrative year to which

12 they apply.

13 ‘‘(5) In establishing enrollment charges under this

14 subsection, projected administrative costs for the Govern15 mentwide plan may not exceed 1 percent of the projected

16 cost of providing benefits under such plan.

17 ‘‘(b)(1)(A) For the first administrative year during

18 which the Governmentwide plan is in effect, the biweekly

19 contribution required of an employee enrolled in such plan

20 shall be—

21 ‘‘(i) if enrolled in the standard option—

22 ‘‘(I) for self alone, $10 per pay period; or

23 ‘‘(II) for self and family, $22 per pay pe24 riod; or

25 ‘‘(ii) if enrolled in the high option—
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1 ‘‘(I) for self alone, $20 per pay period; or

2 ‘‘(II) for self and family, $44 per pay pe3 riod.

4 ‘‘(B) For each subsequent administrative year, the bi5 weekly contribution required of an employee enrolled in

6 the Governmentwide plan shall be the amount last re7 quired (under subparagraph (A) or pursuant to adjust8 ment under this subparagraph, as applicable) before the

9 start of such year, increased by the lesser of—

10 ‘‘(i) the percentage by which the medical care

11 component of the consumer price index (as deter12 mined by the Bureau of Labor Statistics) for the

13 last base quarter before the start of such year ex14 ceeds such component of such index (as so deter15 mined) for the second to last base quarter before the

16 start of such year (if at all); or

17 ‘‘(ii) the percentage by which the average of the

18 enrollment charges determined under subsection (a)

19 for such year exceeds the average of the enrollment

20 charges determined under such subsection for the

21 previous administrative year (if at all).

22 For purposes of this subparagraph, the term ‘base quar23 ter’ means the 3-month period ending on December 31st

24 of a year.
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1 ‘‘(2) The Office shall provide for conversion of bi2 weekly rates of contribution under this subsection to rates

3 for employees paid on other than a biweekly basis and for

4 annuitants, and for this purpose may provide for the ad5 justment of the converted rate to the nearest cent.

6 ‘‘(3)(A) Except as otherwise provided in subpara7 graph (B) or section 8912(3), contributions under this

8 subsection shall be made through withholdings from the

9 pay of the enrolled employee or the annuity of the enrolled

10 annuitant, as the case may be.

11 ‘‘(B) An annuitant whose annuity is insufficient to

12 cover the full amount of the withholdings required under

13 this subsection may enroll (or remain enrolled) in the Gov14 ernmentwide plan, notwithstanding any other provision of

15 this section, if the annuitant elects, under conditions pre16 scribed by regulations of the Office, to pay currently into

17 the Fund, through the retirement system that administers

18 the annuitant’s health benefits enrollment, an amount

19 equal to the withholdings that would otherwise be required

20 under this subsection.

21 ‘‘(c)(1) The amount necessary to pay the total enroll22 ment charge (as determined under subsection (a)), after

23 the enrollee’s contribution is deducted, shall be paid

24 through Government contributions.
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1 ‘‘(2) Such Government contributions, in any instance

2 in which they are being made on behalf of an employee,

3 shall be made at the same time as the employee contribu4 tion is made.

5 ‘‘(3) Government contributions under this subsection

6 for an employee shall be paid—

7 ‘‘(A) in the case of employees generally, from

8 the appropriation or fund which is used to pay the

9 employee;

10 ‘‘(B) in the case of an elected official, from an

11 appropriation or fund available for payment of other

12 salaries of the same office or establishment;

13 ‘‘(C) in the case of an employee of the legisla14 tive branch who is paid by the Clerk of the House

15 of Representatives, from the contingent fund of the

16 House; and

17 ‘‘(D) in the case of an employee in a leave with18 out pay status, from the appropriation or fund

19 which would be used to pay the employee if such em20 ployee were in a pay status.

21 ‘‘(4)(A) Except as provided in subparagraph (B),

22 Government contributions under this subsection for an an23 nuitant shall be paid from annual appropriations which

24 are authorized to be made for that purpose and which may

25 be made available until expended.
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1 ‘‘(B) Government contributions under this subsection

2 for an individual who first becomes an annuitant by reason

3 of retirement from employment with the United States

4 Postal Service on or after October 1, 1986, or for a survi5 vor of such an individual or of an individual who died on

6 or after October 1, 1986, while employed by the United

7 States Postal Service, shall be paid by the United States

8 Postal Service.

9 ‘‘(5)(A) In the case of an employee holding a position

10 on a part-time career employment basis (as defined in sec11 tion 3401(2)), the Government contribution shall be equal

12 to—

13 ‘‘(i) the amount which would be payable by the

14 Government if the employee were employed on a full15 time career basis, multiplied by

16 ‘‘(ii) the percentage derived by—

17 ‘‘(I) dividing the average number of hours

18 in such employee’s regularly scheduled work19 week by the average number of hours in the

20 regularly scheduled workweek of an employee

21 serving in a comparable position on a full-time

22 career basis (as determined under regulations

23 prescribed by the Office); and

24 ‘‘(II) multiplying the quotient under

25 subclause (I) by 100.
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1 ‘‘(B) Any shortfall in Government contributions shall,

2 to the extent attributable to subparagraph (A), be made

3 up through a corresponding increase in the amount of the

4 employee contribution.

5 ‘‘§ 8906. Utilization review under the Government6 wide plan

7 ‘‘(a) In order to help prevent excessive or otherwise

8 inappropriate types or levels of hospital, medical, or men9 tal-health care, and the costs associated therewith, the

10 Board shall establish procedures to ensure that cost- and

11 utilization-control measures (consistent with those com12 mon to group health benefits plans offered by large em13 ployers) are implemented under the Governmentwide plan.

14 ‘‘(b) Any second opinion, certification, or other form

15 of review required under this section shall be obtained

16 from the appropriate carrier under section 8907 (or per17 son under contract with such carrier for that purpose).

18 The Office of Personnel Management shall establish the

19 qualification requirements for any person performing any

20 such review for purposes of this section.

21 ‘‘(c) With respect to mental health and substance

22 abuse benefits, a carrier (or other qualified reviewing en23 tity) may, when medically appropriate, recommend alter24 natives to inpatient care.
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1 ‘‘§ 8907. Administration of the Governmentwide plan

2 ‘‘(a)(1) The Governmentwide plan shall be adminis3 tered on a regional basis. To that end, the Office of Per4 sonnel Management, in consultation with the Board, shall

5 establish such number of geographic regions as the Office

6 considers appropriate in order that each individual who

7 is covered by the plan shall be included within the adminis8 trative jurisdiction of 1 of those regions.

9 ‘‘(2) The Office may modify the number or bound10 aries of the regions established under this subsection only

11 as of the start of a contract term (described in subsection

12 (b)(2)(B)) or at such other times as the Office may by

13 regulation prescribe.

14 ‘‘(b)(1) The processing of claims, implementation of

15 utilization review requirements, and other functions relat16 ing to the administration of the plan (as identified by the

17 Office) shall be the responsibility of the carrier designated

18 under paragraph (2) with respect to such region.

19 ‘‘(2)(A) The Office, in accordance with competitive

20 bidding procedures established by the Office, may contract

21 with a carrier to carry out the functions required under

22 paragraph (1) with respect to a region.

23 ‘‘(B) Each contract shall be for a uniform term of

24 at least 3 administrative years, but may be made auto25 matically renewable from term to term in the absence of

26 notice of termination by either party.
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1 ‘‘(C) To be eligible for consideration, a carrier

2 must—

3 ‘‘(i) be licensed to issue group health insurance

4 in each State (including the District of Columbia, if

5 applicable) which is included, in whole or in part,

6 within the region involved, except that an organiza7 tion which at any time during the 24-month period

8 ending on the date of enactment of the Federal Em9 ployees Health Benefits Reform Act of 1993 was

10 under contract with the Office under the provisions

11 of this title then designated as section 8902 for a

12 health plan that was self-insured shall be eligible for

13 consideration regardless of the number of States in

14 which it is licensed to issue group insurance; and

15 ‘‘(ii) demonstrate that it has or will have (by

16 the start of the contract term)—

17 ‘‘(I) a provider-agreement program suffi18 cient to provide the benefits described in section

19 8904(b)(2)(C);

20 ‘‘(II) an exclusive provider-agreement pro21 gram relating to mental health and substance

22 abuse benefits; and

23 ‘‘(III) a mail order prescription drug pro24 gram.
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1 ‘‘(D) Subsections (c), (e), and (f) of section 8910

2 shall apply to a contract under this section in the same

3 way as if it were a contract under section 8908.

4 ‘‘(E) An employee organization shall not be subject

5 to the requirement under subparagraph (C)(i).

6 ‘‘(3) If no carrier is selected with respect to a region,

7 the Office shall carry out the functions described in para8 graph (1) with respect to such region.

9 ‘‘(c) Notwithstanding any other provision of this sec10 tion, an employee organization which, at any time during

11 the 24-month period before the date of enactment of the

12 Federal Employees Health Benefits Reform Act of 1993,

13 was under contract with the Office under the provisions

14 of this title then designated as section 8902 for a health

15 benefits plan that was self-insured, may be selected to ad16 minister the Governmentwide plan with respect to—

17 ‘‘(1) an employee within that organization’s

18 bargaining unit (as determined under applicable pro19 visions of law);

20 ‘‘(2) an annuitant under section 8901(3) (A) or

21 (C) who, immediately before becoming such an an22 nuitant, was an employee within that organization’s

23 bargaining unit (as so determined); and
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1 ‘‘(3) any individual who is covered by such plan

2 as a family member of any such employee or annu3 itant.

4 Any selections under this subsection shall be made by the

5 Office.

6 ‘‘§ 8908. Prepayment plans

7 ‘‘(a)(1) The Office of Personnel Management may

8 contract for (without regard to section 5 of title 41 or

9 other statute requiring competitive bidding) or approve

10 one or more of the following health benefits plans:

11 ‘‘(A) GROUP-PRACTICE PREPAYMENT PLANS.—

12 Group-practice prepayment plans which offer health

13 benefits of the types referred to in paragraph (2), in

14 whole or substantial part on a prepaid basis, with

15 professional services thereunder provided by physi16 cians practicing as a group in a common center or

17 centers. The group shall include at least 3 physi18 cians who receive all or a substantial part of their

19 professional income from the prepaid funds and who

20 represent 1 or more medical specialties appropriate

21 and necessary for the population proposed to be

22 served by the plan.

23 ‘‘(B) INDIVIDUAL-PRACTICE PREPAYMENT

24 PLANS.—Individual-practice prepayment plans which

25 offer health benefits of the types referred to in para-
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1 graph (2), in whole or substantial part on a prepaid

2 basis, with professional services thereunder provided

3 by individual physicians who agree, under certain

4 conditions approved by the Office, to accept the pay5 ments provided by the plans as full payment for cov6 ered services given by them including, in addition to

7 in-hospital services, general care given in their of8 fices and the patients’ homes, out-of-hospital diag9 nostic procedures, and preventive care, and which

10 plans are offered by organizations which have suc11 cessfully operated similar plans before approval by

12 the Office of the plan in which employees may en13 roll.

14 ‘‘(C) MIXED-MODEL PREPAYMENT PLANS.—

15 Mixed-model prepayment plans are a combination of

16 the type of plans described in subparagraph (A) and

17 the type of plans described in subparagraph (B).

18 ‘‘(2) The plans described in paragraph (1) shall offer,

19 at a minimum, the same types of benefits as are offered

20 under the standard option of the Governmentwide plan.

21 ‘‘(b)(1) The Government contribution on behalf of

22 any individual enrolled in a plan under this section—

23 ‘‘(A) shall be equal to an amount which bears

24 the same relationship to the total enrollment charge
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1 for the coverage involved as the ratio under para2 graph (2); and

3 ‘‘(B) shall be paid from the same source as

4 would be required under paragraph (3) or (4) of sec5 tion 8905(c) (as applicable).

6 ‘‘(2) The ratio to be used for purposes of paragraph

7 (1)(A) is equal to—

8 ‘‘(A) the sum of the biweekly Government con9 tribution under the Governmentwide plan for the

10 standard and high options, respectively (for self or

11 self and family, as applicable), as determined under

12 section 8905(c), divided by

13 ‘‘(B) the sum of the total biweekly enrollment

14 charge under the Governmentwide plan for the

15 standard and high options, respectively (for self or

16 self and family, as applicable), as determined under

17 section 8905(a).

18 ‘‘(c)(1) Except as otherwise provided in paragraph

19 (2) or section 8912(3), there shall be withheld from the

20 pay of an enrolled employee or the annuity of an enrolled

21 annuitant (as the case may be) the amount necessary to

22 pay the total enrollment charge for a plan under this sec23 tion, after taking into account the amount of the Govern24 ment contribution.
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1 ‘‘(2) In the case of an annuitant whose annuity is

2 insufficient to cover the full amount of the withholding

3 required under paragraph (1), the same election as pro4 vided for under section 8905(b)(3)(B) shall be available.

5 ‘‘§ 8909. Supplementary plans

6 ‘‘(a) The Office of Personnel Management may con7 tract for (without regard to section 5 of title 41 or other

8 statute requiring competitive bidding) or approve one or

9 more health benefits plans which offer benefits of the

10 types referred to in subsection (b), which are sponsored

11 or underwritten, and administered, in whole or substantial

12 part, by employee organizations, and which are available

13 only to individuals who at the time of enrollment are mem14 bers of the organization (and family members).

15 ‘‘(b) Any such plan may offer dental benefits, vision16 care benefits, and any other type of benefit, mutually

17 agreed to by the employee organization and the Office, not

18 offered by the Governmentwide plan.

19 ‘‘(c)(1)(A) Except as provided in subparagraph (B),

20 an individual shall be eligible to enroll (or remain enrolled)

21 in any plan under this section during any period of time

22 during which such individual is enrolled in a basic health

23 benefits plan.

24 ‘‘(B) An individual shall not be eligible to enroll (or

25 remain enrolled) in any plan under this section if—
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1 ‘‘(i) such individual’s eligibility for coverage in

2 a basic health benefits plan is under section 8911a;

3 or

4 ‘‘(ii) such individual has nongroup coverage

5 under the basic health benefits plan.

6 ‘‘(2) Coverage under this section for family members

7 may not be provided during any period of time during

8 which they are not also covered under a basic health bene9 fits plan.

10 ‘‘(d)(1) The enrollee shall pay the full enrollment

11 charge for coverage under this section. Except as other12 wise provided in paragraph (2) or section 8912(3), pay13 ments under this subsection shall be made through

14 withholdings from the pay of the enrolled employee or the

15 annuity of the enrolled annuitant (as the case may be).

16 ‘‘(2) In the case of an annuitant whose annuity is

17 insufficient to cover the full amount of the withholding

18 required under paragraph (1), the same election as pro19 vided for under section 8905(b)(3)(B) shall be available.

20 ‘‘§ 8910. Contract requirements

21 ‘‘(a) Each contract under section 8908 or 8909—

22 ‘‘(1) shall be for a uniform term of at least 1

23 administrative year, but may be made automatically

24 renewable from term to term in the absence of no25 tice of termination by either party; and
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1 ‘‘(2) shall contain a detailed statement of bene2 fits offered and shall include such maximums, limi3 tations, exclusions, and other definitions of benefits

4 as the Office considers necessary or desirable.

5 ‘‘(b) The Office of Personnel Management may pre6 scribe reasonable minimum standards for any plan under

7 section 8908 or 8909 and for carriers offering the plans.

8 Approval of a plan may be withdrawn only after notice

9 and opportunity for hearing to the carrier concerned with10 out regard to subchapter II of chapter 5 and chapter 7.

11 The Office may terminate the contract of a carrier, effec12 tive at the end of the contract term, if the Office finds

13 that at no time during the preceding two contract terms

14 did the carrier have 300 or more employees and annu15 itants (exclusive of family members) enrolled in the plan.

16 ‘‘(c)(1) A contract may not be made, or a plan ap17 proved, under section 8908 or 8909 which excludes an in18 dividual because of race, sex, health status, annuitant sta19 tus, or, at the time of the first opportunity to enroll, be20 cause of age.

21 ‘‘(2)(A) A contract may not be made, or a plan ap22 proved, under section 8908 which does not offer to each

23 employee, annuitant, family member, former spouse, or

24 person having continued coverage under section 8911a

25 whose enrollment in the plan is ended, except by a can-
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1 cellation of enrollment, a temporary extension of coverage

2 during which that individual may exercise the option to

3 convert, without evidence of good health, to a nongroup

4 contract providing health benefits; an employee, annu5 itant, family member, former spouse, or person having

6 continued coverage under section 8911a who exercises this

7 option shall pay the full periodic charges of the nongroup

8 contract.

9 ‘‘(B) The benefits and coverage made available under

10 subparagraph (A) are noncancelable by the carrier except

11 for fraud, over-insurance, or nonpayment of periodic

12 charges.

13 ‘‘(d) With respect to any contract under section 8908

14 or 8909, the rates determined for the first contract term

15 may be redetermined, for any later administrative year,

16 in the same manner as provided for under section

17 8905(a)(2)(B).

18 ‘‘(e) Each contract under section 8908 or 8909 shall

19 require the carrier to agree to pay for or provide a health

20 service or supply in any case in which the Office finds that

21 the employee, annuitant, family member, or other individ22 ual is entitled thereto under the terms of the contract.

23 ‘‘(f) The provisions of any contract under section

24 8908 or 8909 which relate to the nature or extent of cov25 erage or benefits (including payments with respect to ben-
37

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1 efits) shall supersede and preempt any State or local law,

2 or any regulation issued thereunder, which relates to

3 health insurance or plans to the extent that such law or

4 regulation is inconsistent with such contractual provisions.

5 ‘‘§ 8911. Automatic coverage; elections of coverage

6 ‘‘(a)(1) Subject to paragraph (2)(A), an employee

7 shall, as of the date of first becoming eligible for coverage

8 under this chapter, be covered under the Governmentwide

9 plan’s standard option for self alone.

10 ‘‘(2)(A) Instead of the coverage provided for under

11 paragraph (1), an employee may elect—

12 ‘‘(i) a different level or type of coverage under

13 the Governmentwide plan;

14 ‘‘(ii) coverage under a different basic health

15 benefits plan; or

16 ‘‘(iii) exclusion from coverage under this chap17 ter.

18 ‘‘(B) In addition to or instead of any election under

19 subparagraph (A), an employee (excluding any employee

20 who makes an election under subparagraph (A)(iii)) may

21 elect—

22 ‘‘(i) to be covered under a supplementary health

23 benefits plan;

24 ‘‘(ii) to participate in the flexible spending plan

25 under section 8912; or
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1 ‘‘(iii) any other option which would be available

2 to such employee during an open enrollment period

3 (described in section 8916).

4 ‘‘(C) Any election under subparagraph (A) or (B)—

5 ‘‘(i) must be submitted to the employing office

6 of the individual involved, in writing, in such form

7 and within such time as the Office of Personnel

8 Management shall by regulation prescribe; and

9 ‘‘(ii) shall, if it is submitted in accordance with

10 clause (i) but after coverage commences, become ef11 fective at the beginning of the next applicable pay

12 period.

13 ‘‘(3) An election of noncoverage under this subsection

14 shall not prevent the employee from subsequently making

15 any election for which such employee is eligible during an

16 open enrollment period or at any other time otherwise al17 lowable under this chapter.

18 ‘‘(b) An annuitant who, at the time of becoming an

19 annuitant, was enrolled in a basic plan under this chap20 ter—

21 ‘‘(1) as an employee for a period of not less

22 than—

23 ‘‘(A) the 5 years of service immediately be24 fore retirement; or
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1 ‘‘(B) the full period or periods of service

2 between the last day of the first period, as pre3 scribed by regulations of the Office, in which

4 that individual is eligible to enroll in the plan

5 and the date on which such individual becomes

6 an annuitant;

7 whichever is shorter; or

8 ‘‘(2) as a member of the family of an employee

9 or annuitant;

10 may continue that individual’s enrollment under the condi11 tions of eligibility prescribed by regulations of the Office.

12 The Office may, in its sole discretion, waive the require13 ments of this subsection in the case of an individual who

14 fails to satisfy such requirements if the Office determines

15 that, due to exceptional circumstances, it would be against

16 equity and good conscience not to allow such individual

17 to be enrolled as an annuitant in a basic plan under this

18 chapter.

19 ‘‘(c)(1) A former spouse may—

20 ‘‘(A) within 60 days after the dissolution of the

21 marriage, or

22 ‘‘(B) in the case of a former spouse of a former

23 employee whose marriage was dissolved after the

24 employee’s retirement, within 60 days after the dis25 solution of the marriage or, if later, within 60 days
40

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1 after an election is made under section 8339(j)(3) or

2 8417(b) for such former spouse by the retired em3 ployee,

4 enroll in a basic plan under this chapter as an individual

5 or for self and family (as provided in paragraph (2)), sub6 ject to agreeing to pay the employee and Government con7 tributions which would be payable in the case of an em8 ployee enrolled in the same plan and level of benefits. The

9 former spouse shall submit an enrollment application and

10 make payments to the agency which, at the time of divorce

11 or annulment, employed the employee to whom the former

12 spouse was married or, in the case of a former spouse who

13 is receiving annuity payments under section 8341(h),

14 8345(j), 8445, or 8467, to the Office.

15 ‘‘(2) Coverage for self and family under this sub16 section shall be limited to—

17 ‘‘(A) the former spouse; and

18 ‘‘(B) unmarried dependent natural or adopted

19 children of the former spouse and the employee who

20 are—

21 ‘‘(i) under 22 years of age;

22 ‘‘(ii) 22 years of age or older, but incapa23 ble of self-support because of mental or physical

24 disability which existed before age 22; or
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1 ‘‘(iii) students (as described in section

2 8901(6)(C)) at least 22 but less than 23 years

3 of age (excluding anyone under clause (ii)).

4 ‘‘§8911a. Continued coverage for certain individuals

5 ‘‘(a) Any individual described in paragraph (1) or (2)

6 of subsection (b) may elect to continue coverage under this

7 chapter (including under the Governmentwide plan) in ac8 cordance with this section.

9 ‘‘(b) This section applies with respect to—

10 ‘‘(1) any employee who—

11 ‘‘(A) is separated from service either vol12 untarily or involuntarily, excluding an employee

13 involuntarily separated for gross misconduct (as

14 defined under regulations prescribed by the Of15 fice of Personnel Management); and

16 ‘‘(B) would not otherwise be eligible for

17 any benefits under this chapter (determined

18 without regard to any temporary extension of

19 coverage and without regard to any benefits

20 available under a nongroup contract); and

21 ‘‘(2) any individual who—

22 ‘‘(A) ceases to meet the requirements for

23 being considered an unmarried dependent child

24 under this chapter;
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1 ‘‘(B) on the day before so ceasing to meet

2 the requirements referred to in subparagraph

3 (A), was covered under a basic plan under this

4 chapter as a member of the family of an em5 ployee or annuitant; and

6 ‘‘(C) would not otherwise be eligible for

7 any benefits under this chapter (determined

8 without regard to any temporary extension of

9 coverage and without regard to any benefits

10 available under a nongroup contract).

11 ‘‘(c)(1) The Office shall prescribe regulations and

12 provide for the inclusion of appropriate terms in contracts

13 with carriers to provide that—

14 ‘‘(A) with respect to an employee who becomes

15 (or will become) eligible for continued coverage

16 under this section as a result of separation from

17 service, the separating agency shall, before the end

18 of the 30-day period beginning on the date as of

19 which coverage (including any temporary extensions

20 of coverage) would otherwise end, notify the individ21 ual of such individual’s rights under this section;

22 and

23 ‘‘(B) with respect to a child of an employee or

24 annuitant who becomes eligible for continued cov25 erage under this section as a result of ceasing to
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1 meet the requirements for being considered a mem2 ber of the employee’s or annuitant’s family—

3 ‘‘(i) the employee or annuitant may pro4 vide written notice of the child’s change in sta5 tus (complete with the child’s name, address,

6 and such other information as the Office may

7 by regulation require)—

8 ‘‘(I) to the employee’s employing

9 agency; or

10 ‘‘(II) in the case of an annuitant, to

11 the Office; and

12 ‘‘(ii) if the notice referred to in clause (i)

13 is received within 60 days after the date as of

14 which the child involved first ceases to meet the

15 requirements involved, the employing agency or

16 the Office (as the case may be) must, within 14

17 days after receiving such notice, notify the child

18 of such child’s rights under this section.

19 ‘‘(2) In order to obtain continued coverage under this

20 section, an appropriate written election (submitted in such

21 manner as the Office by regulation prescribes) must be

22 made—

23 ‘‘(A) in the case of an individual seeking contin24 ued coverage based on a separation from service, be-
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1 fore the end of the 60-day period beginning on the

2 later of—

3 ‘‘(i) the effective date of the separation; or

4 ‘‘(ii) the date the separated individual re5 ceives the notice required under paragraph

6 (1)(A); or

7 ‘‘(B) in the case of an individual seeking con8 tinued coverage based on a change in circumstances

9 making such individual ineligible for coverage as an

10 unmarried dependent child, before the end of the 60-

11 day period beginning on the later of—

12 ‘‘(i) the date as of which such individual

13 first ceases to meet the requirements for being

14 considered an unmarried dependent child; or

15 ‘‘(ii) the date such individual receives no16 tice under paragraph (1)(B)(ii);

17 except that if a parent fails to provide the notice re18 quired under paragraph (1)(B)(i) in timely fashion,

19 the 60-day period under this subparagraph shall be

20 based on the date under clause (i), irrespective of

21 whether or not any notice under paragraph

22 (1)(B)(ii) is provided.

23 ‘‘(d)(1)(A) An individual receiving continued coverage

24 under this section shall be required to pay currently into
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1 the Fund, under arrangements satisfactory to the Office,

2 an amount equal to the sum of—

3 ‘‘(i) the employee and Government contribu4 tions which would be required in the case of an em5 ployee enrolled in the same plan and level of bene6 fits; and

7 ‘‘(ii) an amount, determined under regulations

8 prescribed by the Office, necessary for administra9 tive expenses, but not to exceed 2 percent of the

10 total amount under clause (i).

11 ‘‘(B) Payments under this section to the Fund

12 shall—

13 ‘‘(i) in the case of an individual whose contin14 ued coverage is based on such individual’s separa15 tion, be made through the agency which last em16 ployed such individual; or

17 ‘‘(ii) in the case of an individual whose contin18 ued coverage is based on a change in circumstances

19 referred to in subsection (c)(2)(B), be made

20 through—

21 ‘‘(I) the Office if, at the time coverage

22 would (but for this section) otherwise have been

23 discontinued, the individual was covered as the

24 child of an annuitant; or
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1 ‘‘(II) the employee’s employing agency as

2 of the time referred to in subclause (I) if the

3 individual was covered as the child of an em4 ployee at such time.

5 ‘‘(2) If an individual elects to continue coverage

6 under this section before the end of the applicable period

7 under subsection (c)(2), but after such individual’s cov8 erage under this chapter (including any temporary exten9 sions of coverage) expires, coverage shall be restored retro10 actively, with appropriate contributions (determined in ac11 cordance with paragraph (1)) and claims (if any), to the

12 same extent and effect as though no break in coverage

13 had occurred.

14 ‘‘(3)(A) An individual making an election under sub15 section (c)(2)(B) may, at such individual’s option, elect

16 coverage either as an individual or for self and family.

17 ‘‘(B) For the purpose of this paragraph, members of

18 an individual’s family shall be determined in the same way

19 as would apply under this chapter in the case of an en20 rolled employee.

21 ‘‘(C) Nothing in this paragraph shall be considered

22 to limit an individual making an election under subsection

23 (c)(2)(A) to coverage for self alone.

24 ‘‘(e)(1) Continued coverage under this section may

25 not extend beyond—
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1 ‘‘(A) in the case of an individual whose contin2 ued coverage is based on separation from service,

3 the date which is 18 months after the effective date

4 of the separation; or

5 ‘‘(B) in the case of an individual whose contin6 ued coverage is based on ceasing to meet the re7 quirements for being considered an unmarried de8 pendent child, the date which is 36 months after the

9 date on which the individual first ceases to meet

10 those requirements, subject to paragraph (2).

11 ‘‘(2)(A) In the case of an individual described in sub12 paragraph (B), extended coverage under this section may

13 not extend beyond the date which is 36 months after the

14 separation date referred to in subparagraph (B)(iii).

15 ‘‘(B) This paragraph applies with respect to any indi16 vidual who—

17 ‘‘(i) ceases to meet the requirements for being

18 considered an unmarried dependent child;

19 ‘‘(ii) as of the day before so ceasing to meet the

20 requirements referred to in clause (i), was covered

21 as the child of a former employee receiving contin22 ued coverage under this section based on the former

23 employee’s separation from service; and

24 ‘‘(iii) so ceases to meet the requirements re25 ferred to in clause (i) before the end of the 18-
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1 month period beginning on the date of the former

2 employee’s separation from service.

3 ‘‘(f)(1) The Office shall prescribe regulations under

4 which, in addition to any individual otherwise eligible for

5 continued coverage under this section, and to the extent

6 practicable, continued coverage may also, upon appro7 priate written application, be afforded under this sec8 tion—

9 ‘‘(A) to any individual who—

10 ‘‘(i) if subparagraphs (A) and (C) of para11 graph (10) of section 8901 were disregarded,

12 would be eligible to be considered a former

13 spouse within the meaning of such paragraph;

14 but

15 ‘‘(ii) would not, but for this subsection, be

16 eligible to be so considered; and

17 ‘‘(B) to any individual whose coverage as a

18 family member would otherwise terminate as a result

19 of a legal separation.

20 ‘‘(2) The terms and conditions for coverage under the

21 regulations shall include—

22 ‘‘(A) consistent with subsection (c), any nec23 essary notification provisions, and provisions under

24 which an election period of at least 60 days’ dura25 tion is afforded;
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1 ‘‘(B) terms and conditions identical to those

2 under subsection (d), except that contributions to

3 the Fund shall be made through such agency as the

4 Office by regulation prescribes;

5 ‘‘(C) provisions relating to the termination of

6 continued coverage, except that continued coverage

7 under this section may not (subject to paragraph

8 (3)) extend beyond the date which is 36 months

9 after the date on which the qualifying event under

10 this subsection (the date of divorce, annulment, or

11 legal separation, as the case may be) occurs; and

12 ‘‘(D) provisions designed to ensure that any

13 coverage pursuant to this subsection does not ad14 versely affect any eligibility for coverage which the

15 individual might otherwise have under this chapter

16 (including as a result of any change in personal cir17 cumstances) if this subsection had not been enacted.

18 ‘‘(3) In the case of an individual—

19 ‘‘(A) who becomes eligible for continued cov20 erage under this subsection based on a divorce, an21 nulment, or legal separation from a person who, as

22 of the day before the date of the divorce, annulment,

23 or legal separation (as the case may be) was receiv24 ing continued coverage under this section for self
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1 and family based on such person’s separation from

2 service; and

3 ‘‘(B) whose divorce, annulment, or legal separa4 tion (as the case may be) occurs before the end of

5 the 18-month period beginning on the date of the

6 separation from service referred to in subparagraph

7 (A),

8 extended coverage under this section may not extend be9 yond the date which is 36 months after the date of the

10 separation from service, as referred to in subparagraph

11 (A).

12 ‘‘§ 8911b. Coverage for certain other employees

13 ‘‘(a)(1) An employee enrolled in a basic plan under

14 this chapter who is placed in a leave without pay status

15 may have such employee’s coverage and the coverage of

16 members of such employee’s family continued under the

17 plan for not to exceed 12 months under regulations pre18 scribed by the Office of Personnel Management. The regu19 lations may provide for the waiving of contributions by

20 the employee.

21 ‘‘(2) An employee who enters on approved leave with22 out pay to serve as a full-time officer or employee of an

23 organization composed primarily of employees within 60

24 days after entering on that leave without pay, may file

25 with such employee’s employing agency an election to con-
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1 tinue such employee’s health benefits enrollment and ar2 range to pay currently into the Fund, through such em3 ployee’s employing agency, both employee and agency con4 tributions from the beginning of leave without pay. The

5 employing agency shall forward the enrollment charges so

6 paid to the Fund. If the employee does not so elect, such

7 employee’s enrollment will continue during nonpay status

8 and end as provided by paragraph (1) and implementing

9 regulations.

10 ‘‘(b)(1)(A) The Office shall prescribe regulations

11 under which temporary employees (who meet the require12 ments of paragraph (2)) may enroll, either as an individ13 ual or for self and family, in a basic plan under this chap14 ter.

15 ‘‘(B) To be eligible to enroll under this subsection,

16 a temporary employee must have completed 12 months of

17 current continuous employment, excluding any break in

18 service of 5 days or less.

19 ‘‘(2) Any temporary employee enrolled in a basic plan

20 under this subsection shall be responsible for paying,

21 through withholdings from pay, both employee and Gov22 ernment contributions.
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1 ‘‘§ 8911c. Coverage of restored employees and survi2 vor or disability annuitants

3 ‘‘(a) An employee enrolled in a basic plan under this

4 chapter who is removed or suspended without pay and

5 later reinstated or restored to duty on the ground that

6 the removal or suspension was unjustified or unwarranted

7 may, at such employee’s option, enroll as a new employee

8 or have such employee’s coverage restored, with appro9 priate adjustments made in contributions and claims, to

10 the same extent and effect as though the removal or sus11 pension had not taken place.

12 ‘‘(b) A surviving spouse whose survivor annuity under

13 this title was terminated because of remarriage and is

14 later restored may, under such regulations as the Office

15 of Personnel Management may prescribe, enroll in a basic

16 plan under this chapter if such spouse was covered by any

17 such plan immediately before such annuity was termi18 nated.

19 ‘‘(c) A disability annuitant whose disability annuity

20 under section 8337 was terminated and is later restored

21 under the second or third sentence of subsection (e) of

22 such section may, under regulations prescribed by the Of23 fice, enroll in a basic plan under this chapter if such annu24 itant was covered by any such plan immediately before

25 such annuity was terminated.
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1 ‘‘§ 8911d. Double coverage; change in family status

2 ‘‘(a) If an employee, annuitant, or other individual

3 eligible to enroll in a basic plan under this chapter has

4 a spouse who is also eligible to enroll, either spouse, but

5 not both, may enroll for self and family, or each spouse

6 may enroll as an individual. However, an individual may

7 not be covered both as an enrollee and as a family mem8 ber.

9 ‘‘(b) An employee, annuitant, or other individual en10 rolled in a basic plan under this chapter may change such

11 individual’s coverage or that of the individual and mem12 bers of such individual’s family by an application filed

13 within 60 days after a change in family status or at other

14 times and under conditions prescribed by regulations of

15 the Office of Personnel Management.

16 ‘‘§ 8911e. Clarifying provisions

17 ‘‘The following rules shall apply in administering the

18 provisions of sections 8911 through 8911d:

19 ‘‘(1) In administering a provision which re20 quires that an individual currently be, or previously

21 have been, enrolled in (or covered under) a basic

22 health benefits plan, as a condition for continued en23 rollment or other treatment under this chapter, en24 rollment in (or coverage under) a plan under this

25 chapter (as previously in effect) shall be treated as

26 if it had been under a basic health benefits plan.
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1 ‘‘(2) In order to compute any remaining period

2 of eligibility for continued coverage (where eligibility

3 is limited to a specific term), any period of contin4 ued coverage under this chapter (as previously in ef5 fect) shall be treated as a period of continued cov6 erage under a basic health benefits plan.

7 ‘‘(3) The Office of Personnel Management shall

8 prescribe rules relating to procedures for continuing

9 the coverage of an individual who is last covered (be10 fore first starting continued coverage under a basic

11 health benefits plan, as an annuitant or otherwise)

12 under a health benefits plan under this chapter (as

13 previously in effect). The rules shall include provi14 sions to provide that if continued coverage is elected,

15 but no basic plan under this chapter is indicated,

16 coverage shall be under the Governmentwide plan.

17 ‘‘(4) The Office shall prescribe any other rules

18 which may be necessary to carry out the purposes of

19 this section.

20 ‘‘§ 8912. Flexible spending plan

21 ‘‘The Office of Personnel Management shall by regu22 lation provide for the establishment of a flexible spending

23 plan. Such plan—

24 ‘‘(1) shall be available to employees with health

25 insurance coverage under this chapter;
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1 ‘‘(2) shall be designed and maintained in a

2 manner that ensures that benefits—

3 ‘‘(A) meet the requirements for exclusion

4 from gross income under section 105(b) of the

5 Internal Revenue Code of 1986; and

6 ‘‘(B) are provided pursuant to salary re7 duction agreements meeting the requirements of

8 section 125 of the Internal Revenue Code of

9 1986 for exclusion from gross income;

10 ‘‘(3) shall require, as a condition for participa11 tion, that the employee agree that the amounts de12 ducted or withheld from pay under the plan—

13 ‘‘(A) shall be sufficient to pay the full

14 amount of the employee contributions for any

15 basic or supplementary health benefits plan in

16 which the employee is enrolled; and

17 ‘‘(B) shall be used for that purpose;

18 ‘‘(4) shall provide that any amounts in excess

19 of those required under paragraph (3) may be used

20 for any deductible, copayment, coinsurance, or other

21 amount for which the employee is liable under a

22 basic or supplementary health benefits plan; and

23 ‘‘(5) shall provide that any amounts forfeited

24 under the plan shall be transferred to a separate ac25 count—
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1 ‘‘(A) which shall be within the Employees

2 Health Benefits Fund; and

3 ‘‘(B) which shall be used for purposes of

4 the programs under section 8919(e).

5 ‘‘§ 8913. Federal Employees Health Benefits Board

6 ‘‘(a) There shall be established a Federal Employees

7 Health Benefits Board.

8 ‘‘(b)(1) The Board shall be composed of 6 members,

9 all of whom shall be appointed by the President, except

10 that—

11 ‘‘(A) 2 shall be appointed taking into consider12 ation any recommendations made by the Speaker of

13 the House of Representatives after consultation with

14 the minority leader of the House of Representatives;

15 and

16 ‘‘(B) 2 shall be appointed taking into consider17 ation any recommendations made by the majority

18 leader of the Senate after consultation with the mi19 nority leader of the Senate.

20 ‘‘(2) A member of the Board shall be appointed for

21 a term of 4 years, except that of the members first ap22 pointed—

23 ‘‘(A) 2 shall be appointed for a term of 3 years;

24 and

25 ‘‘(B) 2 shall be appointed for a term of 2 years.
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1 Terms of the members first appointed shall be specified

2 by the President at the time of appointment.

3 ‘‘(3)(A) A vacancy on the Board shall be filled in the

4 manner in which the original appointment was made.

5 ‘‘(B) An individual chosen to fill a vacancy shall be

6 appointed for the unexpired term of the member replaced.

7 ‘‘(4) A member may continue to serve after the expi8 ration of such member’s term until a successor is ap9 pointed, but for not more than 12 months.

10 ‘‘(5) A chairman shall be elected by the members of

11 the Board.

12 ‘‘(6) Any appointment or recommendation under this

13 subsection shall be made from among individuals who—

14 ‘‘(A) represent organizations representing sub15 stantial numbers of employees or annuitants; and

16 ‘‘(B) are generally recognized for their knowl17 edge and experience in the field of health insurance,

18 health care, or employee compensation.

19 ‘‘(c) In carrying out their responsibilities under this

20 chapter, members of the Board shall act solely in the in21 terest of individuals participating in the Governmentwide

22 plan.

23 ‘‘(d) The Board may—

24 ‘‘(1) appoint such personnel as may be nec25 essary; and
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1 ‘‘(2) procure the services of experts or consult2 ants in accordance with section 3109.

3 ‘‘§ 8914. Employees Health Benefits Fund

4 ‘‘(a) There is in the Treasury of the United States

5 an Employees Health Benefits Fund which is adminis6 tered by the Office of Personnel Management. All con7 tributions of enrollees and the Government made under

8 this chapter shall be paid into the Fund. The Fund is

9 available—

10 ‘‘(1) without fiscal year limitation for benefits

11 payable under the Governmentwide plan and all pay12 ments to approved health benefits plans under sec13 tion 8908 or 8909; and

14 ‘‘(2) to pay expenses for administering this

15 chapter within the limitations that may be specified

16 annually by Congress.

17 ‘‘(b)(1) Portions of the contributions made by enroll18 ees in any of the basic health benefits plans and by the

19 Government on their behalf shall be regularly set aside

20 in the Fund as follows:

21 ‘‘(A) From contributions for the Government22 wide plan, those portions allocable to defraying the

23 cost of administering such plan and maintaining a

24 contingency reserve for such plan, respectively, as

25 determined under section 8905(a).
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1 ‘‘(B) From the contributions for each of the

2 other basic plans under this chapter, a percentage

3 (not to exceed the percentage of the total enrollment

4 charge under the Governmentwide plan allocable to

5 defraying administrative costs attributable to such

6 plan) determined by the Office to be reasonably ade7 quate to pay the administrative costs attributable to

8 the basic plan involved.

9 ‘‘(2) The Office, from time to time and in amounts

10 it considers appropriate, may transfer unused funds for

11 administrative expenses of the Governmentwide plan to

12 the contingency reserve of such plan. Such contingency re13 serve may be used to defray increases in future rates

14 under, or may be applied to reduce the contributions of

15 enrollees and the Government to, the Governmentwide

16 plan, as the Office shall from time to time determine.

17 ‘‘(3)(A) Of any amounts paid into the Fund for ad18 ministrative expenses, 90 percent shall be available for ex19 penses incurred by the Office and 10 percent shall be

20 available for expenses incurred by the Board.

21 ‘‘(B) The Office, from time to time and in amounts

22 it considers appropriate, may transfer any unused funds

23 for administrative expenses of the respective basic health

24 benefits plans to the account established under section

25 8912(5) to subsidize the programs under section 8919(e).
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1 ‘‘(c) The Secretary of the Treasury may invest and

2 reinvest any of the money in the Fund in interest-bearing

3 obligations of the United States, and may sell these obliga4 tions for the purposes of the Fund. The interest on and

5 the proceeds from the sale of these obligations become a

6 part of the Fund.

7 ‘‘(d) When the assets, liabilities, and membership of

8 employee organizations sponsoring or underwriting plans

9 approved under section 8909 are merged, the assets and

10 liabilities of the plans sponsored or underwritten by the

11 merged organizations shall be transferred at the beginning

12 of the contract term next following the date of the merger

13 to the plan sponsored or underwritten by the successor

14 organization. Each employee, annuitant, former spouse, or

15 person having continued coverage under section 8911a af16 fected by a merger shall be transferred to the plan spon17 sored or underwritten by the successor organization unless

18 he enrolls in another supplementary plan under this chap19 ter.

20 ‘‘§ 8915. Debarment and other sanctions against pro21 viders

22 ‘‘(a)(1) For the purpose of this section, an individual

23 or entity shall be considered to have been convicted of a

24 criminal offense if—
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1 ‘‘(A) a judgment of conviction for such offense

2 has been entered against the individual or entity by

3 a Federal, State, or local court;

4 ‘‘(B) there has been a finding of guilt against

5 the individual or entity by a Federal, State, or local

6 court with respect to such offense;

7 ‘‘(C) a plea of guilty or nolo contendere by the

8 individual or entity has been accepted by a Federal,

9 State, or local court with respect to such offense; or

10 ‘‘(D) in the case of an individual, the individual

11 has entered a first offender or other program pursu12 ant to which a judgment of conviction for such of13 fense has been withheld;

14 without regard to the pendency or outcome of any appeal

15 (other than a judgment of acquittal based on innocence)

16 or request for relief on behalf of the individual or entity.

17 ‘‘(2)(A) Notwithstanding any other provision of this

18 chapter, if a provider is barred under subsection (b) or

19 (c) from participating in the program under this chapter,

20 no payment may be made by any basic or supplementary

21 plan under this chapter (to such provider or by reimburse22 ment) for any service or supply furnished by such provider

23 during the period of the debarment.
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1 ‘‘(B) Each contract under this chapter shall contain

2 such provisions as may be necessary to carry out subpara3 graph (A) and the other provisions of this section.

4 ‘‘(b) The Office of Personnel Management may bar

5 the following providers of health care services or supplies

6 from participating in the program under this chapter:

7 ‘‘(1) Any provider that has been convicted,

8 under Federal or State law, of a criminal offense re9 lating to fraud, corruption, breach of fiduciary re10 sponsibility, or other financial misconduct in connec11 tion with the delivery of a health care service or sup12 ply.

13 ‘‘(2) Any provider that has been convicted,

14 under Federal or State law, of a criminal offense re15 lating to neglect or abuse of patients in connection

16 with the delivery of a health care service or supply.

17 ‘‘(3) Any provider that has been convicted,

18 under Federal or State law, in connection with the

19 interference with or obstruction of an investigation

20 or prosecution of a criminal offense described in

21 paragraph (1) or (2).

22 ‘‘(4) Any provider that has been convicted,

23 under Federal or State law, of a criminal offense re24 lating to the unlawful manufacture, distribution,

25 prescription, or dispensing of a controlled substance.
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1 ‘‘(5) Any provider—

2 ‘‘(A) whose license to provide health care

3 services or supplies has been revoked, sus4 pended, restricted, or not renewed, by a State

5 licensing authority for reasons relating to the

6 provider’s professional competence, professional

7 performance, or financial integrity; or

8 ‘‘(B) that surrendered such a license while

9 a formal disciplinary proceeding was pending

10 before such an authority, if the proceeding con11 cerned the provider’s professional competence,

12 professional performance, or financial integrity.

13 ‘‘(c) Whenever the Office determines—

14 ‘‘(1) in connection with a claim presented under

15 this chapter, that a provider of health care services

16 or supplies—

17 ‘‘(A) has charged for health care services

18 or supplies that the provider knows or should

19 have known were not provided as claimed; or

20 ‘‘(B) has charged for health care services

21 or supplies in an amount substantially in excess

22 of such provider’s customary charges for such

23 services or supplies, or charged for health care

24 services or supplies which are substantially in

25 excess of the needs of the covered individual or
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1 which are of a quality that fails to meet profes2 sionally recognized standards for such services

3 or supplies;

4 ‘‘(2) that a provider of health care services or

5 supplies has knowingly made, or caused to be made,

6 any false statement or misrepresentation of a mate7 rial fact which is reflected in a claim presented

8 under this chapter; or

9 ‘‘(3) that a provider of health care services or

10 supplies has knowingly failed to provide any infor11 mation required by the Office, a carrier, or other

12 person administering a plan under this chapter to

13 determine whether a payment or reimbursement is

14 payable under this chapter or the amount of any

15 such payment or reimbursement;

16 the Office may, in addition to any other penalties that may

17 be prescribed by law, and after consultation with the At18 torney General, impose a civil monetary penalty of not

19 more than $10,000 for any item or service involved. In

20 addition, such a provider shall be subject to an assessment

21 of not more than twice the amount claimed for each such

22 item or service. In addition, the Office may make a deter23 mination in the same proceeding to bar such provider from

24 participating in the program under this chapter.

25 ‘‘(d) The Office—
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1 ‘‘(1) may not initiate any debarment proceeding

2 against a provider, based on such provider’s having

3 been convicted of a criminal offense, later than 6

4 years after the date on which such provider is so

5 convicted; and

6 ‘‘(2) may not initiate any action relating to a

7 civil penalty, assessment, or debarment under this

8 section, in connection with any claim, later than 6

9 years after the date the claim is presented, as deter10 mined under regulations prescribed by the Office.

11 ‘‘(e) In making a determination relating to the appro12 priateness of imposing or the period of any debarment

13 under this section, or the appropriateness of imposing or

14 the amount of any civil penalty or assessment under this

15 section, the Office shall take into account—

16 ‘‘(1) the nature of any claims involved and the

17 circumstances under which they were presented;

18 ‘‘(2) the degree of culpability, history of prior

19 offenses or improper conduct of the provider in20 volved; and

21 ‘‘(3) such other matters as justice may require.

22 ‘‘(f)(1) The debarment of a provider under subsection

23 (b) or (c) shall be effective at such time and upon such

24 reasonable notice to such provider, covered individuals,
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1 carriers, and other persons as may be specified in regula2 tions prescribed by the Office.

3 ‘‘(2)(A) Except as provided in subparagraph (B), a

4 debarment shall be effective with respect to any health

5 care services or supplies furnished by a provider on or

6 after the effective date of such provider’s debarment.

7 ‘‘(B) A debarment shall not apply with respect to in8 patient institutional services furnished to an individual

9 who was admitted to the institution before the date the

10 debarment would otherwise become effective until the pas11 sage of 30 days after such date, unless the Office deter12 mines that the health or safety of the individual receiving

13 those services warrants that a shorter period, or that no

14 such period, be afforded.

15 ‘‘(3) Any notice referred to in paragraph (1) shall

16 specify the date as of which debarment becomes effective

17 and the minimum period of time for which such debarment

18 is to remain effective.

19 ‘‘(4)(A) A provider barred from participating in the

20 program under this chapter may, after the expiration of

21 the minimum period of debarment referred to in para22 graph (3), apply to the Office, in such manner as the Of23 fice may by regulation prescribe, for termination of the

24 debarment.

25 ‘‘(B) The Office may—
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1 ‘‘(i) terminate the debarment of a provider,

2 pursuant to an application filed by such provider

3 after the end of the minimum debarment period, if

4 the Office determines, based on the conduct of the

5 applicant, that—

6 ‘‘(I) there is no basis under subsection (b)

7 or (c) for continuing the debarment; and

8 ‘‘(II) there are reasonable assurances that

9 the types of actions which formed the basis for

10 the original debarment have not recurred and

11 will not recur; or

12 ‘‘(ii) notwithstanding any provision of subpara13 graph (A), terminate the debarment of a provider,

14 pursuant to an application filed by such provider be15 fore the end of the minimum debarment period, if

16 the Office determines that—

17 ‘‘(I) based on the conduct of the applicant,

18 the requirements of subclauses (I) and (II) of

19 clause (i) have been met; and

20 ‘‘(II) early termination under this clause is

21 warranted based on the fact that the provider

22 is the sole community provider or the sole

23 source of essential specialized services in a com24 munity, or other similar circumstances.

25 ‘‘(5) The Office shall—
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1 ‘‘(A) promptly notify the appropriate State or

2 local agency or authority having responsibility for

3 the licensing or certification of a provider barred

4 from participation in the program under this chapter

5 of the fact of the debarment, as well as the rea6 sons for such debarment;

7 ‘‘(B) request that appropriate investigations be

8 made and sanctions invoked in accordance with ap9 plicable law and policy; and

10 ‘‘(C) request that the State or local agency or

11 authority keep the Office fully and currently in12 formed with respect to any actions taken in re13 sponse to the request.

14 ‘‘(6) The Office shall, upon written request and pay15 ment of a reasonable charge to defray the cost of comply16 ing with such request, furnish a current list of any provid17 ers barred from participating in the program under this

18 chapter, including the minimum period of time remaining

19 under the terms of each provider’s debarment.

20 ‘‘(g)(1) The Office may not make a determination

21 under subsection (b) or (c) adverse to a provider of health

22 care services or supplies until such provider has been given

23 written notice and an opportunity for a hearing on the

24 record. A provider is entitled to be represented by counsel,
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1 to present witnesses, and to cross-examine witnesses

2 against the provider in any such hearing.

3 ‘‘(2) Notwithstanding section 8918 any person ad4 versely affected by a final decision under paragraph (1)

5 may obtain review of such decision in the United States

6 Court of Appeals for the Federal Circuit. A written peti7 tion requesting that the decision be modified or set aside

8 must be filed within 60 days after the date on which

9 such person is notified of such decision.

10 ‘‘(3) Matters that were raised or that could have been

11 raised in a hearing under paragraph (1) or an appeal

12 under paragraph (2) may not be raised as a defense to

13 a civil action by the United States to collect a penalty or

14 assessment imposed under this section.

15 ‘‘(h) A civil action to recover civil monetary penalties

16 or assessments under subsection (c) shall be brought by

17 the Attorney General in the name of the United States,

18 and may be brought in the United States district court

19 for the district where the claim involved was presented or

20 where the person subject to the penalty resides. Amounts

21 recovered under this section shall be paid to the Office

22 for deposit into the Fund.

23 ‘‘(i) The Office shall prescribe regulations under

24 which, with respect to services or supplies furnished by

25 a debarred provider to a covered individual during the pe-
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1 riod of such provider’s debarment, payment or reimburse2 ment under this chapter may be made, notwithstanding

3 the fact of such debarment, if such individual did not know

4 or could not reasonably be expected to have known of the

5 debarment. In any such instance, the carrier or other ad6 ministrative entity involved shall take appropriate meas7 ures to ensure that the individual is informed of the debar8 ment and the minimum period of time remaining under

9 the terms of the debarment.

10 ‘‘§ 8916. Open enrollment periods; informational re11 quirements

12 ‘‘(a)(1) Under regulations which it shall prescribe,

13 the Office of Personnel Management shall, before the start

14 of each administrative year, provide a period of not less

15 than 3 weeks during which—

16 ‘‘(A) any eligible individual may elect to become

17 enrolled in a basic or supplementary plan under this

18 chapter, or begin participating in the flexible spend19 ing plan under section 8912;

20 ‘‘(B) an individual enrolled in a basic or supple21 mentary plan under this chapter may elect to termi22 nate the enrollment, transfer to another such plan,

23 or make any other change in the terms or conditions

24 of such individual’s enrollment which is allowable;

25 and
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1 ‘‘(C) any individual participating in the flexible

2 spending plan under section 8912 may elect to cease

3 participating in such plan or make any other change

4 allowable with respect to such plan.

5 ‘‘(2) In addition to any opportunity afforded under

6 paragraph (1), an individual enrolled in a basic plan under

7 this chapter shall be permitted to transfer such individ8 ual’s enrollment to another such plan, cancel such enroll9 ment, or make any other election allowable under this

10 chapter at such other times and subject to such conditions

11 as the Office may by regulation prescribe.

12 ‘‘(b)(1) The Office shall make available to each indi13 vidual eligible to enroll in a basic plan under this chapter

14 such information, in a form acceptable to the Office (after

15 consultation with the carrier, if any), as may be necessary

16 to enable the individual to make an informed choice with

17 respect to such plans and supplementary plans under this

18 chapter.

19 ‘‘(2) Each enrollee in a basic or supplementary health

20 benefits plan shall be issued an appropriate document set21 ting forth or summarizing—

22 ‘‘(A) the services or benefits, including maxi23 mums, limitations, and exclusions, to which the en24 rollee or the enrollee and any covered family mem25 bers are entitled thereunder;
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1 ‘‘(B) the procedure for obtaining benefits; and

2 ‘‘(C) the principal provisions of the plan affect3 ing the enrollee and any eligible family members.

4 ‘‘(3)(A) In addition to any informational require5 ments otherwise provided for under this subsection, regu6 lations prescribed by the Office shall include provisions to

7 ensure that each employee eligible to enroll in a basic plan

8 under this chapter (whether actually enrolled or not) is

9 notified in writing as to the rights afforded under section

10 8911a.

11 ‘‘(B) Notification under this paragraph shall be pro12 vided by employing agencies at an appropriate point in

13 time before each period under subsection (b)(1), so that

14 employees may be aware of their rights under section

15 8911a when making enrollment decisions during such

16 period.

17 ‘‘§ 8917. Studies, reports, and audits

18 ‘‘(a) The Office of Personnel Management shall make

19 a continuing study of the operation and administration of

20 this chapter, including surveys and reports on basic and

21 supplementary health benefits plans available to employees

22 and on the experience of the plans.

23 ‘‘(b) In carrying out this section, the Office shall, on

24 an annual basis, compile statistics and submit to the

25 Board a written report describing—
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1 ‘‘(1) the degree to which the basic and supple2 mentary health benefits plans are utilized during the

3 period covered by the report; and

4 ‘‘(2) the overall cost to the Government associ5 ated with providing each of those types of benefits

6 during that period.

7 ‘‘(c) Each contract entered into under this chapter

8 with a carrier shall contain provisions requiring such car9 rier to—

10 ‘‘(1) furnish such reasonable reports as the Of11 fice determines to be necessary to enable it to carry

12 out its functions under this chapter; and

13 ‘‘(2) permit the Office and representatives of

14 the General Accounting Office to examine records of

15 the carrier as may be necessary to carry out the pur16 poses of this chapter.

17 ‘‘(d) Each Government agency shall keep such

18 records, make such certifications, and furnish the Office

19 with such information and reports as may be necessary

20 to enable the Office to carry out its functions under this

21 chapter.

22 ‘‘§ 8918. Jurisdiction of courts

23 ‘‘The district courts of the United States have origi24 nal jurisdiction, concurrent with the United States Claims
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1 Court, of a civil action or claim against the United States

2 founded on this chapter.

3 ‘‘§ 8919. Regulations

4 ‘‘(a) The Office of Personnel Management may pre5 scribe regulations necessary to carry out this chapter, ex6 cept to the extent that regulatory authority is specifically

7 assigned to another agency.

8 ‘‘(b) The regulations of the Office may prescribe the

9 time at which and the manner and conditions under which

10 an employee is eligible to enroll in a basic or supple11 mentary plan under this chapter. The regulations may ex12 clude an employee on the basis of the nature and type

13 of his employment or conditions pertaining to it, such as

14 short-term appointment, seasonal or intermittent employ15 ment, and employment of like nature. The Office may not

16 exclude—

17 ‘‘(1) an employee or group of employees solely

18 on the basis of the hazardous nature of employment;

19 ‘‘(2) a teacher in the employ of the Board of

20 Education of the District of Columbia, whose pay is

21 fixed by section 1501 of title 31, District of Colum22 bia Code, on the basis of the fact that the teacher

23 is serving under a temporary appointment if the

24 teacher has been so employed by the Board for a pe-
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1 riod or periods totaling not less than two school

2 years;

3 ‘‘(3) an employee who is occupying a position

4 on a part-time career employment basis (as defined

5 in section 3401(2)); or

6 ‘‘(4) an employee who is employed on a tem7 porary basis and is eligible under section 8911b(b).

8 ‘‘(c) The regulations of the Office shall provide for

9 the beginning and ending dates of coverage (including for

10 family members) under basic and supplementary health

11 benefit plans. The regulations may permit the coverage to

12 continue, exclusive of the temporary extension of coverage

13 under section 8907(b)(3) or 8910(c)(2) and any nongroup

14 coverage, until the end of the pay period in which an em15 ployee is separated from the service, or until the end of

16 the month in which an annuitant or former spouse ceases

17 to be entitled to annuity, and in case of the death of an

18 employee or annuitant, may permit a temporary extension

19 of the coverage of members of his family for not to exceed

20 90 days.

21 ‘‘(d) The Secretary of Agriculture shall prescribe reg22 ulations to effect the application and operation of this

23 chapter to an individual named by section 8901(1)(F).

24 ‘‘(e) The regulations of the Office shall provide for

25 the establishment of—
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1 ‘‘(1) smoking-cessation and weight-control pro2 grams;

3 ‘‘(2) high-blood-pressure and cancer-screening

4 programs; and

5 ‘‘(3) other ‘wellness programs’ for Federal em6 ployees.

7 ‘‘(f)(1) The Office shall prescribe such regulations as

8 may be necessary to ensure that, for any annuitant eligible

9 to receive benefits both under this chapter and under part

10 A or B of title XVIII of the Social Security Act,

11 deductibles and coinsurance or copayment amounts under

12 this chapter shall be waived to the same extent as occurred

13 immediately before the date of enactment of the Federal

14 Employees Health Benefits Reform Act of 1993.

15 ‘‘(2) When an individual is eligible for benefits under

16 this chapter which would be duplicative of benefits under

17 part A or B of title XVIII of the Social Security Act, the

18 primary payer shall be the same as would have been the

19 case in those same circumstances immediately before the

20 date referred to in paragraph (1).

21 ‘‘§ 8920. Effect of other statutes

22 ‘‘Any provision of law outside of this chapter which

23 provides coverage or any other benefit under this chapter

24 to any individuals who (based on their being employed by

25 an entity other than the Government) would not otherwise
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1 be eligible for any such coverage or benefit shall not apply

2 with respect to any individual appointed, transferred, or

3 otherwise commencing that type of employment on or after

4 October 1, 1988.’’.

5 SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS.

6 (a) The last sentence of section 1840(d)(1) of the So7 cial Security Act (42 U.S.C. 1395s(d)(1)) is amended—

8 (1) by striking ‘‘8903 or 8903a’’ and inserting

9 ‘‘paragraph (1) or (2) of section 8903’’; and

10 (2) by striking ‘‘8906’’ and inserting ‘‘8905’’.

11 (b) Section 613(c) of the Alaska Railroad Transfer

12 Act of 1982 (45 U.S.C. 1212(c)) is repealed.

13 (c)(1) Section 832 of the Foreign Service Act of 1980

14 (22 U.S.C. 4069c) and section 16 of the Central Intel15 ligence Agency Act of 1949 (50 U.S.C. 403p) are each

16 amended—

17 (A) by amending subparagraph (B) of sub18 section (b)(1) to read as follows:

19 ‘‘(B) arranges to pay currently into the Em20 ployees Health Benefits Fund under section 8914 of

21 title 5, United States Code, an amount equal to the

22 sum which would be required under section

23 8911a(d)(1)(A) of such title.’’; and

24 (B) by amending subsection (e) to read as fol25 lows:
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1 ‘‘(e) For purposes of this section, the term ‘health

2 benefits plan’ means a health benefits plan described in

3 paragraph (1) or (2) of section 8903 of title 5, United

4 States Code.’’.

5 (2) Section 833 of the Foreign Service Act of 1980

6 (22 U.S.C. 4069c-1) is repealed.

7 (d) Section 104(e) of the Indian Self–Determination

8 and Education Assistance Act (25 U.S.C. 450i(e)) is

9 amended—

10 (1) in the matter before paragraph (1) by strik11 ing ‘‘8914’’ and inserting ‘‘8920’’; and

12 (2) in paragraph (3) by striking ‘‘8909’’ and in13 serting ‘‘8914’’.

14 SEC. 4. EFFECTIVE DATE; SAVINGS PROVISIONS; COORDI15 NATION.

16 (a) EFFECTIVE DATE.—

17 (1) IN GENERAL.—This Act and the amend18 ments made by this Act shall take effect at the be19 ginning of the first fiscal year beginning at least 12

20 months after the date of enactment of this Act.

21 (2) SPECIAL RULE.—In order to facilitate the

22 timely implementation of the health benefits pro23 gram provided for by this Act, members of the Fed24 eral Employees Health Benefits Board may be ap25 pointed at any time on or after the first day of the
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1 ninth month preceding the effective date under para2 graph (1), and, once constituted, the Board may ex3 ercise any authority which would be available to it

4 if the amendments made by this Act were then in

5 effect.

6 (b) SAVINGS PROVISIONS.—

7 (1) CLAIMS.—For purposes of determining the

8 rights of any individual covered by a health benefits

9 plan immediately before the effective date of this

10 Act, and the obligations of the carrier offering such

11 plan, the provisions of chapter 89 of title 5, United

12 States Code, and any contract thereunder, as in ef13 fect immediately before such effective date, shall

14 continue to apply in the same way as if an election

15 to transfer coverage to another such plan had been

16 made by or with respect to such individual during

17 the period last afforded before such effective date

18 under section 8905(f)(1) of such title (as then in

19 effect).

20 (2) DEBARMENTS.—

21 (A) ORDERS.—Any debarment order is22 sued under section 8902a of title 5, United

23 States Code, before this Act takes effect shall

24 continue in effect, according to its terms, unless

25 modified, terminated, or superseded in accord-
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1 ance with applicable succeeding provisions of

2 law.

3 (B) PROCEEDINGS.—Nothing in this Act

4 shall affect any administrative proceeding pend5 ing under such section 8902a at the time this

6 Act takes effect. Orders shall be issued in such

7 proceedings and appeals shall be taken there8 from as if this Act had not been enacted.

9 (c) COORDINATION.—The Office of Personnel Man10 agement shall prescribe regulations to ensure that, after

11 the effective date of this Act, any class of individuals who

12 would then otherwise have been entitled to any coverage,

13 rights, or benefits under chapter 89 of title 5, United

14 States Code, but who (because of this Act) would cease

15 to be so entitled, shall be allowed to participate in the pro16 gram established by this Act.

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