[Federal Register Volume 72, Number 50 (Thursday, March 15, 2007)]
[Rules and Regulations]
[Pages 12037-12038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-4695]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 875

RIN 3206-AK99


Federal Long Term Care Insurance Program: Miscellaneous Changes, 
Corrections, and Clarifications

AGENCY: Office of Personnel Management.

ACTION: Final regulation.

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SUMMARY: The Office of Personnel Management (OPM) is issuing a final 
rule to make miscellaneous changes, corrections, and clarifications to 
the Federal Long Term Care Insurance Program (FLTCIP) regulations.

DATES: Effective Date: April 16, 2007.

FOR FURTHER INFORMATION CONTACT: Edward M. DeHarde, Center for Employee 
and Family Support Policy, Strategic Human Resources Policy Division, 
Office of Personnel Management, 1900 E Street, NW., Washington, DC 
20415; or call him at 202-606-0004.

SUPPLEMENTARY INFORMATION: The current FLTCIP regulations were 
published in the Federal Register at 70 FR 30605, May 27, 2005. In 
those regulations OPM replaced references to ``Federal civilian and 
Postal employees and members of the uniformed services'' with ``active 
workforce member'' in several places. We are making a similar change in 
two additional places: Sec.  875.405 and Sec.  875.410. We are also 
correcting a section reference in Sec.  875.209 of the previously 
published regulations.
    In addition, Sec.  875.408 of the FLTCIP regulations discusses 
incontestability, a provision that allows coverage based on an 
erroneous application to continue under certain circumstances. The 
FLTCIP contractor often doesn't learn that coverage is based on an 
erroneous application until someone files a claim, and the contractor 
becomes aware that the information on the individual's application 
differed from what is shown in the individual's medical records. If the 
erroneous coverage has been in effect less than two years, or if the 
application contained knowingly false or misleading information, the 
contractor may rescind (void) the coverage and refund the individual's 
premiums. Section 875.104 of the FLTCIP regulations contains procedures 
for resolving disputes concerning eligibility for benefits and payment 
of claims. These final regulations clarify that the claims dispute 
procedures apply only to persons who have valid coverage under the 
Program. They do not apply to individuals whose erroneous coverage is 
rescinded.
    A proposed rule was published to amend 5 CFR part 875 in the 
Federal Register at 71 FR 19459, April 14, 2006. OPM requested comments 
by June 13, 2006. We received one comment by that date, from an FLTCIP 
enrollee. The issues raised by this commenter are discussed below.
    The commenter did not address the miscellaneous changes, 
corrections, and clarifications that were contained in the proposed 
regulation. Instead, the commenter suggested that OPM should 
specifically list in the regulations which injuries qualify for 
coverage under FLTCIP to ensure that enrollees with similar injuries 
receive similar coverage. The comment received is beyond the scope of 
the proposed change to FLTCIP regulations. In addition, coverage under 
FLTCIP is not based on an enrollee's injury or medical diagnosis; it is 
based on an enrollee's established inability to perform defined 
activities of daily living or an enrollee's severe cognitive 
impairment. Therefore, for the reasons supplied in the proposed rule, 
the proposed rule amending 5 CFR part 875 which was published in the 
Federal Register at 71 FR 19459, April 14, 2006, is adopted as a final 
rule without change.

Executive Order 12866, Regulatory Review

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

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
affect only enrollees in the Federal Long Term Care Insurance Program.

List of Subjects in 5 CFR Part 875

    Administrative practices and procedures, Employee benefit plans, 
Government contracts, Government employees, Health insurance, Military 
personnel, Retirement.

    Office of Personnel Management.
Linda M. Springer,
Director.

0
Accordingly, OPM is amending 5 CFR part 875, as follows:

PART 875--FEDERAL LONG TERM CARE INSURANCE PROGRAM

0
1. The authority citation for 5 CFR part 875 continues to read as 
follows:

    Authority: Authority: 5 U.S.C. 9008.


0
2. In Sec.  875.104 add paragraph (f) to read as follows:


Sec.  875.104  What are the steps required to resolve a dispute 
involving benefit eligibility or payment of a claim?

* * * * *
    (f) The procedures described in paragraphs (a), (b), (c), (d), and 
(e) of this section apply only if you have valid coverage under the 
FLTCIP. If the Carrier determines that your coverage was based on an 
erroneous application and voids the coverage as described in Sec.  
875.408 of this part, these provisions do not apply. The Carrier will 
provide you with information on your review rights in its rescission 
letter (letter voiding your coverage).

0
3. In Sec.  875.209 revise the last sentence of paragraph (b) to read 
as follows:


Sec.  875.209  How do I demonstrate that I am eligible to apply for 
coverage?

* * * * *
    (b) * * * The incontestability provisions in Sec.  875.408 do not 
apply to this section.

0
4. In Sec.  875.405 revise the first sentence of paragraph (a)(1) to 
read as follows:


Sec.  875.405  If I marry, may my new spouse apply for coverage?

    (a)(1) If you are an active workforce member and you have married, 
your spouse is eligible to submit an application for coverage under 
this section within 60 days from the date of your marriage and will be 
subject to the underwriting requirements in force for the spouses of 
active workforce members during the most recent open season. * * *
* * * * *

0
5. In Sec.  875.408 revise paragraph (a) to read as follows:

[[Page 12038]]

Sec.  875.408  What is the significance of incontestability?

    (a) Incontestability means coverage issued based on an erroneous 
application may remain in effect. Such coverage will not remain in 
effect under any of the following conditions:
    (1) If your coverage has been in force for less than 6 months, the 
Carrier may void your coverage upon a showing that information on your 
signed application that was material to your approval for coverage is 
different from what is shown in your medical records.
    (2) If your coverage has been in force for at least 6 months but 
less than 2 years, the Carrier may void your coverage upon a showing 
that information on your signed application that was material to your 
approval for coverage is different from what is shown in your medical 
records and pertains to the condition for which benefits are sought.
    (3) After your coverage has been in effect for 2 years, the Carrier 
may void your coverage only upon a showing that you knowingly and 
intentionally made a false or misleading statement or omitted 
information in your signed application for coverage regarding your 
health status that was material to your approval for coverage.
    (4) If your coverage is voided, as described in paragraph (a)(1), 
(a)(2), or (a)(3) of this section, no claims will be paid. In addition, 
the provisions of Sec.  875.104 relating to the procedures for 
resolving a dispute involving benefits eligibility or claims denials do 
not apply to your situation. You may request a review by the Carrier if 
you believe that your coverage was voided in error. You must submit 
your request in writing to the Carrier within 30 days of the date of 
the rescission letter (letter voiding your coverage).
* * * * *

0
6. In Sec.  875.410 revise the first sentence to read as follows:


Sec.  875.410  May I continue my coverage when I leave Federal or 
military service?

    If you are an active workforce member, your coverage will 
automatically continue when you leave active service, as long as the 
Carrier continues to receive the required premium when due. * * *

 [FR Doc. E7-4695 Filed 3-14-07; 8:45 am]
BILLING CODE 6325-39-P