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[Federal Register Volume 78, Number 103 (Wednesday, May 29, 2013)]
[Rules and Regulations]
[Pages 32116-32121]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-12412]

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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

RIN 0720-AB48
[Docket ID: DOD-2011-HA-0029]

TRICARE Young Adult

AGENCY: Office of the Secretary, DoD.

ACTION: Final rule.

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SUMMARY: This final rule implements Section 702 of the Ike Skelton 
National Defense Authorization Act for Fiscal Year 2011 (NDAA for 
FY11). It establishes the TRICARE Young Adult (TYA) program to provide 
an extended TRICARE Program coverage opportunity to most unmarried 
children under the age of 26 of uniformed services sponsors. The TYA 
program is a premium-based program.

DATES: This rule is effective June 28, 2013.

FOR FURTHER INFORMATION CONTACT: Mark Ellis, TRICARE Management 
Activity, TRICARE Policy and Operations Directorate, 7700 Arlington 
Boulevard, Suite 5101, Falls Church, VA 22042-5101, telephone (703) 
681-0039.

SUPPLEMENTARY INFORMATION: 

I. Introduction and Background

A. Overview

    An interim final rule was published in the Federal Register on 
April 27, 2011 (76 FR 23479-23485) that established the TYA program by 
implementing Section 702 of the Ike Skelton NDAA for FY 2011 (Pub. L. 
111-383). The TYA program provides TRICARE Program coverage to 
unmarried children under the age of 26 of TRICARE-eligible sponsors who 
no longer meet the age requirements for TRICARE eligibility (age 21, or 
23 if enrolled in a full-time course of study at an approved 
institution of higher learning, and the sponsor provides more than 50 
percent of the student's financial support), and who are not eligible 
for medical coverage from an eligible employer-sponsored plan based on 
their individual employment status (as defined in section 5000A(f)(2) 
of the Internal Revenue Code of 1986). If qualified, they can purchase 
TRICARE Standard/Extra or TRICARE Prime benefits coverage. The 
particular TRICARE option available depends on the uniformed service 
sponsor's eligibility and the availability of the TRICARE option in the 
dependent's geographic location.

B. Public Comments

    The interim final rule was published in the Federal Register on 
April 27, 2011. One online comment was received via 
www.regulations.gov. We thank the commenter for the comments. Specific 
matters raised by those comments are summarized below.

II. Provisions of the Rule Regarding the TYA Program

A. Establishment of the TYA Program (Sec.  199.26(a))

    1. Provisions of Interim Final Rule. This paragraph describes the 
nature, purpose, statutory basis, scope, and major features of TYA, a 
full cost, premium-based TRICARE Program coverage made available for 
purchase worldwide. TYA is similar to young adult coverage under the 
Patient Protection and Affordable Care Act, but reflects a number of 
differences between TRICARE, a statutorily-created DoD health benefits 
program and typical civilian health care plans. Among these is that TYA 
is a full cost premium based program; it is limited to unmarried 
dependent children of TRICARE-eligible sponsors; and the dependent 
child must not be eligible for medical coverage from an eligible 
employer-sponsored plan based on their individual

[[Page 32117]]

employment status (an exclusion that does not expire on January 1, 
2014, but is permanent). TYA is codified in Title 10, United States 
Code, Section 1110b.
    The major features of the program include making TYA coverage 
available for purchase at a premium which will represent the full cost, 
including reasonable administrative costs, as determined on an 
appropriate actuarial basis for coverage. There will be various 
premiums depending on whether the dependent's sponsor is active duty, 
retired, or eligible under another option such as TRICARE Reserve 
Select (TRS) or TRICARE Retired Reserve (TRR), and the adult 
dependent's desired health coverage--TRICARE Standard/Extra or, for 
those eligible and where available, TRICARE Prime. The rules and 
procedures otherwise outlined in Part 199 of 32 CFR which implements 
Chapter 55 of Title 10, U.S. Code, relating to the operation and 
administration of the TRICARE program based on the sponsor's status and 
health coverage plan will apply for cost-shares, deductibles, and 
catastrophic caps upon purchasing TYA coverage. Young adult dependents 
of members on active duty orders written, or otherwise continuous, for 
more than 30 days are eligible for benefits under the TRICARE Extended 
Care Health Option (ECHO) program under Sec.  199.5 of this Part. The 
TRICARE Dental Program (Sec.  199.13 of this Part) and the TRICARE 
Retiree Dental Program (Sec.  199.22 of this Part) are not included as 
part of TYA.
    Under TYA, qualified young adult dependents may purchase individual 
TRICARE Program coverage by submitting a completed request in the 
appropriate format along with an initial payment of the applicable 
premium at the time of enrollment. When TRICARE Program coverage 
becomes effective, a TYA purchaser receives the TRICARE benefits 
according to the rules governing the TRICARE Program that the dependent 
qualified for and selected based on the uniformed services sponsor's 
status (active duty, retired, Selected Reserve, or Retired Reserve) and 
the availability of a desired TYA option in his or her geographic 
location. The rules and procedures otherwise outlined in the TRICARE 
Regulation (Part 199) relating to the operation and administration of 
the TRICARE programs will apply for cost-shares, deductibles, and 
catastrophic caps upon purchasing TYA coverage. The young adult 
dependent's cost-shares, deductibles, and catastrophic caps will be 
based on the sponsor's status (active duty, retired, Selected Reserve, 
or Retired Reserve) and whether the dependent has purchased TRICARE 
Standard/Extra or Prime coverage. TYA dependents are provided access 
priority for care in military treatment facilities based on their 
uniformed services sponsor's status and the selection of a TYA option.
    The Continued Health Care Benefits Program (CHCBP) (see Sec.  
199.20) shall be made available to all young adult dependents after 
aging out of the TYA program or who otherwise lose their eligibility 
for the TYA program, whether due to a change in the status of the young 
adult and/or the status of their sponsor. CHCBP participants are not 
eligible for military treatment facility (MTF) care other than in 
emergencies.
    2. Analysis of Major Public Comments: One comment noted support for 
the TYA program because it will undoubtedly increase health insurance 
coverage for those who may have gone uninsured.
    Response: We acknowledge the commenter's statement as consistent 
with the purposes of the TYA program.
    3. Provisions of the Final Rule.
    In Sec.  199.26(a), we clarified that the uniformed service 
sponsors must be TRICARE eligible to qualify their eligible dependents 
to purchase TYA coverage. We also clarified the criteria for TRICARE 
eligibility up to the age of 23.
    In Sec.  199.26(a)(4)(i)(D), we deleted a potentially misleading 
reference to Sec.  199.3 of this Part. Eligibility and qualifications 
for the TYA program as defined in Sec.  199.3 of this Part will be 
clarified in Sec.  199.26(b).
    We clarified in Sec.  199.26(a)(4)(i)(D)(2) that TRICARE Prime 
coverage may be available for purchase by dependents of sponsors who 
are retired members if otherwise qualified, but not dependents of 
sponsors who are in the Retired Reserve if their sponsor participates 
in TRR. Dependents of retired members in the Retired Reserve are only 
eligible to purchase TRICARE Standard/Extra coverage. Also, it was an 
error to state that the retired member must be eligible for a TRICARE 
Prime plan as a qualification for the young adult dependent to be 
eligible to purchase TRICARE Prime coverage. Dependents of retired 
members other than members of the Retired Reserve may purchase TRICARE 
Prime coverage if otherwise qualified even if the retired sponsor is 
not eligible for or enrolled in TRICARE Prime.

B. Qualifications for TYA coverage (Sec.  199.26(b))

    1. Provisions of the Interim Final Rule. This paragraph defines the 
statutory conditions under which unmarried children of TRICARE-eligible 
sponsors qualify as young adult dependents under the TYA program. To 
qualify as a young adult dependent, the dependent must be under the age 
of 26, not be otherwise eligible for another TRICARE Program, and not 
be eligible for medical coverage from an eligible employer-sponsored 
plan based on their individual employment status (as defined in section 
5000A(f)(2) of the Internal Revenue Code of 1986). The dependents' 
sponsor is responsible for keeping the Defense Enrollment Eligibility 
Reporting System (DEERS) current with eligibility data through the 
sponsor's Service personnel office. Using information from the DEERS, 
TRICARE contractors have the responsibility to validate a dependent's 
qualifications to purchase TYA coverage.
    2. Analysis of Major Public Comments. No public comments were 
received relating to this section of the rule.
    3. Provisions of the Final Rule. In Sec.  199.26(b)(1)(i), we 
clarified that former dependents under the Transitional Compensation 
Program (TCP) under 10 U.S.C 1059 as defined in Sec.  199.3(b)(2)(iii) 
of this Part are not eligible to purchase TYA coverage because TRICARE 
coverage for these former dependents under the TCP is not authorized by 
chapter 55 of title 10 United States Code (U.S.C.), nor by section 
1145a of 10 U.S.C, but rather by section 1059 of 10 U.S.C.
    In that same paragraph, we clarify that dependents of North 
Atlantic Treaty Organization (NATO) sponsors as defined in Sec.  
199.3(a) of this Part are not eligible to purchase TYA coverage because 
NATO treaties do not specifically address young adult coverage.

C. TYA premiums (Sec.  199.26(c))

    1. Provisions of Interim Final Rule. Qualified young adult 
dependents are charged premiums for coverage under TYA that represent 
the full cost of providing TRICARE benefits under this program, 
including the reasonable costs of administration of the program. The 
total annual premium amounts shall be determined by the Assistant 
Secretary of Defense for Health Affairs (ASD(HA)) using an appropriate 
actuarial basis and are established and updated annually, on a calendar 
year basis, by the ASD(HA) for qualified young adult dependents. A 
premium shall be charged for each individual qualified young adult 
dependent regardless of whether a sponsoring member has more than one 
young adult dependent child who qualifies or purchases coverage under 
the TYA program. The cost shares

[[Page 32118]]

for TRICARE Standard/Extra or Prime programs in which the adult child 
is enrolled shall be based on the status of the dependent's sponsor. 
Because of the differences in cost-shares among the programs and status 
of the sponsor, there will be a different premium for TRICARE Standard/
Extra and TRICARE Prime, including the Uniformed Services Family Health 
Plan. Premiums are to be paid monthly. The monthly rate for each month 
of a calendar year is one-twelfth of the annual rate for that calendar 
year.
    The appropriate actuarial basis used for calculating premium rates 
shall be one that most closely approximates the actual cost of 
providing care to the same demographic population as those enrolled in 
TYA as determined by the ASD(HA). TYA premiums shall be based on the 
actual costs of providing benefits to TYA dependents during the 
preceding years if the population of young adult dependents enrolled in 
TYA is large enough during those preceding years to be considered 
actuarially appropriate. Until such time that actual costs from those 
preceding years become available, TYA premiums shall be based on the 
actual costs during the preceding calendar years for providing benefits 
to the population of dependents over the age 21 until reaching age 26 
in order to make the underlying group actuarially appropriate. An 
adjustment may be applied to cover overhead costs for administration of 
the program by the government. Additionally, premium adjustments may be 
made to cover the prospective costs of any significant program changes.
    2. Analysis of Major Public Comments. No public comments were 
received relating to this section of the rule.
    3. Provisions of the Final Rule. The final rule is consistent with 
the interim final rule.

D. Procedures (Sec.  199.26(d))

    1. Provisions of Interim Final Rule. The Director, TRICARE 
Management Activity (TMA) will establish procedures for administration 
of TYA. These will include procedures to purchase individual coverage, 
such as a request in an approved format, along with an initial payment 
of the applicable premium. Applicants must also certify that they meet 
the statutory qualifications to purchase coverage under this program. 
Additional procedures will be established for a qualified young adult 
dependent to purchase TYA coverage with an effective date immediately 
following the last effective date of coverage under which they 
previously qualified in another TRICARE option.
    There will be open enrollment so that a qualified young adult 
dependent may purchase TYA coverage at any time. The effective date of 
coverage for TRICARE Standard/Extra will coincide with the first day of 
a month after the date the application and required payment is 
received. The effective date of coverage for TRICARE Prime will be the 
first day of the second month after the month in which application and 
required payment is received. There will be a limited period for 
retroactive coverage. A qualified young adult dependent may elect to 
start coverage under the TRICARE Standard/Extra plan effective with the 
statutory start date of January 1, 2011, if the dependent was eligible 
as of that date. If retroactive coverage is elected then retroactive 
premiums must be paid back to the statutory start date of January 1, 
2011. If no retroactive coverage is elected or the retroactive premiums 
are not paid within the time prescribed, then coverage will not be 
retroactive and coverage will apply only prospectively beginning on the 
first day of the month after the date of the application. There shall 
be no retroactive coverage offered under any TRICARE Prime plan. No 
purchase of retroactive coverage may take place after September 30, 
2011.
    With respect to termination of coverage, a loss of eligibility or 
entitlement for medical benefits of the sponsor will result in 
termination of coverage for the dependent's TYA coverage on the same 
date as the sponsor, unless otherwise authorized. Upon the death of an 
active duty sponsor, young adult dependents may purchase TYA coverage 
until reaching age 26. If a Selected Reserve (Sel Res) or Retired 
Reserve member ends TRS or TRR coverage, respectively, eligibility for 
the young adult dependent to purchase coverage under TYA also ends. If 
a Sel Res sponsor dies while enrolled in TRS, the otherwise eligible 
young adult dependent can purchase TYA coverage up to 6 months after 
the death of the sponsor. If a Retired Reserve sponsor dies while 
enrolled in TRR, the otherwise eligible young adult dependent may 
continue to purchase TYA coverage until the date on which the deceased 
sponsor would have turned age 60. If the Retired Reserve sponsor was 
not enrolled in TRR at the time of death, there is no eligibility to 
purchase TYA coverage until the sponsor would have turned age 60. As of 
the date on which the deceased retired sponsor would have turned age 
60, the young adult dependent qualifies as a survivor of a deceased 
retired sponsor and can purchase TYA coverage until reaching age 26. 
Coverage will terminate whenever a dependent ceases to meet the 
qualifications for the program. Claims will be denied effective with 
the termination date. In addition, covered dependents may terminate 
coverage at any time by submitting a completed request in the 
appropriate format. Dependents whose coverage under TYA terminates for 
failure to pay premiums in accordance with program requirements will 
not be allowed to purchase coverage again under TYA for a period of one 
year following the date of their coverage termination. This 
ineligibility period shall be known as a ``lockout'' period. A request 
for a waiver of the ``lockout'' period may be granted by the Director, 
TRICARE Management Activity, based on extraordinary circumstances 
beyond the control of the young adult dependent which resulted in 
inability to make payments in accordance with program requirements. The 
Director may allow a 90-day grace period for payment to be made. 
However, if payment is not made by the 90th day, then coverage will be 
deemed to have terminated as of the last day of the month in which an 
appropriate payment was made and no claims may be paid for care 
rendered after the date of termination. Upon termination of eligibility 
to purchase TYA coverage, qualified dependents may purchase coverage 
under the CHCBP for up to 36 months except if locked out of TYA. Upon 
application and payment of appropriate premiums, a young adult 
dependent who has already purchased coverage under any of the options 
offered under TYA may change to another TRICARE option for which the 
dependent is eligible. Eligibility is based on the sponsor's status and 
the dependent's geographic location.
    2. Analysis of Major Public Comments. No public comments were 
received relating to this section of the rule.
    3. Provisions of the Final Rule. In Sec.  199.26(d)(2)(i)(A), we 
deleted eligibility to purchase TYA coverage by former dependents in 
the Transitional Compensation Program under 10 U.S.C 1059 and under 
Sec.  199.3(b)(2)(iii) of this Part. We added eligibility to purchase 
TYA coverage for dependents of former active duty members covered under 
the Transitional Assistance Management Program (TAMP) who are otherwise 
qualified.
    We added a new Sec.  199.26(d)(2)(iii) to add that young adult 
dependents currently enrolled in TYA may have their TRICARE coverage 
terminated when the sponsor's status changes (for example, from active 
duty to retired

[[Page 32119]]

status). Young adult dependents have 30 thirty days to re-establish 
their TYA coverage without a break in coverage and must re-qualify for 
TYA coverage for which they are then eligible.
    In Sec.  199.26(d)(2) and subordinate paragraphs, we clarified the 
rule that procedures may be established for TYA coverage to be 
suspended up to one year followed by final termination for young adult 
dependents if they fail to make premium payments in accordance with 
established procedures or otherwise request suspension/termination of 
coverage. Procedures may be established for the suspension to be lifted 
upon request before final termination is applied. Procedures may also 
be established for the suspension to be lifted upon request for undue 
hardship as defined by Sec.  199.26(g) before final termination is 
applied.
    In Sec.  199.26(d)(5), we added that upon a change in sponsor 
status, young adult dependents currently enrolled in TYA coverage may 
have their coverage automatically transferred to another TRICARE option 
consistent with the sponsor's new status. Recurring TYA premiums may be 
automatically adjusted by the servicing contractor.

E. Preemption of State Laws (Sec.  199.26(e))

    1. Provisions of Interim Final Rule. This paragraph provides that 
the preemptions of State and local laws established for the TRICARE 
program also apply to TYA. Any State or local law or regulation 
pertaining to health insurance, prepaid health plans, or other health 
care delivery, administration, and financing methods is preempted and 
does not apply in connection with TYA.
    2. Analysis of Major Public Comments. No public comments were 
received relating to this section of the rule.
    3. Provisions of the Final Rule. The final rule is consistent with 
the interim final rule.

F. Administration (Sec.  199.26(f))

    1. Provisions of Interim Final Rule. This paragraph provides that 
the Director, TRICARE Management Activity, may establish other 
administrative processes and procedures necessary for the effective 
administration of TYA.
    2. Analysis of Major Public Comments. No public comments were 
received relating to this section of the rule.
    3. Provisions of the Final Rule. The final rule is consistent with 
the interim final rule.

G. Terminology (Sec.  199.26(g))

    1. Provisions of Interim Final Rule. New paragraph.
    2. Analysis of Major Public Comments. No public comments were 
received relating to this section of the rule.
    3. Provisions of the Final Rule. Added definition of undue hardship 
as it relates to suspension and termination of TYA coverage.

III. Regulatory Procedures

Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''

    Executive Orders 12866 and 13563 require certain regulatory 
assessments for any significant regulatory action that would result in 
an annual effect on the economy of $100 million or more, or have other 
substantial impacts. This rule will not. This final rule will not have 
an impact on the economy greater than $100 million annually.

Congressional Review Act

    The Congressional Review Act establishes certain procedures for 
major rules, defined as those with similar major impacts. This final 
rule will not have a major impact as that term is used under the 
Congressional Review Act.

Section 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    This rule does not contain unfunded mandates. It does not contain a 
Federal mandate that may result in the expenditure by State, local, and 
tribunal governments, in aggregate, or by the private section, of $100 
million in any one year.

Public Law 96-354, ``Regulatory Flexibility Act''

    The Regulatory Flexibility Act (RFA) requires that each Federal 
agency prepare, and make available for public comment, a regulatory 
flexibility analysis when the agency issues a regulation that would 
have significant impact on a substantial number of small entities. This 
final rule will not have a significant impact on a substantial number 
of small entities.

Paperwork Reduction Act of 1995

    This rule will impose additional information collection 
requirements on the public under the under the provisions of the 
Paperwork Reduction Act (44 U.S.C. Chapter 35) in the form of a TYA 
application form. Comments were solicited via the interim final rule 
published on April 27, 2011 (76 FR 23479-23485). No comments were 
received. OMB approved the TYA application form and assigned the 
collection of information OMB Control Number 0720-0049.

Executive Order 13132, ``Federalism''

    We have examined the impact(s) of the final rule under Executive 
Order 13132 and it does not have policies that have federalism 
implications that would have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. The preemption provisions in the rule conform to 
law and long-established TRICARE policy. Therefore, consultation with 
State and local officials is not required.

List of Subjects in 32 CFR Part 199

    Claims, Handicapped, Health insurance, and Military personnel.

    Accordingly, 32 CFR part 199 is amended as follows:

PART 199--[AMENDED]

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

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

0
2. Section 199.26 is revised to read as follows:

Sec.  199.26  TRICARE Young Adult.

    (a) Establishment. The TRICARE Young Adult (TYA) program offers the 
medical benefits provided under the TRICARE Program to qualified 
unmarried adult children of TRICARE-eligible uniformed service sponsors 
who do not otherwise have eligibility for medical coverage under a 
TRICARE Program at age 21 (23 if enrolled in a full-time course of 
study at an approved institution of higher learning, and the sponsor 
provides over 50 percent of the student's financial support), and are 
under age 26.
    (1) Purpose. As specified in paragraph (c) of this section, TYA is 
a premium-based health option that is available for purchase by any 
qualified adult child as that term is defined in paragraph (b) of this 
section. The TYA program allows a qualified adult child to purchase 
TRICARE coverage.
    (2) Statutory authority. TYA is authorized by 10 U.S.C. 1110b.
    (3) Scope of the program. TYA is geographically applicable to the 
same extent as specified in Sec.  199.1(b)(1).
    (4) Major features of TYA. (i) TRICARE rules applicable.
    (A) Unless specified in this section or otherwise prescribed by the 
Assistant Secretary of Defense (Health Affairs)

[[Page 32120]]

(ASD (HA)), provisions of this part apply to TYA.
    (B) The TRICARE Dental Program (Sec.  199.13) and the TRICARE 
Retiree Dental Program (Sec.  199.22) are not covered under TYA.
    (C) TRICARE Standard is available to all TYA-eligible young adult 
dependents. TYA enrollees in TRICARE Standard may use TRICARE Extra 
(under Sec.  199.17(e)).
    (D) TRICARE Prime is available to TYA-eligible young adult 
dependents, provided that TRICARE Prime (including the Uniformed 
Services Family Health Plan) is available in the geographic location 
where the TYA enrollee resides. This applies to TYA-eligible:
    (1) Dependents of sponsors on active duty orders written, or 
otherwise continuously, for more than 30 days or covered by TAMP (under 
Sec.  199.3(e));
    (2) Dependents of sponsors who are retired members other than 
retired members of the Retired Reserve; and
    (3) Survivors of members who died while on active duty for more 
than 30 days or while receiving retired or retainer pay.
    (ii) Premiums. TYA coverage is a premium based program that an 
eligible young adult dependent may purchase. There is only individual 
coverage, and a premium shall be charged for each dependent even if 
there is more than one qualified dependent in the uniformed service 
sponsor's family that qualifies for TYA coverage. Dependents qualifying 
for TYA status can purchase individual TRICARE Standard/Extra or 
TRICARE Prime coverage (as applicable) according to the rules governing 
the TRICARE option for which they are qualified on the basis of their 
uniformed service sponsor's TRICARE-eligible status (active duty, 
retired, Selected Reserve, or Retired Reserve) and the availability of 
a desired option in their geographic location. Premiums shall be 
determined in accordance with paragraph (c) of this section.
    (iii) Procedures. Under TYA, qualified dependents under paragraph 
(b) of this section may purchase individual TYA coverage by submitting 
a completed request in the appropriate format along with an initial 
payment of the applicable premium. Procedures for purchasing coverage 
and paying applicable premiums are prescribed in paragraph (d) of this 
section.
    (iv) Benefits. When their TYA coverage becomes effective, qualified 
beneficiaries receive the benefit of the TRICARE option that they 
selected, including, if applicable, access to military treatment 
facilities and pharmacies. TYA coverage features the per service cost 
share, deductible and catastrophic cap provisions based on program 
selected, i.e., the TRICARE Standard/Extra program or the TRICARE Prime 
program, as well as the status of their military sponsor. Access to 
military treatment facilities under the system of access priorities in 
Sec.  199.17(d)(1) is also based on the program selected as well as the 
status of the military sponsor. Premiums are not credited to 
deductibles or catastrophic caps.
    (v) Transition period. During fiscal year 2011, the TYA program 
will include only TRICARE Standard program coverage.
    (b) Eligibility for TRICARE Young Adult coverage.--(1) Young Adult 
Dependent. A young adult dependent qualifies to purchase TYA coverage 
if the dependent meets the following criteria:
    (i) Would be a dependent child under 10 U.S.C. 1072, but for 
exceeding the age limit under that section (abused dependents and NATO 
dependents are not eligible for TYA coverage); and
    (ii) Is a dependent under the age of 26; and
    (iii) Is not enrolled, or eligible to enroll, for medical coverage 
in an eligible employer-sponsored health plan as defined in section 
5000A(f)(2) of the Internal Revenue Code of 1986; and
    (iv) Is not otherwise eligible under Sec.  199.3; and
    (v) Is not a member of the uniformed services.
    (2) The dependents' sponsor is responsible for keeping the Defense 
Enrollment Eligibility Reporting System (DEERS) current with 
eligibility data through the sponsor's Service personnel office. Using 
information from the DEERS, the TRICARE regional contractors have the 
responsibility to validate a dependent's qualifications to purchase TYA 
coverage.
    (c) TRICARE Young Adult premiums. Qualified young adult dependents 
are charged premiums for coverage under TYA that represent the full 
cost of the program, including reasonable administrative costs, as 
determined by the ASD(HA) utilizing an appropriate actuarial basis for 
the provision of TRICARE benefits for the TYA-eligible beneficiary 
population. Separate premiums shall be established for TRICARE Standard 
and Prime plans. There may also be separate premiums based on the 
uniformed services sponsor's status. Premiums are to be paid monthly. 
The monthly rate for each month of a calendar year is one-twelfth of 
the annual rate for that calendar year.
    (1) Annual establishment of rates.--(i) Monthly premium rates shall 
be established and updated annually on a calendar year basis by the 
ASD(HA) for TYA individual coverage.
    (ii) The appropriate actuarial basis used for calculating premium 
rates shall be one that most closely approximates the actual cost of 
providing care to a similar demographic population (based on age and 
health plans) as those enrolled in TYA, as determined by the ASD(HA). 
TYA premiums shall be based on the actual costs of providing benefits 
to TYA dependents during the preceding years if the population of TYA 
enrollees is large enough during those preceding years to be considered 
actuarially appropriate. Until such time that actual costs from those 
preceding years become available, TYA premiums shall be based on the 
actual costs during the preceding calendar years for providing benefits 
to the population of similarly aged dependents to make the underlying 
group actuarially appropriate. An adjustment may be applied to cover 
overhead costs for administration of the program.
    (2) Premium adjustments. In addition to the determinations 
described in paragraph (c)(1) of this section, premium adjustments may 
be made prospectively for any calendar year to reflect any significant 
program changes mandated by legislative enactment, including but not 
limited to significant new programs or benefits.
    (d) Procedures. The Director, TRICARE Management Activity may 
establish procedures for the following.
    (1) Purchasing coverage. Procedures may be established for a 
qualified dependent to purchase individual coverage. To purchase TYA 
coverage for effective dates of coverage described below, qualified 
dependents must submit a request in the appropriate format, along with 
an initial payment of the applicable premium required by paragraph (c) 
of this section in accordance with established procedures.
    (i) Continuation coverage. Procedures may be established for a 
qualified dependent to purchase TYA coverage with an effective date 
immediately following the date of termination of coverage under another 
TRICARE program. Application for continuation coverage must be made 
within 30 days of the date of termination of coverage under another 
TRICARE program.
    (ii) Open enrollment. Procedures may be established for a qualified 
dependent to purchase TYA coverage at any time. The effective date of 
coverage will coincide with the first day of a month.
    (iii) Retroactive coverage. A qualified young adult dependent may 
elect retroactive TRICARE Standard coverage effective as of January 1, 
2011, if

[[Page 32121]]

dependent was eligible as of that date. If retroactive coverage is 
elected, retroactive premiums must be paid for the time period between 
January 1, 2011, and the date of the election. If no retroactive 
coverage is elected or the retroactive premiums are not paid within the 
time prescribed, coverage will not be retroactive and coverage will 
apply only prospectively under the procedures set forth for open 
enrollment. No purchase of retroactive coverage may take place after 
September 30, 2011. Coverage under TRICARE Prime may not be made 
retroactively.
    (2) Suspension and termination. Procedures may be established for 
TYA coverage to be suspended and/or terminated as follows.
    (i) Loss of eligibility or entitlement for coverage by the sponsor 
will result in termination of the dependent's TYA coverage unless 
otherwise specified. The effective date of the sponsor's loss of 
eligibility for care will also be the effective date of termination of 
benefits under the TYA program unless specified otherwise.
    (A) Active duty military sponsor. TYA coverage ends effective the 
date of military sponsor's separation from military service, unless the 
dependent would be eligible under section 199.3(e) of this Part but for 
the dependent's age, for the duration of the Transitional Assistance 
Management Program (TAMP) eligibility or until reaching age 26, 
whichever comes first. Upon the death of an active duty sponsor, 
dependents eligible for Transitional Survivor coverage may purchase TYA 
coverage if otherwise qualified.
    (B) Selected Reserve (Sel Res) Sponsor. Sel Res sponsors must be 
currently enrolled in TRICARE Reserve Select (TRS) before a young adult 
dependent is eligible to purchase TYA. If TRS coverage is terminated by 
the sponsor, TYA coverage ends effective the same termination date as 
the sponsor. If the Sel Res sponsor dies while enrolled in TRS, the 
young adult dependent is eligible to purchase TYA coverage for six 
months after the date of death of the Sel Res sponsor, if otherwise 
qualified.
    (C) Retired Reserve Sponsor. Retired Reserve members not yet 
eligible for retired or retainer pay must be enrolled in TRICARE 
Retired Reserve (TRR) to establish TYA eligibility for their young 
adult dependents. If TRR coverage is terminated by the sponsor, the TYA 
coverage for the young adult dependent ends effective the same date as 
the sponsor's termination of coverage under TRR. If the retired reserve 
sponsor dies while enrolled in TRR, the young adult dependent may 
continue to purchase TYA coverage until the date on which the deceased 
member would have attained age 60, if otherwise qualified. If the 
Retired Reserve member dies and is not enrolled in TRR, there is no 
eligibility for TYA coverage until the sponsor would have reached age 
60. On the date the Retired Reserve member would have reached 60, a 
young adult dependent who otherwise qualifies for TYA qualifies as a 
dependent of a deceased retired sponsor and can purchase TYA coverage.
    (ii) Failure of a young adult dependent to maintain the eligibility 
qualifications in paragraph (b) of this section shall result in the 
termination of coverage under the TYA program. The effective date of 
termination shall be the date upon which the adult young dependent 
failed to meet any of the prerequisite qualifications. If a subsequent 
change in circumstances re-establishes eligibility (such as losing 
eligibility for an eligible employer-sponsored plan), the young adult 
dependent may re-enroll for coverage under the TYA program.
    (iii) Coverage may also be terminated due to a change in the 
sponsor's status, and the young adult dependent must re-qualify and 
reapply for TYA coverage within 30 days of termination to preclude a 
gap in coverage.
    (iv) Termination of coverage results in denial of claims for 
services with a date of service after the effective date of 
termination.
    (v) Coverage may be suspended and finally terminated for young 
adult dependents upon request at any time by submitting a completed 
request in the appropriate format in accordance with established 
procedures.
    (vi) Coverage may be suspended and finally terminated for young 
adult dependents who fail to make premium payments within established 
procedures.
    (vii) Under paragraph (d)(2)(v) or (d)(2)(vi) of this section, TYA 
coverage may be first suspended for a period up to one year followed by 
final termination. Procedures may be established for the suspension to 
be lifted upon request before final termination is applied. Procedures 
may also be established for the suspension to be lifted before final 
termination is applied upon request for undue hardship as defined by 
Sec.  199.26(g).
    (3) Eligibility for the Continued Health Care Benefit Program. Upon 
termination of eligibility to purchase TYA coverage, dependents may 
purchase coverage for up to 36 months through the Continued Health Care 
Benefit Program under Sec.  199.20 unless locked out of TYA.
    (4) Changing coverage. Upon application and payment of appropriate 
premiums, qualified dependents already enrolled in and who are current 
in their premium payments may elect to change to another TRICARE 
program for which the qualified dependent is eligible based on the 
sponsor's eligibility and the geographic location of the qualified 
young adult dependent. Upon change in sponsor status (for example, 
active duty to retired status), TYA coverage may be automatically 
transferred to the appropriate TRICARE option consistent with the 
sponsor's new status. Recurring TYA premiums may be adjusted 
accordingly. Administrative processes may be established for changes in 
program enrollment; however, no change shall be effective until the 
applicable premium has been paid.
    (e) Preemption of State laws.--The preemption provisions of Sec.  
199.17(a)(7) are applicable to the TYA program.
    (f) Administration. The Director, TRICARE Management Activity may 
establish other processes, policies and procedures for the effective 
administration of the TYA Program and may authorize exceptions to 
requirements of this section, if permitted by law.
    (g) Terminology. The following term applies to the TYA program:
    Undue hardship. This term involves a situation that the TYA 
dependent could neither have prevented nor avoided by taking reasonable 
and timely action. The ASD(HA) may provide further guidelines regarding 
use of this term.

    Dated: May 10, 2013.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2013-12412 Filed 5-28-13; 8:45 am]
BILLING CODE 5001-06-P
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