Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System

United States

Office of Personnel Management

Retirement and Insurance Service

Benefits Administration Letter

Number: 98-206 Date: February 17,1999 

Subject: Federal Employees Health Benefits (FEHB) Program: New Disenrollment

Regulations

Background On November 4, 1998, the Office of Personnel Management

(OPM) published final Federal Employees Health Benefits

(FEHB) Program regulations in the Federal Register (63 FR

59457) allowing FEHB carriers to disenroll individuals in

specific situations. A non-substantive correction to these

regulations was published in the Federal Register (63 FR

64761) on November 23, 1998. These regulations took

effect on December 4, 1998.

The purpose of this letter is to note the major changes made

by the regulations and their impact on the Federal agencies.

_______________________________________________

What the New Regulations Do The new regulations make additions to the existing FEHB

Program regulations:

1. Employing offices are now required by regulation to

provide information about enrollees in the FEHB Program

to the carriers of the plans in which they are enrolled.

Previously, employing offices were required administratively

to provide this information.

2. The FEHB carriers are now required by regulation to use

the information provided by the employing offices to

reconcile their enrollment records. Previously, the carriers

were only required contractually to perform enrollment

reconciliation.

3. The FEHB carriers are now allowed to disenroll 

individuals when: 1) they are unable to verify the
 

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Retirement Group Life Health Benefits Retirement

System Insurance Program System

enrollment; 2) a reliable source informs them of the death of

an enrollee with a self only enrollment; 3) a child survivor

annuitant covered under a self only enrollment reaches age

22 and is capable of self-support; and 4) an individual

notifies the carrier that he or she has separated from Federal

employment.

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SPECIFIC INFORMATION

Enrollment reconciliation These regulations adopt as a regulatory requirement the

current administrative quarterly reporting requirement and

the requirement for carriers to use the information to

reconcile their enrollment records.

Employing offices are required to report to each carrier on a

quarterly basis the names of the individuals who are enrolled

in the carrier’s plan in a format and containing information

as specified in OPM Payroll Office Letter 92-06, issued on

March 24, 1992. This letter was reissued with Payroll Office

Letter 97-06 on March 27, 1997.

When a carrier receives a quarterly report, it is required by

its contract with OPM to compare the enrollees listed with

its own record of enrollees for that payroll office. If the

carrier records show an enrollee who is not listed by the

payroll office, the carrier must contact the payroll office for

an explanation. The payroll office provides documentation

to resolve the discrepancy or gives the reason the individual

is no longer in the plan or no longer on the payroll and the

effective date of the change.

Your obligation to perform a thorough enrollment

reconciliation is not lessened by the disenrollment

authority being given to the carriers. Your most

important responsibility is to assist the carriers in their

reconciliation efforts by providing the quarterly

reconciliation reports timely and settling any enrollment

discrepancies that arise. If reconciliations are completed

accurately and timely, there will be few individuals

disenrolled.

________________________________________________
 

Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System

Disenrollment when carrier is If a carrier cannot reconcile its record of an individual’s

unable to reconcile enrollment enrollment with agency enrollment records or does not

receive documentation from the agency necessary to resolve

the discrepancy within 31 days of a request, the carrier has

the authority to disenroll the individual. The individual then

has an opportunity to respond. Prior to these new

regulations, the carriers did not have the authority to

disenroll.

________________________________________________

Procedure for disenrollment The regulations provide an administrative procedure for

notifying the enrollee of the disenrollment. Under this

procedure, the carrier must provide written notice to

affected individuals that the employing office of record does

not show them as enrolled in the carrier's plan and they will

be disenrolled 31 calendar days after the date of the notice

unless the enrollees provide appropriate documentation to

resolve the discrepancy. Appropriate documentation

includes, but is not limited to, a copy of the Standard Form

2809 (or a letter confirming an electronic transaction), the

Standard Form 2810 transferring the enrollment into the

gaining employing office (or the equivalent electronic

submission), copies of earnings and leave statements or

annuity statements showing withholdings for the health

benefits plan, or a document or other credible information

from the enrollee's employing office stating that the

individual is entitled to continued enrollment in the plan and

that the premiums are being paid. 

If the carrier does not receive any documentation attempting

to resolve the discrepancy within the 31-day time frame, the

carrier should disenroll the individual without further notice.

If the carrier receives documentation from the enrollee in an

attempt to resolve the discrepancy, the carrier will notify

both the enrollee and the employing office of record 

of its decision on the information.

If the information received is sufficient to show the

individual as enrolled, the carrier will stop the disenrollment

process. The employing office must then update its records
 

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to ensure that the individual’s enrollment is properly

reflected on the payroll system and thus will appear on the

next quarterly reconciliation report.

If the information is inadequate to show the individual as

enrolled, the carrier will proceed with the disenrollment

process and advise the individual of reconsideration rights.

________________________________________________

Reconsideration Enrollees may ask their employing office or retirement

system to reconsider a carrier's decision to disenroll them. If

the individual has submitted information to the carrier

attempting to resolve the enrollment discrepancy, the

reconsideration process begins after the carrier makes a

determination. A request for reconsideration must be made

in writing and must include the enrollee's name, address,

Social Security Number or other personal identification

number, name of carrier, reason(s) for the request, and, if

applicable, retirement claim number. The employing office

must notify the carrier when a request for reconsideration of

the decision to disenroll the individual is made.

A request for reconsideration must be filed within 60

calendar days after the date of the carrier's disenrollment

notice. The time limit on filing may be extended when the

individuals show that they were not notified of the time limit

and were not otherwise aware of it, or that they were

prevented by circumstances beyond their control from

making the request within the time limit.

After reconsideration, the employing office must issue a

written notice of its final decision to the individual and 

notify the carrier of the decision. The notice must fully set

forth the findings and conclusions on which the decision 

was based. The carrier may be notified of the decision by

telephone since we do not want eligible enrollees to remain

disenrolled while a carrier waits for a written notice. If upon

reconsideration the employing office determines the

individual is entitled to continued enrollment in the plan, the

disenrollment is void and coverage is reinstated

retroactively.
 

Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System

___________________________________________

Erroneous disenrollments We expect that few individuals would reach the end of this

process without their actual enrollment status becoming

clear. However, in the event that an individual was

disenrolled under the regulations and it is later discovered

that another provision of the regulations should have been

applied to the individual's circumstances, the disenrollment

under this regulation would become void and the enrollment

would be reinstated retroactively to the date of the

disenrollment. For example, if it later became 

clear that the individual's enrollment should have continued

because he or she retired under circumstances 

allowing continued enrollment, the disenrollment would

become void.

________________________________________________

Employing office We anticipate that in many cases people receiving a

responsibilities disenrollment notice will contact their personnel office for

assistance. The standard disenrollment notice used by the

carriers will advise individuals to send appropriate

documentation to resolve the enrollment discrepancy to

both their carrier and their personnel office. When a

personnel office is contacted, we expect them to inform the

payroll office of the situation in order to coordinate any

necessary actions that need to be taken. This will ensure that

the individual’s enrollment continues and enrollment records

are updated so the next quarterly reconciliation report is

correct. We expect the same coordination between

personnel and payroll offices if a disenrollment proceeds to

the point of agency reconsideration.
 

Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System

When an agency receives the carrier’s decision on

documentation submitted by an enrollee to resolve a

discrepancy, coordination is also needed between the

personnel and payroll offices to ensure that enrollment 

records are updated so the next quarterly reconciliation

report will be correct.

 _______________________________________________

Death of enrollee with a self The regulations allow a carrier to end a self only 

only enrollment enrollment upon receipt of reliable information that the

enrollee has died. 

Reliable information includes claims for hospital or

physician costs incurred at time of death, or correspondence

returned from the Postal Service noting that the enrollee is

deceased.

The disenrollment is effective on the last day of the pay

period in which the individual dies. If the date of death is

unknown, the plan will disenroll the individual on the last

day of the pay period in which information of the death is 

received.

In the event the employing office determines the report of

death was in error, or the carrier receives appropriate

documentation that the report of death was in error, and the

individual is eligible for enrollment, the disenrollment under

this regulation is void and coverage is reinstated

retroactively.

________________________________________________

Child survivor annuitant with The regulations allow a carrier to disenroll a child 

self only enrollment reaches survivor annuitant when the child becomes age 22, unless

age 22 the carrier has information indicating that the child is 

eligible for continued coverage because the child is

incapable of self support due to a physical or mental

disability.

The disenrollment is effective at midnight of the day the 
 

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enrollee turns 22. The carrier must provide the enrollee with

a written notice of disenrollment prior to their 22nd birthday.

The child may ask the retirement system to reconsider the

carrier’s decision. The request for reconsideration must be

made in writing and must include the enrollee's name,

address, Social Security Number or other identifier, name of

carrier, reason(s) for the request, and the survivor annuity

claim number. The retirement system must notify the carrier

when a request for reconsideration is received.

A request for reconsideration of the carrier's decision must

be filed with the retirement system within 60 calendar days

from the date of the carrier's disenrollment notice. The time

limit on filing may be extended when individuals show that

they were not notified of the time limit and were not

otherwise aware of it, or that they were prevented by

circumstances beyond their control from making the request

within the time limit.

After reconsideration, the retirement system must issue a

written notice of its final decision to the individual and

notify the carrier of the decision. The notice must fully set

forth the findings and conclusions on which the decision

was based. The carrier may be notified of the decision by

telephone, since we do not want eligible enrollees to remain

disenrolled while a carrier waits for a written notice. If upon

reconsideration the retirement system determines the

individual is entitled to continued enrollment in the plan as a

survivor annuitant, the disenrollment is void and coverage is

reinstated retroactively.

________________________________________________

Enrollee separates from The regulations allow a carrier to disenroll former 

Federal employment employees who notify the carrier that they have separated

from Federal employment under circumstances that do not

entitle them to an immediate annuity.

The disenrollment is effective on the last day of the pay
 

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System Insurance Program System

period in which the separation occurred, if known,

otherwise the carrier will disenroll the employee on the

date the employee provides as the date of separation. The

carrier must provide enrollees with a written notice of

disenrollment advising them of their right to convert to a

non-group contract and possible eligibility to enroll under

temporary continuation of coverage.

________________________________________________

Other reconciliation issues While under certain circumstances the new regulations

allow a carrier to disenroll an individual who is not listed on

an employing office’s quarterly reconciliation report, there

are other reconciliation issues that are not addressed by the

regulations. These situations will be discussed here.

1. There is a difference in the enrollee’s name between the

carrier’s records and the employing office’s records. 

If the carrier notes the discrepancy, they will contact the

enrollee with a request for the correct information. The

carrier’s request for information will advise the enrollee to

provide the correct name to both the carrier and the

employing agency. Once the employing office receives this

information from the enrollee, they should update their

enrollment records.

2. An individual’s name appears on the quarterly

reconciliation report, but does not appear on the carrier’s

enrollment records.

Carriers will contact the employing office and request

verification of the individual’s enrollment. Carriers will not

enroll the individual until they receive evidence of the

enrollment from the employing office. 

3. There is a difference in the individual’s enrollment status

(self only vs. self and family) or plan option (High
 

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 vs. Standard) between the employing office’s quarterly

reconciliation report and the carrier’s enrollment records.

If the employing office’s records indicate better coverage

than the carrier’s records, (i.e., employing office shows self

and family enrollment and carrier shows self only enrollment

or employing office shows High option enrollment and

carrier shows Standard option enrollment) the carrier will

conform their records to match those of the employing

office.

If, however, the employing office’s records indicate lesser

coverage than the carrier’s records, (i.e., employing office

shows self only enrollment and carrier shows self and family

enrollment or employing office shows Standard option

enrollment and carrier shows High option enrollment) the

carrier will notify both the enrollee and the employing office

in writing of the discrepancy. The letter from the carrier will

indicate that if they don’t receive confirmation of the

individual’s better coverage within 31 days of the date of

the letter, they will conform their records to match those of

the employing office indicating a lesser level of coverage.

4. Enrollee is in a leave without pay status for more than

365 days and the agency has not terminated the enrollment.

The carrier will suspend the enrollment, with a written

notice to both the enrollee and the employing office, until

the agency terminates the enrollment.

In all four of these situations, it is very important that you

respond to carrier requests for information timely. It is also

important that you update enrollment records when

necessary so incorrect information is not provided to the

carriers on subsequent quarterly reconciliation reports.

Questions If you have any questions regarding this regulatory change

or reconciliation issues in general, please contact Jay Fritz
 

Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System

of my staff at (202) 606-0004, or via email at

JAYFRITZ@opm.gov.

______________________________________________________________________________

Abby L. Block, Chief

Insurance Policy 

 and Information Division