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[Federal Register Volume 73, Number 170 (Tuesday, September 2, 2008)]
[Proposed Rules]
[Pages 51260-51261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20269]

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OFFICE OF PERSONNEL MANAGEMENT

48 CFR Part 1652

RIN 3206-AL66

Federal Employees Health Benefits Program Acquisition Regulation: 
Miscellaneous Clarifications and Corrections

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing a proposed 
rule to amend the Federal Employees Health Benefits Acquisition 
Regulations (FEHBAR). The rule clarifies the rate setting process for 
community rated carriers with respect to Similarly Sized Subscriber 
Groups (SSSG) and removes the ban on adjustments based on rate 
reconciliation for the final year of Federal Employees Health Benefits 
Program (FEHBP) contracts.

DATES: Comments must be received on or before: October 2, 2008.

FOR FURTHER INFORMATION CONTACT: Edward M. DeHarde, Senior Policy 
Analyst at 202-606-0004, or e-mail [email protected].

ADDRESSES: You may submit comments, identified by docket number and/or 
RIN

[[Page 51261]]

number by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Edward M. DeHarde, Senior Policy Analyst, Insurance 
Policy Group, Office of Personnel Management, 1900 E Street, NW., Room 
3415, Washington, DC 20415.

SUPPLEMENTARY INFORMATION: The purpose of this proposed regulation is 
to clarify requirements with respect to the rate setting process for 
community rated carriers and to require rate reconciliation for the 
final contract term for community rated carriers that leave the FEHBP.
    In prior years, carriers were not subjected to rate reconciliation 
in the final year of their contracts. Information technology and 
electronic transmission and storage of data now make it possible to 
efficiently perform rate reconciliation for the final contract year. 
Therefore, OPM will begin conducting such rate reconciliation on 
community rated contracts that terminate after January 1, 2009.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because all the small 
plan FEHBP contracts fall below the threshold for submitting cost or 
pricing data.

Executive Order 12866, Regulatory Review

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

Lists of Subjects in 48 CFR Parts 1652

    Government employees, Government procurement, Health insurance, 
Reporting and recordkeeping requirements.

Office of Personnel Management.

Michael W. Hager,
Acting Director.

    Accordingly, OPM proposes to amend chapter 16 of title 48, CFR as 
follows:

PART 1652--CONTRACT CLAUSES

    1. The authority citation for part 1652 continues to read as 
follows:

    Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.

Subpart 1652.2--Texts of FEHBP Clauses

    2. Amend Sec.  1652.216-70 by revising paragraphs (b)(2) through 
(b)(4) and (b)(6), and adding paragraphs (b)(7) and (b)(8) to read as 
follows:

1652.216-70  Accounting and price adjustment.

* * * * *
    (b) * * *
    (2) The subscription rates agreed to in this contract shall be 
equivalent to the subscription rates given to the carrier's similarly 
sized subscriber groups (SSSGs) as defined in FEHBAR 1602.170-13. The 
subscription rates shall be determined according to the carrier's 
established policy which must be applied consistently to the FEHBP and 
to the carrier's similarly sized subscriber groups (SSSGs). If an SSSG 
receives a rate lower than that determined according to the carrier's 
methodology, it is considered a discount. The FEHBP must receive a 
discount equal to or greater than the carrier's largest SSSG discount.
    (3) If, at the time of the rate reconciliation, the subscription 
rates are found to be lower than the equivalent rates for the lower of 
the two SSSGs, the carrier may include an adjustment to the Federal 
group's rates for the next contract period, except as noted in 
paragraph (b)(7) of this clause.
    (4) If, at the time of the rate reconciliation, the subscription 
rates are found to be higher than the equivalent rates for the lower of 
the two SSSGs, the Carrier shall reimburse the Fund, for example, by 
reducing the FEHB rates for the next contract term to reflect the 
difference between the estimated rates and the rates which are derived 
using the methodology of the lower rated SSSG, except as noted in 
paragraph (b)(7) of this clause.
* * * * *
    (6) For contract years beginning on or after January 1, 2009, in 
the event this contract is not renewed, the final rate reconciliation 
will be performed. The carrier must promptly pay any amount owed to 
OPM. Any amount recoverable by the carrier is limited to the amount in 
the contingency reserve for the terminating plan as of December 31 of 
the terminating year.
    (7) Carriers may provide additional guaranteed discounts to the 
FEHBP that are not given to SSSGs. Any such guaranteed discounts must 
be clearly identified as guaranteed discounts. After the beginning of 
the contract year for which the rates are set, these guaranteed FEHBP 
discounts may not be adjusted.
    (8) Carriers may not impose surcharges (loadings not defined based 
on an established rating method) on the FEHBP subscription rates or use 
surcharges in the rate reconciliation process irrespective of whether 
surcharges are applied to the SSSGs.

[FR Doc. E8-20269 Filed 8-29-08; 8:45 am]
BILLING CODE 6325-39-P
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