S. 2657

One Hundred Eighth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the twentieth day of January, two thousand and four

An Act

To amend part III of title 5, United States Code, to provide for the establishment

of programs under which supplemental dental and vision benefits are made available to Federal employees, retirees, and their dependents, to expand the contracting authority of the Office of Personnel Management, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Federal Employee Dental and

Vision Benefits Enhancement Act of 2004’’.

SEC. 2. ENHANCED DENTAL BENEFITS FOR FEDERAL EMPLOYEES.

Subpart G of part III of title 5, United States Code, is amended

by inserting after chapter 89 the following:

‘‘CHAPTER 89A—ENHANCED DENTAL BENEFITS

‘‘Sec.

‘‘8951. Definitions.

‘‘8952. Availability of dental benefits.

‘‘8953. Contracting authority.

‘‘8954. Benefits.

‘‘8955. Information to individuals eligible to enroll.

‘‘8956. Election of coverage.

‘‘8957. Coverage of restored survivor or disability annuitants.

‘‘8958. Premiums.

‘‘8959. Preemption.

‘‘8960. Studies, reports, and audits.

‘‘8961. Jurisdiction of courts.

‘‘8962. Administrative functions.

‘‘§ 8951. Definitions

‘‘In this chapter:

‘‘(1) The term ‘employee’ means an employee defined under

section 8901(1).

‘‘(2) The terms ‘annuitant’, ‘member of family’, and

‘dependent’ have the meanings as such terms are defined under

paragraphs (3), (5), and (9), respectively, of section 8901.

‘‘(3) The term ‘eligible individual’ refers to an individual

described in paragraph (1) or (2), without regard to whether

the individual is enrolled in a health benefits plan under

chapter 89.

‘‘(4) The term ‘Office’ means the Office of Personnel

Management.

‘‘(5) The term ‘qualified company’ means a company (or

consortium of companies or an employee organization defined

under section 8901(8)) that offers indemnity, preferred provider
S. 2657—2

organization, health maintenance organization, or discount

dental programs and if required is licensed to issue applicable

coverage in any number of States, taking any subsidiaries

of such a company into account (and, in the case of a consortium, considering the member companies and any subsidiaries

thereof, collectively).

‘‘(6) The term ‘employee organization’ means an association

or other organization of employees which is national in scope,

or in which membership is open to all employees of a Government agency who are eligible to enroll in a health benefits

plan under chapter 89.

‘‘(7) The term ‘State’ includes the District of Columbia.

‘‘§ 8952. Availability of dental benefits

‘‘(a) The Office shall establish and administer a program

through which an eligible individual may obtain dental coverage

to supplement coverage available through chapter 89.

‘‘(b) The Office shall determine, in the exercise of its reasonable

discretion, the financial requirements for qualified companies to

participate in the program.

‘‘(c) Nothing in this chapter shall be construed to prohibit

the availability of dental benefits provided by health benefits plans

under chapter 89.

‘‘§ 8953. Contracting authority

‘‘(a)(1) The Office shall contract with a reasonable number

of qualified companies for a policy or policies of benefits described

under section 8954 without regard to section 5 of title 41 or any

other statute requiring competitive bidding. An employee organization may contract with a qualified company for the purpose of

participating with that qualified company in any contract between

the Office and that qualified company.

‘‘(2) The Office shall ensure that each resulting contract is

awarded on the basis of contractor qualifications, price, and reasonable competition.

‘‘(b) Each contract under this section shall contain—

‘‘(1) the requirements under section 8902(d), (f), and (i)

made applicable to contracts under this section by regulations

prescribed by the Office;

‘‘(2) the terms of the enrollment period; and

‘‘(3) such other terms and conditions as may be mutually

agreed to by the Office and the qualified company involved,

consistent with the requirements of this chapter and regulations

prescribed by the Office.

‘‘(c) Nothing in this chapter shall, in the case of an individual

electing dental supplemental benefit coverage under this chapter

after the expiration of such individual’s first opportunity to enroll,

preclude the application of waiting periods more stringent than

those that would have applied if that opportunity had not yet

expired.

‘‘(d)(1) Each contract under this chapter shall require the qualified company to agree—

‘‘(A) to provide payments or benefits to an eligible individual if such individual is entitled thereto under the terms

of the contract; and

‘‘(B) with respect to disputes regarding claims for payments

or benefits under the terms of the contract—
S. 2657—3

‘‘(i) to establish internal procedures designed to expeditiously resolve such disputes; and

‘‘(ii) to establish, for disputes not resolved through

procedures under clause (i), procedures for 1 or more alternative means of dispute resolution involving independent

third-party review under appropriate circumstances by

entities mutually acceptable to the Office and the qualified

company.

‘‘(2) A determination by a qualified company as to whether

or not a particular individual is eligible to obtain coverage under

this chapter shall be subject to review only to the extent and

in the manner provided in the applicable contract.

‘‘(3) For purposes of applying the Contract Disputes Act of

1978 to disputes arising under this chapter between a qualified

company and the Office—

‘‘(A) the agency board having jurisdiction to decide an

appeal relative to such a dispute shall be such board of contract

appeals as the Director of the Office of Personnel Management

shall specify in writing (after appropriate arrangements, as

described in section 8(c) of such Act); and

‘‘(B) the district courts of the United States shall have

original jurisdiction, concurrent with the United States Court

of Federal Claims, of any action described in section 10(a)(1)

of such Act relative to such a dispute.

‘‘(e) Nothing in this section shall be considered to grant

authority for the Office or third-party reviewer to change the terms

of any contract under this chapter.

‘‘(f) Contracts under this chapter shall be for a uniform term

of 7 years and may not be renewed automatically.

‘‘§ 8954. Benefits

‘‘(a) The Office may prescribe reasonable minimum standards

for enhanced dental benefits plans offered under this chapter and

for qualified companies offering the plans.

‘‘(b) Each contract may include more than 1 level of benefits

that shall be made available to all eligible individuals.

‘‘(c) The benefits to be provided under enhanced dental benefits

plans under this chapter may be of the following types:

‘‘(1) Diagnostic.

‘‘(2) Preventive.

‘‘(3) Emergency care.

‘‘(4) Restorative.

‘‘(5) Oral and maxillofacial surgery.

‘‘(6) Endodontics.

‘‘(7) Periodontics.

‘‘(8) Prosthodontics.

‘‘(9) Orthodontics.

‘‘(d) A contract approved under this chapter shall require the

qualified company to cover the geographic service delivery area

specified by the Office. The Office shall require qualified companies

to include dentally underserved areas in their service delivery areas.

‘‘(e) If an individual has dental coverage under a health benefits

plan under chapter 89 and also has coverage under a plan under

this chapter, the health benefits plan under chapter 89 shall be

the first payor of any benefit payments.
S. 2657—4

‘‘§ 8955. Information to individuals eligible to enroll

‘‘(a) The qualified companies at the direction and with the

approval of the Office, shall make available to each individual

eligible to enroll in a dental benefits plan information on services

and benefits (including maximums, limitations, and exclusions),

that the Office considers necessary to enable the individual to

make an informed decision about electing coverage.

‘‘(b) The Office shall make available to each individual eligible

to enroll in a dental benefits plan, information on services and

benefits provided by qualified companies participating under

chapter 89.

‘‘§ 8956. Election of coverage

‘‘(a) An eligible individual may enroll in a dental benefits plan

for self-only, self plus one, or for self and family. If an eligible

individual has a spouse who is also eligible to enroll, either spouse,

but not both, may enroll for self plus one or self and family.

An individual may not be enrolled both as an employee, annuitant,

or other individual eligible to enroll and as a member of the family.

‘‘(b) The Office shall prescribe regulations under which—

‘‘(1) an eligible individual may enroll in a dental benefits

plan; and

‘‘(2) an enrolled individual may change the self-only, self

plus one, or self and family coverage of that individual.

‘‘(c)(1) Regulations under subsection (b) shall permit an eligible

individual to cancel or transfer the enrollment of that individual

to another dental benefits plan—

‘‘(A) before the start of any contract term in which there

is a change in rates charged or benefits provided, in which

a new plan is offered, or in which an existing plan is terminated;

or

‘‘(B) during other times and under other circumstances

specified by the Office.

‘‘(2) A transfer under paragraph (1) shall be subject to waiting

periods provided under a new plan.

‘‘§ 8957. Coverage of restored survivor or disability annuitants

‘‘A surviving spouse, disability annuitant, or surviving child

whose annuity is terminated and is later restored, may continue

enrollment in a dental benefits plan subject to the terms and

conditions prescribed in regulations issued by the Office.

‘‘§ 8958. Premiums

‘‘(a) Each eligible individual obtaining supplemental dental coverage under this chapter shall be responsible for 100 percent of

the premiums for such coverage.

‘‘(b) The Office shall prescribe regulations specifying the terms

and conditions under which individuals are required to pay the

premiums for enrollment.

‘‘(c) The amount necessary to pay the premiums for enrollment

may—

‘‘(1) in the case of an employee, be withheld from the

pay of such an employee; or

‘‘(2) in the case of an annuitant, be withheld from the

annuity of such an annuitant.
S. 2657—5

‘‘(d) All amounts withheld under this section shall be paid

directly to the qualified company.

‘‘(e) Each participating qualified company shall maintain

accounting records that contain such information and reports as

the Office may require.

‘‘(f)(1) The Employee Health Benefits Fund is available, without

fiscal year limitation, for reasonable expenses incurred by the Office

in administering this chapter before the first day of the first contract

period, including reasonable implementation costs.

‘‘(2)(A) There is established in the Employees Health Benefits

Fund a Dental Benefits Administrative Account, which shall be

available to the Office, without fiscal year limitation, to defray

reasonable expenses incurred by the Office in administering this

chapter after the start of the first contract year.

‘‘(B) A contract under this chapter shall include appropriate

provisions under which the qualified company involved shall, during

each year, make such periodic contributions to the Dental Benefits

Administrative Account as necessary to ensure that the reasonable

anticipated expenses of the Office in administering this chapter

during such year are defrayed.

‘‘§ 8959. Preemption

‘‘The terms of any contract that relate to the nature, provision,

or extent of coverage or benefits (including payments with respect

to benefits) shall supersede and preempt any State or local law,

or any regulation issued thereunder, which relates to dental benefits, insurance, plans, or contracts.

‘‘§ 8960. Studies, reports, and audits

‘‘(a) Each contract shall contain provisions requiring the qualified company to—

‘‘(1) furnish such reasonable reports as the Office determines to be necessary to enable it to carry out its functions

under this chapter; and

‘‘(2) permit the Office and representatives of the Government Accountability Office to examine such records of the qualified company as may be necessary to carry out the purposes

of this chapter.

‘‘(b) Each Federal agency shall keep such records, make such

certifications, and furnish the Office, the qualified company, or

both, with such information and reports as the Office may require.

‘‘(c) The Office shall conduct periodic reviews of plans under

this chapter, including a comparison of the dental benefits available

under chapter 89, to ensure the competitiveness of plans under

this chapter. The Office shall cooperate with the Government

Accountability Office to provide periodic evaluations of the program.

‘‘§ 8961. Jurisdiction of courts

‘‘The district courts of the United States have original jurisdiction, concurrent with the United States Court of Federal Claims,

of a civil action or claim against the United States under this

chapter after such administrative remedies as required under section 8953(d) have been exhausted, but only to the extent judicial

review is not precluded by any dispute resolution or other remedy

under this chapter.
S. 2657—6

‘‘§ 8962. Administrative functions

‘‘(a) The Office shall prescribe regulations to carry out this

chapter. The regulations may exclude an employee on the basis

of the nature and type of employment or conditions pertaining

to it.

‘‘(b) The Office shall, as appropriate, provide for coordinated

enrollment, promotion, and education efforts as appropriate in consultation with each qualified company. The information under this

subsection shall include information relating to the dental benefits

available under chapter 89, including the advantages and disadvantages of obtaining additional coverage under this chapter.’’.

SEC. 3. ENHANCED VISION BENEFITS FOR FEDERAL EMPLOYEES.

Subpart G of part III of title 5, United States Code, is amended

by inserting after chapter 89A (as added by section 2 of this Act)

the following:

‘‘CHAPTER 89B—ENHANCED VISION BENEFITS

‘‘Sec.

‘‘8981. Definitions.

‘‘8982. Availability of vision benefits.

‘‘8983. Contracting authority.

‘‘8984. Benefits.

‘‘8985. Information to individuals eligible to enroll.

‘‘8986. Election of coverage.

‘‘8987. Coverage of restored survivor or disability annuitants.

‘‘8988. Premiums.

‘‘8989. Preemption.

‘‘8990. Studies, reports, and audits.

‘‘8991. Jurisdiction of courts.

‘‘8992. Administrative functions.

‘‘§ 8981. Definitions

‘‘In this chapter:

‘‘(1) The term ‘employee’ means an employee defined under

section 8901(1).

‘‘(2) The terms ‘annuitant’, ‘member of family’, and

‘dependent’ have the meanings as such terms are defined under

paragraphs (3), (5), and (9), respectively, of section 8901.

‘‘(3) The term ‘eligible individual’ refers to an individual

described in paragraph (1) or (2), without regard to whether

the individual is enrolled in a health benefits plan under

chapter 89.

‘‘(4) The term ‘Office’ means the Office of Personnel

Management.

‘‘(5) The term ‘qualified company’ means a company (or

consortium of companies or an employee organization defined

under section 8901(8)) that offers indemnity, preferred provider

organization, health maintenance organization, or discount

vision programs and if required is licensed to issue applicable

coverage in any number of States, taking any subsidiaries

of such a company into account (and, in the case of a consortium, considering the member companies and any subsidiaries

thereof, collectively).

‘‘(6) The term ‘employee organization’ means an association

or other organization of employees which is national in scope,

or in which membership is open to all employees of a Government agency who are eligible to enroll in a health benefits

plan under chapter 89.
S. 2657—7

‘‘(7) The term ‘State’ includes the District of Columbia.

‘‘§ 8982. Availability of vision benefits

‘‘(a) The Office shall establish and administer a program

through which an eligible individual may obtain vision coverage

to supplement coverage available through chapter 89.

‘‘(b) The Office shall determine, in the exercise of its reasonable

discretion, the financial requirements for qualified companies to

participate in the program.

‘‘(c) Nothing in this chapter shall be construed to prohibit

the availability of vision benefits provided by health benefits plans

under chapter 89.

‘‘§ 8983. Contracting authority

‘‘(a)(1) The Office shall contract with a reasonable number

of qualified companies for a policy or policies of benefits described

under section 8984 without regard to section 5 of title 41 or any

other statute requiring competitive bidding. An employee organization may contract with a qualified company for the purpose of

participating with that qualified company in any contract between

the Office and that qualified company.

‘‘(2) The Office shall ensure that each resulting contract is

awarded on the basis of contractor qualifications, price, and reasonable competition.

‘‘(b) Each contract under this section shall contain—

‘‘(1) the requirements under section 8902 (d), (f), and (i)

made applicable to contracts under this section by regulations

prescribed by the Office;

‘‘(2) the terms of the enrollment period; and

‘‘(3) such other terms and conditions as may be mutually

agreed to by the Office and the qualified company involved,

consistent with the requirements of this chapter and regulations

prescribed by the Office.

‘‘(c) Nothing in this chapter shall, in the case of an individual

electing vision supplemental benefit coverage under this chapter

after the expiration of such individual’s first opportunity to enroll,

preclude the application of waiting periods more stringent than

those that would have applied if that opportunity had not yet

expired.

‘‘(d)(1) Each contract under this chapter shall require the qualified company to agree—

‘‘(A) to provide payments or benefits to an eligible individual if such individual is entitled thereto under the terms

of the contract; and

‘‘(B) with respect to disputes regarding claims for payments

or benefits under the terms of the contract—

‘‘(i) to establish internal procedures designed to expeditiously resolve such disputes; and

‘‘(ii) to establish, for disputes not resolved through

procedures under clause (i), procedures for 1 or more alternative means of dispute resolution involving independent

third-party review under appropriate circumstances by

entities mutually acceptable to the Office and the qualified

company. ‘‘(2) A determination by a qualified company as to whether

or not a particular individual is eligible to obtain coverage under
S. 2657—8

this chapter shall be subject to review only to the extent and

in the manner provided in the applicable contract.

‘‘(3) For purposes of applying the Contract Disputes Act of

1978 to disputes arising under this chapter between a qualified

company and the Office—

‘‘(A) the agency board having jurisdiction to decide an

appeal relative to such a dispute shall be such board of contract

appeals as the Director of the Office of Personnel Management

shall specify in writing (after appropriate arrangements, as

described in section 8(c) of such Act); and

‘‘(B) the district courts of the United States shall have

original jurisdiction, concurrent with the United States Court

of Federal Claims, of any action described in section 10(a)(1)

of such Act relative to such a dispute.

‘‘(e) Nothing in this section shall be considered to grant

authority for the Office or third-party reviewer to change the terms

of any contract under this chapter.

‘‘(f) Contracts under this chapter shall be for a uniform term

of 7 years and may not be renewed automatically.

‘‘§ 8984. Benefits

‘‘(a) The Office may prescribe reasonable minimum standards

for enhanced vision benefits plans offered under this chapter and

for qualified companies offering the plans.

‘‘(b) Each contract may include more than 1 level of benefits

that shall be made available to all eligible individuals.

‘‘(c) The benefits to be provided under enhanced vision benefits

plans under this chapter may be of the following types:

‘‘(1) Diagnostic (to include refractive services).

‘‘(2) Preventive.

‘‘(3) Eyewear.

‘‘(d) A contract approved under this chapter shall require the

qualified company to cover the geographic service delivery area

specified by the Office. The Office shall require qualified companies

to include visually underserved areas in their service delivery areas.

‘‘(e) If an individual has vision coverage under a health benefits

plan under chapter 89 and also has coverage under a plan under

this chapter, the health benefits plan under chapter 89 shall be

the first payor of any benefit payments.

‘‘§ 8985. Information to individuals eligible to enroll

‘‘(a) The qualified companies at the direction and with the

approval of the Office, shall make available to each individual

eligible to enroll in a vision benefits plan information on services

and benefits (including maximums, limitations, and exclusions),

that the Office considers necessary to enable the individual to

make an informed decision about electing coverage.

‘‘(b) The Office shall make available to each individual eligible

to enroll in a vision benefits plan, information on services and

benefits provided by qualified companies participating under

chapter 89.

‘‘§ 8986. Election of coverage

‘‘(a) An eligible individual may enroll in a vision benefits plan

for self-only, self plus one, or for self and family. If an eligible

individual has a spouse who is also eligible to enroll, either spouse,

but not both, may enroll for self plus one or self and family.
S. 2657—9

An individual may not be enrolled both as an employee, annuitant,

or other individual eligible to enroll and as a member of the family.

‘‘(b) The Office shall prescribe regulations under which—

‘‘(1) an eligible individual may enroll in a vision benefits

plan; and

‘‘(2) an enrolled individual may change the self-only, self

plus one, or self and family coverage of that individual.

‘‘(c)(1) Regulations under subsection (b) shall permit an eligible

individual to cancel or transfer the enrollment of that individual

to another vision benefits plan—

‘‘(A) before the start of any contract term in which there

is a change in rates charged or benefits provided, in which

a new plan is offered, or in which an existing plan is terminated;

or

‘‘(B) during other times and under other circumstances

specified by the Office.

‘‘(2) A transfer under paragraph (1) shall be subject to waiting

periods provided under a new plan.

‘‘§ 8987. Coverage of restored survivor or disability annuitants

‘‘A surviving spouse, disability annuitant, or surviving child

whose annuity is terminated and is later restored, may continue

enrollment in a vision benefits plan subject to the terms and conditions prescribed in regulations issued by the Office.

‘‘§ 8988. Premiums

‘‘(a) Each eligible individual obtaining supplemental vision coverage under this chapter shall be responsible for 100 percent of

the premiums for such coverage.

‘‘(b) The Office shall prescribe regulations specifying the terms

and conditions under which individuals are required to pay the

premiums for enrollment.

‘‘(c) The amount necessary to pay the premiums for enrollment

may—

‘‘(1) in the case of an employee, be withheld from the

pay of such an employee; or

‘‘(2) in the case of an annuitant, be withheld from the

annuity of such an annuitant.

‘‘(d) All amounts withheld under this section shall be paid

directly to the qualified company.

‘‘(e) Each participating qualified company shall maintain

accounting records that contain such information and reports as

the Office may require.

‘‘(f)(1) The Employee Health Benefits Fund is available, without

fiscal year limitation, for reasonable expenses incurred by the Office

in administering this chapter before the first day of the first contract

period, including reasonable implementation costs.

‘‘(2)(A) There is established in the Employees Health Benefits

Fund a Vision Benefits Administrative Account, which shall be

available to the Office, without fiscal year limitation, to defray

reasonable expenses incurred by the Office in administering this

chapter after the start of the first contract year.

‘‘(B) A contract under this chapter shall include appropriate

provisions under which the qualified company involved shall, during

each year, make such periodic contributions to the Vision Benefits

Administrative Account as necessary to ensure that the reasonable
S. 2657—10

anticipated expenses of the Office in administering this chapter

during such year are defrayed.

‘‘§ 8989. Preemption

‘‘The terms of any contract that relate to the nature, provision,

or extent of coverage or benefits (including payments with respect

to benefits) shall supersede and preempt any State or local law,

or any regulation issued thereunder, which relates to vision benefits,

insurance, plans, or contracts.

‘‘§ 8990. Studies, reports, and audits

‘‘(a) Each contract shall contain provisions requiring the qualified company to— ‘‘(1) furnish such reasonable reports as the Office determines to be necessary to enable it to carry out its functions

under this chapter; and ‘‘(2) permit the Office and representatives of the Government Accountability Office to examine such records of the qualified company as may be necessary to carry out the purposes

of this chapter.

‘‘(b) Each Federal agency shall keep such records, make such

certifications, and furnish the Office, the qualified company, or

both, with such information and reports as the Office may require.

‘‘(c) The Office shall conduct periodic reviews of plans under

this chapter, including a comparison of the vision benefits available

under chapter 89, to ensure the competitiveness of plans under

this chapter. The Office shall cooperate with the Government

Accountability Office to provide periodic evaluations of the program.

‘‘§ 8991. Jurisdiction of courts

‘‘The district courts of the United States have original jurisdiction, concurrent with the United States Court of Federal Claims,

of a civil action or claim against the United States under this

chapter after such administrative remedies as required under section 8983(d) have been exhausted, but only to the extent judicial

review is not precluded by any dispute resolution or other remedy

under this chapter.

‘‘§ 8992. Administrative functions

‘‘(a) The Office shall prescribe regulations to carry out this

chapter. The regulations may exclude an employee on the basis

of the nature and type of employment or conditions pertaining

to it.‘‘(b) The Office shall, as appropriate, provide for coordinated

enrollment, promotion, and education efforts as appropriate in consultation with each qualified company. The information under this

subsection shall include information relating to the vision benefits

available under chapter 89, including the advantages and disadvantages of obtaining additional coverage under this chapter.’’.

SEC. 4. TECHNICAL AND CONFORMING AMENDMENT.

The table of chapters for part III of title 5, United States

Code, is amended by inserting after the item relating to chapter

89 the following:

‘‘89A. Enhanced Dental Benefits ..................................................................... 8951

‘‘89B. Enhanced Vision Benefits ...................................................................... 8981’’.
S. 2657—11

SEC. 5. APPLICATION TO POSTAL SERVICE EMPLOYEES.

Section 1005(f) of title 39, United States Code, is amended

in the second sentence by striking ‘‘chapters 87 and 89’’ and

inserting ‘‘chapters 87, 89, 89A, and 89B’’.

SEC. 6. REQUIREMENT TO STUDY HEALTH BENEFITS COVERAGE FOR

DEPENDENT CHILDREN WHO ARE FULL-TIME STUDENTS.

Not later than 6 months after the date of enactment of this

Act, the Office of Personnel Management shall submit to Congress

a report describing and evaluating options whereby benefits under

chapter 89 of title 5, United States Code, could be made available

to an unmarried dependent child under 25 years of age who is

enrolled as a full-time student at an institution of higher education

as defined under section 101 of the Higher Education Act of 1965

(20 U.S.C. 1001).

SEC. 7. EFFECTIVE DATE.

The amendments made by this Act shall take effect on the

date of enactment of this Act and shall apply to contracts that

take effect with respect to the calendar year 2006.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.