926 Federal Register / Vol. 80, No. 4 / Wednesday, January 7, 2015 / Proposed Rules 

OFFICE OF PERSONNEL 

MANAGEMENT 

48 CFR Parts 1602, 1615, and 1652 

RIN 3206–AN00 

Federal Employees Health Benefits 

Program; Rate Setting for CommunityRated Plans 

AGENCY: U.S. Office of Personnel 

Management. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The U.S. Office of Personnel 

Management (OPM) is issuing a Notice 

of Proposed Rulemaking to make 

changes to the Federal Employees 

Health Benefits Acquisition Regulation 

(FEHBAR). These changes would: 

Define which subscriber groups may be 

included for consideration as similarly 

sized subscriber groups (SSSGs); require 

the SSSG to be traditional community 

rated; establish that traditional 

community-rated Federal Employees 

Health Benefits (FEHB) plans must 

select only one rather than two SSSGs; 

and make conforming changes to FEHB 

contract language to account for the new 

medical loss ratio (MLR) standard for 

most community-rated FEHB plans. 

DATES: Comments are due on or before 

March 9, 2015. 

ADDRESSES: Send written comments to 

Delon Pinto, Senior Policy Analyst, 

Planning and Policy Analysis, U.S. 

Office of Personnel Management, Room 

4312, 1900 E Street NW., Washington, 

DC; or FAX to (202) 606–4640 Attn: 

Delon Pinto. You may also submit 

comments using the Federal 

eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

FOR FURTHER INFORMATION CONTACT: 

Delon Pinto, Senior Policy Analyst, at 

Delon.Pinto@opm.gov or (202) 606– 

0004. 

SUPPLEMENTARY INFORMATION: The U.S. 

Office of Personnel Management is 

issuing a notice of proposed rulemaking 

to update the Federal Employees Health 

Benefits Acquisition Regulation to 

accommodate the new FEHB specific 

medical loss ratio (MLR) requirement 

for most community-rated plans as well 

as to update the similarly sized 

subscriber group (SSSG) requirement for 

traditional community-rated plans. 

Background on Federal Employees 

Health Benefits Rate-Setting for 

Community Rated Plans 

The Patient Protection and Affordable 

Care Act, Pub. L. 111–148, was enacted 

on March 23, 2010; the Health Care and 

Education Reconciliation Act, Pub. L. 

111–152, was enacted on March 30, 

2010 (these are collectively known as 

the ‘‘Affordable Care Act’’). In April 

2012, OPM issued a final rule 

establishing an FEHB specific MLR 

requirement to replace the SSSG 

comparison requirement for most 

community rated FEHB plans (77 FR 

19522). The FEHB specific MLR rules 

are based on the medical loss ratio 

standard established by the Affordable 

Care Act and defined by the U.S. 

Department of Health and Human 

Services, the U.S. Department of Labor, 

and the U.S. Department of Treasury in 

26 CFR part 54, 29 CFR part 2590, 45 

CFR part 146, and 45 CFR part 158. 

Community-rated FEHB plans were 

permitted to elect to follow the FEHB 

specific MLR requirements instead of 

the SSSG requirements for calendar year 

2012. Beginning with the 2013 calendar 

year, the FEHB specific MLR 

requirements were mandatory for all 

community-rated carriers except those 

that are State-mandated to use 

traditional community rating (TCR). 

State mandated TCR plans will continue 

to be subject to the SSSG comparison 

requirements. 

Provisions of This Proposed Regulation 

This proposed rule makes three 

changes to the requirements for SSSGs. 

In the past, OPM has required that plans 

identify two non-FEHB subscriber 

groups (employer groups covered by an 

issuer) that are closest in size to the 

FEHB group and, if either or both of 

those groups received a discounted rate, 

the carrier must provide the largest 

discount to FEHB. This proposed rule 

defines the entities whose groups may 

be selected for comparison as an SSSG. 

In addition, this rule states any SSSG 

must also be rated TCR in order to 

maintain alignment between the TCRrated FEHB group and the subscriber 

group used for comparison. Last, OPM 

is requiring plans to identify one, rather 

than two, SSSG subscriber groups used 

for the comparison. OPM considers it 

unnecessary to require more than one 

comparison group if the SSSG must also 

be rated TCR for the reasons set forth 

below. 

TCR plans are those that, usually by 

State law, are required to set the same 

rates for all subscriber groups regardless 

of the health risks and other 

characteristics of any specific group. 

Under TCR, an FEHB group must be 

charged the same premium as all other 

groups in its service area that receive 

the same set of benefits. The health plan 

cannot adjust premiums for a specific 

group to reflect the healthcare 

utilization characteristics of that 

specific group. 

Since the TCR premium does not 

necessarily reflect the experience of a 

specific group, an FEHB specific MLR 

requirement is not appropriate. 

However, if a State-mandated TCR 

carrier has no other groups that are TCR, 

and therefore no SSSG, the carrier will 

be subject to the FEHB specific MLR 

requirements. In that situation, applying 

the FEHB specific MLR requirement is 

appropriate. 

Definition of Entities Included for SSSG 

Comparison 

This proposed regulation identifies 

which SSSGs are available for 

comparison under 48 CFR 1602.170–13. 

A subscriber group purchasing 

healthcare benefits from an entity may 

be an SSSG if the entity is the carrier, 

a division or subsidiary of the carrier, a 

separate line of business or qualified 

separate line of business of the carrier, 

or if the entity maintains a contractual 

arrangement with the carrier to provide 

healthcare benefits. If the entity is any 

of the preceding, any of its subscriber 

groups may be included as an SSSG so 

long as the entity reports financial 

statements on a consolidated basis with 

the carrier or shares, delegates, or 

otherwise contracts with the carrier, any 

portion of its workforce that involves 

the management, design, pricing, or 

marketing of the healthcare product. 

Conforming Changes Due to MLR-Based 

FEHB Rate Requirements 

The FEHBAR contains language 

required in all FEHB contracts with 

health insurance carriers. In the April 2, 

2012 final rule, OPM did not update all 

of the FEHBAR contract language to 

account for the new FEHB-specific MLR 

requirement. Omitted from that 

regulation were some changes, 

described below, to 48 CFR 1652.215– 

70, ‘‘Rate Reduction for Defective 

Pricing or Defective Cost or Pricing 

Data,’’ to account for the new rules. 

48 CFR 1652.215–70 describes how a 

contracting officer at OPM may make an 

offset from premiums if pricing or cost 

and pricing data are defective. This 

proposed rule adds a provision stating 

that such an offset can be made if a 

Carrier, which is not mandated by the 

State to use traditional community 

rating, has developed FEHB rates 

inconsistent with the FEHB-specific 

MLR requirement. This proposed rule 

also adds a provision that simple 

interest must be paid to the Government 

when an MLR penalty is assessed as a 

result of an audit finding by the OPM 

Office of the Inspector General (OIG). 

This is not a policy change, but a 

conforming change so all FEHB 


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contracts account for the new FEHBspecific MLR requirement. 

The April 2, 2012 final rule included 

two different ‘‘Certificates of accurate 

cost or pricing data’’ in 48 CFR 

1615.406–2: One for SSSG pricing, and 

one for MLR pricing. Previously there 

was only one certificate for all carriers. 

This proposed rule changes some 

references from ‘‘certificate’’ to 

‘‘certificates’’ to reflect this change. 

Technical Corrections 

This proposed rule includes two 

technical corrections that correct 

inadvertent errors from earlier 

amendments to chapter 16 of the 

FEHBAR. 

In the June 2011 interim final rule, the 

word ‘‘issuer’’ was used erroneously in 

place of the word ‘‘carrier’’ in two 

places. Per chapter 89 title 5 U.S. Code, 

OPM is authorized to contract with 

carriers. This technical correction is 

made in 48 CFR 1602.170–14(a) and 

1652.216–70(b)(2)(i). 

This proposed rule also clarifies, in 48 

CFR 1652.216–70(b), how communityrated carriers must develop their FEHB 

rates. Previously, this section 

erroneously stated that carriers should 

‘‘base their rating methodology on the 

MLR threshold.’’ The corrected language 

states that all community-rated plans 

must develop the FEHB’s rates using 

their State-filed rating methodology or, 

if not required to file with the State, 

their standard written and established 

rating methodology. 

Regulatory Flexibility Act 

OPM certifies that this regulation will 

not have a significant economic impact 

on a substantial number of small entities 

because the regulation only affects 

health insurance carriers in the FEHB 

Program. 

Executive Order 12866, Regulatory 

Review 

This rule has been reviewed by the 

Office of Management and Budget in 

accordance with Executive Order 12866. 

OPM has examined the impact of this 

proposed rule as required by Executive 

Order 12866 and Executive Order 

13563, which direct agencies to assess 

all costs and benefits of available 

regulatory alternatives and, if regulation 

is necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public, health, and 

safety effects, distributive impacts, and 

equity). A regulatory impact analysis 

must be prepared for major rules with 

economically significant effects of $100 

million or more in any one year. This 

rule is not considered a major rule 

because there will be no increased costs 

to Federal agencies, Federal Employees, 

or Federal retirees in their health 

insurance premiums. 

Federalism 

We have examined this rule in 

accordance with Executive Order 13132, 

Federalism, and have determined that 

this rule will not have any negative 

impact on the rights, roles, and 

responsibilities of State, local, or tribal 

governments. 

List of Subjects in 48 CFR Parts 1602, 

1615, and 1652 

Government employees, Government 

procurement, Health insurance, 

Reporting and recordkeeping 

requirements. 

U.S. Office of Personnel Management. 

Katherine Archuleta, 

Director. 

For the reasons set forth in the 

preamble, OPM proposes to amend 

chapter 16 of title 48 CFR (FEHBAR) as 

follows: 

TITLE 48—FEDERAL ACQUISITION 

REGULATIONS SYSTEM 

CHAPTER 16—OFFICE OF PERSONNEL 

MANAGEMENT FEDERAL EMPLOYEES 

HEALTH BENEFITS ACQUISITION 

REGULATION 

Subchapter A—General 

PART 1602—DEFINITIONS OF WORDS 

AND TERMS 

■ 1. The authority citation for part 1602 

continues to read as follows: 

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

48 CFR 1.301. 

■ 2. Revise 1602.170–13 to read as 

follows: 

1602.170–13 Similarly sized subscriber 

groups. 

(a) A Similarly sized subscriber group 

(SSSG) is a non-FEHB employer group 

that: 

(1) As of the date specified by OPM 

in the rate instructions, has a subscriber 

enrollment closest to the FEHBP 

subscriber enrollment; 

(2) Uses traditional community rating; 

and 

(3) Meets the criteria specified in the 

rate instructions issued by OPM. 

(b) Any group with which an entity 

enters into an agreement to provide 

health care services is a potential SSSG 

(including groups that are traditional 

community rated and covered by 

separate lines of business, government 

entities, groups that have multi-year 

contracts, and groups having point-ofservice products) except as specified in 

paragraph (c) of this section. 

(1) An entity’s subscriber groups may 

be included as an SSSG if the entity is 

any of the following: 

(i) The carrier; 

(ii) A division or subsidiary of the 

carrier; 

(iii) A separate line of business or 

qualified separate line of business of the 

carrier; or 

(iv) An entity that maintains a 

contractual arrangement with the carrier 

to provide healthcare benefits. 

(2) A subscriber group covered by an 

entity meeting any of the criteria under 

paragraph (b)(1) of this section may be 

included for comparison as a SSSG if 

the entity meets any of the following 

criteria: 

(i) It reports financial statements on a 

consolidated basis with the carrier; or 

(ii) Shares, delegates, or otherwise 

contracts with the carrier, any portion of 

its workforce that involves the 

management, design, pricing, or 

marketing of the healthcare product. 

(c) The following groups must be 

excluded from SSSG consideration: 

(1) Groups the carrier rates by the 

method of retrospective experience 

rating; 

(2) Groups consisting of the carrier’s 

own employees; 

(3) Medicaid groups, Medicare-only 

groups, and groups that receive only 

excepted benefits as defined at section 

9832(c) of title 26, United States Code; 

(4) A purchasing alliance whose ratesetting is mandated by the State or local 

government; 

(5) Administrative Service 

Organizations (ASOs); 

(6) Any other group excluded from 

consideration as specified in the rate 

instructions issued by OPM. 

(d) OPM shall determine the FEHBP 

rate by selecting the lowest rate derived 

by using rating methods consistent with 

those used to derive the SSSG rate. 

(e) In the event that a State-mandated 

TCR carrier has no SSSG, then it will be 

subject to the FEHB specific MLR 

requirement. 

■ 3. Revise 1602.170–14(a) to read as 

follows: 

1602.170–14 FEHB-specific medical loss 

ratio threshold calculation. 

Medical Loss Ratio (MLR) means the 

ratio of plan incurred claims, including 

the carrier’s expenditures for activities 

that improve health care quality, to total 

premium revenue determined by OPM, 

as defined by the Department of Health 

and Human Services in 45 CFR part 158. 

* * * * * 


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Subchapter C—Contracting Methods and 

Contract Types 

PART 1615—CONTRACTING BY 

NEGOTIATION 

■ 4. The authority citations for part 

1615 continue to read as follows: 

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

48 CFR 1.301. 

■ 5. In 1615.402, revise paragraphs 

(c)(2), (c)(3)(i)(A) and (B), and (c)(4) to 

read as follows: 

1615.402 Pricing policy. 

* * * * * 

(c) * * * 

(2) For contracts with fewer than 

1,500 enrollee contracts for which the 

FEHB Program premiums for the 

contract term will be at or above the 

threshold at FAR 15.403–4(a)(1), OPM 

will require the carrier to submit its rate 

proposal, utilization data, and a 

certificate of accurate cost or pricing 

data required in 1615.406–2. In 

addition, OPM will require the carrier to 

complete the proposed rates form 

containing cost and pricing data, and 

the Community-Rate Questionnaire, but 

will not require the carrier to send these 

documents to OPM. The carrier will 

keep the documents on file for periodic 

auditor and actuarial review in 

accordance with 1652.204–70. OPM will 

perform a basic reasonableness test on 

the data submitted. Rates that do not 

pass this test will be subject to further 

OPM review. 

* * * * * 

(3) * * * 

(i) * * * 

(A) For contracts with 1,500 or more 

enrollee contracts for which the FEHB 

Program premiums for the contract term 

will be at or above the threshold at FAR 

15.403–4(a)(1), OPM will require the 

carrier to provide the data and 

methodology used to determine the 

FEHB Program rates. OPM will also 

require the data and methodology used 

to determine the rates for the carrier’s 

SSSG. The carrier will provide cost or 

pricing data required by OPM in its rate 

instructions for the applicable contract 

period. OPM will evaluate the data to 

ensure that the rate is reasonable and 

consistent with the requirements in this 

chapter. If necessary, OPM may require 

the carrier to provide additional 

documentation. 

(B) Contracts will be subject to a 

downward price adjustment if OPM 

determines that the Federal group was 

charged more than it would have been 

charged using a methodology consistent 

with that used for the SSSG. Such 

adjustments will be based on the rate 

determined by using the methodology 

(including discounts) the carrier used 

for the SSSG. 

* * * * * 

(4) Contracts will be subject to a 

downward price adjustment if OPM 

determines that the Federal group was 

charged more than it would have been 

charged using a methodology consistent 

with that used for the similarly-sized 

subscriber group (SSSG). Such 

adjustments will be based on the rate 

determined by using the methodology 

(including discounts) the carrier used 

for the SSSG. 

* * * * * 

■ 6. In 1615.406–2, revise the section 

heading and the first certificate to read 

as follows: 

1615.406–2 Certificates of accurate cost or 

pricing data for community-rated carriers. 

* * * * * 

(Beginning of first certificate) 

Certificate of Accurate Cost or Pricing 

Data for Community-Rated Carriers 

(SSSG methodology) 

This is to certify that, to the best of 

my knowledge and belief: (1) The cost 

or pricing data submitted (or, if not 

submitted, maintained and identified by 

the carrier as supporting 

documentation) to the Contracting 

officer or the Contracting officer’s 

representative or designee, in support of 

the ll* FEHB Program rates were 

developed in accordance with the 

requirements of 48 CFR Chapter 16 and 

the FEHB Program contract and are 

accurate, complete, and current as of the 

date this certificate is executed; and (2) 

the methodology used to determine the 

FEHB Program rates is consistent with 

the methodology used to determine the 

rates for the carrier’s Similarly Sized 

Subscriber Group. 

* Insert the year for which the rates 

apply. 

Firm: lllllllllllllll

Name: lllllllllllllll

Signature: lllllllllllll

Date of Execution: llllllllll

(End of first certificate) 

* * * * * 

Subchapter H—Clauses and Forms 

PART 1652—CONTRACT CLAUSES 

■ 7. 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. 

■ 8. In 1652.215–70, revise paragraphs 

(a) and (c) to read as follows: 

1652.215–70 Rate Reduction for Defective 

Pricing or Defective Cost or Pricing Data. 

* * * * * 

(a) If any rate established in 

connection with this contract was 

increased because: 

(1) The Carrier submitted, or kept in 

its files in support of the FEHBP rate, 

cost or pricing data that were not 

complete, accurate, or current as 

certified in one of the Certificates of 

Accurate Cost or Pricing Data (FEHBAR 

1615.406–2); 

(2) The Carrier submitted, or kept in 

its files in support of the FEHBP rate, 

cost or pricing data that were not 

accurate as represented in the rate 

reconciliation documents or MLR 

Calculation; 

(3) The Carrier developed FEHBP 

rates for traditional community-rated 

plans with a rating methodology and 

structure inconsistent with that used to 

develop rates for a similarly sized 

subscriber group (see FEHBAR 

1602.170–13) as certified in the 

Certificate of Accurate Cost or Pricing 

Data for Community-Rated Carriers; 

(4) The Carrier, who is not mandated 

by the State to use traditional 

community rating, developed FEHBP 

rates with a rating methodology and 

structure inconsistent with its Statefiled rating methodology (or if not 

required to file with the State, their 

standard written and established rating 

methodology) or inconsistent with the 

FEHB specific medical loss ratio (MLR) 

requirements (see FEHBAR 1602.170– 

13); or 

(5) The Carrier submitted or, kept in 

its files in support of the FEHBP rate, 

data or information of any description 

that were not complete, accurate, and 

current—then, the rate shall be reduced 

in the amount by which the price was 

increased because of the defective data 

or information. 

* * * * * 

(c) When the Contracting Officer 

determines that the rates shall be 

reduced and the Government is thereby 

entitled to a refund or that the 

Government is entitled to a MLR 

penalty, the Carrier shall be liable to 

and shall pay the FEHB Fund at the 

time the overpayment is repaid or at the 

time the MLR penalty is paid— 

(1) Simple interest on the amount of 

the overpayment from the date the 

overpayment was paid from the FEHB 

Fund to the Carrier until the date the 

overcharge is liquidated. In calculating 

the amount of interest due, the quarterly 

rate determinations by the Secretary of 

the Treasury under the authority of 26 

U.S.C. 6621(a)(2) applicable to the 

periods the overcharge was retained by 

the Carrier shall be used; 

(2) A penalty equal to the amount of 

overpayment, if the Carrier knowingly 


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Federal Register / Vol. 80, No. 4 / Wednesday, January 7, 2015 / Proposed Rules 929 

submitted cost or pricing data which 

was incomplete, inaccurate, or 

noncurrent; and 

(3) Simple interest on the MLR 

penalty from the date on which the 

penalty should have been paid to the 

FEHB Fund to the date on which the 

penalty was or will be actually paid to 

the FEHB fund. The interest rate shall 

be calculated as specified in paragraph 

(c)(1) of this clause. 

■ 9. In 1652.216–70, revise paragraphs 

(b)(2), (3), (7), and (8) to read as follows: 

1652.216–70 Accounting and price 

adjustment. 

* * * * * 

(b) * * * 

(2) Effective January 1, 2013 all 

community-rated plans must develop 

the FEHBP’s rates using their State-filed 

rating methodology or, if not required to 

file with the State, their standard 

written and established rating 

methodology. A carrier who mandated 

by the State to use traditional 

community rating will be subject to 

paragraph (b)(2)(ii) of this clause. All 

other carriers will be subject to 

paragraph (b)(2)(i) of this clause. 

(i) The subscription rates agreed to in 

this contract shall meet the FEHBspecific MLR threshold as defined in 

FEHBAR 162.170–14. The ratio of a 

plan’s incurred claims, including the 

carrier’s expenditures for activities that 

improve health care quality, to total 

premium revenue shall not be lower 

than the FEHB-specific MLR threshold 

published annually by OPM in its rate 

instructions. 

(ii) The subscription rates agreed to in 

this contract shall be equivalent to the 

subscription rates given to the carrier’s 

similarly sized subscriber group (SSSG) 

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 SSSG. If the SSSG 

receives a rate lower than that 

determined according to the carrier’s 

established policy, it is considered a 

discount. The FEHBP must receive a 

discount equal to or greater than the 

carrier’s SSSG discount. 

(3) If subject to paragraph (b)(2)(ii) of 

this clause, then: 

(i) If, at the time of the rate 

reconciliation, the subscription rates are 

found to be lower than the equivalent 

rates for the SSSG, the carrier may 

include an adjustment to the Federal 

group’s rates for the next contract 

period, except as noted in paragraph 

(b)(3)(iii) of this clause. 

(ii) If, at the time of the rate 

reconciliation, the subscription rates are 

found to be higher than the equivalent 

rates for the SSSG, 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 SSSG, except as 

noted in paragraph (b)(3)(iii) of this 

clause. 

(iii) Carriers may provide additional 

guaranteed discounts to the FEHBP that 

are not given to the SSSG. 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. 

* * * * * 

(7) Carriers may provide additional 

guaranteed discounts to the FEHBP. 

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. If the carrier is subject to the 

SSSG rules and imposes a surcharge on 

the SSSG, the carrier cannot impose the 

surcharge on FEHB. 

* * * * * 

[FR Doc. 2014–30633 Filed 1–6–15; 8:45 am] 

BILLING CODE 6325–63–P 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Part 890 

RIN 3206–AN07 

Federal Employees Health Benefits 

Program: Enrollment Options 

Following the Termination of a Plan or 

Plan Option 

AGENCY: Office of Personnel 

Management. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Office of Personnel 

Management (OPM) is issuing a 

proposed rule to amend the Federal 

Employees Health Benefits (FEHB) 

Program regulations regarding 

enrollment options following the 

termination of a plan or plan option. 

DATES: OPM must receive comments on 

or before March 9, 2015. 

ADDRESSES: Send written comments to 

Chelsea Ruediger, Planning and Policy 

Analysis, U.S. Office of Personnel 

Management, Room 4312, 1900 E Street 

NW., Washington, DC 20415. You may 

also submit comments using the Federal 

eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

FOR FURTHER INFORMATION CONTACT: 

Chelsea Ruediger at (202) 606–0004. 

SUPPLEMENTARY INFORMATION: When a 

plan or plan option in the Federal 

Employees Health Benefits (FEHB) 

Program terminates, OPM provides the 

enrollees of that plan or plan option a 

time period in which they may elect to 

enroll in a new plan or plan option. 

This proposed rule clarifies the actions 

that OPM and employing agencies may 

take when an enrollee fails to make an 

enrollment election during the time 

period provided. 

Current regulation ends an 

employee’s enrollment in the FEHB 

Program if he or she fails to make an 

enrollment election during the time 

period provided by OPM following a 

plan termination. This proposed 

regulation amends 5 CFR 890.301 to 

require the employing office to enroll 

automatically these employees into the 

lowest-cost nationwide plan option 

based on the enrollee share of the cost 

of a self only enrollment. Under the 

proposed regulation, a plan will not be 

considered the lowest-cost nationwide 

plan option if it is a High Deductible 

Health Plan (HDHP) or if it requires a 

membership fee or an association fee. 

For annuitants, current regulation 

provides that individuals who fail to 

make an enrollment election during the 

time provided by OPM following a plan 

termination shall be considered to be 

enrolled in the option of the Blue Cross 

and Blue Shield Service Benefit Plan 

that OPM determines most closely 

approximates the terminated plan. The 

proposed regulation amends 5 CFR 

890.306 to provide that these annuitants 

will be enrolled into the lowest-cost 

nationwide plan option that is available 

to the individual based on the same 

criteria listed above. 

Current regulation provides that when 

a plan discontinuation occurs due to a 

disaster, employees and annuitants who 

fail to make an enrollment election 

within 60 days of the disaster, as 

announced by OPM, shall be considered 

to be enrolled in the Standard Option of 

the Blue Cross and Blue Shield Service 

Benefit Plan. The proposed rule amends 

the regulation to provide that these 

individuals will be enrolled into the 

lowest-cost nationwide plan option that 

is available to the individual based on 

the same criteria listed above. It also 

provides belated enrollment authority 

for individuals who, for causes beyond 


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