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

their control, are unable to make 

enrollment changes and are enrolled in 

the lowest-cost nationwide plan. 

Since 2004, OPM has allowed up to 

three plan options under a plan. See 69 

FR 31721. Accordingly, the proposed 

rule also updates outdated language in 

5 CFR 890.301 and 890.306 that 

considers the termination of a plan 

option under a plan with a total of only 

two plan options. Under the proposed 

rule, when two or more plan options 

remain after a different plan option is 

terminated, the employing office will 

enroll the employee in the lowest-cost 

remaining plan option that is not an 

HDHP. 

Conforming edits have been made to 

5 CFR 890.806 for former spouses and 

5 CFR 890.1108 for enrollees in 

temporary continuation of coverage 

status. 

We are seeking comment on these 

provisions. 

Paperwork Reduction Act (PRA) 

OPM has reviewed this proposed rule 

for PRA implications and have 

determined that it does not apply to this 

action. 

Regulatory Impact Analysis 

OPM has examined the impact of this 

proposed rule as required by Executive 

Order 12866 and Executive Order 

13563, which directs 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. After 

completing this analysis, OPM has 

determined that this rule is not 

considered a major rule. 

Regulatory Flexibility Act 

I certify that this regulation will not 

have a significant economic impact on 

a substantial number of small entities 

because the regulation only impacts 

options available for FEHB enrollees 

when the plan or plan option in which 

they are enrolled terminates. 

Executive Order 12866, Regulatory 

Review 

This rule has been reviewed by the 

Office of Management and Budget in 

accordance with Executive Order 12866. 

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 5 CFR Part 890 

Administrative practice and 

procedure, Government employees, 

Health facilities, Health insurance, 

Health professions, Hostages, Iraq, 

Kuwait, Lebanon, Military personnel, 

Reporting and recordkeeping 

requirements, Retirement. 

U.S. Office of Personnel Management. 

Katherine Archuleta, 

Director. 

Accordingly, OPM proposes to amend 

title 5, Code of Federal Regulations, part 

890 as follows: 

PART 890—FEDERAL EMPLOYEES 

HEALTH BENEFITS PROGRAM 

■ 1. The authority citation for part 890 

continues to read as follows: 

Authority: 5 U.S.C. 8913; Sec. 890.301 

also issued under sec. 311 of Pub. L. 111–03, 

123 Stat. 64; Sec. 890.111 also issued under 

section 1622(b) of Pub. L. 104–106, 110 Stat. 

521; Sec. 890.112 also issued under section 

1 of Pub. L. 110–279, 122 Stat. 2604; 5 U.S.C. 

8913; Sec. 890.803 also issued under 50 

U.S.C. 403p, 22 U.S.C. 4069c and 4069c–1; 

subpart L also issued under sec. 599C of Pub. 

L. 101–513, 104 Stat. 2064, as amended; Sec. 

890.102 also issued under sections 11202(f), 

11232(e), 11246 (b) and (c) of Pub. L. 105– 

33, 111 Stat. 251; and section 721 of Pub. L. 

105–261, 112 Stat. 2061; Pub. L. 111–148, as 

amended by Pub. L. 111–152. 

■ 2. Amend § 890.301 by revising 

paragraphs (i)(4)(ii), (iii), and (iv) and 

adding paragraphs (i)(4)(v) and (n) to 

read as follows: 

§ 890.301 Opportunities for employees 

who are not participants in premium 

conversion to enroll or change enrollment; 

effective dates. 

* * * * * 

(i) * * * 

(4) * * * 

(ii) If the whole plan is discontinued, 

an employee who does not change the 

enrollment within the time set in 

paragraph (i)(4)(i) of this section will be 

enrolled in the lowest-cost nationwide 

plan option, as defined in paragraph (n) 

of this section; 

(iii) If one or more options of a plan 

are discontinued, an employee who 

does not change the enrollment will be 

enrolled in the remaining option of the 

plan, or in the case of a plan with two 

or more options remaining, the lowestcost remaining option that is not a High 

Deductible Health Plan (HDHP). 

(iv) If the discontinuance of the plan, 

whether permanent or temporary, is due 

to a disaster, an employee must change 

the enrollment within 60 days of the 

disaster, as announced by OPM. If an 

employee does not change the 

enrollment within the time frame 

announced by OPM, the employee will 

be enrolled in the lowest-cost 

nationwide plan option, as defined in 

paragraph (n) of this section. The 

effective date of enrollment changes 

under this provision will be set by OPM 

when it makes the announcement 

allowing such changes; 

(v) An employee who is unable, for 

causes beyond his or her control, to 

make an enrollment change within the 

60 days following a disaster and is, as 

a result, enrolled in the lowest-cost 

nationwide plan as defined in paragraph 

(n) of this section, may request a belated 

enrollment into the plan of his or her 

choice subject to the requirements of 

paragraph (c) of this section. 

* * * * * 

(n) OPM will annually determine the 

lowest-cost nationwide plan option 

calculated based on the enrollee share of 

the cost of a self only enrollment. The 

plan option identified may not be a 

High Deductible Health Plan (HDHP) or 

an option from a health benefits plan 

that charges an association or 

membership fee. 

■ 3. Amend § 890.306 by revising 

paragraphs (l)(4)(ii), (iii), (iv), and (v) 

and adding paragraph (l)(4)(vi) to read 

as follows: 

§ 890.306 When can annuitants or survivor 

annuitants change enrollment or reenroll 

and what are the effective dates? 

* * * * * 

(l) * * * 

(4) * * * 

(ii) If a plan discontinues all of its 

existing options, an annuitant who does 

not change his or her enrollment is 

deemed to have enrolled in the lowestcost nationwide plan option, as defined 

in § 890.301(n); except when the 

annuity is insufficient to pay the 

withholdings, then paragraph (q) of this 

section applies. 

(iii) If one or more options of a plan 

are discontinued, an annuitant who 

does not change the enrollment will be 

enrolled in the remaining option of the 

plan, or in the case of a plan with two 

or more options remaining, the lowestcost remaining option that is not a High 

Deductible Health Plan (HDHP). In the 

event that the annuity is insufficient to 

pay the withholdings, then paragraph 

(q) of this section applies; 

(iv) After an involuntary enrollment 

under paragraph (l)(4)(ii) or (iii) of this 

section becomes effective, the annuitant 

may change the enrollment to another 

option of the plan into which he or she 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 4 / Wednesday, January 7, 2015 / Proposed Rules 931 

was enrolled or another health plan of 

his or her choice retroactively within 

90-days after OPM advises the annuitant 

of the new enrollment; 

(v) If the discontinuance of the plan, 

whether permanent or temporary, is due 

to a disaster, an annuitant must change 

the enrollment within 60 days of the 

disaster, as announced by OPM. If an 

annuitant does not change the 

enrollment within the time frame 

announced by OPM, the annuitant will 

be enrolled in the lowest-cost 

nationwide plan option, as defined in 

§ 890.301(n). The effective date of 

enrollment changes under this provision 

will be set by OPM when it makes the 

announcement allowing such changes; 

(vi) An annuitant who is unable, for 

causes beyond his or her control, to 

make an enrollment change within the 

60 days following a disaster and is, as 

a result, enrolled in the lowest-cost 

nationwide plan as defined in 

§ 890.301(n), may request a belated 

enrollment into the plan of his or her 

choice subject to the requirements of 

paragraph (c) of this section. 

* * * * * 

■ 4. Amend § 890.806 by revising 

paragraphs (j)(4)(ii), (iii), and (iv) and 

adding paragraph (j)(4)(v) to read as 

follows: 

§ 890.806 When can former spouses 

change enrollment or reenroll and what are 

the effective dates? 

* * * * * 

(j) * * * 

(4) * * * 

(ii) If the whole plan is discontinued, 

a former spouse who does not change 

the enrollment within the time set will 

be enrolled in the lowest-cost 

nationwide plan option, as defined in 

§ 890.301(n); 

(iii) If one or more options of a plan 

are discontinued, a former spouse who 

does not change the enrollment will be 

enrolled in the remaining option of the 

plan, or in the case of a plan with two 

or more options remaining, the lowestcost remaining option that is not a High 

Deductible Health Plan (HDHP); 

(iv) If the discontinuance of the plan, 

whether permanent or temporary, is due 

to a disaster, the former spouse must 

change the enrollment within 60 days of 

the disaster, as announced by OPM. If 

a former spouse does not change the 

enrollment within the time frame 

announced by OPM, the former spouse 

will be enrolled in the lowest-cost 

nationwide plan option, as defined in 

§ 890.301(n). The effective date of 

enrollment changes under this provision 

will be set by OPM when it makes the 

announcement allowing such changes; 

(v) A former spouse who is unable, for 

causes beyond his or her control, to 

make an enrollment change within the 

60 days following a disaster and is, as 

a result, enrolled in the lowest-cost 

nationwide plan as defined in 

§ 890.301(n), may request a belated 

enrollment into the plan of his or her 

choice subject to the requirements of 

paragraph (c) of this section. 

* * * * * 

■ 5. Amend § 890.1108 by revising 

paragraphs (h)(4)(ii), (iii), and (iv) and 

adding paragraph (h)(4)(v) to read as 

follows: 

§ 890.1108 Opportunities to change 

enrollment; effective dates. 

* * * * * 

(h) * * * 

(4) * * * 

(ii) If the whole plan is discontinued, 

an enrollee who does not change the 

enrollment within the time set will be 

enrolled in the lowest-cost nationwide 

plan option, as defined in § 890.301(n); 

(iii) If one or more options of a plan 

are discontinued, an enrollee who does 

not change the enrollment will enrolled 

in the remaining option of the plan, or 

in the case of a plan with two or more 

options remaining, the lowest-cost 

remaining option that is not a High 

Deductible Health Plan (HDHP); 

(iv) If the discontinuance of the plan, 

whether permanent or temporary, is due 

to a disaster, the enrollee must change 

the enrollment within 60 days of the 

disaster, as announced by OPM. If the 

enrollee does not change the enrollment 

within the time frame announced by 

OPM, the enrollee will be enrolled in 

the lowest-cost nationwide plan option, 

as defined in § 890.301(n). The effective 

date of enrollment changes under this 

provision will be set by OPM when it 

makes the announcement allowing such 

changes; 

(v) An enrollee who is unable, for 

causes beyond his or her control, to 

make an enrollment change within the 

60 days following a disaster and is, as 

a result, enrolled in the lowest-cost 

nationwide plan as defined in 

§ 890.301(n), may request a belated 

enrollment into the plan of his or her 

choice subject to the requirements of 

paragraph (c) of this section. 

* * * * * 

[FR Doc. 2014–30636 Filed 1–6–15; 8:45 am] 

BILLING CODE 6325–63–P 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Part 890 

RIN 3206–AN14 

Federal Employees Health Benefits 

Program; Subrogation and 

Reimbursement Recovery 

AGENCY: Office of Personnel 

Management. 

ACTION: Proposed rule. 

SUMMARY: The United States Office of 

Personnel Management (OPM) is issuing 

a proposed rule to amend the Federal 

Employees Health Benefits (FEHB) 

Program regulations to clarify the 

conditional nature of FEHB Program 

benefits and benefit payments under the 

plan’s coverage as subject to a carrier’s 

entitlement to subrogation and 

reimbursement recovery, and therefore, 

that such entitlement falls within the 

preemptive scope of the U.S.C. FEHB 

contracts must include a provision 

incorporating the carrier’s subrogation 

and reimbursement rights and FEHB 

plan brochures must explain the 

carrier’s subrogation and reimbursement 

policy. 

DATES: Comments are due on or before 

February 6, 2015. 

ADDRESSES: Send written comments to 

Marguerite Martel, 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: Marguerite Martel. You may 

also submit comments using the Federal 

eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

FOR FURTHER INFORMATION CONTACT: 

Marguerite Martel at Marguerite.Martel@

opm.gov or (202) 606–0004. 

SUPPLEMENTARY INFORMATION: The FEHB 

Act, as codified at 5 U.S.C. 8902(m)(1) 

provides: ‘‘The terms of any contract 

under this chapter which 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 health insurance or plans.’’ 

This proposed regulation reaffirms that 

a covered individual’s entitlement to 

FEHB benefits and benefit payments is 

conditioned upon, and limited by, a 

carrier’s entitlement to subrogation and 

reimbursement recoveries pursuant to a 

subrogation or reimbursement clause in 

the FEHB contract. This proposed 

regulation also reaffirms that a FEHB 

carrier’s rights and responsibilities 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS