AGENCY:

Office of Personnel Management.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

The Office of Personnel Management (OPM) is issuing a proposed rule to ensure the continuation of certain benefits and services that could be impacted by a lapse in appropriations. First, the proposed rule implements Section 1110 of the National Defense Authorization Act for Fiscal Year 2020 (FY20 NDAA) which designates certain Federal Employees Health Benefits (FEHB) Program and Federal Employees' Group Life Insurance (FEGLI) services as emergency services under the Antideficiency Act. These services are deemed as services for emergencies involving the safety of human life or the protection of property. The law also provides that employees furloughed as a result of a lapse in appropriations shall, during such lapse, be deemed to be in pay status, for purposes of enrolling or changing enrollment in the FEHB Program. Secondly, the proposed rule implements a section of law which authorizes continuation of coverage under the Federal Employees Dental and Vision Insurance Program (FEDVIP) and the Federal Long Term Care Insurance Program (FLTCIP) for enrollees who are furloughed or excepted from furlough and working without pay due to a lapse in appropriations, and provides that coverage may not be cancelled as a result of nonpayment of premiums or other periodic charges due to such a lapse. The proposed rule also clarifies that upon the end of a lapse in appropriations, FEDVIP and FLTCIP premiums will be paid from back pay or may be paid back from another source for FLTCIP enrollees who elected to make payments directly to the Carrier.

DATES:

OPM must receive comments on or before August 19, 2020.

ADDRESSES:

You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:

• Federal Rulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at http://www.regulations.gov as they are received without change, including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT:

Julia Elam, Program Analyst, at (202) 606-2128 or Padma Shah, Senior Policy Analyst, at (202) 606-2128.

SUPPLEMENTARY INFORMATION:

Background

The Federal Benefits Programs

Federal Employees' Group Life Insurance Program (FEGLI)

FEGLI is administered by the United States Office of Personnel Management (OPM) in accordance with Chapter 87 of Title 5 of the U.S. Code and implementing regulations (Title 5, part 87, and Title 48, chapter 21 of the Code of Federal Regulations). As of September 30, 2019, FEGLI covers an estimated 4.3 million employees and annuitants enrolled in Basic insurance, including 1.2 million employees and annuitants enrolled in Option A—Standard insurance, 1.2 million employees and annuitants with Option B—Additional insurance that has not reduced to zero, and 924,000 employees and annuitants enrolled in Option C—Family insurance that has not reduced to zero. Eligible employees are automatically enrolled in Basic insurance unless the employee waives this coverage, and FEGLI coverage can be continued upon retirement, if certain requirements are met. For most enrollees, the Government pays one-third of the premium cost for Basic insurance and the enrollee pays two-thirds of the premium cost. Those enrolled in Basic insurance may also elect Optional A, B, or C insurance. Enrollees pay the full cost for all Optional insurance.

Federal Employees Health Benefits (FEHB) Program

The FEHB Program is administered by OPM in accordance with Title 5 Chapter 89, United States Code and implementing regulations (Title 5, Parts 890, 892 and Title 48, Chapter 16). As of March 2019, there were approximately 8.2 million Federal employees, annuitants, certain Tribal employees, and their family members covered by the FEHB Program. It is the largest employer-sponsored health insurance program in the country. The Government contribution toward premium costs for most enrollees is set in statute as the lesser of 72 percent of the weighted average premium of all health plans or 75 percent of that plan option's premium. Using 2020 premiums with 2019 enrollments, the Government contribution toward 2020 premiums is $39.8 billion and the enrollee portion is $17.3 billion.

Federal Employees Dental and Vision Insurance Program (FEDVIP)

FEDVIP was created as a result of the enactment of the Federal Employee Dental and Vision Benefits Enhancement Act of 2004, Public Law 108-496. This Act required OPM to make stand-alone dental and vision insurance available to Federal employees, annuitants, and their family members. Certain TRICARE-eligible individuals who are authorized under Section 715 of the National Defense Authorization Act of Fiscal Year 2017, Public Law 114-328, recently became eligible for FEDVIP. As of November 2019, FEDVIP has 4.8 million enrollees with approximately 6.6 million covered individuals. There is no Government contribution towards premiums; enrollees pay the full cost of coverage. FEDVIP is administered by OPM in accordance with 5 U.S.C. chapters 89A and 89B and implementing regulations (5 CFR part 894).

Federal Long Term Care Insurance Program (FLTCIP)

FLTCIP was created as a result of the enactment of the Long Term Care Security Act of 2000, Public Law 106-265. Eligible individuals may apply for insurance to help them pay for the costs of long term care. Most Federal employees and annuitants and their qualified relatives, and active and retired members of the uniformed services and their qualified relatives, can apply for FLTCIP coverage. As of November 2019, FLTCIP has 268,000 enrollees. FLTCIP is administered by OPM in accordance with 5 U.S.C. chapter 90 and implementing regulations (5 CFR part 875). FLTCIP is an enrollee-pay-all program; there is no Government contribution toward premiums.

Discussion of the Changes

Designation of FEHB Program and FEGLI Program Services as Emergency Services Under the Antideficiency Act

The Constitution provides that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by law.” U.S. Const. art. I, section 9, cl. 7. The Treasury is further protected through the Antideficiency Act, 31 U.S.C. 1341 et seq. Among other things, the Antideficiency Act prohibits all officers and employees of the Federal Government from entering into obligations in advance of appropriations (31 U.S.C. 1341) and it prohibits employing Federal personnel in advance of appropriations except in emergencies involving the safety of human life or the protection of property (31 U.S.C. 1342).^[1] Section 1110(b) of Public Law 116-92 amends 5 U.S.C. 8702 (automatic coverage of life insurance), to provide that any services by an officer or employee under Chapter 87 of Title 5 relating to FEGLI benefits shall be deemed for purposes of 31 U.S.C. 1342, as services for emergencies involving the safety of human life or the protection of property. In addition, Section 1110(a) of Public Law 116-92 amends 5 U.S.C. 8905 to provide that any services by an officer or employee for the purposes of enrolling an individual in an FEHB plan, or changing the enrollment of an individual, shall be deemed, for purposes of section 1342 of Title 31, as services for emergencies involving the safety of human life or the protection of property. Therefore, the Government may continue to employ Federal officers and employees to perform such emergency services related to the FEGLI and FEHB Programs.

In this proposed rule, OPM amends the FEGLI regulations by adding a new section 5 CFR 870.106 in subpart A, which designates certain FEGLI services as emergency services under the Antideficiency Act. These services include, but are not limited to, any activities related to enrollment, changing enrollment, temporary extension of coverage and conversion, eligibility, certification of coverage, and matters relating to reemployed annuitants and survivor annuitants. OPM's current regulations do not address how or whether agencies must make changes to FEGLI for enrollees during a furlough. OPM also amends the FEHB Program regulations by adding a new section 5 CFR 890.113 in subpart A, which designates certain FEHB Program services as emergency services under the Antideficiency Act. These services include, but are not limited to, activities related to enrollment, changing enrollment, temporary extension of coverage and conversion, eligibility, and matters relating to reemployed annuitants and survivor annuitants.

Under Section 1110(d) of Public Law 116-92, the amendments relating to the designation of FEHB Program and FEGLI services as emergency services shall apply to any lapse in appropriations beginning on or after December 20, 2019, the date of enactment of the FY20 NDAA. The FEHB Program and FEGLI regulations have been updated with new sections 5 CFR 890.113(b) and 5 CFR 870.106(b), respectively, to clarify that the designation of FEHB Program and FEGLI services as emergency services shall apply to any lapse in appropriations beginning on or after December 20, 2019.

Opportunities To Enroll and Change Enrollment in the FEHB Program for Furloughed Employees and Employees Excepted From Furlough and Working Without Pay During a Lapse in Appropriations

Generally, an employee needs to be in pay status in order to enroll or change enrollment in the FEHB Program. See 5 CFR 890.301(b), which indicates that an FEHB “enrollment or change of enrollment takes effect on the first day of the first pay period that begins after the date the employing office receives an appropriate request to enroll or change the enrollment and that follows a pay period during any part of which the employee is in pay status.” (emphasis added). Likewise, under 5 CFR 890.301(f)(4), “an open season new enrollment takes effect on the first day of the first pay period that begins in the next following year and which follows a pay period during any part of which the employee is in a pay status.” Currently, when an employee is furloughed or excepted from furlough and working without pay as a result of a lapse in appropriations, he or she is not receiving pay during the lapse. Therefore, this regulatory requirement prevents enrollment changes made by employees affected by a furlough from becoming effective. Therefore, under current regulations, such employees cannot enroll or change enrollment in the FEHB Program. Under section 1110(c)(2) of the FY20 NDAA, such employees would be deemed to be in pay status, during the lapse, for purposes of enrolling or changing enrollment in the FEHB Program.

Section 1110(c)(2) refers to furloughed employees but not to employees excepted from furlough and working without pay. However, OPM interprets the statute's purpose to be that of protecting the benefits of employees affected by a lapse in appropriations. Further, all other clauses in sections 1110 and 1111—the two provisions in the FY20 NDAA addressing Federal benefit programs to include FEHB, FEGLI, FEDVIP and FLTCIP—encompass both furloughed employees and employees excepted from furlough and working without pay. Given these facts, and pursuant to OPM's general authority to interpret the provisions of the FEHB Act, 5 U.S.C. 8901 et seq., and to fill in statutory gaps left by Congress, as well as OPM's broad authority under 5 U.S.C. 8913(b) to prescribe the conditions under which employees are eligible to enroll in the FEHB Program, OPM is also including similarly situated employees who are excepted from furlough and working without pay as being deemed to be in a pay status for the purpose of enrolling or changing enrollment in the FEHB Program. This will ensure that all employees that would otherwise be affected by a lapse in appropriations will be treated the same.

This proposed rule would add a new paragraph (o) to 5 CFR 890.301 and revise that section's heading. Under new paragraph (o), employees furloughed or excepted from furlough and working without pay as a result of a lapse in appropriations are deemed to be in pay status, during such lapse, for purposes of enrolling or changing enrollment in the FEHB Program. The number of employees that would likely enroll or change enrollment during a lapse in appropriations would depend on the length of the lapse, the timing of the lapse, and number of employees impacted by the lapse. Based on recent data, OPM estimates that during a year, there are approximately 460,000 new enrollment or enrollment change transactions that occur through the electronic FEHB Data Hub. About 57% of these transactions occur during Open Season, and about 43% of these transactions occur outside Open Season. OPM estimates these numbers represent 75% of total transactions with the remaining transactions being paper transactions that occur outside of the FEHB Data Hub. The amendments relating to enrollment and changing enrollment in the FEHB Program apply to any lapse of appropriations beginning on or after December 20, 2019, the date the FY20 NDAA was enacted.

Continuation of FLTCIP and FEDVIP During a Lapse in Appropriations

Section 1111 of the FY20 NDAA amended 5 U.S.C. 9003, and authorized the continuation of coverage under FLTCIP for an enrollee who is an employee or member of the uniformed services who, due to a lapse in appropriations, is furloughed or excepted from furlough and working without pay during such lapse, and provides that these FLTCIP enrollees may not have coverage cancelled as a result of nonpayment of premiums or other periodic charges during a lapse. Under the FY20 NDAA, FLTCIP premiums will be paid to the Carrier from enrollees' back pay made available as soon as practicable upon the end of such a lapse. If the enrollee has elected to pay premiums by a method other than payroll deduction, the enrollee may continue to pay premiums pursuant to such election.

Currently, if an employee with FLTCIP is furloughed, payroll deductions stop for any employee that does not receive pay during a shutdown furlough. However, during a shutdown furlough an impacted employee's coverage does not terminate due to nonpayment of premiums. The employee will accrue a debt for FLTCIP premiums. Once the shutdown ends, the Program Administrator will collect the past due amount of missed FLTCIP premiums from the employee's upcoming pay, which may include making adjustments to the deduction amount. It will work with the enrollee to collect the back premiums limiting the amount per pay check to prevent undue hardship. The Program Administrator does not attempt to terminate an enrollment or collect missed premium until after the furlough is resolved.

Under the proposed rule, continuation of FLTCIP coverage is authorized for an enrollee who is an employee or member of the uniformed services who, due to a lapse in appropriations, is furloughed or excepted from furlough and working without pay during such lapse. The proposed rule also clarifies that upon the end of a lapse in appropriations, FLTCIP premiums will be paid from back pay or may be paid back from another source for FLTCIP enrollees who elected to make payments directly to the Carrier. During a furlough, an employee can stop or continue direct pay or debit billing during a furlough. These enrollees will receive letters from the Program Administrator about any back premiums to pay. This proposed rule does not affect the amount of premiums collected, but it may change when the premiums are received by the Carrier.

It also provides that FLTCIP enrollees may not have coverage cancelled as a result of nonpayment of premiums or other periodic charges during a lapse. In 5 CFR 875.302 OPM is adding a new paragraph (c) to add an exception to allow FLTCIP coverage to continue if any enrollee is furloughed, or excepted from furlough and working without pay during a lapse in appropriations, and that coverage may not be cancelled as a result of nonpayment of premiums or other periodic charges due during such lapse. This proposed rule also adds in new paragraph 5 CFR 875.302(c)(1) to provide that an enrollee who elected to pay FLTCIP premiums directly to the Carrier, may continue to pay premiums pursuant to such election. Otherwise; if the premiums had been withheld from pay and Congress appropriates back pay as authorized by 31 U.S.C. 1341(c)(2), premiums will be paid to the Carrier from the enrollee's back pay made available as soon as practicable upon the end of such a lapse. If Congress does not appropriate back pay for the lapse period, if the enrollee usually pays premiums through payroll deduction, and the lapse period is less than three consecutive pay periods, the accumulated premiums will be withheld when the lapse ends and employees can be paid. Otherwise, the Program Administrator will begin to bill the enrollee directly for premium payments. The enrollee must pay those bills on a timely basis in order to continue coverage. A new paragraph 5 CFR 875.302(c)(2), explains that upon the end of a lapse in appropriations, premiums will be required from all impacted enrollees, and if premiums are not paid as soon as practicable upon the end of the lapse when due, coverage will terminate pursuant to current regulations at 5 CFR 875.412(c).

Section 1111 of Public Law 116-92 also amends 5 U.S.C. 8956 (dental benefits) and 8986 (vision benefits), to authorize the continuation of coverage under a vision and/or dental benefits plan for any employee or a covered TRICARE-eligible individual enrolled in such a plan who, as a result of a lapse in appropriations, is furloughed or excepted from furlough and working without pay. FEDVIP coverage for these enrollees may not be cancelled as a result of nonpayment of premiums or other periodic charges due to a lapse in appropriations, and, assuming Congress appropriates back pay as authorized by 31 U.S.C. 1341(c)(2), FEDVIP premiums will be paid to the Carrier from the enrollee's back pay made available as soon as practicable upon the end of such a lapse. If Congress does not appropriate back pay for the lapse period, the Program Administrator will begin billing seventy (70) calendar days after the first missed payment. The first direct bill will be mailed on the next available direct bill cycle date following the 70-day period. The Program Administrator may not terminate an enrollment during a lapse in appropriation (furloughed employees, during a lapse in appropriations, are not considered to be on a leave without pay). When employees return to work and receive pay, the Program Administrator will collect 2 missed premium payments each month until the previously unpaid premiums are caught up. This will also pertain to retirees impacted by a lapse in appropriation.

Currently, if a FEDVIP enrollee has been furloughed, FEDVIP coverage will continue. Payroll deductions will cease for any employee that does not receive pay and missed premium payments will be withheld from pay upon return to pay status. The Program Administrator, will begin to directly bill enrollees for premiums 70 calendar days after the first missed payment, but may not terminate an enrollment due to a lapse in appropriations. The proposed rule authorizes continuation of coverage under a vision and/or dental benefits plan for any employee or a covered TRICARE-eligible individual enrolled in such a plan who, as a result of a lapse in appropriations, is furloughed or excepted from furlough and working without pay. FEDVIP coverage for these enrollees may not be cancelled as a result of nonpayment of premiums or other periodic charges due to a lapse in appropriations, and FEDVIP premiums will be paid to the Carrier from the enrollee's back pay made available as soon as practicable upon the end of such a lapse. The proposed rule does not affect the amount of premiums collected, but it may change when the premiums are received by the insurance carrier.

In 5 CFR 894.405, OPM adds a new paragraph (c), which adds an exception to allow FEDVIP coverage to continue for any enrollee who is furloughed or is excepted from furlough and working without pay during a lapse in appropriations. In addition, in 5 CFR 894.406, OPM adds a new paragraph (c), which adds an exception to allow FEDVIP coverage to continue for any enrollee who is a TRICARE-eligible individual who is furloughed or is excepted from furlough and working without pay during a lapse. Currently, under 5 CFR 894.405 and 894.406, if a FEDVIP enrollee goes into nonpay status or the enrollee's pay or annuity, including uniformed services retirement pay, is insufficient to cover the allotments, the enrollee may contact the Program Administrator and make payments directly, or coverage will stop if the enrollee does not make premium payments, and the enrollee has to wait until open season to enroll.

In 5 CFR 894.601, OPM amends paragraph (b) to add an exception to allow FEDVIP coverage to continue for any enrollee who is furloughed or excepted from furlough and working without pay during a lapse in appropriations. Currently, under 5 CFR 894.601(b), FEDVIP coverage stops if an enrollee goes into a period of nonpay or insufficient pay, including insufficient uniformed services pay or uniformed services retirement pay, if the enrollee does not make premium payments.

Under Section 1111(c) of Public Law 116-92, the amendments relating to the continuation of FEDVIP and FLTCIP under chapter 89A, 89B, or 90 (respectively) of Title 5, United States Code, apply to any contract for those benefits entered into before, on, or after December 20, 2019, the date of enactment of Public Law 116-92.

In addition to the above regulatory changes, OPM is updating the authority citation for parts 870, 875, 890 and 894.

Expected Impact of Proposed Changes

OPM seeks general comments on the impact of this regulation. OPM does not believe this regulation will have a large impact on the broader life insurance, dental, vision, or long term care insurance markets as FEGLI, FEDVIP, and FLTCIP constitute a small percentage of participating Carriers' overall business line in their respective non-Federal life, dental, vision, or long term care insurance portfolios. OPM also does not believe this regulation will have a large impact on the broader health insurance market even if FEHB constitutes a large percentage of a Carrier's overall business line because administrative actions such as processing enrollments and enrollment changes are routine practices.

Regulatory Impact Analysis

OPM has examined the impact of this rulemaking 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. While this rulemaking does not reach the economic effect of $100 million or more under Executive Order 12866, this rulemaking is still designated as a “significant regulatory action,” under Executive Order 12866 and has been reviewed by OMB.

Reducing Regulation and Controlling Regulatory Costs

This proposed rule, if finalized as proposed, is expected to impose no more than de minimis costs and thus be neither an E.O. 13771 regulatory action nor an E.O. 13771 deregulatory action.

Regulatory Flexibility Act

I certify that this regulation will not have a significant economic impact on a substantial number of small entities.

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

5 CFR Part 870

• Administrative practice and procedure
• Government employees
• Hostages
• Iraq
• Kuwait
• Lebanon
• Life insurance
• Retirement

5 CFR Part 875

• Administrative practice and procedure
• Employee benefit plans
• Government contracts
• Government employees
• Health insurance
• Military personnel
• Organization and functions
• Retirement

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

5 CFR Part 894

• Administrative practice and procedure
• Government employees
• Health facilities
• Health insurance
• Health professions
• Hostages
• Iraq
• Kuwait
• Lebanon
• Military personnel
• Reporting and recordkeeping requirements
• Retirement

Accordingly, OPM proposes to amend title 5, Code of Federal Regulations parts 870, 875, 890, 894 as follows:

PART 870—FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM

1. The authority citation for Part 870 is revised to read as follows:

Authority: 5 U.S.C. 8716; Subpart J also issued under section 599C of Pub. L. 101-513, 104 Stat. 2064, as amended; Sec. 870.302(a)(3)(ii) also issued under section 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 870.302(a)(3) also issued under sections 11202(f), 11232(e), and 11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251, and section 7(e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 870.302(a)(3) also issued under section 145 of Pub. L. 106-522, 114 Stat. 2472; Secs. 870.302(b)(8), 870.601(a), and 870.602(b) also issued under Pub. L. 110-279, 122 Stat. 2604; Subpart E also issued under 5 U.S.C. 8702(c); Sec. 870.601(d)(3) also issued under 5 U.S.C. 8706(d); Sec. 870.703(e)(1) also issued under section 502 of Pub. L. 110-177, 121 Stat. 2542; Sec. 870.705 also issued under 5 U.S.C. 8714b(c) and 8714c(c); Pub. L. 104-106, 110 Stat. 521; Pub. L. 116-92.

Subpart A—Administration and General Provisions

2. Amend subpart A by adding section 870.106 to read as follows:

PART 875—FEDERAL LONG TERM CARE INSURANCE PROGRAM

3. The authority citation for part 875 is revised to reads as follows:

Authority: 5 U.S.C. 9008, Pub. L. 116-92.

Subpart C—Cost

4. Amend § 875.302 by adding paragraph (c) to read as follows:

PART 890—FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

5. The authority citation for part 890 is revised to read as follows:

Authority: 5 U.S.C. 8913; Sec. 890.102 also issued under sections 11202(f), 11232(e), and 11246(b) of Pub. L. 105-33, 111 Stat. 251; Sec. 890.112 also issued under section 1 of Pub. L. 110-279, 122 Stat. 2604; 5 U.S.C. 8913; Sec. 890.301 also issued under sec. 311 of Pub. L. 111-3, 123 Stat. 64; Sec. 890.111 also issued under section 1622(b) of Pub. L. 104-106, 110 Stat. 521; Sec. 890.803 also issued under 50 U.S.C. 3516 (formerly 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; subpart M also issued under section 721 of Pub. L. 105-261, 112 Stat. 2061; Pub. L. 111-148, as amended by Pub. L. 111-152; Pub. L. 116-92.

Subpart A—Administration and General Provisions

6. Amend subpart A by adding § 890.113 to read as follows:

Subpart C—Enrollment

7. Amend § 890.301 by revising the section heading and adding paragraph (o) to read as follows:

PART 894—FEDERAL EMPLOYEES DENTAL AND VISION INSURANCE PROGRAM

8. The authority citation for part 894 is revised to read as follows:

Authority: 5 U.S.C. 8962; 5 U.S.C. 8992; Subpart C also issued under section 1 of Pub. L. 110-279, 122 Stat. 2604; Sec. 715 of Pub. L. 114-328, 130 Stat. 2221; Pub. L. 116-92.

Subpart D—Cost of Coverage

9. Amend § 894.405 by adding paragraph (c) to read as follows:

10. Amend § 894.406 by adding paragraph (c) to read as follows:

Subpart F—Termination or Cancellation of Coverage

11. Amend § 894.601 by revising paragraph (b) to read as follows:

Footnotes