Federal Employees Health Benefits Program: New Premium Rating Method for Most Community Rated Plans; Withdrawal, 38282 [2011-16280]
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38282
Federal Register / Vol. 76, No. 125 / Wednesday, June 29, 2011 / Rules and Regulations
Interim final rule with request
for comments.
OFFICE OF PERSONNEL
MANAGEMENT
ACTION:
5 CFR Part 890; 48 CFR Parts 1602,
1615, 1632, and 1652
SUMMARY:
RIN 3206–AM39
Federal Employees Health Benefits
Program: New Premium Rating Method
for Most Community Rated Plans;
Withdrawal
U.S. Office of Personnel
Management.
ACTION: Interim final rule; withdrawal.
AGENCY:
The U.S. Office of Personnel
Management (OPM) is withdrawing an
interim final regulation that appeared in
the Federal Register of June 23, 2011
(76 FR 36857). The document amends
the Federal Employees Health Benefits
(FEHB) regulations at 5 CFR Chapter 89
and also the Federal Employees Health
Benefits Acquisition Regulation
(FEHBAR) at 48 CFR Chapter 16 and
would replace the procedure by which
premiums for community rated FEHB
carriers are compared with the rates
charged to a carrier’s similarly sized
subscriber groups (SSSGs).
DATES: The interim final rule published
on Thursday, June 23, 2011 at 76 FR
36857 is withdrawn as of June 29, 2011.
FOR FURTHER INFORMATION CONTACT:
Louise Dyer, Senior Policy Analyst,
(202) 606–0770, or by e-mail to
Louise.Dyer@opm.gov.
SUMMARY:
This rule
is being withdrawn due to the version
submitted to the Federal Register was
incorrect and contained numerous
errors. In today’s issue of the Federal
Register, you will find the correct
version of the interim rule.
SUPPLEMENTARY INFORMATION:
U.S. Office of Personnel Management.
Edward M. DeHarde,
Program Manager, National Healthcare
Operations.
[FR Doc. 2011–16280 Filed 6–28–11; 8:45 am]
BILLING CODE 6325–24–P
OFFICE OF PERSONNEL
MANAGEMENT
emcdonald on DSK2BSOYB1PROD with RULES2
5 CFR Part 890
48 CFR Parts 1602, 1615, 1632, and
1652
RIN 3206–AM39
Federal Employees Health Benefits
Program: New Premium Rating Method
for Most Community Rated Plans
U.S. Office of Personnel
Management.
AGENCY:
VerDate Mar<15>2010
18:24 Jun 28, 2011
Jkt 223001
The U.S. Office of Personnel
Management (OPM) is issuing an
interim final regulation amending the
Federal Employees Health Benefits
(FEHB) regulations and also the Federal
Employees Health Benefits Acquisition
Regulation (FEHBAR). This interim final
regulation replaces the procedure by
which premiums for community rated
FEHB carriers are compared with the
rates charged to a carrier’s similarly
sized subscriber groups (SSSGs). This
new procedure utilizes a medical loss
ratio (MLR) threshold, analogous to that
defined in both the Affordable Care Act
(ACA, Pub. L. 111–148) and the
Department of Health and Human
Services (HHS) interim final regulation
published December 1, 2010 (75 FR
74864). The purpose of this interim final
rule is to replace the outdated SSSG
methodology with a more modern and
transparent calculation while still
ensuring that the FEHB is receiving a
fair rate. This will result in a more
streamlined process for plans and
increased competition and plan choice
for enrollees. The new process will
apply to all community rated plans,
except those under traditional
community rating (TCR). This new
process will be phased in over two
years, with optional participation for
non-TCR plans in the first year.
DATES: This interim final rule is
effective July 29, 2011. Comments are
due on or before August 29, 2011.
FOR FURTHER INFORMATION CONTACT:
Louise Dyer, Senior Policy Analyst,
(202) 606–0770, or by e-mail to
Louise.Dyer@opm.gov.
SUPPLEMENTARY INFORMATION: The Office
of Personnel Management is issuing an
interim final regulation to establish a
new rate-setting procedure for most
FEHB plans that are subject to
community rating. Currently, a carrier’s
rates for its community rated FEHB
plans are compared with the rates the
carrier charges to its similarly sized
subscriber groups (SSSGs) during a
reconciliation process in the plan year.
This interim final regulation replaces
this SSSG process with a requirement
that most community rated plans meet
an FEHB-specific medical loss ratio
(MLR) target. Plans that are required to
use traditional community rating (TCR)
per their state regulator will be exempt
from this new rate-setting procedure.
This MLR-based rate setting process will
ensure the Government and Federal
employees are receiving a fair market
rate and a good value for their premium
dollars.
PO 00000
Frm 00002
Fmt 4701
Sfmt 4700
ACA Medical Loss Ratio Requirement
Effective for 2011, most health
insurance policies, including those
issued under FEHB, are required to meet
a medical loss ratio standard set forth in
Federal law, or pay rebates to the
individuals insured. This MLR
requirement was enacted in the ACA in
a new section 2718 of the Public Health
Service Act titled ‘‘Bringing Down the
Cost of Health Care Coverage,’’ and is
intended to control health care costs by
limiting the percentage of premium
receipts that can be used for non-claim
costs (costs for purposes other than
providing care or improving the quality
of care). The details of this ACArequired MLR formula comparing nonclaim costs to overall expenditures were
promulgated in an HHS interim final
regulation published in the Federal
Register on December 1, 2010 (75 FR
74864). Non-claim costs include plan
administration costs, marketing costs,
and profit. ACA requires that health
insurance issuers, beginning in calendar
year 2011, meet an MLR of 85% for
large groups, (i.e., non-claim costs may
not exceed 15%). If an issuer does not
meet the MLR target, it must pay a
premium rebate.
FEHB-Specific MLR Threshold
Under this OPM regulation, in
addition to being subject to the ACArequired MLR, most FEHB community
rated plans will be required to meet an
FEHB-specific MLR threshold for the
annual rates negotiated for their Federal
enrollment. This new requirement will
be included in 48 CFR 1615.402(c)(3)(ii)
and will be phased in over two years. If
the plan falls below the FEHB-specific
MLR threshold, the plan must pay a
subsidization penalty into a newly
established Subsidization Penalty
Account (defined in 5 CFR
890.503(c)(6)). The FEHB-specific MLR
threshold will be set in OPM’s annual
rate instructions to FEHB plans
published in the spring of each year,
rather than by regulation. If the plan has
met or exceeded the FEHB-specific MLR
threshold, there is no exchange of funds
or adjustment of premiums necessary.
This rule establishes a process by
which FEHB community rated plans
(other than plans using TCR) will
calculate and submit the MLR for their
FEHB plans. This process will take
place after the end of the plan year and
after the carrier has calculated and
submitted to HHS the ACA-required
MLR. Under this regulation, premium
rates for community rated plans will
continue to be negotiated prior to the
plan year based on the plan’s
community rating methodology. There
E:\FR\FM\29JNR2.SGM
29JNR2
]]>Agencies
[Federal Register Volume 76, Number 125 (Wednesday, June 29, 2011)]
[Rules and Regulations]
[Page 38282]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16280]
[[Page 38281]]
Vol. 76
Wednesday,
No. 125
June 29, 2011
Part II
Office of Personnel Management
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5 CFR Part 890; 48 CFR Parts 1602, 1615, et al.
Federal Employees Health Benefits Program: New Premium Rating Method
for Most Community Rated Plans; Withdrawal; Final Rules
Federal Register / Vol. 76 , No. 125 / Wednesday, June 29, 2011 /
Rules and Regulations
[[Page 38282]]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890; 48 CFR Parts 1602, 1615, 1632, and 1652
RIN 3206-AM39
Federal Employees Health Benefits Program: New Premium Rating
Method for Most Community Rated Plans; Withdrawal
AGENCY: U.S. Office of Personnel Management.
ACTION: Interim final rule; withdrawal.
-----------------------------------------------------------------------
SUMMARY: The U.S. Office of Personnel Management (OPM) is withdrawing
an interim final regulation that appeared in the Federal Register of
June 23, 2011 (76 FR 36857). The document amends the Federal Employees
Health Benefits (FEHB) regulations at 5 CFR Chapter 89 and also the
Federal Employees Health Benefits Acquisition Regulation (FEHBAR) at 48
CFR Chapter 16 and would replace the procedure by which premiums for
community rated FEHB carriers are compared with the rates charged to a
carrier's similarly sized subscriber groups (SSSGs).
DATES: The interim final rule published on Thursday, June 23, 2011 at
76 FR 36857 is withdrawn as of June 29, 2011.
FOR FURTHER INFORMATION CONTACT: Louise Dyer, Senior Policy Analyst,
(202) 606-0770, or by e-mail to Louise.Dyer@opm.gov.
SUPPLEMENTARY INFORMATION: This rule is being withdrawn due to the
version submitted to the Federal Register was incorrect and contained
numerous errors. In today's issue of the Federal Register, you will
find the correct version of the interim rule.
U.S. Office of Personnel Management.
Edward M. DeHarde,
Program Manager, National Healthcare Operations.
[FR Doc. 2011-16280 Filed 6-28-11; 8:45 am]
BILLING CODE 6325-24-P
