Traumatic Injury Protection Rider to Servicemembers' Group Life Insurance, 10362-10365 [E7-4141]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 72, Number 45 (Thursday, March 8, 2007)]
[Rules and Regulations]
[Pages 10362-10365]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-4141]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 9

RIN 2900-AM36


Traumatic Injury Protection Rider to Servicemembers' Group Life 
Insurance

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document adopts with changes a Department of Veterans 
Affairs (VA) interim final rule that implemented section 1032 of Public 
Law 109-13, the ``Emergency Supplemental Appropriations Act for 
Defense, the Global War on Terror, and Tsunami Relief, 2005.'' Section 
1032 of Public Law 109-13 established an automatic traumatic injury 
protection rider to Servicemembers' Group Life Insurance (SGLI) for any 
SGLI insured who sustains a serious traumatic injury that results in 
certain losses as prescribed by the Secretary of Veterans Affairs in 
collaboration with the Secretary of Defense. Section 1032(a) is 
codified at 38 U.S.C. 1980A. Section 1032(c)(1) of Public Law 109-13 
also authorized the payment of this traumatic injury benefit (TSGLI) to 
members of the uniformed services who incurred a qualifying loss 
between October 7, 2001, and the effective date of section 1032 of 
Public Law 109-13, i.e., December 1, 2005, provided the loss was a 
direct result of injuries incurred in Operation Enduring Freedom (OEF) 
or Operation Iraqi Freedom (OIF). This document modifies Sec.  9.20 of 
the interim rule to provide that a service member must suffer a 
scheduled loss within 2 years after a traumatic injury, rather than one 
year as provided in current Sec.  9.20(d)(4). This document also amends 
Sec.  9.20(d)(1) to clarify that a service member does not have to be 
insured under SGLI in order to be eligible for TSGLI based upon 
incurrence of a traumatic injury between October 7, 2001, and December 
1, 2005, if the member's loss was a direct result of injuries incurred 
in OEF or OIF.

DATES: Effective Date: March 8, 2007.
    Applicability Date: VA will apply the final rule to injuries 
incurred in Operation Enduring Freedom or Operation Iraqi Freedom on or 
after October 7, 2001, through and including November 30, 2005, and to 
all injuries incurred on or after December 1, 2005.

FOR FURTHER INFORMATION CONTACT: Gregory Hosmer, Senior Insurance 
Specialist/Attorney, Department of Veterans Affairs Regional Office and 
Insurance Center, P.O. Box 13399, Philadelphia, Pennsylvania 19101, 
(215) 842-2000 ext. 4280.

SUPPLEMENTARY INFORMATION: On December 22, 2005, VA published an 
interim final rule in the Federal Register (70 FR 75940) to implement 
section 1032 of Public Law 109-13.
    We provided a 30-day comment period on the interim final rule, 
which ended on January 23, 2006. We received comments from only one 
organization, the Wounded Warrior Project (WWP). WWP stated that it was 
pleased with the regulation as a whole and with the decision to 
implement it immediately as an interim final rule, but raised issues 
WWP believed should be addressed in future versions of the regulation. 
WWP expressed concern that the definition of ``incurred in Operation 
Enduring Freedom'' in Sec.  9.20(b)(2)(i) and ``incurred in Operation 
Iraqi Freedom'' in Sec.  9.20(b)(2)(ii) would allow TSGLI benefits for 
injuries incurred prior to December 1, 2005, only if the service member 
was deployed outside the

[[Page 10363]]

United States on orders in support of OEF or OIF. WWP states that TSGLI 
benefits should be paid to all members of the uniformed services who 
suffered a loss as a result of a traumatic injury prior to December 1, 
2005, irrespective of the service member's location or orders at the 
time of the injury. This suggested change to Sec.  9.20 would require a 
statutory amendment. Section 9.20(b)(2)(i) and (ii) implement section 
1032(c)(1) of Public Law 109-13, which limited TSGLI benefits for 
injuries incurred prior to December 1, 2005, to members injured in OEF 
and OIF. To the extent that this comment suggests that VA could define 
the terms ``Operation Enduring Freedom'' and ``Operation Iraqi 
Freedom'' to encompass service in any location occurring at the same 
time as OEF and OIF, such a definition would be inconsistent with the 
plain meaning of section 1032(c) of Public Law 109-13 because it would 
deprive those statutory terms of any meaning or effect.
    WWP also commented that the interim final rule should be amended to 
increase the period after a traumatic injury within which a scheduled 
loss must occur, from the current 365 days to 2 years. We concur with 
WWP's comment. In adopting the 365-day period in Sec.  9.20(d)(4) of 
the interim rule, we acknowledged the Department of Defense's (DoD) 
advice that physicians and service members go to great lengths to 
preserve a member's injured limb and that amputation of a limb 
frequently occurs only after a significant period of time passes after 
a traumatic injury. 70 FR 75942. WWP informed us in its comments that 
there are several cases in which severely injured service members are 
still attempting to save their injured limbs more than a year after the 
traumatic injury because of sophisticated medical treatment currently 
available. Based on the new information, we believe that it is entirely 
reasonable to amend Sec.  9.20(d)(4) to increase the period of time 
following a traumatic injury in which a scheduled loss must occur from 
365 days to 2 years for all scheduled losses. When we issued the 
interim final rule, section 1032(a)(2) of Public Law 109-13, which this 
rule implements, specifically provided that a member must suffer a 
scheduled loss before the end of the period prescribed by the Secretary 
of Veterans Affairs, ``except, if the loss is quadriplegia, paraplegia, 
or hemiplegia, the member suffers the loss not later than 365 days 
after sustaining the traumatic injury.'' However, on June 16, 2006, 
Congress enacted the Veterans' Housing Opportunity and Benefits 
Improvement Act of 2006, Public Law 109-233, section 501(a)(3) of which 
eliminated the requirement that a scheduled loss due to quadriplegia, 
paraplegia, or hemiplegia occur within 365 days after a traumatic 
injury. Accordingly, extending the time period to 2 years for all 
scheduled losses is consistent with current statutory requirements.
    Congress did not specify whether the change made by section 
501(a)(3) would apply to claims filed or injuries suffered prior to the 
date of that change in law. Under established rules of statutory 
construction, a new statute is presumed not to operate retroactively 
unless its language requires that result. See Landgraf v. USI Film 
Prods., 511 U.S. 244 (1994). However, a statute does not operate 
retroactively merely because it is applied to a claim filed before the 
statute was enacted. Id. at 269. Rather, a statute would have a 
disfavored retroactive effect only if it impairs previously established 
rights, imposes new duties with respect to transactions already 
completed, or imposes some similar alteration with respect to past 
events. Id. at 280. Determining whether application of a new statute 
would have retroactive effect requires consideration of the nature and 
degree of the change in law, the degree of connection between the new 
law and a relevant past event, and notions of fair notice and 
reasonable reliance. Princess Cruises, Inc. v. United States, 397 F.3d 
1358, 1362-63 (Fed. Cir. 2005). Under this analysis, we conclude that 
applying the change made by section 501(a)(3) of Public Law 107-103 to 
previously filed claims or previously incurred injuries would not have 
a disfavored retroactive effect.
    In establishing the TSGLI program, Congress made clear its intent 
to authorize payment for some injuries and losses incurred before that 
program took effect. The change made by section 501(a)(3) would work a 
relatively minor change in the TSGLI eligibility criteria and applying 
that change to prior claims or injuries would appear to be consistent 
with the objectives of the TSGLI provisions authorizing payments based 
on injuries preceding the program's creation. Further, because TSGLI is 
intended to provide a source of income for expenses during periods of 
disablement and convalescence following a loss due to traumatic injury, 
we believe the application of the new law is more directly connected to 
those persistent circumstances than to the past date on which an injury 
or loss was incurred or a claim was filed. We also note that the change 
in law would not have affected conduct prior to the date of its 
enactment, nor would it upset any settled expectations in any 
meaningful way. The service member's traumatic injury, the scheduled 
loss due to the injury, and the resulting economic burdens on the 
service member were not within any party's control and obviously 
actions were not taken in reliance on prior law. Although application 
of the new law would increase the government's economic burden, we 
believe the additional burden is relatively small and is countered in 
this instance by the other considerations discussed above. Accordingly, 
we conclude that section 501(a)(3) of Public Law 109-233 may be applied 
to claims that were filed before the date that statute was enacted and 
which remained pending on that date.
    Finally, WWP expressed concern that the DoD points of contact in 
each branch of service are unable to certify service member claims for 
retroactive payment in which the member's scheduled loss is based upon 
the inability to perform activities of daily living (ADL) because the 
``service member medical records do not adequately reflect the amount 
of time the claimant was unable to perform the requisite ADL.'' WWP 
urges DoD and VA to give the benefit of the doubt to members in this 
situation due to the difficulty in substantiating a scheduled loss when 
medical records do not contain the necessary ADL documentation. For 
purposes of deciding a case before the Secretary of Veterans Affairs, a 
statute provides that, when there is an ``approximate balance of 
positive and negative evidence'' concerning an issue, the Secretary 
must give the benefit of the doubt to the claimant (38 U.S.C. 5107(b)). 
If there is no evidence on a particular issue or if the evidence is not 
deemed to be in approximate balance, the benefit-of-the-doubt standard 
under the statute does not apply. See Ortiz v. Principi, 274 F.3d 1361, 
1365 (Fed. Cir. 2001). Decisions about entitlement to TSGLI, unlike 
decisions regarding entitlement to VA compensation and pension, are 
made by each uniformed service. 38 CFR 9.20(f). It would therefore be 
inappropriate for VA to promulgate a benefit-of-the-doubt rule in this 
rulemaking to be applied by DoD in making decisions about TSGLI 
entitlement.
    WWP also states that DoD should be more cognizant of the need to 
document a member's inability to conduct ADL in future cases. We agree 
that verification of a service member's inability to perform ADL has in 
some instances been difficult. We have taken steps to address the need 
for complete

[[Page 10364]]

documentation in future cases. DoD service branch points of contacts, 
physicians, and other medical care providers have been given detailed, 
clarifying guidance on the definition of the term ``inability to carry 
out activities of daily living'' in Sec.  9.1(k). They have also been 
instructed by the branches of military service on where and how to 
request supporting documentation regarding a member's ability to 
perform ADL. We therefore do not believe that any amendment to Sec.  
9.1(k) is required at this time.
    The interim final rule stated, in Sec.  9.20(d)(1), that a 
servicemember must be insured under SGLI to be eligible for TSGLI. We 
neglected to explain that this requirement does not apply to payments 
of retroactive TSGLI based on traumatic injuries occurring on or after 
October 7, 2001, though and including November 30, 2005. Section 
1032(c)(1) of Public Law 109-13 provided that ``[a]ny member'' who 
experienced a traumatic injury between October 7, 2001, and December 1, 
2005, is eligible for TSGLI if the qualifying loss is a direct result 
of injuries incurred in Operation Enduring Freedom or Operation Iraqi 
Freedom. The term ``member'' is defined in 38 U.S.C. 1965(5), for 
purposes of subchapter III of chapter 19, title 38, United States Code, 
and whether a person is insured under SGLI is not one of the criteria 
of the definition. We are therefore amending Sec.  9.20(d)(1) to 
clarify that, if a member had a traumatic injury on or after October 7, 
2001, through and including November 30, 2005, and if the qualifying 
loss is a direct result of injuries incurred in Operation Enduring 
Freedom or Operation Iraqi Freedom, the member is eligible for TSGLI 
even if he or she was not insured under SGLI.
    Also, former 38 U.S.C. 1980A(h) provided that ``[c]overage for loss 
resulting from traumatic injury * * * shall cease at midnight on the 
date of the member's separation from the uniformed service.'' Section 
501(a)(8) of Public Law 109-233 amended 38 U.S.C. 1980A(h) to provide 
that TSGLI coverage terminates at midnight on the date of the 
``termination of the member's duty status in the uniformed services 
that established eligibility for Servicemembers' Group Life 
Insurance,'' notwithstanding the extension of SGLI coverage provided 
under 38 U.S.C. 1968(a). This statutory amendment clarifies when TSGLI 
coverage terminates. We are amending the parenthetical at the end of 
Sec.  9.20(d)(1) to conform to the clarifying change made by section 
501(a)(8) of Public Law 109-233.
    We have also revised Sec.  9.20(f) to conform to section 501(a)(6) 
of Public Law 109-233, which amended 38 U.S.C. 1980A(f) to explain in 
more detail the nature of the uniformed services' certification. This 
amendment relates to non-substantive, procedural matters.
    Finally, we note that section 501(c)(2) of Public Law 109-233 
repealed section 1032(c) of Public Law 109-13 pertaining to TSGLI 
eligibility for service members who suffered scheduled losses as a 
result of injuries incurred in OEF or OIF between October 7, 2001, and 
December 1, 2005, and instead provides TSGLI to service members who 
suffered scheduled losses as a direct result of a traumatic injury 
incurred in the theater of operations for OEF or OIF beginning on 
October 7, 2001, and ending at the close of November 30, 2005. That 
change may implicate matters beyond the scope of the interim final rule 
and the public comments received to date. Accordingly, we will publish 
a rule implementing section 501(c)(3) of Public Law 109-233 in the 
future.
    To the extent an intervening statutory change may apply to a 
particular claim, VA must follow statutory requirements even if it has 
not yet revised its regulations. We are therefore adding Sec.  9.20(j) 
to explain that the TSGLI program will be administered in accordance 
with the provisions of Sec.  9.20, except to the extent that any 
provision in the rule is inconsistent with subsequently enacted 
applicable law.
    For the reasons stated above and in the interim final rule notice, 
VA will adopt the interim final rule as final, with the changes to 
Sec.  9.20(d)(1) and (4) and addition of Sec.  9.20(j) discussed above. 
We are also adding information to the end of Sec.  9.20 regarding the 
Office of Management and Budget information collection control number 
for this rule.

Administrative Procedure Act

    In the December 22, 2005, Federal Register notice, we determined 
that there was a basis under the Administrative Procedure Act for 
issuing the interim final rule with immediate effect. We invited and 
received public comment on the final rule. This document affirms the 
interim final rule as a final rule with the changes to Sec.  9.20(d)(1) 
and (4) and (f) and the addition of Sec.  9.20(j). The amendment to 
Sec.  9.20(d)(1) is interpretative and clarifies the eligibility 
criteria for TSGLI. The amendment to the parenthetical at the end of 
Sec.  9.20(d)(1) makes the regulation consistent with a clarifying 
amendment to 38 U.S.C. 1980A(h) made by section 501(a)(8). The 
amendment to Sec.  9.20(d)(4) in this rule is liberalizing and will 
make more injured service members eligible for TSGLI. Section 1032 of 
Public Law 109-13 went into effect on December 5, 2005, and the final 
rule is necessary to implement the TSGLI program. The purpose of TSGLI 
is to ensure that payment is made to severely injured service members 
as soon as possible following a traumatic injury in order to reduce the 
financial burden resulting from a severe loss. The amendment to Sec.  
9.20(f) relates to non-substantive, procedural matters and makes the 
regulation consistent with 38 U.S.C. 1980A(f) as amended by section 
501(a)(6) of Public Law 109-233. The amendment to Sec.  9.20(j) is 
interpretative and is intended only to explain that applicable law will 
be applied to decide TSGLI claims. Accordingly, we have concluded under 
5 U.S.C. 553 that there is good cause for dispensing with prior notice 
and comment regarding the amendments to Sec.  9.20(d), (f), and (j) 
because such a procedure is impracticable, unnecessary and contrary to 
the public interest.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
and tribal governments, in the aggregate, or by the private sector of 
$100 million or more (adjusted annually for inflation) in any given 
year. This rule would have no effect on State, local, or tribal 
governments or the private sector.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Order 
classifies a rule as a significant regulatory action requiring review 
by the Office of Management and Budget if it meets any one of a number 
of specified conditions, including: having an annual effect on the 
economy of $100 million or more, creating a serious inconsistency or 
interfering with an action of another agency, materially altering the 
budgetary impact of entitlements or the rights of entitlement 
recipients, or raising novel legal or policy issues. VA examined the 
economic, legal, and policy implications of this final rule and stated 
in the December 22, 2005, Federal Register

[[Page 10365]]

notice that it is a significant regulatory action because it exceeds 
the $100 million threshold.

Paperwork Reduction Act

    The collection of information under the Paperwork Reduction Act (44 
U.S.C. 3501-3521) referenced in this final rule has been approved under 
OMB control number 2900-0671.

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this final 
rule will not have a significant economic impact on a substantial 
number of small entities as they are defined in the Regulatory 
Flexibility Act (5 U.S.C. 601-612). Only service members and their 
beneficiaries could be directly affected. Therefore, pursuant to 5 
U.S.C. 605(b), this rule is exempt from the final regulatory 
flexibility analysis requirements of 5 U.S.C. 604.

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance Program number for 
this regulation is 64.103, Life Insurance for Veterans.

List of Subjects in 38 CFR Part 9

    Life insurance, Military personnel, Veterans.

    Approved: November 30, 2006.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.

0
For the reasons set out in the preamble, the interim final rule 
amending 38 CFR part 9, which was published at 70 FR 75940 on December 
22, 2005, is adopted as a final rule with the following changes:

PART 9--SERVICEMEMBERS' GROUP LIFE INSURANCE AND VETERANS' GROUP 
LIFE INSURANCE

0
1. The authority citation for part 9 is revised to read as follows:

    Authority: 38 U.S.C. 501, 1965-1980A.


0
2. Section 9.20 is amended by:
0
a. Revising paragraph (d)(1).
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b. Revising paragraph (d)(4).
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c. Revising paragraph (f)
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d. Adding paragraph (j).
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e. Adding an information collection approval parenthetical number 
immediately following the authority citation.
    The revisions and additions read as follows:


Sec.  9.20  Traumatic injury protection.

* * * * *
    (d) * * *
    (1) You must be a member of the uniformed services who is insured 
by Servicemembers' Group Life Insurance under section 1967(a)(1)(A)(i), 
(B) or (C)(i) of title 38, United States Code, on the date you 
sustained a traumatic injury, except if you are a member who 
experienced a traumatic injury on or after October 7, 2001, through and 
including December 1, 2005, and your scheduled loss was a direct result 
of injuries incurred in Operation Enduring Freedom or Operation Iraqi 
Freedom. (For this purpose, you will be considered a member of the 
uniformed services until midnight on the date of termination of your 
duty status in the uniformed services that established your eligibility 
for Servicemembers' Group Life Insurance, notwithstanding an extension 
of your Servicemembers' Group Life Insurance coverage under section 
1968(a) of title 38, United States Code.)
* * * * *
    (4) You must suffer a scheduled loss under paragraph (e)(7) of this 
section within two years of the traumatic injury.
* * * * *
    (f) Who will determine eligibility for traumatic injury protection 
benefits? Each uniformed service will certify its own members for 
traumatic injury protection benefits based upon section 1032 of Public 
Law 109-13, section 501 of Public Law 109-233, and this section. The 
uniformed service will certify whether you were at the time of the 
traumatic injury insured under Servicemembers' Group Life Insurance and 
whether you have sustained a qualifying loss.
* * * * *
    (j) The Traumatic Servicemembers' Group Life Insurance program will 
be administered in accordance with this rule, except to the extent that 
any regulatory provision is inconsistent with subsequently enacted 
applicable law.


(The Office of Management and Budget has approved the information 
collection requirements in this section under control number 2900-
0671.)

 [FR Doc. E7-4141 Filed 3-7-07; 8:45 am]
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