Federal Employees Health Benefits Program and Federal Employees Dental and Vision Insurance Program: Expanding Coverage of Children; Federal Flexible Benefits Plan: Pre-Tax Payment of Health Benefits Premiums: Conforming Amendments, 64873-64879 [2013-25734]

Agencies

• Office of Personnel Management

[Federal Register Volume 78, Number 210 (Wednesday, October 30, 2013)]
[Rules and Regulations]
[Pages 64873-64879]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-25734]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 78, No. 210 / Wednesday, October 30, 2013 / 
Rules and Regulations

[[Page 64873]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 890, 892, 894

RIN 3206-AM55


Federal Employees Health Benefits Program and Federal Employees 
Dental and Vision Insurance Program: Expanding Coverage of Children; 
Federal Flexible Benefits Plan: Pre-Tax Payment of Health Benefits 
Premiums: Conforming Amendments

AGENCY: U.S. Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The United States Office of Personnel Management (OPM) is 
issuing a final rule to amend the Federal Employees Health Benefits 
Program (FEHB) regulations regarding coverage for children up to age 
26. The regulations also allow children of same-sex domestic partners 
living in states that do not allow same-sex couples to marry to be 
covered family members under the FEHB and the Federal Employees Dental 
and Vision Insurance Program (FEDVIP).

DATES: This final rule is effective beginning January 1, 2014.

FOR FURTHER INFORMATION CONTACT: Rachel Royster, Program Analyst, 
Rachel.Royster@opm.gov or (202) 606-4181.

SUPPLEMENTARY INFORMATION: On July 20, 2012, OPM published proposed 
regulations in the Federal Register (77 FR 42914-42918) to expand 
coverage of children under the FEHB Program and FEDVIP. Comments were 
requested to be received on or before September 18, 2012. After 
reviewing the comments received, OPM has decided to release this final 
regulation as proposed with several changes. The most significant 
change to this regulation is that eligibility for the children of same-
sex domestic partners is limited to those states in which same-sex 
couples are unable to marry. We have also made several other minor 
changes. First, we have added language reflecting that children under 
the age of 26, or children of any age who are incapable of self-support 
because of a mental or physical disability which existed before age 26, 
are considered family members under the FEHB Program. Second, the final 
rule changes the period of time within which notification of the 
termination of a domestic partnership must be provided to the employing 
office from 7 to 30 days, and permits either the enrollee or the 
domestic partner to provide the notification. These changes will align 
the rules on such notifications with those for other programs OPM 
administers, such as the Federal Long Term Care Insurance Program. 
Third, the language in section 890.302(b)(6) has been modified slightly 
to make it consistent with the language in sections 892.102 and 
894.403. Fourth, the language in section 890.804(b)(i) has been changed 
slightly to reflect the terminology used in the statute. Fifth, the 
definition of ``stepchild'' was modified to clarify that the term 
includes children of former spouses or eligible same-sex domestic 
partners where the child continues to live with the enrollee in a 
regular parent-child relationship.
    As explained in the proposed rule, this regulation: (1) Brings FEHB 
rules into compliance with changes to health insurance coverage for 
children under the Patient Protection and Affordable Care Act, Public 
Law 111-148, as amended by the Health Care and Education Reconciliation 
Act, Public Law 111-152 (the Affordable Care Act); (2) extends FEHB and 
FEDVIP benefits to children of same-sex domestic partners of Federal 
employees who live in states that do not allow same-sex couples to 
marry, consistent with Presidential Memoranda issued on June 17, 2009, 
and June 2, 2010; (3) makes other non-substantive, technical conforming 
amendments to the FEDVIP rules, which reference current FEHB rules that 
are being amended by this rule; and (4) updates the Federal Flexible 
Benefits Plan: Pre-Tax Payment of Health Benefits Premiums (Part 892) 
rules to reflect the above-referenced changes required by the 
Affordable Care Act and to implement changes in connection with the 
extension of FEHB coverage to children of same-sex domestic partners of 
Federal employees.

Analysis of and Responses to Public Comments

    We received 17 comments on the proposed rule, with a majority 
relating to the extension of coverage to children of same-sex domestic 
partners under the FEHB Program and FEDVIP. A majority of commenters 
(about 3 to 1) supported extending coverage to children of same-sex 
domestic partners. Other comments and OPM's responses are detailed 
below. One comment related to the requirement that money deposited in a 
flexible spending account be forfeited if eligible expenses are not 
incurred within the timeframe specified by the Internal Revenue Service 
(IRS). That issue is outside of the scope of this proposed rule and is 
therefore not addressed below.
    Comment: Multiple commenters recommended that OPM adopt the policy 
found in the FEHB Handbook that allows stepchildren to remain on their 
Federal employee or annuitant parents' insurance even after a domestic 
partnership between the Federal employee or annuitant and his or her 
same-sex domestic partner has ended. The commenters noted that 
currently, the policy governing the FEHB Program allows stepchildren to 
continue to be covered by the enrollee's Self and Family enrollment 
after the enrollee divorces the child's natural parent if the child is 
living with the enrollee in a parent-child relationship. The commenters 
asserted that extending this policy to children of same-sex domestic 
partners would protect a child if a relationship between the enrollee 
and the child continues beyond the enrollee's relationship with his or 
her same-sex domestic partner. The commenters also requested that OPM 
expand the current policy to provide coverage for children after the 
domestic partnership ends not only if the child lives with the enrollee 
in a parent-child relationship, but also if the enrollee provides 
``substantial ongoing support'' for the child.
    Response: OPM agrees with the commenters and has added language to 
the definition of ``stepchild'' to clarify that the term shall continue 
to refer to a child who continues to live with the enrollee in a 
regular-parent child

[[Page 64874]]

relationship after divorce from the spouse, termination of the domestic 
partnership, or the death of the spouse or domestic partner. OPM 
considers the fact that the child lives with the enrollee in a regular 
parent-child relationship as integral in establishing the continued 
existence of the parent-child relationship between the enrollee and the 
child. OPM intends for children of same-sex domestic partners to be 
treated the same as currently eligible stepchildren. OPM does not 
intend to expand its policy to cover children who are not stepchildren, 
as defined here, whose only relationship to the enrollee is that of a 
child of a former spouse or domestic partner.
    Comment: Two commenters suggested that OPM's proposed definition of 
stepchild to include the children of same-sex domestic partners is 
beyond the scope of OPM's authority and violates Section 3 of the 
Defense of Marriage Act (DOMA), 1 U.S.C. 7 (Pub. L. 104-199).
    Response: OPM is granted the authority in 5 U.S.C. 8913 to 
prescribe regulations necessary to carry out the FEHB Program. OPM's 
authority with respect to defining eligible children is especially 
broad, as Congress, in the FEHB Act, provided a non-exclusive list of 
examples of the types of children who may be eligible for coverage. OPM 
has historically, through its regulations and other communications, 
established rules and provided guidance on specific parent-child 
relationships and eligibility for FEHBP coverage. Here, exercising its 
long-held discretion in this area, OPM has determined that coverage may 
be extended to children of the same-sex domestic partners of certain 
Federal employees and annuitants through a regulation defining the term 
``stepchild'' as that term is used in the law governing the FEHB 
Program. The definition of ``stepchild'' set forth in this regulation 
appropriately encompasses and reflects the variety of parent-child 
relationships that exist today.
    It should be noted that, as an alternative to adding a definition 
of the term ``stepchild,'' OPM also considered including in the 
regulation a new category of child--the child of a same-sex domestic 
partner--that would have expanded upon the examples of types of 
children that Congress provided in the statute (e.g., adopted child, 
recognized natural child, stepchild and foster child). While there are 
a number of approaches that would have been reasonable, OPM chose the 
approach of adding a definition of the term ``stepchild'' because this 
nomenclature specifically recognizes the parent-child relationship 
between the employee (annuitant)/parent and the child.
    Although the comment that this regulation violates DOMA is no 
longer relevant in light of the Supreme Court's June 26, 2013 decision 
striking down Section 3 of DOMA as unconstitutional, it is important to 
emphasize that this regulation was not in violation of Section 3 of 
DOMA even while that provision was in force. Section 3 of DOMA limited 
the meaning of the terms ``marriage'' and ``spouse,'' when used in 
Federal laws. Through this regulation, OPM has expanded its definition 
of the term ``stepchild'' with respect to the provision of healthcare 
benefits for children. Consequently, Section 3 of DOMA simply had no 
bearing on this regulation, and these recommended changes were always 
within the purview of OPM's discretion. Finally, as explained in the 
proposed rule and as explained in greater detail below, the change is 
consistent with Executive Order 13563 and President Obama's memoranda 
of June 17, 2009, and June 2, 2010.
    Comment: One commenter suggested that OPM only recognize same-sex 
domestic partnerships in states that do not recognize same-sex marriage 
or where a similar relationship, such as a civil union, is not 
permitted.
    Response: At the time this rule was issued in proposed form, 
Section 3 of DOMA, 1 U.S.C. 7, prohibited OPM from recognizing same-sex 
marriages. Section 3 of DOMA provided that, when used in a Federal law, 
the term ``marriage'' meant only a legal union between one man and one 
woman as husband and wife, and that the term ``spouse'' referred only 
to a person of the opposite sex who is a husband or wife. Thus, the 
availability of same-sex marriage in a particular state was not 
relevant to our determination of coverage eligibility for the children 
of enrollees' same-sex domestic partners. As explained above, on June 
26, 2013, the Supreme Court struck down Section 3 of DOMA as 
unconstitutional. Subsequent to the Supreme Court's ruling, OPM issued 
administrative guidance explaining that legally married same-sex 
spouses and any newly eligible (step)children of Federal employees and 
annuitants would be eligible to participate in the FEHB and FEDVIP, 
irrespective of the employees' or annuitants' state of residence.
    Now that FEHB and FEDVIP coverage is available to the children of 
an employee's same-sex spouse, OPM has reconsidered the need and scope 
of the proposed rule to extend benefits to the children of same-sex 
domestic partners. Although there are arguments that could support a 
decision by OPM to move ahead with the uniform, national rule 
originally contemplated in the proposed regulation, OPM has decided to 
limit this regulation to those same-sex couples living in states where 
marriage is not available to them.
    Only a minority of states currently permits same-sex marriage, and 
therefore, many same-sex couples do not have the same access to 
marriage that is available to opposite-sex couples. Until marriage is 
available to same-sex couples in all fifty states, the extension of 
benefits to same-sex domestic partners will continue to play an 
important role in bridging the gap in legal treatment between same-sex 
and opposite-sex couples.
    For these reasons, this proposed regulation to provide FEHB and 
FEDVIP benefits to the stepchildren of same-sex domestic partners will 
not be withdrawn in whole, but instead will be tailored to those 
couples who are unable to marry under the laws of the state in which 
they reside.
    Same-sex couples living in states that allow them to marry have 
access to many, if not all, of the protections that married opposite-
sex couples enjoy. Therefore, for employees living in states where they 
are able to marry, there is less need to create a separate path by 
which stepchildren of Federal employees can be deemed eligible for 
coverage under FEHB and FEDVIP. For those employees unable to marry 
under the laws of the states in which they live, however, it is 
appropriate to extend FEHB and FEDVIP eligibility to stepchildren, 
albeit in a potentially non-tax preferred manner, in the form described 
in this regulation.
    We recognize that the legal landscape is rapidly changing, and 
certain states that currently do not allow same-sex couples to marry 
may soon allow them to do so. Same-sex couples may also relocate from 
states where they cannot marry to states where they are permitted to 
marry. The possibility that the relevant state marriage laws may change 
mid-year has the potential to create significant administrative 
difficulties. For this reason, eligibility for FEHB and FEDVIP coverage 
will be determined once annually, and will depend on whether an 
enrollee seeking to cover the child of his or her same-sex domestic 
partner lives in a state that authorizes same-sex marriage as of the 
last day prior to Open Season for enrollment in benefits for the 
following year. An otherwise eligible stepchild whose parents lived in 
a state that did not permit them to marry prior to the commencement of 
Open Season will remain eligible to receive those benefits

[[Page 64875]]

for the entire calendar year, even if that state changes its marriage 
laws mid-year to authorize same-sex marriage or if the couple moves to 
a state that permits same-sex marriage.
    Nothing in this regulation changes the rules that otherwise apply 
when an enrollee experiences a qualifying life event, including 
marriage. See OPM Benefits Administration Letter 13-203 (clarifying 
that same-sex couples who marry after June 26, 2013, have 60 days after 
the marriage to change their FEHB enrollment). OPM will issue guidance 
to clarify, among other things, how enrollees should inform their 
employing agency if a child they were covering under a FEHB Self and 
Family enrollment or a FEDVIP Self Plus One or Self and Family 
enrollment pursuant to this regulation, and for whom the value of the 
benefit was not tax preferred, becomes a stepchild who is the child of 
the enrollee's spouse, thus eliminating the need to impute the value of 
the benefit to their income.
    Finally, with respect to the suggestion regarding civil unions, 
domestic partnership or other non-marital relationship, the fact that 
an employee may be in a state-created relationship with the child's 
other parent other than a marriage will not render the child eligible 
for coverage as a stepchild under the FEHB or FEDVIP. Therefore, 
requiring employees to enter into one of these other relationship 
statuses where available is not appropriate.
    Comment: Several commenters requested that OPM extend coverage 
under the FEHB Program to same-sex spouses and/or domestic partners.
    Response: As a result of the Supreme Court's decision striking down 
Section 3 of DOMA as unconstitutional, same-sex spouses of Federal 
employees and annuitants are now able to access benefits that are 
provided to spouses, including FEHB benefits. 5 U.S.C. 8901(5) defines 
``member of family'' to mean the employee's ``spouse'' and certain 
children. Same-sex domestic partners are not encompassed within the 
statutory definition of member of family. OPM is therefore without 
authority to extend coverage to domestic partners.
    Comment: One commenter argued that extending coverage to children 
of same-sex domestic partners is inequitable because it does not 
include coverage for children of opposite-sex domestic partners.
    Response: Children of opposite-sex domestic partners were not 
included because opposite-sex partners may obtain coverage for their 
children through marriage, an option that is not yet universally 
available to same-sex domestic partners. Same-sex domestic partners do 
currently have the option to marry in some states, and as discussed 
above, we have decided that where same-sex couples live in states that 
grant them equal marriage rights, they will not be eligible for the 
domestic partner benefits made available through this regulation. 
Finally, any enrollee seeking to cover a child of his or her same-sex 
domestic partner pursuant to this regulation must certify that he or 
she would marry his or her same-sex domestic partner were that option 
available in his or her state of residence.
    Comment: One commenter argued that this regulation creates a legal 
anomaly and injustice by not providing health coverage for other 
children in non-marital households. The commenter gives the example of 
Federal employees who have assumed responsibility for the care of a 
grandchild or a niece where the child's natural parents are no longer 
living and able to care for these children as ineligible for coverage 
under the FEHB Program.
    Response: OPM disagrees with the contention of the commenter that 
the children in the examples given are ineligible for coverage under 
the FEHB Program and therefore are treated unfairly by this rule. OPM 
has broadly defined the term ``foster child'' and allows Federal 
employees who have a relationship with a ``foster child'' to cover such 
a child under a Self and Family enrollment. The definition is designed 
to ensure that children who have parent-child relationships with 
Federal employees and annuitants, including non-traditional 
relationships, are eligible for coverage under the FEHB Program.
    Comment: One commenter requested that OPM make changes impacting 
dependent eligibility so that FEHB Program insurance carriers may 
consider the cost of any such expansion during benefit and rate 
negotiations for the following year.
    Response: We believe the addition of these family members will only 
have a negligible impact on costs for participating FEHB plans.
    Comment: Multiple commenters recommended that OPM explicitly state 
that there are two interpretations under IRS regulations and guidance 
where coverage for a child of a same-sex domestic partner may be 
treated favorably for tax purposes: (1) If the employee is considered 
the child's stepparent under state law and (2) if the child is an 
employee's qualifying relative. In addition, several commenters 
requested that OPM provide clear and detailed guidance to enrollees 
concerning the tax consequences of covering children of domestic 
partners. One commenter suggested that the process for an employee to 
establish favorable tax treatment for a child should not be more 
onerous than submitting an IRS W-4 form.
    Response: OPM cannot provide individualized tax advice to 
enrollees, as we do not administer the Tax Code. However, OPM plans to 
issue general guidance on our Web site and to employing agencies and 
payroll offices informing enrollees of the documentation and 
information that the enrollee will be required to submit to the 
employing office in order to establish whether their child's coverage 
is eligible for favorable tax treatment, such as an annual 
certification. It will be incumbent on the enrollee to consult with 
appropriate professionals to determine whether, taking into account the 
enrollee's unique situation, FEHB and/or FEDVIP coverage provided to 
his or her stepchild meets applicable requirements for favorable tax 
treatment. If the enrollee does not establish that the stepchild 
qualifies for favorable tax treatment, then the fair market value of 
coverage provided to the child will be imputed to the enrollee and 
subject to applicable taxes. OPM guidance will also include the annual 
fair market value calculations for each FEHB and FEDVIP plan to aid 
enrollees in understanding the financial implications of covering a 
stepchild for whom preferential tax treatment has not been established. 
OPM believes that the specifics of the tax treatment of this coverage 
will be best communicated through annual guidance to employing agencies 
and enrollees as opposed to regulatory language because IRS guidance 
and policies may change from year to year. OPM plans to create a 
process that is minimally onerous for enrollees, while ensuring that 
agencies receive required information that is accurate.
    Comment: A commenter expressed concern about the equity of imputing 
income for these benefits to Federal employees in accordance with 
current IRS regulations and guidance.
    Response: OPM does not have the authority to make changes to 
current IRS regulations and guidance concerning the tax treatment of 
health insurance benefits; therefore this comment is outside the scope 
of these proposed regulations. FEHB and FEDVIP enrollees will be 
subject to the same State and Federal taxation rules as other employees 
receiving employer-sponsored benefits in the United States.

[[Page 64876]]

    In the proposed rule, OPM also requested comments on how, in the 
case of the provision of FEHB coverage to the child of a same-sex 
domestic partner who does not qualify for favorable tax treatment under 
the Internal Revenue Code, the fair market value (FMV) of that coverage 
might be calculated for different types of plan coverage. Several 
commenters suggested methods for calculating the FMV.
    Two commenters suggested using the methodology in Private Letter 
Ruling 9603011, where the FMV is the difference between the Self and 
Family premium and the Self Only premium for the selected plan, net of 
employee contributions. One commenter suggested that this is a 
preferable method because it is calculated from information that is 
publicly available and does not require complicated actuarial 
calculations on the part of the FEHB Program carrier. One commenter 
suggested that OPM may calculate FMV using the difference between the 
actuarial value of insurance for a single person and that of insurance 
for a couple or family. One commenter suggested that OPM use the actual 
premium cost the Federal Government would have paid if the child was 
not included in the policy, despite this method being opposed by the 
IRS in some private letter rulings. Several commenters suggested that 
OPM consider actuarial studies and data to ensure that an accurate FMV 
is determined.
    OPM appreciates the input from commenters on how to determine FMV 
for coverage of children of domestic partners. OPM plans to provide, in 
the form of guidance to agencies, the FMV calculation for each FEHB 
plan for those who wish to cover children of domestic partners in a 
Self and Family enrollment (and for FEDVIP plans for those covering 
such children under a Self Plus One or Self and Family enrollment) 
where the children are not eligible for favorable tax treatment as a 
dependent. This calculation will be available to Federal agencies, 
payroll offices and enrollees annually, beginning for plan year 2014.

Regulatory Impact Analysis

    OPM has examined the impact of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review) 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. I certify that this 
regulation will not have a significant economic impact because the 
regulation only adds a small additional group of children to the list 
of groups eligible for coverage under FEHB and FEDVIP.

List of Subjects

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 892

    Administrative practice and procedure, Government employees, Health 
insurance, Taxes, Wages.

5 CFR Part 894

    Administrative practice and procedure, Government employees, Health 
insurance, Taxes, Wages

U.S. Office of Personnel Management.
Elaine Kaplan,
Acting Director.

    Accordingly, OPM is amending 5 CFR chapter I as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

0
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.

0
2. Section 890.302 is revised to read as follows:


Sec.  890.302  Coverage of family members.

    (a)(1) An enrollment for self and family includes all family 
members who are eligible to be covered by the enrollment. Except as 
provided in paragraph (a)(2) of this section, no employee, former 
employee, annuitant, child, or former spouse may enroll or be covered 
as a family member if he or she is already covered under another 
person's self and family enrollment in the FEHB Program.
    (2) Dual enrollment. (i) A dual enrollment exists when an 
individual is covered under more than one FEHB Program enrollment. Dual 
enrollments are prohibited except when an eligible individual would 
otherwise not have access to coverage and the dual enrollment has been 
authorized by the employing office.
    (ii) Exception. An individual described in paragraph (a)(2)(i) of 
this section may enroll if he or she or his or her eligible family 
members would otherwise not have access to coverage, in which case the 
individual may enroll in his or her own right for self only or self and 
family coverage, as appropriate. However, an eligible individual is 
entitled to receive benefits under only one enrollment regardless of 
whether he or she qualifies as a family member under a spouse's or 
parent's enrollment. To ensure that no person receives benefits under 
more than one enrollment, each enrollee must promptly notify the 
insurance carrier as to which persons will be covered under his or her 
enrollment. These individuals are not covered under the other 
enrollment. Examples include but are not limited to:
    (A) To protect the interests of married or legally separated 
Federal employees, annuitants and their children, an employee or 
annuitant may enroll in his or her own right in a self only or self and 
family enrollment, as appropriate, even though his or her spouse also 
has a self and family enrollment if the employee, annuitant or his or 
her children live apart from the spouse and would otherwise not have 
access to coverage due to a service area restriction and the spouse 
refuses to change health plans.
    (B) When an employee who is under age 26 and covered under a 
parent's self and family enrollment acquires an eligible family member, 
the employee may elect to enroll for self and family coverage.
    (iii) Children are entitled to receive benefits under only one 
enrollment regardless of whether the children qualify as family members 
under the enrollment of both parents or of a parent and a stepparent 
and regardless of whether the parents are married, unmarried, divorced, 
legally separated, or in a domestic partnership. To ensure that no 
person receives benefits under more than one enrollment, each enrollee 
must promptly notify the insurance carrier as to which family members 
will be covered under his or her enrollment. These individuals are not 
covered under the other enrollment.

[[Page 64877]]

    (b)(1) A child under the age of 26, or a child of any age who is 
incapable of self-support because of a mental or physical disability 
which existed before age 26, is considered to be a family member 
eligible to be covered by the enrollment of an enrolled employee or 
annuitant or a former employee or child enrolled under Sec.  890.1103 
of this part if he or she is--
    (i) A child born within marriage;
    (ii) A recognized natural child;
    (iii) An adopted child;
    (iv) A stepchild; or
    (v) A foster child.
    (2) Meaning of stepchild. Except as provided in paragraph (b)(5) of 
this section, for purposes of this part, the term ``stepchild'' refers 
to the child of an enrollee's spouse or domestic partner and shall 
continue to refer to such child after the enrollee's divorce from the 
spouse, termination of the domestic partnership, or death of the spouse 
or domestic partner, so long as the child continues to live with the 
enrollee in a regular parent-child relationship.
    (3) Meaning of domestic partner. For purposes of this part, the 
term ``domestic partner'' is a person in a domestic partnership with an 
employee, annuitant, former employee or child enrolled under Sec.  
890.1103.
    (4) Meaning of domestic partnership. For purposes of this part, the 
term ``domestic partnership'' is defined as a committed relationship 
between two adults of the same sex, in which the partners--
    (i) Are each other's sole domestic partner and intend to remain so 
indefinitely;
    (ii) Maintain a common residence, and intend to continue to do so 
(or would maintain a common residence but for an assignment abroad or 
other employment-related, financial, or similar obstacle);
    (iii) Are at least 18 years of age and mentally competent to 
consent to a contract;
    (iv) Share responsibility for a significant measure of each other's 
financial obligations;
    (v) Are not married or joined in a civil union to anyone else;
    (vi) Are not a domestic partner of anyone else;
    (vii) Are not related in a way that, if they were of opposite sex, 
would prohibit legal marriage in the U.S. jurisdiction in which the 
domestic partnership was formed;
    (viii) Provide documentation demonstrating fulfillment of the 
requirements of paragraphs (b)(4)(i) through (vii) of this section as 
prescribed by OPM; and
    (ix) Certify that they understand that willful falsification of the 
documentation described in paragraph (b)(4)(viii) of this section may 
lead to disciplinary action and the recovery of the cost of benefits 
received related to such falsification and may constitute a criminal 
violation under 18 U.S.C. 1001.
    (x) Certify that they would marry but for the failure of their 
state of residence to permit same-sex marriage.
    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, the child of an enrollee and a domestic partner who otherwise 
meet the requirements of paragraphs (b)(4)(i) through (viii) of this 
section but live in a state that has authorized marriage by same-sex 
couples prior to the first day of Open Season, shall not be considered 
a stepchild who is the child of a domestic partner in the following 
plan year. The determination of whether a state's marriage laws render 
a child ineligible for coverage as a stepchild who is the child of a 
domestic partner shall be made once annually, based on the law of the 
state where the same-sex couple lives on the last day before Open 
Season begins for the following plan year. A child's eligibility for 
coverage as a stepchild who is the child of a domestic partner in a 
particular plan year shall not be affected by a mid-year change to a 
state's marriage law or by the couple's relocation to a different 
state. For mid-year enrollment changes involving the addition of a new 
stepchild, as defined by this regulation, outside of Open Season, the 
determination of whether a state's marriage laws render the child 
ineligible for coverage shall be made at the time the employee notifies 
the employing office of his or her desire to cover the child.
    (6) Termination of domestic partnership. An enrollee or his or her 
domestic partner must notify the employing office within thirty 
calendar days in the event that any of the conditions listed in 
paragraphs (b)(4)((i) through (vii) of this section are no longer met, 
in which case a domestic partnership will be deemed terminated.
    (7) Tax issues. The fair market value of coverage provided to a 
stepchild who is the child of a domestic partner will be taxed in 
accordance with applicable tax laws unless the enrollee establishes 
that the stepchild qualifies for favorable tax treatment.
    (c) Child incapable of self-support. When an individual's 
enrollment for self and family includes a child who has become 26 years 
of age and is incapable of self-support, the employing office must 
require such enrollee to submit a physician's certificate verifying the 
child's disability. The certificate must--
    (1) State that the child is incapable of self-support because of a 
physical or mental disability that existed before the child became 26 
years of age and that can be expected to continue for more than 1 year;
    (2) Include a statement of the name of the child, the nature of the 
disability, the period of time it has existed, and its probable future 
course and duration; and,
    (3) Be signed by the physician and show the physician's office 
address. The employing office must require the enrollee to submit the 
certificate on or before the date the child becomes 26 years of age. 
However, the employing office may accept otherwise satisfactory 
evidence of incapacity that is not timely filed.
    (d) Renewal of certificates of incapacity. The employing office 
must require an enrollee who has submitted a certificate of incapacity 
to renew that certificate on the expiration of the minimum period of 
disability certified.
    (e) Determination of incapacity. (1) Except as provided in 
paragraph (e)(2) of this section, the employing office shall make 
determinations of incapacity.
    (2) Either the employing office or the carrier may make a 
determination of incapacity if a medical condition, as specified by 
OPM, exists that would cause a child to be incapable of self-support 
during adulthood.

0
3. Section 890.804 is revised to read as follows:


Sec.  890.804  Coverage.

    (a) Type of enrollment. A former spouse who meets the requirements 
of Sec.  890.803 may elect coverage for self only or for self and 
family. A family enrollment covers only the former spouse and any child 
of both the former spouse and the employee, former employee or employee 
annuitant, provided such child is not otherwise covered by a health 
plan under this part. A child must be under age 26 or incapable of 
self-support because of a mental or physical disability existing before 
age 26. No person may be covered by two enrollments.
    (b) A child is considered to be the child of the former spouse or 
the employee, former employee, or employee annuitant if he or she is--
    (1) A natural child; or
    (2) An adopted child.
    (c) Child incapable of self-support. When a former spouse enrolls 
for a family enrollment which includes a child who has become 26 years 
of age and is incapable of self-support, the employing office shall 
determine such child's eligibility in accordance with Sec.  890.302(c), 
(d), and (e).

[[Page 64878]]


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4. In Sec.  890.1102, revise the definition of ``Qualifying event'' to 
read as follows:


Sec.  890.1102  Definitions.

* * * * *
    Qualifying event means any of the following events that qualify an 
individual for temporary continuation of coverage under subpart K of 
this part:
    (1) A separation from Government service.
    (2) A divorce or annulment.
    (3) A change in circumstances that causes an individual to become 
ineligible to be considered a child who is a covered family member 
under this part.

0
5. In Sec.  890.1103, revise paragraphs (a) introductory text and 
(a)(2) to read as follows:


Sec.  890.1103  Eligibility.

    (a) Except as provided by paragraph (b) of this section, 
individuals described by this section are eligible to elect temporary 
continuation of coverage under this subpart. Eligible individuals are 
as follows:
* * * * *
    (2) Individuals whose coverage as children under the family 
enrollment of an employee, former employee, or annuitant ends because 
they cease meeting the requirements for being considered covered family 
members. For the purpose of this section, children who are enrolled 
under this part as survivors of deceased employees or annuitants are 
considered to be children under a family enrollment of an employee or 
annuitant at the time of the qualifying event.
* * * * *

0
6. In Sec.  890.1104, revise paragraphs (b)(2) and (3) to read as 
follows:


Sec.  890.1104  Notification by agency.

* * * * *
    (b) * * *
    (2) If the notice described in paragraph (b)(1) of this section is 
received by the employing office within 60 days after the date on which 
the child ceased meeting the requirements for being considered a 
covered family member, the employing office must notify the child of 
his or her rights under this subpart within 14 days after receiving the 
notice.
    (3) This paragraph does not preclude the employing office from 
notifying the child of his or her rights based on oral or written 
notification by the child, another family member, or any other source 
that the child no longer meets the requirements for being considered a 
covered family member.
* * * * *

0
7. In Sec.  890.1107, revise paragraph (b) to read as follows:


Sec.  890.1107  Length of temporary continuation of coverage.

* * * * *
    (b)(1) Except as provided in paragraph (b)(2) of this section, in 
the case of individuals who are eligible for continued coverage under 
Sec.  890.1103(a)(2), the temporary continuation of coverage ends on 
the date that is 36 months after the date the individual first ceases 
to meet the requirements for being considered a child who is a covered 
family member, unless it is terminated earlier under the provisions of 
Sec.  890.1110.
    (2) The temporary continuation of coverage ends on the date that is 
36 months after the date of the separation from service on which the 
former employee's continuation of coverage is based, unless it is 
terminated earlier under the provisions of Sec.  890.1110, in the case 
of individuals who--
    (i) Are eligible for continued coverage under Sec.  890.1103(a)(2); 
and
    (ii) As of the day before ceasing to meet the requirements for 
being considered children who are covered family members, were covered 
family members of a former employee receiving continued coverage under 
this subpart; and
    (iii) Cease meeting the requirements for being considered children 
who are covered family members before the end of the 18-month period 
specified in paragraph (a) of this section.
* * * * *


Sec.  890.1202  [Amended]

0
8. In Sec.  890.1202, remove the words ``unmarried dependent'' from the 
definition of ``covered family members.''


Sec.  890.1203  [Amended]

0
9. In Sec.  890.1203, in paragraph (b), remove the word ``dependent'' 
each time it appears.

PART 892--FEDERAL FLEXIBLE BENEFITS PLAN: PRE-TAX PAYMENTS OF 
HEALTH BENEFITS PREMIUMS PROGRAM

0
10. The authority citation for part 892 continues to read as follows:

    Authority: 5 U.S.C. 8913; 5 U.S.C. 1103(a)(7); 26 U.S.C. 125; 
Sec. 892.101 also issued under sec. 311 of Pub. L. 111-3, 123 Stat. 
64.


0
11. In Sec.  892.101, the definition of ``Dependent'' and the 
introductory text and paragraph (1)(iii) of the definition of 
``Qualifying life event'' are revised to read as follows:


Sec.  892.101  Definitions.

* * * * *
    Dependent means a family member who is both eligible for coverage 
under the FEHB Program and either a dependent as defined in section 152 
of the Internal Revenue Code or a child as defined in section 152(f)(1) 
of the Internal Revenue Code who is under age 27 as of the end of the 
employee's taxable year.
* * * * *
    Qualifying life event means an event that may permit changes to 
your FEHB enrollment as well as changes to your premium conversion 
election as described in Treasury regulations at 26 CFR 1.125-4. For 
purposes of determining whether a qualifying life event has occurred 
under this part, a stepchild who is the child of an employee's domestic 
partner as defined in part 890 of this chapter shall be treated as 
though the child were a dependent within the meaning of 26 CFR 1.125-4 
even if the child does not so qualify under such Treasury regulations. 
Such events include the following:
    (1) * * *
    (iii) Last dependent child loses coverage, for example, the child 
reaches age 26, disabled child becomes capable of self support, child 
acquires other coverage by court order; and * * *

0
12. In Sec.  892.102, add two sentences to the end of the section to 
read as follows:


Sec.  892.102  What is premium conversion and how does it work?

    * * * There is one exception, however. If your FEHB enrollment 
covers a stepchild who is the child of a domestic partner as defined in 
part 890 of this chapter, and that stepchild does not qualify for 
favorable tax treatment under applicable tax laws, then the portion of 
the allotted amount described above that represents the employee's 
contribution toward the fair market value of FEHB coverage provided to 
the child will be separately imputed to the employee as income and 
subject to applicable taxes.


Sec.  892.208  [Amended]

0
13. In Sec.  892.208(b), the number ``22'' is removed and the number 
``26'' is added in its place.

PART 894--FEDERAL EMPLOYEES DENTAL AND VISION INSURANCE PROGRAM

0
14. The authority citation for part 894 continues to read as follows:

    Authority: 5 U.S.C. 8962; 5 U.S.C. 8992; subpart C also issued 
under sec. 1 of Pub. L. 110-279, 122 Stat. 2604.


[[Page 64879]]



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15. In Sec.  894.101, the definition of ``Acquiring an eligible child'' 
is revised and definitions for ``Domestic partner,'' ``Domestic 
partnership'' and ``Stepchild'' are added in alphabetical order to read 
as follows:


Sec.  894.101  Definitions.

* * * * *
    Acquiring an eligible child means one of the following:
    (1) Birth of a child;
    (2) Adoption of a child;
    (3) Acquisition of a foster child as described in Sec.  
890.101(a)(8) of this chapter;
    (4) Acquisition of a stepchild who lives with the enrollee in a 
regular parent-child relationship;
    (5) Establishment of a recognized natural child;
    (6) Residence change of the enrollee's stepchild or recognized 
natural child who moves in with the enrollee; and
    (7) An otherwise eligible child becoming unmarried due to divorce 
or annulment of marriage, or death.
* * * * *
    Domestic partner means a person in a domestic partnership with an 
employee or annuitant.
    Domestic partnership means a committed relationship between two 
adults of the same sex, in which the partners--
    (1) Are each other's sole domestic partner and intend to remain so 
indefinitely;
    (2) Maintain a common residence, and intend to continue to do so 
(or would maintain a common residence but for an assignment abroad or 
other employment-related, financial, or similar obstacle);
    (3) Are at least 18 years of age and mentally competent to consent 
to a contract;
    (4) Share responsibility for a significant measure of each other's 
financial obligations;
    (5) Are not married or joined in a civil union to anyone else;
    (6) Are not a domestic partner of anyone else;
    (7) Are not related in a way that, if they were of opposite sex, 
would prohibit legal marriage in the U.S. jurisdiction in which the 
domestic partnership was formed;
    (8) Provide documentation demonstrating fulfillment of the 
requirements of paragraphs (1) through (7) of this definition as 
prescribed by OPM; and
    (9) Certify that they understand that willful falsification of the 
documentation described in paragraph (8) of this definition may lead to 
disciplinary action and the recovery of the cost of benefits received 
related to such falsification and may constitute a criminal violation 
under 18 U.S.C. 1001.
    (10) Certify that they would marry but for the failure of their 
state of residence to permit same-sex marriage.
    (11) Termination of Domestic Partnership. An enrollee or his or her 
domestic partner must notify the employing office within thirty 
calendar days in the event that any of the conditions listed in 
paragraphs (1) through (7) of this definition are no longer met, in 
which case a domestic partnership will be deemed terminated.
* * * * *
    Stepchild means:
    (1) Except as provided in paragraph (2) of this definition, the 
child of an enrollee's spouse or domestic partner and shall continue to 
refer to such child after the enrollee's divorce from the spouse, 
termination of the domestic partnership, or death of the spouse or 
domestic partner, so long as the child continues to live with the 
enrollee in a regular parent-child relationship.
    (2) The child of an enrollee and a domestic partner who otherwise 
meet the requirements of paragraphs (1) through (8), set forth in the 
definition of Domestic Partnership, but live in a state that has 
authorized marriage by same-sex couples prior to the first day of Open 
Season, shall not be considered a stepchild who is the child of a 
domestic partner in the following plan year. The determination of 
whether a state's marriage laws render a child ineligible for coverage 
as a stepchild who is the child of a domestic partner shall be made 
once annually, based on the law of the state where the same-sex couple 
lives on the last day before Open Season begins for enrollment for the 
following year. A child's eligibility for coverage as a stepchild who 
is the child of a domestic partner in a particular plan year shall not 
be affected by a mid-year change to a state's marriage law or by the 
couple's relocation to a different state. For midyear enrollment 
changes involving the addition of a new stepchild, as defined by this 
regulation, outside of Open Season, the determination of whether a 
state's marriage laws render the child ineligible for coverage shall be 
made at the time the employee notifies the employing office of his or 
her desire to cover the child.
* * * * *

0
16. Add Sec.  894.308 to subpart C to read as follows:


Sec.  894.308  How do I establish the dependency of my recognized 
natural child?

    (a) Dependency is established for a recognized natural child who 
lives with the enrollee in a regular parent-child relationship, a 
recognized natural child for whom a judicial determination of support 
has been obtained, or a recognized natural child to whose support the 
enrollee makes regular and substantial contributions.
    (b) The following are examples of proof of regular and substantial 
support. More than one of the following proofs may be required to show 
support of a recognized natural child who does not live with the 
enrollee in a regular parent-child relationship and for whom a judicial 
determination of support has not been obtained:
    (1) Evidence of eligibility as a dependent child for benefits under 
other State or Federal programs;
    (2) Proof of inclusion of the child as a dependent on the 
enrollee's income tax returns;
    (3) Canceled checks, money orders, or receipts for periodic 
payments from the enrollee for or on behalf of the child.
    (4) Evidence of goods or services which show regular and 
substantial contributions of considerable value;
    (5) Any other evidence which OPM shall find to be sufficient proof 
of support or of paternity or maternity.

0
17. In Sec.  894.403, add a sentence to the end of paragraph (a) to 
read as follows:


Sec.  894.403  Are FEDVIP premiums paid on a pre-tax basis?

    (a) * * * However, if your enrollment covers a stepchild who is the 
child of a domestic partner as defined in Sec.  894.101, and that 
stepchild does not qualify for favorable tax treatment under applicable 
tax laws, the allotted amount of premium that represents the fair 
market value of the FEDVIP coverage provided to the stepchild will be 
separately imputed to the employee as income and subject to applicable 
taxes.
* * * * *
[FR Doc. 2013-25734 Filed 10-29-13; 8:45 am]
BILLING CODE 6325-63-P