Federal Employees Health Benefits (FEHB) Program: FEHB Employee Premium Contributions for Employees in Leave Without Pay or Other Nonpay Status, 59518-59521 [2016-20565]
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59518
Proposed Rules
Federal Register
Vol. 81, No. 168
Tuesday, August 30, 2016
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
OFFICE OF PERSONNEL
MANAGEMENT
5 CFR Part 890
RIN 3206–AN33
Federal Employees Health Benefits
(FEHB) Program: FEHB Employee
Premium Contributions for Employees
in Leave Without Pay or Other Nonpay
Status
U.S. Office of Personnel
Management.
ACTION: Notice of proposed rulemaking.
AGENCY:
The United States Office of
Personnel Management (OPM) is issuing
a proposed rule to provide flexibility to
agencies regarding payment for Federal
Employees Health Benefits (FEHB)
coverage for employees entering leave
without pay (LWOP) or any other type
of nonpay status, except when nonpay
is as a result of a lapse of
appropriations. The regulation also
affects employees who have insufficient
pay to cover their premium
contribution. Under current regulations,
a Federal agency pays the employee’s
share and the Government’s share of
FEHB premiums if an employee in
LWOP or other nonpay status elects to
continue coverage while in LWOP or
other nonpay status and agrees to repay
the agency (referred to interchangeably
as ‘‘employing office’’) for their
employee share upon return to
employment for up to 365 days. In other
words, the agency must allow an
employee to incur a debt for the
employee contribution to premium.
This outlay of funds may result in an
agency incurring a significant amount of
debt. This proposed rule would provide
an agency with the flexibility to require
that all of its employees in LWOP or
other nonpay status, except as a result
of lapse of appropriations, pay their
employee share for FEHB coverage
directly to the agency and keep the
payments current, if those employees
elect to continue FEHB enrollment.
Under 5 U.S.C. 8906(e), if an employee
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in LWOP status chooses to continue
FEHB enrollment, the employee and
Government contributions shall be paid
on a current basis; and, if necessary, the
agency shall approve advance payment
of a portion of basic pay sufficient to
cover the employee contribution. The
agency will then recover the amount
that it advanced from the employee
upon his or her return to employment.
Under current regulations employees
in LWOP or other nonpay status can
elect to make premium payments
directly to an agency and keep
payments current. Alternatively,
employees in these circumstances may
elect not to pay premiums directly on a
current basis and can incur a debt such
that their employing office advances the
payments to cover their premiums. The
employee agrees that upon his or her
return to employment, or upon pay
becoming sufficient, the employing
office will deduct, in addition to the
current pay period’s premium, the
accrued unpaid premiums from the
employee’s salary until the debt is
recovered. Under this proposed rule, an
agency may choose to require that an
employee pay premiums directly to the
agency on a current basis if the agency
makes a determination that all
employees in non-pay or insufficient
pay status must pay premiums
currently. The proposed rule also
specifies the procedures for
disenrollment for nonpayment of
premiums.
Comments are due on or before
October 31, 2016.
ADDRESSES: Send written comments to
Julia Elam, Planning and Policy
Analysis, U.S. Office of Personnel
Management, Room 4316, 1900 E Street
NW., Washington, DC 20415. You may
also submit comments using the Federal
eRulemaking Portal: https://
www.regulations.gov/. Follow the
instructions for submitting comments.
FOR FURTHER INFORMATION CONTACT: Julia
Elam at (202) 606–0004.
SUPPLEMENTARY INFORMATION: OPM is
revising the options and procedures that
employing offices may use when an
employee elects to continue FEHB
coverage in leave without pay (LWOP)
or other nonpay status, except as a
result of lapse of appropriations, when
the employee’s pay is insufficient to
cover premiums. Under 5 U.S.C.
8906(e)(1)(a), an employee enrolled in a
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health benefits plan who is placed in a
leave without pay or other nonpay
status may have his coverage and the
coverage of members of his family
continued under the plan for not to
exceed one year. According to the
statute, the agency is responsible for
ensuring the employee and Government
contributions are paid to the Employees
Health Benefits Fund on a current basis;
and if necessary, the head of the agency
may approve advance payment of
employee premiums, which the agency
can later recover from the employee.
The employee may alternatively elect to
terminate FEHB enrollment. This
proposed rule does not affect agencies’
advancing payment of health insurance
premiums for employees with the
following categories of qualifying
LWOP, which includes the following:
Family and Medical Leave Act,
performance of duty in the uniformed
services under the Uniformed Services
Employment and Reemployment Rights
Act of 1994, 38 U.S.C. 4301 et seq.,
receiving medical treatment under
Executive Order 5396 (Jul. 7 1930), and
periods during which workers
compensation is received under the
Federal Employees Compensation Act, 5
U.S.C. chapter 81. We solicit comments
on the exemption of categories of
employees in LWOP from this proposed
rule.
Under current regulations at 5 CFR
890.502(b), an employing office must
inform the employee about available
health benefits choices as soon as it
becomes aware that an employee’s
premium payments cannot be made
because he or she will be, or already is
in a LWOP or other nonpay status, or
the employee’s pay is insufficient to
cover premium. The employing office
must give the employee written notice
of the options to terminate coverage or
continue coverage with either the direct
pay or the advance payment option. The
employee then must elect in writing to
either continue health benefits coverage
or terminate it, while in LWOP or other
nonpay status or pay is insufficient to
cover premiums. If the employee’s
coverage is continued, the employee
may pay the employee share of the
premium directly to the agency, or the
employee may opt for the agency to
advance payment of the employee
portion of the premium and agree to
repay the premiums to the agency upon
returning to employment or upon pay
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Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Proposed Rules
becoming sufficient. Accordingly, there
is the possibility that the employee will
incur a debt to the agency if the
employee chooses to continue coverage
and receive an advanced payment and
does not return to work or is, for some
reason, unable to repay the premium
amount. Under § 890.502(b)(2)(ii), the
employing office can pay the
employee’s contributions and recover
the amount of accrued unpaid
premiums as a debt to the Federal
Government upon the employee’s return
to employment or when the employee’s
pay becomes sufficient.
Under this proposed regulation, each
agency would make the determination
of whether its employees in LWOP or
other nonpay status would be required
to pay the employee share of premiums
directly to the agency on a current basis,
or whether it is necessary, within the
meaning of 5 U.S.C. 8906(e)(1)(B), for
the agency to approve advance payment
of the employee share of the premium.
The agency would make the
determination for all its affected
employees at least once every 2 years.
OPM is proposing this change to
complement the FEHB Modification of
Eligibility final regulation (79 FR 62325,
published on October 17, 2014) which
allows generally for certain temporary,
intermittent and seasonal employees to
enroll in the FEHB Program if they are
expected to work at least 130 hours per
month for at least 90 days. OPM
recognizes that the recent expansion of
eligibility for FEHB coverage may
impact an agency’s budget due to the
required FEHB Government health
benefit contributions for newly eligible
employees who elect to participate in
FEHB coverage and go into LWOP or
other nonpay status based on the
intermittent nature of the work
performed.
OPM proposes for § 890.502(b) to
establish that an agency have the
discretion to determine whether it is
necessary for employees in LWOP or
other nonpay status to be advanced a
portion of basic pay sufficient to pay
current employee contribution to
premium, or whether the employees
must be required to pay the employee
contribution of the FEHB premium
currently to the agency. The
determination made by the agency must
apply to all employees in non-pay or
insufficient pay status, and it cannot be
made on a case-by-case basis. When
assessing whether it is necessary to pay
advanced employee contributions for
premiums, the regulation provides that
an agency shall balance the needs of the
agency, including available financial
resources and ease of operation, with
those of its employees, including typical
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job series and pay grades and access to
direct payment methods. Agencies
should also consider that if they do
advance employee contributions for
premiums, these employees will incur a
debt which may not occur if the
employee had an option to pay
premiums directly to the agency. We are
seeking comment on these and other
factors agencies should utilize to make
this determination. The agency may
reassess its determination every one or
two years and provide notification to all
employees. An agency may default to its
original determination and is not
required to make a new determination at
the time of reassessment. If an agency
chooses to require its employees in
these circumstances to make direct
premium contributions on a current
basis, it must provide written notice to
the affected employees. This section
also explains that an agency may choose
the other option to exercise its
discretion to approve advance payment
of the employee portion of the premium
while its employees are in LWOP or
other nonpay status. This would be a
change to current regulations at
§ 890.502(b)(2)(ii), which presently
provides that an employee may choose
this option if he or she does not does
not wish to pay the premium directly to
the agency and keep the payments
current.
OPM proposes for § 890.502(c)(2) to
establish procedures for terminating
enrollment for employees in LWOP or
nonpay status that fail to directly pay
premiums currently. The regulation also
proposes notice requirements for the
employee to receive regarding
termination of enrollment.
Under this proposed regulation, an
employee that is in LWOP or other
nonpay status or has insufficient pay to
cover his or her share of FEHB
premiums will have his or her
enrollment cancelled if he or she has
signed an agreement to directly pay
premiums on a current basis and fails to
make these payments currently, or
enrollment terminated if the employee
does not return the written notice. The
proposed regulation gives an employee
the opportunity to seek reinstatement
from the agency if he or she can show
they were prevented from paying
premiums, or from returning the written
notice, by circumstances beyond their
control. The employee must describe
the circumstances that prevented him or
her from making a payment or returning
the notice within 31 days after receiving
notice of disenrollment. Under this
proposal, termination of an enrollment
for failure to return a written notice
entitles the employee to a 31-day
temporary extension of coverage and
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opportunity to convert to an individual
policy, while failure to pay premiums
after electing to continue FEHB
enrollment is considered a cancellation.
OPM is seeking comments on the
implementation of this proposed rule
for employees currently on LWOP or
other nonpay status in which pay is
insufficient to cover the employee share
of FEHB premiums. OPM proposes
making the rule effective for employees
who enter into LWOP or other nonpay
status after the date of the rule and not
affecting employees currently on LWOP
or other nonpay status.
Regulatory Impact Analysis
OPM has examined the impact of this
proposed rule as required by Executive
Order 12866 and Executive Order
13563, which directs agencies to assess
all costs and benefits of available
regulatory alternatives and, if regulation
is necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public, health, and
safety effects, distributive impacts, and
equity). A regulatory impact analysis
must be prepared for major rules with
economically significant effects of $100
million or more in any one year. This
rule is not considered a major rule
because there will be a minimal impact
on costs to Federal agencies.
Regulatory Flexibility Act
I certify that this regulation will not
have a significant economic impact on
a substantial number of small entities
because the regulation only affects
health insurance benefits of Federal
employees and annuitants.
Regulatory Review
This rule has been reviewed by the
Office of Management and Budget in
accordance with Executive Orders
13563 and 12866.
Federalism
We have examined this rule in
accordance with Executive Order 13132,
Federalism, and have determined that
this rule restates existing rights, roles
and responsibilities of State, local, or
tribal governments.
List of Subjects on 5 CFR Part 890
Administrative practice and
procedure, Government employees,
Health insurance.
U.S. Office of Personnel Management.
Beth F. Cobert,
Acting Director.
For the reasons set forth in the
preamble, the Office of Personnel
Management proposes to amend 5 CFR
part 890 as follows:
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Federal Register / Vol. 81, No. 168 / Tuesday, August 30, 2016 / Proposed Rules
PART 890—FEDERAL EMPLOYEES
HEALTH BENEFITS PROGRAM
1. The authority citation for part 890
continues to read as follows:
■
Authority: 5 U.S.C. 8913; Sec. 890.301
also issued under sec. 311 of Pub. L. 111–03,
123 Stat. 64; Sec. 890.111 also issued under
section 1622(b) of Pub. L. 104–106, 110 Stat.
521; Sec. 890.112 also issued under section
1 of Pub. L. 110–279, 122 Stat. 2604; 5 U.S.C.
8913; Sec. 890.803 also issued under 50
U.S.C. 403p, 22 U.S.C. 4069c and 4069c–1;
subpart L also issued under sec. 599C of 101,
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.
Subpart E—Contributions and
Withholdings
2. In § 890.502:
a. Redesignate paragraphs (b) through
(f) as paragraphs (c) through (g).
■ b. Add new paragraph (b).
■ c. Revise newly redesignated
paragraph (c).
The addition and revision read as
follows:
■
■
§ 890.502 Withholdings, contributions,
LWOP, premiums, and direct premium
payment.
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(b) Agency flexibility to require direct
payment of employee premiums on a
current basis. An agency may require all
employees that enter leave without pay
(LWOP) or other nonpay status except
for as a result of lapse of appropriations,
whose pay is insufficient to cover
premium, pay their employee premium
contributions directly to the agency on
a current basis or; if necessary, the
agency may elect to provide advance
payment of the employee portion of
premium for all employees in these
circumstances. In determining whether
it is necessary to pay employee
contributions for premiums, an agency
shall balance the needs of the agency,
including available financial resources
and ease of operation, with those of its
employees, including typical job series
and pay grades and access to direct
payment methods. The agency may
reassess its policy decision every one or
two years and should provide
notification to all its employees. An
agency must choose one of these two
options for all employees that enter nonpay status or whose pay is insufficient
to cover premium, except for certain
qualifying LWOP categories.
(1) For purposes of this paragraph (b),
qualifying LWOP categories are exempt
from an agency determination.
Regardless of the agency’s
determination under paragraph (b), an
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agency shall advance payment for
employee premiums for employees
utilizing the following categories of
LWOP: For purposes of the Family and
Medical Leave Act, for performance of
duty in the uniformed services under
the Uniformed Services Employment
and Reemployment Rights Act of 1994,
38 U.S.C. 4301 et seq., for receiving
medical treatment under Executive
Order 5396 (Jul. 7 1930), and for periods
during which workers compensation is
received under the Federal Employees
Compensation Act, 5 U.S.C. chapter 81.
(2) If an employing office requires an
employee to pay the employee share of
premium contributions directly to the
agency on a current basis for the period
during which an employee specifies he
or she will be in LWOP or other nonpay
status, the employing office must
provide the employee written notice
and an agreement that he or she will be
required to pay premiums directly to the
agency on a current basis by following
the procedures as outlined in
paragraphs (c)(2) of this section. The
employee must sign the agreement if he
or she chooses to continue coverage
under an agency’s election to require
that payments be made directly on a
current basis.
(3) If necessary, an agency may elect
to advance a portion of basic pay
sufficient to pay current employee
contributions to premium for employees
entering LWOP or other nonpay status.
If the agency so elects, the employing
office must provide the employee
written notice and an agreement that he
or she will incur a debt to the extent of
the advanced premiums, and will be
required to repay the unpaid premiums
from salary deduction, upon returning
to pay status or upon payment becoming
sufficient to cover premiums, until the
debt is recovered in full, by following
the procedures as outlined in
paragraphs (c)(2) of this section.
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(c) Procedures when an employee
enters a leave without pay (LWOP) or
other nonpay status or pay is
insufficient to cover premium. The
employing office must tell the employee
about available health benefits choices
as soon as it becomes aware that an
employee’s premium payments cannot
be made because he or she will be or is
already in a leave without pay (LWOP)
status or other type of nonpay status.
(This does not apply when nonpay is as
a result of a lapse of appropriations or
employees have been furloughed. In
these instances, the premiums will
accumulate and be paid upon return to
duty). The employing office must also
tell the employee about the option
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available to them as determined by the
agency or that the employee can elect to
terminate enrollment when an
employee’s pay is not enough to cover
the premiums.
(1) The employing office must provide
the employee written notice of the
option available to them as determined
by the agency and consequences as
described in paragraphs (c) (2) (i) and
(ii) of this section and will send a letter
by first class mail if it cannot give it to
the employee directly. If it mails the
notice, it is deemed to be received
within 5 days.
(2) The employee must elect in
writing to either continue their FEHB
enrollment under the option that the
employer has chosen or terminate it.
(Exception: An employee who is subject
to a court or administrative order as
discussed in § 890.301(g)(3) cannot elect
to terminate his or her enrollment as
long as the court or administrative order
is still in effect and the employee has at
least one child identified in the order
who is still eligible under the FEHB
Program, unless the employee provides
documentation that he or she has other
coverage for the child(ren).) The
employee may continue enrollment by
returning a signed form to the
employing office within 31 days after he
or she receives the notice (45 days for
an employee residing overseas). When
an employee mails the signed form, its
postmark will be used as the date the
form is returned to the employing office.
If an employee elects to continue their
enrollment under the option that the
employer has chosen, he or she must
elect in writing the option that has been
specified by the employing office for all
employees as described in paragraph
(b). The employee would agree to the
following as specified by the employing
office:
(i) If the agency has elected to allow
all employees to pay the premium
directly to the agency and keep the
payments current, the employee must
agree to pay the premium directly, or;
(ii) If the agency has elected to allow
all employees to incur a debt as
described in paragraph (b)(2) he or she
must agree that upon returning to
employment or upon pay becoming
sufficient to cover the premiums, the
employing office will deduct, in
addition to the current pay period’s
premiums, an amount equal to the
premiums for a pay period during
which the employee was in a leave
without pay (LWOP) or other nonpay
status, or pay was not enough to cover
premiums. The employing office will
continue using this method to deduct
the accrued unpaid premiums from
salary until the debt is recovered in full.
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The employee must also agree that if he
or she does not return to work or the
employing office cannot recover the
debt in full from salary, the employing
office may recover the debt from
whatever other sources it normally has
available for recovery of a debt to the
Federal Government.
(iii) If an employee elects to terminate
enrollment, the effective date of the
termination is retroactive to the end of
the last pay period in which the
premium was withheld from pay.
(3) If the employee does not return the
signed form within the time period
described in paragraph (c)(2) of this
section, the employing office will
terminate the enrollment and notify the
employee in writing of the termination.
(4) If an employee has not elected to
terminate enrollment and is prevented
by circumstances from returning a
signed form indicating the employee
elects to continue their enrollment
under the option that the employer has
chosen, the employee may request
reinstatement.
(i) If the employee is prevented by
circumstances beyond his or her control
from returning a signed form to the
employing office within the time period
described in paragraph (c)(2) of this
section, he or she may write to the
employing office and request
reinstatement of the enrollment. The
employee must describe the
circumstances that prevented him or her
from returning the form. The request for
reinstatement must be made within 30
calendar days from the date the
employing office gives the employee
notice of the termination. The
employing office will determine if the
employee is eligible for reinstatement of
coverage. When the determination is
affirmative, the employing office will
reinstate the enrollment of the employee
retroactive to the date of termination. If
the determination is negative, the
employee may request a review of the
decision from the employing office (see
§ 890.104).
(ii) If the employee is subject to a
court or administrative order as
discussed in § 890.301(g)(3), the
coverage cannot terminate unless the
employee has provided documentation
to the employing office that he or she
has other coverage for the child or
children, and the employing office has
determined the coverage is appropriate,
as discussed in 5 CFR 890.301(g)(3). If
the employee does not return the signed
form, the coverage will continue and the
employee will incur a debt to the
Federal Government, and the employing
office will recover the amount of
accrued unpaid premium as a debt
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under as discussed in paragraph(c)(2)(ii)
of this section.
(5) Terminations of enrollment under
paragraphs (c)(2) and (3) of this section
are retroactive to the last day of the last
pay period in which the premium was
withheld from pay. The employee and
covered family members, if any, are
entitled to the 31-day temporary
extension of coverage and opportunity
to convert to a non-group policy under
§ 890.401. An employee whose coverage
is terminated under this paragraph may
re-enroll upon his or her return to duty
in pay status in a position in which the
employee is eligible for coverage under
this part.
(6) If an employee signs and returns
a form to the employing office stating
that he or she will make premium
payments directly to the agency and
keep the payments current in
accordance with paragraph (c)(2)(i) but
fails to pay currently, as soon as it
becomes aware of the nonpayment of
premium, the employing office shall
notify the employee that he or she has
31 days to make payments current or
she or he will have coverage terminated
retroactively to the day that follows the
last day of the last pay period for which
a current employee contribution was
received.
(i) If the employee does not make a
payment within the 31 days of the
notification, the employing office must
terminate the employee’s enrollment
retroactively to the day that follows the
last day of the last pay period for which
a current employee contribution was
received.
(ii) Termination of an enrollment for
failure to pay premiums after the
employee had elected to continue
coverage and to pay premiums currently
under (c)(2)(i) and (c)(6), is considered
a cancellation as described in
§ 890.401(a)(2) and the employee is not
entitled to a 31-day temporary extension
of coverage or opportunity to convert to
an individual policy.
(iii) If an employee that has
enrollment terminated under this part
was prevented by circumstances beyond
his or her control from making payment
within 31 days after receipt of the notice
of termination, he or she may request
reinstatement of coverage by writing to
the employing office. Such a request
must be filed within 30 calendar days
from the date of termination and must
be accompanied by verification that the
employee was prevented by
circumstances beyond his or her control
from paying within the time limit. The
verification must describe the
circumstances that prevented him or her
from making a payment within 31 days
after receipt of the notice of termination.
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59521
The employing office will determine if
the employee is eligible for
reinstatement of coverage; and, when
the determination is affirmative, notify
the carrier of the decision. The notice
must set forth the findings on which the
decision was based. If the employing
office determines that the employee was
prevented from making payments
current within the timeframe due to
circumstances beyond his or her
control, the employee’s enrollment will
be reinstated retroactive to the date of
termination.
(iv) An employee whose coverage is
terminated under paragraph (c)(6) may
enroll upon his or her return to duty in
pay status in a position in which the
employee is eligible for coverage.
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[FR Doc. 2016–20565 Filed 8–29–16; 8:45 am]
BILLING CODE 6325–63–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 205
[Document Number AMS–NOP–16–0069;
NOP–16–08]
National Organic Program: Notice of
Interim Instruction on Material Review
Agricultural Marketing Service,
USDA.
ACTION: Notice of availability of interim
instruction with request for comments.
AGENCY:
The Agricultural Marketing
Service (AMS) is announcing the
availability of an interim instruction
document intended for use by
accredited certifying agents. The interim
instruction document is entitled: NOP
3012: Material Review. This instruction
specifies the criteria and process that
USDA accredited organic certifying
agents (certifiers) must follow when
approving substances for use in organic
production and handling. This
instruction is directed at certifiers, who
must meet certain terms and conditions
as part of their accreditation. The AMS
invites interested parties to submit
comments about this instruction
document.
SUMMARY:
To ensure that NOP considers
your comment on this interim
instruction before it begins work on the
final version, submit written comments
on the interim instruction by October
31, 2016.
ADDRESSES: Submit written requests for
hard copies of this interim instruction to
Dr. Paul Lewis, Standards Division,
National Organic Program (NOP),
DATES:
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[Federal Register Volume 81, Number 168 (Tuesday, August 30, 2016)]
[Proposed Rules]
[Pages 59518-59521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20565]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Proposed Rules
[[Page 59518]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AN33
Federal Employees Health Benefits (FEHB) Program: FEHB Employee
Premium Contributions for Employees in Leave Without Pay or Other
Nonpay Status
AGENCY: U.S. Office of Personnel Management.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The United States Office of Personnel Management (OPM) is
issuing a proposed rule to provide flexibility to agencies regarding
payment for Federal Employees Health Benefits (FEHB) coverage for
employees entering leave without pay (LWOP) or any other type of nonpay
status, except when nonpay is as a result of a lapse of appropriations.
The regulation also affects employees who have insufficient pay to
cover their premium contribution. Under current regulations, a Federal
agency pays the employee's share and the Government's share of FEHB
premiums if an employee in LWOP or other nonpay status elects to
continue coverage while in LWOP or other nonpay status and agrees to
repay the agency (referred to interchangeably as ``employing office'')
for their employee share upon return to employment for up to 365 days.
In other words, the agency must allow an employee to incur a debt for
the employee contribution to premium. This outlay of funds may result
in an agency incurring a significant amount of debt. This proposed rule
would provide an agency with the flexibility to require that all of its
employees in LWOP or other nonpay status, except as a result of lapse
of appropriations, pay their employee share for FEHB coverage directly
to the agency and keep the payments current, if those employees elect
to continue FEHB enrollment. Under 5 U.S.C. 8906(e), if an employee in
LWOP status chooses to continue FEHB enrollment, the employee and
Government contributions shall be paid on a current basis; and, if
necessary, the agency shall approve advance payment of a portion of
basic pay sufficient to cover the employee contribution. The agency
will then recover the amount that it advanced from the employee upon
his or her return to employment.
Under current regulations employees in LWOP or other nonpay status
can elect to make premium payments directly to an agency and keep
payments current. Alternatively, employees in these circumstances may
elect not to pay premiums directly on a current basis and can incur a
debt such that their employing office advances the payments to cover
their premiums. The employee agrees that upon his or her return to
employment, or upon pay becoming sufficient, the employing office will
deduct, in addition to the current pay period's premium, the accrued
unpaid premiums from the employee's salary until the debt is recovered.
Under this proposed rule, an agency may choose to require that an
employee pay premiums directly to the agency on a current basis if the
agency makes a determination that all employees in non-pay or
insufficient pay status must pay premiums currently. The proposed rule
also specifies the procedures for disenrollment for nonpayment of
premiums.
DATES: Comments are due on or before October 31, 2016.
ADDRESSES: Send written comments to Julia Elam, Planning and Policy
Analysis, U.S. Office of Personnel Management, Room 4316, 1900 E Street
NW., Washington, DC 20415. You may also submit comments using the
Federal eRulemaking Portal: https://www.regulations.gov/. Follow the
instructions for submitting comments.
FOR FURTHER INFORMATION CONTACT: Julia Elam at (202) 606-0004.
SUPPLEMENTARY INFORMATION: OPM is revising the options and procedures
that employing offices may use when an employee elects to continue FEHB
coverage in leave without pay (LWOP) or other nonpay status, except as
a result of lapse of appropriations, when the employee's pay is
insufficient to cover premiums. Under 5 U.S.C. 8906(e)(1)(a), an
employee enrolled in a health benefits plan who is placed in a leave
without pay or other nonpay status may have his coverage and the
coverage of members of his family continued under the plan for not to
exceed one year. According to the statute, the agency is responsible
for ensuring the employee and Government contributions are paid to the
Employees Health Benefits Fund on a current basis; and if necessary,
the head of the agency may approve advance payment of employee
premiums, which the agency can later recover from the employee. The
employee may alternatively elect to terminate FEHB enrollment. This
proposed rule does not affect agencies' advancing payment of health
insurance premiums for employees with the following categories of
qualifying LWOP, which includes the following: Family and Medical Leave
Act, performance of duty in the uniformed services under the Uniformed
Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. 4301
et seq., receiving medical treatment under Executive Order 5396 (Jul. 7
1930), and periods during which workers compensation is received under
the Federal Employees Compensation Act, 5 U.S.C. chapter 81. We solicit
comments on the exemption of categories of employees in LWOP from this
proposed rule.
Under current regulations at 5 CFR 890.502(b), an employing office
must inform the employee about available health benefits choices as
soon as it becomes aware that an employee's premium payments cannot be
made because he or she will be, or already is in a LWOP or other nonpay
status, or the employee's pay is insufficient to cover premium. The
employing office must give the employee written notice of the options
to terminate coverage or continue coverage with either the direct pay
or the advance payment option. The employee then must elect in writing
to either continue health benefits coverage or terminate it, while in
LWOP or other nonpay status or pay is insufficient to cover premiums.
If the employee's coverage is continued, the employee may pay the
employee share of the premium directly to the agency, or the employee
may opt for the agency to advance payment of the employee portion of
the premium and agree to repay the premiums to the agency upon
returning to employment or upon pay
[[Page 59519]]
becoming sufficient. Accordingly, there is the possibility that the
employee will incur a debt to the agency if the employee chooses to
continue coverage and receive an advanced payment and does not return
to work or is, for some reason, unable to repay the premium amount.
Under Sec. 890.502(b)(2)(ii), the employing office can pay the
employee's contributions and recover the amount of accrued unpaid
premiums as a debt to the Federal Government upon the employee's return
to employment or when the employee's pay becomes sufficient.
Under this proposed regulation, each agency would make the
determination of whether its employees in LWOP or other nonpay status
would be required to pay the employee share of premiums directly to the
agency on a current basis, or whether it is necessary, within the
meaning of 5 U.S.C. 8906(e)(1)(B), for the agency to approve advance
payment of the employee share of the premium. The agency would make the
determination for all its affected employees at least once every 2
years. OPM is proposing this change to complement the FEHB Modification
of Eligibility final regulation (79 FR 62325, published on October 17,
2014) which allows generally for certain temporary, intermittent and
seasonal employees to enroll in the FEHB Program if they are expected
to work at least 130 hours per month for at least 90 days. OPM
recognizes that the recent expansion of eligibility for FEHB coverage
may impact an agency's budget due to the required FEHB Government
health benefit contributions for newly eligible employees who elect to
participate in FEHB coverage and go into LWOP or other nonpay status
based on the intermittent nature of the work performed.
OPM proposes for Sec. 890.502(b) to establish that an agency have
the discretion to determine whether it is necessary for employees in
LWOP or other nonpay status to be advanced a portion of basic pay
sufficient to pay current employee contribution to premium, or whether
the employees must be required to pay the employee contribution of the
FEHB premium currently to the agency. The determination made by the
agency must apply to all employees in non-pay or insufficient pay
status, and it cannot be made on a case-by-case basis. When assessing
whether it is necessary to pay advanced employee contributions for
premiums, the regulation provides that an agency shall balance the
needs of the agency, including available financial resources and ease
of operation, with those of its employees, including typical job series
and pay grades and access to direct payment methods. Agencies should
also consider that if they do advance employee contributions for
premiums, these employees will incur a debt which may not occur if the
employee had an option to pay premiums directly to the agency. We are
seeking comment on these and other factors agencies should utilize to
make this determination. The agency may reassess its determination
every one or two years and provide notification to all employees. An
agency may default to its original determination and is not required to
make a new determination at the time of reassessment. If an agency
chooses to require its employees in these circumstances to make direct
premium contributions on a current basis, it must provide written
notice to the affected employees. This section also explains that an
agency may choose the other option to exercise its discretion to
approve advance payment of the employee portion of the premium while
its employees are in LWOP or other nonpay status. This would be a
change to current regulations at Sec. 890.502(b)(2)(ii), which
presently provides that an employee may choose this option if he or she
does not does not wish to pay the premium directly to the agency and
keep the payments current.
OPM proposes for Sec. 890.502(c)(2) to establish procedures for
terminating enrollment for employees in LWOP or nonpay status that fail
to directly pay premiums currently. The regulation also proposes notice
requirements for the employee to receive regarding termination of
enrollment.
Under this proposed regulation, an employee that is in LWOP or
other nonpay status or has insufficient pay to cover his or her share
of FEHB premiums will have his or her enrollment cancelled if he or she
has signed an agreement to directly pay premiums on a current basis and
fails to make these payments currently, or enrollment terminated if the
employee does not return the written notice. The proposed regulation
gives an employee the opportunity to seek reinstatement from the agency
if he or she can show they were prevented from paying premiums, or from
returning the written notice, by circumstances beyond their control.
The employee must describe the circumstances that prevented him or her
from making a payment or returning the notice within 31 days after
receiving notice of disenrollment. Under this proposal, termination of
an enrollment for failure to return a written notice entitles the
employee to a 31-day temporary extension of coverage and opportunity to
convert to an individual policy, while failure to pay premiums after
electing to continue FEHB enrollment is considered a cancellation. OPM
is seeking comments on the implementation of this proposed rule for
employees currently on LWOP or other nonpay status in which pay is
insufficient to cover the employee share of FEHB premiums. OPM proposes
making the rule effective for employees who enter into LWOP or other
nonpay status after the date of the rule and not affecting employees
currently on LWOP or other nonpay status.
Regulatory Impact Analysis
OPM has examined the impact of this proposed rule as required by
Executive Order 12866 and Executive Order 13563, which directs agencies
to assess all costs and benefits of available regulatory alternatives
and, if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public, health, and safety effects, distributive impacts, and equity).
A regulatory impact analysis must be prepared for major rules with
economically significant effects of $100 million or more in any one
year. This rule is not considered a major rule because there will be a
minimal impact on costs to Federal agencies.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because the regulation
only affects health insurance benefits of Federal employees and
annuitants.
Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Orders 13563 and 12866.
Federalism
We have examined this rule in accordance with Executive Order
13132, Federalism, and have determined that this rule restates existing
rights, roles and responsibilities of State, local, or tribal
governments.
List of Subjects on 5 CFR Part 890
Administrative practice and procedure, Government employees, Health
insurance.
U.S. Office of Personnel Management.
Beth F. Cobert,
Acting Director.
For the reasons set forth in the preamble, the Office of Personnel
Management proposes to amend 5 CFR part 890 as follows:
[[Page 59520]]
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 101, 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.
Subpart E--Contributions and Withholdings
0
2. In Sec. 890.502:
0
a. Redesignate paragraphs (b) through (f) as paragraphs (c) through
(g).
0
b. Add new paragraph (b).
0
c. Revise newly redesignated paragraph (c).
The addition and revision read as follows:
Sec. 890.502 Withholdings, contributions, LWOP, premiums, and direct
premium payment.
* * * * *
(b) Agency flexibility to require direct payment of employee
premiums on a current basis. An agency may require all employees that
enter leave without pay (LWOP) or other nonpay status except for as a
result of lapse of appropriations, whose pay is insufficient to cover
premium, pay their employee premium contributions directly to the
agency on a current basis or; if necessary, the agency may elect to
provide advance payment of the employee portion of premium for all
employees in these circumstances. In determining whether it is
necessary to pay employee contributions for premiums, an agency shall
balance the needs of the agency, including available financial
resources and ease of operation, with those of its employees, including
typical job series and pay grades and access to direct payment methods.
The agency may reassess its policy decision every one or two years and
should provide notification to all its employees. An agency must choose
one of these two options for all employees that enter non-pay status or
whose pay is insufficient to cover premium, except for certain
qualifying LWOP categories.
(1) For purposes of this paragraph (b), qualifying LWOP categories
are exempt from an agency determination. Regardless of the agency's
determination under paragraph (b), an agency shall advance payment for
employee premiums for employees utilizing the following categories of
LWOP: For purposes of the Family and Medical Leave Act, for performance
of duty in the uniformed services under the Uniformed Services
Employment and Reemployment Rights Act of 1994, 38 U.S.C. 4301 et seq.,
for receiving medical treatment under Executive Order 5396 (Jul. 7
1930), and for periods during which workers compensation is received
under the Federal Employees Compensation Act, 5 U.S.C. chapter 81.
(2) If an employing office requires an employee to pay the employee
share of premium contributions directly to the agency on a current
basis for the period during which an employee specifies he or she will
be in LWOP or other nonpay status, the employing office must provide
the employee written notice and an agreement that he or she will be
required to pay premiums directly to the agency on a current basis by
following the procedures as outlined in paragraphs (c)(2) of this
section. The employee must sign the agreement if he or she chooses to
continue coverage under an agency's election to require that payments
be made directly on a current basis.
(3) If necessary, an agency may elect to advance a portion of basic
pay sufficient to pay current employee contributions to premium for
employees entering LWOP or other nonpay status. If the agency so
elects, the employing office must provide the employee written notice
and an agreement that he or she will incur a debt to the extent of the
advanced premiums, and will be required to repay the unpaid premiums
from salary deduction, upon returning to pay status or upon payment
becoming sufficient to cover premiums, until the debt is recovered in
full, by following the procedures as outlined in paragraphs (c)(2) of
this section.
* * * * *
(c) Procedures when an employee enters a leave without pay (LWOP)
or other nonpay status or pay is insufficient to cover premium. The
employing office must tell the employee about available health benefits
choices as soon as it becomes aware that an employee's premium payments
cannot be made because he or she will be or is already in a leave
without pay (LWOP) status or other type of nonpay status. (This does
not apply when nonpay is as a result of a lapse of appropriations or
employees have been furloughed. In these instances, the premiums will
accumulate and be paid upon return to duty). The employing office must
also tell the employee about the option available to them as determined
by the agency or that the employee can elect to terminate enrollment
when an employee's pay is not enough to cover the premiums.
(1) The employing office must provide the employee written notice
of the option available to them as determined by the agency and
consequences as described in paragraphs (c) (2) (i) and (ii) of this
section and will send a letter by first class mail if it cannot give it
to the employee directly. If it mails the notice, it is deemed to be
received within 5 days.
(2) The employee must elect in writing to either continue their
FEHB enrollment under the option that the employer has chosen or
terminate it. (Exception: An employee who is subject to a court or
administrative order as discussed in Sec. 890.301(g)(3) cannot elect
to terminate his or her enrollment as long as the court or
administrative order is still in effect and the employee has at least
one child identified in the order who is still eligible under the FEHB
Program, unless the employee provides documentation that he or she has
other coverage for the child(ren).) The employee may continue
enrollment by returning a signed form to the employing office within 31
days after he or she receives the notice (45 days for an employee
residing overseas). When an employee mails the signed form, its
postmark will be used as the date the form is returned to the employing
office. If an employee elects to continue their enrollment under the
option that the employer has chosen, he or she must elect in writing
the option that has been specified by the employing office for all
employees as described in paragraph (b). The employee would agree to
the following as specified by the employing office:
(i) If the agency has elected to allow all employees to pay the
premium directly to the agency and keep the payments current, the
employee must agree to pay the premium directly, or;
(ii) If the agency has elected to allow all employees to incur a
debt as described in paragraph (b)(2) he or she must agree that upon
returning to employment or upon pay becoming sufficient to cover the
premiums, the employing office will deduct, in addition to the current
pay period's premiums, an amount equal to the premiums for a pay period
during which the employee was in a leave without pay (LWOP) or other
nonpay status, or pay was not enough to cover premiums. The employing
office will continue using this method to deduct the accrued unpaid
premiums from salary until the debt is recovered in full.
[[Page 59521]]
The employee must also agree that if he or she does not return to work
or the employing office cannot recover the debt in full from salary,
the employing office may recover the debt from whatever other sources
it normally has available for recovery of a debt to the Federal
Government.
(iii) If an employee elects to terminate enrollment, the effective
date of the termination is retroactive to the end of the last pay
period in which the premium was withheld from pay.
(3) If the employee does not return the signed form within the time
period described in paragraph (c)(2) of this section, the employing
office will terminate the enrollment and notify the employee in writing
of the termination.
(4) If an employee has not elected to terminate enrollment and is
prevented by circumstances from returning a signed form indicating the
employee elects to continue their enrollment under the option that the
employer has chosen, the employee may request reinstatement.
(i) If the employee is prevented by circumstances beyond his or her
control from returning a signed form to the employing office within the
time period described in paragraph (c)(2) of this section, he or she
may write to the employing office and request reinstatement of the
enrollment. The employee must describe the circumstances that prevented
him or her from returning the form. The request for reinstatement must
be made within 30 calendar days from the date the employing office
gives the employee notice of the termination. The employing office will
determine if the employee is eligible for reinstatement of coverage.
When the determination is affirmative, the employing office will
reinstate the enrollment of the employee retroactive to the date of
termination. If the determination is negative, the employee may request
a review of the decision from the employing office (see Sec. 890.104).
(ii) If the employee is subject to a court or administrative order
as discussed in Sec. 890.301(g)(3), the coverage cannot terminate
unless the employee has provided documentation to the employing office
that he or she has other coverage for the child or children, and the
employing office has determined the coverage is appropriate, as
discussed in 5 CFR 890.301(g)(3). If the employee does not return the
signed form, the coverage will continue and the employee will incur a
debt to the Federal Government, and the employing office will recover
the amount of accrued unpaid premium as a debt under as discussed in
paragraph(c)(2)(ii) of this section.
(5) Terminations of enrollment under paragraphs (c)(2) and (3) of
this section are retroactive to the last day of the last pay period in
which the premium was withheld from pay. The employee and covered
family members, if any, are entitled to the 31-day temporary extension
of coverage and opportunity to convert to a non-group policy under
Sec. 890.401. An employee whose coverage is terminated under this
paragraph may re-enroll upon his or her return to duty in pay status in
a position in which the employee is eligible for coverage under this
part.
(6) If an employee signs and returns a form to the employing office
stating that he or she will make premium payments directly to the
agency and keep the payments current in accordance with paragraph
(c)(2)(i) but fails to pay currently, as soon as it becomes aware of
the nonpayment of premium, the employing office shall notify the
employee that he or she has 31 days to make payments current or she or
he will have coverage terminated retroactively to the day that follows
the last day of the last pay period for which a current employee
contribution was received.
(i) If the employee does not make a payment within the 31 days of
the notification, the employing office must terminate the employee's
enrollment retroactively to the day that follows the last day of the
last pay period for which a current employee contribution was received.
(ii) Termination of an enrollment for failure to pay premiums after
the employee had elected to continue coverage and to pay premiums
currently under (c)(2)(i) and (c)(6), is considered a cancellation as
described in Sec. 890.401(a)(2) and the employee is not entitled to a
31-day temporary extension of coverage or opportunity to convert to an
individual policy.
(iii) If an employee that has enrollment terminated under this part
was prevented by circumstances beyond his or her control from making
payment within 31 days after receipt of the notice of termination, he
or she may request reinstatement of coverage by writing to the
employing office. Such a request must be filed within 30 calendar days
from the date of termination and must be accompanied by verification
that the employee was prevented by circumstances beyond his or her
control from paying within the time limit. The verification must
describe the circumstances that prevented him or her from making a
payment within 31 days after receipt of the notice of termination. The
employing office will determine if the employee is eligible for
reinstatement of coverage; and, when the determination is affirmative,
notify the carrier of the decision. The notice must set forth the
findings on which the decision was based. If the employing office
determines that the employee was prevented from making payments current
within the timeframe due to circumstances beyond his or her control,
the employee's enrollment will be reinstated retroactive to the date of
termination.
(iv) An employee whose coverage is terminated under paragraph
(c)(6) may enroll upon his or her return to duty in pay status in a
position in which the employee is eligible for coverage.
* * * * *
[FR Doc. 2016-20565 Filed 8-29-16; 8:45 am]
BILLING CODE 6325-63-P
