Servicemembers' Group Life Insurance Traumatic Injury Protection Program Amendments, 59865-59866 [2024-16238]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 89, Number 142 (Wednesday, July 24, 2024)]
[Proposed Rules]
[Pages 59865-59866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16238]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 9

RIN 2900-AS12


Servicemembers' Group Life Insurance Traumatic Injury Protection 
Program Amendments

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
regulations that govern the Servicemembers' Group Life Insurance (SGLI) 
Traumatic Injury Protection (TSGLI) program to correct an unintended 
amendment that was made in a recent rulemaking amending the TSGLI 
Schedule of Losses for payments for inability to perform at least two 
activities of daily living (ADL) as a result of a traumatic injury 
other than a traumatic brain injury.

DATES: Comments must be received on or before September 23, 2024,

ADDRESSES: Comments must be submitted through www.regulations.gov. 
Except as provided below, comments received before the close of the 
comment period will be available at www.regulations.gov for public 
viewing, inspection, or copying, including any personally identifiable 
or confidential business information that is included in a comment. We 
post the comments received before the close of the comment period on 
www.regulations.gov as soon as possible after they have been received. 
VA will not post on Regulations.gov public comments that make threats 
to individuals or institutions or suggest that the commenter will take 
actions to harm an individual. VA encourages individuals not to submit 
duplicative comments; however, we will post comments from multiple 
unique commenters even if the content is identical or nearly identical 
to other comments. Any public comment received after the comment 
period's closing date is considered late and will not be considered in 
the final rulemaking. In accordance with the Providing Accountability 
Through Transparency Act of 2023, a 100 word Plain-Language Summary of 
this proposed rule is available at Regulations.gov, under RIN 2900-
AS12.

FOR FURTHER INFORMATION CONTACT: Paul Weaver, Insurance Specialist, 
Department of Veterans Affairs Insurance Service (310/290B), 5000 
Wissahickon Avenue, Philadelphia, PA 19144, (215) 842-2000, ext. 4263. 
(This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: TSGLI provides up to $100,000 of traumatic 
injury coverage to all servicemembers enrolled in SGLI, and the 
coverage provides a financial benefit to seriously injured SGLI 
insureds to assist them with expenses incurred during long periods of 
recovery and rehabilitation.
    On March 15, 2023, VA published a final rule in the Federal 
Register, 88 FR 15,907, that amended its regulations governing the 
TSGLI program. Among other things, VA recodified the schedule and 
amended the eligibility standards for certain losses covered under the 
schedule. Following publication of the final rule, VA discovered that 
it had inadvertently changed the Schedule of Losses for inability to 
perform at least two ADLs as a result of a traumatic injury other than 
a traumatic brain injury. Neither the preamble to the proposed rule nor 
the preamble to the final rule addressed this change to the TSGLI 
regulation. See 85 FR 50,973; 88 FR 15,907.
    The current TSGLI Schedule of Losses, as published in the 2023 
final rule referenced above, includes a new interval for payment at the 
15th consecutive day of ADL loss. 38 CFR 9.21(c)(20) (a ``[t]raumatic 
injury, other than traumatic brain injury, resulting in inability to 
perform at least 2 activities of daily living . . . [is] payable at the 
15th consecutive day of ADL loss [at] $25,000''). The payment schedule 
retains the original text for the tiered eligibility standards for 
payments at the 30th, 60th, and 90th consecutive-day intervals, but it 
does not include payment at the 120th consecutive-day interval.
    VA implemented the TSGLI program in December 2005 (see 70 FR 
75,940, 75,947), and from that time until the 2023 final rule, VA had 
applied the same tiered schedule for amounts payable under the TSGLI 
schedule for an inability to perform at least two ADLs as a result of a 
traumatic injury other than a traumatic brain injury: $25,000 at the 
30th consecutive day of the inability to perform ADLs, with additional 
payments of $25,000 each at the 60th, 90th, and 120th consecutive day 
intervals thereafter. This scheduled loss was initially codified at 38 
CFR 9.20(e)(7)(xliv), and although the scheduled loss was recodified in 
subsequent amendments to the TSGLI regulations, VA did not intend to 
change the tiered schedule for TSGLI payments for an inability to 
perform ADLs as a result of a traumatic injury other than a traumatic 
brain injury.
    In its recent review of the TSGLI regulation prior to the 2023 
final rule, VA determined that the TSGLI payment range for the 
scheduled losses did not warrant amendment, noting that the then-
existing payment amounts in the regulation exceeded payouts under many 
commercial accidental death and dismemberment insurance policies on 
which VA's schedule was based and was consistent with Congress's intent 
concerning VA's administration of the program. See 88 FR 15,908 
(discussing VA's decision not to change the TSGLI payment schedule).
    VA has considered but declines to adopt the changed tiered schedule 
for payments based on the loss of ADLs due to traumatic injury other 
than brain injury listed in current 38 CFR 9.21(c)(20), which is the 
result of VA's inadvertent error. As an initial matter, we note that 
the 30-, 60-, 90-, and 120-day intervals under the Schedule of Losses 
were intended for general applicability under this program, unless 
otherwise specified. Revisions to the

[[Page 59866]]

time periods prescribed for the tiered payments for this scheduled loss 
currently allow for payments higher than intended and may also 
potentially result in higher payout amounts to individuals with severe 
but temporary injuries than those paid to injured servicemembers who 
have permanent injuries.
    VA is also obligated to manage TSGLI according to sound actuarial 
principles (38 U.S.C. 1980A(e)(4) and (5)). See 70 FR 75,940. Further, 
Congress has expressed its desire that the TSGLI premium remain minimal 
(151 Cong. Rec. S4095 (2005) (statement of Sen. Craig)). Reducing the 
first prescribed interval for the most common loss payout under the 
schedule would substantially increase the benefit costs under the 
program--which is funded by servicemembers' premiums--and jeopardize 
the actuarial soundness of the program by placing upward pressure on 
the TSGLI premium. If the premiums are no longer sufficient to cover 
program costs, the only way for the program to avoid a funding loss is 
to increase the premium. See 38 U.S.C. 1980A(a) and (e).
    Finally, VA does not have the authority to make unilateral 
revisions to regulations that govern coverage for loss due to traumatic 
injury. See 38 U.S.C. 1980A(j) (requiring VA to consult with the 
Secretary of Defense when promulgating regulations which govern 
coverage for loss due to traumatic injury). During both the TSGLI Year-
One Review and the TSGLI Year-Ten Review, VA consulted, as required by 
law, with the uniformed services as well as VA, military, and private 
medical professionals on this issue. VA findings from this consultation 
confirmed the 30, 60, 90, and 120-day payment intervals. Therefore, VA 
has determined that it is necessary to correct this error instead of 
retaining the erroneous amendment containing the currently reduced time 
periods.
    For the reasons explained, VA proposes to amend 38 CFR 9.21(c)(20) 
to reinstate the tiered schedule for payments for an inability to 
perform at least two ADLs as a result of a traumatic injury other than 
a traumatic brain injury beginning at 30 consecutive days, with 
additional payments at 60, 90, and 120 consecutive days.

Executive Orders 12866, 13563 and 14094

    Executive Order 12866 (Regulatory Planning and Review) directs 
agencies to assess the costs and benefits of available regulatory 
alternatives and, when regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, and other advantages; 
distributive impacts; and equity). Executive Order 13563 (Improving 
Regulation and Regulatory Review) emphasizes the importance of 
quantifying both costs and benefits, reducing costs, harmonizing rules, 
and promoting flexibility. Executive Order 14094 (Executive Order on 
Modernizing Regulatory Review) supplements and reaffirms the 
principles, structures, and definitions governing contemporary 
regulatory review established in Executive Orders 12866 and 13563. The 
Office of Information and Regulatory Affairs has determined that this 
rulemaking is not a significant regulatory action under Executive Order 
12866, as amended by Executive Order 14094. The Regulatory Impact 
Analysis associated with this rulemaking can be found as a supporting 
document at www.regulations.gov.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (5 
U.S.C. 601-612). The factual basis for this certification is because 
the regulation affects only individuals and would not directly affect 
any small entities. Therefore, pursuant to 5 U.S.C. 605(b), the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604 do not apply.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Paperwork Reduction Act

    Although this proposed rule contains collection of information 
under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3521), there are no provisions associated with this rulemaking 
constituting any new collection of information or any revisions to the 
existing collection of information. The collection of information for 
38 CFR 9.21 is currently approved by the Office of Management and 
Budget (OMB) and have been assigned OMB control number 2900-0919.

Assistance Listing

    The Assistance Listing number and title for the program affected by 
this document is 64.103, Life Insurance for Veterans.

List of Subjects in 38 CFR Part 9

    Life insurance, Military personnel, Veterans.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved and signed 
this document on July 17, 2024, and authorized the undersigned to sign 
and submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of 
General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, VA proposes to amend 38 CFR 
part 9 as set forth below:

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

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

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

0
2. Amend Sec.  9.21 by revising paragraph (c)(20)(i) through (iv) to 
read as follows:


Sec.  9.21  Schedule of Losses.

* * * * *
    (c) * * *
* * * * *
    (20) Traumatic injury, other than traumatic brain injury, resulting 
in inability to perform at least 2 activities of daily living (ADL):
    (i) The amount payable at the 30th consecutive day of ADL loss is 
$25,000.
    (ii) The amount payable at the 60th consecutive day of ADL loss is 
an additional $25,000.
    (iii) The amount payable at the 90th consecutive day of ADL loss is 
an additional $25,000.
    (iv) The amount payable at the 120th consecutive day of ADL loss is 
an additional $25,000.
* * * * *
[FR Doc. 2024-16238 Filed 7-23-24; 8:45 am]
BILLING CODE 8320-01-P