Postal Service Reform Act; Establishment of the Postal Service Health Benefits Program
Final rule.
CFR Part: "5 CFR Part 890"; "48 CFR Parts 1602 and 1609"
RIN Number: "RIN 3206-AO43"
Citation: "89 FR 37061"
Page Number: "37061"
"Rules and Regulations"
Agency: "
SUMMARY: This rule finalizes an interim final rule that established the
DATES:
Effective
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
Executive Summary On
OPM is making several changes between the interim final rule and this final rule:
* In SEC 890.1604, OPM is clarifying the requirements to enroll in Medicare Part B by expressly providing that the exceptions referring to events occurring "as of
* Section 890.1604(c) is reserved in anticipation of future rulemaking.
* In SEC 890.1604(e), OPM is clarifying that a
* In SEC 890.1604, OPM is removing reference to the
* In SEC 890.1606(e), OPM is correcting a typographical error by removing the word "the" before "
These changes do not affect OPM's estimation of the regulatory impact of the PSHB Program.
To the greatest extent possible, OPM aligned the rules pertaining to PSHB plans with the regulations governing FEHB plans. Where there was no existing rule applicable to FEHB plans, OPM implemented rules to provide the greatest flexibility for
The PSHB Program includes health benefits plans available to
The exceptions to the Medicare Part B enrollment requirement for PSHB enrollment described at
* Individuals who are
* Individuals who, on
*
*
*
* A family member of a
OPM will contract with carriers to offer two categories of health benefits plans through the broad umbrella of the FEHB Program, established under 5 U.S.C. 8901 et seq. OPM's authority to contract for FEHB plans and OPM's authority to contract for PSHB plans are in separate parts of the FEHB statute. First, pursuant to 5 U.S.C. 8902, OPM may contract with carriers to offer FEHB plans. Second, pursuant to 5 U.S.C. 8903c, OPM may now contract with carriers to offer PSHB plans through the PSHB Program within the FEHB Program. The broad umbrella of the FEHB Program comprises both FEHB plans and PSHB plans. OPM started the process of approving carrier participation in the PSHB Program when the interim final rule became effective on
This rule finalizes the interim final rule at 88 FR 20383 with minimal changes, as discussed further in the preamble, due to comments received during the 60-day comment period and a minor technical correction.
Background
Section 101 of the PSRA adds new section 8903c to 5 U.S.C. chapter 89 and directs OPM to establish the PSHB Program within the
The PSHB Program was authorized under the Title I Postal Service Financial Reforms provisions in the PSRA in furtherance of
FOOTNOTE 1 H. Rept. 117-89- Postal Service Reform Act of 2021, H.Rept.117-89, 117th Cong. (2023), https://www.congress.gov/congressional-report/117th-congress/house-report/89/1. END FOOTNOTE
Section 102 of the PSRA ("The USPS Fairness Act") amends 5 U.S.C. 8909a, which was established in the Postal Accountability and Enhancement Act of 2006 (Pub. L. 109-435), and required the
FOOTNOTE 2 The requirement for pre-funding payments into the PSRHBF was established by the 2006 Postal Accountability and Enhancement Act (Pub. L. 109-435) and required the
A. Legislative Requirements for Establishing the PSHB Program
Section 101 of Title I of the PSRA directs OPM to "establish the Postal Service Health Benefits Program within the Federal Employees Health Benefits Program" under 5 U.S.C. chapter 89. The PSRA specifies that "[e]xcept as otherwise provided . . . any [PSHB] contract . . . shall be consistent with the requirements of this chapter for contracts under section 8902 with carriers to offer health benefits plans." Therefore, generally, the requirements of the FEHB Program will apply to the PSHB Program, unless otherwise set forth in the PSRA or in 5 CFR part 890.
The PSHB Program is required by statute to begin in
The PSRA requires OPM to direct PSHB Carriers to coordinate PSHB coverage with Medicare for enrollees and their family members covered by Medicare. This coordination must include Part D prescription drug coverage for Medicare Part D-eligible individuals. In the initial contract year, the PSRA requires OPM to contract with health insurance carriers to provide coverage with benefits and cost-sharing equivalent to FEHB plans offered by the same carrier, except to the extent needed to integrate Medicare Part D prescription drug benefits.
The PSRA requires OPM to share information with other agencies to implement the statutory requirements, including the Medicare Part B enrollment requirement and the Medicare Part B special enrollment period administered by the
B. PSHB Program Background Information
The PSRA establishes the PSHB Program within the FEHB Program. The FEHB Program was established in 1960 and provides a choice of health plans, including fee-for-service plans and health maintenance organizations, to approximately 8.2 million covered individuals including employees of the Federal Government, Federal retirees (referred to as annuitants due to their eligibility for an annuity), members of their families, former spouses, and other groups statutorily eligible as enumerated in 5 U.S.C. 8901 or set forth in other authorizing legislation. Currently,
Health benefits plans offered under the FEHB Program cover a wide range of health services including routine physical exams, primary and specialist provider visits, inpatient hospital care, outpatient care, surgery, laboratory and diagnostic tests, prescription drugs, and mental health services. Required benefits are listed in broad categories at 5 U.S.C. 8904 and include "hospital benefits", "surgical benefits", "medical care and treatment", and "obstetrical benefits", among others. Eligible individuals, including
OPM negotiates the benefits, coverage, and premium details of each plan in the FEHB Program with health benefits carriers each year. Each year, OPM issues guidance for health benefits carriers preparing health benefits plan proposals. The guidance for the 2025 plan year is available here: https://www.opm.gov/healthcare-insurance/carriers/fehb/2024/2024-04.pdf. This guidance references OPM's commitment to ensuring that the Federal Government offers competitive, comprehensive health insurance benefits and includes OPM's policy goals and initiatives for the year. The guidance outlines technical requirements for each proposal, including benefit package details such as actuarial value, benefit changes from the previous year, and the drug formulary.
Carriers offering PSHB plans, as part of the FEHB Program, will be subject to the same or similar guidance as is issued to FEHB plans. The PSRA requires that carriers offering PSHB plans will, to the greatest extent practicable, offer benefits and cost-sharing (e.g., deductibles, copayments, and coinsurance) equivalent to the benefits and cost-sharing for FEHB plans for that carrier in the initial contract year.
Generally, an enrollment in a health benefits plan under the FEHB Program may be continued into retirement if the enrollee has been enrolled in a health benefits plan under the FEHB Program for five years before retiring or, if less than five years, for all periods in which they were eligible to enroll. Enrollees in an FEHB plan can also enroll in Medicare when they become eligible for Medicare regardless of whether they are retired or still actively employed. Medicare is the primary payer for annuitants who are enrolled in an FEHB plan and covered by Medicare. The rules for continuing a PSHB enrollment into retirement parallel those applicable for FEHB but the Medicare enrollment requirements differ for PSHB as discussed in the next section.
C. PSHB Program Eligibility
Under the PSRA,
A "covered Medicare individual" under section 8903c(a)(1) means an individual who is entitled to Medicare Part A, excluding an individual who is eligible to enroll under section 1818 or 1818A of the Social Security Act (42 U.S.C. 1395i-2, 1395i-2a). Individuals entitled to Medicare Part A under 1818 are individuals age 65 or older who are not otherwise entitled to premium-free Medicare Part A, typically due to not having the required work history for premium-free Part A. Individuals entitled to enroll under 1818A are disabled individuals who lose Medicare coverage solely because they have exceeded the amounts allowed for substantial gainful work. /3/ These individuals are exempt from the Medicare Part B enrollment requirement that applies to most other
FOOTNOTE 3 For more information, see SSA's amounts for Substantial Gainful Activity at https://www.ssa.gov/oact/cola/sga.html. END FOOTNOTE
For purposes of the FEHB Program, 5 U.S.C. 8901(5) defines a "member of family" of employees and annuitants to include spouses and children under 22 years of age, subject to exception, including natural children, adopted children, stepchildren, and foster children. The enactment of the Affordable Care Act in 2010 required health insurers to cover dependents until age 26. At that time, OPM issued updates to its regulations codified at 5 CFR 890.302(b) and (c) to reflect that change, which defines FEHB covered family members to include such children until they reach the age of 26, subject to exception. The PSHB Program will align with 5 CFR part 890 regarding the definition of family members for all purposes, including the Medicare SEP opportunity.
The PSRA adds new definitions to chapter 89. Section 8903c(a)(9) defines a
The PSRA does not establish a distinct category for
FOOTNOTE 4 5 U.S.C. 8901(3)(C). END FOOTNOTE
Section 8906(g)(2) authorizes Government contributions for health benefits for individuals who become
The definition of
D. Centralized Enrollment
The FEHB Program's enrollment functions are decentralized processes that utilize independent systems at different Federal agencies. For purposes of the PSHB Program, OPM will shift certain responsibilities from the employing office to a centralized enrollment system which will be administered by OPM. The centralized enrollment system will be an electronic enrollment solution for all PSHB stakeholder groups including enrollees, the
Comments Received on the Interim Final Rule and OPM's Responses
OPM received a total of 71 comments on the interim final rule. Most of these were from individual
Many public comments expressed support for the alignment between the FEHB and PSHB Programs. Commenters expressed support for issues in the rule including the
In reviewing comments received in response to the interim final rule and feedback received, OPM determined a need to provide additional specification on several topics that were beyond the scope of the interim final rule. Accordingly, OPM will soon issue a proposed rule that further explains and expands on the implementation of the PSHB Program to provide clarity for PSHB Carriers, other agencies, and
A. Transition From FEHB Plans to PSHB Plans
The interim final rule detailed the process by which
Comments: OPM received several comments with concerns about the effect of the new program on
Response: Pursuant to 5 U.S.C. chapter 89, the PSHB Program must include
Comment: A commenter asked that OPM consider creating a hardship exception allowing individuals to continue in their chosen FEHB plan after the PSHB Program begins, should that plan not be offered in PSHB. The commenter stated that some small regional plans may not be available, creating a potential loss of access to coverage under those plans due to the creation of PSHB.
Response: OPM does not have the statutory authority to allow a hardship exception as requested by the commenter. Where a small regional plan is no longer available in the PSHB Program, coverage will nonetheless always be available under one of the nationwide PSHB plans.
Comments: Several commenters requested that Postal annuitants who retired under the Civil Service Retirement System, rather than the Federal Employees Retirement System, be allowed to maintain coverage under an FEHB plan.
Response: OPM does not have the statutory authority to allow an exception based on a
Comments: Several commenters asked why employees of the
Response:
Comments: Several commenters asked if PSHB Program enrollment will count towards the five-year FEHB Program enrollment requirement to retire with FEHB coverage from another agency.
Response: Yes, the five-year requirement under the FEHB Program will continue to be in effect for the PSHB Program. An individual is eligible to continue enrollment in a PSHB plan into retirement if they meet the five-year requirement and were enrolled in a PSHB plan immediately before retirement. The five-year requirement does not change and is not changed by the Medicare Part B enrollment requirement for certain
A
A
Comment: One commenter asked if a
Response: Yes, the PSHB Program does not affect the eligibility of any
B. Medicare Part B Enrollment Requirement for Postal Service Annuitants
Many commenters asked about the details of the Medicare Part B enrollment requirement for
The PSRA authorized a Medicare Part B Special Enrollment Period (SEP) for certain
As explained below in the section of the preamble discussing the changes included in this final rule, OPM is amending
Comment: A commenter said that many
Response: OPM and the
OPM does not have the authority to enroll
FOOTNOTE 5 Explanation of Medicare late enrollment penalties available here: https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties. END FOOTNOTE
Comment: Some commenters asked when family members of disabled
Response: A family member of a disabled
Comment: A commenter asked whether a family member must maintain Part B coverage if the family member is enrolled in Medicare Part B prior to
Response: No, a Medicare covered family member is required to be enrolled in Medicare Part B only if the
C. Exceptions to the Medicare Part B Enrollment Requirement
OPM received several comments regarding the details of the requirement for
Comment: A commenter expressed support for OPM's rule to allow self-attestations as proof of eligibility for health services from the
Response: OPM is not authorizing PSHB Carriers to determine whether an individual is excepted from the Medicare Part B enrollment requirement under the IHS exception or any other exceptions under
Comment: Several commenters requested clarification regarding how the PSHB Program will affect enrollees residing outside
Response: The interim final rule included a list of exceptions to the Medicare Part B enrollment requirement at 5 CFR 890.1604(c). These exceptions included an exception for Medicare covered
D. Changes To Coverage and Premium Costs Due to the Medicare Part B Enrollment Requirement
Comment: OPM received several comments from
Response: OPM negotiates health benefits and premiums each year with carriers. As delineated in the interim final rule, a carrier's PSHB plan must provide equivalent benefits and cost-sharing to the carrier's FEHB plan in the 2025 contract year. Approved PSHB Carriers will submit benefit and rate proposals for PSHB plans by the end of
OPM is asking carriers to focus on Medicare coordination in both FEHB plans and PSHB plans for 2025. The call letter for the 2025 FEHB and PSHB plan year /6/ states "All Carriers must implement a multi-pronged educational outreach effort to eligible enrollees focused on Medicare coordination. . . . FEHB and PSHB Program members for whom Medicare is primary must receive medical and drug coverage equal to or greater than the medical and drug coverage they would have received without Medicare Advantage Prescription Drug Plan (MA-PD) EGWP or Prescription Drug Plan (PDP) EGWP."
FOOTNOTE 6 https://www.opm.gov/healthcare-insurance/carriers/fehb/2024/2024-04.pdf. END FOOTNOTE
The call letter further ensures robust coordinated coverage by directing carriers that "The PSRA requires PSHB Carriers, in the initial contract year, to provide benefits and cost-sharing that are equivalent to the benefits and cost-sharing of that Carrier's 2025 FEHB plan option, except to the extent needed to integrate Medicare Part D prescription drug benefits. PDP EGWP formularies must, at a minimum, include the same covered drugs under the plan's formulary. Furthermore, every drug covered under a plan option's formulary must be covered at the same or lower cost-share by the plan's PDP EGWP formulary. In circumstances where equivalent drug benefits and cost-sharing (not actuarial equivalence) cannot be met due to limitations in integrating Medicare Part D prescription drug benefits, PSHB Carriers must provide justification explaining why they cannot meet this standard."
E. Continuity of Costs and Coverage Between FEHB Plans and PSHB Plans
Comment: OPM received many comments regarding changes in premium costs and benefits between FEHB plans and PSHB plans. There were questions about specific covered services and requesting information about whether such services will be covered in a similar way after the launch of the PSHB Program. Several commenters raised concerns about possible cost increases after the launch of the new program.
Response: The PSRA requires that, in the initial contract year, a carrier offering PSHB plans must offer coverage with equivalent benefits and cost-sharing to FEHB plans offered by that carrier, except to the extent needed to integrate Medicare Part D prescription drug benefits. This requirement was codified in the interim final rule at
OPM is approving carriers for participation in the PSHB Program. Approved carriers will submit plan benefit and rate proposals by the end of
In order to ensure that the drug coverage under a PSHB plan's Medicare Part D EGWP is equal to the drug coverage under the PSHB plan, OPM has required that PSHB plans' "PDP EGWP formularies must, at a minimum, include the same covered drugs under the plan's formulary. Furthermore, every drug covered under a plan option's formulary must be covered at the same or lower cost-share by the plan's PDP EGWP formulary." See supra note 6.
F. Information Sharing
The interim final rule outlined a process for agencies to share relevant information for OPM's administration of the PSHB Program. This included implementing a statutory requirement for OPM and the SSA to share information necessary to identify individuals who may be eligible to enroll in Medicare Part B during the 6-month Medicare special enrollment period (SEP) from
Comment: A commenter suggested that coordination of benefits with Medicare at 5 U.S.C. 8910(d) requires OPM to expand PSHB information sharing regulations at 5 CFR 890.1612 to the entire FEHB Program and allow carriers to access that information for coordination and reporting purposes.
Response: OPM agrees that information sharing between agencies is critical to administer the PSHB Program effectively. OPM is not expanding our information sharing effort to the entire FEHB Program since the PSRA's information sharing provisions are intended to implement the PSHB Program and its Medicare enrollment requirement for certain
G. Centralized Enrollment System
The interim final rule explained that OPM will develop and implement a centralized enrollment system for the PSHB Program. The centralized enrollment system will be an electronic enrollment solution for PSHB enrollees, the
Comment: Several commenters made specific recommendations about the mechanics and operations of OPM's PSHB central enrollment system. Commenters requested elements such as specific data fields, a total cost calculator, and filtering capabilities.
Response: OPM appreciates the comments and will consider the recommendations in the system design. In
That request for proposal (RFP) is available at https://sam.gov/opp/94b39c9c3e504c02ae593ab3fab7a342/view.
The RFP includes nearly 300 distinct requirements, including determining eligibility based on listing all necessary data fields to manage eligibility and enrollment, the ability for users to calculate total costs, and sort and filter plan information. OPM is on track with development of the system and is determining how and when these functionalities will be rolled out. /7/
FOOTNOTE 7 From the PSHB System Performance Work Statement (https://sam.gov/api/prod/opps/v3/opportunities/resources/files/81805a8de14f4084b5650da08d347e42/download?&status=archived&token=) "Starting in the fall of 2024, the system will process all enrollments and changes in enrollments for PSHB, including open season transactions, qualifying life events, and enrollments for newly eligible. The fully functional system will provide an account-based, one-stop-shop where enrollees can: (1) compare and learn about PSHB plan options, including benefits, provider networks, formulary, cost-sharing, and total out-of-pocket expenses, (2) select a plan that fits the unique needs of their family, and (3) complete the enrollment process. The system will also serve as the authoritative source for PHSBP enrollment data, ensure enrollee eligibility by exchanging data with relevant Federal agencies, and provide real-time enrollment and premium transaction information to all employing agencies and participating PSHBP health insurance issuers (herein referred to as Carriers)." END FOOTNOTE
Comment: One commenter requested that OPM continue to provide periodic updates to carriers as the centralized enrollment system is developed, so that carriers can make appropriate adjustments to their systems and processes.
Response: OPM intends to continue regular communications with carriers as OPM's plans for the central enrollment system development. Carriers may contact their OPM contract representatives with specific questions.
H.
The interim final rule included several provisions related to contracting, including requirements for PSHB Carriers and PSHB plans.
Comment: Several commenters had specific recommendations about contracts, including details about the contract effective date and several comments related to accounting principles.
Response: OPM appreciates the comments and notes that PSHB contracting details are outside the scope of the regulation.
I. Automatic Enrollment
The interim final rule implemented the requirement that
Comment: A commenter requested clarification on 5 CFR 890.1605(c), regarding how automatic enrollment will work for a carrier that has three FEHB plan options but intends to offer only two PSHB plan options.
Response: In the interim final rule at
Comment: One commenter asked for clarity regarding the definition of a carrier for purposes of automatic enrollment and recommended that OPM allow automatic enrollment into the same carrier as under FEHB, regardless of whether the plans available in the PSHB Program are offered under a different contract than the enrollee's current FEHB plan.
Response: In the interim final rule, OPM defined "PSHB Carrier" at 48 CFR 1602.170-20, as follows: "PSHB Carrier means a carrier that enters into a contract with OPM under 5 U.S.C. 8902 to offer a health benefits plan in the PSHB Program." The interim final rule provided that the enrollee is automatically enrolled into a PSHB plan offered by the same carrier. This is true even though the PSHB plan is under a different contract with OPM than the enrollee's 2024 FEHB plan. OPM will automatically enroll the enrollee into a PSHB plan offered by a different carrier (the lowest-cost nationwide PSHB plan option that is not a high deductible health plan and does not charge an association or membership fee) if the carrier of the enrollee's 2024 FEHB plan does not offer a PSHB plan in 2025.
J. Health Benefits Education Program
Comment: One commenter requested that OPM provide outreach and education to
Response: The
In
OPM and the
The
Additionally, PSHB plan premiums will be made public in
K. Prescription Drug Benefits and Integration of Medicare Part D
As noted in the preamble to the interim final rule, PSHB plans must provide prescription drug benefits through Medicare Part D to
Comment: Several commenters asked about how the timing of Medicare Part D coverage will align with the
Response: OPM appreciates the comment and is actively engaged with key stakeholders to ensure that enrollees and covered family members experience a seamless enrollment process. OPM notes that the proposed rule will provide more information regarding PSHB Program implementation of Medicare Part D coverage.
Comment: One commenter requested that OPM address perceived conflicts between the
Response: OPM, through its guidance, rate and benefits negotiations, contract administration and negotiations process, will ensure that carriers' plan proposals are in compliance with all applicable requirements.
Comment: One commenter raised a concern about OPM's method for automatically enrolling members who do not choose a PSHB plan during the transitional Open Season in 2024. This commenter was concerned about whether members may be automatically enrolled into a plan with a standalone PDP, and whether an MA-PD plan may be more advantageous for such members.
Response: As directed by the PSRA, PSHB Carriers must integrate Medicare Part D into their PSHB plan design through a PDP or a contract with a PDP sponsor. OPM will also consider approving a carrier's MA-PD plan so long as the carrier provides a PDP. Whether a carrier provides Medicare Part D through a PDP or through a PDP and MA-PD does not affect automatic enrollment into a PSHB plan during the transitional Open Season. If an individual wants to be covered by a PDP or MA-PD, if available, under a PSHB plan enrollment then the enrollee may choose a PSHB plan with the desired prescription drug benefits during the transitional Open Season. OPM notes that the proposed rule will provide more information regarding program implementation, including group enrollment and Medicare Part D plans including MA-PD plans.
Comment: One commenter asked that OPM encourage or require PSHB plans to offer health reimbursement arrangements (HRAs) with sufficient funds to offset the cost of any Medicare Part D income-related monthly adjusted amount (IRMAA), or alternatively, to reduce the costs of Part B premiums or other out-of-pocket expenses if not subject to IRMAA.
Response: PSHB Carriers may propose to offer HDHPs with an HRA, and individuals may enroll in such a plan and use the HRA to help pay for qualified medical expenses, Medicare premiums including any applicable IRMAA, and other qualified medical expenses. As demonstrated in the
L. Medicare Part B Special Enrollment Period (SEP)
The PSRA authorized a 6-month Medicare Part B SEP that will run from
Medicare-eligible individuals may have several opportunities to sign up for Medicare. More information is available at the CMS website here: https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-can-i-sign-up-for-medicare. If an individual does not enroll in Medicare Part B at their earliest opportunity, they may be subject to a permanent Medicare Part B late enrollment penalty. /8/ The PSRA allows the
FOOTNOTE 8 https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties. END FOOTNOTE
FOOTNOTE 9 https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start#SEP. END FOOTNOTE
Comment: A commenter asked if OPM and SSA will include any additional criteria to determine who is eligible for the SEP.
Response: OPM does not have the authority to establish eligibility criteria for the Medicare Part B SEP. Under the PSRA, the SEP is available to a
Comment: A commenter requested further clarification regarding the SEP for PSHB, asking specifically if OPM intends to create an appeals process for those who believe that they are eligible for SEP but were misinformed or were never informed.
Response: OPM is coordinating with SSA and the
Comment: A commenter requested clarification as to whether any PSHB plan information will be available at the beginning or during the SEP to allow individuals eligible to enroll in Medicare Part B during the SEP to consider the PSHB plans in deciding whether to enroll in Part B.
Response: The PSRA authorized a 6-month Medicare Part B SEP that will run from
Comment: A commenter asked if OPM would consider extending the SEP to ensure Medicare Part B decisions and PSHB decisions can be made at the same time.
Response: The Medicare Part B SEP is established by statute under the PSRA and is administered by SSA. The authorizing language for the SEP, codified in the Social Security Act at section 1837(o)(1)(B) (42 U.S.C 1395p(o)(1)(B)) states that eligible individuals "may elect to be enrolled under this part during a special enrollment period during the 6-month period beginning on
Comment: A commenter asked when individuals would be notified about SEP eligibility.
Response: OPM is coordinating with SSA and the
M.
Comment: A commenter made a recommendation about the timing of the maximum Government contribution calculation and recommends that OPM release the maximum Government contribution earlier to create fair competition between all carriers.
Response: In the interim final rule, OPM addressed the
N. Allocation of Carrier Reserves
Comment: One commenter recommended that OPM promote fair allocation of carrier reserves.
Response: OPM issued Carrier Letter 2023-13 (CL 2023-13) in
Comment: One commenter inquired about the effect of PSHB on
Response: All payment options that are available for FEHB plans, including direct pay, will be available for enrollees in PSHB plans. Note that, if an annuitant pays both the employee share and the Government's share of premium, then the annuitant is not within the statutory definition of a
Regulatory Changes in This Final Rule
OPM is amending
OPM is making this change to provide more clarity as to the applicability of exceptions to the Medicare Part B enrollment requirement under 5 CFR 890.1604. The statutory language in 5 U.S.C. 8903c(e), "as of"
Therefore, OPM is clarifying timing aspects of several exceptions to the requirement to enroll in Medicare Part B. Specifically, OPM is clarifying that the statutory exception at 5 U.S.C. 8903c(e)(3)(A)(i), which applies to individuals "as of"
OPM is revising the regulatory text of
We are reserving
OPM is revising
Under part 890, OPM has imposed similar responsibilities on individuals to inform OPM of any changes that may affect their or their family member's eligibility or coverage, for instance, if an individual is covered under another insurance plan. (See 5 CFR 890.302(a)(2)(ii), "To ensure that no person receives benefits under more than one enrollment, each enrollee must promptly notify the insurance carrier as to which person(s) will be covered under his or her enrollment; see also 5 CFR 890.1605(d)(2) "The enrollee must affirmatively notify the PSHB Carrier, employing office, or OPM of any changes to members of family;" and
OPM is correcting a typo in
The changes outlined in this section do not affect OPM's estimation of the regulatory impact of the PSHB Program.
Regulatory Impact Analysis
A. Need for Regulatory Action
This final rule follows an interim final rule implementing sections 101 and 102 of the PSRA, which direct OPM to establish the
The PSHB Program is contained within chapter 89, which governs the FEHB Program generally. The PSRA confirms that PSHB plans are subject to the same provisions as FEHB plans unless they are inconsistent with the PSRA. OPM is given the discretion to make such determinations.
Section 101 of the PSRA, codified at 5 U.S.C. 8903c, directs OPM to issue regulations establishing the PSHB Program and gives OPM the discretion to include "any provisions necessary to implement this section." Section 8903c(g) addresses the topics for which
B. Summary of Impacts
Overall, the PSRA and the PSHB Program, through this final rule, promote the financial stability and long-term viability of the
This societal benefit will result primarily from the removal of the prefunding obligation related to future retiree health benefits and the shifting of insurance coverage costs away from the
From a societal perspective, the primary costs associated with the implementation of the PSHB Program will be administrative and operational costs necessary to initiate and maintain the program, including development of information technology (IT) systems, education and outreach, and additional administrative staffing for the design, maintenance, and oversight of the increased quantity of health plans. These costs will be largest in the initial start-up phase and will be borne by Federal agencies, as well as carriers offering both FEHB plans and PSHB plans. The PSRA appropriated
Most of the impact from the PSRA and this regulation will occur via distributional effects. The principal transfer will be the shifting of premium costs from the
FOOTNOTE 10 H.R. 3076, Postal Service Reform Act of 2021--Cost Estimate,
Ultimately, the total costs and benefits associated with the PSRA and this final rule are highly uncertain because enrollee and carrier reactions to the effects on Medicare, the FEHB Program, and the new PSHB Program are unknown. In accordance with
C. Regulatory Baseline
The regulatory baseline for the final rule is the FEHB Program as it is currently administered, as the eligible population under both programs will largely remain the same.
Beginning in the 2025 plan year, the PSHB Program will be the only health benefits program available through the
Currently,
Prior to the PSRA, the
Carriers that participate in the PSHB Program will generally be subject to the same minimum requirements for plan design that exist for FEHB plans under the FEHB Program, but PSHB plans will be required to integrate Part D prescription drug benefits for Postal Service Medicare covered annuitants and Medicare covered members of family. In addition, carriers that are offering both PSHB plans and FEHB plans will need to offer equivalent benefits and cost sharing in the initial year, other than as needed to integrate Part D coverage.
D. Benefits of Regulatory Action and Implementation
The interim final rule implemented the requirements of the PSRA. That rule built on the statute by offering clarity and efficient implementation. The timely promulgation of the interim final rule allowed other Federal agencies, PSHB Carriers, and enrollees to begin necessary education and deliberation. This final rule corrects a typographic error in the interim final rule and clarifies some exceptions to the Medicare Part B enrollment requirement.
The
FOOTNOTE 11 The
Within these communities, the
FOOTNOTE 12 Audit Report Mail Service During the Early Stages of the COVID-19 Pandemic,
FOOTNOTE 13
With greater financial stability for the
Medicare covered annuitants may be eligible, depending on whether they meet statutory income and resource thresholds, for the low-income cost-sharing subsidies and premium subsidies that are part of the Medicare part D program, under section 1860D-14 of the Social Security Act.
E. Costs of Regulatory Action and Implementation
Implementation of the PSRA and this final rule necessitates the administration and oversight of new health benefits plans, including substantial member education and outreach efforts, additional interagency coordination and the creation of new IT processes to satisfy new statutory eligibility and enrollment requirements, creating startup and ongoing costs to agencies, enrollees, and carriers. Table 1 summarizes the assessment of the administrative costs associated with this regulatory action.
This table illustrates OPM's best estimate of costs, including startup and ongoing maintenance costs given the information available from OPM and other agencies at this time. The costs are still subject to modification as the program implementation continues. For the purposes of this regulatory impact assessment (RIA), Startup Costs were defined as upfront, non-recurring costs associated with the PSRA implementation, including regulatory review costs, and are represented as aggregate total expenditures for the years leading up to and immediately following the PSHB implementation. Ongoing Costs were defined as recurring costs (e.g., salary costs) beginning in the years preceding or immediately following the PSRA implementation and expected to persist through at least FY2032. All ongoing costs are presented as fully loaded, annual totals. Given that onboarding and development will occur during the run-up period, ongoing costs are expected to gradually ramp up between FY2022-FY2025 and become fully loaded by the beginning of FY2026. These estimates for ongoing costs are preliminary, and funding for ongoing costs would be subject to the annual budget process.
Table 1-Estimated Administrative and Implementation Costs Associated With This Final Rule
Agency/category Startup costs Ongoing costs
fn1
OPM fn2 $ 81,680,944 $ 49,315,703
Personnel 24,434,476
IT and IT Contracts 68,307,195 20,961,759
Non-IT Contracts 3,600,000 1,735,695
General (Supplies, Equipment, Communications, Training) 9,773,749 2,183,773
Postal Service 11,500,000 1,425,000
Implementation costs (updating systems, developing training materials, etc.) 11,500,000
Personnel (4 Program and 2 IT full-time employees (FTEs)) $ 925,000
Communications 500,000
Department of Labor 72,500 2,000
Training and Communication 72,500
Additional support and communication for separate Open Season 2,000
Department of Veterans Affairs 395,000
IT Contracts 395,000
Social Security Administration 7,327,764 407,881
Staffing and Overhead 5,161,138 407,881
System Updates 2,166,626
Ongoing Data Exchange TBD
Indian Health Service
Carriers Unknown Unknown
Total Known Administrative and Implementation Costs 100,976,208 51,150,584
fn1 Ongoing costs represented as fully loaded annual costs beginning in FY2026 and remaining consistent through at least FY2032. Given that development and onboarding will occur during run-up period to PSHB implementation, ongoing costs will likely cross multiple fiscal periods and gradually ramp up between FY2022 and FY2025, although all costs are expected to become fully realized beginning in FY2026. All costs are represented based on 2022 dollars and pay scales and are subject to change based on PSHB enrollment and carrier participation following implementation.
fn2 Table 1 does not utilize estimates from OPM's FY 2025 Congressional Budget Justification (CBJ). The FY 2025 CBJ estimates would reflect $ 80.1 million startup and $ 51.7 million ongoing costs.
Table 2 depicts the projected allocation of total startup and ongoing costs by year for fiscal years (FY) 2022 through 2032. Given that operations and maintenance activities are occurring in the run-up period, albeit at a different intensity, and a portion of start-up costs were allocated for go-live and post go-live support (e.g., call centers), the expected costs for FY2022-FY2025 are composed of both startup and ongoing costs. Beginning in FY2026, expected costs are all attributable to recurring operational and maintenance activities.
Table 2-Projected Total Administrative and Implementation Costs by Year-All Agencies, FY2022-2032 Type of Cost fn1 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Startup Costs$ 3.68 $ 48.49 $ 46.74 $ 2.06 Recurring Costs 3.69 17.98 28.39 50.47 51.15 51.15 51.15 51.15 51.15 51.15 51.15 Total Costs 7.38 66.47 75.14 52.53 51.15 51.15 51.15 51.15 51.15 51.15 51.15 fn1 Annual cost projections are in terms of 2022 dollars and pay scales and do not reflect any adjustments for inflation, discounting, staffing promotions, etc. This table is intended only to summarize the expected timing of the costs outlined in table 1 and is not meant to reflect budgetary expectations.
Detailed Startup and Ongoing Cost Related to the PSRA
The following sections contain underlying details for the cost estimates presented in table 1, including, where appropriate, the assumptions and methodology used by individual agencies in preparing them. For the purposes of this regulatory impact assessment (RIA), Startup Costs were defined as upfront, non-recurring costs associated with the PSRA implementation, including regulatory review costs, and are represented as aggregate total expenditures for the years leading up to and immediately following the PSHB implementation. Ongoing Costs were defined as recurring costs (e.g., salary costs) beginning in the years preceding or immediately following the PSRA implementation and expected to persist through at least FY2032. All ongoing costs are presented as fully loaded, annual totals. These estimates for ongoing costs are preliminary, and funding for ongoing costs would be subject to the annual budget process.
OPM
Startup Costs: OPM estimates a total of
The remaining
Ongoing Costs: As this is a new program, additional staffing and resources will be essential to establish and administer the PSHB. OPM estimates a total of
The above costs are represented as fully loaded annual projections based on 2022 dollars. Salaries and overhead (benefits, equipment, etc.) were based on 2022 pay tables and
Startup Costs: The
Ongoing Costs: In preparation for and following implementation of the PSHB, the
Department of Labor--
Startup Costs: OWCP estimates a total of
Ongoing Costs: Beginning in 2025, OWCP estimates an additional
Startup Costs: The
Startup Costs: SSA estimates
Ongoing Costs: SSA anticipates approximately 3 FTEs will be needed to support the PSHB following implementation, with estimated salary and overhead costs totaling
Carriers (Not Quantified)
Carriers will also have startup costs to participate in the PSHB Program, although the magnitude of these costs is unknown and will likely vary by carrier. Based on the 2021 FEHB headcount, OPM estimates that 41 FEHB Carriers provide coverage to
In developing plan options for the PSHB, carriers will not simply be able to duplicate FEHB plan designs as the requirement to integrate Part D coverage is substantively different. While large carriers may be able to leverage existing experience integrating Medicare Part D coverage in their other books of business, the need to apply and submit a different PSHB proposal will be a cost to carriers. PSHB Carriers will continue to incur annual costs to offer plans as there will need to be two sets of proposals, contract negotiations, and enrollment processing for carriers offering both PSHB and FEHB plans. This will likely create additional staffing costs on an ongoing basis.
Postal Service Annuitants (Not Quantified)
Existing and future
As with the training and communications costs for the first year,
Transfers
The main impact of section 101 of the PSRA and these rules will be a transfer of costs from the
FOOTNOTE 14 FEHB Program Carrier Letter Number 2023-02, FEHB and Medicare Part D Prescription Drug Coordination (published
Table 3-Net Transfer Effects
Projected Change in Annual Coverage Costs Due to PSRA ( $ Billions)
Agency/Outlay FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY23-27 FY23-32
CMS fn1 0.00 0.00 0.00 0.50 0.76 0.92 1.11 1.16 1.35 1.53 1.73 2.18 9.06
Part B, net of premium fna 0.00 0.00 0.00 0.09 0.18 0.24 0.31 0.39 0.47 0.57 0.68 0.51 2.93
Part D, net of premium and clawback fnb 0.00 0.00 0.00 0.41 0.58 0.68 0.80 0.77 0.88 0.96 1.05 1.67 6.13
USPS fn2 0.00 0.00 0.00 - 0.30 - 0.30 - 0.30 - 0.30 - 0.40 - 0.40 - 0.40 - 0.40 - 0.90 - 2.80
USPS share of employee premiums 0.00 0.00 0.00 - 0.30 - 0.30 - 0.30 - 0.30 - 0.40 - 0.40 - 0.40 - 0.40 - 0.90 - 2.80
PSRHBF Annuitant Premiums fn3 0.00 0.00 0.00 - 0.17 - 0.23 - 0.29 - 0.36 - 0.45 - 0.49 - 0.53 - 0.58 - 0.69 - 3.10
PSRHBF Share of Annuitant Premiums 0.00 0.00 0.00 - 0.17 - 0.23 - 0.29 - 0.36 - 0.45 - 0.49 - 0.53 - 0.58 - 0.69 - 3.10
FEHB and Federal Share USPS Premiums fn3 0.00 0.00 0.00 - 0.09 - 0.09 - 0.10 - 0.10 - 0.10 - 0.11 - 0.11 - 0.12 - 0.28 - 0.83
Payments for NP annuitant premiums 0.00 0.00 0.00 - 0.06 - 0.07 - 0.07 - 0.07 - 0.08 - 0.08 - 0.09 - 0.09 - 0.20 - 0.61
Federal Share of USPS Annuitant Premiums 0.00 0.00 0.00 - 0.03 - 0.03 - 0.03 - 0.03 - 0.03 - 0.03 - 0.03 - 0.03 - 0.08 - 0.21
Employee and Annuitant Share of Premiums 0.00 0.00 0.00 - 0.26 - 0.26 - 0.25 - 0.25 - 0.25 - 0.25 - 0.24 - 0.23 - 0.76 - 1.98
Postal employee share PSHB premiums fn2 0.00 0.00 0.00 - 0.10 - 0.11 - 0.12 - 0.13 - 0.14 - 0.15 - 0.16 - 0.17 - 0.34 - 1.09
Postal annuitants share PSHB premiums fn2 0.00 0.00 0.00 - 0.11 - 0.12 - 0.14 - 0.15 - 0.16 - 0.17 - 0.18 - 0.19 - 0.37 - 1.22
Non-Postal employee share FEHB premiums fn3 0.00 0.00 0.00 - 0.04 - 0.04 - 0.04 - 0.04 - 0.05 - 0.05 - 0.05 - 0.05 - 0.12 - 0.36
Non-Postal annuitant share FEHB premiums fn3 0.00 0.00 0.00 - 0.03 - 0.03 - 0.03 - 0.03 - 0.04 - 0.04 - 0.04 - 0.04 - 0.09 - 0.28
Postal annuitant premiums for Medicare B fn1a 0.00 0.00 0.00 0.03 0.05 0.08 0.11 0.13 0.16 0.19 0.23 0.16 0.98
The estimated costs in this table were aggregated from multiple, independent analyses conducted by separate agencies, and are intended only to represent the directional flow of costs between various stakeholders. Due to the differences in assumptions and methodology employed by each agency (as detailed below), the cumulative impacts represented in this table do not directly align with the general expectation, as detailed in the narrative below, that aggregate premium payments will be lower post-PSRA due to the transfer of costs to drug manufacturers via mandatory Part D discounts. All estimates are based on coverage provisions as of 2023 and do not reflect expected changes to pharmaceutical coverage from the Inflation Reduction Act or Carrier Letter Number 2023-04, the 2023 FEHB Call Letter.
Sources and methodology:
fn1 Projected Medicare costs for additional Part B and Part D enrollment were provided by CMS.
fna Part B projections were based on an assumption that about 7,000 new retirees plus spouses would enroll in Part B in 2025, and growth would be consistent with aged enrollment. Additionally, CMS assumed that roughly 14,000 existing retirees would enroll in 2025, which would degrade over time due to deaths. Expected costs and premiums for additional enrollees were assumed to be consistent with current average Part B beneficiaries.
fnb CMS estimated additional Part D costs based on projected annual headcounts of Postal Service annuitants. Annual headcounts were estimated using the 2021 Postal Service annuitant enrollment total (approximately 515,000) and applying an annual growth rate based on the number of new postal retirees in 2021. Growth estimates were trended by the projected annual growth in overall Part A and/or Part B enrollment and were decremented yearly by the annual mortality rates from SSA for ages 70-75. Using this methodology, CMS estimated that approximately 603,000 postal retirees would join Part D in 2025 and that this population would grow to 797,000 by 2032. To project annual Part D spending on Postal retirees, CMS assumed a 90/10 split between PDP-EGWP and MAPD-EGWP, and annual costs consistent with current beneficiaries in each of these enrollment categories.
fn2 Based on estimates provided by USPS actuaries and budget analysts. Projected savings on PSHB premiums are based on the expected reduction in the portion of retirees' medical costs that will be paid by PSHB plans, which is expected to lower overall costs in the combined pool of annuitants and employees and reduce premiums. USPS assumed that 30% of grandfathered annuitants would enroll in Part B during the SEP, resulting in 30,000 new enrollments in 2025. Annual projections for current and annuitant Postal enrollee populations were based on mortality and retirement projections for the postal population, which were developed by OPM.
fn3 Estimates from OPM Office of Administration (OA) Budget Summary as of January 2023 . Assumed 30% of grandfathered annuitants and family members would join during SEP and stable population of total annuitants from 2025-2032 (annual new retirees + family members [approximate] deaths in Postal annuitant population). Differential costs of FEHB and PSHB population was estimated using age distribution in the two populations, which skews slightly higher for Postal, and historical average costs by age band for the joint FEHB population. OA estimates a 5.8% reduction in average PSHB premiums beginning in 2025, which is attributed to the Part B and Part D requirements, and a 0.4% reduction in average FEHB premiums. Annual projections assumed a 4.8% medical inflation rate.
The mandatory Medicare Part B enrollment for all future Postal Service Medicare covered annuitants enrolled in PSHB starting in 2025, as well as the optional Part B enrollment for current annuitants who are entitled to Part A, will shift a portion of Government share of premium costs for these individuals away from the
Medicare Part B enrollment and the shift of healthcare costs to Medicare will lower the aggregate costs among the PSHB population as Medicare will cover a larger portion of healthcare costs for
As required in the PSRA, the
Uncertainty and Directional Effects Related to Enrollment, Utilization, and Carrier Participation
The summary above is based on baseline assumptions that plan enrollment, carrier participation, and healthcare utilization will remain consistent following implementation of the PSHB Program. It is likely that implementation of the PSHB Program and the additional Medicare enrollment requirements will impact some or all of these baseline assumptions, which will have downstream effects for cost and utilization within both the PSHB and FEHB populations. The magnitude and directionality of these effects will depend on several factors that are presently uncertain.
Individual carriers will likely weigh the costs and benefits of offering FEHB plans and PSHB plans. Shifting enrollment numbers and additional implementation costs may lead some carriers to scale back or discontinue offering both FEHB and PSHB plans. This would impact the number of available plan options for both PSHB and FEHB enrollees, as well as the likelihood that enrollees will be able to remain enrolled in a plan with the same carrier and have a consistent choice of plans and options from year to year. However, as noted below, it is likely that the PSRA will increase the total number of plans covering the
PSHB enrollees required to enroll in Medicare Part B would be subject to additional premiums, which may impact the likelihood of their enrollment in PSHB plans. It is estimated that around 25% of
The additional Medicare Part B and Part D coverage may also induce a moral hazard effect due to the more robust coverage and lower cost-sharing. Moral hazard refers to the tendency of individuals to increase health care utilization and spending in response to greater coverage or lower out-of-pocket costs. If an individual is required to enroll in Medicare, they may feel more compelled to utilize the benefits, increasing overall health care consumption. This effect could increase utilization of both necessary and unnecessary health services upon introduction of increased coverage and lower cost sharing. Increased utilization among these individuals would increase the overall per member costs within the PSHB plans which may result in higher premiums and potentially impact health outcomes.
Because not all carriers will offer both FEHB plans and PSHB plans, the result is smaller risk pools within each plan option, which could lead to greater uncertainty with respect to costs. With smaller risk pools, each enrollee's health status has a larger impact on total costs. This can create greater variability in annual premiums. Smaller risk pools increase individual plans' exposure to high-cost outlier events, as there are fewer low or average-cost enrollees to offset these costs. Administrative costs would also be spread across smaller risk pools. To ensure financial solvency in such scenarios, plans may seek to price this additional risk exposure into premiums, resulting in an increase in the aggregate costs for all PSHB plan and FEHB plan enrollees compared to the baseline.
At present, there remains a great deal of uncertainty with respect to the longer-term impacts on plan enrollment, carrier participation, plan design, and plan premiums. It is possible that a number of FEHB Carriers will elect not to participate in the PSHB Program or to drop their current FEHB plan offerings. Consolidation within the FEHB and PSHB markets would likely benefit larger carriers and may yield some efficiencies through greater economies of scale, although on aggregate, it is expected that PSHB implementation will result in a greater number of total plans across both the FEHB and PSHB Programs and increased administrative costs and premiums. Fewer options within the PSHB Program may also simplify plan choice for employees and annuitants, saving time on plan comparisons.
Enrollment in the PSHB Program, particularly among individuals who are required to enroll in Medicare Part B, is also uncertain. For future
F. Alternatives
There are no feasible alternatives to the final rule as it implements section 8903c, as added by the PSRA, which establishes the PSHB Program and is mandated by the law. Therefore, OPM does not have the discretion to forego issuing regulations altogether. However, we considered alternatives to certain aspects of this regulation.
Initial Enrollment in the PSHB Program and Medicare Part B
OPM recognizes that, for a small portion of
We explored an opportunity for
Allowing individuals to pre-enroll in PSHB plans during the SEP means they would sign up for a plan without knowing their PSHB premium obligation. Similarly, because OPM will not have certified the PSHB plans by the time the Medicare SEP occurs, there would be no way for an individual to know whether a given carrier will be participating in the PSHB Program for the next plan year, let alone what the final contract would look like. In general, while allowing those annuitants taking advantage of the Medicare SEP to simultaneously pre-enroll in a PSHB plan seems like it could reduce confusion and frustration from having two separate enrollment obligations, the timing of simultaneous PSHB pre-enrollment and the Medicare SEP would mean choosing a PSHB plan with unknown benefits and premiums and likely having to review the selection again during the PSHB Open Season period to ensure that the plan an individual pre-enrolled in actually makes sense for them once plan details are finalized and approved by OPM.
Much of the rationale for considering PSHB plan pre-enrollment can be achieved by providing information about automatic enrollment to
Centralized Enrollment
OPM is developing a centralized enrollment system simultaneously with the implementation of the PSHB Program. As explained above, the centralized enrollment system will shift certain responsibilities from the employing office to a new system which will function as an electronic enrollment solution for all PSHB stakeholder groups. Developing a centralized enrollment system for the PSHB Program allows OPM to take advantage of IT solutions and create a modern enrollment system for
PSHB Plan Coverage Effective Date
OPM considered keeping the effective date of coverage for coverage under PSHB Plans as the first day of the first pay period of the calendar year for
The benefits of a
Regulatory Review
OPM has examined the impact of this rule as required by Executive Orders 12866, 13563, and 14094, which direct 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).
Regulatory Flexibility Act
The Director of OPM certifies this regulation will not have a significant economic impact on a substantial number of small entities.
Federalism
OPM has examined this rule in accordance with Executive Order 13132, Federalism, and has determined that this rule will not have any negative impact on the rights, roles and responsibilities of State, local, or Tribal governments.
Civil Justice Reform
This regulation meets the applicable standard set forth in Executive Order 12988, Civil Justice Reform.
Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending by State, local, and Tribal governments in any 1 year of
Congressional Review Act
Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act) (5 U.S.C.
Paperwork Reduction Act of 1995 (44
Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid OMB Control Number.
In the interim final rule, OPM requested comment on what, if any, information collection activities may be required by this rulemaking, including any comments on whether to create a new information collection or revise the information collection for SF-2809, Health Benefits Election Form, under OMB Control number 3206-0160. A commenter recommended that OPM update the existing Standard Form (SF) 2809 for
The information collection for form SF-2809 (OMB Control Number 3206-0160) is currently approved with an estimated public burden of 9,000 hours. The information collection (OMB Control number 3206-0141) associated with that form is currently approved with an estimated public burden of 11,667 hours.
A list of routine uses associated with these forms can be found in the Privacy Act System of Records Notice (SORN), OPM/CENTRAL 1 Civil Service Retirement and Insurance, available at https://www.opm.gov/information-management/privacy-policy/sorn/opm-sorn-central-1-civil-service-retirement-and-insurance-records.pdf.
Participants in the 6-month Medicare Part B SEP will use form CMS 40B, Application for Enrollment in Medicare--Part B (
List of Subjects in 5 CFR Part 890 Administrative practice and procedure, Government employees, Health facilities, Health insurance, Health professions,
Kayyonne Marston,
Federal Register Liaison.
For reasons stated in the preamble, OPM is adopting the interim rule amending 5 CFR part 890 published on
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. 890.102 also issued under sections 11202(f), 11232(e), and 11246 (b) of Pub. L. 105-33, 111 Stat. 251; Sec. 890.111 also issued under 36 U.S.C. 5522; Sec. 890.112 also issued under 2 U.S.C. 2051; Sec. 890.113 also issued under section 1110 of Pub. L. 116-92, 133 Stat. 1198 (5 U.S.C. 8702 note); Sec. 890.301 also issued under 26 U.S.C. 9801; Sec. 890.302(b) also issued under 42 U.S.C. 300gg-14; Sec. 890.803 also issued under 50 U.S.C. 3516 (formerly 50 U.S.C. 403p) and 22 U.S.C. 4069c and 4069c-1; subpart L also issued under section 599C of Pub. L. 101-513, 104 Stat. 2064 (5 U.S.C. 5561 note); subpart M also issued under 10 U.S.C. 1108 and 25 U.S.C. 1647b; and subpart P issued under 5 U.S.C. 8903c.
Subpart P--Postal Service Health Benefits Program
2. Revise
(a) Annuitant. A
(b) Member of family. A Postal Service Medicare covered annuitant's member of family who is entitled to Medicare Part A must be enrolled in Medicare Part B to be covered or continue coverage in a health benefits plan under this subpart, unless:
(1) The Postal Service Medicare covered annuitant is excepted from the requirement to enroll in Medicare Part B as provided by paragraphs (d)(1)(i) through (v) of this section; or
(2) The member of family is excepted from the requirement to enroll in Medicare Part B as provided by paragraphs (d)(2)(i) through (iv) of this section.
(c) [Reserved]
(d) Exceptions. The Medicare Part B enrollment requirements provided in paragraphs (a) and (b) of this section do not apply:
(1) To a Postal Service Medicare covered annuitant who--
(i) Was a
(ii) Was a
(iii) Resides outside
(iv) Is enrolled in health care benefits provided by the
(v) Is eligible for health services from the
(2) To a Medicare covered member of family who--
(i) Is eligible for PSHB coverage under the PSHB enrollment of a Postal Service Medicare covered annuitant who is not required to enroll in Medicare Part B, as provided in paragraphs (d)(1)(i) through (v) of this section;
(ii) Resides outside
(iii) Is enrolled in health care benefits provided by the
(iv) Is eligible for health services from the
(e) Documentation requirements. To qualify for an exception under paragraph (d) of this section, a Postal Service Medicare covered annuitant, or a Medicare covered member of family must meet one of the following documentation requirements:
(1) Documentation or information in a form, manner, and frequency as prescribed by OPM demonstrating qualification, satisfactory to the
(2) Documentation from the
(3) Documentation from the
(f) Notification of non-enrollment in Part B. A Postal Service Medicare covered annuitant or a Medicare covered member of family who is required to be enrolled in Medicare Part B must promptly notify the
(g) Effect of non-enrollment in Part B. Failure to enroll or disenrollment from Medicare Part B will have the effect of a termination of PSHB coverage, as described in
3. Amend
*****
(e) Under this subpart, an enrollment, change of enrollment, or reenrollment made during Open Season takes effect on
*****
[FR Doc. 2024-09565 Filed 5-3-24;
BILLING CODE 6325-63-P
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