Postal Service Health Benefits Program: Additional Requirements and Clarifications

OFFICE OF PERSONNEL MANAGEMENT <CFR>5 CFR Part 890</CFR> <DEPDOC>[Docket ID: OPM-2024-0002]</DEPDOC> <RIN>RIN 3206-AO59</RIN> <SUBJECT>Postal Service Health Benefits Program: Additional Requirements and Clarifications</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of Personnel Management. <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Office of Personnel Management (OPM) is issuing a notice of proposed rulemaking to clarify and establish additional requirements regarding the Postal Service Health Benefits (PSHB) Program, which was established pursuant to the Postal Service Reform Act of 2022. This proposed rule expands on previous regulations concerning the PSHB Program and is intended to provide greater detail and clarity necessary to properly implement PSHB in 2025 and beyond. In particular, this proposed rule includes details on: reconsideration of PSHB eligibility decisions, various applications of the Medicare Part B enrollment requirement, allocation of reserve credits, calendar year alignment of Government contribution requirements, financial reporting and actuarial calculations, premium payment prioritization from the Postal Service Retiree Health Benefits Fund, and Medicare Part D integration. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received on or before June 24, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit comments, identified by docket number or Regulation Identifier Number (RIN) and title, by the following method: <E T="03">Federal eRulemaking Portal: https://www.regulations.gov.</E> Follow the instructions for submitting comments. All comments received must include the agency name and docket number or RIN for this document. The general policy for comments from members of the public is to make them available for public viewing at <E T="03">https://www.regulations.gov</E> without change, including any personal identifiers or contact information. However, OPM retains discretion to redact personal or sensitive information from comments before they are posted. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Cameron Stokes, Senior Policy Analyst, at (202) 936-2847 or <E T="03">Cameron.Stokes@opm.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> Section 101 of the Postal Service Reform Act of 2022 (PSRA), Public Law 117-108, added new section 8903c to 5 U.S.C. chapter 89 and directs OPM to establish the PSHB Program within the Federal Employees Health Benefits (FEHB) Program for Postal Service employees, Postal Service annuitants, and their eligible family members. OPM will administer the PSHB Program in accordance with 5 U.S.C. chapter 89 and implementing regulations (5 CFR parts 890 and 892, and 48 CFR chapter 16), including any amendments resulting from this rulemaking. Under 5 U.S.C. 8903c(c)(3), except as otherwise set forth in 5 U.S.C. 8903c, the provisions of chapter 89 “applicable to health benefits plans offered by carriers under section 8903 or 8903a shall apply to plans offered under” the PSHB Program. On April 6, 2023, OPM issued an interim final rule (88 FR 20383) to establish the PSHB Program. The interim final rule became effective on June 5, 2023. On May 6, 2024, OPM published a final rule (89 FR 37061) that made minor changes to the regulations in response to public comments. (This notice of proposed rulemaking refers to the interim final rule and the final rule collectively as the “initial rulemaking.”) However, as program development and interagency coordination continued after publication of the interim final rule, OPM determined a need to provide additional specification on several topics that were beyond the scope of that initial rulemaking. While that initial rulemaking established the Program, this proposed rule further explains and expands on the implementation of the PSHB Program to provide clarity for PSHB Carriers, other agencies, and Postal Service employees and Postal Service annuitants before the program begins enrollment for 2025. In particular, OPM is proposing to provide implementation details on several additional topics: reconsideration of initial decisions concerning PSHB eligibility; application of the Medicare Part B enrollment requirement and associated exceptions in specific scenarios; allocation of reserve credits; calendar year alignment of government contribution requirements; financial reporting and actuarial calculations; premium payment prioritization from the Postal Service Retiree Health Benefits Fund; and Medicare Part D integration. <HD SOURCE="HD1">Discussion of the Proposed Changes</HD> <HD SOURCE="HD2">Initial Decision and Reconsideration of PSHB Program Eligibility and Enrollment</HD> The interim final rule at 5 CFR 890.1606(d) provided that standards for requesting reconsideration of an initial decision affecting enrollment in the PSHB Program will be the same as current FEHB standards at 5 CFR 890.104. However, on page 20401 of the preamble to that rule at 88 FR 20383 (April 6, 2023) noted that OPM was considering establishing PSHB-specific processes. With the establishment of a new enrollment system for the PSHB Program, OPM had to reevaluate how to process, address, and even adjudicate reconsideration requests, particularly how to distinguish between reconsideration requests concerning enrollment decisions versus eligibility decisions. Therefore, OPM is proposing a series of changes to incorporate existing FEHB reconsiderations standards and processes into the PSHB Program while also taking into account aspects of the PSHB Program that are unique from FEHB. These aspects include OPM's responsibility to administer the enrollment system and receive information from source agencies regarding Medicare Part B exceptions. OPM proposes to amend § 890.1602(c) by adding a definition of “Reconsideration” that parallels the definition at § 890.101 with respect to PSHB reconsiderations. The definition notes that reconsideration means the final level of administrative review of an initial decision by an employing office or OPM. Under existing regulations at § 890.1602, for purposes of this part, the United States Postal Service is the employing office for Postal Service employees, and the Retirement Services office within OPM is the employing office for Postal Service annuitants. These changes reflect that OPM will retain authority under this Part to reconsider certain initial decisions and issue final agency decisions regarding enrollments and coverage of family members with respect to Postal Service employees and Postal Service annuitants in the PSHB Program. In making a final agency decision in response to a reconsideration request, OPM will consider facts submitted by an individual, including proof of family member eligibility, facts from a source agency pursuant to a data exchange and the opportunity for an individual to contest the data, and certain Medicare Part B exceptions, as discussed below. OPM also proposes to define “source agency.” The definition notes that source agency means an agency that routinely provides information or data to OPM pursuant to an agreement under 5 CFR 890.1612 (regarding information sharing for Medicare Part B enrollment requirements and exceptions) or 5 U.S.C. 8903c(e)(3)(C) (regarding identification of individuals who reside abroad). As indicated in proposed § 890.1612(c), a source agency may also refer to other agencies routinely providing information as required by OPM. OPM proposes to amend § 890.1606(d) to reflect that initial decisions and reconsiderations of PSHB eligibility or enrollment, as applicable, will be made pursuant to proposed § 890.1607, as discussed below in the preamble. Currently, there is a cross-reference to § 890.104, which will no longer be applicable to PSHB. OPM proposes to add new § 890.1607 governing initial decisions and reconsiderations of PSHB eligibility or enrollment, as applicable. Proposed § 890.1607 would replace § 890.104 with respect to the PSHB Program. These changes reflect that in the PSHB Program, OPM may issue an initial decision regarding an individual's eligibility for PSHB where that eligibility is conditioned on a source agency's data or information that it sends to OPM pursuant to a data exchange, under § 890.1612, discussed below in this section of the preamble. Before OPM will issue such an initial decision under § 890.1607, OPM will provide notice, as described under § 890.1612(f), that information or data OPM has received from a source agency may render the individual ineligible for PSHB enrollment or coverage and will provide instructions on how the individual may contest that information or data with the source agency before OPM issues a decision. Under proposed § 890.1612(f), OPM would notify an individual that they may be ineligible for PSHB enrollment or coverage based on information provided to OPM by a source agency. In that notice, OPM would provide the individual with the source agency's contact information on how the individual may contest the accuracy of the information used to determine PSHB eligibility. Paragraph (f) would also provide an explanation of the associated processes and timeframes to contest the provided evidence and to demonstrate that the individual is so engaged in such a contest with the source agency. Proposed § 890.1612(g) provides an individual who would be disenrolled or removed from the PSHB Program based on information from a source agency with information on their reconsideration rights. Section 890.1607 cross references § 890.1612, which accounts for provision of such notice and establishes a process under which an individual may dispute data OPM relies on from a source agency, over which OPM does not maintain authority and cannot independently verify. Proposed § 890.1607 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 137k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━