Postal Service Health Benefits Program: Additional Requirements and Clarifications

<RULE> 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> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Office of Personnel Management (OPM) is issuing this final rule 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 (PSRA). This final 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 final rule includes details on reconsideration of PSHB eligibility decisions, 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> This final rule is effective October 24, 2024. </EFFDATE> <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">Executive Summary</HD> On May 24, 2024, OPM issued a notice of proposed rulemaking (NPRM) “Postal Service Health Benefits Program: Additional Requirements and Clarifications” at 89 FR 45782, to clarify and establish additional requirements regarding the Postal Service Health Benefits (PSHB) Program, which was established pursuant to the PSRA. The NPRM followed OPM's May 6, 2024, publication of a final rulemaking, “Postal Service Reform Act; Establishment of the Postal Service Health Benefits Program” at 89 FR 37061, that established the PSHB Program for Postal Service employees, Postal Service annuitants, and their eligible family members. The May 6, 2024, final rule adopted the provisions of OPM's interim final rule, published April 6, 2023, at 88 FR 20383, with minor clarifying changes. <HD SOURCE="HD1">Background</HD> OPM, the United States Postal Service (USPS or Postal Service), and PSHB Carriers have been working to implement the provisions of the PSHB Program set out in the PSRA and previous rulemaking in anticipation of the 2024 Open Season. The provisions in this final rule are intended to complement and clarify various areas of the program that have been identified during its development. While OPM intends for this final rule, combined with the PSRA and the earlier interim final rule with request for comment and its subsequent final rule, and notice of proposed rulemaking, to create a comprehensive legal framework for the PSHB Program's January 1, 2025 start date, the agency recognizes the operation of the program will inevitably give rise to further changes as the Program is implemented over time. As with previous PSHB rulemakings, OPM consulted with partner agencies in the development of these regulations as consistent with 5 U.S.C. 8903c. OPM has worked closely with USPS and the Centers for Medicare & Medicaid Services (CMS), specifically, on the substance of this rulemaking, particularly as it relates to the impact of the Part D benefit integration on Postal Service annuitants and eligible family members. The May 24, 2024, proposed rule had a 30-day comment period during which OPM received 22 comments, of which 15 comments were responsive, addressing the issues raised in the proposed rule. Five comments were from organizations consisting of employee unions, Federal Employees Health Benefits (FEHB) or potential PSHB Carriers, and trade groups, and 10 were from individuals or anonymous commenters with six nonresponsive or duplicative comments and one comment from an individual that is not publicly available due to the inclusion of personally identifiable information. The comment containing personally identifiable information expressed concerns about the personal impact of the Medicare integration provisions of the PSRA. The responsive comments are summarized and responded to below. <HD SOURCE="HD1">Court Review—5 CFR 890.107(f)</HD> OPM proposed to add new paragraph (f) to 5 CFR 890.107 to establish that PSHB enrollment related lawsuits concerning Postal Service annuitants and their family members, involving data received under agreements with source agencies but where OPM lacks authority or means to obtain independent verification, may not be brought later than December 31 of the third year after the year in which the enrollment action was effectuated. This proposal also limited the review of OPM final decisions based on data obtained under data exchange agreements with source agencies to the administrative record before OPM when OPM effectuated the enrollment action. OPM did not receive any comments on this proposal. OPM is adopting this provision as proposed. <HD SOURCE="HD1">Definitions and Deemed References—5 CFR 890.1602(c)</HD> OPM proposed to add new definitions for “Reconsideration” and “Source agency” for purposes of initial decisions and reconsiderations of eligibility determinations. Under existing regulations at § 890.1602, for purposes of this part, the USPS is the employing office for Postal Service employees, and the Retirement Services office within OPM is the employing office for Postal Service annuitants. These proposed changes reflect that OPM would 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. Two commenters expressed support for OPM's approach to determining eligibility for family members of USPS employees and annuitants. The commenters suggest that this approach, which streamlines eligibility determinations within OPM for these groups, will enhance consistency and accuracy of eligibility determinations. OPM welcomes these comments in support of the proposed approach to determining eligibility for family members of USPS employees and annuitants. OPM agrees that this approach will result in efficiencies in the eligibility process and will promote accuracy in the process. Another commenter requested clarification on what would make a Postal Service employee or annuitant ineligible for the PSHB Program. They asked whether there are pre-existing condition exclusions or any other eligibility limitations based on health status. OPM appreciates this comment and request for clarification around PSHB eligibility. This comment is beyond the scope of this rulemaking as this rulemaking does not establish new eligibility criteria for PSHB Program participation. In response to the inquiry about the use of health status in eligibility determinations, OPM is clarifying that the FEHB statute, at 5 U.S.C. 8902(f), prohibits the use of health status, including pre-existing conditions, in eligibility determinations in FEHB and PSHB. OPM and USPS have developed, and will continue to develop, educational resources that address questions such as those relating to eligibility. More information about the PSHB is available on OPM's website, <SU>1</SU> <FTREF/> and USPS has additional resources including the USPS MyHR  <SU>2</SU> <FTREF/> PSHB page and keepingposted.org. <SU>3</SU> <FTREF/> OPM and USPS encourage anyone with questions to review these resources. OPM is finalizing these definitions as proposed. <FTNT> <SU>1</SU>  OPM's PSHB Program information can be found at <E T="03">https://www.opm.gov/healthcare-insurance/pshb/.</E> </FTNT> <FTNT> <SU>2</SU>  MyHR is the new USPS human resources website and is only accessible to USPS employees. The name and location of USPS human resources website is subject change with time. </FTNT> <FTNT> <SU>3</SU>  Keeping Posted is a USPS-operated website providing benefits information targeted at Postal retirees. The PSHB resources page can be accessed at <E T="03">https://www.keepingposted.org/postal-service-health-benefits.htm.</E> The name and location of the USPS website is subject change with time. </FTNT> <HD SOURCE="HD1">Medicare Enrollment Requirement for Certain Postal Service Annuitants and Eligible Family Members; Survivor Annuitants—5 CFR 890.1604(c), (d), and (f)</HD> OPM proposed in § 890.1604(c) to clarify that a survivor annuitant who is entitled to Medicare Part A  <SU>4</SU> <FTREF/> must be enrolled in Medicare Part B to continue enrollment in PSHB, unless the individual qualifies for an exception as set forth in § 890.1604(d)(3). In § 890.1604(d)(3), OPM proposed exceptions to the Medicare Part B enrollment requirement for those survivor annuitants who are entitled to Part A. Specifically, OPM proposed that a survivor annuitant would retain any exception that the Postal Service annuitant qualified for prior to the annuitant's death. A survivor annuitant would also individually qualify for a Part B enrollment exception in several additional circumstances: if the survivor annuitant resides outside of the United States and its territories, if the survivor annuitant is enrolled in health care benefits provided by the Department of Veterans Affairs (VA) (including individuals who are not required to enroll in the VA's system of patient enrollment referred to in 38 U.S.C. 1705(a)), or if the survivor annuitant is eligible for health services from the Indian Health Service. Survivor annuitants would be subject to all documentation requirements. 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