[Federal Register Volume 79, Number 145 (Tuesday, July 29, 2014)]
[Proposed Rules]
[Pages 43969-43972]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17806]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 79, No. 145 / Tuesday, July 29, 2014 / 
Proposed Rules

[[Page 43969]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AM86


Federal Employees Health Benefits Program Expansion of 
Eligibility to Certain Employees on Temporary Appointments and Certain 
Employees on Seasonal and Intermittent Schedules

AGENCY: Office of Personnel Management.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The United States Office of Personnel Management (OPM) is 
issuing a proposed rule that would expand eligibility for enrollment 
under the Federal Employees Health Benefits (FEHB) Program to certain 
temporary, seasonal, and intermittent employees who are identified as 
full-time employees. This regulation would make FEHB coverage available 
to these newly eligible employees no later than January 2015.

DATES: OPM must receive comments on or before August 28, 2014.

ADDRESSES: Send written comments to Louise Yinug, Senior Policy 
Analyst, Planning and Policy Analysis, U.S. Office of Personnel 
Management, Room 3415, 1900 E Street NW., Washington, DC; or FAX to 
(202) 606-0036 Attn: Louise Yinug. You may also submit comments using 
the Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.

FOR FURTHER INFORMATION CONTACT: Louise Yinug, Senior Policy Analyst at 
(202) 606-0004.

SUPPLEMENTARY INFORMATION:  OPM is proposing to expand eligibility for 
coverage under the Federal Employees Health Benefits (FEHB) Program to 
certain temporary, seasonal, and intermittent Federal employees who are 
expected to work full-time schedules within the meaning of section 
4980H of the Internal Revenue Code (IRC) for at least 90 days.
    This proposed rule would expand eligibility by authorizing 
enrollment in a FEHB health plan for certain Federal employees on 
temporary appointments and certain employees working on seasonal and 
intermittent schedules. Currently, most employees on temporary 
appointments become eligible for FEHB coverage after completing one 
year of current continuous employment and, once eligible for coverage, 
do not receive an employer contribution to premium. Employees working 
on seasonal schedules for less than six months in a year and those 
working intermittent schedules are excluded from eligibility regardless 
of the work hours for which they are expected to be scheduled. Some 
limited exceptions were made to these exclusions for temporary 
firefighters and emergency response workers in 5 CFR 890.102(h) and 
(i).
    Under this proposed regulation, employees on temporary 
appointments, employees on seasonal schedules who will be working less 
than six months per year, and employees working intermittent schedules 
would be eligible to enroll in a FEHB health plan if the employee is 
expected to work a full-time schedule of 130 or more hours in a 
calendar month. If the employing office expects the employee to work at 
least 90 days, the employee is eligible to enroll upon notification of 
the employee's eligibility by the employing office. If the employing 
office expects the employee to work fewer than 90 days, the employee 
will be eligible to enroll after the completion of a 90 day waiting 
period. Temporary, seasonal, and intermittent employees who are 
expected to work a schedule of less than 130 hours in a calendar month 
would not be eligible to enroll in a FEHB health plan. Temporary, 
seasonal, and intermittent employees for whom the expectation of hours 
of employment changes from less than 130 hours per calendar month to 
130 hours or more per calendar month would become eligible to enroll in 
an FEHB health plan as described above.
    The change in eligibility for coverage set forth in this proposed 
regulation is intended to ensure, to the greatest extent practicable, 
that full-time employees, within the meaning of section 4980H of the 
IRC and Treasury regulations thereunder (79 FR 8544, February 12, 2014) 
are eligible to enroll in FEHB. IRC section 4980H, enacted as part of 
the Affordable Care Act, defines a full-time employee as, with respect 
to any month, an employee who is employed on average at least 30 hours 
of service per week (IRC section 4980H(c)(4)). Under the IRC section 
4980H regulations a full-time employee means, with respect to any 
calendar month, an employee who is employed at least 130 hours of 
service in that month.
    This proposed rule would allow newly eligible employees (employees 
on an appointment limited to one year and employees working on a 
seasonal or intermittent schedule) to initially enroll under the FEHB 
program with a Government contribution to premium if they are expected 
to be employed on a full-time schedule and are expected to work for at 
least 90 days.
    Some temporary employees who have completed one year of continuous 
employment are already eligible for FEHB coverage but without a 
Government contribution to premium. This proposed rule would allow 
these employees to enroll in a FEHB plan under 5 CFR 890.102(j) (with a 
Government contribution to premium) if the employee is determined by 
his or her employing office to be newly eligible for FEHB coverage 
under this regulation.
    Enrollments for employees newly eligible pursuant to this rule 
would be accepted during a 60-day period after the employing office 
notifies employees of their eligibility to enroll in a FEHB health 
plan. Coverage will become effective as provided for by 5 CFR 890.301. 
Employing offices must promptly determine eligibility of new and 
current employees and upon determining eligibility, promptly offer 
employees an opportunity to enroll in the FEHB Program so that coverage 
becomes effective no later than January 2015.
    While this proposed regulation would expand FEHB coverage to new 
categories of Federal employees, there are other employers who are 
entitled to purchase FEHB coverage for their own employees or whose 
employees are otherwise entitled to enroll in FEHB coverage. These 
other employers may have made or are planning to make other 
arrangements to provide health insurance for their temporary, seasonal,

[[Page 43970]]

and intermittent employees. Accordingly, the OPM Director may waive 
application of this proposed rule when the employer of an individual 
not covered by 5 U.S.C. 8901(1)(A) demonstrates to OPM that these 
expansion requirements would have an adverse impact on the employer's 
need for self-governance. We expect such instances to be rare.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because the regulation 
only adds to the list of groups eligible to enroll under the FEHB 
Program.

Executive Orders 13563 and 12866, Regulatory Review

    OPM has examined the impact of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993) and 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011). Executive Orders 12866 and 13563 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). A 
regulatory impact analysis must be prepared for major rules with 
economically significant effects ($100 million or more in at least one 
year). Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a rule 
that may:
    (1) Have an annual effect on the economy of $100 million or more in 
at least one year or adversely affect in a material way a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal government or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
Executive Order 12866.
    As shown in the analysis that follows, the economic impact of this 
rule is projected to fall below the $100 million threshold. Although 
not economically significant, this rule has been determined to be a 
``significant regulatory action'' under section 3(f)(4) and thus has 
been reviewed by the Office of Management and Budget in accordance with 
Executive Orders 13563 and 12866.

Baseline FEHB Eligibility and Federal Government Employer 
Responsibility

    If finalized, this proposed rule would expand eligibility to enroll 
in a FEHB plan to certain temporary, seasonal, and/or intermittent 
employees who are identified as working full-time. In order to estimate 
rule-induced impacts, it is necessary to assess the number of full-time 
Federal employees who are not currently eligible to participate in the 
FEHB program or are not currently eligible to have the government pay a 
portion of their premium, and thus may be affected by the proposed 
rule.
    The following categories of Federal employees are either excluded 
by regulation from participating in the FEHB Program or are not 
currently eligible to have the government pay a portion of their 
premium:
     Temporary employees with less than a year of service. Per 
OPM regulations, most of these individuals are not eligible to enroll 
in FEHB. In 2012 OPM published a regulation extending FEHB eligibility 
to certain temporary firefighters and some personnel performing 
emergency response functions.
     Seasonal employees. Seasonal employees working six months 
or fewer are generally prohibited by regulation from enrolling in FEHB.
     Intermittent employees. Intermittent employees are 
generally prohibited by regulation from enrolling in FEHB. In 2012, 
however, OPM published a regulation extending FEHB eligibility to 
certain intermittent employees engaged in emergency response and 
recovery work.
     Temporary employees with more than a year of service. Per 
statute, these employees can enroll in an FEHB plan if they pay the 
entire premium with no Government contribution.
    OPM has worked with Federal payroll providers to assess how many 
full-time Federal employees are without access to FEHB. The data show 
that all responding executive agencies have a small number of full-time 
employees (as defined in Section 4980H of the IRC) without access to 
FEHB. The number without access varies from agency to agency. Within 
agencies, the number varies from month to month. Some large departments 
hire full-time temporary or seasonal employees only for a few months of 
the year.
    The agencies included in our data, in aggregate, offer FEHB to at 
least 95 percent of full-time employees (and their dependents) for all 
months. Across civilian, non-Postal, executive agencies and all months 
of the year, our data indicate that there are 300,000 full-time 
employee-months currently ineligible for FEHB (0.9 to 2 percent of the 
Federal workforce).
    The Federal government and its agencies are subject to employer 
shared responsibility like other applicable large employers. The 
employer shared responsibility payments only apply if a full-time 
employee (defined as an employee with 130 hours of service in a month) 
receives a premium tax credit in connection with the purchase of health 
insurance through an Exchange. We do not know whether the full-time 
Federal employees not yet eligible for FEHB would, in the absence of 
this rule, be eligible for premium tax credits in connection with 
coverage purchased on an Exchange because we lack information on other 
available sources of health coverage or household income. Even in the 
extremely unlikely case that all 300,000 employee-months without FEHB 
are eligible to receive a premium tax credit in connection with 
coverage purchased on an Exchange, the total assessable payment 
incurred by the Federal agencies would be well below the threshold for 
economic significance, which is $100 million.\1\ While we expect that 
agencies will be in compliance with the employer shared responsibility 
provision without this proposed rule, we are undertaking the FEHB 
expansion regardless to even out rules across different types of 
workers.
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    \1\ The relevant employer payment would be $250 per month (or 
$3,000 per year), as indexed, only for those full-time employees who 
receive a premium tax credit in connection with coverage purchased 
on an Exchange.
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Impacts of the Proposed Rule

    Agencies may incur FEHB expansion costs; a rough quantification of 
these potential costs appears below.
    We do not know how many individuals without an offer of FEHB, which 
varies widely from month to month, would enroll in FEHB if it were 
available. Our similar recent regulations expanding FEHB coverage to 
certain temporary firefighters and disaster recovery workers resulted 
in very limited take-up, ranging from approximately 10 to 20 percent. 
We estimate, using enrollment-weighted averages, that FEHB coverage 
currently costs the government about $700 per full-time worker per 
month for affected agencies.\2\ Given this average cost

[[Page 43971]]

estimate, if those currently without FEHB eligibility become eligible 
and the portion of newly eligible employees who enroll is between 10 
and 20 percent, this expansion would generate costs to the Federal 
government of well below the threshold for economic significance, which 
is $100 million.
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    \2\ This estimate includes FEHB premium payments but not 
administrative costs to employing agencies.
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    The premium payments newly made by the Federal government are 
appropriately categorized as costs to society if rule-induced increases 
in FEHB enrollment would be associated with providing additional 
medical services to newly-enrolled individuals. To the extent that 
increases in enrollment do not change how society uses its resources, 
then premium payments by the government would instead be transfers 
between members of society. Recipients of these transfers could include 
newly-enrolled individuals, if they would have paid (or paid more) for 
medical services or for health insurance premiums in the absence of the 
rule, or providers and charities, if the effect of the rule is a 
decrease in uncompensated care.
    We lack exact data to quantify rule-induced public health benefits 
or to refine our estimates of costs and transfers. We therefore request 
comments on any of this proposed rule's impacts.

Federalism

    We have examined this rule in accordance with Executive Order 
13132, Federalism, and have determined that this rule will not have any 
negative impact on the rights, roles and responsibilities of State, 
local, or tribal governments.

List of Subjects in 5 CFR Parts 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Military personnel, Reporting and recordkeeping 
requirements, Retirement.

U.S. Office of Personnel Management.
Katherine Archuleta,
Director.
    Accordingly, OPM proposes to amend title 5, Code of Federal 
Regulations as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

    1. The authority citation for part 890 continues to read as 
follows:

    Authority:  5 U.S.C. 8913; Sec. 890.301 also issued under sec. 
311 of Pub. L. 111-03, 123 Stat. 64; Sec. 890.111 also issued under 
section 1622(b) of Pub. L. 104-106, 110 Stat. 521; Sec. 890.112 also 
issued under section 1 of Pub. L. 110-279, 122 Stat. 2604; 5 U.S.C. 
8913; Sec. 890.803 also issued under 50 U.S.C. 403p, 22 U.S.C. 4069c 
and 4069c-1; subpart L also issued under sec. 599C of Pub. L. 101-
513, 104 Stat. 2064, as amended; Sec. 890.102 also issued under 
sections 11202(f), 11232(e), 11246 (b) and (c) of Pub. L. 105-33, 
111 Stat. 251; and section 721 of Pub. L. 105-261, 112 Stat. 2061.

0
2. Section 890.102 is amended by adding paragraphs (j) and (k) to read 
as follows:


Sec.  890.102  Coverage.

* * * * *
    (j)(1) Notwithstanding paragraphs (c)(1), (2), and (3) of this 
section, an employee working on a temporary appointment, an employee 
working on a seasonal schedule of less than six months in a year, or an 
employee working on an intermittent schedule, for whom the employing 
office expects the total hours in the regularly scheduled 
administrative workweek plus hours of irregular or occasional overtime 
work to be at least 130 hours per calendar month, is eligible to enroll 
in a health benefits plan under this part as follows:
    (i) If the employing office expects the employee to work at least 
90 days, the employee is eligible to enroll upon notification of the 
employee's eligibility by the employing office, and
    (ii) If the employing office expects the employee to work fewer 
than 90 days, the employee will be eligible to enroll after the 
completion of a 90 day waiting period.
    (2) An employee working on a temporary appointment, an employee 
working on a seasonal schedule of less than six months in a year, or an 
employee working on an intermittent schedule for whom the employing 
office expects the total hours in the regularly scheduled 
administrative workweek plus hours of irregular or occasional overtime 
work to be less than 130 hours per calendar month is generally 
ineligible to enroll in a health benefits plan under this part. If the 
expectation of hours of employment changes to 130 hours or more per 
month, that employee is eligible to enroll in a health benefits plan 
under this part as described in paragraph (j)(1) of this section.
    (3) Once an employee is enrolled under paragraph (j) of this 
section, eligibility will not be revoked, regardless of his or her 
actual work schedule or employer expectations in subsequent years, 
unless the employee separates from Federal service or receives a new 
appointment (in which case eligibility will be determined by the rules 
applicable to the new appointment).
    (4) For purposes of paragraph (j) of this section, a regularly 
scheduled administrative workweek includes hours of paid leave and 
hours of leave without pay for purposes of taking leave under the 
Family Medical Leave Act under 5 U.S.C. chapter 63, subchapter V, for 
performance of duty in the uniformed services under the Uniformed 
Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. 4301 
et seq., for receiving medical treatment under Executive Order 5396 
(Jul. 17, 1930), and for periods during which workers compensation is 
received under the Federal Employees Compensation Act, 5 U.S.C. chapter 
81.
    (5) Each temporary employee who is initially eligible for FEHB 
coverage on the basis of paragraph (j) of this section is entitled to 
enroll in accordance with Sec.  890.301(a). A temporary employee who is 
currently eligible under 5 U.S.C. 8906a (with no Government 
contribution) but who is not enrolled on the effective date of 
paragraph (j), and who would also meet eligibility requirements on the 
basis of paragraph (j), is entitled to enroll (with a Government 
contribution) on the basis of paragraph (j) in accordance with Sec.  
890.301(h)(4)(ii). A temporary employee who is enrolled under 5 U.S.C. 
8906a (with no Government contribution) on the effective date of 
paragraph (j), and who would also meet eligibility requirements on the 
basis of paragraph (j), is entitled to change enrollment (with a 
Government contribution) on the basis of paragraph (j) in accordance 
with Sec.  890.301(h)(4)(ii).
    (k) The Director, upon written request of an employer of employees 
other than those covered by 5 U.S.C. 8901(1)(A), may, in his or her 
sole discretion, waive application of paragraph (j) of this section to 
its employees when the employer demonstrates to the Director that the 
waiver is necessary to avoid an adverse impact on the employer's need 
for self-governance.
0
3. Amend Sec.  890.301 by:
0
a. Revising the heading of paragraph (h);
0
b. Redesignating paragraph (h)(4) as paragraph (h)(4)(i); and
0
c. Adding paragraph (4)(ii) to read as follows:


Sec.  890.301  Opportunities for employees who are not participants in 
premium conversion to enroll or change enrollment; effective dates.

* * * * *
    (h) Change in employment status or entitlement to Government 
contribution. * * *
    (ii) A change in entitlement to Government contribution as a result 
of

[[Page 43972]]

becoming eligible for coverage under Sec.  890.102(j).
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[FR Doc. 2014-17806 Filed 7-24-14; 4:15 pm]
BILLING CODE 6325-63-P