AGENCY: Office of Personnel Management
ACTION: Final ruleSUMMARY:
This rule finalizes an interim final rule that established the Postal Service Health Benefits (PSHB) Program for Postal Service employees, Postal Service annuitants, and their eligible family members, pursuant to the Postal Service Reform Act of 2022. This Program will include health benefits plans available to United States Postal Service (Postal Service) employees, Postal Service annuitants, and their eligible family members starting January 1, 2025. For these individuals, eligibility for enrollment or coverage in FEHB plans based on Postal Service employment will end on December 31, 2024, and they will be able to enroll in or be covered only by PSHB plans after that time. Open Season for enrollee selection of PSHB plans will occur from November 11 through December 9, 2024. OPM will publish the negotiated PSHB plan rates and benefits for the 2025 plan year in September 2024. This rule adopts the provisions of the interim final rule with minor clarifications on the Office of Personnel Management’s (OPM) implementation of the PSHB Program.
DATES: Effective July 5, 2024.
FOR FURTHER INFORMATION CONTACT:
Louise Dyer Yinug, Senior Policy Analyst, at (202) 972-0913.SUPPLEMENTARY INFORMATION:
Executive Summary
On April 6, 2023, OPM issued an interim final rule (88 FR 20383) to establish the Postal Service Health Benefits (PSHB) Program within the Federal Employees Health Benefits (FEHB) Program as required by the Postal Service Reform Act of 2022 (PSRA), Public Law 117-108. The interim final rule amended subparts A, C, and E of 5 CFR part 890 related to the FEHB Program and 48 CFR chapter 16, the OPM Federal Employees Health Benefits Acquisition Regulation (FEHBAR). The interim final rule also added a new subpart P to 5 CFR part 890 regulating the new PSHB Program within the FEHB Program.
OPM is making several changes between the interim final rule and this final rule:
- In § 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 January 1, 2025” includes events that occur on January 1, 2025.
- Section 890.1604(c) is reserved in anticipation of future rulemaking.
- In § 890.1604(e), OPM is clarifying that a Postal Service annuitant or their family member who is required to be enrolled in Medicare Part B must promptly notify OPM or the Postal Service, in writing, if they choose not to enroll in or to disenroll from Medicare Part B.
- In § 890.1604, OPM is removing reference to the Postal Service as the entity to receive documentation of overseas residency to qualify for an exception to the Part B enrollment requirement.
- In § 890.1606(e), OPM is correcting a typographical error by removing the word “the” before “January 1 of the next year.”
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 Postal Service employees, Postal Service annuitants, and their family members. An example of this is the rules pertaining to disenrollment from PSHB for Medicare eligible annuitants who are not enrolled in Medicare Part B despite the requirement to be so enrolled. OPM is defining such a circumstance as a termination of coverage, with rights to a temporary extension of coverage and conversion rights, rather than a cancellation of coverage.
The PSHB Program includes health benefits plans available to Postal Service employees, Postal Service annuitants, and their eligible family members starting January 1, 2025. For these individuals, eligibility for enrollment or coverage in FEHB plans based on Postal Service employment will end after December 31, 2024, and they will be able to enroll in or be covered only by PSHB plans starting January 1, 2025. Subject to limited exceptions, Postal Service annuitants who retire and become entitled to Medicare Part A after January 1, 2025, and their family members who are entitled to Medicare Part A will be required to enroll in Medicare Part B as a condition of eligibility to enroll in the PSHB Program.
The exceptions to the Medicare Part B enrollment requirement for PSHB enrollment described at § 890.1604 are:
- Individuals who are Postal Service annuitants on or before January 1, 2025, and who are not both entitled to Medicare Part A and enrolled in Medicare Part B on January 1, 2025;
- Individuals who, on January 1, 2025, are Postal Service employees and are aged 64 and over;
- Postal Service annuitants and family members residing outside the United States and its territories who demonstrate their residency;
• Postal Service annuitants and their family members enrolled in certain Department of Veterans Affairs (VA) health care benefits. This exemption is derived from 5 U.S.C. 8903c(e)(3)(A)(iv)(II), which refers to individuals “enrolled in health care benefits provided by the VA under subchapter II of chapter 17 of title 38, United States Code.” Subchapter II of chapter 17 of title 38, U.S.C. governs who is eligible for various VA health care benefits, including eligibility for VA hospital care and medical services. There is a limited class of veterans who are not required to enroll in the system of patient enrollment referred to in 38 U.S.C. 1705(a) in order to receive VA benefits described in subchapter II of chapter 17 of title 38, United States Code. As such, this regulation is drafted to include all veterans described in 38 U.S.C. 1710, including those who are not required to enroll in the VA’s system of patient enrollment referred to in 38 U.S.C. 1705(a);
- Postal Service annuitants and family members eligible for health services provided by the Indian Health Service; and
- A family member of a Postal Service annuitant who is not required to enroll in Medicare Part B, based on a statutory exception, in order to be eligible for PSHB coverage.
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 June 5, 2023.
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.