H.R. 656 - FEDERAL EMPLOYEES HEALTH BENEFITS REFORM ACT OF 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85B01152R001001360005-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: December 14, 2007
• Sequence Number: 5
• Publication Date: September 23, 1983
• Content Type: MEMO

Approved For Release 2007/12/14: CIA-RDP85B01152R001001360005-4
! r
DD/A Registry
9 3 - z135Z
OLL 83-2247
23 September 1983
Deputy Director for Administration
vda/mes McDonald
Associate Deputy Director for Administration
L-egisiarion ion, OLL
SUBJECT: H.R. 656 -- Federal Employees Health
.Benefits Reform Act of 1983
1. Attached for your information and review is a copy of
H.R. 656, which was introduced by Representative Oakar (D., OH)
and is presently before the House Post Office and Civil Service
Committee. This bill amends 5 U.S.C. ? 8901 et se q. concerning
health plans for federal employees.
2. Section 2 of this bill increases the employee share of
the contribution. to health coverage from 60 percent to 75
percent of the average subscription charge. Section 3 of this
bill also extends federal health benefits to employees who are
separated due to reductions in force (RIF). Sections 5 and 6
add mental health benefits, alcohol and drug.abuse
rehabilitation and dental benefits to federal health programs.
STAT
STAT
Liaison Division
Office of Legislative Liaison
STAT
I
Approved For Release 2007/12/14: CIA-RDP85B01152R001001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BOl 152RO01001360005-4
98TH CONGRESS fJ? Ro
1ST SESSION 656
To amend the Federal employee health benefit plan provisions of chapter 89 of
title 5, United States Code, to increase the Government contribution rate, to
extend coverage for employees who are separated due to reductions in force,
to require carriers to obtain reinsurance or stop-loss insurance (or to other-
wise demonstrate financial responsibility), to assure adequate mental health
benefit levels and otherwise limit benefit reductions, to mandate an open
season each year, and for other purposes.
IN TEE HOUSE OF REPRESENTATIVES
JANrA.RY 6, 1983
Ms. OAFiAE introduced the following bill; which was referred to the Committee on
Post Office and Civil Service
A BILL
To amend the Federal employee health benefit plan provisions
of chapter 89 of title 5, United States Code, to increase the
Government contribution rate, to extend coverage for em-
ployees who are separated due to reductions in force, to
require carriers to obtain reinsurance or stop-loss insurance
(or to otherwise demonstrate financial responsibility), to
assure adequate mental health benefit levels and otherwise
limit benefit reductions, to mandate an open season each
year, and for other purposes.
1 Be it enacted by the Senate and House of Representa-
2 fives of the United States of America in Congress assembled,
Approved For Release 2007/12/14: CIA-RDP85BOl 152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
? ?
2
1 SHORT TITLE; TABLE OF CONTENTS
2 SECTION 1. (a) This Act may be cited as the. "Federal
3 Employees Health Benefits Reform Act of 1983".
4 (b), The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Increase in Government contribution rate; repeal of 75 per centum maximum.
Sec. 3. Continuation of coverage for employees separated due to a reduction in
force, and certain others.
Sec. 4. Financial responsibility requirement.
Sec. 5. Mental health benefits.
Sec. 6. Comprehensive dental benefits.
Sec. 7. Limitations on benefit reductions and Office of Personnel Management con-
tracting discretion.
Sec. 8. Open season.
Sec. 9. Employee status.
Sec. 10. Elimination.of requirement of three medical specialties for group-practice
prepayment plans.
5 INCREASE IN GOVERNMENT CONTRIBUTION RATE; REPEAL
6 OF. 75 5 PER CENTUM MAXThfUM
7 SEC. 2. (a) Section 8906(b)(1) of title 5, United States
8 Code, relating to the Government contribution, is amended
9 by striking out "60 percent" and inserting in lieu thereof "75
10 percent".
11 (b) Section 8906(b)(2) of title 5, United States Code, is
12 amended by striking out "75 percent" and inserting in lieu
13 thereof "100 percent".
14 (c) Section 8906(b) of title 5, United States Code, is
15 amended by adding at the end thereof the following new
16 paragraph:
17 "(4) In addition to the Government contribution, a Gov-
18 ernment differential shall be paid in the case of each employ-
19 ee or annuitant who is 65 years of age or older, who is not
NA GEC Tti
Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
3
1 entitled to hospital insurance benefits under part A of title
2 XVVIII of the Social Security Act (42 U.S.C. 1395c and fol-
3 lowing), and who is enrolled in an approved health benefits
4 plan. Such differential shall be equal to 5 percent of the aver-
5 age subscription charge determined under subsection (a) of
.6 this section. The. Government differential under this para-
7 graph shall be treated the same as the Government contribu-
8 tion except that,
9 "(A) such differential shall not. be taken into ac-
10 count in determining the amount to be paid by the em-
11 ployee or annuitant; and
12 "(B) such differential shall be paid to the health
13 benefits plan in which the employee or annuitant is en-
14 rolled.".
15 (d) The amendments made by this section shall become
16 effective with respect to contracts entered into or renewed for
17 calendar year 1984 or thereafter.
18 CONTINUATION OF COVERAGE FOR EMPLOYEES SEPA-
19 RATED DUE TO A REDUCTION IN' FORCE, AND CER-
20 TAN OTHERS
21 SEC. 3. (a)(1) Chapter 89 of title 5, United States Code,
22 is amended by adding after section 8906 the following new
23 section:
HR Approved For Release 2007/12/14: CIA-RDP85BO1152 R001001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
W 4P
4
1 "? 8906a. Continuation of coverage
2 "(a) An individual described in paragraph (1), (2), (3), or
3 (4) of subsection (b) of this section may elect to continue cov-
4 erage under an approved health benefits plan in accordance
5 with the provisions of this section.
6 "(b)(1) An employee who is involuntarily separated from
7 the civil service due to a reduction in force, and who was
8 enrolled in an approved health benefits plan immediately
9 before the separation, may continue such individual's enroll-
10 meat for self alone or for self and family (as the case may be).
11 "(2) In the case of the spouse of an employee or annu-
12 itant whose marriage is dissolved by divorce or annulment, if
13 the employee or annuitant was enrolled for self and family in
14 an approved health benefits plan immediately before the di-
15 vorce or annulment becomes final, the former spouse of such
16 employee or annuitant may continue the enrollment for self
17 and family or for self alone, except that nothing in this para-
18 graph shall be construed to allow an unmarried dependent
19 child to be enrolled as a member of more than one family at
20 any time.
21 "(3) An individual who elects to receive the lump-sum
22 credit under section 8342(a) of this title, and who was en-
23 rolled in an approved health benefits plan immediately before
24 such election, may continue such individual's enrollment for
25 self alone or for self and family (as the case may be).
Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
4P ?
1 "(4) An individual who is 22 years of age or older may
2 continue such individual's enrollment in an approved health
3 benefits plan if-
4 "(A) the enrollment being continued was based on
5 such individual's being an unmarried dependent child
6 who was incapable of self-support because of a mental
7 or physical disability which existed before age 22; and
8 "(B) such disability is determined not to have
9 ended before such individual attained age 22.
10 "(c)(1) Any individual seeking to continue enrollment in
11 a health benefits plan under this section shall, within 31 days
12 after the date of the terminating event, and in accordance
13 with such procedures as the Office of Personnel Management
14 shall by regulation. prescribe, file an election to continue such
15 enrollment and arrange to pay currently into the Employees
16 Health Benefits Fund an amount equal to the sum of the
17 employee and agency contributions payable in the case of an.
18 employee enrolled in the same health benefits plan and level
19 of benefits.
20 "(2) The Office may, for good cause shown, extend the
21 31-day period referred to in paragraph (1) of this subsection.
22 "(3) For the purpose of paragraph (1) of this subsection,
23 `date of the terminating event' means-
24 "(A) in the case of an individual involuntarily sep-
25 crated from the civil service due to a reduction in
HR 656 IH
Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
0 ?
6
1 force, the date as of which such individual is so sepa-
2 rated;
3 "(B) in the case of the spouse of an employee or
4 annuitant whose marriage is dissolved by divorce or
5 annulment, the date that the divorce or annulment be-
6 comes final;
7 "(C) in the case of an individual who elects to re-
8 ceive the lump-sum credit under section 8342(a) of this
9 title, the date that the payment of the lump-sum credit
10 is made; and
11 "(D) in the case of an unmarried individual 22
12 years of age or older whose coverage is based on a
13 mental or physical disability which existed before age
14 22, the date that such disability is determined under
15 this chapter no longer, to exist.
16 "(d)(1) An individual who makes an election under sub-
17 section (c) of this section may, at the time. of making such
18 election and under the conditions prescribed by regulations of
19 the Office, change the level of benefits under the health bene-
20 fits plan in which such individual is continuing coverage, but
21 only if the change is to a lower level.
22 "(2) An individual enrolled in a health benefits plan
23 under this section-
24 "(A) may change such individual's coverage or
25 that of the individual and members of such individual's
HR 656 IH
Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
1 family (as the case may be) by an application filed
2 within 60 days after a change in family status or at
3 other times and under conditions prescribed by regula-
4 tions of the Office; and
5 "(B) may transfer such individual's enrollment to
6 another plan described by section 8903 of this title at
7 the times and under the conditions prescribed by regu-
8 lations of the Office.
9 "(3) An individual-
'10 "(A) who is eligible to continue enrollment in a
11 health benefits plan under this section, but who does
12 not make an election under subsection (c) of this sec-
13 tion, or
14
"(B)
who makes an election under subsection (c)
15 of this section, but whose enrollment is subsequently
16 ended (other than by a cancellation of enrollment),
17 shall be granted a temporary extension of coverage, during
18 which such individual may exercise the option to convert;
19 without evidence of good health, to a nongroup contract pro-
20 viding health benefits. Any individual who exercises this
21 option shall pay the full periodic charges of the nongroup
22 contract.
23 "(e)(1) The coverage provided under this section for any
24 individual separated due to a reduction in force (described in
25 subsection (b)(1)) may not extend beyond the end of the 12th
HR. 6rI T"
Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85B01152R001001360005-4
0 ?
8
1 calendar month beginning after the separation takes effect, or
2. (if earlier) the first day the individual involved becomes em-
3 ployed by any employer in a position in which the individual
4 is eligible to participate in any health benefits plan that. is
5 sponsored (in whole or in part) by such employer and has
6 benefits at least equivalent to the lowest benefit level availa-
7 ble under any approved Government-wide plan.
8 "(2) Under regulations prescribed by the Office of Per-
9 sonnel Management, the coverage provided under this section
10 for any other individual described in subsection (b) may not
11 extend beyond the end of the calendar month during which
12 the status or circumstances of the individual change to the
13 extent that the individual ceases to meet the applicable re-
14 quirements under paragraph (2), (3), or (4), as the case may
15 be.".
16 (2) The analysis for chapter 89 of title 5, United States
17 Code, is amended by inserting after the item relating to sec-
18 tion 8906 the following new item:
"8906a. Continuation of coverage.".
19 (b) Section 8906(d) of title 5, United States Code, is
20 amended-
21 (1) by striking out "(d)" and inserting in lieu
22 thereof "(d)(1) and
23 (2) by adding at the end thereof the following new
24 paragraph:
HR 656 IH
Approved For Release 2007/12/14: CIA-RDP85B01152R001001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
? 0-
9
1 "(2) Nothing in paragraph (1) of this subsection shall be
2 construed to prohibit the enrollment of an annuitant whose
3 annuity is less than the withholding required under such
4 paragraph if such annuitant arranges to pay, at the times and
5 under the conditions prescribed by the Office, the amount of
6 the deficiency.".
7 (c) The amendments made by this section shall become
8 effective with respect to contracts entered into or renewed for
9 calendar year 1984 or thereafter.
10 FINANCIAL RESPONSIBILITY REQUIREMENT
11 SEC. 4. (a) Section 8902 of title 5, United States Code,
12 relating to the contracting authority of the Office of Person-
13 nel Management, is amended by redesignating subsections (d)
14 through (m) as subsections (e) through (n), respectively, and
15 by inserting after subsection (c) the following new subsection:
16 "(d) A contract for a plan described by section 8903(3)
17 of this title shall require the carrier-
18 "(1) to meet the reinsurance requirements of sub-
19 section (c)(1) of this section;
20 "(2) to enter into an agreement approved by the
21 Office with an underwriting subcontractor licensed to
22 issue group health insurance in all the States and the
23 District of Columbia; or
24 "(3) to demonstrate ability to meet reasonable
25 minimum financial standards prescribed by the Office.".
HR 656 IH
Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
10
1 (b) Section 8902.(i) of title 5, United States Code, as
2 redesignated by subsection (a), is amended by striking out
3 "under subsection (g)" and inserting in lieu thereof "under
4 subsection (h)".
5 (c) The amendments made by this section shall become
6 effective with respect to contracts entered into or renewed for
7 calendar year 1986 or thereafter.
8 . MENTAL HEALTH BENEFITS
9 SEC. 5. (a) The first sentence of section 8904 of title 5,
10 United States Code, is. amended by striking_ out "may" and
11 inserting in lieu thereof "shall".
12 (b) Paragraphs (1) and (2) of section 8904 of title 5,
13 United States Code, are amended by adding at the end of
14 each such paragraph the following:
15 "(G) Nervous and mental disorder benefits.
16 "(H) Alcoholism and substance abuse treatment
17 and rehabilitation benefits.".
18 (c) Section 8904 of title 5, ' United States Code, is
19 amended by adding after paragraph (4) the following:
20 "(5) No health benefits plan described in para-
21 graph (1), (2), or (3) of this section shall be contracted
22 for or approved which does not provide, without dis-
23 crimination as to the coinsurance ratio or the deduct-
24 ible, for 50 outpatient visits and 60 inpatient days of
25 nervous and mental disorder benefits, and two 28-day
Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
0
11
1 alcoholism treatment and rehabilitation benefits, but
2 such alcoholism benefits are only required to the extent
3 that an individual has not previously been enrolled in a
4 program of similar duration for which benefits were
5 provided.
6 "(6) Whenever benefits of the type described in
7 paragraph (1)(G) or (2)(G) of this section under any
8 plan contracted for or approved hereunder are limited,
9 such limits shall be exceeded on a case-by-case basis
10 and only to the extent that an established peer review
11 mechanism determines such treatment to be medically
12 or psychologically necessary and appropriate.
13 "(7) The catastrophic benefits provided for in
14 paragraph (6) of this section shall be paid out of the
15 stop-loss fund established by section 8909(a)(3) of this
16 title to the extent of 80 percent of the part of each
17 outpatient claim that exceeds 50 visits annually and 80
18 percent of the part of each inpatient claim resulting
19 from a period of hospitalization in excess of 60 days.".
20 (d) Section 8909(a) of title 5, United States Code, is
21 amended-
22 (1) in paragraph (1), by striking out "and";
23 (2) in paragraph (2), by striking out the period
24 and inserting in lieu thereof "; and"; and
25 (3) by adding at the end thereof the following:
HR 656 IH
Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152 R001001360005-4
? ?
12
1 "(3) to pay the catastrophic benefits described in
2 paragraphs (6) and (7) of section 8904 of this title.".
3 (e) Section 8909(b)(1) of title 5, United States Code, is
4 amended to read as follows:
5 "(1) One percent of all contributions made availa-
6 ble by subsection (a) of this section out of which is to
7 be allocated that part determined by the Office to be
8 reasonably adequate to pay the administrative expenses
9 referred to in subsection (a)(2) of this section with the
10 balance to be used to pay the catastrophic benefits re-
11 ferred to in subsection (a)(3) of this section.".
12 (f) The first sentence following paragraph (2) in section
13 8909(b) of title 5, United States Code, is amended by insert-
14 ing "expenses" after "and for catastrophic benefits".
15 (g) The amendments made by this section shall become
16 effective with respect to contracts entered into or renewed for
17 calendar year 1984 or thereafter.
18 COMPREHENSIVE DENTAL BENEFITS
19 SEC. 6. (a) Paragraphs (1) and (2) of section 8904 of
20 title 5, United States Code, as amended by section 5, are
21 further amended by adding at the end of each such paragraph
22 the following:
23 "(I) Comprehensive dental benefits.".
HR 656 IH
Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
? ?
13
I (b) The amendments made by this section shall become
2 effective with respect to contracts entered into or renewed for
3 calendar year 1984 or thereafter.
4 LIMITATIONS ON BENEFIT REDUCTIONS AND OFFICE OF
5 PERSONNEL MANAGEMENT CONTRACTING DISCRETION
6 SEC. 7. (a) Section 8902 of title 5, United States Code,
7 relating to contracting authority, as amended by section 4, is
8 amended by adding at the end thereof the following new sub-
9 section:
10 "(o)(1) Except as provided under paragraph (2) of this
11 subsection, the Office may not negotiate or enter into any
12 contract with any qualified carrier for any health benefits
13 plan for any calendar year unless the benefits provided by
14 such plan are actuarially equivalent to at least 95 percent of
15 (A) the benefits under the plan provided by such carrier for
16 the preceding calendar year, or (B) if the plan was not offered
17 by any carrier during the preceding year, the benefits pro-
18 vided by the approved plan which was offered during the
19 preceding year and which is most similar to., the plan.
20 "(2) The requirements of paragraph (1) shall not apply if
21, the carrier and the Office mutually agree to a waiver of such
22 requirements.
23 "(3) The Office shall exercise its authority under subsec-
24 tion (a) and enter into a contract with any qualified carrier for
25 any calendar year if-
HR 65 Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152 R001001360005-4
? 0
14
1 "(A) the plan benefits meet the applicable require-
2 ments of paragraph (1), and
3 "(B) the carrier and the plan offered by the carri-
4 er under the contract meet all applicable standards and
5 requirements established by and under this chapter.".
6 (b) The amendments made by this section shall become
7 effective with respect. to contracts entered into or renewed for
8 calendar year 1984 or thereafter.
9 OPEN SEASON
10 SEC. 8. (a) Section 8905(e) of title 5, United States
11 Code,. is amended to read as follows:
12 "(e)(1) The Office, shall prescribe regulations under
13 which, before the start of any contract term in which an ad-
14 justment is to be made in any of the rates charged or benefits
15 provided under a health benefits plan described by section
16 8903 of this title, or a newly approved health benefits plan is
17 offered or an existing plan is terminated a period of not less
18 than 3 weeks shall be provided during which any employee
19 or annuitant enrolled in a health benefits plan described by
20 that section may either transfer that individual's enrollment
21 to another such plan or cancel such enrollment.
22 "(2) Not later than 4 weeks before the start of any
23 period described in paragraph (1) of this subsection, the Office
24 shall make available to each employee or annuitant enrolled
Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4
 Approved For Release 2007/12/14: CIA-RDP85BO1152RO01001360005-4
a .
15
1 in a health benefits plan under this chapter the information
2 required by section 8907(a) of this title.".
3 (b) The amendments made by this section shall become
4 effective with respect to contracts entered into or renewed for
5 calendar year 1984 or thereafter.
6 EMPLOYEE STATUS
7 SEc. 9. (a) Section 8902(f) of title 5, United States
8 Code, is amended by inserting "nonactive employee status,"
9 after "health status,".
10 (b) The amendment made by this section shall become
I1 effective with respect to contracts entered into or renewed for
12 calendar year 1984 or thereafter.
13 ELIMINATION OF -REQUIREMENT OF THREE MEDICAL SPE-
14 CL .LTIES FOR GROUP-PRACTICE PREPAYMENT PLANS
15 SEc. 10. (a) The second sentence of section 8903(4)(A)
16 of title 5, United States Code, relating to group-practice pre-
17 payment plans, is amended to read as follows: "The group
18 shall include physicians who receive all or a substantial part
19 of their professional income from the prepaid funds and who
20 represent medical specialties appropriate and necessary for
21 the population served and proposed to be served by the
22 plan. ".
23 (b) The amendment made by this section shall become
24 effective with respect to contracts entered into or renewed for
25 calendar year 1984 or thereafter.
0
HR 6,51 Approved For Release 2007/12/14: CIA-RDP85B01152RO01001360005-4