OFFICE OF PERSONNEL MANAGEMENT (OPM) DRAFT BILL THE FEDERAL EMPLOYEES HEALTH BENEFITS REFORM ACT OF 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP95B00895R000200040013-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 38
• Document Creation Date: December 21, 2016
• Document Release Date: October 27, 2008
• Sequence Number: 13
• Publication Date: July 5, 1983
• Content Type: MEMO

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v
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
July 5, 1983
Department
of
Agriculture
Department
of
Education
Department
of
Energy
Department
of
Housing and Urban Development
Department
of
the Interior
Department
of
Justice
Department
of
State
A cy for international Development
entral Intelligence Agency
Environmental Protection Agency
National Aeronautics and Space Administration
Tennessee Valley Authority
U.S. Information Agency
Veterans Administration
SUBJECT: Office of Personnel Management (OPM) draft bill,
the "Federal Employees Health Benefits Reform Act
of 1983".
Attached, for your information, is a copy of OPM's draft bill to
reform the FEHB program, as transmitted to the Congress on
June 21, 1983.
The bill was circulated for comment only to members of the
Cabinet Council on Management and Administration, which had
considered this legislation.
R
Naomi R. Sweeney
Acting Assistant Director
for Legislative Reference
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United States
Office of
Personnel Management Washington, D.C. 20415
June 21, 1933
Honorable George Bush
President of the Senate
Washington, D.C. 20510
The Office of Personnel Management submits herewith a legislative proposal,
"To restructure the Federal Employees Health Benefits Program to strengthen
financial control over the Program and enhance competition among participa-
ting health plans, and for other purposes." We request that you refer this
proposal to the appropriate committee for early consideration.
Our plan utilizes what is popularly known as the "voucher" approach. It
embodies an exciting free-market method of providing health insurance for
Federal employees, and will give them the greatest possible choice in
selecting health plans for themselves and their families. It will also
enable the Federal Government to get a firm grip on its cost of providing
benefits under the Program. It will get the Federal Government out of the
business of designing benefit packages and setting premium rates, and will
allow participating insurance companies to design a range of benefit
offerings and rates to suit a variety of individual needs at an appropriate
cost, subject to minimum requirements with respect to catastrophic protec-
tion which all plans will be required to offer. Market forces will
determine the rates, and enrollees will therefore enjoy attractive benefits
at the lowest cost. It will continue the traditional policy of allowing
retiring Federal workers to continue enrollment in the plans participating
in the FEHB Program.
While the current FEHB Program offers considerable choice to employees and
retirees, our proposal is designed to greatly enhance this choice. For
example, the current definition of "carrier" in section 8901(8) of title 5,
United States Code, would be broadened in order to open much wider the door
to participation in the Program. Eligible plans would now include: (1)
plans offered by any legal entity licensed to market group health insurance,
provided that the insurer is licensed to do business in a State or the
District of Columbia where the plan is offered to FEHB enrollees, and plans
offered by individual Blue Cross and Blue Shield corporations; (2) employee
organization-sponsored plans, and (3) all Federally qualified health mainten-
ance organizations (HMO's). In addition, the new definition of "carrier"
offers the possibility of adding regional plans to the others listed above.
Reinsurance requirements will ensure financial stability of the plans in the
Program. All health plans presently in the Program will be offered the oppor-
tunity to continue to participate, and the new reinsurance requirements will
not apply to currently participating plans, provided they are financially
stable.
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Under this bill, the Government will no longer intrude into the relation-
ship between an enrollee and the insurance company by negotiating detailed
contracts with carriers which set out benefits and rates. OPM's statutory
authority to negotiate such contracts would be dropped, and eligible
carriers would simply submit proposed plans to OPM for approval. This
approval would be given, basically, if the carrier certifies that it will
offer group health insurance to all eligible enrollees: (1) at races con-
sistent with the lowest rates the carrier offers for comparable policies;
(2) which provides a minimum level of catastrophic protection, taking
into account enrollee payments for such medical, hospital, and surgical
services as may be specified by OPM regulations; and (3) with acceptable
conversion rights for those who involuntarily lose their group eligibility.
These features provide the opportunity for a wide variety of insurance
carriers to participate in the program and to offer as many different
levels of coverage as they wish, at premium rates which may range from an
amount approximating the amount of the Government contribution to much
higher amounts sufficient to provide extensive coverage beyond the cata-
strophic protection, e.g., full or co-payment for services below the
catastrophic deductible.. The enrollee would thus be free to spend as
much or as little out of pocket as he desires for varying levels of
coverage and would continue to have the convenience of payroll and
annuity deduction of any premium in excess of the Government contribu-
tion. No longer will the Government decide for him the amount of addi-
tional coverage that will be available, or how much he will have to
spend to get it.
The bill would further require each employing office and retirement system
to issue to their eligible employees and annuitants such materials as OPM
may prescribe for purposes of facilitating a choice among available health
benefits plans. The legislation would call on OPM "to take such steps as
it considers appropriate and feasible to ensure that comparative information
will be available to enrollees," particularly encouraging and assisting
private sector initiatives in this regard. In a departure from present
practice, the bill specifies that the carrier of each health plan will be
responsible for providing enrollees with a detailed, written plan descrip-
tion in a format approved by OPM. Presently, OPM must produce these bro-
chures, and Government expenses will be greatly reduced by placing this
responsibility with the carriers. Our measure also would require carriers
to grant OPM and GAO access to plan records, and to have in place a satis-
factory utilization review system.
The present system ties the Government contribution to high option rates
charged by six of the largest carriers in the Program. This means that cost
to the Government is driven by benefits offered by these plans alone. We
propose to replace this system with one in which the reformed FEHB Program
would start out with a specific Government contribution (based on the average
contribution rate during the year prior to inauguration of the new system)
for two kinds of coverage: self-only, and self-and-family. In each succeed-
ing year, these amounts would be adjusted in accordance with the percentage
change in the implicit price deflator for the Gross National Product over
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the 12-month period ending March 31 preceding the new plan year, as determined
by OPM based upon GNP calculations published by the Bureau of Economic Analysis
of the U.S. Department of Commerce. This new method for determining the Govern-
ment's contribution will result in substantial savings in Government outlays
under the FEHB system in future years, because of the establishment of an
indexed contribution rate.
An important change, with major implications for cost and utilization
control in the health care industry, involves elimination of the current
"75 percent rule." Under current law, the Government can pay no more than
75 percent of the total premium of any FEHB plan. This tends to discourage
enrollees from selecting good low-option plans which otherwise may meet
their needs. Our bill would allow the Government contribution to fund the
entire premium cost of any health benefits plan and, if an enrollee elects
a less comprehensive plan with a premium cost below the available Government
contribution, the enrollee would be entitled to receive a cash rebate equal
to the amount of any excess Government contribution, except that such rebate
may not exceed 40 percent of the authorized Government contribution in each
case. This can be expected to encourage enrollees to select lower cost plans,
with their built-in incentives for avoiding over-utilization of health care
services.
Another funding feature would require that the U.S. Postal Service and the
District of Columbia government assume the financial responsibility for
Government contributions on behalf of their retired employees or their
survivors and forward the appropriate amounts to OPM for deposit in the
Employees Health Benefits Fund. This provision would eliminate what is
now an unintended subsidy under the FEHB program for off-budget agencies
due to the fact that the FEHB law has historically authorized annual
appropriations for FEHB contributions on behalf of all annuitants. In
addition, the Department of Labor would make contributions on behalf of
those receiving workers' compensation benefits, and charge such benefits
back to the former employing agency.
OPM's administration of the new FEHB system would be financed by a contri-
bution from Federal agencies for each enrollment, not to exceed one percent
of the basic Government premium contribution rates. Administrative expenses
would continue to be subject to limitations specified each year by Congress.
This agency would continue to receive all Government and enrollee contribu-
tions and forward appropriate payments to participating health plans.
In addition to the already existing statutory provision for an administra-
tive reserve in the Employees Health Benefits Fund, this bill establishes
an enrollees' contingency reserve account, to which OPM may credit amounts
which accrue to the general Fund over and above the amounts due the carriers,
and any unobligated balances remaining in current health plan contingency
reserve accounts after the transition to the new system is complete. The
new reserve would be available, without fiscal year limitation, for payment
of expenses which OPM deems proper for the benefit of FEHB enrollees.
Section 4 of the legislation would amend the Retired Federal Employees
Health Benefits Act (RFEHBA) by abolishing the old Government-wide
"Uniform Plan" as of December 31, 1983. On January 1, 1984, remaining
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enrollees in the old plan would be transferred automatically to the
Government-wide Indemnity Benefit Plan, in FEHBP, at an appropriate level
of benefits. Like the Uniform Plan, the Indemnity Benefit Plan is under-
written by the Aetna Life Insurance Company. The Uniform Plan enrolls
only a closed and rapidly declining population--employees who retired
before July 1, 1960, or the survivors of employees who retired or died
before that date--who, due to their advancing ages, experience high
utilization of benefits. Continuation of the Uniform Plan would require
substantial annual premium increases which plan enrollees can ill afford,
since they typically receive small annuities. Automatic transfer of
these enrollees to low-option coverage under the Indemnity Benefit Plan
will provide these individuals with much better overall coverage at a lower
cost. Section 4 of our bill would also transfer any contingency reserves
or other monies credited to the Uniform Plan to the FEHB Fund, to the credit
of the low-option contingency reserve of the Indemnity Benefit Plan.
The Office of Management and Budget advises that enactment of this proposal
would be in accord with the program of the President.
A similar letter is being sent to the President of the Senate.
Sincerely yours,
Donald J. Devine
Director
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Federal Employees Health Benefits Reform Act of 1983
This legislative proposal, developed by the Office of Personnel Management,
would restructure and reform the Federal Employees Health Benefits Program
to achieve a number of important objectives:
- Encourage vouchered competition among health benefits plans by
opening program to a broader range of private insurance carriers,
to allow more choice to employees and to encourage price com-
petition among plans.
- Decrease Government intrusion into the benefit design and rate
setting of these private insurance plans, and rely on market
forces instead to encourage carriers to offer the most
attractive benefits at the lowest rates, subject to minimum
requirements with respect to catastrophic protection.
- Give Federal employees and annuitants a broader range of plans,
with different benefits and rates, from which to choose a health
benefits package best suited to the needs of themselves and their
families.
- Control costs to the Government, by replacing the present
benefit-driven Government contribution formula with a new
formula indexed to the percentage change in the implicit
price deflator for the Gross National Product.
- Encourage employees and annuitants to select lower cost plans,
with their built-in incentives for discouraging overutilization
of services, by removing the present 75 percent limitation on
the Government contribution toward the cost of any particular
health plan or level of benefits and by authorizing cash rebates
of up to 40 percent of the authorized Government contribution
rate in cases of enrollees who select health benefits plans
which cost less than such contribution.
- Reduce administrative expenses for the entire program by lessening
Government involvement in the private health plans and their rela-
tionship with their enrollees.
- Require OPM to declare a 30-day open enrollment season in advance
of any changes in benefits or premiums under approved health plans.
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"To restructure the Federal Employees Health Benefits Program
to strengthen financial control over the Program and enhance
competition among participating health plans, and for other
purposes."
The FEHB Program needs major reform to set it on a firm course for the
future, so that the interests of enrollees and the Government are protected.
This bill is designed to preserve the best features of the current Program
while solving the problems.
This Act may be cited as the "Federal Employees Health Benefits Reform Act
of 1983."
Subsection 2(a) of the bill would revise and reenact the current Federal
Employees Health Benefits (FEHB) law (5 U.S.C., ch. 89) as follows:
The definitions in the current section 8901 would be essentially reenacted
with the notable exception of "carrier." The new definition would broaden
health plan participation to include (A) Government:-wide, regional, or local
plans offered by one or more Blue Cross and Blue Shield corporations or by
any legal entity licensed to market group health insurance in the State in
which the plan is offered; (B) additional employee organization-sponsored
plans; and (C) all Federally qualified health maintenance organizations
(HMO's).
?8902. Qualified Health Benefits Plans
The law would no longer authorize OPM to contract with carriers for FEHB
plans. Eligible carriers would be required to submit proposed plans for
OPM approval which would be accorded if the carrier certifies that group
insurance benefits will be offered,to all eligible FEHB participants:
(1) at rates consistent with the carrier's lowest schedule of rates for
comparable policies; (2) in accordance with minimum catastrophic protec-
tion requirements specified by OPM regulations; and (3) with acceptable
conversion rights upon involuntary termination of group eligibility.
Reinsurance requirements would ensure the financial stability of plans.
This section also requires carriers to provide enrollees with a detailed
plan description in a format approved by OPM, to grant OPP1 and GAO access
to plan records, and to have in place a satisfactory utilization review
system.
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?8903. Enrollment Procedures
This section essentially reenacts current provisions of law.
Each employing office and retirement system would he required to issue to
their eligible employees and annuitants such materials as OPM may prescribe
for purposes of facilitating a choice among available health benefits plans,
including: a list of plans and their respective premium rates, instructions
for obtaining detailed information on benefits from carriers, and a health
care voucher form on which to register a choice of plan. OPHI would see to
it that comparative information on plans is made available to enrollees.
?8904. Government Contributions and Enrollee Premiums
The most important correction needed is in calculating the Government con-
tribution to health benefits premiums. The current formula which ties that
contribution to the average premium for the highest level of benefits
offered by six of the plans with the largest FEHB enrollments is too
unpredictable. The proposal would replace this formula with specified
contribution rates which would be amounts equal to the average Government
contribution rate in the preceding plan year for self-only and self-and-
family enrollments, respectively, indexed in accordance with the percentage
change in the implicit price deflator for the Gross National Product over
the 12-month period ending March 31 preceding each plan year, as determined
by OPM based on GNP calculations published by the Bureau of Economic Analysis
of the U.S. Department of Commerce.
Another change would be to eliminate the current 75 percent limitation on
the Government contribution toward the cost of a particular plan or level
of benefits in order to encourage enrollees to select lower cost plans,
possibly at no enrollee cost. Moreover, if an enrollee elects a health
plan with a premium cost below the available Government contribution, the
enrollee would be entitled to receive a cash rebate equal to the amount of
any excess Government contributions, except that such rebate may not exceed
40 percent of the authorized Government contribution in each case. Health
plan premiums in excess of the basic Government contribution would be with-
held from the enrollee's pay or annuity.
In addition to the basic Government contribution, Government agencies would
contribute an amount for each enrollment, as determined necessary by OPM but
not to exceed one percent of the basic Government premium contribution rate,
to fund OPM's administration of the law. Expenditures for administrative
expenses would be subject to limitations imposed each year by Congress. OPM
would continue to receive all Government contributions and enrollee withhold-
ings and to forward appropriate payments to participating health plans.
The proposal would further improve Program financing by requiring the Postal
Service and the District of Columbia government to assume responsibility for
payment of Government contributions on behalf of their retired employees, or
their survivors, as well as requiring the Department of Labor to make con-
tributions on behalf of recipients of workers' compensation benefits and
charge such amounts back to the former employing agency.
?8905. Coverage of Reinstated Employees and Restored Annuitants
This section essentially reenacts 5 U.S.C. 8908.
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?8906. Employees Health Benefits Fund
In addition to the existing administrative reserve, an enrollees' contingency
reserve account would be established in the Fund, to which OPi1 may credit any
amounts which accrue to the general Fund in excess of premium payments clue
carriers and, pursuant to section 3 of the bill, any balance remaining in
existing health plan contingency reserve accounts in the Fund at the end of
two years after termination of final contracts entered into under current
provisions of 5 U.S.C. 8902. The newly created reserve would be available,
without fiscal year limitation, for payment of expenses which OPM deems
proper for the benefit of FEHB enrollees.
?8907. Studies and Reports
This section essentially reenacts 5 U.S.C. 8910.
?8908. Jurisdiction of Courts
This section essentially reenacts 5 U.S.C. 8912.
?8909. Regulations
This section substantially reenacts 5 U.S.C. 8913.
Section 2(b) of the bill would make the amendments to chapter 89 of title 5,
United States Code, effective with respect to health plan enrollments and
Government contributions on and after October 1, 1984. To ensure that the
new provisions will be fully implemented on the specified effective date,
the bill would authorize OPM to automatically assign current FEHB enrollees
who do not specify a choice with respect to health plan coverage under the
new program to an appropriate successor health plan. Also, section 2(b)
would permit currently operating FEHB plans to continue under the new pro-
gram without meeting the new reinsurance requirements, provided they are
financially stable.
Section 3(a) would amend existing FEHB law to provide that all contracts
which become effective in January 1984 shall terminate effective
September 30, 1984.
Section 3(b) would provide that any balance in health plan contingency reserve
accounts in the Employees Health Benefits Fund shall be transferred to the
enrollees' contingency reserve account established under section 8906(c) of
title 5, United States Code, as amended by section 2 of this bill, effective
October 1, 1986.
Section 3(c) would provide that the administrative reserve account in the
Employees Health Benefits Fund immediately prior to the effective date of
section 2 of this bill shall be available without limitation to meet OPM's
expenses for implementation of this law.
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The Retired Federal Employees Health Benefits Act would be amended to abol-
ish the Government-wide Uniform Plan, effective December 31, 1983. Then,
effective January 1, 1984, any remaining Uniform Plan enrollees would he
automatically transferred to an appropriate level of benefits under the
Government-wide Indemnity Benefit Plan under the FEHB Program.
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To restructure the Federal Employees Health Benefits Program
to strengthen financial control over the Program and enhance
competition among participating health benefits plans, and for
other purposes.
Be it enacted by the Senate and House of Representative-, of the United,
States of America in Congress assembled, That this Act may be cited as the
"Federal Employees Health Benefits Reform Act of 1983".
Sec. 2. (a.) Chapter 89 of title 5, United States Code, is revised and
reenacted as follows:
"CHAR 89- EMPLOYETi, HFAT,TH INSURANCE
"Sec.
8901.
Definitions.
8902.
Qualified health benefits plans.
8903.
Enrollment
procedures.
8904.
Government
contributions and enrollee premitm s.
8905.
Coverage of
reinstated employees and restored annuitants.
8906.
Employees Health Benefits Fund.
8907.
Studies and Reports.
8908.
Jurisdiction of courts.
8909.
Regulations.
"?8901.
Definitions
"For purposes of this chapter--
"(1) 'employee' means--
"(A) an employee as defined by section 2105 of this title;
"(B) a Member of Congress as defined by section 2106 of this
title;
"(C) a Congressional employee as defined by section 2107 of this
title;
"(D) the President;
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"(E) an individual employed by the goverrrient of the Di nt;rict of
Columbia, unless otherwise provided by the District of Columbia Council
in accordance with section 714(c) of the Act of December 24, 1973
(87 Stat. 819);
"(F) officers and employees of the United States Postal Service,
unless otherwise provided by the Postal Service in accordance with
section 1005(f) of title 39, United States Code;
"(G) an individual employed by Gallaudet College;
"(H) an individual employed by a county committee established
under section 590h(b) of title 16; and
"(I) an individual appointed to a position on the office staff of
a former President under section 1(b) of the Act of August 25, 1958
(72 Stat. 838);
but does not include-
11(i) an employee of a corporation supervised by the Farm Credit
Administration if private interests elect or appoint a member of the
board of directors;
"(ii) an individual who is not a citizen or national of the United
States and whose permanent duty station is outside the United States,
unless the individual was an employee for the purpose of this chapter
on September 30, 1979, by reason of service in an Executive agency,
the United States Postal Service, or the Smithsonian Institution in
the area which was then known as the Canal Zone;
"(iii) an employee of the Tennessee Valley Authority; or
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"(iv) an employee excluded by regulation of the Off:tce of
Personnel Management under section 2909(b) of this title;
11(2) 'Government' means the Government of the H w
government of the District of Columbia;
"(3) "annuitant" means--
"(A) an employee who retires on an immediate annuity under
subchapter III of chapter 83 of this title or another retirement system
for employees of the Government, after five or more years of service or
for disability;
"(B) a family member who receives an in Mediate annuity as the
survivor of an employee or of a retired employee described by sub-
paragraph (A) of this paragraph;
"(C) an employee who receives monthly compensation under
subchapter I of chapter 81 of this title and who is dete ,fined by
the Secretary of Labor to be unable to return to duty; and
"(D) a family member who receives monthly compensation under
subchapter I of chapter 81 of this title as the surviving beneficiary
"(1) an employee who died as a result of injury or illness
compensable under that subchapter; or
"(ii) a former employee who died while receiving monthly
compensation under the subchapter and who had been held by the
Secretary to have been unable to return to duty;
"(14) 'service', as used in paragraph (3) of this section, means service
which is creditable under subchapter III of chapter 83 of this title;
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"(5) 'family member' means the spouse of an employee or annuitant and
an unmarried dependent child under 22 years of age, including--
"(A) an adopted child or recognized natural child; and
"(B) a stepchild or foster child, but only if the child lives
with the employee or anniiit,rnt inn -I J I C I r,, 1:11 i ?ll; ?I 1i
or such an to harried dependent child regardless of ale who is incapable of'
self-support because of mental or physical disability which existed before
age 22;
"(h) 'dependent', in the case of any child, means that the employee or
annuitant involved is either living with or contributing to the support of
such child, as determined in accordance with such regulations as the Office
shall prescribe, or if the employee or annuitant is deceased, the deceased
individual lived with or contributed to the support of such child ' ediately
before death ;
"(7) 'health benefits plan' means a group insurance policy or contract,
medical or hospital service agreement, membership or subscription contract,
or similar group arrangement provided by a carrier for the purpose of
providing, paying for, or reimbursing expenses for health services;
"(R) 'carrier' means--
"(A) one or more not-for-profit corporations which are organized
and authorized under the laws of a State or the District of Columbia for
the primary purpose of operating; a service benefit health plan, or plans,
under which prepaid hospital, medical, surgical, and related services
are provided to subscribers to such plan or plans p11rsuant to partici-
pation agreements between the corporation and physicians, hospitals,
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and other providers of health services, or any legal entity which is
licensed under the laws of a State or the District of Columbia to
issue group health insurance policies providing indemnity benefits to
covered individuals for specified health care expenses and which
chooses to offer a qualified health benefits plan, or plans, under
this chapter;
"(B) an employee organization, as defined in paragraph (9) of
this section, which sponsors, and administers in whole or in sub-
stantial part, a health plan available only to individuals, and
their family members, who are regular or associate members of the
organization, provided however, that if an employee organization
elects to offer limited associate memberships for purposes of
health plan participation under this chapter, associate memberships
must be offered equally to all employees and annuitants eligible to
enroll in a qualified health benefits plan pursuant to this chapter;
"(C) a Federally qualified health maintenance organization within
the meaning of section 1310(d)(l) of title )ITT of the Public health
Service Act (42 U.S.C. 300e-9(d)(1)); and
"(D) any corporation, association, partnership, or other organi-
zation which contracted with the Office of Personnel Management as of
September 30, 1981, to offer a comprehensive medical plan or network
of plans described in section 8903(4) of this title as then in effect,
provided such organization continuously offers such qualified health
benefits plan or network of plans under this chapter after September 30,
1984;
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"(g) 'employee organization' means an association or other organization
of employees or retired employees which is national in scope, or in which
el.i r.~h 1
membership is open to all employees of a Government agency who are
to enroll in a qualified health benefits plan under this chapter;
"(10) 'open enrollment season' means a 30-day period, which shall be
designated by the Office of Personnel Management prior to the beginning of
any plan year with respect to which changes in premium rates or benefits
are approved by the Office in its administration of this chapter, during
which period any eligible employee who is not enrolled in a qualified health
benefits plan described in section 8902 of this title may enroll and any
enrolled employee or annuitant may change his enrollment to another plan
or benefits option;
"(11) 'health care voucher' means a document for use in enrolling in
a health benefits plan or changing enrollment to another plan or benefits
option pursuant to this chapter on which an individual shall indicate a
choice of a qualified health benefits plan and level of benefits, if
applicable, under this chapter; and
"(12) 'plan year' means the twelve-month period beginning each October 1,
corresponding to the Federal Government's fiscal year.
"8902. Qualified health benefits plans.
"(a) A carrier, as defined in section 8901(8) of this title, that
wishes to offer one or more group health insurance plans to employees and
annuitants pursuant to this chapter shall apply for approval of such plan
or plans by the Office of Personnel Management in such manner as the Office
may require by regulation. The Office shall approve all plans as qualified
for participation under this chapter which satisfy the following conditions:
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"(1) The carrier shall certify that premium charges for enroll-
ments under this chapter in each level of benefits of the plan shall
be consistent with the lowest schedule of rates charged for co,par--able
benefits levels under the carrier's other group policies;
"(2) The carrier shall certify that each level of benefits under
a proposed plan will provide comprehensive benefits for covered services
and supplies provided to an enrollee or eligible family member in any
plan year, with no out-of-pocket expenditure by the enrollee, after the
enrollee has incurred creditable deductible and coinsurance expenditures
in that plan year equal to a maximum enrollee financial participation
requirement which shall be specified under the terms of the plan, and
which shall not be greater than a maximum permissible enrollee finan-
cial participation amount which the Office establishes as appropriate
for that category of health plan, and which shall take into considera-
tion enrollee payments for such services as medical, hospital, and
surgical benefits, as the Office determines appropriate;
"(3) The carrier agrees to offer each level of benefits to all
eligible enrollees at a uniform premium rate for self-only enrollments,
and a uniform premium rate for self-and-family enrollments, for a term
of at least one plan year;
"(4) The carrier shall agree to operate, or contract for, a health
services utilization review system satisfactory to the Office;
"(5) The carrier shall agree to accept for enrollment, without
regard to race, sex, health status, or age, and in accordance with
procedures established pursuant to section 8903 of this title,
any employee or annuitant who is eligible to enroll in a qualified
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health benefits plan pursuant to this chapter and, if the employee or
annuitant so elects, family members, as defined in section 8901(5) of
this title, provided, however, that plans offered by carriers described
in subparagraph (B) of section 8901(8) of this title shall be open to
employees and annuitants who reside in a State (or the District of
Columbia) in which the carrier is licensed to do business, and plans
offered by carriers described in subparagraph (R) of section 8901(8)
of this title shall be open only to employees and annuitants who at
the time of enrollment are members or associate members of the sponsor-
ing employee organization, and plans offered by carriers described in
subparagraphs (C) and (D) of section 8901(8) of this title may be
limited to employees and annuitants who live or work in the geographic
area served by a particular plan;
"(6) The carrier shall agree to provide detailed written statements
of the rights and obligations of the plan and its enrollees, including
services and benefits to which plan enrollees are entitled and any
maximums, limitations, and exclusions applicable to such services and
benefits, in a format approved by the Office, and to provide an enrollee
identification card, and a description of procedures for obtaining
benefits, to all who enroll in the plan pursuant to this chapter;
"(7) The carrier shall agree that if, during the course of a plan
year, an enrollee changes his enrollment to another health benefits
plan under conditions prescribed by this chapter, or applicable regu-
lations issued by the Office, the former health plan shall permit
such enrollee to terminate enrollment and shall not require any premium
or other payment after enrollment in the plan is terminated;
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"(8) The carrier shall agree to offer each employee, annuitant,
or family member whose eligibility under this chapter is ended, except
by voluntary cancellation of health plan enrollment, a 31-day extension
of coverage during which such individual shall have the option to
convert without evidence of good health to a nongroup contract with
the carrier providing health benefits. Such nongroup contract shall
provide benefits at least equal to the lowest level of benefits offered
under the qualified health benefits plan from which the individual
terminated. The premitun for such nongroup contract shall be consistent
with the lowest rates charged by the carrier under comparable nongroup
policies. Any individual who exercises this conversion option shall
pay the full periodic premium charges of the nongroup contract directly
to the carrier;
"(9) The carrier shall furnish to the Office such evidence as the
Office may require that the carrier has obtained adequate reinsurance
of its health benefits plan against loss, except that the Office may
waive such requirement for reinsurance if the carrier petitions the
Office for such waiver, on the basis that such reinsurance is unneces-
sary because of the carrier's financial stability and capacity for
risk absorption;
"(10) The carrier shall agree to furnish such reports as the Office
determines to be necessary to enable the Office to carry out its func-
tions under this chapter, and to permit the Office and representatives
of the General Accounting Office to examine such records of the carrier
as may be necessary to determine the carrier's financial stability and
othen,rise carry out the purposes of this chapter.
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"(b) Approval of a -ptan for participation under this chapter as a
qualified health benefits plan may be withdrawn by the Office, after notice
of the reasons for withdrawal and opportunity for a hearing for the carrier
concerned and without regard to subchapter II of chapter 5 and chapter 7 of
this title, if the Office determines that the plan is not in compliance
with any provision of this chapter or applicable regulations.
"(c) The provisions of any health benefits plan approved by the Office
for participation under this chapter, which provisions are set forth in a
written plan description furnished to enrollees pursuant to subsection (a)(6)
of this section and relate to the nature or extent of coverage or benefits
(including payments with respect to benefits), shall supersede and preempt
any State or local law, or any regulation issued thereunder, which relates
to health insurance and plans or the format of informational materials, to
the extent that such law or regulation is inconsistent with such provisions.
"?8903. Enrollment procedures.
"(a) Each eligible employee shall, upon entering on duty, be issued by
the employing office a list of qualified health benefits plans available
pursuant to this chapter and the applicable premium rates, and a health
care voucher, as described in section 8901(11) of this title, on which to
indicate a choice of plans and, if applicable, level of benefits, and
whether his enrollment is for self-only or for self-and-family.
"(b) An annuitant who at the time he becomes an annuitant has been
enrolled in a qualified health benefits plan pursuant to this chapter-
"(1) as an employee for a period of not less than--
"(A) the five years of serviQe immediately before retirement; or
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"(B) the full period or periods of service between the last day
of the first period in which he was eligible to enroll in a health
benefits plan under this chapter (or similar provisions of prior lave)
and the date on which he becomes an annuitant, if less than five years;
or
"(2) as a family member of an employee or annuita.nt;
shall continue to be eligible while an annuitant to be enrolled in a quali-
fied health benefits plan pursuant to this chapter so long as such individ-
ual remains continuously enrolled in any health benefits plan pursuant to
this chapter.
"(c) If an employee or annuitant has a spouse who is also an employee
or annuitant, either spouse, but not both, may enroll in a qualified health
benefits plan for self-and-family coverage or each spouse may enroll as an
individual. However, an individual may not be enrolled both individually
as an employee or annuitant and as a family member of another enrollee.
"(d) Each eligible employee and annuitant shall, at the beginning of
each open enrollment season, be issued, by his employing office or retire-
ment system, such materials as the Office may prescribe for purposes of
facilitating a choice among available health benefits plans, including:
a list of qualified health benefits plans and their respective pre-
mium rates, instructions for obtaining benefit brochures from carriers,
and a health care voucher to be completed and returned to the indi.vidual'a
employing office or retirement system indicating his choice of plan, level
of benefits, and whether the enrollment is for self-only or self-and-family
coverage. The Office shall take such steps as it considers appropriate
and feasible to ensure that comparative information on available qualified
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health benefits plan is available to each elitg-ihle unployoe and aiunrit,ru11,
during each open enrollment season. Fhployees and annuitants who are
enrolled in a qualified health benefits plan under this chapter and who do
not complete and return the health care voucher to their employing office
or retirement system during the open enrollment season to change their
enrollment shall continue to be enrolled in the same health benefits plan
or, in the event such plan ceases participation under this chapter, in a
plan which is reasonably similar to the discontinued plan, as determined
by the Office.
"(e) An employee or annuitant may, under conditions prescribed by
regulations of the Office, be issued a health care voucher for the purpose
of changing his coverage, or that of himself and his family members, upon
application filed with the employing office or retirement system within 60
days after a change in family status.
"(f) An employee or annuitant may be issued a health care voucher for
use in transferring his enrollment from one qualified health benefits plan
to another if the health benefits plan in which such individual is enrolled
ceases participation under this chapter, and at such other times and under
conditions prescribed by regulations of the Office.
"(g)(l) Each employing office or retirement system to which a completed
health care voucher is returned by an eligible employee or annuitant under
the provisions of this section shall promptly send a copy of the completed
voucher to the carrier selected by the employee or annuitant.
"(2) Each employing office or retirement system that is responsible
for the enrollment of employees or annuitants in qualified health benefits
plans under this chapter shall promptly notify the affected carrier, in a
manner to be prescribed by the Office, if an employee or annuitant becomes
ineligible for continued coverage under that carrier's plan because the
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employee or annuitant has elected to transfer his enrollment to another
carrier in accordance with the procedures under this section or has sepa-
rated from the service or otherwise became ineligible for continued coverage.
"(3) Each employing office or retirement system that is responsible
for the enrollment of employees or annuitants in qualified health benefits
plans under this chapter shall, at the beginning of each calendar year and
in a manner to be prescribed by the Office, transmit to each carrier a list
of all employees or annuitants for whom the employing office or retirement
system is responsible and who are enrolled in the carrier's plan, together
with an identification of the level of benefits under which the employee or
annuitant is covered and whether the coverage is for self-only or self-and-
family.
"?8904. Government contributions and enrollee premiums.
"(a)(1) The Office of Personnel Management shall determine in advance
of each plan year the basic rates of Government contributions available
under this chapter toward the premium cost of self-only and self-and-family
enrollments, respectively, in qualified health benefits plans, in accordance
with the provisions of this subsection.
"(2) For purposes of determining the Government contribution rates per
enrollee for each plan year, the Office shall first determine for the fiscal
year preceding the new plan year the average biweekly Government contribution
made toward self-only and self-and-family health plan enrollments under this
chapter, respectively, on behalf of enrollees other than active and retired
officers and employees of the United States Postal Service and the survivors
of such individuals, including in such average Government contribution the
amount of any excess Government contribution paid to employees and annuitants
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under subsection (c)(1) of this section. The Office shall then adjust
such average contribution rates in accordance with the Office's determi-
nation of the percentage change in the implicit price deflator for the
Gross National Product for the calendar quarter ending Parch 31 immediately
preceding a new plan year, relative to the implicit price deflator for the
Gross National Product for the calendar quarter ending the preceding riarch
31, as such quarterly figures are published by the Bureau of Economic
Analysis of the Department of Commerce.
"(3) The Office shall provide for conversion of biweekly rates of
Government contributions and enrollee premiums determined under this section
to rates for employees and annuitants paid on other than a biweekly basis,
and for this purpose may provide for the adjustment of the converted rate
to the nearest cent.
"(b)(l) Except as provided by paragraph (2) of this subsection and
paragraph (2) of subsection (e) of this section, for all periods during
which an enrollment under this chapter continues, a Government contribution
as determined by the Office under subsection (a) of this section shall be
payable on behalf of each enrolled employee and annuitant. For employees,
adjustments in the Government premitun contribution rates computed by the
Office in accordance with subsection (a) of this section and changes in
health benefits plan premium rates shall take effect on the first day of
the first pay period beginning on or after the beginning, of the plan year.
For an annuitant, the adjustments in contribution and. premium rates shall
take effect on the first day of the plan year.
"(2) In the case of an enrolled employee who is occupying a position
on less than a full-time basis, the biweekly Government contribution shall
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be an amount which bears the same ratio to the adjusted contribution rates
determined under subsection (a) of this section as the average number of
hours of such employee's regularly scheduled workweek bears to the averap;e
number of hours in the regularly scheduled workweek of an employee serving
in a comparable position on a full-time basis (as determined under regula-
tions prescribed by the Office).
"(c)(1) Each employee or annuitant who elects to enroll in a qualified
health benefits plan pursuant to this chapter shall be responsible for
payment of any group premium charge applicable to such enrollment in excess
of the biweekly Goverrynent contribution authorized under subsection (b) of
this section for each pay period during which the enrollment continues.
Withholdings for this purpose shall be made from the pay of each enrolled
employee and the annuity of each enrolled annuitant.
"(2) If the periodic Government contribution rate authorized under
subsection (b) of this section for self-only or self-and-family health
plan enrollments exceeds the periodic premium charge for an approved
health benefits plan and enrollment category selected by an eligible
employee or annuitant under this chapter, the excess Government contribu-
tion shall be paid directly to the enrolled employee or annuitant each
pay period in accordance with subsections (f) and (g) of this section,
but only to the extent that such excess amount does not exceed )40 percent
of the authorized Government contribution rate.
"(d) In addition to Government contributions authorized under sub-
section (b) of this section, there shall be contributed by the Government
for each enrollment an amount which the Office determines to be necessary
for administrative costs in accordance with section 8906(b) of this title.
"(e)(1) An employee enrolled in a health benefits plan under this
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chapter who is placed in a leave without pay status may have his coverage
and the coverage of his family members continued under the plan for not to
exceed one year, subject to payment of the appropr:i.;ithh n counts Iw t l it,
Government and the enrollee as required by subsections (h) and (c) of this
section.
"(2) An employee who enters on approved leave without pay to serve as
a full-time officer or Employee of a labor organization, as defined by
section 7103(a)(4) of this title, may, within 60 days after entering on
that leave without pay, file with his employing agency an election to
continue his enrollment under this chapter and arrange to pay currently
into the Employees Health Benefits Fund, through his employing agency,
both employee and agency contributions from the beginning of the period of
leave without pay. The employing agency shall forward the enrollment
charges so paid to the Office for deposit to the Fund. if the employee
does not so elect, his enrollment will be subject to paragraph (1) of this
subsection and implementing regulations.
"(f) The Government contributions toward health plan premiums and
administrative costs under this section for an employee, and any payments
to employees under subsection (c)(2) of this section, shall be paid--
"(1) in the case of employees generally, from the appropriation
or fund which is used to pay the employee;
"(2) in the case of an elected official, from an appropriation or
fund available for payment of other salaries of the same office or
establishment;
"(3) in the case of an employee of the legislative branch who is
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paid by the Clerk of the House of Representatives, from the contingent
fund of the House; and
"(4) in the case of an employee in a leave without pay status,
from the appropriation or fund which would be used to pry the employee
if he were in a pay status.
"(g)(l) Except as provided in paragraphs (2), (3), and (4) of this
subsection, Government contributions toward health plan premiums and
administrative costs authorized under this section relative to annuitant
enrollments under this chapter, and any payments to annuitants under sub-
section (c)(2) of this section, shall be paid by the Office from annual
appropriations which are authorized to be made for that purpose and which
may be made available until expended.
"(2) In the case of annuitants who are retired officers or employees
of the United States Postal Service or the Post Office Department, or the
survivors of such individuals, the United States Postal Service shall pay
all Government contributions authorized by this section and shall forward
contributions required by subsections (b) and (d) of this section to the
Flnployees Health Benefits Fund upon notification by the Office of the
amounts which the Office determines are necessary for this purpose.
"(3) In the case of annuitants who are retired officers or employees
of the government of the District of Columbia, or the survivors of such
individuals, the District of Columbia goverrr:nent shall pay all Government
contributions authorized by this section and shall for'iard contributions
required by subsections (b) and (d) of this section to the Employees
Health Benefits Fund upon notification by the Office of the amounts which
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the Office determines are necessary for this purpose.
"(4) In the case of annuitants who receive monthly compensation under
subchapter I of chapter 81 of this title, all Government contributions
authorized by this section shall be paid from the Fmployees' Cornpennation
Fund established under section 8147(a) of this title, with such contribu-
tions charged back to the former employing agency in accordance with
section 8147(b) of this title. The Secretary of Labor shall authorize
payment to the Employees Health Benefits Fund of contributions required by
subsections (b) and (d) of this section upon notification by the Office
of the amounts the Office determines are necessary for this purpose.
"(h)(1) In accordance with regulations prescribed by the Office, an
employing agency or retirement system which fails to collect enrollee
premium contributions and forward them, along with Government contributions
toward health plan premiums and administrative expenses, to the Office in
the correct amounts and in a timely manner for deposit to the credit of
the Employees Health Benefits Fund shall be liable for the appropriate
amounts, plus interest at a rate determined by the Office and computed
from the time such payment should have been forwarded to the Office.
"(2) If an agency fails to withhold the proper amount of health
benefits premium contributions from an individual's salary, compensation,
or retirement annuity, the collection of unpaid premiums may be waived by
the agency if, in the judgment of the agency, the individual is without
fault and recovery would be against equity and good conscience. However,
if the agency so waives the collection of unpaid enrollee premium contri-
butions, the agency shall submit an amount equal to the sum of the
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uncollected enrollee contributions and appropriate Government contribu-
tions, plus interest, as required by paragraph (1) of this subsection.
"(i) The Office shall forward enrollee premium contributions and
applicable. Government premium contributions for enrollees in each health
benefits plan to the carrier no later than 30 days after such monies are
received by the Office for deposit to the Fmployees Health Benefits Fund.
18905. Coverage of reinstated employees and restored annuitants.
"(a) An employee enrolled in a health benefits plan tinder this chapter
who is removed or suspended without pay and later reinstated or restored to
duty on the grounds that the removal or suspension was unjustified or
unwarranted may, at his option, be issued a health care voucher for pur-
poses of enrolling as a new employee or have his coverage restored, with
appropriate adjustments made in contributions and claims, to the same extent
and effect as though the removal or suspension had not taken place.
"(b) A disability annuitant whose annuity tinder section 8337 of this
title, or a similar provision of another retirement system for employees of
the Government, is terminated because the annuitant recovers from disability
or is restored to an earning capacity fairly comparable to the current rate
of pay of the position occupied at the time of retirement, and whose annuity
is later restored due to recurrence of the disability or loss of earning
capacity, shall upon such restoration, be issued a health care voucher by
his retirement system for purposes of enrolling in a health benefits plan
pursuant to this chapter, if such annuitant was covered by any such plan
imediately prior to the termination of annuity.
"(c) A surviving spouse whose survivor annuity tinder this title was
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terminated because of remarriage and is later restored shall, under such
regulations as the Office of Personnel Management may prescribe, be
a health care voucher by the retirement system for purposes of enrolling; in
a health benefits plan under this chapter, if such spouse was covered by
any such plan immediately before such annuity was terminated.
"?8906. Employees Health Benefits Fund.
"(a) Pursuant to this section and similar provisions of prior law,
there is authorized to be in the Treasury of the United States an Employees
Health Benefits Fund which shall be administered by the Office of Personnel
Management. The contributions of employees, annuitants, and the Government
toward health plan premium charges and administrative expenses prescribed
by section 8904 of this title shall be paid into the Fund. The Fund,
other than accounts identified for specific purposes under this section
and the Retired Federal Employees Health Benefits Act (74 Stat. 850), is
available, without fiscal year limitation, for payments by the Office to
approved health benefits plans of premium charges with respect to enroll-
ments under this chapter.
"(b) An amount, as determined by the Office to be necessary from time
to time, but not to exceed one percent of the Government contribution rates
as determined by the Office pursuant to section 8904(a)(2) of this title,
shall be set aside from Government contributions paid into the Fund for
each enrollment during a plan year under section 8904 of this title as an
administrative expense reserve to be available, within the limitations that
may be specified annually by Congress, to pay the administrative expenses
incurred by the Office under this chapter.
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"(c) There shall be an enrollees' contingency reserve account in the
Fund. The Office, from time to time and in amounts it considers appropriate,
may transfer any amounts credited to the general Employees Health Benefits
Fund in prior plan years in excess of premiums due carriers to the enrollees'
contingency reserve account. This account shall be available to the Office,
without fiscal year limitation, for payment of any expenses which the Office
may, in its discretion, deem proper for the benefit of individuals enrolled
in health plans pursuant to this chapter.
"(d) The Secretary of the Treasury may invest and reinvest any of the
money in the Fund which is not immediately required for premium payments to
carriers, administrative expenses, or authorized disbursements from the
enrollee contingency reserve, in interest-bearing obligations of the United
States, and may sell these obligations for the purposes of the Fund. The
interest on and the proceeds from the sale of these obligations shall become
a part of the enrollees' contingency reserve in the Fund as authorized
under subsection (c) of this section.
"?8907. Studies and reports.
"(a) The Office of Personnel Management shall make a continuing study
of the operation and administration of this chapter, including surveys and
reports on health benefits plans available to employees and on the experi-
ence of the plans.
"(b) Each Government agency shall keep such records, make such
certifications, and furnish,the Office .,with such information and reports
as may be necessary to enable the Office to carry out its functions under
this chapter.
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11?8908. Jurisdiction of courts.
"The district courts of the United States have original jurisdiction,
concurrent with the United States Claims Court, of a civil action or claim
against the United States founded on this chapter.
"?8909. Regulations.
"(a) The Office of Personnel Management shall prescribe regulations
necessary to carry out the purposes of this chapter.
"(b) The regulations of the Office may exclude an employee from
coverage under this chapter on the basis of the nature and type of his
employment or conditions pertaining to it, such as short-term appointments,
seasonal or intermittent employment, and employment of like nature. The
Office may not exclude--
"(1) an employee or group of employees solely on the basis of the
hazardous nature of employment;
"(2) a teacher in the employ of the Board of Education of the
District of Columbia, whose pay is fixed by section 1501 of title 31,
District of Columbia Code, on the basis of the fact that the teacher
is serving under a temporary appointment if the teacher has been so
employed by the Board for a period or periods totaling not less than
two school years; or
"(3) an employee solely on the basis of occupying a position on a
part-time career employment basis (as defined in section 3402(2) of
this title).
"(c) The regulations of the Office shall provide for the beginning and
ending dates of coverage of employees and annuitants and their family
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members under health benefits plans. The regulations may require the cover-
age to continue, exclusive of the temporary extension of coverage described
by section 8902(a)(8) of this title, until the end of the pay period in
which an employee is separated from the service, or until the end of the
month in which an annuitant ceases to be entitled to annuity, and in case
of the death of an employee or annuitant, may permit a temporary extension
of the coverage of his family members for not to exceed 90 days.
"(d) The Secretary of Agriculture shall prescribe regulations to
effect the application and operation of this chapter to an individual
named by section 8901(l)(H) of this title.".
(b) (1) The amendments made by subsection (a) of this section shall
take effect on October 1, 19811, and shall be effective with respect to
health plan enrollments and Government contributions under chapter 89 of
title 5, United States Code, on and after that date, and the Office of
Personnel Management shall take such steps as it considers necessary prior
to that date, including scheduling a special open enrollment season, to
ensure that such provisions will be able to be implemented on that date.
The Office may, with respect to enrollees in health benefits plans available
pursuant to chapter 89 of title 5, United States Code, before October 1,
1984, automatically assign any individuals who do not specify a choice
with respect to health plan coverage effective on and after that date to
an appropriate level of benefits in a successor plan offered by the same
carrier, or, in the event such carrier is no longer a participant under
this chapter, to a plan which the Office determines is reasonably similar
to the individual's health plan coverage under this chapter before
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October 1, 1984, unless the individual enrollee gives notice in accordance
with regulations prescribed by the Office that the automatic assignment
is unacceptable.
(2) Notwithstanding section 8902(a)(9) of title 5, United States Code
as amended by subsection (a) of this section, any carrier that, on the
day before the date of enactment of this Act, is operating a health benefits
plan under chapter 89 of title 5, as in effect before the amendments made
by subsection (a) shall not be subject to the requirements of such section
8902(a)(9), provided that the Office of Personnel Management determines
such carrier to be financially stable.
Sec. 3. (a) Section 8902(a) of title 5, United States Code, as in
effect prior to October 1, 1984, is amended on the date of enactment of
this Act by adding the following sentence at the end thereof:
"Notwithstanding the foregoing sentence, all contracts for
health plans under this chapter which become effective as of
January 1984 shall terminate effective September 30, 1984."
(b) Contingency reserve funds set aside in the Employees Health
Benefits Fund for individual health benefits plans pursuant to section
8909(b)(2) of title 5, United States Code, as in effect on September 30,
1984, shall for a period of two years beyond termination of health plan
contracts pursuant to section 8902(a) of title 5, United States Code, as
amended by subsection (a) of this section, remain available to pay accrued
claims against the respective health benefits plans to the extent that the
Office of Personnel Management determines that other reserves held by the
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carrier of a terminated plan are insufficient to liquidate outstanding
claims. Effective October 1, 1986, the Office shall determine the total of
any individual health plan contingency reserve accounts re nainiig, ii t the
Employees Health Benefits Fund, and shall transfer all such contingency
reserve funds, together with any interest income earned from the investment
of such funds by the Secretary of the Treasury in interest-bearing obliga-
tions of the United States, to the enrollees' contingency reserve account
established in the Employees Health Benefits Fund pursuant to section 8906(c)
of title 5, United States Code.
(c) Any unused administrative reserve funds set aside in the Employees
Health Benefits Fund pursuant to subsection 8909(b)(1) of title 5, United
States Code, as in effect immediately before the effective date of section 2
of this Act, shall be available, without limitation, to pay administrative
expenses incurred by the Office in implementing the provisions of this Act.
Sec. 4. (a) The Retired Federal Employees Health Benefits Act (74
Stat. 849) is amended as follows:
(1) The word "Commission" is deleted wherever it appears and the words
"Office of Personnel Management" substituted in place thereof;
(2) Section 2(1) is amended to read:
"(1) the terms 'employee' and 'Gove mnent' have the same meanings
when used in this Act as such terms have for purposes of section 8901
of title 5, United States Code.";
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(3) Sections 3, 5, and 10 are repealed;
(4) Section 4 is amended by replacing the first two sentences with the
following sentence:
"If a retired employee enrolls for self-only in a health benefits
plan as provided for by section 6 of this Act, the Government shall
contribute each month toward his subscription charge an amount equal
to the current monthly premium of an individual for each month under
section 1839(c)(3) of the Social Security Act.";
(5) Section 6(a) is amended in the first sentence by striking out
other than the plan provided for under section 3 of this Act,";
(6) Section 7 is amended to read:
"Each retired employee shall, within such time after March 1,
1961, as the Office of Personnel Management shall prescribe, notify
the Office of his election to enroll in or retain existing coverage
in a private health benefits plan and receive Government contributions
under section 6 of this Act, or not to participate in the program
offered under this Act. If the retired employee elects to enroll
under this section, his election shall he accompanied by a certificate
of the carrier certifying the fact of his enrollment and the cost to
him of the health benefits plan, or of the health benefits portion of
the plan.";
(7) Section 8 Is amended to read:
"(a) The Government contribution toward the cost of enrollments
in private health benefits plans under sections 4 and 6 of this Act,
and expenses incurred by the Office of Personnel Management in the
administration of this Act, shall be paid from funds that shall be
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credited for this purpose by the Secretary of the Treasury, out of
money in the Treasury of the United States which is not otherwise
appropriated, to the Employees Health Benefits Fund established in
the Treasury of the United States for purposes of chapter 89 of title
5, United States Code, upon notification by the Office of the amounts
which the Office determines are necessary for purposes of this section.
"(b) The funds credited to the Employees Health Benefits Fund
under subsection (a) of this section shall be available without fiscal
year limitation for payment of the Government contributions provided
for by sections 4 and 6 of this Act through agencies of the Government
which administer a retirement system for employees of the Government
and for expenses incurred by the Office in administering this Act.";
(8) The first sentence of section 9(b) is repealed;
(9) Section 9(c) is amended by--
(A) striking out ", and withholdings required by section 5 of
this Act" in clause (4);
(B) repealing clause (6); and
(C) striking out the words "and withholding" in clause (8); and
(10) Section 12 is amended by striking out the words "and withholdings".
(b) Subsection (a) of this section becomes effective on January 1,
1984. On that date, all monies credited to the Retired Employees Health
Benefits Fund in the Treasury of the United States shall, except as provided
by subsection (d) of this section, be transferred to the Employees Health
Benefits Fund established pursuant to section 8909 of title 5, United States
Code, and set aside for purposes of the Retired Federal Employees Health
Benefits Act.
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(c) Each individual enrolled in the Government-wide plan pursuant
to section 3 of the Retired Federal Fnployees Health Benefits Act on
December 31, 1983, shall be automatically transferred to an appropriate
level of benefits under the Indemnity Benefit Plan described in paragraph
(2) of section 8903 of title 5, United States Code, as in effect on the
date of enactment of this Act, effective January 1, 1984, unless the
individual elects enrollment in another type of plan described in section
8903.
(d) Effective January 1, 1984, any contingency reserve to the credit
of the Government-wide plan under the Retired Employees Health Benefits
Act, and any monies received on or after that date with respect to enroll-
ments in such plan, shall be transferred to the contingency reserve of the
Indemnity Benefit Plan in the Fmployees Health Benefits Fund established
under section 8909(b) of title 5, United States Code, which contingency
reserve shall be made available for payment of any outstanding obligations
of the terminated Government-wide plan.
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