[Federal Register: July 19, 2000 (Volume 65, Number 139)]
[Rules and Regulations]
[Page 44644-44649]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 890 and 892
RIN 3206-AJ17
Health Insurance Premium Conversion
AGENCY: Office of Personnel Management.
ACTION: Interim rule with request for comments.
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SUMMARY: The Office of Personnel Management (OPM) is issuing interim
regulations to enable employees to pay Federal Employees Health
Benefits (FEHB) premiums with pre-tax dollars, as provided under
section 125 of the Internal Revenue Code. These regulations establish
the basic rules under which this premium conversion plan will operate,
beginning October 2000.
DATES: This interim rule is effective September 18, 2000. Comments must
be received on or before September 18, 2000.
ADDRESSES: Send written comments to Abby L. Block, Chief, Insurance
Policy and Information Division, Office of Insurance Programs,
Retirement and Insurance Service, Office of Personnel Management, 1900
E Street NW., Washington, DC 20415-3666; or deliver to OPM, Room 3425,
1900 E Street NW., Washington, DC; or FAX to (202) 606-0633.
FOR FURTHER INFORMATION CONTACT: Laurie Bodenheimer, (202) 606-0004, or
email to lrbodenh@opm.gov.
SUPPLEMENTARY INFORMATION:
Background
At the President's direction, OPM will implement a health insurance
premium conversion plan for employees participating in the FEHB
Program. The premium conversion plan is part of a ``cafeteria plan''
under Section 125 of the Internal Revenue Code. OPM will execute a
separate plan document to comply with Section 125 requirements and will
make that document available on OPM's website: www.opm.gov. OPM is also
issuing separate instructions to personnel and payroll offices.
The premium conversion plan will take effect on October 1, 2000.
Under the plan, employees' health benefit premium withholdings are
treated as a pre-tax salary deduction. Because premium conversion
lowers employees' taxable income, it reduces their tax burden. The
reduction in taxable income reduces the base for Federal income tax,
Social Security and Medicare taxes, and, in most States and localities,
State and local taxes based on income.
While most Federal employees are currently not covered by a premium
conversion plan, the Federal Judiciary, the United States Postal
Service, and some smaller Executive Branch agencies with independent
compensation-setting authority have already implemented their own
premium conversion plans. Employees of those entities will not be
covered by the premium conversion plan described here.
All other employees in the Executive Branch of the Federal
Government who are participating in the FEHB Program, and whose pay is
issued by an Executive Branch agency, will automatically have their
salary reduced (through a Federal allotment) and their FEHB premiums
paid under the premium conversion plan. Also, individuals enrolled in
the FEHB Program who are employed outside the Executive Branch, or
whose pay is not issued by an agency of the Executive Branch, will have
their salaries reduced and their FEHB premiums paid under our premium
conversion plan if their employer, in coordination with their payroll
office, agrees to offer participation in the plan. However, any
individual enrolled in the FEHB
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Program who does not want to participate in premium conversion may
waive participation, subject to the limitations in these regulations.
Premium conversion has no effect on: statutory pay provisions or
the General Schedule; the amount of any employee's health insurance
premium; or the amount of the Government share towards the FEHB premium
on behalf of any employee. Base pay for retirement, life insurance and
Thrift Savings Plan purposes is unaffected.
To ensure that the premium conversion plan qualifies for pre-tax
treatment of health insurance premiums, OPM is also amending its
allotment regulations at 5 CFR part 550, subpart C in a separate
interim rule issued simultaneously with this rule. Each employee
participating in premium conversion will make an allotment to his or
her employing agency in the amount of the employee share of the FEHB
insurance premium. The agency will then use that amount to pay the
employee's premium. The allotment will be automatic unless the employee
elects to waive premium conversion.
Waiver of Notice of Proposed Rulemaking
In accordance with section 553(b)(3)(B) of title 5 of the U.S.
Code, I find that good cause exists for waiving the general notice of
proposed rulemaking. An opportunity for public comment prior to issuing
this rule is unnecessary and contrary to the public interest. In
developing this regulation, OPM worked extensively with affected
stakeholders. OPM followed the Internal Revenue Code to develop a plan
document and regulations that comply with tax law and parallel the
practices of private sector employers. It is necessary that payroll
offices begin work on systems changes so that this benefit will be
available at the start of Fiscal Year 2001--a logical time in terms of
Federal agency budget and payroll administration.
Regulatory Planning and Review
This regulation has been reviewed by the Office of Management and
Budget in accordance with Executive Order 12866, ``Regulatory Planning
and Review.'' Because this regulation has an economic impact exceeding
$100 million annually it is defined by that Executive Order as being
``economically significant.'' It is classified as a major regulation in
accordance with the Congressional Review Act because of its economic
impact.
Analysis of Costs and Benefits
In OPM's view, the benefits of this regulation substantially
outweigh the costs. Under this regulation, Federal employees with
health insurance through the FEHB Program will begin paying their
insurance premiums with pre-tax dollars, similar to how millions of
private sector employees currently pay their health insurance premiums.
The benefits of this change in tax status are significant: the Federal
Government will become a more competitive employer and the tax
liability of Federal employees will decrease.
Costs of this regulation include a start-up cost in the first year
to implement the program; a decrease in Medicare, Social Security and
income taxes paid by Federal employees; and a decrease in Federal
employer payments to the Medicare and Social Security Trust Funds. The
benefits and costs of this regulation are described in more detail in
the following sections.
Statement of Need for Proposed Action
In his 2001 Budget, the President directed OPM to implement health
insurance premium conversion. Premium conversion will bring the Federal
Government in line with private sector practices regarding employee
payments of health insurance premiums. Over 60 million private sector
employees with employment based health insurance pay their premiums
with pre-tax dollars. This regulation will take advantage of current
law to allow over 1.5 million Federal employees, representing more than
3 million lives including dependents, to have the same benefit as
private sector workers. As a result, the Federal Government will become
a more competitive employer and health insurance will become more
affordable for Federal employees.
Examination of Alternative Approaches
In order to implement the President's premium conversion directive,
regulatory action is necessary. In developing this regulation, OPM
considered various ways to put premium conversion into operation. OPM
also hired a contractor with substantial experience in employee
benefits tax compliance to write a plan document that conforms to IRS
Section 125 rules.
OPM met with those Federal agencies that have already implemented a
premium conversion plan: the U.S. Postal Service, the Federal
Judiciary, and some small Executive Branch agencies with independent
compensation-setting authority. It studied the range of implementation
issues that these organizations encountered, from payroll system
changes and educational outreach to complying with the tax code, and
identified the key issues that OPM would need to address. OPM has
developed these regulations by using the ``best practices'' of other
employers in terms of premium conversion program development and
implementation.
Benefits Analysis
Over the last few decades, the U.S. labor market has become
increasingly competitive. Unemployment rates have hovered at about 4
percent, the lowest rates since 1970. Labor force participation rates
are at all time highs--67 percent in recent months, up from around 60
percent in 1970. Given these tight labor market conditions, the Federal
Government, like all employers, must use every means possible to
attract and retain high quality employees. Currently, the Federal
Government is at a competitive disadvantage in the labor market because
its employees pay their health insurance premiums with after-tax
dollars. In the private sector, many employees pay their health
insurance premiums with pre-tax dollars, resulting in reduced tax
liabilities and greater take-home pay. This regulation will eliminate
the Federal Government's competitive disadvantage in this area, giving
it an additional tool to attract and retain high quality workers and
increase employee satisfaction.
Another advantage of this regulation is that it lowers the tax
liability of Federal employees. Under this regulation, Federal
employees will enjoy the same benefit as private sector employees and
no longer will pay income tax, Social Security tax or Medicare tax on
their health insurance premium dollars. This tax cut increases the
take-home pay of Federal workers; Federal workers enrolled in the FEHB
Program can save over $430 per year on average.
Cost Analysis
The costs associated with this regulation are the start-up costs to
implement the premium conversion program; the decrease in Medicare,
Social Security, and income taxes paid by Federal employees; and the
decrease in Federal employer payments to the Medicare and Social
Security Trust Funds.
The start-up costs of this regulation will be incurred in the first
year of the program as individual Federal Government Agencies update
their payroll systems to accommodate
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premium conversion and as OPM and individual Agencies educate the
Federal employee population, including benefits officers, about the new
program. OPM estimates the start-up cost to be $3 million in 2001, with
$2.5 million coming from Agency implementation costs and the remaining
$.5 million from educational outreach programs such as information
pamphlets for employees and benefits officers. The cost estimate is
based on an assumption that each of the 164 discrete non-Postal payroll
systems would incur $15,000 in spending on systems analysis,
programming, testing, and overhead.
In Fiscal Year 2001, the tax benefit to Federal employees caused by
premium conversion is estimated to be about $670 million; $550 million
in Federal income taxes, $85 million in Social Security taxes, and $35
million in Medicare taxes. The decrease in Federal employer payments to
the Medicare and Social Security Trust Funds is estimated to be $85
million and $35 million dollars respectively. Assuming that health
insurance premiums will continue to increase at recent rates, the
change in tax benefits and Federal employer payments from premium
conversion is expected to grow at roughly a proportional rate in each
subsequent year.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes
certain requirements with respect to Federal rules that are subject to
the notice and comment requirements of section 553(b) of the
Administrative Procedure Act (5 U.S.C. 551 et seq.) and which are
likely to have a significant economic impact on a substantial number of
small entities. Unless an agency determines that a rule is not likely
to have a significant economic impact on a substantial number of small
entities, the RFA requires that the agency present an initial
regulatory flexibility analysis at the time of the publication of the
rulemaking describing the impact of the rule on small entities and
seeking public comment on such impact. Small entities include small
businesses, organizations and governmental jurisdictions.
OPM has determined that this rule will not have a significant
economic impact on a substantial number of small entities. The
regulation does not impact small entities.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), as well as Executive Order 12875, this interim-final rule does
not include any Federal mandate that may result in an expenditure in
any one year by State, local, or tribal governments, in the aggregate,
or by the private sector, of $100 million or more.
Federalism
We have examined this rule in accordance with Executive Order
13132, Federalism, and have determine that this final rule will not
have any negative impact on the rights, roles, and responsibilities of
State, local or Tribal governments.
List of Subjects
5 CFR Part 890
Administrative practice and procedure, Government employees, Health
facilities, Health insurance, Health professions, Hostages, Iraq,
Kuwait, Lebanon, Reporting and recordkeeping requirements, Retirement.
5 CFR Part 892
Administrative practice and procedure, Government employees, Health
insurance, Wages, Taxes.
U.S. Office of Personnel Management.
Janice R. Lachance,
Director.
Accordingly, OPM is amending 5 CFR part 890 and adding part 892 as
follows:
PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM
1. The authority citation for part 890 continues to read as
follows:
Authority: 5 U.S.C. 8913; Sec. 890.303 also issued under 50
U.S.C. 403 p, 22 U.S.C. 4069c and 4069c-1; subpart L also issued
under sec. 599C of Pub. L. 101-513, 104 Stat. 2064, as amended;
Sec. 890.102 also issued under sections 11202(f), 11232(e), and
11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251; and section 721
of Pub. L. 105-261, 112 Stat. 2061.
2. Amend Sec. 890.301 to revise the heading and paragraph (e)(1) to
read as follows:
Sec. 890.301 Opportunities for employees who are not participants in
premium conversion to enroll or change enrollment; effective dates.
* * * * *
(e)(1) Change to self only. (1) An employee may change the
enrollment from self and family to self only at any time, except that
an employee participating in health insurance premium conversion as
provided in part 892 of this chapter may make this change only during
an open season or on account of and consistent with a qualifying life
event as defined in Sec. 892.101 of this chapter that affects
eligibility for coverage.
* * * * *
3. Amend Sec. 890.304 to revise paragraph (d)(1) to read as
follows:
Sec. 890.304 Termination of enrollment.
* * * * *
(d)(1) An enrollee may cancel his or her enrollment at any time by
filing an appropriate request with the employing office except that an
employee participating in health insurance premium conversion as
provided in part 892 of this chapter may make this change only during
an open season or on account of and consistent with a qualifying life
event defined in Sec. 892.101 of this chapter that affects eligibility
for coverage. The cancellation takes effect on the last day of the pay
period in which the appropriate request canceling the enrollment is
received by the employing office.
* * * * *
4. Add part 892 to read as follows:
PART 892--FEDERAL FLEXIBLE BENEFITS PLAN: PRE-TAX PAYMENT OF HEALTH
BENEFITS PREMIUMS
Subpart A--Administration and General Provisions
Sec.
892.101 Definitions
892.102 What is premium conversion and how does it work?
892.103 What can I do if I disagree with my agency's decision
about my pre-or post-tax election?
Subpart B--Eligibility and Participation
892.201 Who is covered by the premium conversion plan?
892.202 Are retirees eligible for the premium conversion plan?
892.203 When will my premium conversion begin?
892.204 How do I waive participation in premium conversion before
the benefit first becomes effective?
892.205 May I waive participation in premium conversion after the
initial implementation?
892.206 Can I cancel my waiver and participate in premium
conversion?
892.207 Can I make changes to my FEHB enrollment while I am
participating in premium conversion?
892.208 Can I change from self-and-family enrollment in FEHB to
self-only enrollment at any time?
892.209 Can I cancel FEHB coverage at any time?
892.210 Does premium conversion change the effective date of an
FEHB enrollment, change in enrollment, or cancellation of
enrollment?
892.211 What happens if I go on leave without pay (LWOP)?
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Subpart C--Contributions and Withholdings
892.301 How do I pay my premium?
892.302 Will the Government contribution continue?
892.303 Can I pay my premiums directly by check under the premium
conversion plan?
Subpart D--Reemployed Annuitants
892.401 Am I eligible for premium conversion if I retire and then
come back to work for the Federal Government?
Authority: 5 U.S.C. 8913; 26 U.S.C. 125.
Subpart A--Administration and General Provisions
Sec. 892.101 Definitions.
Days mean calendar days.
Dependent means a family member who is both eligible for coverage
under the FEHB Program and a dependent as defined in section 152 of the
Internal Revenue Code.
FEHB Program means the Federal Employees Health BenefitsProgram
described in 5 U.S.C. 8901.
Open Season means the period of time each year as described in
Sec. 890.301(f) of this chapter when all individuals eligible for FEHB
coverage have the opportunity to enroll or change their enrollment.
These changes become effective with the first pay period that begins in
the following year. For additional open seasons authorized by OPM, the
effective date is specified.
OPM means the Office of Personnel Management.
Qualifying life event means events that may permit election changes
as described in Treasury regulations at 26 CFR 1.125-4 and includes the
following:
(1) Addition of a dependent;
(2) Birth or adoption of a child;
(3) Changes in entitlement to Medicare or Medicaid for you, your
spouse or dependent;
(4) Change in work site;
(5) Change in your employment status or that of your spouse or
Dependent from either full-time to part-time, or the reverse;
(6) Death of your spouse or Dependent;
(7) Divorce or annulment;
(8) Loss of a Dependent;
(9) Marriage;
(10) Significant change in the health coverage of you or your
spouse related to your spouse's employment;
(11) Start or end of an unpaid leave of absence by you or your
spouse; or
(12) Start or end of your spouse's employment.
Sec. 892.102 What is premium conversion and how does it work?
Premium conversion is a method of reducing your taxable income by
the amount of your contribution to your FEHB insurance premium. If you
are a participant in the premium conversion plan, Section 125 of the
Internal Revenue Code allows you to reduce your salary (through an
employer allotment) and provide that portion of your salary back to
your employer. Instead of being paid to you as taxable income, this
allotted amount is used to purchase your FEHB insurance for you. The
effect is that your taxable income is reduced. Because taxable income
is reduced, the amount of tax you pay is reduced. You save on Federal
income tax, Social Security and Medicare tax and in most States and
localities, State and local income taxes.
Sec. 892.103 What can I do if I disagree with my agency's decision
about my pre-or post-tax election?
You may use the reconsideration procedure set out at
Sec. Sec. 890.104 of this chapter to request an agency to reconsider
its initial decision affecting your participation in the premium
conversion plan.
Subpart B--Eligibility and Participation
Sec. 892.201 Who is covered by the premium conversion plan?
(a) All employees in the Executive Branch of the FederalGovernment
who are participating in the FEHB Program (as described in 5
U.S.C.8901), and whose pay is issued by an agency of the
ExecutiveBranch of the Federal Government, are automatically covered by
the premium conversion plan. Certain reemployed annuitants may be
considered employees for purposes of premium conversion, as described
in subpart D of this part.
(b) Employees of organizations that have established a premium
conversion plan under separate authority prior to October 2000 may not
participate in the premium conversion plan described here because they
are already covered by their employing agency's plan.
(c) Individuals enrolled in FEHB who are not employees of the
Executive Branch of the Federal government or are not employees of the
Federal government, will be covered by the premium conversion plan if
their employer signs an adoption agreement that is accepted by OPM.
(d) Individuals enrolled in FEHB who are appointed by an agency in
the Executive Branch, but whose pay is not issued by that agency, will
be covered by the premium conversion plan if the entity that makes
their FEHB contribution signs an adoption agreement that is accepted by
OPM.
(e) Individuals may waive premium conversion by filing a waiver
form with their employer in accordance with this part.
Sec. 892.202 Are retirees eligible for the premium conversion plan?
No, only current employees who are enrolled in the FEHBProgram are
covered by the premium conversion plan. Former employees are not
eligible. If you are a reemployed annuitant, see subpart D of this
part.
Sec. 892.203 When will my premium conversion begin?
Your salary reduction (through a Federal allotment) and pre-tax
benefit become effective with the first day of the first pay period
beginning on or after October 1, 2000, if you are employed in a covered
Executive Branch agency as described in Sec. 892.201(a). Otherwise,
your salary reduction (through a Federal allotment) and pre-tax benefit
will be effective on the first day of the first pay period beginning on
or after the date that your employer officially adopts the premium
conversion plan (see Sec. 892.201(c), (d)).
Sec. 892.204 How do I waive participation in premium conversion before
the benefit first becomes effective?
You must file a waiver form by the date set by your employing
office, but not later than the day before the effective date of
coverage. The waiver form is available from your employing office.
Sec. 892.205 May I waive participation in premium conversion after the
initial implementation?
Yes, but the opportunity to waive premium conversion is limited.
You may waive premium conversion:
(a) During the annual FEHB open season. The effective date of the
waiver will be the first day of the first pay period that begins in the
following calendar year;
(b) At the same time as you sign up for FEHB when first hired or
hired as a reemployed annuitant. Employees who leaveFederal service and
are rehired after a three-day break in service or in a different
calendar year also may waive;
(c) In conjunction with a change in FEHB enrollment, on account of
and consistent with a qualifying life event (see Sec. 892.101); or
(d) When you have a qualifying life event and the waiver is on
account of and consistent with that qualifying life event(even if you
do not change your FEHB enrollment). You have 60 days after the
qualifying life event to file a waiver with your employer. The waiver
is effective on the first day of the pay
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period following the date your employer receives the waiver.
Sec. 892.206 Can I cancel my waiver and participate in premium
conversion?
Yes, you may cancel a waiver and participate in premium conversion
if:
(a) You have a qualifying life event; the change in FEHB coverage
is consistent with the qualifying life event; and you complete an
election form to participate in premium conversion within 60 days after
the qualifying life event; or
(b) You cancel your waiver during an open season, including an
extended open season authorized by OPM.
Sec. 892.207 Can I make changes to my FEHB enrollment while I am
participating in premium conversion?
Generally, you can make changes to your FEHB enrollment for the
same reasons and with the same effective dates listed in Sec. 890.301
of this chapter. However, if you are participating in premium
conversion there are two exceptions: you must have a qualifying life
event to change from self-and-family enrollment to self-only enrollment
or to drop FEHB coverage entirely. (See Sec. 892.209 and Sec. 892.210.)
Your change in enrollment must be consistent with and correspond to
your qualifying life event as described in Sec. 892.101. These
limitations only apply to changes you may wish to make outside open
season.
Sec. 892.208 Can I change from self-and-family enrollment in FEHB to
self-only enrollment at any time?
If you are participating in premium conversion you may change your
FEHB enrollment from self-and-family to self-only:
(a) During the annual open season; or
(b) Within 60 days after you have a qualifying life event.Your
change in enrollment must be consistent with and correspond to your
qualifying life event. For example, if you get divorced, changing to
self-only would be consistent with that qualifying life event. If you
adopt a child, a change from self-only to self-and-family coverage
would also be consistent with that qualifying life event.
Sec. 892.209 Can I cancel FEHB coverage at any time?
If you are participating in premium conversion you may cancel your
FEHB coverage:
(a) During the annual open season; or
(b) Within 60 days after you have a qualifying life event.Your
cancellation of coverage must be consistent with and correspond to your
qualifying life event. For example, if you get married and your spouse
is employed by a company that provides health insurance for you, then
canceling FEHB coverage would be consistent with that qualifying life
event. If you adopt a child, canceling coverage would not be consistent
with that qualifying life event.
Sec. 892.210 Does premium conversion change the effective date of an
FEHB enrollment, change in enrollment, or cancellation of enrollment?
No. If you are participating in premium conversion, the effective
date of an FEHB enrollment, change in enrollment, or cancellation of
enrollment is the same effective date as provided in Sec. 890.301 of
this chapter.
Sec. 892.211 What happens if I go on leave without pay (LWOP)?
(a) Your commencement of LWOP is a qualifying life event as
described in Sec. 892.101. You may change your premium conversion
election (waive if you now participate, or participate if you now
waive).
(b)(1) You may continue your FEHB coverage by agreeing in advance
of LWOP to one of the payment options described in paragraphs (b)(2),
(b)(3), or (b)(4) of this section.
(2) Pre-pay. Prior to commencement of your LWOP you may pay the
amount due for your share of your FEHB premium during your LWOP period,
if your employing agency, at its discretion, allows you to do
so.Contributions under the pre-pay option may be made through premium
conversion on a pre-tax basis. Alternatively, you may pre-pay premiums
for the LWOP period on an after-tax basis.
(3) Direct pay. Under the direct pay option, you may pay your share
of your FEHB premium on the same schedule as payments would be made if
you were not on LWOP, as described in Sec. 890.502(b) of this chapter.
You must make the premium payments directly to your employing agency.
The payments you make under the direct pay option are not subject to
premium conversion, and are made on an after-tax basis.
(4) Catch-up. Under the catch-up option, you must agree in advance
of the LWOP period that: you will continue FEHB coverage while on LWOP;
your employer will advance your share of your FEHB premium during your
LWOP period; and you will repay the advanced amounts when you return
from LWOP. (Described in Sec. 890.502(b) of this chapter.) Your catch-
up contributions may be made through premium conversion.
(5) If you remain in FEHB upon your return from LWOP, your catch-up
premiums and current premiums will be paid at the same time.
(c) Your return from LWOP constitutes a qualifying life event as
described in Sec. 892.101. You may change your premium conversion
election (waive if you now participate, or participate if you now
waive). The election you choose upon return from LWOP will apply to
your current as well as your catch-up premiums.
Subpart C--Contributions and Withholdings
Sec. 892.301 How do I pay my premium?
As a participant in premium conversion, instead of having your
premium withheld from after-tax salary, your salary will be reduced
(through a Federal allotment) by the amount equal to yourFEHB premium,
which you will allot to your agency. The allotment from salary
satisfies the FEHB premium payment requirement of 5U.S.C. 8906. Your
employer is authorized to accept this allotment under
Sec. 550.311(a)(8) and Sec. 550.312 of this chapter or, for employers
not subject to those regulations, a similar mechanism.Your agency will
use the allotment to pay your share of your FEHB premium. This will
reduce your taxable income as described in Sec. 892.102.
Sec. 892.302 Will the Government contribution continue?
Yes, your employer will still pay the same share of your premium as
provided in the Federal Employees Health Benefits Act, and Sec. 890.501
of this chapter. Employee allotments do not count toward the
Government's statutory maximum contribution.
Sec. 892.303 Can I pay my premiums directly by check under the premium
conversion plan?
No, your employer must take your contribution to your FEHB premium
from your salary to qualify for pre-tax treatment.
Subpart D--Reemployed Annuitants
Sec. 892.401 Am I eligible for premium conversion if I retire and then
come back to work for the Federal Government?
(a) If you are a retired individual enrolled in FEHB who is
receiving an annuity and you are reemployed in a position that conveys
FEHB eligibility and is covered by the premium conversion plan, you are
automatically covered by premium conversion, unless you waive
participation as described in Sec. 892.205.
(b)(1) If you do not waive premium conversion, your FEHB coverage
will be transferred to your employing agency, and your employing agency
will assume responsibility for contributing the
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government share of your FEHB coverage. Your coverage will be based on
your status as an active employee and your employing agency will deduct
your premiums from your salary.
(2) If you elect to waive participation in premium conversion, you
will keep your FEHB coverage as an annuitant, but your contributions
towards yourFEHB premiums will be made on an after-tax basis. Your
employing agency must receive your waiver no later than 60 days after
the date you return to Federal employment. A waiver will be effective
at the beginning of the first pay period after your employer receives
it.
(c) If you did not carry FEHB into retirement and you are
reemployed as an employee in a position covered by the premium
conversion plan, you may enroll in the FEHB Program as a new employee
as described in Sec. 890.301 of this chapter. Upon enrolling in FEHB,
you are automatically covered by the premium conversion plan, unless
you waive participation as described in Sec. 892.205.
(d) Your status as an annuitant under the retirement regulations
and your right to continue FEHB as an annuitant following your period
of reemployment is unaffected.
[FR Doc. 00-18209 Filed 7-14-00; 3:19 pm]
BILLING CODE 6325-01-D