Federal HR Policies Affecting Schedule A Appointment
Federal Employees Health Benefits
The Federal Employees Health Benefits (FEHB) program became effective in 1960. It is the largest employer sponsored group health insurance program in the world with over 9 million participants.
Title 5 U.S. Code, Chapter 89, Health Insurance
Title 5 Code of Federal Regulations (CFR), Part 890, Federal Employees Health Benefits Program
FEHB Handbook - A Handbook for Enrollees and Employing Offices
Payroll Office Letter P-00-13, Dated July 13, 2000, FEHB Premium Conversion
BAL Number 00-215, Dated August 24, 2000, Pre-Tax Payment of FEHB Insurance Premiums (Premium Conversion)
BAL Number 00-224, dated November 21, 2000, Federal Employees Health Benefits: Children's Equity
Section 7220 of Public Law No 107-171, Dated May 13, 2002, Termination of Certain Schedule A Appointments
BAL Number 11-203, dated March 10, 2011, Federal Employees Health Benefits Program and the Affordale Care Act: Covering Children unitil Age 26
FEHB is a benefit offered to Schedule A appointees in Cooperative Extension organizations which have a Cooperative Agreement with USDA in accordance with the Federal Employees Health Benefits Program Act (Title 5 U.S. Code Chapter 89 and Title 5 CFR, Part 890).
The CES employees Schedule A appointments were terminated effective January 31, 2003. Section 7220 of Public Law 107-171, dated 5/13/2002, terminated the Federal Schedule A appointments for CES employees with the companion Federal appointment and Federal benefits.
However, the legislation included a stipulation which allowed the affected CES employees to continue to participate in the Federal benefits programs without having the Federal appointment. The legislation stated that the former Federal appointees could continue to participate in the programs that they were eligible to participate in prior to the enactment of the new law except for the Federal Workers' Compensation Program. For additional information, see the section in this guidance on Schedule A appointments.
There are many "Health Plan" choices available to Cooperative Extension employees that were on Schedule A appointments. They can choose from among Fee for Service (FFS) plans, regardless of where they live, or a Point of Service (POS) plan and Health Maintenance Organizations (HMO) within the area serviced by the plan. They can also enroll in the National Plans (Blue Cross and Blue Shield, Mail Handlers, Alliance Health Plan, etc.) available to all Federal employees.
Before choosing a plan, the participant should check each plan to see if the plan offers the services needed. All of the plans have family and self only coverage.
Costs will come in the form of premiums, deductibles, coinsurance (a percentage of the bill) and/or copayments (an up front fixed dollar amount). The participant should review the various plans offered and compare these expenses to determine how they fit into their budget and decide which plan is best suited for their individual needs.
The Government pays a portion of the plan premium and the participants' share of the premium should be made through payroll deduction.. The participant's cost is usually 25% of the total premium and the other 75% is paid by the Government.
The Government contribution will be prorated for appointees on a part-time work schedule, i.e., the Government's share will be lower for appointees on a part-time tour, and the appointees' cost is prorated in proportion to the percentage of full-time service.
Cooperative Extension employees who were previously on a Schedule A appointments who choose to move from one CES organization to another without a break in service of more than 3 calendar days, and who are not enrolled in the Federal Health Benefits program or enrolled in a local plan that is not available in their area of employment, have 60 days from the date of their appointment to complete the Standard Form (SF) 2809, Health Benefits Registration Form, electing the health benefits plan and option of their choice. Cooperative Extension Human Resource offices will contact the appointee before the election period ends to remind the appointee that they need to complete and return the SF 2809.
If the former Schedule A appointee does not return the completed form before the 60 day election period ends, they will be considered to have elected not to enroll and a SF 2809 will be completed for them to document the fact that the appointee was reminded of the deadline and elected not to enroll in the FEHB program.
Former Federal appointees who previously elected not to enroll or canceled their enrollment may be allowed to participate in the FEHB program if the reason for enrolling or changing enrollment is one of the events that will allow a permissible change.
Participating employees/retirees may select coverage for themselves, a spouse, unmarried dependents under 26, and disabled dependents older than 26 who are incapable of supporting themselves. Participants can change from family to self only at any time if their organization does not participate in Premium C onversion and they do not have a Premium C onversion waiver on file.
Effective Date of Coverage and Changes in Coverage
Unless otherwise specified, enrollments and changes in enrollments become effective on the first day of the first pay period that begins after the employing office receives the appropriate request and that follows a pay period that the appointee is in pay status.
Cancellations are effective on the last day of the pay period that the employing office receives the request. Participants' that cancel their FEHB coverage are not eligible for the 31 day extension of coverage and they can not convert their coverage to an individual policy.
Terminations are usually effective on the last day of the pay period that the appointee is on the rolls of the Cooperative Extension organization and the coverage continues for 31 days after the effective date of the separation.
Documenting Changes in Coverage
Changes in an employees health insurance coverage is documented on an SF 2810, Change in Health Benefits, form if the enrollee is transferring from one CES organization to another, or if the enrollee resigns or is separated from their employing organization.
A completed SF 2810 is the only mechanism through which the health benefits carriers can be made aware that an individual has left Federal service and is no longer enrolled in the FEHB program. It is essential that a properly completed SF 2810 be completed and forwarded to the carriers when the following situations occur:
- the employment is terminated;
- conclusion of 365 days in leave without pay (LWOP) or other non-pay status;
- return to military duty for more than 30 days;
- transfer in from another agency or payroll office;
- reinstatement (correction of erroneous action);
- change in name of enrollee; and
- individuals leave Federal service.
The Office of Personnel Management (OPM) discontinued the use of the SF 2810 when an employees' coverage was transferred to another agency, or the employee dies or retires, or when the enrollment must be transferred to or from the Office of Workers Compensation Programs (OWCP). Instead of using the SF 2810, OPM suggest that a memo be prepared to the gaining agency informing them of the transferee's health insurance coverage. However, the gaining agency must prepare a SF 2810, documenting the transfer of the employees' insurance to the new agency, and file a copy in the OPF.
Mandatory Changes in Coverage
The issuance of a court or administrative order requiring a former Federal appointee to provide health benefits for his/her children is considered to be a change in family status allowing an enrollment change. The Children's Equity Act requires mandatory self and family coverage for FEHB-eligible employees who do not comply with a court or administrative order to provided health benefits for their children. A former Federal appointee subject to such an order must enroll in self and family coverage in a plan that provides full benefits to his/her child/children in the area where they live, or provide documentation that he/she has other health coverage for the children. If the former Federal appointee does not enroll in an appropriate health plan or provide documentation of other coverage for the children, the CES agency must enroll the employee in self and family coverage in the standard option of the Blue Cross and Blue Shield Service Benefit Plan (enrollment code 105).
Premium Conversion is a tax benefit that allows an employee to allot a portion of their salary back to the employer, which the employer then uses to pay the employee's contribution for FEHB coverage. This allotment is made on a pre-tax basis, which means that the money is not subject to Federal income, Medicare, or Social Security taxes. In addition, most States and localities that impose an income tax will not tax the allotment, therefore less tax is withheld and paychecks are larger. Paying health insurance premiums on a pre-tax basis will make FEHB more affordable for employees.
CES former Federal appointees that participate in the FEHB program are eligible to have their FEHB premiums paid under the premium conversion plan if their employer agrees to adopt the Federal plan and offer participation in premium conversion. These employees are allowed to participate because they are employed by their respective colleges and universities under a Cooperative Agreement that allows them to participate in the Federal health insurance plans. Some colleges and universities do not participate in the Federal Premium Conversion plan because they participate in their state plan.
Participation in premium conversion is automatic unless an employee chooses not to participate. Employees that participate in the FEHB program who choose not to participate in premium conversion need to complete a form to waive pre-tax treatment of their employee contribution to the FEHB Program. The Premium Conversion Waiver/Election Form can be used by all former Federal appointees that move from one CES organization to another, with coverage effective the same day as the elected Federal plan; and, current employees who wish to stop their participation in premium conversation. Each year during FEHB open season eligible employees may decide whether or not to participate for the following year. Elections to not participate in premium conversions can also be made during the calendar year if the employee experiences a qualifying life event., e.g., marriage, birth of a child, etc.
Each year there is an opportunity to enroll or change plans. The open enrollment season is usually held from around mid-November to mid-December. OPM will announce the specific dates for the open enrollment season each year.
Effect of LWOP or Insufficient Pay on FEHB Coverage
Employing offices are required to notify participants in the FEHB program that are on LWOP or whose pay is insufficient to cover the cost of their premiums as soon as they are aware that premium payments cannot be withheld from the participants' salary. The notice must be in writing and explain the options available to the participant to continue or terminate their FEHB coverage. This notice serves as due process and could lead to the termination of the participants' coverage if they do not respond within the specified time frame.
Enrollment continues for up to 365 days of LWOP unless the participant wants to terminate their coverage or does not respond to their employing office's notice about continued coverage. The participant must pay their share of the premiums for every pay period that their enrollment continues.
The FEHB program offers continued coverage:
- for the participant and their family when the participant retirees, if eligible;
- for a former spouse of a participant if they are divorced and there is a qualifying court order;
- for the family of a deceased participant; and
- for a participant and their family when they move, transfer, go on leave without pay, or enter military service (certain variations ine when they retire. If an employee plans to retire before they meet the 5 year requirement they may request OPM to grant them a waiver. OPM has the authority to grant the waiver when, in its sole discretion, it determines that it would be against equity and good conscience not to allow a person to be enrolled in the FEHB Program as an annuitant.
All requests for waivers must be submitted to USDA for review and approval and the CES employing office will prepare a cover memo and submit the request to USDA HRD MSB. The USDA HRD MSB will submit the request to OPM after advising the USDA Office of Human Resources Management (OHRM) of the request. OPM will not consider request submitted to their office without the cover letter from USDA.
Attachment A provides information and guidance to CES employees that would like to request a waiver of the 5-year requirement and a sample letter is included in the attachment. All request for waivers must be submitted to USDA four months prior to the planned retirement date.
Attachment B provides information on OPM's procedure for Personnel Offices to submit an employee's request for Waiver of the 5-Year Requirement for Carrying Health Benefits into Retirement. Note: Attachment B has been modified for CES use, since all requests must be submitted through USDA to OPM. The employee is responsible for providing the CES HRD office, and the USDA HRD MSB with a copy of OPM's response. The retirement action must include a remark for the approved request and a copy of OPM's approval of the request for waiver must be a retirement application.
Coverage after the Former Schedule A Appointee's Health Benefit Ends
The program offers either Temporary Continuation of Coverage (TCC) or conversion to non-group (private) coverage:
- for the participant and their family if the participant leaves their employment with the Cooperative Extension organization, for reasons other than gross misconduct, and the participant is not going to another federal appointment with another agency;
- for a dependent if they marry or turn 26; and
- for a participant's former spouse if they are divorced and have a qualifying court order.
Coverage that is terminated is automatically extended for 31 days after the effective date of the termination and the participant can convert their coverage to a private plan. If a former Schedule A appointee in the Cooperative Extension organization loses coverage other than by cancellation they may be eligible for TCC.
The employing office must notify employees within 61 days after their regular FEHB enrollment terminates, of their opportunity to enroll under TCC and provide them with a copy of the TCC under the FEHB program (RI 79-27) pamphlet. The former appointee has 60 days, from the date of the event that creates the opportunity to enroll in TCC, or 65 days after the date on their notice from the employing office, which is later, to enroll under TCC. TCC is effective on the 32nd day after the date the employee separates and allows the continuation of coverage for up to 18 months.
Employing offices are responsible for providing all employees who are enrolled or eligible to enroll in FEHB with information about their right to TCC. However, the employing office is not obligated to notify the employees' family members when they are no longer eligible for coverage under the CES former Federal appointee's enrollment or provide notification of their eligible for TCC.
It is the employees’ responsibility to notify their employing office of the change in their child's/children's status. They must provide the CES Human Resources Office with the name and address of the child and the date of the event that caused their loss of FEHB coverage within 60 days from the loss of coverage. The employing office has 14 days to notify the child of his/her TCC rights. If the child or another person notifies the employing office of the child's loss of coverage the time limit for electing TCC is shorter. Children are eligible for up to 36 months of TCC coverage, after the date of the event that caused them to lose their dependent coverage, instead of converting to an individual contract.
If a former spouse is eligible for TCC, the former Federal appointee or their former spouse must notify the employing office within 60 days after the date of their divorce or annulment. They must provide the CES Human Resources Office with the name and address of the former spouse and a certified copy of the divorce decree or other document showing the date of the divorce or annulment is also required. The employing office has 14 days to notify the former spouse of his/her rights. If another person notifies the employing office of the former spouses's spouse’s loss of coverage the time limit for electing TCC is shorter. Former spouses are eligible for up to 36 months of TCC coverage, after the date of the divorce or annulment that caused them to lose their dependent coverage, instead of converting to an individual contract.
Each employing office must establish procedures for notifying current and former employees about their eligibility to enroll, including what documents are needed to determine eligibility, and accepting enrollment elections from former employees, children, and former spouses. RI 79-27, Temporary Continuation of Coverage under the Federal Employees Health Benefits Program, provides information on the TCC and the OPM FEHB Handbook includes sample notices for former spouses and children of CES Federal appointees that are no longer eligible for coverage under their parents plan.
The employing office of the employee or annuitant at the time of the qualifying event is responsible for collecting premiums. The employing office sends the premiums it collects to OPM.
Claims should be made directly with the FEHB plan providing coverage.
Records and Forms
There are many forms for the FEHB program. These forms should be filed in the Official Personnel Folder (OPF) and kept as a permanent record, unless a form contains specific instructions to do something different. Claim forms should not be included in the OPF. Standard forms (SF) can be downloaded and used as official forms.
Coordination of Benefits
If the participant or a covered family member of the participant is entitled to benefits from a source other than their FEHB plan, e.g., spouse's health insurance coverage, Medicare, Medicaid, or no-fault automobile insurance, coordination of benefits will take place. The participant must disclose information about the other source of benefits to their plan's Carrier. The SF 2809 has a section for other insurance coverage and the information should be on the form when the appointee enrolls in the FEHB program. Changes after the initial enrollment, or change in enrollment, must be documented and forwarded to the carrier, and/or provided upon request.
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