This subpart sets forth the establishment, administration, and requirements of the Postal Service Health Benefits Program under 5 U.S.C. 8903c,within.S.C. chapter 89. This subpart incorporates provisions of this part to the extent generally applicable and not inconsistent with this subpart.

(a) In this subpart, the terms set out in § 890.101 apply unless stated otherwise.

(b) In this subpart, the terms covered Medicare individual, initial contract year, initial participating carrier, Medicare Part A, Medicare Part B, and Postal Service Medicare covered annuitant have the meanings set forth in 5 U.S.C. 8903c.

(c) In this subpart—

Cancel means to submit to the employing office an appropriate request electing not to be enrolled in a PSHB plan, by an enrollee who is eligible to continue enrollment, including because the enrollee did not enroll in, or chose to disenroll from, Medicare Part B.

Election not to enroll means to submit an appropriate request electing not to be enrolled in a PSHB plan by an individual who is eligible to enroll, including because the individual chooses not to enroll in Medicare Part B.

Medicare coverage means coverage that meets the requirements of § 890.1604.

Reconsideration means the final level of administrative review of an initial decision by an employing office or OPM, as applicable.

Source agency means an agency that periodically provides information or data to OPM pursuant to an agreement under § 890.1612.

(d) In this subpart, wherever reference is made to other subparts of this part—

(1) A reference to employee is deemed a reference to Postal Service employee;

(2) A reference to enrollee is deemed a reference to a Postal Service employee or Postal Service annuitant in whose name the enrollment is carried;

(3) A reference to annuitant, survivor annuitant, or an individual with entitlement to an annuity is deemed a reference to Postal Service annuitant;

(4) A reference to employer, employing agency, employing office, or agency for Postal Service employees is deemed a reference to the Postal Service, for Postal Service annuitants is deemed a reference to the appropriate retirement system or other appropriate entity for compensationers, those enrolled under TCC or Spouse Equity, and annuitants whose annuity is insufficient to withhold the cost of health benefits premiums; and

(5) A reference to carrier is deemed a reference to a PSHB Carrier.

(a) Except as provided by paragraph (b) of this section, the following individuals are eligible to enroll, or to be covered under an enrollment, in a health benefits plan described at 5 U.S.C. 8903c and under this subpart:

(1) Postal Service employee;

(2) Postal Service annuitant; and

(3) Member of family of an individual in paragraph (a)(1) or (2) of this section.

(b) For purposes of this subpart, a Postal Service employee includes a Postal Service employee who receives monthly compensation under 5 U.S.C. chapter 81, subchapter I (“compensationer”), who is determined by the Secretary of Labor to be unable to return to duty.

(c) The following individuals may not enroll, or be covered under an enrollment, in this subpart:

(1) Any Postal Service Medicare covered annuitant who is not enrolled in Medicare Part B and is required to be enrolled in Medicare Part B, in accordance with § 890.1604;

(2) Any Medicare covered member of family of a Postal Service Medicare covered annuitant who is not enrolled in Medicare Part B and is required to be enrolled in Medicare Part B, in accordance with § 890.1604; or

(3) Any individual covered by an FEHB plan under this part, except as permitted by § 890.302(a)(2).

(d) Former spouses of Postal Service employees and Postal Service annuitants may establish their eligibility to enroll under subpart H of this part. A former spouse of a Postal Service employee or Postal Service annuitant who is enrolled in an FEHB plan on or before December 31, 2024, may continue enrollment in an FEHB plan and is not required to enroll in a PSHB plan. A former spouse who is eligible under § 890.803(a)(2) because of their enrollment in a PSHB plan is not eligible to enroll or remain enrolled in a PSHB plan; they may enroll in an FEHB plan and, accordingly, the Medicare enrollment requirements in § 890.1604 would not apply.

(e) Survivor annuitants have the same eligibility for reinstatement of enrollment as described in § 890.303(d) for enrollment in a PSHB plan or an FEHB plan as applicable to the service that gives rise to the survivor annuitant status, except that the Medicare enrollment requirements in § 890.1604 would apply to reinstatements of enrollment into a PSHB plan.

(f) Individuals enrolled or covered under the PSHB Program are eligible to elect temporary continuation of coverage as provided under subpart K of this part.

(a) Annuitant. A Postal Service annuitant who is entitled to Medicare Part A must be enrolled in Medicare Part B to enroll or continue enrollment in a health benefits plan under this subpart, except as otherwise provided by paragraph (d)(1) of this section.

(b) Member of family. A Postal Service Medicare covered annuitant's member of family who is entitled to Medicare Part A must be enrolled in Medicare Part B to be covered or continue coverage in a health benefits plan under this subpart, unless:

(1) The Postal Service Medicare covered annuitant is excepted from the requirement to enroll in Medicare Part B as provided by paragraphs (d)(1)(i) through (v) of this section; or

(2) The member of family is excepted from the requirement to enroll in Medicare Part B as provided by paragraphs (d)(2)(i) through (iv) of this section.

(c) Survivor annuitant. (1) A Postal Service annuitant's member of family who is an annuitant as defined in 5 U.S.C. 8901(3)(B) and who is entitled to Medicare Part A must be enrolled in Medicare Part B to continue enrollment in a health benefits plan under this subpart, except as otherwise provided by paragraph (d)(3) of this section;

(2) A Postal Service employee's member of family who is an annuitant as defined in 5 U.S.C. 8901(3)(B) and who is entitled to Medicare Part A, must be enrolled in Medicare Part B to continue enrollment in a health benefits plan under this subpart, except as provided in paragraphs (d)(3)(ii) through (iv) of this section.

(d) Exceptions. The Medicare Part B enrollment requirements provided in paragraphs (a) and (b) of this section do not apply:

(1) To a Postal Service Medicare covered annuitant who—

(i) Was a Postal Service annuitant on or before January 1, 2025, and who was not both entitled to Medicare Part A and enrolled in Medicare Part B on January 1, 2025;

(ii) Was a Postal Service employee and was 64 years of age or older on January 1, 2025;

(iii) Resides outside the United States (which includes the States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands), provided that the individual demonstrates such residency;

(iv) Is enrolled in health care benefits provided by the Department of Veterans Affairs (VA) under 38 U.S.C. chapter 17, subchapter II, including individuals who are not required to enroll in the VA's system of patient enrollment referred to in 38 U.S.C. 1705(a), subject to the documentation requirements in paragraph (e)(2) of this section; or

(v) Is eligible for health services from the Indian Health Service, subject to the documentation requirements in paragraph (e)(3) of this section.

(2) To a Medicare covered member of family who—

(i) Is eligible for PSHB coverage under the PSHB enrollment of a Postal Service Medicare covered annuitant who is not required to enroll in Medicare Part B, as provided in paragraphs (d)(1)(i) through (v) of this section;

(ii) Resides outside the United States (which includes the States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands), provided that the individual demonstrates such residency;

(iii) Is enrolled in health care benefits provided by the VA under 38 U.S.C. chapter 17, subchapter II, including individuals who are not required to enroll in the VA's system of patient enrollment referred to in 38 U.S.C. 1705(a) to receive VA hospital care and medical services, subject to the documentation requirements in paragraph (e)(2) of this section; or

(iv) Is eligible for health services from the Indian Health Service subject to the documentation requirements in paragraph (e)(3) of this section.

(3) To a survivor annuitant, as described in paragraph (c) of this section, who:

(i) At the time of becoming a survivor annuitant the Postal Service annuitant was subject to an exception under paragraph (d)(1) of this section;

(ii) Resides outside the United States (which includes the States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands), provided that the individual demonstrates such residency;

(iii) Is enrolled in health care benefits provided by the Department of Veterans Affairs (VA) under 38 U.S.C. chapter 17, subchapter II, including individuals who are not required to enroll in the VA's system of patient enrollment referred to in 38 U.S.C. 1705(a), subject to the documentation requirements in paragraph (e)(2) of this section; or

(iv) Is eligible for health services from the Indian Health Service, subject to the documentation requirements in paragraph (e)(3) of this section.

(e) Documentation requirements. To qualify for an exception under paragraph (d) of this section, a Postal Service Medicare covered annuitant, or a Medicare covered member of family must meet one of the following documentation requirements:

(1) Documentation or information in a form, manner, and frequency as prescribed by OPM demonstrating qualification, satisfactory to the Postal Service, for the exceptions at paragraph (d)(1)(iii) or (d)(2)(ii) of this section;

(2) Documentation from the Department of Veterans Affairs in a form, manner, and frequency as prescribed by OPM demonstrating the individual meets an exception identified in paragraph (d)(1)(iv) or (d)(2)(iii), of this section; or

(3) Documentation from the Indian Health Service (IHS) in a form, manner, and frequency as prescribed by OPM in consultation with IHS demonstrating the individual meets an exception identified in paragraph (d)(1)(v) or (d)(2)(iv) of this section.

(f) Notification of non-enrollment in Medicare Part B. A Postal Service Medicare covered annuitant, a Medicare covered member of family, or a survivor annuitant, as described in paragraph (c) of this section, who is required to be enrolled in Medicare Part B must promptly notify OPM or the Postal Service, in writing, if they choose not to enroll in or to disenroll from Medicare Part B as described in § 890.1608(e).

(g) Effect of non-enrollment in Part B. Failure to enroll or disenrollment from Medicare Part B will have the effect of a termination of PSHB coverage, as described in § 890.1608(b).

(a) Definitions. In this section—

Current enrollment type means the type of coverage (self only, self plus one, or self and family) of the FEHB plan in which the individual is enrolled during the contract year immediately preceding the initial contract year;

Current option with respect to an individual, means the option under a FEHB plan in which the individual is enrolled during the contract year immediately preceding the initial contract year; and

Current plan means, with respect to an individual, the FEHB plan in which the individual is enrolled during the contract year immediately preceding the initial contract year.

(b) Transitional Open Season. (1) During the Open Season that immediately precedes the initial contract year (i.e., the transitional Open Season), a Postal Service employee or Postal Service annuitant—

(i) May elect to enroll or elect not to enroll in a PSHB plan; and

(ii) Will not be enrolled or continue enrollment in an FEHB plan under this part as a Postal Service employee or a Postal Service annuitant.

(2) A Postal Service employee or Postal Service annuitant who is eligible to enroll in a PSHB plan and is enrolled in an FEHB plan but who does not make an election during the transitional Open Season either to enroll in a PSHB plan or not to enroll in a PSHB plan will be automatically enrolled in a PSHB plan pursuant to paragraph (c) of this section.

(3) During the transitional Open Season, a Postal Service employee in a nonpay status, such as leave without pay, except for the case of a 365-day period of nonpay status as set forth at § 890.303(e), may enroll in a PSHB plan or may be automatically enrolled in a PSHB plan pursuant to paragraph (b)(2) of this section.

(c) Automatic enrollment. Each Postal Service employee or Postal Service annuitant who is enrolled in an FEHB plan on December 31, 2024, and does not make an enrollment action during the transitional Open Season under paragraph (b) of this section, will be automatically enrolled in the PSHB Program as follows:

(1) Into corresponding plan. Individuals enrolled in a carrier's 2024 FEHB plan where the carrier offers the same plan in 2025 in FEHB and offers a 2025 PSHB plan with at least one option that has equivalent benefits and cost sharing and in the same geographic area as the 2025 FEHB plan, will be enrolled in that 2025 PSHB plan and into an option as follows:

(i) Equivalent option. Individuals enrolled in a carrier's 2024 FEHB option where the carrier offers that option in 2025 in FEHB and also offers a 2025 PSHB option with equivalent benefits and cost sharing as the 2025 FEHB option, as determined by OPM, will be automatically enrolled into that 2025 PSHB option; or

(ii) No equivalent option. Individuals enrolled in a carrier's 2024 FEHB option where the carrier does not offer a 2025 PSHB option that meets the criteria in (1)(i), will be automatically enrolled into the lowest-cost option of the 2025 PSHB plan, that is not a High Deductible Health Plan (HDHP) and does not charge an association or membership fee, except that if the only option is an HDHP, then the individual will be enrolled in that HDHP option.

(2) Into a 2025 PSHB plan where the carrier offers no 2025 FEHB plan. Individuals enrolled in a carrier's 2024 FEHB plan where the carrier offers no 2025 FEHB plan and offers a 2025 PSHB plan with at least one option with similar benefits and cost sharing and in the same geographic area as the 2024 FEHB plan, as determined by OPM, will be enrolled in that 2025 PSHB plan and into an option as follows:

(i) Similar option. Individuals enrolled in a carrier's 2024 FEHB option where the carrier offers a 2025 PSHB option with similar benefits and cost sharing as the 2024 FEHB option, as determined by OPM, will be automatically enrolled into that 2025 PSHB option; or

(ii) No similar option. Individuals enrolled in a carrier's 2024 FEHB option where the carrier does not offer a 2025 PSHB option that meets the criteria in paragraph (c)(2)(i) of this section, will be automatically enrolled into the lowest-cost option of the 2025 PSHB plan, or in the case where the 2025 PSHB plan has two or more options, into the lowest-cost option that is not a High Deductible Health Plan (HDHP) and does not charge an association or membership fee.

(3) Into different plan. Individuals enrolled in a carrier's 2024 FEHB plan where paragraphs (c)(1) and (2) of this section do not apply will be enrolled in the lowest-cost nationwide PSHB option, consistent with § 890.301(n).

(4) Same enrollment type. Individuals automatically enrolled under this section will be automatically enrolled into the same enrollment type as the individual's 2024 enrollment type.

(d) Automatic enrollment—effect on family members. A Postal Service employee or Postal Service annuitant automatically enrolled under paragraph (c) of this section will be enrolled in the same enrollment type they were enrolled in immediately preceding the initial contract year. The enrollee's family member(s), if eligible, will be covered under the same enrollment type they were covered under immediately preceding the initial contract year.

(1) A self plus one enrollment will cover the same eligible family member as in the current plan. Automatic enrollment does not verify eligibility of family members. The enrollee must make an affirmative enrollment change to remove an ineligible family member and may replace them with an eligible family member or change the enrollment to a self only or to a self and family enrollment type. Failure to affirmatively change an automatic enrollment to remove an ineligible family member from a self plus one enrollment will result in coverage only for the enrollee but premium withholding for a self plus one enrollment.

(2) A self and family enrollment will include all eligible members of family. Automatic enrollment does not verify identity of eligible family members. The enrollee must affirmatively notify the PSHB Carrier, employing office, or OPM of any changes to members of family.

(e) Belated enrollment and enrollment changes. Belated enrollments and enrollment changes will be permitted as follows:

(1) In general, belated enrollments or belated enrollment changes are permitted in accordance with § 890.301(c) for Postal Service employees and § 890.306(c) for Postal Service annuitants.

(2) Any individuals who should have been automatically enrolled pursuant to this section but were not, are deemed to have met the requirement to show that they were unable to enroll for cause beyond their control.

(3) OPM may, in its discretion, deem other individuals or groups of individuals to have met the requirement to show that they were unable to enroll for cause beyond their control.

(4) Unless required to be a prospective change by governing premium conversion under part 892 of this chapter, a belated Open Season enrollment or enrollment change, coverage, and premium obligation take effect on January 1 of the contract year.

(a) Except as otherwise provided in this subpart, a Postal Service employee may enroll or change enrollment, as provided by § 890.301, in a PSHB plan and may not enroll in a FEHB plan as a Postal Service employee.

(b) Except as otherwise provided in this subpart, a Postal Service annuitant may change enrollment or reenroll as provided by § 890.306, in a PSHB plan and may not enroll or reenroll in a FEHB plan as a Postal Service annuitant.

(c) Except as otherwise provided in this subpart, reinstatement of enrollment in accordance with § 890.305 is permitted in a PSHB plan.

(d) Initial decisions and reconsiderations of PSHB eligibility or enrollment will be made pursuant to § 890.1607.

(e) Under this subpart, an enrollment, change of enrollment, or reenrollment made during Open Season takes effect on January 1 of the next year.

(f) Under this subpart, OPM will effectuate the following health benefits actions: to enroll or change enrollment; to elect not to enroll; and to reenroll. The employing office makes determinations of eligibility under 5 U.S.C. chapter 89, pursuant to application of 39 U.S.C. 1005.

(a) Who may file. An individual may request the employing agency or OPM, as applicable, to reconsider the employing office's or OPM's initial decision denying eligibility for, or enrollment in, or coverage under, the PSHB Program. Individuals subject to § 890.1112 are not entitled to reconsideration as used in this subpart.

(b) Initial decision. An employing office's or OPM's initial decision must be in writing and state the right to an independent level of review (reconsideration).

(1) Except as otherwise provided in this subpart, employing offices are responsible for initial decisions concerning PSHB eligibility for Postal Service employees or Postal Service annuitants.

(2) OPM is responsible for initial decisions concerning:

(i) Verification that an individual is an eligible member of family under § 890.302;

(ii) Postal Service annuitants or their family members who are not required to enroll in VA's system of patient enrollment referred to in 38 U.S.C. 1705(a), and who must provide documentation from the VA under § 890.1604(d)(2) indicating they satisfy the requirements for an exception described in § 890.1604(c)(1)(iv) or (c)(2)(iii); and

(iii) Postal Service annuitants or their family members who must provide documentation from the Indian Health Service under § 890.1604(d)(3) indicating they satisfy the requirements for an exception described in § 890.1604(c)(1)(v) or (c)(2)(iv).

(3) OPM is responsible for initial decisions regarding enrollment actions made based on information received from source agencies with which OPM has an information sharing agreement established pursuant to § 890.1612. An initial decision under this paragraph will be issued only after the notice process under § 890.1612 is completed.

(c) Reconsideration. (1) A request for reconsideration must be made in writing, must include the claimant's name, address, date of birth, Social Security number or other unique identifier, name of the carrier, reason(s) for the request, documentary evidence in support of the request, if any, and, if applicable, retirement claim number.

(2) The reconsideration review must be an independent review designated at or above the level at which the initial decision was rendered.

(d) Time limit. A request for reconsideration of an initial decision must be filed with the employing agency or OPM, as applicable, within 30 calendar days from the date of the written decision stating the right to a reconsideration. The time limit on filing may be extended, at the discretion of the employing agency or OPM, when the individual shows that they were not notified of the time limit and were not otherwise aware of it, demonstrates a good faith effort to obtain the documentation as described under paragraph (b)(2)(ii) or (iii) of this section, or that they were prevented by circumstances beyond their control from making the request within the time limit. The employing agency's or OPM's decision in response to a request for reconsideration of an employing office's initial decision is a final decision as described in paragraph (e) of this section.

(e) Final decision. After reconsideration, the employing agency or OPM, as applicable, must issue a final decision within 30 days of the request for reconsideration, which must be in writing and must fully set forth the findings and conclusions.

(a) Enrollment in FEHB plan terminates prior to the initial PSHB contract year. For individuals who are eligible to enroll under this subpart pursuant to § 890.1603(a), enrollment in an FEHB plan and coverage of the enrollee and covered family members under that FEHB plan will terminate at the end of the contract year preceding the initial contract year.

(1) Coverage under an FEHB plan will remain available for an eligible family member who is or becomes covered as a member of family of an FEHB plan enrollee who is not eligible for a PSHB plan pursuant to § 890.1603(a)(1) or (2).

(2) Coverage as a family member under an FEHB plan will remain available for a Postal Service employee or Postal Service annuitant who is or becomes covered under their family member's FEHB enrollment. A Postal Service annuitant's or Postal Service employee's family member who meets the eligibility requirements for their own enrollment in an FEHB plan will remain eligible to enroll in an FEHB plan.

(3) Individuals whose coverage is terminated under this paragraph (a) are not eligible for temporary continuation of coverage under subpart K of this part pursuant to § 890.1103(b).

(b) Disenrollment and removal from enrollment: Postal Service Medicare covered annuitants and Medicare covered members of family not enrolled in Medicare Part B. An individual who is required to be enrolled in Medicare Part B and is not enrolled in Medicare Part B will not be disenrolled or removed from PSHB coverage immediately and will be given one opportunity to remain enrolled in or covered by PSHB if they enroll or reenroll in Medicare Part B during their next available Medicare enrollment period, which may be the next Medicare General Enrollment Period, except that an individual who was excepted from the Medicare Part B requirement pursuant to § 890.1604(d)(1)(iii) or (d)(2)(ii) must enroll not later than the end of the Medicare General Enrollment Period beginning January 1 of the following calendar year. Failure to enroll or reenroll in Medicare Part B at the next enrollment period may result in disenrollment from PSHB or removal from coverage under a PSHB enrollment. If disenrolled, a Postal Service annuitant will not be permitted to reenroll in PSHB, as described in paragraph (b)(5) of this section, and a family member who is removed from coverage under a PSHB enrollment, may have their PSHB coverage reinstated only as described in paragraph (b)(9) of this section. (1) Unless the individual qualifies for an exception under § 890.1604(c), a Postal Service Medicare covered annuitant may be disenrolled and a Medicare covered member of family may be removed from PSHB coverage if not enrolled in Medicare Part B either:

(i) By the end of their Medicare initial enrollment period or applicable Medicare special enrollment period; or,

(ii) Any time after January 1, 2025, that the PSHB Carrier, the Postal Service, or OPM determines that the individual was required to be enrolled but has not enrolled in Medicare Part B.

(2) A Postal Service Medicare covered annuitant will not be disenrolled from PSHB and a Medicare covered member of family will not be removed from PSHB coverage in a case where that individual was not informed of their obligation to enroll in Medicare Part B, or it would be against equity and good conscience to remove the individual.

(3) A Postal Service Medicare covered annuitant will not be disenrolled and a Medicare covered member of family will not be removed from PSHB coverage due to not being enrolled in Medicare Part B if such individual qualifies for one of the exceptions in § 890.1604(c).

(4) A Postal Service Medicare covered annuitant may not be disenrolled if they have suspended PSHB enrollment while enrolled in a Medicare-sponsored plan under section 1833, 1876, or 1851 of the Social Security Act as described in § 890.304(d)(2).

(5) Disenrollment of a Postal Service Medicare covered annuitant from a PSHB plan under this section shall be considered a termination with entitlement of the enrollee and their covered family members to a 31-day temporary extension of coverage and the right of conversion under § 890.401, except as provided at paragraph (b)(5)(ii) of this section.

(i) A Postal Service annuitant will have no further opportunity to reenroll in a PSHB plan. Disenrollment of a Postal Service annuitant will also result in the removal of covered family members from PSHB coverage.

(ii) Disenrollment or removal from coverage under an enrollment will be prospective in all cases except where fraud or intentional misrepresentation of material fact is found, in which case the individual's coverage will be terminated retroactively, as applicable, and no right to a 31-day temporary extension of coverage or to conversion under § 890.401 will be available.

(iii) Disenrollment or removal under this section will occur only after a notice process under § 890.1612, if applicable, is completed and an initial decision to disenroll or remove, subject to reconsideration under § 890.1607(b), is issued.

(6) An individual who is disenrolled from Medicare Part B, where the individual is required to be enrolled in Medicare Part B and does not have an exception under this subpart, will be issued an initial decision disenrolling them from PSHB or removing them from coverage under a PSHB enrollment at the time OPM becomes aware of the Medicare disenrollment. Individuals disenrolled or removed from PSHB coverage will be entitled to a 31-day temporary extension of coverage and rights to conversion.

(7) Within 60 days of OPM's initial decision, a Postal Service Medicare covered annuitant or Medicare covered member of family, as applicable, may request reconsideration of OPM's initial decision to disenroll or remove the individual from PSHB coverage. OPM will notify the carrier when a request for reconsideration of the decision to disenroll or remove the individual from the enrollment is made. The time limit for filing may be extended as noted in § 890.1607.

(8) If the Postal Service Medicare covered annuitant provides acceptable proof of PSHB eligibility subsequent to disenrollment which renders the disenrollment inappropriate, the enrollment shall be reinstated retroactively so that there is no gap in enrollment, as appropriate. A Postal Service Medicare covered annuitant's PSHB enrollment cannot be reinstated after disenrollment from a PSHB plan based on failure to enroll in, disenrolling from, or being disenrolled from Medicare Part B, except that a one-time opportunity as set forth at § 890.1608(b) may be available if the Postal Service annuitant has not previously invoked and used it.

(9) If the Postal Service Medicare covered member of family, who is required to be enrolled in Medicare Part B and is removed from a Postal Service Medicare covered annuitant's PSHB enrollment because the family member failed to enroll in, disenrolls from, or is disenrolled from Medicare Part B, the family member's PSHB coverage may be reinstated. Reinstatement of the family member's PSHB coverage will be permitted only if the Postal Service Medicare covered annuitant's PSHB enrollment continues, and only if proof of the family member's Medicare Part B enrollment which renders the removal inappropriate, is provided by the Postal Service Medicare covered annuitant or Medicare covered member of family, as applicable. The family member's PSHB coverage will be reinstated upon request by the Postal Service Medicare covered annuitant to reinstate the family member's PSHB coverage subsequent to removal, at the Postal Service Medicare covered annuitant's option, as follows:

(i) Prospectively, within 60 days of the Medicare covered family member gaining coverage under Medicare Part B, or

(ii) Retroactively to the date of termination of PSHB coverage, so that there is no gap in coverage, provided that the proof demonstrates the family member was continuously enrolled in Medicare Part B since that date and subsequent to removal, as appropriate.

(c) Ineligibility under this subpart. The PSHB Carrier, Postal Service, other applicable employing offices, or OPM, as appropriate, may take action to disenroll ineligible individuals from enrollment or remove covered members of family from an enrollment pursuant to § 890.308.

(d) Removal due to fraud or misrepresentation. Pursuant to § 890.308(e)(3) and (f)(3), fraud or intentional misrepresentation of the fact of non-enrollment in, or disenrollment from, Medicare Part B may be grounds for retroactive disenrollment and removal to the date of loss of eligibility.

(e) Cancellation of PSHB in writing to the Postal Service due to lack of Medicare coverage. As required by 5 U.S.C. 8903c(g)(3)(D), the Postal Service Medicare covered annuitant or a Medicare covered member of family may cancel coverage under this subpart in writing to the Postal Service because the individuals choose not to enroll in or to disenroll from Medicare Part B. In such a case, PSHB enrollment or coverage under this subpart will be cancelled as described in paragraphs (e)(1) through (4) of this section.

(1) The cancellation of a Postal Service Medicare covered annuitant's PSHB plan enrollment—

(i) Is effective as of the last day of the last pay period in which the Postal Service Medicare covered annuitant was enrolled in Medicare Part B, or the last day of the last pay period before the individual became a Postal Service Medicare covered annuitant; and

(ii) Cancels the PSHB plan coverage of any family members covered under a self plus one or self and family enrollment, subject to applicable provisions at § 890.1609.

(2) The cancellation of a Medicare covered member of family's PSHB plan coverage is effective the last day in which the Medicare covered family member was enrolled in Medicare Part B, or the last day before the individual became eligible for Medicare but did not enroll.

(3) When writing to notify the Postal Service that a Medicare covered member of family will not enroll in or will disenroll from Medicare Part B, the Postal Service Medicare covered annuitant may elect to decrease their PSHB plan enrollment type as described in § 890.306(e).

(4) Cancellation of PSHB enrollment or coverage under this paragraph (e) shall be treated as a termination and an enrollee or covered family member whose enrollment or coverage is canceled is entitled to a 31-day temporary extension of coverage and right of conversion in accordance with § 890.401.

(f) Temporary extension of coverage and conversion. A Postal Service employee, Postal Service annuitant, or their covered family member whose enrollment or coverage is terminated other than by cancellation of the enrollment or discontinuance of the plan, in whole or part, is entitled to a 31-day temporary extension of coverage and right of conversion in accordance with § 890.401.

(a) A 31-day temporary extension of coverage and right of conversion under subpart D of this part is available from the health benefits plan under 5 U.S.C. chapter 89 in which the enrollee or covered family member was most recently enrolled or covered.

(b) If an individual was enrolled in or covered by a PSHB plan until becoming eligible for temporary continuation of coverage under subpart K of this part, the individual may elect coverage under subpart K by a PSHB plan offered under this subpart.

(a) Minimum standards for PSHB plans. To qualify for approval by OPM, a health benefits plan under this subpart shall—

(1) Meet the minimum standards for health benefits plans at § 890.201, unless otherwise stated in this subpart;

(2) Provide prescription drug benefits pursuant to 5 U.S.C. 8903c(h)(2);

(3) Provide equivalent benefits and cost-sharing in the initial contract year to the carrier's FEHB plan, as applicable, pursuant to section 8903c(c)(2);

(4) Maintain separate reserves, including contingency reserves, with respect to enrollees in each PSHB plan as directed by OPM; and

(5) Begin coverage on January 1 of each year.

(b) Minimum standards for PSHB Carriers. The minimum standards for health benefits carriers under this subpart shall be those contained in 48 CFR 1609.70.

(c) Approval of plans with 1,500 or more Postal enrollees. To the greatest extent practicable, in the initial contract year, OPM shall approve a health benefits plan offered by a carrier under this subpart that has equivalent benefits and cost-sharing to the FEHB plan offered by that carrier in which the total enrollment of Postal Service employees and Postal Service annuitants was 1,500 or more in the 2023 contract year. OPM may exempt a comprehensive medical plan, as described in 5 U.S.C. 8903(4), from the requirement in this paragraph (c).

(d) Withdrawal of plan approval. Failure on the part of the PSHB Carrier's plan to meet the standards in this section is cause for OPM's withdrawal of approval of the plan in accordance with § 890.1611.

(a) OPM may withdraw approval of a health benefits plan or carrier under this subpart and may give notice of non-renewal of a contract pursuant to § 890.204 if the standards in § 890.1610 and 48 CFR 1609.70 are not met.

(b) Contracts to offer health benefits plans in the PSHB Program pursuant to 5 U.S.C. 8903c(c)(1)(A) are subject to nonrenewal in accordance with § 890.205.

(a) OPM shall establish periodic agreements with the Social Security Administration regarding Postal Service annuitants and their eligible family members for purposes of:

(1) Determining whether Postal Service Medicare covered annuitants and Medicare covered members of family of those annuitants satisfy the Medicare enrollment requirements at § 890.1604; and

(2) Determining which Postal Service annuitants and family members of such annuitants may be eligible to enroll in Medicare Part B under section 1837(o) of the Social Security Act.

(b) OPM shall identify Postal Service annuitants and their eligible family members who may be covered Medicare individuals from OPM's stored enrollment data. OPM will provide identifying information about these annuitants and their eligible family members to the Social Security Administration via secure data transfer for the purposes as outlined in the periodic agreements.

(c) OPM shall establish periodic agreements with the Department of Health and Human Services, the United States Postal Service, the Department of Veterans Affairs, and other Federal agencies as needed to share data and information as is necessary to carry out 5 U.S.C. 8903c and this subpart.

(d) These agreements shall specify, at a minimum, the purpose and legal authorities that govern the elements of information or data to be shared, the process that will be used for sharing the information or data, the frequency of sharing the information and data, and the permitted uses and redisclosure of the information and data.

(e) The agreements established under paragraph (c) of this section shall, to the greatest extent practicable, ensure that data is shared for the following purposes:

(1) To determine which Postal Service employees or Postal Service annuitants may be eligible to enroll in a PSHB plan; and which family members may be covered;

(2) To determine which Postal Service Medicare covered annuitants and their Medicare covered members of family may be subject to the enrollment requirements described in § 890.1604; and

(3) To create a system for data sharing as needed for carrying out 5 U.S.C. 8903c and this subpart.

(f) If a source agency has provided information or data, regarding a Postal Service Medicare covered annuitant or Medicare covered member of family, which establishes a basis that the individual may be ineligible for PSHB enrollment or coverage, OPM will provide the individual with written notice that will contain at a minimum:

(1) An explanation of the PSHB enrollment requirements and exceptions described in § 890.1604 and the specific information or data provided to OPM from the source agency that was the basis for the notice;

(2) The source agency's contact information where the individual may ask questions or contest the accuracy of the information or data on which OPM based the notice;

(3) An explanation of the required process and timeframe(s) for providing OPM with evidence that the individual is engaged in a dispute with the source agency identified in the notice for the purposes of seeking the source agency's correction of the information or data, affecting the individual's PSHB eligibility, provided to OPM pursuant to the agreements described in this section;

(4) That the individual will remain enrolled or covered under PSHB while the individual is engaged in disputing the information or data with the source agency, as described in paragraph (f)(2) of this section;

(5) That the individual will be disenrolled or removed from PSHB, as described in § 890.1608 and subject to reconsideration, within 60 days of the date of the notice if the individual does not provide sufficient evidence, in the discretion of OPM, as described in paragraph (f)(3) of this section; and

(6) That the individual will be disenrolled or removed from PSHB, as described in § 890.1608 and subject to reconsideration, within 60 days of the notice, notwithstanding evidence of a dispute, if the information or data OPM receives from the source agency continues to provide no basis for OPM to establish that the individual satisfies PSHB enrollment requirements.

(g) OPM will issue an initial decision in accordance with § 890.1607(b)(3). If an individual will be disenrolled or removed from PSHB based on the information or data from the source agency, in paragraph (f) of this section, the individual will be notified in writing that the disenrollment or removal, as applicable, is subject to reconsideration pursuant to § 890.1607, and that such reconsideration is limited to a review of the source agency's data or information, received pursuant to an agreement under this section or 5 U.S.C. 8903c(e)(3)(C) that was before OPM at the time it effectuated the disenrollment or removal action.

(a) In general. The calculations for contributions and withholdings for coverage under this subpart will be made in the same manner as 5 U.S.C. 8906 and subpart E of this part. For purposes of this subpart, the subscription charge and the Government contribution under 5 U.S.C. 8906(b) will begin on January 1 of each year for Postal Service employees and Postal Service annuitants.

(b) Postal Service contribution. The Government contribution with respect to the Postal Service for health benefits plans under this subpart shall be determined annually in accordance with § 890.501 commencing 2024 using the weighted average of rates offered by PSHB plans for the following year with respect to self only, self plus one, and self and family enrollments. For the initial contract year, the weighted average applicable for determining the Government contribution by the Postal Service will be determined using the calculation at 5 U.S.C. 8903c(i), except that OPM will use available data with respect to Postal Service enrollment for 2024, taking into account 2023 data.

(c) Medicare late enrollment penalty. Upon request by the Postal Service, and only until the Postal Service Retiree Health Benefits Fund established under 5 U.S.C. 8909a is depleted, OPM will pay out of such Fund any late enrollment penalties required under section 1839(e)(1) of the Social Security Act for individuals who enrolled during the Special Enrollment Period established under section 1837(o) of the Social Security Act (42 U.S.C. 1395p). If at any time the PSRHBF is depleted, USPS shall pay late enrollment penalties out of its funds established under 39 U.S.C. 2003. In making such late enrollment penalty payments, OPM, as administrator of the Fund under 5 U.S.C. 8909a(a), will prioritize the payment of health benefit premiums for individuals described in 5 U.S.C. 8906(g)(2)(A), over the late enrollment penalties.

(d) Calculations for the Postal Service Retiree Health Benefits Fund. As directed by 5 U.S.C. 8909a OPM shall make annual computations with respect to the cost of claims attributable to Postal Service annuitants and their covered family members, and the United States Postal Service shall pay into the Fund annually according to those computations.

(e) Clarification of statutory terms. (1) OPM has determined that “net claims costs” in the calculation in 5 U.S.C. 8909a(e)(1) is equivalent to “estimated net claims costs” as defined in 5 U.S.C. 8909a(g).

(2) The computations for post-retirement health obligations computed under 39 U.S.C. 3654(b) shall be performed using an aggregate entry-age normal cost method described in 5 U.S.C. 8331(17) and in accordance with 8348(h).

(3) In accordance with 5 U.S.C. 8348(h), for purposes of computing the amounts described in 39 U.S.C. 3654(b), this includes:

(i) Current annuitants as described in 5 U.S.C. 8909a(e)(1)(A) means individuals who are Postal Service annuitants on September 30 of the relevant reporting year described in 5 U.S.C. 8909a(d); and

(ii) Current employees as described in 5 U.S.C. 8909a(e)(1)(B) means individuals who are Postal Service employees on September 30 of that year.

(a) Correction of errors. (1) Except as otherwise provided in this section, the employing office or OPM may make prospective or retroactive corrections of administrative errors at any time. Retroactive corrections may not apply retroactively beyond the initial contract year.

(2) OPM may order or make, as applicable, a correction of an administrative error upon a showing satisfactory to OPM that it would be against equity and good conscience not to do so.

(3) OPM may make retroactive correction of enrollee enrollment code errors if the enrollee reports the error by the end of the pay period following the one in which they received the first written documentation (i.e., pay statement or enrollment change confirmation) indicating the error.

(4) OPM may order the termination of an enrollment in any comprehensive medical plan described in 5 U.S.C. 8903(4) and permit the individual to enroll in another PSHB plan for purposes of this subpart, upon a showing satisfactory to OPM that the furnishing of adequate medical care is jeopardized by a seriously impaired relationship between a patient and the comprehensive medical plan's affiliated health care providers.

(5) Retroactive corrections are subject to withholdings and contributions under the provisions of §§ 890.502 and 890.1613.

(b) Carrier entitlement to pursue subrogation and reimbursement recoveries. Carrier entitlement to pursue subrogation and reimbursement recoveries must follow the requirements of § 890.106.

(c) Enrollment reconciliation. (1) OPM and each PSHB Carrier must, at OPM's direction and in the manner requested by OPM, reconcile PSHB plan enrollment records, including with a list of the Postal Service Medicare covered annuitants and their Medicare covered members of family that satisfy the Medicare enrollment requirements at § 890.1604.

(2) Any Postal Service Medicare covered annuitant or a Medicare covered member of family of such annuitant that is found to be enrolled or covered under a PSHB plan without satisfying the Medicare enrollment requirements at § 890.1604 shall be disenrolled or removed pursuant to § 890.1608.

(d) Information about PSHB Program enrollment requirements. OPM shall provide timely information about PSHB Program enrollment requirements to the United States Postal Service to disseminate to Postal Service employees, Postal Service annuitants, and their eligible family members. Any requests for more information should be directed, in writing, to the United States Postal Service.

(e) All other provisions. Other requirements of this part not referenced within this subpart shall be interpreted to apply to the PSHB Program consistent with definitions and deemed references, unless it conflicts with this subpart, as determined by the Director.

(f) Conflicts. In the event of a conflict between a provision of this subpart and a provision in this part, as determined by the Director, this subpart will supersede.

(a) Definitions. For purposes of this section concerning crediting separate reserves from FEHB Options to PSHB Options, and for these purposes only, the following definitions apply:

2024 FEHB Option premium means, for a 2024 FEHB Option, the 2024 premium attributable to both Postal Service and non-Postal Service enrollees.

2024 Postal Service premium means, for a 2024 FEHB Option, the 2024 premium attributable to Postal Service employees and Postal Service annuitants as defined under 5 U.S.C. 8903c(a).

Amounts available means:

(i) With respect to experience-rated 2024 FEHB Options, the sum of the balances in the Option's Contingency Reserve Account and Letter of Credit Account less the Runout as of December 31, 2024; and

(ii) With respect to community-rated 2024 FEHB Options, the Option's Contingency Reserve Account balance as of December 31, 2024.

Corresponding PSHB option means a 2025 PSHB Option that is in the same geographic area and has equivalent benefits and cost-sharing as a 2025 FEHB Option, and that 2025 FEHB Option was also offered in 2024 by the same carrier.

Option means a level of benefits offered by a carrier to self only, self plus one, and self and family enrollees in a specific geographic area, with a unique set of premiums.

Plan means all Options offered by a carrier within a defined geographic area under a single contract.

Runout means the amount estimated by OPM, as of December 31, 2024, needed to pay claims and expenses incurred but not paid for periods on or before December 31, 2024, for an experience-rated FEHB Option, considering any income attributable to periods on or before, but not yet received by, December 31, 2024.

(b) Reserve credits. As soon as practicable on or after January 1, 2025, OPM will credit each PSHB Option's reserves according to the method described in paragraph (c) of this section.

(c) Reserve credit methodology. OPM will determine the Reserve credit for each 2024 FEHB Option and allocate it to the PSHB.

(1) OPM will determine the 2024 Postal Service premium by multiplying a 2024 FEHB Option's self only, self plus one, and self and family 2024 premiums by the number of Postal Service enrollments of that Option in each enrollment type and taking the sum of these three amounts.

(2) OPM will determine the 2024 FEHB Option premium by multiplying each 2024 FEHB Option's self only, self plus one, and self and family premiums by the number of total enrollments (inclusive of both Postal Service and non-Postal Service enrollments) in each enrollment type for that Option and taking the sum of these three amounts. OPM will use its March 2024 enrollment reports to determine the total enrollments.

(3) OPM will calculate the Postal Service Percentage for each 2024 FEHB Option by dividing the 2024 Postal Service Premium by 2024 FEHB Option Premium.

(4) OPM will calculate the Reserve Credit by multiplying the Postal Service Percentage for each 2024 FEHB Option by the Amounts Available for that Option.

(5) OPM will reallocate the Reserve Credit for each 2024 FEHB Option into a PSHB Contingency Reserves and Letter of Credit Account, as applicable, as follows:

(i) If a carrier offers an FEHB Plan with one, two, or three Options in 2024 and offers the same number of Corresponding PSHB Options in 2025, the Reserve Credits for those Options will be allocated to the Corresponding PSHB Options' reserves.

(ii) If a carrier offers an FEHB Plan with two or three Options in 2024 and offers only one Corresponding PSHB Option in 2025, the Reserve Credits attributable to all the 2024 FEHB Plan's Options will be allocated to that Corresponding PSHB Option's reserve.

(iii) If a carrier offers an FEHB Plan with three Options in 2024 and offers only two Corresponding PSHB Options in 2025, the Reserve Credits attributable to the two FEHB Options that have Corresponding PSHB Options will be allocated to those two Corresponding PSHB Options' reserves. The Reserve Credit from the third FEHB Option (that does not have a Corresponding PSHB Option) will be allocated to one of the two Corresponding PSHB Plan Options that has the lowest self only premium and is not a High Deductible Health Plan (HDHP).

(iv) If a carrier offers an FEHB Plan in 2024 and offers no FEHB Plan in 2025, but offers at least one 2025 PSHB Option with similar benefits and cost sharing and in the same geographic area as the carrier's 2024 FEHB Plan, as determined by OPM, the Reserve Credit(s) attributable to that FEHB Plan will be credited to the reserves of the carrier's 2025 PSHB Options as described in paragraphs (c)(5)(i) through (iii) of this section as if the 2025 PSHB Option(s) were a Corresponding PSHB Option.

(v) If a carrier offers an FEHB Plan in 2024, and offers that FEHB Plan in 2025, but offers no Corresponding PSHB Options for that 2025 FEHB Plan, the Reserve Credit(s) attributable to that FEHB Plan will be credited to the reserves of the PSHB Options offered in 2025, proportionately, consistent with 5 U.S.C. 8903c(j)(2) where the subscription charges paid are the 2024 Postal Service Premium.

(vi) If a carrier offers a 2025 PSHB Option for which no 2024 Postal Service Premium is attributable, then that 2025 PSHB Option will receive no Reserve Credit.

(a) Carrier requirement to offer Medicare Part D prescription drug benefits. (1) A carrier that offers a PSHB plan must provide prescription drug benefits to any Postal Service annuitant and member of family of such annuitant who is a Part D-eligible individual (as defined in section 1860D-1(a)(3)(A) of the Social Security Act) through a Medicare Part D EGWP as described as employer-based retiree health coverage under section 1860D-22(b), (c)(1), and (3)(A) of such Act .

(2) A carrier must provide Medicare Part D coverage through a prescription drug plan (PDP), as defined in section 1860D-41(a)(14) of such Act, or through contracts between the PSHB plan and a PDP sponsor, as defined in section 1860D-41(a)(13) of such Act, of such a prescription drug plan.

(3) A carrier may, in addition to offering a PDP required under paragraph (a)(2) of this section and subject to OPM's approval, offer a Medicare Advantage plan with prescription drug coverage (MAPD), as defined in section 1860D-1(a)(3)(C) of such Act.

(b) Prescription drug coverage under a PSHB plan through Medicare Part D. A Postal Service annuitant and a member of family of such annuitant who is a Part D-eligible individual must be enrolled in a PSHB plan's Part D EGWP in order to receive prescription drug coverage under the PSHB plan. The prescription drug benefit is not covered under a PSHB plan for a Part D-eligible individual who is not enrolled in the PSHB plan's Part D EGWP.

(1) Prescription Drug Coverage for Medicare Part D-eligible annuitants and members of family residing outside of the United States. A carrier will not group enroll, as described in paragraph (d) of this section, a Medicare Part D-eligible Postal Service annuitant or a member of family of such annuitant who resides outside of the United States (which includes the States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands) into the Medicare Part D EGWP offered by the plan. A carrier must provide prescription drug coverage through the PSHB plan to these individuals.

(c) PSHB plan enrollment or disenrollment and Medicare EGWPs. Changes to enrollment during Open Season under § 890.301(f) or because of a qualifying life event as defined in part 892 of this chapter apply with respect to changes to PSHB plans that include a Medicare Part D EGWP.

(d) Carrier requirements for group enrollment into Medicare EGWPs. A carrier must comply with all applicable CMS requirements regarding Part D-eligible individual group enrollment into Medicare EGWPs, including all applicable CMS notice requirements. Nothing in this section shall be construed as affecting an individual's ability to select a PSHB plan pursuant to § 890.1606.

(1) PDP EGWP. Annually at the conclusion of Open Season under § 890.301(f), or when an enrollee makes a change to their PSHB enrollment because of a qualifying life event under § 892.101 of this chapter, a carrier must automatically group enroll a Part D-eligible individual, who is covered by the carrier's PSHB plan, into the PSHB plan's PDP EGWP, unless the individual:

(i) Elects to enroll or is enrolled in the PSHB plan's MAPD EGWP described in paragraph (d)(2) of this section; or

(ii) Has opted out of group enrollment in the PSHB plan's PDP EGWP or MAPD EGWP for the current or upcoming plan year, as applicable.

(2) MAPD EGWP. Annually, at the conclusion of Open Season under § 890.301(f), or when an enrollee makes a change to their PSHB enrollment because of a qualifying life event, a carrier must automatically enroll a Part D-eligible individual who is covered by the carrier's PSHB plan into the carrier's PSHB plan's MAPD EGWP if the individual elects to enroll in the carrier's MAPD EGWP. During the transitional Open Season, a carrier must automatically enroll a Part D-eligible individual into the carrier's 2025 PSHB plan's MAPD EGWP if the individual is covered by that carrier's 2024 FEHB plan's MAPD EGWP, and if the individual elects the carrier's 2025 PSHB plan or is automatically enrolled into the carrier's 2025 PSHB plan under § 890.1605.

(3) Notice. In addition to the CMS notice requirements, each year, not less than 30 calendar days prior to the start of Open Season under § 890.301(f), a carrier must send written notice to Part D-eligible individuals who are enrolled in the carrier's PSHB plan that they will be group enrolled into the PDP EGWP offered under the carrier's PSHB plan. In addition, when an enrollee makes a change because of a qualifying life event, a carrier must send such written notice to the Part D-eligible individuals covered under the enrollment. The notice shall state:

(i) The carrier intends to enroll the individual in the carrier's Medicare Part D PDP EGWP as described under paragraph (d)(1) of this section, or MAPD EGWP as described under paragraph (d)(2) of this section as applicable, during Open Season under § 890.301(f), or as a result of a qualifying life event, as applicable;

(ii) The individual may affirmatively opt out of group enrollment;

(iii) Opting out of group enrollment means that the individual is deciding not to be enrolled in the PSHB plan's PDP EGWP, or MAPD EGWP if applicable;

(iv) The date by which the individual must opt out of group enrollment, if the individual chooses to opt out;

(v) The procedure for how an individual affirmatively opts out of group enrollment;

(vi) The individual will not receive prescription drug coverage under the PSHB plan if the individual is not enrolled in the PSHB plan's PDP EGWP, or MAPD EGWP if applicable; and

(vii) That no adjustment will be made to the enrollee's share of the PSHB plan option premium.

(4) Additional requirements for PSHB plans providing an MAPD EGWP. If a PSHB plan offers an MAPD EGWP, the carrier must comply with all applicable Medicare requirements and the carrier must also provide the notices as described in (d)(3) of this section. In addition, such notice must state how the individual can enroll in the PSHB plan's PDP EGWP if the individual is opting out of group enrollment or disenrolling from a PSHB plan's MAPD EGWP during Open Season or as a result of a qualifying life event, the date by which the individual must enroll in the PDP EGWP, and must state that if the individual is required to be enrolled in Medicare Part B in order to maintain eligibility for PSHB plan coverage and does not qualify for an exception under § 890.1604, the individual must remain enrolled in Part B.

(5) Notices to be shared with OPM. A carrier must provide OPM with the notices under this section and the notices that CMS requires regarding PDP EGWP and MAPD EGWP group enrollment each year, at the time the carrier submits its benefits and rate proposal.

(e) Effect of opting out of group enrollment into or disenrolling from a Medicare EGWP—(1) Effect of opting out of group enrollment. By opting out of group enrollment in a PSHB plan's Medicare PDP EGWP or MAPD EGWP, as applicable, the individual will not receive prescription drug coverage under the PSHB plan unless, during the Open Season or pursuant to the qualifying life event in which the individual opted out of group enrollment, the individual elects to enroll in a Part D EGWP under their PSHB plan.

(2) Opportunity to enroll other than group enrollment. A Part D-eligible individual may enroll in a PDP EGWP or, if eligible, an MAPD EGWP, under a PSHB plan, under the same conditions that govern enrollment in a PSHB plan during Open Season or pursuant to a qualifying life event.

(3) Disenrollment. An individual may disenroll from their PSHB plan's Part D EGWP at any time during the plan year which means they will not receive prescription drug coverage under the PSHB plan.

(4) Enrollment flexibility. A Part D-eligible individual who is not enrolled in the PDP EGWP or MAPD EGWP, as applicable, for prescription drug benefits offered by their PSHB plan may request enrollment into their PSHB plan's EGWP outside of Open Enrollment or a qualifying life event to correct errors.

(i) Part D EGWP Enrollment Flexibility. A Part D-eligible individual who opts out of Part D EGWP group enrollment or disenrolls from their PSHB plan's Part D EGWP can request enrollment into their plan's Part D EGWP within 90 days of the start of plan year or 90 days from the effective date of coverage after a qualifying life event that permitted a plan change. Enrollments made under this paragraph (e)(4)(i) will be retroactive to the extent consistent with applicable CMS regulations.

(ii) Exceptional circumstances. A Part D-eligible individual who opts out of Part D EGWP group enrollment or disenrolls from their PSHB plan's Part D EGWP can request enrollment into their plan's Part D EGWP 91 days or more after the start of the plan year or the effective date of coverage after a qualifying life event that permitted a plan change as determined by OPM. Enrollments made under this paragraph (e)(4)(ii) will be prospective.

(iii) Changes to enrollment under this paragraph (e)(4) are limited to new enrollments into the individual's current PSHB plan's Part D EGWP.

(f) PDP EGWP and MAPD EGWP prescription drug benefits. A carrier must provide prescription drug benefits to a PSHB EGWP plan's Part D-eligible covered individuals that are equal to or better than the prescription drug benefits provided to that PSHB plan's covered individuals who are not eligible to enroll in Part D and not enrolled in the plan's EGWP, subject to paragraph (f)(3) of this section. For purposes of this section:

(1) A carrier must ensure that a Medicare Part D EGWP within the PSHB Program includes the same medications, products, and supplies covered in the corresponding plan option's PSHB pharmacy benefit with the same or lower cost sharing, to the extent consistent with applicable Medicare provisions; and

(2) A carrier must not reduce or otherwise limit prescription drug benefits to meet this standard, for example by limiting the coverage of medications, products, and supplies or increasing cost sharing of the prescription drug benefits provided to individuals covered under the PSHB plan who are not eligible for Part D.

(3) A carrier may request OPM approval to offer different medications, products, or supplies, or modify cost sharing on their EGWP formulary. OPM has discretion to determine whether and to what extent a carrier request under this subsection is necessary and consistent with 5 U.S.C. 8903c.