tinuance of the plan under which he is covered, in whole or part, is entitled to a 31-day extension of coverage for self alone or self and family, as the case may be, without contributions by the enrolled person or the Government, during which he is entitled to exercise the right of conversion provided for by this part. A change from self and family to self alone operates as a cancellation as to the members of the family. The 31-day extension of coverage and the right of conversion for any person ends on the effective date of a new enrollment under this part which covers the person.

(b) Continuation of benefits. (1) Any person who has been granted a 31-day extension of coverage in accordance with paragraph (a) of this section and who is confined in a hospital or other institution for care or treatment on the 31st day of the temporary extension is entitled to continuation of the benefits of the plan during the continuance of the confinement but not beyond the 60th day after the end of the temporary extension.

(2) Any person whose enrollment has been changed from one plan to another, or from one option of a plan to the other option of that plan, unless because of the discontinuance of the plan in whole or part or pursuant to an order of the Bureau of Retirement and Insurance, and who is confined in a hospital or other institution for care or treatment on the last day of enrollment under the prior plan or option, is entitled to a continuation of the benefits of the prior plan or option during the continuance of the confinement, but not beyond the 91st day after the last day of enrollment in the prior plan or option. The plan or option to which enrollment has been changed shall not pay benefits with respect to that person while that person is entitled to continuance of benefits under the prior plan or option.

Subpart E-Contributions and
Withholdings

enrolled in a plan whose total enrollment charge is less than twice the appropriate contribution listed in paragraph (a) of this section is 50 percent of the enrollment charge.

(c) The Government contribution for annuitants and for employees who are not paid biweekly is a percentage of that fixed by paragraphs (a) and (b) of this section proportionate to the length of the pay period, rounding fractions of a cent to the nearest cent.

(d) The Government contribution for employees whose annual pay is paid during a period shorter than 52 workweeks is determined on an annual basis and prorated over the number of installments of pay regularly paid during the year.

(e) The employing office shall not make a contribution for an employee or annuitant for periods for which withholding is not made.

§ 890.502 Employee withholdings.

(a) The employing office shall make the withholding required from enrolled survivor annuitants from the annuity of any surviving spouse. If that annuity is less than the withholding required, the employing office shall make the withholding to the extent necessary from the annuity of the youngest child, and, if necessary, from the annuity of the next older child, in succession, until the withholding is satisfied.

(b) The employing office shall not withhold from an employee who is in nonpay status, or from an annuitant for periods for which he does not receive annuity.

(c) Withholding for employees whose annual pay is paid during a period shorter than 52 workweeks is determined on an annual basis and prorated over the number of installments of pay regularly paid during the year.

§ 890.503 Reserves.

(a) The enrollment charge consists of the rate approved by the Commission for payment to the plan for each employee or annuitant enrolled, plus 4 percent, of which one part is for an administrative reserve and three parts are for a contingency reserve for the plan.

(b) The administrative reserve is credited with the one one-hundred-andfourth of the enrollment charge set aside for the administrative reserve. The administrative reserve is available for payment of administrative expenses of the Commission incurred under this part,

and for such other purposes as may be authorized by law.

(c) (1) The contingency reserve for each plan is credited with (1) the three one-hundred-and-fourths of the enrollment charge set aside for the contingency reserve from the enrollment charges for employees and annuitants enrolled for that plan, (ii) amounts transferred in accordance with law from other contingency reserves and the administrative reserve, (iii) income from investment of the reserve, (iv) its proportionate share of the income from investment of the administrative reserve, and (v) any return of reserves of the plan. The preferred minimum balance for the contingency reserve is 1 month's subscription charges at the average monthly rate paid from the Employees Health Benefits Fund for the plan during the most recent contract period.

(2) Except as provided by subparagraphs (3) and (4) of this paragraph, when, as of the end of a contract period, the total of all the reserves held by a carrier for the plan amounts to less than the total of the last 5 months' subscription charges paid from the fund to the carrier for the plan, the carrier is entitled to payment from the contingency reserve of the lesser of: An amount equal to the difference between the total of the last 5 months' subscription charges paid from the fund to the carrier for the plan and the total of the reserves held by the carrier for the plan, or an amount equal to the excess, if any, of the contingency reserve over the preferred minimum balance. The Commission shall authorize this payment after receipt of the accounting report for the contract period. The carrier shall credit the amount so paid to the special reserve for the plan.

(3) If more than 50 percent of the enrollees in a plan are stationed at posts of duty outside the United States, its possessions, and the Commonwealth of Puerto Rico, when the special reserve held by the carrier for the plan at the end of a contract period amounts to less than one-sixth of the last year's subscription charges paid from the fund to the carrier for the plan, the carrier is entitled to payment from the contingency reserve of the lesser of: An amount equal to the difference between one-sixth of the last year's subscription charges paid from the fund to the carrier for the plan and the total of the special reserve held by the carrier for the plan, or an amount

equal to the excess, if any, of the contingency reserve over the preferred minimum balance. The Commission shall authorize this payment after receipt of the account report for the contract period. The carrier shall credit the amount so paid to the special reserve for the plan.

(4) The Commission may, by agreement with the carrier, approve community rating for a group-practice plan. If the contingency reserve of the carrier of a community rated plan exceeds the preferred minimum balance, the carrier may request the Commission to pay a portion of the reserve not greater than the excess of the contingency reserve over the preferred minimum balance. The carrier shall state the reason for the request. The Commission will decide whether to allow the request in whole or in part and will advise the plan of its decision.

PART 891-RETIRED FEDERAL EMPLOYEES HEALTH BENEFITS

In this part:

(a) "Annuity" means the periodic payment due a former employee or his survivors by reason of past service, but does not include compensation paid under subchapter I of chapter 81 of title 5, United States Code.

(b) "Annuity period" means the period for which an installment of annuity is paid.

(c) "Bureau of Employees' Compensation" means the Bureau of Employees' Compensation, Department of Labor.

(d) "Carrier" means a voluntary association, corporation, partnership, or other nongovernmental organization which lawfully offers a health benefits plan.

(e) "Compensation" means monthly compensation paid under subchapter I of chapter 81 of title 5, United States Code, and includes compensation payable every 4 weeks.

(f) "Elect" means to file with the retirement office under which retired or with the Bureau of Employees' Compensation, as the case may be, a properly completed form, prescribed by the Commission for the purpose, giving notice of intention (1) to subscribe to the uniform plan, (2) to receive a Government contribution toward the cost of a private health benefits plan, or (3) not to participate in the program.

(g) "Employee" means an appointive or elective officer or employee in or under the executive, judicial, or legislative branch of the United States Government, including a Government-owned or controlled corporation (but not including any corporation under the supervision of the Farm Credit Administration, of which corporation any member of the board of directors is elected or appointed by private interests), or of the government of the District of Columbia, and includes an Official Reporter of Debates of the Senate and a person employed by the Official Reporters of Debates of the Senate in connection with the performance of their official duties, and an employee of Gallaudet College, but does not include (1) a member of a "uniformed service" as that term is defined in section 1072 of title 10, United States Code, (2)

a noncitizen employee whose permanentduty station is located outside a State of the United States or the District of Columbia, or (3) an employee of the Tennessee Valley Authority.

(h) "Government" means the Government of the United States of America and the government of the District of Columbia.

(i) "Health benefits plan" means an individual or group insurance policy or contract, medical or hospital service arrangement, membership or subscription contract, or similar agreement provided by a carrier for a stated periodic premium or subscription charge for the purpose of providing, paying for, or reimbursing expenses for hospital care, surgical or medical diagnosis, care, and treatment, drugs and medicines, remedial care, or other medical supplies and services, or any combination of these.

(j) "Immediate annuity" means (1) as applied to a retired employee, an annuity which begins to accrue not later than 1 month after the date of the separation from the service on which title to the annuity is based; and (2) as applied to a survivor, an annuity which begins to accrue not later than 1 month (i) after the date of death of the employee or annuitant whose service forms the basis for the annuity, or (ii) after the birth of a posthumous child of such an employee or annuitant.

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(k) "Member of family" means former employee's spouse and any unmarried child (1) under 19 years of age (including (1) an adopted child, and (ii) a stepchild or recognized natural child who lives with the former employee in a regular parent-child relationship or did so at the time of the former employee's death); or (2) regardless of age who is incapable of self-support because of mental or physical disability that existed before the child became 19 years of age. As used in this paragraph, "former employee" means the former employee on whose service title to annuity is based.

(1) "Private health benefits plan" means a health benefits plan other than the uniform plan.

(m) "Retired employee" includes (1) a former employee retired under subchapter III of chapter 83 of title 5, United States Code, or other retirement system for civilian employees of the Government (not including the social security system), (2) an employee or

(a) General conditions of eligibility. (1) A retired employee who is enrolled or covered by the enrollment of another under Part 890 of this chapter, or who is covered by the election of another retired employee under this part, is ineligible to subscribe to the uniform plan or to receive a Government contribution toward the cost of a private health benefits plan.

(2) A retired employee is ineligible to subscribe to the uniform plan if his annuity or compensation is not sufficient to cover the necessary withholding.

(b) Retired employees (other than survivors) entitled to annuity. A retired employee (other than a survivor) who is entitled to an annunity is eligible for the benefits provided by this part if— (1) He retired before his first pay period beginning after June 30, 1960;

(2) He retired on immediate annuity; (3) He had at least 12 years of creditable service, or retired under a disability provision of his retirement system;

a citizen, or a noncitizen having a permanent-duty station within the several States or the District of Columbia on the day before retirement.

For the purpose of this paragraph, an employee is considered to have retired before his first pay period beginning after June 30, 1960, if his annuity began to accrue before his first pay period after June 30, 1960, or if he was eligible under paragraph (d) of this section until the date his annuity began to accrue.

(c) Survivors entitled to annuity. A survivor who is entitled to annuity is eligible for the benefits provided by this part if he is:

(1) In receipt of immediate annuity as the survivor of (i) an employee who died before his first pay period beginning after June 30, 1960; or (ii) a retired employee whose annuity began to accrue before his first pay period beginning after June 30, 1960;

(2) The survivor of (i) an employee who had at least 5 years' creditable service, (ii) a former employee who retired having at least 12 years' creditable service and received an immediate annuity, or (iii) a former employee who retired under a disability provision of his retirement system; and

(3) Not receiving annuity as the survivor of a person who at the time of the retirement or death, as the case may be, on which annuity is based, was an employee of the Tennessee Valley Authority or of any corporation under the jurisdiction of the Farm Credit Administration of which corporation any member of the board of directors was elected or appointed by private interests, or was a noncitizen having a permanent-duty station outside the several States and the District of Columbia.

(d) Retired employees (other than survivors) entitled to compensation. A retired employee (other than a survivor) who is entitled to compensation is eligible for the benefits provided by this part if

(1) He is receiving monthly compensation for an injury sustained or illness contracted before his first pay period beginning after June 30, 1960;

(2) He is held by the Secretary of Labor to be unable to return to duty;

(3) He is receiving compensation based on employment which was not in the Tennessee Valley Authority or in a corporation under the supervision of the Farm Credit Administration, of which

corporation any member of the board of directors was elected or appointed by private interests; and

(4) At the time of sustaining the injury or contracting the illness, as the case may be, on which compensation is based, he was a citizen, or a noncitizen having a permanent-duty station within the several States or the District of Columbia at that time.

(e) Family members entitled to compensation. A member of a family who is receiving compensation is eligible for the benefits provided by this part if he is:

(1) A survivor beneficiary of (i) an employee who completed 5 years of service and died as a result of injury or illness which is compensable under subchapter I of chapter 81 of title 5, United States Code, and which was sustained or contracted before his first pay period beginning after June 30, 1960, or (ii) a former employee who was separated after having completed at least 5 years of service and who died while receiving monthly compensation under that subchapter on account of injury sustained or illness contracted before his first pay period beginning after June 30, 1960, and who has been held by the Secretary of Labor to have been unable to return to duty; and

(2) Not receiving compensation as the survivor of a person who at the time of sustaining the injury or contracting the illness, as the case may be, on which compensation is based, was an employee of the Tennessee Valley Authority or of any corporation under the jurisdiction of the Farm Credit Administration of which corporation any member of the board of directors was elected or appointed by private interests, or was a noncitizen having a permanent-duty station outside the several States and the District of Columbia.

(f) Determinations of eligibility. The Bureau of Retirement and Insurance of the Commission, on request, shall determine the eligibility of a retired employee, or class of retired employees, to make the elections and receive the Government contributions provided for by this part.

§ 891.104 Responsibilities of retirement offices.

(a) The Bureau of Employees' Compensation is responsible only for retired employees who are receiving compensation from the Bureau and is responsible

even though the retired employee has retired under another retirement office from which he is not currently receiving annuity. If the retired employee is currently receiving annuity from another retirement office, that retirement office, rather than the Bureau of Employees' Compensation, will have the responsibilities imposed on retirement offices by this part for that retired employee.

(b) Retirement offices are responsible, in accordance with regulations and instructions issued by the Commission, for withholding from the annuity or compensation of each retired employee within the jurisdiction of the retirement office who elects to subscribe to the uniform plan his share of the cost, for forwarding the amount withheld to the Retired Federal Employees Health Benefits Fund, and for reporting to the Commission amounts required for Government contribution for these retired employees.

(c) Retirement offices are responsible, in accordance with regulations and instructions issued by the Commission, for reporting to the Commission amounts required for Government contributions to retired employees within the jurisdiction of the retirement office who have elected to receive a Government contribution toward the cost of a private health benefits plan, and for paying the Government contributions to these retired employees.

(d) Retirement offices are responsible for advising retired employees within the jurisdiction of the retirement office of the rights and obligations of retired employees under this part.

(e) When one or more of the family members is a child 19 years of age or older who is incapable of self-support because of mental or physical disability which existed before the child became 19 years of age, the appropriate retirement office shall obtain the necessary evidence and make a determination of incapacity.

(f) Retirement offices are responsible, in accordance with regulations and instructions issued by the Commission, for verifying continuing eligibility of retired employees to receive Government contributions.

§ 891.105 Appeals.

(a) A retired employee may appeal any determination by the Bureau of Retirement and Insurance that he is not eligible to make an election or to receive a Government contribution under this