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.

(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) Except as provided by paragraph (c)(1) of this section, a Postal Service Medicare covered annuitant may not enroll or continue enrollment in a health benefits plan under this subpart unless the annuitant is entitled to benefits under Medicare Part A and enrolled in Medicare Part B.

(b) Except as provided by paragraph (c)(2) of this section, where a Postal Service annuitant is a covered Medicare individual and is required to enroll in Medicare Part B in order to be enrolled in a health benefits plan under this subpart, a Medicare covered member of family of the Postal Service annuitant may not enroll in a health benefits plan under this subpart as a member of family of the Postal Service annuitant unless the member of family is enrolled in Medicare Part B.

(c) Pursuant to paragraph (d) of this section, the requirements under paragraphs (a) and (b) of this section, as applicable, shall not apply to the following individuals:

(1) A Postal Service Medicare covered annuitant who—

(i) As of January 1, 2025, is a Postal Service annuitant who is not both entitled to Medicare Part A and enrolled in Medicare Part B;

(ii) As of January 1, 2025, was a Postal Service employee who is at least 64 years of age;

(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 to the Postal Service;

(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 (d)(2) of this section; or

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

(2) A Medicare covered member of family who—

(i) Is eligible for PSHB coverage based on a Postal Service Medicare covered annuitant who is not required to enroll in Medicare Part B in order to be eligible for coverage under this subpart;

(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 to the Postal Service;

(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 (d)(2) of this section; or

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

(d) To qualify for an exception under paragraph (c) 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) Demonstrating qualification to the Postal Service for the exceptions at paragraphs (c)(1)(iii) and (c)(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 paragraphs (c)(1)(iv) and (c)(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 paragraphs (c)(1)(v) and (c)(2)(iv) of this section.

(e) A Postal Service Medicare covered annuitant or a Medicare covered member of family may notify 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). This will have the effect of a termination of coverage, pursuant to § 890.1608(b).

(f) The process for disenrollment or removal from PSHB enrollment for non-enrollment in Medicare Part B is 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 a current plan and does not enroll or make an election not to enroll, for the initial contract year, will be automatically enrolled in a PSHB plan by OPM as follows:

(1) In a PSHB plan by the carrier of the individual's current plan if the carrier offers only one plan under this subpart.

(2) If the carrier of the individual's current plan offers more than one health benefits plan or option under this subpart, in the plan and option offered by that carrier that provides coverage with equivalent benefits and cost sharing to the individual's current plan and option, as determined by OPM.

(3) If there is no such plan as identified by OPM in paragraph (c)(1) or (2) of this section, in the lowest-cost nationwide plan option offered under this subpart that is not a high deductible health plan and does not charge an association or membership fee as determined by OPM.

(4) All enrollments under paragraph (c)(1) of this section will be in the same enrollment type as the current 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) Except as otherwise provided in this subpart, initial decisions and reconsiderations on enrollment and eligibility under this subpart will be made pursuant to § 890.104.

(e) Under this subpart, an enrollment, change of enrollment, or reenrollment made during Open Season takes effect on the 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) 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. Coverage under a FEHB plan will remain available for an eligible family member who is or becomes covered as a member of family of a FEHB plan enrollee who is not eligible for a PSHB plan pursuant to § 890.1603(a)(1) or (2). 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. (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 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. In such a case, that individual will be permitted to stay enrolled in or covered by PSHB if they enroll in Medicare during their next enrollment opportunity, such as the next Medicare general enrollment period.

(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 PSHB covered family members to a 31-day temporary extension of coverage and the right of conversion under § 890.401.

(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.

(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.

(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 is depleted, OPM will pay out of the 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).

(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. OPM has determined that “future 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).

(a) Correction of errors. Correction of errors under this subpart may be made according to § 890.103, except that retroactive corrections to an enrollment under this subpart may not apply retroactively beyond the initial contract year. OPM retains authority to order correction of errors under this subpart.

(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.