
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC1108]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                           PART II--PERSONNEL
 
                   CHAPTER 55--MEDICAL AND DENTAL CARE
 
Sec. 1108. Health care coverage through Federal Employees Health 
        Benefits program: demonstration project
        
    (a) FEHBP Option Demonstration.--The Secretary of Defense, after 
consulting with the other administering Secretaries, shall enter into an 
agreement with the Office of Personnel Management to conduct a 
demonstration project (in this section referred to as the 
``demonstration project'') under which eligible beneficiaries described 
in subsection (b) and residing within one of the areas covered by the 
demonstration project may enroll in health benefits plans offered 
through the Federal Employees Health Benefits program under chapter 89 
of title 5. The number of eligible beneficiaries and family members of 
such beneficiaries under subsection (b)(2) who may be enrolled in health 
benefits plans during the enrollment period under subsection (d)(2) may 
not exceed 66,000.
    (b) Eligible Beneficiaries; Coverage.--(1) An eligible beneficiary 
under this subsection is--
        (A) a member or former member of the uniformed services 
    described in section 1074(b) of this title who is entitled to 
    hospital insurance benefits under part A of title XVIII of the 
    Social Security Act (42 U.S.C. 1395c et seq.);
        (B) an individual who is an unremarried former spouse of a 
    member or former member described in section 1072(2)(F) or 
    1072(2)(G));
        (C) an individual who is--
            (i) a dependent of a deceased member or former member 
        described in section 1076(b) or 1076(a)(2)(B) of this title or 
        of a member who died while on active duty for a period of more 
        than 30 days; and
            (ii) a member of family as defined in section 8901(5) of 
        title 5; or

        (D) an individual who is--
            (i) a dependent of a living member or former member 
        described in section 1076(b)(1) of this title who is entitled to 
        hospital insurance benefits under part A of title XVIII of the 
        Social Security Act, regardless of the member's or former 
        member's eligibility for such hospital insurance benefits; and
            (ii) a member of family as defined in section 8901(5) of 
        title 5.

    (2) Eligible beneficiaries may enroll in a Federal Employees Health 
Benefit plan under chapter 89 of title 5 under this section for self-
only coverage or for self and family coverage which includes any 
dependent of the member or former member who is a family member for 
purposes of such chapter.
    (3) A person eligible for coverage under this subsection shall not 
be required to satisfy any eligibility criteria specified in chapter 89 
of title 5 (except as provided in paragraph (1)(C) or (1)(D)) as a 
condition for enrollment in health benefits plans offered through the 
Federal Employees Health Benefits program under the demonstration 
project.
    (4) For purposes of determining whether an individual is a member of 
family under paragraph (5) of section 8901 of title 5 for purposes of 
paragraph (1)(C) or (1)(D), a member or former member described in 
section 1076(b) or 1076(a)(2)(B) of this title shall be deemed to be an 
employee under such section.
    (5) An eligible beneficiary who is eligible to enroll in the Federal 
Employees Health Benefits program as an employee under chapter 89 of 
title 5 is not eligible to enroll in a Federal Employees Health Benefits 
plan under this section.
    (c) Area of Demonstration Project.--The Secretary of Defense and the 
Director of the Office of Personnel Management shall jointly identify 
and select the geographic areas in which the demonstration project will 
be conducted. The Secretary and the Director shall establish at least 
six, but not more than ten, such demonstration areas. In establishing 
the areas, the Secretary and Director shall include--
        (1) an area that includes the catchment area of one or more 
    military medical treatment facilities;
        (2) an area that is not located in the catchment area of a 
    military medical treatment facility;
        (3) an area in which there is a Medicare Subvention 
    Demonstration project area under section 1896 of title XVIII of the 
    Social Security Act (42 U.S.C. 1395ggg); and
        (4) not more than one area for each TRICARE region.

    (d) Duration of Demonstration Project.--(1) The Secretary of Defense 
shall conduct the demonstration project during three contract years 
under the Federal Employees Health Benefits program.
    (2) Eligible beneficiaries shall, as provided under the agreement 
pursuant to subsection (a), be permitted to enroll in the demonstration 
project during an open enrollment period for the year 2000 (conducted in 
the fall of 1999). The demonstration project shall terminate on December 
31, 2002.
    (e) Prohibition Against Use of MTFs and Enrollment Under TRICARE.--
Covered beneficiaries under this chapter who are provided coverage under 
the demonstration project shall not be eligible to receive care at a 
military medical treatment facility or to enroll in a heath care plan 
under the TRICARE program.
    (f) Term of Enrollment in Project.--(1) Subject to paragraphs (2) 
and (3), the period of enrollment of an eligible beneficiary who enrolls 
in the demonstration project during the open enrollment period for the 
year 2000 shall be three years unless the beneficiary disenrolls before 
the termination of the project.
    (2) A beneficiary who elects to enroll in the project, and who 
subsequently discontinues enrollment in the project before the end of 
the period described in paragraph (1), shall not be eligible to reenroll 
in the project.
    (3) An eligible beneficiary enrolled in a Federal Employees Health 
Benefits plan under this section may change health benefits plans and 
coverage in the same manner as any other Federal Employees Health 
Benefits program beneficiary may change such plans.
    (g) Effect of Cancellation.--The cancellation by an eligible 
beneficiary of coverage under the Federal Employee Health Benefits 
program shall be irrevocable during the term of the demonstration 
project.
    (h) Separate Risk Pools; Charges.--(1) The Director of the Office of 
Personnel Management shall require health benefits plans under chapter 
89 of title 5 that participate in the demonstration project to maintain 
a separate risk pool for purposes of establishing premium rates for 
eligible beneficiaries who enroll in such a plan in accordance with this 
section.
    (2) The Director shall determine total subscription charges for self 
only or for family coverage for eligible beneficiaries who enroll in a 
health benefits plan under chapter 89 of title 5 in accordance with this 
section. The subscription charges shall include premium charges paid to 
the plan and amounts described in section 8906(c) of title 5 for 
administrative expenses and contingency reserves.
    (i) Government Contributions.--The Secretary of Defense shall be 
responsible for the Government contribution for an eligible beneficiary 
who enrolls in a health benefits plan under chapter 89 of title 5 in 
accordance with this section, except that the amount of the contribution 
may not exceed the amount of the Government contribution which would be 
payable if the electing beneficiary were an employee (as defined for 
purposes of such chapter) enrolled in the same health benefits plan and 
level of benefits.
    (j) Report Requirements.--(1) The Secretary of Defense and the 
Director of the Office of Personnel Management shall jointly submit to 
Congress two reports containing the information described in paragraph 
(2). The first report shall be submitted not later than the date that is 
15 months after the date that the Secretary begins to implement the 
demonstration project. The second report shall be submitted not later 
than December 31, 2002.
    (2) The reports required by paragraph (1) shall include the 
following:
        (A) Information on the number of eligible beneficiaries who 
    elect to participate in the demonstration project.
        (B) An analysis of the percentage of eligible beneficiaries who 
    participate in the demonstration project as compared to the 
    percentage of covered beneficiaries under this chapter who elect to 
    enroll in a health care plan under such chapter.
        (C) Information on eligible beneficiaries who elect to 
    participate in the demonstration project and did not have Medicare 
    Part B coverage before electing to participate in the project.
        (D) An analysis of the enrollment rates and cost of health 
    services provided to eligible beneficiaries who elect to participate 
    in the demonstration project as compared with similarly situated 
    enrollees in the Federal Employees Health Benefits program under 
    chapter 89 of title 5.
        (E) An analysis of how the demonstration project affects the 
    accessibility of health care in military medical treatment 
    facilities, and a description of any unintended effects on the 
    treatment priorities in those facilities in the demonstration area.
        (F) An analysis of any problems experienced by the Department of 
    Defense in managing the demonstration project.
        (G) A description of the effects of the demonstration project on 
    medical readiness and training of the Armed Forces at military 
    medical treatment facilities located in the demonstration area, and 
    a description of the probable effects that making the project 
    permanent would have on the medical readiness and training.
        (H) An examination of the effects that the demonstration 
    project, if made permanent, would be expected to have on the overall 
    budget of the Department of Defense, the budget of the Office of 
    Personnel Management, and the budgets of individual military medical 
    treatment facilities.
        (I) An analysis of whether the demonstration project affects the 
    cost to the Department of Defense of prescription drugs or the 
    accessibility, availability, and cost of such drugs to eligible 
    beneficiaries.
        (J) Any additional information that the Secretary of Defense or 
    the Director of the Office of Personnel Management considers 
    appropriate to assist Congress in determining the viability of 
    expanding the project to all Medicare-eligible members of the 
    uniformed services and their dependents.
        (K) Recommendations on whether eligible beneficiaries--
            (i) should be given more than one chance to enroll in the 
        demonstration project under this section;
            (ii) should be eligible to enroll in the project only during 
        the first year following the date that the eligible beneficiary 
        becomes eligible to receive hospital insurance benefits under 
        part A of title XVIII of the Social Security Act; or
            (iii) should be eligible to enroll in the project only 
        during the 2-year period following the date on which the 
        beneficiary first becomes eligible to enroll in the project.

    (k) Comptroller General Report.--Not later than December 31, 2002, 
the Comptroller General shall submit to Congress a report addressing the 
same matters required to be addressed under subsection (j)(2). The 
report shall describe any limitations with respect to the data contained 
in the report as a result of the size and design of the demonstration 
project.
    (l) Application of Medigap Protections to Demonstration Project 
Enrollees.--(1) Subject to paragraph (2), the provisions of section 
1882(s)(3) (other than clauses (i) through (iv) of subparagraph (B)) and 
1882(s)(4) of the Social Security Act shall apply to enrollment (and 
termination of enrollment) in the demonstration project under this 
section, in the same manner as they apply to enrollment (and termination 
of enrollment) with a Medicare+Choice organization in a Medicare+Choice 
plan.
    (2) In applying paragraph (1)--
        (A) any reference in clause (v) or (vi) of section 1882(s)(3)(B) 
    of such Act to 12 months is deemed a reference to 36 months; and
        (B) the notification required under section 1882(s)(3)(D) of 
    such Act shall be provided in a manner specified by the Secretary of 
    Defense in consultation with the Director of the Office of Personnel 
    Management.

(Added Pub. L. 105-261, div. A, title VII, Sec. 721(a)(1), Oct. 17, 
1998, 112 Stat. 2061.)

                       References in Text

    The Social Security Act, referred to in subsecs. (b)(1)(A), (D)(i), 
(j)(2)(K)(ii), and (l)(1), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, 
as amended. Part A of title XVIII of the Act is classified generally to 
Part A (Sec. 1395c et seq.) of subchapter XVIII of chapter 7 of Title 
42, The Public Health and Welfare. Section 1882 of the Act is classified 
to section 1395ss of Title 42. For complete classification of this Act 
to the Code, see section 1305 of Title 42 and Tables.


Comprehensive Evaluation of Implementation of Demonstration Projects and 
                        TRICARE Pharmacy Redesign

    Pub. L. 105-261, div. A, title VII, Sec. 724, Oct. 17, 1998, 112 
Stat. 2069, as amended by Pub. L. 106-65, div. A, title X, Sec. 1067(3), 
Oct. 5, 1999, 113 Stat. 774, provided that: ``Not later than March 31, 
2003, the Comptroller General shall submit to the Committee on Armed 
Services of the Senate and the Committee on Armed Services of the House 
of Representatives a report containing a comprehensive comparative 
analysis of the FEHBP demonstration project conducted under section 1108 
of title 10, United States Code (as added by section 721), the TRICARE 
Senior Supplement under section 722 [10 U.S.C. 1073 note], and the 
redesign of the TRICARE pharmacy system under section 723 [10 U.S.C. 
1073 note]. The comprehensive analysis shall incorporate the findings of 
the evaluation submitted under section 723(c) and the report submitted 
under subsection (j) of such section 1108.''

                  Section Referred to in Other Sections

    This section is referred to in title 5 sections 8905, 8906, 8909.
