
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 5USC8909]

 
             TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
 
                           PART III--EMPLOYEES
 
                   Subpart G--Insurance and Annuities
 
                      CHAPTER 89--HEALTH INSURANCE
 
Sec. 8909. Employees Health Benefits Fund

    (a) There is in the Treasury of the United States an Employees 
Health Benefits Fund which is administered by the Office of Personnel 
Management. The contributions of enrollees and the Government described 
by section 8906 of this title shall be paid into the Fund. The Fund is 
available--
        (1) without fiscal year limitation for all payments to approved 
    health benefits plans; and
        (2) to pay expenses for administering this chapter within the 
    limitations that may be specified annually by Congress.

Payments from the Fund to a plan participating in a letter-of-credit 
arrangement under this chapter shall, in connection with any payment or 
reimbursement to be made by such plan for a health service or supply, be 
made, to the maximum extent practicable, on a checks-presented basis (as 
defined under regulations of the Department of the Treasury).
    (b) Portions of the contributions made by enrollees and the 
Government shall be regularly set aside in the Fund as follows:
        (1) A percentage, not to exceed 1 percent of all contributions, 
    determined by the Office to be reasonably adequate to pay the 
    administrative expenses made available by subsection (a) of this 
    section.
        (2) For each health benefits plan, a percentage, not to exceed 3 
    percent of the contributions toward the plan, determined by the 
    Office to be reasonably adequate to provide a contingency reserve.

The Office, from time to time and in amounts it considers appropriate, 
may transfer unused funds for administrative expenses to the contingency 
reserves of the plans then under contract with the Office. When funds 
are so transferred, each contingency reserve shall be credited in 
proportion to the total amount of the subscription charges paid and 
accrued to the plan for the contract term immediately before the 
contract term in which the transfer is made. The income derived from 
dividends, rate adjustments, or other refunds made by a plan shall be 
credited to its contingency reserve. The contingency reserves may be 
used to defray increases in future rates, or may be applied to reduce 
the contributions of enrollees and the Government to, or to increase the 
benefits provided by, the plan from which the reserves are derived, as 
the Office from time to time shall determine.
    (c) The Secretary of the Treasury may invest and reinvest any of the 
money in the Fund in interest-bearing obligations of the United States, 
and may sell these obligations for the purposes of the Fund. The 
interest on and the proceeds from the sale of these obligations become a 
part of the Fund.
    (d) When the assets, liabilities, and membership of employee 
organizations sponsoring or underwriting plans approved under section 
8903(3) or 8903a of this title are merged, the assets (including 
contingency reserves) and liabilities of the plans sponsored or 
underwritten by the merged organizations shall be transferred at the 
beginning of the contract term next following the date of the merger to 
the plan sponsored or underwritten by the successor organization. Each 
employee, annuitant, former spouse, or person having continued coverage 
under section 8905a of this title affected by a merger shall be 
transferred to the plan sponsored or underwritten by the successor 
organization unless he enrolls in another plan under this chapter. If 
the successor organization is an organization described in section 
8901(8)(B) of this title, any employee, annuitant, former spouse, or 
person having continued coverage under section 8905a of this title so 
transferred may not remain enrolled in the plan after the end of the 
contract term in which the merger occurs unless that individual is a 
full member of such organization (as determined under section 8903a(d) 
of this title).
    (e)(1) Except as provided by subsection (d) of this section, when a 
plan described by section 8903(3) or (4) or 8903a of this title is 
discontinued under this chapter, the contingency reserve of that plan 
shall be credited to the contingency reserves of the plans continuing 
under this chapter for the contract term following that in which 
termination occurs, each reserve to be credited in proportion to the 
amount of the subscription charges paid and accrued to the plan for the 
year of termination.
    (2) Any crediting required under paragraph (1) pursuant to the 
discontinuation of any plan under this chapter shall be completed by the 
end of the second contract year beginning after such plan is so 
discontinued.
    (3) The Office shall prescribe regulations in accordance with which 
this subsection shall be applied in the case of any plan which is 
discontinued before being credited with the full amount to which it 
would otherwise be entitled based on the discontinuation of any other 
plan.
    (f)(1) No tax, fee, or other monetary payment may be imposed, 
directly or indirectly, on a carrier or an underwriting or plan 
administration subcontractor of an approved health benefits plan by any 
State, the District of Columbia, or the Commonwealth of Puerto Rico, or 
by any political subdivision or other governmental authority thereof, 
with respect to any payment made from the Fund.
    (2) Paragraph (1) shall not be construed to exempt any carrier or 
underwriting or plan administration subcontractor of an approved health 
benefits plan from the imposition, payment, or collection of a tax, fee, 
or other monetary payment on the net income or profit accruing to or 
realized by such carrier or underwriting or plan administration 
subcontractor from business conducted under this chapter, if that tax, 
fee, or payment is applicable to a broad range of business activity.
    (g) The fund described in subsection (a) is available to pay costs 
that the Office incurs for activities associated with implementation of 
the demonstration project under section 1108 of title 10.

(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 605; Pub. L. 95-454, title IX, 
Sec. 906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224; Pub. L. 98-615, 
Sec. 3(6), Nov. 8, 1984, 98 Stat. 3204; Pub. L. 99-53, Sec. 2(e), (f), 
June 17, 1985, 99 Stat. 94; Pub. L. 99-251, title I, Sec. 101, Feb. 27, 
1986, 100 Stat. 14; Pub. L. 100-654, title II, Sec. 202(a), Nov. 14, 
1988, 102 Stat. 3845; Pub. L. 101-508, title VII, Sec. 7002(b), (c), 
Nov. 5, 1990, 104 Stat. 1388-330; Pub. L. 105-261, div. A, title VII, 
Sec. 721(b)(4), Oct. 17, 1998, 112 Stat. 2065; Pub. L. 105-266, 
Sec. 6(b)(1), Oct. 19, 1998, 112 Stat. 2369.)

                      Historical and Revision Notes
------------------------------------------------------------------------
                                                    Revised Statutes and
     Derivation                U.S. Code             Statutes at Large
------------------------------------------------------------------------
                     5 U.S.C. 3007.                Sept. 28, 1959, Pub.
                                                    L. 86-382, Sec.  8,
                                                    73 Stat. 714.
                     ............................  Mar. 17, 1964, Pub.
                                                    L. 88-284, Sec.
                                                    1(12), (13), 78
                                                    Stat. 165.
                     5 U.S.C. 3008(b).             Sept. 23, 1959, Pub.
                                                    L. 86-382, Sec.
                                                    9(b), 73 Stat. 715.
------------------------------------------------------------------------

    In subsection (a), the words ``hereby created'' are omitted as 
executed. The words ``hereinafter referred to as the `Fund' '' are 
omitted as unnecessary. The words ``to reimburse the Employees Health 
Benefits Fund for sums expended by the Commission in administering the 
provisions of this chapter for the fiscal years 1960 and 1961'' in 
former section 3008(b) are omitted as executed.
    In subsection (d), the requirement that the assets and liabilities 
of plans of organizations that have been merged be transferred at the 
beginning of the contract term next following the date of the merger or 
enactment of this subsection is omitted as executed. The next beginning 
contract term referred to was November 1, 1964, and the transfers have 
been made. In the last sentence, the word ``hereafter'' is omitted as 
unnecessary.
    In subsection (e), the word ``is'' is substituted for ``is or has 
been'' as this title is stated prospectively, and any existing rights 
and duties are preserved by technical section 8.
    Standard changes are made to conform with the definitions applicable 
and the style of this title as outlined in the preface of the report.


                               Amendments

    1998--Subsec. (e). Pub. L. 105-266 designated existing provisions as 
par. (1) and added pars. (2) and (3).
    Subsec. (g). Pub. L. 105-261 added subsec. (g).
    1990--Subsec. (a). Pub. L. 101-508, Sec. 7002(b), inserted at end 
``Payments from the Fund to a plan participating in a letter-of-credit 
arrangement under this chapter shall, in connection with any payment or 
reimbursement to be made by such plan for a health service or supply, be 
made, to the maximum extent practicable, on a checks-presented basis (as 
defined under regulations of the Department of the Treasury).''
    Subsec. (f). Pub. L. 101-508, Sec. 7002(c), added subsec. (f).
    1988--Subsec. (d). Pub. L. 100-654 substituted ``former spouse, or 
person having continued coverage under section 8905a of this title'' for 
``or former spouse'' in two places.
    1986--Subsec. (b). Pub. L. 99-251 substituted ``enrollees'' for 
``employees'' in last sentence.
    1985--Subsec. (d). Pub. L. 99-53, Sec. 2(e), substituted ``section 
8903(3) or 8903a'' for ``section 8903(3)'' and inserted provision 
directing that if the successor organization is an organization 
described in section 8901(8)(B) of this title, any transferred employee, 
annuitant, or former spouse may not remain enrolled in the plan after 
the end of the contract term in which the merger occurs unless the 
individual is a full member of such organization (as determined under 
section 8903a(d) of this title).
    Subsec. (e). Pub. L. 99-53, Sec. 2(f), inserted ``or 8903a'' before 
``of this title''.
    1984--Subsecs. (a), (b). Pub. L. 98-615, Sec. 3(6)(A), substituted 
``enrollees'' for ``employees, annuitants,'' in provisions preceding 
par. (1).
    Subsec. (d). Pub. L. 98-615, Sec. 3(6)(B), substituted ``Each 
employee, annuitant, or former spouse'' for ``Each employee or 
annuitant''.
    1978--Subsecs. (a), (b). Pub. L. 95-454 substituted ``Office of 
Personnel Management'' for ``Civil Service Commission'' and ``Office'' 
for ``Commission'' wherever appearing.


                    Effective Date of 1990 Amendment

    Amendment by Pub. L. 101-508 applicable with respect to contract 
years beginning on or after Jan. 1, 1991, see section 7002(g) of Pub. L. 
101-508, set out as a note under section 8902 of this title.


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-654 applicable with respect to any calendar 
year beginning, and contracts entered into or renewed for any calendar 
year beginning, after end of 9-month period beginning Nov. 14, 1988, and 
with respect to any qualifying event occurring on or after first day of 
first calendar year beginning after end of such 9-month period, see 
section 203 of Pub. L. 100-654, set out as a note under section 8902 of 
this title.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-615 effective May 7, 1985, with enumerated 
exceptions, and applicable to any individual who is married to an 
employee or annuitant on or after that date, see section 4(a)(2) of Pub. 
L. 98-615, as amended, set out as a note under section 8341 of this 
title.


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-454 effective 90 days after Oct. 13, 1978, 
see section 907 of Pub. L. 95-454, set out as a note under section 1101 
of this title.


  Disposal of Amounts Remaining as of October 19, 1998, in Contingency 
                      Reserve of Discontinued Plan

    Pub. L. 105-266, Sec. 6(b)(2), Oct. 19, 1998, 112 Stat. 2369, 
provided that: ``In the case of any amounts remaining as of the date of 
the enactment of this Act [Oct. 19, 1998] in the contingency reserve of 
a discontinued plan, such amounts shall be disposed of in accordance 
with section 8909(e) of title 5, United States Code, as amended by this 
subsection, by--
        ``(A) the deadline set forth in section 8909(e) of such title 
    (as so amended); or
        ``(B) if later, the end of the 6-month period beginning on such 
    date of enactment.''


         Amounts To Be Refunded From Carriers' Special Reserves

    Pub. L. 99-272, title XV, Sec. 15202(a), Apr. 7, 1986, 100 Stat. 
333, provided that:
    ``(1) The Office of Personnel Management--
        ``(A) shall determine the minimum level of financial reserves 
    necessary to be held by a carrier for each health benefits plan 
    under chapter 89 of such title for the purpose of ensuring the 
    stable and efficient operation of such plan; and
        ``(B) shall require the carrier to refund to the Employees 
    Health Benefits Fund (described in section 8909(a) of title 5, 
    United States Code) any such reserves in excess of such minimum 
    level in such amounts and at such times during fiscal years 1986 and 
    1987 as the Office determines appropriate.
    ``(2) In carrying out its responsibilities under this subsection, 
the Office shall ensure that the aggregate amount to be refunded to the 
Employees Health Benefits Fund under this subsection--
        ``(A) during fiscal year 1986 shall be not less than 
    $800,000,000; and
        ``(B) during fiscal year 1987 shall be not less than 
    $300,000,000.
    ``(3) No amount in the Employees Health Benefits Fund may be 
transferred to the general fund of the Treasury of the United States as 
a result of a refund made under this subsection.
    ``(4)(A) Subject to subparagraphs (B) and (C), any amounts refunded 
to the Employees Health Benefits Fund under this subsection may be used 
solely for the purpose of paying the Government contribution under 
chapter 89 of title 5, United States Code, for health benefits for 
annuitants, as defined by section 8901(3) of title 5, United States 
Code, (including the Government contribution for former employees of the 
United States Postal Service) enrolled in health benefits plans under 
such chapter.
    ``(B) This paragraph applies to a refund to the extent that such 
refund represents amounts attributable to Government contributions which 
were made under section 8906(b) of title 5, United States Code, 
(including contributions made by the United States Postal Service) as 
determined under regulations which the Office of Personnel Management 
shall prescribe.
    ``(C) Any part of the amount in the Employees Health Benefits Fund 
as a result of a refund made under this subsection may be transferred--
        ``(i) to the government of the District of Columbia, except that 
    the amount of any such part so transferred shall not exceed the 
    amount attributable to the contributions made by the government of 
    the District of Columbia to subscription charges under this chapter 
    (as determined by the Office of Personnel Management); and
        ``(ii) to the United States Postal Service, except that the 
    amount of any such part so transferred shall not exceed the amount 
    attributable to the contributions made by the United States Postal 
    Service to subscription charges under this chapter (as determined by 
    the Office).
    ``(5) The provisions of this subsection shall apply notwithstanding 
any provision of the Federal Employees Benefits Improvement Act of 1985 
[probably means the Federal Employees Benefits Improvement Act of 1986, 
Pub. L. 99-251, see Short Title of 1986 Amendment note set out under 
section 8901 of this title for classification].''


 Restrictions Relating to Amounts Refunded to Employees Health Benefits 
                  Fund From Carriers' Special Reserves

    Section 112 of Pub. L. 99-251 provided that:
    ``(a) Prohibited Transfers.--(1) No amount in the Employees Health 
Benefits Fund may be transferred to the general fund of the Treasury of 
the United States or the United States Postal Service as a result of a 
refund described in paragraph (2).
    ``(2) This subsection applies with respect to any refund made by a 
carrier during fiscal year 1986 or 1987 to the Employees Health Benefits 
Fund to the extent that such refund represents amounts in excess of the 
minimum level of financial reserves necessary to be held by such carrier 
to ensure the stable and efficient operation of its health benefits 
plan.
    ``(b) Restriction Relating to Use of Certain Amounts in the Fund.--
(1) Any amount which is in the Employees Health Benefits Fund, and which 
is described in paragraph (2), may be used solely for the purpose of 
paying the Government contribution under chapter 89 of title 5, United 
States Code, for health benefits for annuitants enrolled in health 
benefits plans (without regard to the health benefits plan or plans from 
which the refunds were received).
    ``(2) This subsection applies with respect to any amounts--
        ``(A) which are referred to in subsection (a)(2); and
        ``(B) which are attributable to Government contributions (other 
    than contributions by the government of the District of Columbia, 
    which shall be returned to such government) that were made under 
    section 8906(b) of title 5, United States Code, as determined under 
    regulations which the Office of Personnel Management shall 
    prescribe.
    ``(c) Definitions.--For the purpose of this section--
        ``(1) the term `Employees Health Benefits Fund' refers to the 
    fund described in section 8909(a) of title 5, United States Code;
        ``(2) the term `carrier' has the meaning given such term by 
    section 8901(7) of such title; and
        ``(3) the term `health benefits plan' has the meaning given such 
    term by section 8901(6) of such title.''

                  Section Referred to in Other Sections

    This section is referred to in sections 6386, 8903b, 8905, 8906 of 
this title; title 22 sections 4069c, 4069c-1; title 25 section 450i; 
title 50 section 403p.
