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Payroll Services Letter 05-05.1 Changes in Health Benefit Processing


Payroll Services Letter 05-05.1 Changes in Health Benefit Processing

Number: PS05-05.1

Date: April 17, 2004 (Revised May, 2009)

Subject: Changes in Health Benefits Processing

Category: Personnel Actions

Reference: PS 05-05, Subject: Changes in Health Benefit Processing, dated April 17, 2004. PS 05-05.1 supersedes PS 05-05. Please replace that letter with this one.


The conversion of the HHS payroll system to the Defense Finance and Accounting Service (DFAS) will require changes in health benefits processing. This letter provides Human Resource Centers (HRC) with information and instructions for the following health benefits actions:


_ _ _ _

A. Employees on Leave Without Pay (LWOP)

Employees taking LWOP have had three options for paying their Federal Employee Health Benefits (FEHB) premiums:

  • Pay-As-You-Go
  • Catch-Up
  • Prepay

These payment options are described in the FEHB Handbook on the OPM website:

Effective April 17, 2005, the third option, Prepay, will no longer be available (LWOP Pre-pay HB Start - NOA Code 9628). As noted in the FEHB Handbook, agencies are not required to offer this option.

Please advise employees of the two options still available to them for paying their share of FEHB premiums while in LWOP status.

B. Reservists Called to Active Duty

When an employee is called to active military duty in support of a contingency operation, HHS will pay that employee’s share of FEHB premiums in addition to the government’s share.

Effective April 17, 2005, HRC Payroll Liaisons must notify their Payroll Customer Service Team of employees called to active duty to ensure that qualifying reservists are not indebted for health benefits premiums.

The notification must be via a Peregrine ticket with the Category: BENEFITS Subcategory: FEHB. The following information must be included:

  • Name
  • SSN
  • FEHB enrollment code
  • A brief statement that the reservist is called to active duty in support of a contingency operation
  • Beginning date employee is eligible to have the agency pay the employee’s share of the FEHB premium
  • Approximate ending date employee is eligible to have the agency pay the employee’s share of the FEHB premium
  • Name and telephone number of the HR office representative responsible for the case

The description field should be used to indicate that the reservist was called to active duty, the FEHB enrollment code, and the effective or beginning date and the approximate end date.

The Secretary of HHS directed the Operating Divisions to arrange for payment of employee shares of FEHB premiums in a memorandum dated April 23, 2003 (attached).

  • Authority to waive the requirement that employees pay their share of FEHB premiums is given under 5 U.S.C. Section 8906(e)(1)(B)(ii) and 5524a(c)
  • Further information is available on the OPM website “Health Benefits Coverage under the FEHB Program for Federal Civilian Employees Called to Active Duty Service”

C. Reconciliation of Health Benefits

Effective April 17, 2005, insurance carriers will inform DFAS and HHS HRs directly of enrollment discrepancies via the Centralized Enrollment Clearinghouse System (CLER). Please refer to PS 05-XX for procedures on processing discrepancies noted in the CLER

D. Waiving FEHB Premium Conversion

While the vast majority of employees take advantage of the “Premium Conversion” program to pay their FEHB premiums with pre-tax dollars, all employees have the right to waive their participation in this program. To do so, they must obtain a waiver form from their HR Center. Waiver requests may only be authorized if they are submitted during “open season” or if a “qualifying life event” applies to the employee.

Effective April 17, 2005, HR Centers are required to send waiver authorization FEHB Premium Conversion Waiver/Election Forms directly to DFAS-Cleveland. The forms should be faxed to the DFAS payroll office at the following numbers:

  • 866-401-5849 toll-free, or
  • 317-275-0354 commercial

Additional information about forwarding documents to the DFAS payroll office is available in PS Letter 05-15: Procedures for Transmitting Documents to DFAS-Cleveland

A template for the waiver form and additional information about the FEHB premium conversion program are available from the following sources:

  • FEHB Premium Conversion Waiver/Election Form. Attachment to BAL 00-215.

For further assistance or for questions regarding the information in this letter, please contact your Customer Service Team in the Payroll Services Division.