Thursday, February 14, 2013
Tweet[IWS] CRS: LAWS AFFECTING THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM (FEHBP) [13 February 2013]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Laws Affecting the Federal Employees Health Benefits Program (FEHBP)
Annie L. Mach, Analyst in Health Care Financing
Ada S. Cornell, Information Research Specialist
February 13, 2013
http://www.fas.org/sgp/crs/misc/R42741.pdf
[full-text, 41 pages]
Summary
The Federal Employees Health Benefits Program (FEHBP) has been in existence for over 50
years. Since its creation, it has provided private health insurance coverage to federal employees,
annuitants, and their dependents. It is the largest employer-sponsored health insurance program in
the country, covering about 8 million enrollees.
The program was created by the Federal Employees Health Benefits Act of 1959 (FEHBA, P.L.
86-382). FEHBA and its subsequent amendments established the parameters for eligibility and
the election of coverage; the types of health plans and benefits that may be offered; the level of
the government’s share of premiums; the Employees Health Benefits Fund to pay for program
expenses; and provisions for studies, reports, and audits. FEHBA also outlined the role of the
Office of Personnel Management (OPM). By law, OPM is given the authority to contract with
insurers and to prescribe regulations to manage FEHBP, among other duties.
The general model of FEHBP has not changed since its inception in 1959. FEHBP was and is a
program that allows competing private insurers to offer numerous types of coverage to enrollees
within broad federal guidelines. The federal government and the employee/annuitant have always
shared the cost of the premium, and generally, employees and annuitants have always had access
to the same plans at the same cost. However, specific features of FEHBP have been modified, in
some cases multiple times, by Congress and OPM. For example, eligibility has been expanded to
include additional types of federal employees and dependents, the formula for determining the
government’s share of premiums has changed, and the types of health benefits offered through
FEHBP plans have been broadened.
Congressional policymakers share responsibility with OPM for the program’s viability and
sustainability. Congress has financial and administrative interest in the program, as the
government pays for a share of FEHBP premiums and Congress has legislative authority to
modify FEHBP. Congressional interest in FEHBP also extends to FEHBP’s potential applicability
as a model for other health care programs or as an avenue to provide coverage, such as extending
aspects of FEHBP to Medicare, or using it as one of the models for the state exchanges under the
Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended).
The purpose of the report is to provide historical and background information that helps explain
how FEHBP has evolved into the program it is today. Policymakers may use this report to
understand how Congress has interacted with FEHBP in the past, and to inform its future
interactions with FEHBP. Specifically, the report includes short discussions of how Congress has
effected and maintained policy changes to FEHBP by restricting the use of federal funds; changed
the formula for determining the government’s share of FEHBP premiums; expanded eligibility for
the program; and implemented policies that affect the relationship between Medicare and FEHBP.
The Appendix includes detailed summaries of selected laws or provisions of laws that have
directly amended or otherwise changed FEHBP.
Contents
Introduction ...................................................................................................................................... 1
Interest in FEHBP ...................................................................................................................... 2
Scope of Report ......................................................................................................................... 3
Conditions on FEHBP Use of Federal Funds .................................................................................. 4
Premium Determinations ................................................................................................................. 5
Eligibility ......................................................................................................................................... 7
Medicare and FEHBP .................................................................................................................... 11
Tables
Table 1. Provisions of Laws Conditioning the Use of Federal Funds for FEHBP ........................... 5
Table 2. Provisions of Laws Related to Changes in How the Government’s Share of the Premium Is Determined .......................... 6
Table 3. Laws Affecting Eligibility for FEHBP ............................................................................... 8
Table 4. Provisions Related to Changing How FEHBP and Medicare Interact ............................. 12
Appendixes
Appendix. FEHBP Legislative History .......................................................................................... 13
Contacts
Author Contact Information........................................................................................................... 38
________________________________________________________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.