VIDEO: OPM Introduction to Open Season 2011 Webcast
OPM’s Healthcare and Insurance staff will be hosting five informational webcasts for the 2011 Federal Benefits Open Season. In these webcasts, OPM explains the basics of Open Season and the benefit programs involved. Read more
OPM Announces 2012 FEHBP Premium Rates
Washington, DC - The U.S. Office of Personnel Management (OPM) announced today that the average premium for the 8 million people enrolled in the Federal Employees Health Benefits program (FEHBP) will increase by 3.8 percent for non-postal employees and all annuitants in 2012, which is approximately half of last year’s increase of 7.3 percent. Read more
USPS Dangling Incentive For APWU Members To Vote YES On Contract
From a PostalReporter reader: Name withheld upon request
from withheld
to Lucille Caldwell
date Thu, Mar 31, 2011 at 1:17 AM
subject PSE’s Health Insurance
Did you notice this unusual health insurance provision in the proposed USPS-APWU Tentative National Agreement, buried on pages 173 to 174? The Postal Service is dangling this as an incentive for APWU members to vote YES on the proposed contract.
After an initial appointment for a 360-day term and upon reappointment to another 360-day term, any eligible non-career PSE employee who wants to participate in the Federal Employees Health Benefits (FEHB) Program on a pretax basis will be required to make an election to do so in accordance with procedures to be published as soon as administratively practicable. A previous appointment as a transitional employee will count toward qualifying for participation in FEHB, in accordance with the Office of Personnel Management (OPM) regulations. The total cost of health insurance is the responsibility of the PSE employee, except as provided below.
The Postal Service will make a contribution in the amount of 75% of the total premium for any eligible PSE who selects the APWU Consumer Driven Health Plan.
Only an APWU member can belong to this FEHBP health plan. Isn’t that clever? Under this proposed contract a Postal Support Employee that doesn’t join the APWU will lose an employer-contribution of $6,817 annually on his/her family health insurance enrollment or $3030 on a self only enrollment [see APWU attachment based on 2011 rates].
OPM IG Releases Study On USPS OIG’s Proposals to Change USPS Funding of Retiree Benefits
Filed under: fehb, oig, opm, postal, postal news, press releases, usps
Press Release from the OPM Office Of Inspector General
Study of the Risks and Consequences of the USPS OIG’s Proposals to Change USPS’s Funding of Retiree Benefits: Shifting Costs from USPS Ratepayers to Taxpayers’
Washington, DC – (Feb. 28, 2011) Today, the U.S. Office of Personnel Management (OPM), Office of the Inspector General (OPM OIG), issued a study analyzing certain proposals issued by the United States Postal Service (USPS), Office of Inspector General (USPS OIG), regarding changes in the manner by which the USPS funds both its retiree annuity and health benefit obligations. The OPM OIG paper, A Study of the Risks and Consequences of the USPS OIG’s Proposals to Change USPS’s Funding of Retiree Benefits: Shifting Costs from USPS Ratepayers to Taxpayers, reviews the impact that the proposals would have upon the trust funds and the Federal benefit programs administered by OPM.
In a series of reports containing these proposals, the USPS OIG has estimated that the USPS has “overpaid” these trust funds by as much as $142 billion. The proposals generally envision changing the law governing the manner in which the USPS’s retiree benefit liabilities are determined and funded.
“We felt that the issues surrounding the USPS OIG’s proposals had not been fully explored,” said Inspector General Patrick E. McFarland. “It was important for us to examine not only the effects that the proposals would have upon the USPS, but also their impact upon the Federal retirement system as a whole. We were also concerned that there was a public perception that OPM may have inappropriately calculated the USPS’s liabilities. In fact, our analysis revealed that OPM has fully complied with the law.”
The OPM OIG study also concludes that generally the proposals would have a lasting negative effect upon the retirement programs and trust funds and have little, if any, positive impact upon the USPS’s ultimate long-term profitability. In addition, the result of these proposals would be to shift costs from USPS ratepayers to the American taxpayers.
While the USPS’s financial situation must be addressed, the OPM OIG study cautions against using the Federal retirement program as a vehicle through which to implement policy objectives unrelated to the Federal retiree benefit programs. “The resolution of the USPS’s financial situation should be fully transparent rather than providing an indirect subsidy from the Federal benefits system,” said Inspector General McFarland.
“While our findings do not support the USPS OIG’s proposals,” stated Inspector General McFarland, “we think that our work, combined with theirs, will help the Congress, the Administration, and the USPS to develop the most efficient and effective resolution of the USPS’s current problems.”
Here’s an interesting little tidbit from the report:
Under the FEHB Program, a portion of a retiree’s health care insurance premium is paid for by the Federal Government (or, in the case of USPS retirees, the USPS) through contributions to the Employees Health Benefits (EHB) Fund.The Federal or USPS retiree contributes the remaining amount of the premium to the fund.
As the USPS OIG’s reports have repeatedly pointed out, the Federal Government does not prefund it s retiree health obligations. Instead, the employer and employee contributions pay only for the costs of the program for that particular year. Consequently, the EHB Fund maintains only a small amount of reserves and thus does not have significant assets that remain in the fund from year to year.
It is unclear, however, what the effect would be upon USPS employees’ or retirees’ rights if the USPS ceased making its required payments into the EHB Fund because the fund does not contain sufficient reserves that could be used to “replace” the USPS’s contributions. Consequently, the fund’s assets would be exhausted very quickly.
In such a scenario, the insurance companies would still be legally entitled to the full amount of the premium negotiated under the contract. The OPM would have to take some sort of action because without the USPS’s contributions, the fund simply would not have enough money to pay every FEHB Program participant’s premium.
Absent an emergency appropriation from Congress, it is possible that the OPM would have to exercise its regulatory authority to disenroll USPS employees and retirees as a class in order to continue providing health care coverage to all other FEHB Program participants.
USPS’s Financial Outlook
While various parties have worked diligently to develop business and operational initiatives geared towards improving the USPS’s business model and financial condition, we have yet see a report that contain s viable projections that it will improve its financial situation.
OPM OIG Study of USPS OIG Proposals Feb 28 2011
Open Season For Health Benefits Starts Monday, Nov. 8
It’s Open Season — the time of year when employees can sign up for benefit programs, change enrollments, or cancel their participation.
Open Season for three benefits programs — Federal Employees Health Benefits (FEHB), Flexible Spending Accounts (FSA), and the Federal Employees Dental and Vision Insurance Program (FEDVIP) — begins Monday, Nov. 8.
FEHB and FEDVIP plans have changed significantly. For example, the 2010 Affordable Care Act changed FEHB eligibility requirements allowing children up to age 26 as eligible dependents for Self and Family coverage (Link, 8/17). Employees are asked to note that even if they keep the same FEHB plans and coverage automatically continues, their premiums may change. It’s also recommended that employees check their insurance coverage for details that could save them money. For example, if you’re enrolled in a family plan but no one else is covered by that plan, changing to the “Self Only” option will reduce your premiums.
Employees with FEHB plans that no longer will be offered must select a new plan or their health insurance coverage will end. Affected employees will receive a letter from the plan and from the Postal Service. Employees whose plan’s service area is changing also will be notified.
FSA — which can save money on taxes for eligible out-of-pocket health care and dependent care expenses — also has changed. The Health Care FSA has added restrictions on coverage for over-the-counter drugs and medicines. Also, children who are not dependents on your taxes may now be covered under your Health Care FSA until Dec. 31 of the year before they turn age 27. Employees who want an FSA for 2011 need to re-enroll — FSA coverage does not continue from year to year. FSA brochures with more details now are being mailed to all employees.
You can make FEHB and FSA selections on PostalEASE. For FEDVIP elections, go to www.benefeds.com.
Open Season for the Annual Leave Exchange (ALE) begins Monday, Nov. 15. Employees eligible to make an ALE election will receive a letter.
FEHB, FSA and FEDVIP booklets will be arriving in the mail. Look for the information and save it when it arrives. Additional Open Season information is in today’s edition of the Postal Bulletin. You also can go to the “My HR” section on LiteBlue for more details.
You will need your employee identification number (EIN) and USPS personal identification number (PIN) to enter PostalEASE or LiteBlue. Forget your PIN? Click here to read “Got Your Number?” in yesterday’s Link for help.
source: USPS News Link
Federal Employees 2011 Open Season for Health Benefits, Dental, Vision Insurance and FSA
From the Office Of Personnel Management
• The U.S. Office of Personnel Management (OPM) has announced that this year’s open season for health benefits, dental and vision insurance, and Flexible Spending Accounts will run from November 8 through December 13, 2010. This open season will give federal employees and retirees the opportunity to change their health-care coverage and employees who are not enrolled, but are eligible to participate, the opportunity to elect coverage.
• Each year, OPM enters into annual negotiations with each FEHB carrier, historically enabling the program to hold premium increases below industry averages and secure good benefits value for enrollees and their families.
• Premiums for the 2011 FEHB Program will rise by an average 7.2 percent for the enrollee share of premiums. This increase is below last year’s premium increase of 8.8 percent and lower than rate hikes predicted for large, employer-sponsored health programs by benefit consultants such as Aon, Milliman, and Price Waterhouse Coopers, which are estimating 2011 premium increases between 8.9 percent and 10.5 percent.
• In January 2011, there will be 207 health plan options in the FEHB Program.
• The Affordable Care Act extends important new benefits to FEHB enrollees and strengthens the program. Preventive care and screenings will be available with no out-of-pocket costs and enrollees will have the right to add their young adult children under the age of 26 to their family health plan. According to an OPM analysis, and consistent with independent reports, these new consumer protections account for a 1.7 percent increase in premiums.
• Additionally, all FEHB plans are fully compliant with the insurance reforms required by the Affordable Care Act and, in the case of preventive care, FEHB plans have extended benefits ahead of when they were required to do so by the Act.
• Enrollees with self-only coverage will pay, on average, $5.53 more each pay period and enrollees with family coverage will pay $11.45 more per pay period. FEHB enrollees pay, on average, 30 percent of the total cost of the plan’s premium while the government pays 70 percent.
• Enrollees in the Blue Cross Blue Shield Standard Option, the most popular FEHB plan choice, will see their share of the premium increase by 6.9 percent for self-only coverage and 7.6 percent for self and family coverage.
• All FEHB plans will offer tobacco cessation benefits in compliance with the U.S. Public Health Services’ 2008 clinical guidance on tobacco cessation. This includes full coverage (no enrollee co-payments) for seven FDA-approved medications, four counseling sessions per quit attempt, and two quit attempts per year.
• Five FEHB plans have increased benefits for hearing devices and/or other assistive devices and twelve FEHB plans currently provide coverage for hearing aids and/or assistive technology devices.
• Sixteen FEHB plans will offer testing for up to four transplant donors for bone marrow and stem cell transplants.
• Two health plans, GEHA and Mail Handlers, will pilot coordination of benefits with Medicare, whereby the FEHB plan will contribute toward the cost of the enrollee’s Medicare Part B premium in return for the enrollee accepting the same cost sharing (e.g. copayment/coinsurance) as non-Medicare enrollees. Medicare enrollees may voluntarily participate in these pilot programs. Currently, these plans waive some cost sharing for enrollees with Medicare coverage.
Non-Dependent Children Can Join FEHBP Next Year
Non-dependent children can join FEHBP as of January 1st, 2011. The child doesn’t have to be your own. It can be your gay partner’s or someone else’s. If it is your own child, the child can be married and have their own employer-sponsored insurance. Almost any child living with a federal employee can be added. See the attachments from OPM. Some employees and retirees may overlook this important benefit change this Open Season.
OPM’s definition of “Foster Child” and “Step Child” is at
http://www.opm.gov/insure/health/reference/handbook/fehb28.asp#FosterChildren.
Changes for Federal Benefits Programs under the Affordable Care Act
http://www.opm.gov/retire/pubs/bals/2010/10-201.pdf
Attachment: Health Reform Changes for Federal Benefits Programs Effective January 1, 2011
http://www.opm.gov/retire/pubs/bals/2010/10-201attachment.pdf
OPM Proposes Changing FEHBP Open Season To Month of November
From the Federal Register
We are also proposing to change the annual FEHB Program Open Season from the Monday of the second full workweek in November through the Monday of the second full workweek in December, to November 1st through November 30th of each year. We are also adding a new opportunity for eligible employees to enroll in the FEHB Program or to change enrollment from self only to self and family under the Children’s Health Insurance Program Reauthorization Act of 2009. Finally, we are proposing to allow FEHB plans to offer three options, without the requirement that one of the options be a high deductible health plan.
Change in Dates of Open Season
The current regulations provide for the FEHB Program Open Season to be held from the Monday of the second full workweek in November through the Monday of the second full workweek in December of each year. We are revising the regulations to change these dates to the month of November. Therefore, beginning in 2010, the Open Season dates will be November 1st through November 30th of each year. This will simplify the annual announcement of the time period for Open Season and allow agencies and employees to better plan for the enrollment opportunity since they will know well in advance when it will occur each year.
New Enrollment Opportunities
Public Law 111-3, the Children’s Health Insurance Program (CHIP) Reauthorization Act of 2009 (the Act), enacted on February 4, 2009, allows States to subsidize health insurance premium payments for certain low-income children who have access to qualified employer-sponsored health insurance coverage. FEHB-eligible enrollees who meet the criteria for child health assistance are eligible to receive State premium subsidy assistance payments to help them pay for their FEHB plan premiums. Current FEHB Program regulations already allow an eligible enrollee who loses coverage under the FEHB Program or another group health plan, including loss of eligibility or assistance under Medicaid or CHIP, to enroll or change enrollment from self only to self and family within the period beginning 31 days before and ending 60 days after the date of loss of coverage. The Act provides new opportunities for eligible employees to enroll in the FEHB Program or to change enrollment from self only to self and family when the employee or an eligible family member becomes eligible for premium assistance under CHIP. Employees must request the change in enrollment within 60 days after the date the employee or eligible family member is determined to be eligible for assistance. Employees may make these enrollment changes regardless of whether they are covered under premium conversion (pay premiums with pre-tax dollars).
DATES: OPM must receive comments on or before June 18, 2010.
Senate-Passed Health Bill Safeguards FEHBP Risk-Pool, But Taxes Premiums
eNAPUS Legislative & Political Bulletin
At 7:00 AM on Christmas Eve, the U.S. Senate sent to a yet-to-be-named House-Senate Conference Committee legislation (H.R. 3590) to revamp the nation’s medical marketplace. The Conference Committee will attempt to resolve the differences between the House and Senate-passed bills. The Senate passed its version on a 60-39 party-line vote; Senator Jim Bunning (R-KY) did not vote.
At the outset, Congress and the Administration sketched a plan to provide health insurance to the uninsured, make health care more affordable, and improve its quality and accessibility. After running through the Saturday Night Live Bass-O-Matic (2009 version), it’s unclear how close to or far from the mark the lawmakers fell. It is obvious, however, that the debate over health care reform is far from over. It will continue to be highly charged and will pull at the seam holding the House Democratic Caucus together. For its part, NAPUS focused its legislative attention on two key elements that may directly affect Postmasters: the integrity of the Federal Employees Health Benefit Program (FEHPB), and shielding FEHBP participants from the impact of an excise tax on certain health plans.
As has been reported in previous eNAPUS Bulletins and Postmasters Gazettes, the Senate has been toying with the idea of opening up the FEHBP to the non-Federal population, as proposed by Sen. Ron Wyden (D-OR); or forcing FEHBP participants into state-administered insurance exchanges, as originally proposed by Sen. Charles Grassley (R-IA). While Postmasters and their allies successfully deflected these proposals, the Senate Leadership suggested that the Office Personnel Management (OPM) contract with two or more national insurance carriers to participate in state-based health insurance exchanges. Our concern was two-fold. First, NAPUS feared that the proposal could result in a merger of the risk-pool for FEHBP and the OPM-contracted plans. This would have resulted in dramatically higher premiums for FEHBP participants. Second, NAPUS was concerned that OPM’s newly-created health insurance contracting authority would divert its limited resources from its core mission of administering the FEHBP on behalf of the federal population. The legislation, as passed by the Senate, responds favorably to NAPUS concerns in this area. Specifically, section 1334(g) of the bill prohibits OPM from allocating “fewer financial or personnel resources to functions of the OPM related to the administration of the FEHBP” and directs the OPM to establish a separate unit to administer its health care reform responsibilities. Moreover, this section requires that participants in the new OPM-contracted plans “be treated as a separate risk pool apart from enrollees in the FEHBP.” Finally, the bill does not require FEHBP plans to participate in the state-based health exchanges. Nevertheless, if this provision were to be included in a final bill it is expected that Blue Cross Blue Shield would elect to participate in the state-exchanges. House Speaker Pelosi has indicated that she supports OPM’s new task.
One of the major points of contention in the soon-to-be-started House-Senate Conference Committee will be the Senate-passed 40% excise tax on high-premium insurance plans. The Congressional Budget Office (CBO) projects that the tax, which begins in Fiscal Year 2013, would raise $149 billion in through Fiscal Year 2019. The excise tax would be levied on the amount that the health insurance premiums exceed a specified threshold – $8,500 for single coverage and $23,000 for family policies. After 2013, the thresholds would be indexed to inflation plus 1 percent. This tax proposal has created a firestorm of protest, particularly from unions, and has created a major political problem for Democrats. One of the defining issues in 2008 elections was taxation of employer-provided health benefits – Democrats, led by Presidential Candidate Obama, campaigned against the levy. (Interestingly, this morning’s Washington Post reported that President Obama accepts the tax.) Besides the political issue of how the campaign promise could impact Democratic turnout in the 2010 Congressional elections, the proposal has a direct bearing on future FEHBP benefits. First, the premium threshold includes the total FEHBP premium (not just the enrollee contribution), vision and dental plan premiums, and contributions to a Flexible Spending Account. This sum of these amounts adds up quickly. Second, the premium threshold is indexed to general inflation, not medical inflation. Additionally, medical inflation, as reflected in FEHBP premium growth, increases much faster than general inflation. Consequently, FEHBP plans will be hit the threshold within a very few years. The result of hitting the mark will force FEHBP plans to reduce benefits, including increasing copayments and deductibles. It is likely that OPM will direct the plans on how to reduce benefits, probably in the form of “Call Letters” to FEHBP carriers, similar to actions taken by the Reagan Administration in the 1980s.
The problem with the excise tax is much more fundamental than its impact upon the active and retired federal workforce. The tax strategy was originally sold as a way to penalize Cadillac health plans (luxury plans), encouraging generous employers to ratchet down excessive benefits. The tax was also a method to raise funds to offset the cost of providing health benefits to the uninsured. However, the tax is not being imposed on the plan’s benefit-value; rather it is levied against the plan’s premium-value. Rule one of insurance: Benefits do not equal premiums – claims reflect premiums. Two plans with identical benefit packages can and will have dramatically different premiums. Plan A has a sick population, it has more claims; the premium will be high. Plan B has a healthy population, it has less claims; the premium will be low. This phenomenon is known as risk-selection. Unlike other plans, FEHBP provides non-discriminatory coverage to all members of the Federal population; it does not cast off retirees. Moreover, there are a significant number of Federal retirees who are not yet Medicare-eligible, and they represent the most expensive population to insure. The net effect of the excise tax is to penalize those health plans that insure an older and sicker population, not those plans that actually provide Cadillac benefits. (If this were the case, the USPS would get nailed for providing such benefits to its PCES employees.)
NAPUS plans to aggressively ensure that the integrity of the FEHBP is protected and to continue to oppose a regressive health care excise tax, which penalizes comprehensive – not excessive – health plans that provide health protection to NAPUS members.
download PDF
Health care update: Excise tax amendments, possible FEHBP role
From the NALC eActivist Network:
Two U.S. senators have responded to the campaign by NALC and other unions to remove an excise tax on health plans, now in the Senate health care bill, that could negatively affect letter carriers’ health plans later in the next decade. Joined by workers and labor leaders at a press conference, Sen. Bernie Sanders (I-VT) announced an amendment to strip the Senate health care bill of the provision which would tax so-called “Cadillac” health plans. NALC is opposed to the 40 percent excise tax on “high-cost” plans, having shown how it could hit the kind of “Chevy” plans used by postal and federal employees and other middle class workers.
Click this link for the Fact Sheet on this topic:
http://nalc.org/depart/legpol/pdf/Excise%20tax.pdf
The Sanders amendment would replace the excise tax on health plans with a surtax on the income of a small fraction of the wealthiest Americans, modeled after similar provisions in the House health care bill.
Sen. Kirsten Gillibrand (D-NY) has also filed an amendment that would affect the health care excise tax. Her amendment would increase the threshold amounts allowed for health plans before they are subject to the tax. While NALC believes the funding mechanisms in the House of Representatives are the fairest ways to fund health care reform, Sen. Gillibrand’s amendment is a step in the right direction.
It’s uncertain at this time whether either of these two amendments will receive a vote on the floor of the Senate. Under Senate rules, no amendment will be accepted without the votes of at least 60 senators. Senate leaders are seeking to include a whole range of changes in a single manager’s amendment with the goal of passing a final bill before the Christmas recess. However, I will write to you and ask you to contact your senators if a vote on either amendment is scheduled.
Meanwhile, the possible use of the Federal Employees Health Benefit Program (FEHBP) as a vehicle to provide non-profit health plan alternatives to the uninsured in the states has been raised. Few details are available at this time and it is too early to know how this proposal would affect us, either positively or negatively. NALC’s legislative team is in constant contact with senate leaders and their aides and will vigorously fight to protect the interests of letter carriers if changes to FEHBP are proposed. We are also working with leaders in the House of Representatives in anticipation of a House-Senate conference on health care legislation.
NALC will continue to monitor the debate and work with our allies in the labor movement to win a health care reform bill that which benefits all Americans and is fair to letter carriers and the middle class.
In solidarity,
Fredric V. Rolando
President