Health Contributions May Rise

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Federal employees could pay more than $200 more per year toward their health care benefits if Congress does not act to change the law that determines how much the government contributes to the Federal Employee Health Benefits Plan (FEHBP).

Under current law, the formula used to calculate the percentage of health care premiums that is paid by agencies and that which is paid by employees will expire in 1998. That would mean employees' share of premiums would rise from 29 percent to 36 percent in 1999, an average increase of $20.00 per month out of federal employees' paychecks, the Federal Managers Association predicts.

"We want some sort of formula that keeps the government's share at the same level as it is now," said Mark Gable, FMA's legislative director.

The government's share of employees' health premiums is determined by averaging the premiums for the five largest health plans and a premium for an Aetna health plan that pulled out the FEHBP in 1989. The Aetna premium, also known as the "phantom" premium, keeps the government's contribution at about 71 percent. The Aetna premium will be factored out of the formula next year under current law, dropping the government's portion of premium payments to about 64 percent.

Members of Congress with large numbers of federal employees and retirees in their districts will likely seek to keep the Aetna premium in the formula.

Reps. Steny Hoyer, D-Md., Connie Morella, R-Md., and Tom Davis, R-Va., have already scored a minor victory on that front by preventing the Congressional Budget Office from assuming any savings in the balanced budget agreement from the federal health care system. The three lawmakers convinced the CBO that assuming federal employees' groups and congressional representatives would not fight to keep the government's share of premiums above 70 percent would not be a wise decision.

Now that the the balanced budget agreement is not depending on the $1.5 billion the government would save if the current formula for calculating premiums was scrapped, the representatives will have an easier time pushing for the formula to be kept as is.

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