Lawmakers Propose Self Plus One Option for Federal Health Program

isak55/Shutterstock.com

This story has been updated. 

The bipartisan budget proposal announced Tuesday would pave the way for a “self plus one” coverage option under the federal employee health insurance program.

A provision in the $85 billion deal unveiled by Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., would allow the Office of Personnel Management to “modernize” the Federal Employees Health Benefits Program by expanding the menu of enrollment options. FEHBP currently offers self-only and family coverage; enrollees with spouses and no dependents must choose the family plan to receive coverage for their spouse. The Federal Employees Dental and Vision Insurance Program, or FEDVIP, has had a self plus one option since 2004.

The addition of self plus one coverage “would align the FEHB program with the commercial market and serve to spread costs across different enrollment types,” a section-by-section analysis of the budget proposal stated. FEHBP provides health care benefits to 8.2 million federal employees, retirees and their dependents.

The House could vote on the legislation, which partially repeals the sequester for two years, before it adjourns on Dec. 13. The bill also would require new civilian federal workers and working-age military retirees to contribute more to their pensions.

Federal employees and their advocates long have complained about the lack of a self plus one option in FEHBP. Employees with spouses and no dependents have balked at having to pay more for a family plan when they don’t have any children. But it’s not clear a self plus one option would be any cheaper for enrollees since that demographic -- employees with a spouse and no dependents -- tends to be older and more expensive to insure than a young couple with children, according to OPM’s analysis. The agency has long studied the costs and benefits of offering self plus one.

“The self plus one premium would be based on the health cost of this group,” states OPM in its online Frequently Asked Questions section. “For this reason, it is not clear that adding additional enrollment options to the FEHB Program would result in any significant benefit to those who ask for the change. In fact, they might be worse off.” The budget legislation would require OPM to do an actuarial analysis of the cost to self plus one beneficiaries for the first year of enrollment.

The Congressional Budget Office estimated including a self plus one option in FEHBP would save roughly $3 billion in direct spending by the government between fiscal 2014 and fiscal 2023. But the nonpartisan office offered this caveat: 
"The provision would reduce direct spending because the government contribution for health benefits for federal retirees is classified as direct spending," said a CBO cost estimate of the budget proposal, referring to the FEHBP proivision. "On the other 
hand, implementing the provision would increase spending subject to appropriation, assuming appropriation of the necessary funds, because the government contribution for health benefits for active federal employees is classified as discretionary spending." 

Expanding the health coverage options for federal workers has many supporters, including some employee and retiree advocates and White House officials. President Obama included a provision to offer self plus one in FEHBP in his fiscal 2014 budget proposal. The National Active and Retired Federal Employees Association and the Federal Managers Association praised the self plus one provision in the Ryan-Murray budget proposal.

“We believe firmly in the principle of offering an equitable and affordable federal benefits package that will best meet the needs of all federal employees,” said Greg Stanford, director of government and public affairs at the Federal Managers Association. “Establishing a self plus one option within FEHBP has been on FMA’s legislative agenda for several years, so we are appreciative that it is included as part of the budget deal.”

(Image via isak55/Shutterstock.com)

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