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Key developments in the world of federal employee benefits: health, pay, and much more.

Health benefits roundup

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This year, open season for the Federal Employees Health Benefits Plan (FEHBP) runs from November 13 through December 11. Here's an early look at some changes to expect this year.

Care for the Underserved

The Office of Personnel Management has released its annual list of states that qualify as medically underserved areas under the FEHBP. For calendar year 2001, they are: Alabama, Idaho, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, South Carolina, South Dakota, Utah and Wyoming. The only change from this year is that North Dakota was removed from the list.

To be a medically underserved area, 25 percent or more of the population must live in an area designated as a "medical care manpower shortage area" by the Department of Health and Human Services.

The designation gives federal employees under FEHBP who live in one of the states on the list more flexibility in choosing a medical provider.

If, under the terms of an FEHBP plan, the carrier will only pay for a particular medical service if it is performed by a certain category of practitioner, then the plan must pay for the same service performed by any other licensed practitioner if the plan enrollee lives in a state that is designated by OPM as medically underserved.

For example, if your health plan says that sprained ankles must be treated by a licensed physical therapist, but you live in Utah, a licensed family practitioner could provide the treatment and your plan would still have to cover the cost.

OPM pointed out that the designation applies to entire states, not just counties. The rule that covers the designation can be found in the Code of Federal Regulations: Title 5; Chapter 1; Part 890; Subpart G; Section 890.702.

Open Season Improvements

The National Association of Retired Federal Employees is lauding several changes OPM has made the the FEHBP open season process this year. Look for new letters, forms and instructions written in plain language. Also, Spanish speakers will benefit from an option to make their transactions in Spanish when they call Open Season Express, a toll free telephone service (800-332-9798) dedicated to processing open season transactions.

Pre-Tax Benefits

The plan allowing federal employees to pay health premiums with pre-tax dollars goes into effect in the first pay period that begins on or after Oct. 1. Unless employees opt out of the new program, they are enrolled automatically. More information and a worksheet that enables employees to find out how the new program will affect their take-home pay is available at OPM's Web site.

Mental Health Coverage

FEHBP carriers will provide expanded benefits for mental health and substance abuse treatment next year. OPM has directed all FEHBP providers to provide the same level of coverage for mental health and substance abuse conditions as they do for traditional medical care.

The new requirement will level the playing field for deductibles, copays, and day and visit limitations, in addition to other factors. Historically, mental health coverage cost more and was more limited.

More information is available at OPM's Web site.

So Long, SAMBA

OPM has canceled a pilot program for a health plan sponsored by the Special Agents Mutual Benefit Association (SAMBA). OPM had granted the SAMBA plan authority to use a federal supply schedule to purchase drugs at discounted rates.

"The three companies that dominate the pharmaceuticals market, Pfizer, Merck and Parke-Davis, decided not to fill orders. They each refused to supply their products to SAMBA from the [supply schedule]. Without that cooperation, the pilot project was not viable and was dropped," OPM said in a statement.

The pharmaceutical industry was opposed to the pilot for fear that it would become a model for other federal plans and undercut the market for prescription drugs.

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