Pay & Benefits Watch Pay & Benefits WatchPay & Benefits Watch
Key developments in the world of federal employee benefits: health, pay, and much more.

Obamacare Could Make FEHBP More Popular


The number of federal employees who are eligible for the Federal Employees Health Benefits Program, but not enrolled, is somewhere between 100,000 and 200,000 people, FEHBP experts agree. “I’m sure it’s a considerable number of people,” says David Ermer, a managing partner at Washington-based Ermer Law Group who represents the Association of Federal Health Organizations, a trade association of FEHBP plans. So what are uninsured feds’ options now that everyone is required to have health insurance under the 2010 Affordable Care Act?

The answer is: It depends.

Federal employees who have opted out of FEHBP coverage do so for different reasons. For some, FEHBP might be too expensive so they choose not to be insured at all, while other feds are on their spouse’s health care plan. Then there are part-time employees and seasonal workers, most of whom are not currently eligible to enroll in FEHBP. Federal workers who don’t participate in FEHBP because of cost concerns eventually will have to choose between enrolling in the federal plan and in the insurance exchange network created by Obamacare. If they don’t want FEHBP, then “they are going to have to look at signing up for the exchanges for 2014, or face the penalty,” says Ermer. The Obama administration has delayed compliance with the law’s individual mandate until March 31, 2014, so uninsured, FEHBP-eligible feds still have some time to peruse their options, though, according to Ermer, there’s really no contest. “Feds are sharp people and they know how to do math,” says Ermer. “I just don’t see how the exchange coverage is going to be a better deal than FEHB.”

If they choose to enroll in FEHBP, uninsured federal employees have to do so during open season, which ends this year on Dec. 9. If they miss that cutoff, they would be forced onto the exchanges in 2014, or pay a penalty. It’s not clear yet whether the administration will delay compliance with the individual mandate past March 31.

Federal workers who participate in their spouse’s health care plan don’t have to do anything, unless they are forced off that plan for some reason, either because of cost or a change in their marital status. Still, it’s probably worth taking a look at what FEHBP has to offer. The program will have 256 health plans in 2014.

Some federal part-time employees, including firefighters and those who provide emergency response services, became eligible to enroll in FEHBP last year, but the vast majority of seasonal workers are not. That could change under Obamacare. The administration has delayed the employer health care mandate until 2015, which means the government will make FEHBP available to many more part-time employees at some point. The Affordable Care Act requires employers with more than 50 employees to extend coverage to all employees who work 30 hours per week for an extended period of time. Ermer says he expected the Office of Personnel Management to be “leading the charge to open up FEHB for those folks in 2014, but that hasn’t happened yet.” It could in 2015, he says. In addition, the Affordable Care Act requires large employers, including the federal government, to auto-enroll new employees into their health plans by 2015. “I don’t know exactly how that will work in terms of FEHB,” Ermer says. The administration “will have to come up with that mechanism too.”

The Postal Service, which awarded a contract to UnitedHealthcare this past spring, will roll out its new health insurance plan for non-career employees on Jan. 1, 2014, to comply with the law. The agency plan could offer health benefits to 35,000 non-career postal employees who are currently left out of FEHBP.

It’s too hard to predict how extra FEHBP enrollees due to Obamacare might affect premium rates, Ermer says. But, he adds, “I can’t imagine it’s a bad thing to add new enrollees.”

Kellie Lunney covers federal pay and benefits issues, the budget process and financial management. After starting her career in journalism at Government Executive in 2000, she returned in 2008 after four years at sister publication National Journal writing profiles of influential Washingtonians. In 2006, she received a fellowship at the Ohio State University through the Kiplinger Public Affairs in Journalism program, where she worked on a project that looked at rebuilding affordable housing in Mississippi after Hurricane Katrina. She has appeared on C-SPAN’s Washington Journal, NPR and Feature Story News, where she participated in a weekly radio roundtable on the 2008 presidential campaign. In the late 1990s, she worked at the Housing and Urban Development Department as a career employee. She is a graduate of Colgate University.

Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.