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:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


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