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Some Feds Could Soon Be Automatically Enrolled in New Health Plans

New rule would involuntarily enroll FEHBP participants whose plans are terminated in the cheapest remaining option.

Federal employees will not have to worry about losing their health insurance if the plan in which they are enrolled is dropped from the government’s offerings, a rule finalized on Wednesday ensured.

The Office of Personnel Management issued the final regulation requiring agencies to automatically enroll employees and annuitants into the lowest-cost nationwide plan within the Federal Employees Health Benefits Program based on self-only enrollment if their current plan is dropped from FEHBP or discontinued because of a disaster. The new rule will take effect Jan. 1, 2016. 

The current policy ends such employees’ FEHBP enrollment if they don’t pick a new plan within a certain time frame, typically within the annual Open Season, which runs from early November to early December, or within 60 days of a disaster. Since carriers that decide to leave FEHBP tend to do so at the end of the contract year, under the current policy if feds do not choose a new plan during Open Season, they would have to wait until the next Open Season  -- a year -- to re-enroll.

Retirees whose plans leave FEHBP are currently enrolled in the Blue Cross and Blue Shield Service Benefit Plan that is most similar to their cancelled plan. Under the new rule, they too will be automatically enrolled in the cheapest available nationwide FEHBP plan. Retirees will have 90 days to switch plans after an involuntary enrollment.

OPM will not consider a High Deductible Health Plan, or a plan that requires an association or membership fee, as an option in which to involuntarily enroll participants whose plans were dropped.

Six plans will drop out of FEHBP next year, affecting 3,000 individuals. In 2015, five plans left the federal insurance program, affecting 25,000 federal employees and retirees.

David Ermer, a managing partner at Washington-based Ermer Law Group who represents the Association of Federal Health Organizations, a trade group of FEHBP plans, previously told Government Executive the new policy was “a reasonable protection for [OPM] to make.”

Commenters on the proposed rule issued earlier this year asked OPM to include local plans when considering which plan in which to automatically enroll FEHBP participants, but the agency declined.

“OPM's intent in this regulation is to ensure that all enrollees with terminating plans have adequate access to affordable health insurance coverage while maintaining a procedure that is reasonable to administer and communicate,” the agency wrote. “Enrollees will have opportunities to change plans according to existing rules if they feel a better plan would meet their needs.”

Another commenter expressed concern that the option selected for automatic enrollment may not be able to handle a sudden influx of new enrollees. OPM attempted to dissuade those fears, saying, “Nationwide FEHB plans have adequate networks and system capabilities to accommodate enrollees in any region of the U.S.”

The proposed rule would not affect feds who voluntarily enroll or switch their plans during the annual Open Season, or within 60 days of a qualifying life event. Qualifying life events include marriage, divorce or a return to civil service from military duty.

Kellie Lunney contributed to this report

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