Pay with Plastic

The next time you visit the doctor, you might be able to leave the cash at home. Federal employees will soon acquire special debit cards to pay for some health care costs.

The Office of Personnel Management, which administers the health insurance program for federal workers, is piloting a debit card program this summer for enrollees in plans run by the Government Employees Hospital Association (GEHA) who also have flexible spending accounts.

Participants will be able to pay for health expenses with cards linked directly to their FSA, eliminating the reimbursement process. If this summer's test run goes well, OPM plans to extend the program to all employees.

"You walk into the doctor's office and instead of giving them a credit card or whatever for their $10 or $15 co-pay, you just give them the debit card, and it will be automatic," said Frank Titus, OPM's assistant director for insurance services.

OPM is hoping the debit cards will boost interest in FSAs, which allow employees to make pre-tax salary contributions into a savings account to pay for medical expenses not covered by insurance.

Items that can be paid for with FSAs include over-the-counter medicine, braces, acupuncture, substance abuse therapy, some infertility treatments, birth control, contact lenses, diaper rash creams, diabetic supplies, flu shots, laser eye surgery and mental health care.

Titus said the number of enrollees in the federal FSA program is comparable to privately sponsored plans, but it's not high enough.

"I don't understand for the life of me why we only have 10 percent of the eligible population enrolled instead of 90 percent," Titus said. "I think some people think that when you talk about using pre-tax dollars and saving tax dollars, somehow the [tax] return is going to get more complicated, but it doesn't."

There are a couple of catches for debit program participants. One is that OPM also will require employees to be enrolled in paperless reimbursement in order to sign up. And, for some items, such as over-the-counter drugs, Titas said employees still may be required to submit receipts to validate the transaction.

Since the program won't launch until the summer, details still need to be worked out.

Teeth for Two

Government workers will have optional dental and vision coverage by the end of 2006. There will be a new option for enrollment in the benefit, as well.

In addition to the traditional "self" and "self plus family" choices, enrollees will be able to choose "self plus one" when signing up for dental and vision insurance. The premiums would cost more than those for a one-person plan but less than for a family plan. The extra option could be used by married couples without children or couples with grown children on their own plans.

"It will be interesting to see what the premiums look like with respect to that," OPM's Titas said. "There are a lot of individuals who write us and believe they are overpaying for insurance because they are self-and-spouse, and they feel like they are subsidizing people with large families."

Dental and vision coverage, which will not be subsidized by the government the way that standard medical coverage is, was authorized by Congress in December 2004. Titas said OPM received 26 proposals from insurance providers to offer the supplement, including both national and regional plans. There also are a couple of plans willing to provide international coverage.

OPM staff members are vetting the proposals, and Titas said they do not yet know how many contracts they will award.