FEHBP Enrollees: The Check Is Not in the Mail

By Kellie Lunney

October 4, 2012

Employers are busy disbursing health care rebates to their workers this fall, as mandated under the health care reform law. Federal employees enrolled in the government’s health care program, however, should not expect to see an extra bump in their paychecks.

The Office of Personnel Management, which administers the Federal Employees Health Benefits Program, will use any rebates it receives from insurance carriers participating in the program to adjust premium rates for the next year, according to an agency spokeswoman. “This is the normal procedure for any rebates and refunds due a plan in the FEHBP,” she said. OPM currently is tallying the number of FEHB plans that owe rebates, the spokeswoman said.

The 2010 Affordable Care Act requires health care insurance companies to spend a specific portion of premium dollars on medical claims or programs that improve the quality of care. Small and medium-size insurance carriers have to spend 80 percent of premiums for medical care and can use the remaining 20 percent for administrative costs such as salaries; for large insurance issuers, the split is 85 percent to 15 percent. If insurance companies do not meet the Medical Loss Ratio standard, commonly known as the 80-20 rule, then they must give policyholders a rebate for the difference. This year, rebates had to be sent to policyholders by Aug. 1. Policyholders -- employers -- can reimburse beneficiaries through a rebate check in the mail, a lump-sum payment to the account used to pay the premium, reductions in future premiums, or by applying the rebate to a health-related program that benefits employees.

For FEHBP enrollees, that could mean a smaller increase in health insurance premiums in 2014. OPM recently announced that premiums for nonpostal FEHBP enrollees will increase an average of 3.4 percent in 2013. Of that increase, government contributions will rise 3.3 percent, while participants will pay 3.7 percent more in 2013. In dollars, that means FEHB enrollees with self-only coverage will pay on average $2.75 more per biweekly pay period and enrollees with family coverage will pay an average of $6.39 extra per pay period. Changes in the enrollee share of premiums vary from plan to plan.

The 2013 increase for nonpostal enrollees is lower than last year’s hike of 3.8 percent. While no one is ever happy about paying higher health care premiums, the 2013 rate may come as a relief to federal enrollees who experienced spikes of more than 7 percent in 2011 and 2010.

Reminder: Open season, during which federal workers can switch enrollments in health insurance plans, will begin Nov. 12 and run through Dec. 10. Enrollment changes take effect the first pay period of 2013.

Flu Shots

It’s that time of year again: Apple cider, pumpkins and flu shots.

The government once again is offering the influenza vaccine free to federal employees in government health clinics nationwide. The Office of Personnel Management and the Health and Human Services Department sent agencies a memorandum urging them to consider inoculating contractors along with the federal workforce. “Given the infectious nature of the influenza virus and the negative workforce and other consequences associated with contracting the virus, agencies within HHS have concluded that providing influenza vaccines to contractors is justified under the necessary expense doctrine if the contractors are co-located with or have substantial physical proximity to agency employees,” the memo stated. The memo also includes HHS’ policy for purchasing the vaccine for contractors. The government has a website -- http://www.flu.gov/ with flu prevention tips, new stories and other information for the public on preventing the spread of influenza.

Checking Out

Some TRICARE enrollees who pay their monthly premiums by check will have to switch to electronic payments before Jan. 1, 2013.

Beginning Jan. 1, TRICARE will accept recurring automatic payments from enrollees in TRICARE Reserve Select or TRICARE Retired Reserve only through credit or debit card, or electronic funds transfer from a linked bank account. Beneficiaries who fail to make the change will lose their coverage. More information is available through beneficiaries’ regional contractors.

By Kellie Lunney

October 4, 2012