Reflections

We have reached the end of another year. The FEHB Program has sailed along smoothly with a reasonable premium increase for 2014 and an uneventful open season.

Beginning tomorrow, the children of same sex domestic partners (living in states that don't recognize same sex marriage) will be eligible for FEHBP coverage as stepchildren under a recent OPM rule.

The biggest FEHBP kerfuffle of the year involved the rocky transfer of member of Congress and their official staffs from the FEHBP to the DC SHOP exchange. (Indeed the kerfuffle gave rise to the FEHBlog being quoted in the New York Times. Unfortunately the FEHBlog's prediction proved to be wrong.)  The FEHBlog was pleased that in its final rule OPM decided that members of Congress and their official staffs could return to the FEHBP upon retirement (if they are eligible for federal retirement).  This means that Capitol Hill will continue to have a vested interest in the FEHBP.

Going forward, the ACA's employer shared responsibility mandate will apply to the federal government in 2015. In 2012, OPM promulgated regulations to the extend the FEHBP to seasonal firefighters and national disaster workers. For 2015, OPM will have to issue rules extending FEHBP coverage to all employees who meets the ACA's 30 hour per week definition of a full time employee. Also for 2015, in accordance with an ACA amendment to the Fair Labor Standards Act, the federal government and all large employers (200 or more employees) will have to enroll new employees into their health benefits program. The ACA is the gift that keeps on giving to lawyers, etc.

Finally, we creep one year closer to the ACA's Cadillac plan tax which takes effect in 2018. The Cadillac plan tax imposes 40% excise tax on employer sponsored plans (FEHBP and FEDFlex in the federal government) to the extent that the combined premiums exceed a statutory threshold -- $10,200 for self only coverage and $27,500 for self and family coverage subject to certain adjustments. This Idaho Business Review article discusses how employers are preparing for this new assessment. The defect in this assessment is that high premiums typically are based on high costs and poor demographics not necessarily generous benefits.

Happy New Year!