In my May 6 column, I reviewed mandates in the Affordable Care Act that have already been implemented in the Federal Employees Health Benefits Program. Now I’ll describe what the future holds for FEHBP under the law.
Beginning in 2014:
Employers must file a return providing the name of each person for whom they provide minimum essential coverage, the number of months of coverage, and other information the secretary of Health and Human Services requires. It isn’t clear how this reporting requirement will be handled by the federal government. Nevertheless, since FEHBP plans already have information about their enrollees and the number of months of coverage, meaning the requirement should not prove difficult. It remains to be seen whether information not already in a plan’s files will be required. In any case, it’s unlikely to have any effect on FEHBP enrollees.
Employers must inform employees about health insurance exchanges created under the law. Although such information might be of limited value to FEHBP enrollees, it may require each plan to put additional information in its brochure.
Members of Congress and congressional staff will no longer be able to enroll in FEHBP. Instead, they may enroll in health plans created under the law or offered through an exchange. For the purposes of this requirement, the term “congressional staff” is limited to those part- or full-timers employed by the official — i.e. personal — office of a member of Congress.
The requirement that members of Congress and their staffs leave FEHBP could have a long-term effect on the program. When they are no longer able to participate in it, members won’t have an incentive to protect FEHBP.
The Office of Personnel Management must enter into contracts to offer at least two multi-state qualified health plans (MSQHPs) through each exchange in each state. And it is authorized to do this without regard to the traditional statutes requiring competitive bidding.
The purpose of this effort is to provide individual or, in the case of small employers, group coverage outside of FEHBP. Therefore, enrollees in the MSQHPs will be treated as a separate risk pool and will have no effect on the management, coverage or premium costs of FEHBP. In fact, to further ensure this separation, OPM is authorized to set up separate units or offices to manage the MSQHPs.
The law mandates that most individuals have health insurance coverage or pay a penalty for noncompliance. And they will be required to maintain minimum essential coverage for themselves and their dependents. Enrollment in a FEHBP plan will satisfy this requirement.
Beginning in 2018:
The law will impose a 40 percent excise tax on health insurers and health plan administrators that exceed certain specified thresholds. The tax will be imposed if their premiums exceed $10,200 for self-only coverage and $27,500 for family coverage. Higher thresholds will apply to those who are retired and between the ages of 55 and 64 and to workers who are in high-risk professions: $11,850 for self-only and $30,950 for family. All these thresholds will be indexed for inflation in the years that follow. None of the plans in FEHBP are currently above those thresholds. On the other hand, because the law will impose an annual fee on health insurance plans based on their market share, it’s likely that many FEHBP carriers will be affected.
How these excise taxes and annual fees will affect the premiums that plans charge enrollees remains to be seen. Clearly, the plans can’t be expected to eat the costs. Therefore, any additional costs they do experience will surely be recouped through small premium increases.
