The Federal Employees Health Benefits (FEHB) Program: Open Season for the 2016 Plan Year

Updated January 19, 2016 The Federal Employees Health Benefits (FEHB) Program: Open Season for the 2016 Plan Year Overview The Federal Employees Health Benefits (FEHB) Program is the largest employer-sponsored health benefits program in the United States. FEHB is administered by the Office of Personnel Management (OPM). Participation in FEHB is voluntary, with 85% of federal employees enrolled and 90% of federal retirees participating. FEHB provides about $48 billion in health benefits annually. According to the most recent estimate from OPM for 2015, there are about 4 million policyholders in FEHB, covering about 8.2 million people, including federal employees, retirees, and their eligible family members. This number includes employees and retirees of the United States Postal Service (USPS). See Figure 1 for a breakdown of FEHB policyholders. Figure 1. Profile of FEHB Policyholders, 2015 Source: Congressional Research Service (CRS) analysis of Office of Personnel Management (OPM) data. Open Season Individuals have the opportunity to enroll for the first time or change their existing health insurance plan during the annual open season. The open season for the 2016 plan year ran from November 9, 2015, through December 14, 2015. Outside of open season, changes are only allowed for individuals with a qualifying life event, such as marriage. The 2016 Plan Year: January 1– December 31, 2016 Plan Options For 2016, there are 252 plan options. FEHB enrollees choose a health plan from a health insurance carrier participating in FEHB. Each carrier offers one or more plans. In general, FEHB health insurance carriers and their health plans fall into two broad categories: fee-for-service (FFS) plans or health maintenance organizations (HMOs). FFS plans are generally available nationwide, and HMOs tend to be locally available. Details for all FEHB plans are available on OPM’s website at http://www.opm.gov/ healthcare-insurance/healthcare/plan-information/. As a practical matter, depending on where an enrollee resides, the choices are limited to about 15 different plans. Plan choices change each year, as plans enter or leave the program or change geographic service areas. For 2016, four new local health plans entered FEHB and six local plans left FEHB. The Federal Employees Dental and Vision Insurance Program (FEDVIP) and the Federal Flexible Spending Account Program (FSAFEDS) options are also available during open season. All individuals eligible for FEHB, including retirees, are also eligible to enroll in FEDVIP, which provides supplemental dental and vision insurance. Currently, FEDVIP has more than 1.6 million enrollees in dental plans and more than 1.1 million in vision plans. Active federal employees are eligible for FSAFEDS, which allows employees to pay for some health care expenses with pretax dollars. More than 350,000 federal employees participate in FSAFEDS. New This Year: The Self Plus One Option In the past, FEHB has offered two enrollment options: selfonly and self and family. The Bipartisan Budget Act of 2013 (P.L. 113-67) established a third enrollment option, self plus one, to begin in 2016. The self plus one option allows the enrollee plus one eligible family member to be covered. Enrollment in self plus one is not automatic; enrollees must sign up during open season or during the year through a qualifying life event, such as marriage. For this year only, outside of open season, OPM has created a one-time Limited Enrollment Period from February 1 to February 29, 2016, to allow employees enrolled in self and family extra time to decrease enrollment to self plus one. FEHB Premiums For employees (other than USPS employees) and retirees in 2016, the weighted average enrollee share of the biweekly FEHB premium for self, self plus one, and self and family is $145.01 and the average government contribution is $336.49, for a total average biweekly premium of $481.50. Figure 2 compares these figures with previous years. Total premiums for employees (other than USPS employees) and retirees will rise by an average of 6.4% in https://crsreports.congress.gov The Federal Employees Health Benefits (FEHB) Program: Open Season for the 2016 Plan Year 2016, a greater increase than the 2.8% increase in 2015. Although premiums increased on average by 6.4%, premiums for any given plan may have increased by more or less or declined. However, looking only at premium changes may not give a complete picture of year-to-year plan changes, as plans may modify benefits or cost-sharing. For comparisons with other years, see Figure 3. than the Basic plan and a deductible, but it has lower copays and greater choice of providers, including coverage for non-preferred and non-participating providers as well as preferred providers. The Basic plan has a lower premium and no deductible but higher co-pays, and it only covers preferred providers. Selected plan details for the Standard and Basic BCBS plans are listed in Table 1. Figure 2. Weighted Average Biweekly FEHB Premiums for Employees (Non-USPS) and Retirees, 2012-2016 Table 1. Employee (Non-USPS) and Retiree Premium Contributions and Cost-Sharing , Standard and Basic BCBS Plans, 2016 Source: OPM. Figure 3. Average FEHB Premium Increase per Year, 2012-2016 Enrollee share of biweekly premium Calendar year deductible Physician outpatient care copayment for preferred providers Hospital Care for preferred providers Out of Pocket Maximum for preferred providers Source: CRS analysis of OPM data, except for the 2016 increase, which was announced in the OPM press release, “Open Season for Federal Health Benefits, Dental and Vision,” September 29, 2015. For employees (other than USPS employees) and retirees, the government share of premiums is set in statute at 72% of the weighted average premium of all plans in the program, not to exceed 75% of any given plan’s premium. For USPS employees, the USPS contribution to premiums is collectively bargained. Plan Details: Blue Cross and Blue Shield The most popular insurance carrier in FEHB is Blue Cross and Blue Shield (BCBS), which offers two FFS health plans: a Standard health plan and a Basic health plan. These plans have the highest level of FEHB enrollment, with a total of more than 2.5 million (more than half) of FEHB policyholders. The Standard plan has a higher premium BCBS Standard Option BCBS Basic Option $100.18 (self only) $231.31 (self + one) $238.24 (self & family) $68.48 (self only) $160.75 (self + one) $164.20 (self & family) $350 per person; $700 per family Primary Care: $25 Specialist Care: $35 (deductible does not apply) None Inpatient: $350 per admission (deductible does not apply) Outpatient: 15% of the Plan allowancea (deductible applies) $5,000 for Self Only $10,000 for Self + One and Self & Family Inpatient: $175 per day up to $875 per admission Outpatient: $100 per day per facility Primary Care: $30 Specialist Care: $40 $5,500 for Self Only $11,000 for Self + One and Self & Family Source: Blue Cross Blue Shield (BCBS) Benefit Plan, 2016, https://www.opm.gov/healthcare-insurance/healthcare/planinformation/plan-codes/2016/brochures/71-005.pdf. a. The “Plan allowance” is the amount BCBS uses to determine their payment and the enrollee’s cost-share for covered services. More Information For more information about FEHB, see CRS Report R43922, Federal Employees Health Benefits (FEHB) Program: An Overview, and CRS Report R42741, Laws Affecting the Federal Employees Health Benefits (FEHB) Program. Also of interest may be CRS Report R43194, Health Benefits for Members of Congress and Designated Congressional Staff. Ada S. Cornell, Senior Research Librarian Namrata K. Uberoi, Analyst in Health Care Financing https://crsreports.congress.gov IF10324 The Federal Employees Health Benefits (FEHB) Program: Open Season for the 2016 Plan Year Disclaimer This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material. https://crsreports.congress.gov | IF10324 · VERSION 6 · UPDATED