Federal Employees Health Benefits (FEHB) Program: An Overview (CRS Report for Congress)
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| Release Date |
Revised Feb. 3, 2016 |
| Report Number |
R43922 |
| Report Type |
Report |
| Authors |
Kirstin B. Blom, Analyst in Health Care Financing; Ada S. Cornell, Information Research Specialist |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The Federal Employees Health Benefits (FEHB) Program provides health insurance to federal employees, retirees, and their dependents. This report provides a general overview of FEHB. It describes the structure of FEHB, including eligibility for the program and coverage options available to enrollees, as well as premiums, benefits and cost sharing, and general financing of FEHB. The report also describes the role of the Office of Personnel Management (OPM) in administering the program.
Eligible individuals include federal employees, retirees, and their family members. As of calendar year 2014, Members of Congress and certain congressional staff are no longer eligible to enroll in plans offered under FEHB as employees but may be eligible to enroll in retirement. Coverage options available to eligible individuals include individual or family coverage in an approved health benefits plan. Beginning in calendar year 2016, individuals have a third coverage option: self plus one coverage for themselves and one eligible family member. Generally, available health benefits plans fall into two broad categories: fee-for-service (FFS) or health maintenance organizations (HMOs). FFS plans tend to be available nationwide, and HMOs tend to be locally available. Premiums are shared between the federal government and the employee or retiree. Benefits and cost sharing vary among FEHB plans, but all plans must cover basic services such as hospital and physician care and may require cost sharing in the form of deductibles, co-payments, or coinsurance. FEHB financing includes government contributions to premiums, contingency reserves in the U.S. Treasury to offset unexpected increases in costs, and administrative expenses incurred by OPM.
The report also discusses how FEHB interacts with the United States Postal Service (USPS) and with Medicare as well as the impact of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) on FEHB. Like most federal agencies, the USPS offers health insurance to its employees through FEHB. However, collective bargaining rights and prefunding obligations for retiree health costs make the USPS unique among federal agencies with regard to health benefits. Most federal employees or retirees aged 65 or older are automatically entitled to Medicare Part A (Hospital Insurance, or HI). They also may choose to enroll in Medicare Part B (Supplementary Medical Insurance, or SMI) and Part D (prescription drug coverage). For individuals covered under an FEHB plan, Medicare is the primary payer, meaning it pays for benefits first, and FEHB is the secondary payer. The ACA established new requirements for FEHB plans in some cases. In others, it had no meaningful effect. For example, the requirement to provide coverage to children up to the age of 26 on their parent's plan was a new requirement for plans, but many plans were already meeting the ACA requirement not to deny coverage based on preexisting conditions.
For information on the current plan year, such as premiums and cost sharing in FEHB and the most recent open season (the period each year during which individuals can enroll or change health plans), see CRS In Focus IF10324, The Federal Employees Health Benefits (FEHB) Program: Open Season for the 2016 Plan Year.
