3/30/10: On March 22, the House of Representatives passed a broad health care reform bill, H.R. 3590, that had previously passed the Senate last December. The President signed that legislation into law last week. In addition, the House and Senate also passed H.R. 4872, a budget reconciliation bill, making amendments to H.R. 3590.

There were a number of issues that NTEU weighed in on that could impact FEHBP enrollees in these laws. First was the issue of maintaining the integrity of the FEHBP as a separate plan providing coverage to federal employees, retirees, and their families. That was maintained in both of the laws.

Second was the issue of placing an excise tax on insurance carriers, including those in FEHBP, that have high premiums. NTEU opposed this proposal out of concern that the increased taxes would likely be passed on to enrollees. The original Senate bill, enacted by the House in H.R. 3590, included a provision that would impose a 40% tax on plans with individual premiums over $8,500 and family premiums over $23,000 beginning in 2013.

However, the reconciliation bill, which NTEU supported, increased the taxation threshold to $10,200 for individuals and $27,500 for families and delayed the implementation until 2018. In addition, it also allowed these thresholds to be increased more in 2018 if medical inflation has increased more than anticipated. The FEHBP’s Blue Cross/Blue Shield standard option will be used as a yardstick to determine whether the 2018 need to be increased further. After 2018, these premium thresholds would be indexed for inflation, based on the Consumer Price Index. While we oppose any excise tax, the provisions of the reconciliation bill were much better than H.R. 3590, and we applauded their passage.

NTEU has strongly supported legislation to allow FEHBP enrollees to cover dependents up through age 26 as required by many states. The new law provides that insurance carriers must cover dependents through age 26. The intent of Congress is clear that FEHBP should be covered by these provisions. We are currently working with key members of Congress to determine whether a technical clarification is needed to ensure that this coverage goes into effect for FEHBP in a timely manner.

NTEU also opposed limitations on Flexible Spending Accounts. H.R. 3590 would have capped Flexible Spending Accounts at $2,500 in 2010. The reconciliation bill delayed any changes until 2013. Again, while we would have preferred no changes, we will supported the delay in the reconciliation bill.

Under the new law, OPM will administer at least two national health plans available to the public. As proposed by NTEU, language was maintained in the law to ensure that these plans will be kept separate from FEHBP and that OPM will receive adequate resources to administer them in a way that there will not be any diminution of their core federal personnel-related functions.

There are many other issues in the health care reform legislation that may have an impact on federal employees, retirees, and their families. We will update you further as more information becomes available.