On Wednesday, the Office of Personnel Management announced new tactics aimed at securing family members of federal employees and retirees involved in the Federal Employees Health Benefits Program are eligible for the government’s employer-sponsored health insurance program.
In a benefits administration letter, OPM Associate Director for health care and insurance Lore Bodenheimer outlined fresh concepts for federal agencies to “promote the integrity” of FEHBP. In 2022, a Government Accountability Office report showed gaps in how the program determines whether family members of federal workers or retirees are still eligible to receive benefits, and the OPM inspector general estimated that FEHBP could be improperly providing benefits between $500 million and $3 billion per year.
GAO recommended that OPM conduct an audit of the employer-sponsored insurance programs enrollees, something the agency has said is too cost prohibitive given its current budget. The House Oversight and Reform Committee last week advanced legislation requiring the audit be done, although no funding mechanism has been addended to the bill yet. Committee Republicans suggested they would be willing to amend the bill to include funding once the Congressional Budget Office has weighed in on its potential cost.
The OPM’s letter states that federal agencies will be required to conduct a review of family members’ eligibility for FEHBP for a random sample of at least 10% of Self Plus One and Self and Family elections as part of this fall’s Open Season elections. That percentage will ramp up in future years, Bodenheimer wrote.
“OPM will provide further guidance on verification of Open Season elections in subsequent years, including expectations for expanding the percentage of elections subject to verification,” the letter states. “Furthermore, OPM plans to provide guidance to require all federal employees to provide eligibility documentation for family member changes during Open Season in subsequent years.”
OPM also announced that it has completed a new “master enrollment index” that the agency will use to spot “irregularities” and then refer agencies to conduct reviews. Further guidance on that process will be published in the coming months.
In a press release announcing the new initiative, the agency highlighted a legislative proposal that accompanied President Biden’s fiscal 2025 budget proposal, that would allow OPM to build a “central enrollment system” for FEHBP. The Postal Service Health Benefits Program, which grants postal workers access to FEHBP, already operates under a centralized enrollment system.
“Current FEHB eligibility determination and enrollment is highly decentralized and requires cooperation between nearly 100 employing offices responsible for determining eligibility and enrolling more than 8 million members,” OPM said. “These benefits are delivered by 68 health insurance carriers in 2024 . . . If funded, OPM could extend [the Postal Service Health Benefits Program’s] central enrollment system to all FEHB enrollments, which would allow OPM to manage and make consistent all FEHB enrollments and remove individuals who cease to be eligible for the program.”
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