OPM wants to keep FEHBP premium increases 'in check'

Thursday - 3/27/2014, 11:34am EDT

Office of Personnel Management Director Katherine Archuleta says she wants to keep premium increases for federal employees' health coverage "in check."

In a keynote speech at the annual FEHB Program Carrier Conference in Arlington, Va., Thursday Archuleta also called on insurance carriers to make prescription drugs more affordable and urged more federal employees to sign up for wellness programs.

Archuleta noted in each of the past three years average premium increases for the Federal Employees Health Benefits Plan have risen less than 4 percent. Last year, the average premium ticked up 3.7 percent.

"This is the first time in 20 years, we have seen such stability," she told the audience of health insurance providers.

But even those limited premium hikes "come amidst difficult times for the federal workforce," Archuleta said, citing the across-the-board sequestration cuts that resulted in unpaid furloughs for thousands of federal employees and a three-year pay freeze that ended earlier this year when federal employees received a slight 1 percent pay bump.

"In light of the continuing tight budget, we must do we all we can to control and lower health costs," she said. "The more we can all do to drive health costs down, the better. We can keep the premium increases in check."

OPM seeks value in prescription costs

The conference comes a week after OPM issued its annual call letter to FEHBP insurers, asking insurers to lay out their benefit and rate proposals for the coming year.

At Thursday's conference, Archuleta said the agency is pushing insurers to ensure federal-employee consumers receive quality and value for their premium dollars.

Also high on the list of OPM health care priorities is better managing prescription drugs and promoting employee wellness programs.

As it stands now, prescription drug costs represent 25 percent of total FEHPB spending.

OPM has directed insurers to roll out drug-cost calculators to allow both current and prospective enrollees to compare prescription drug prices by plan. The plans need to launch the calculators by 2016, according to the call letter.

"We need to continue to focus on the ways to make prescription drugs as affordable as possible while ensuing FEHB members are getting access to safe, high-quality medication," Archuleta said.

Too few employees participate in wellness programs, OPM says

Over the past few years, OPM has also been encouraging FEHBP insurers to beef up the wellness programs they offer.

"But frankly, our employees are not participating in these programs in the numbers that they should," Archuleta said.

She said insurance companies and OPM will brainstorm on ways to increase the number of enrollees who take advantage of the programs.

"In the coming year, I urge you to look at your programs and to work with us to come up with the incentives, the processes, and the innovations that will encourage our employees to take advantage of your programs," she said. "We will collaborate with you to get the word out to the federal workforce that wellness programs work."

FEHBP insurers are required to offer "health risk assessments" and should strive to screen enrollees at least once every three years, according to the 2014 call letter. Plans are authorized to offer up to $250 per enrollee as an incentive to join their insurance company's wellness program. However, only $75 of that incentive can be in the form of cash payments. The remaining amount should be used to purchase health-related goods and services, according to the letter.

Self-plus-one coming in 2016

The federal benefits Open Season for 2015 will launch in November. But federal employees will have to wait even longer before they can sign up for the new self-plus-one enrollment option, recently authorized by Congress.

A benefits administration letter OPM sent to agencies March 24 states the new option, which will cover the enrollee plus one other family member, will be available starting in January 2016.

Currently, FEHBP enrollees can only choose between either single coverage or family coverage.

"This change will bring FEHBP into step with other larger employers, including state and local governments that offer three-tiered enrollment options," Archuleta said in her speech Thursday.

In the benefits letter, OPM said agencies and payroll offices will have to ensure their systems will be able to process the self-plus-one enrollment option and have until September 2015 to test their systems.

Congress approved the self-plus-one option as part of the bipartisan budget deal reached late last year. The Obama administration had proposed the option as part of its fiscal 2014 budget blueprint.

RELATED STORIES:

Top 3 Tips for Open Season

Federal health premiums to rise 3.7 percent in 2014

OPM in talks to add 6 new carriers to FEHBP