The Federal Employees Health Benefit initiative is a well established system by which civilians who are government employees and annuitants of the government get medical insurance and health benefits.
The employees pay one-third of the cost of the insurance where the government pays the rest of it. This makes it a managed competition system. During a particular time period known as open enrollment, the employees will be offered various health plans and they are free to choose the one that suits them best. Once the open enrollment time ends, he or she will be automatically enrolled fully in the plan that the employee chooses. This plan will provide complete coverage regardless of any pre-existing medical conditions. Once the period of annual open enrollment closes, changes to the plans can only be made for any life changing events like wedding, divorce, birth of a baby, change in employment for the spouse and such. Employees can change plans or make changes to their plans again during the next year’s annual enrollment period. Though the specific dates of open enrollment may be different from year to year, it mostly starts with the second full week within November – on the Monday. Open enrollment usually runs up to the second full week of December, ending on the Monday. Studies have shown that mostly only a meager 5% of employees change plans during open enrollment periods.
Through the FEHB program, insurance companies, employee related associations and employee labor unions can participate and market medical insurance or health insurance plans to their employees. OPM or the Office of Personnel Management in the US runs the administration of the FEHB program.
Premium amounts can vary depending on the plan. While employers pay up to 72% depending on whether the plan is an individual plan or a family plan, the employees pay the rest of the premium.
As health care expenses rise and premiums also increase as a result, this amount can also rise from year to year. The FEHB model depends on customer choices, as opposed to Medicare, by which they can choose from competing medical insurance providers which determine costs, benefits, premium payments and level of service in return. Whereas, in Medicare, all the determining factors are centrally decided upon by laws and regulation. However, over the years, FEHB model has outdone the Medicare system not only with respect to controlling costs, but also with respect to improvement in benefits, enrolling services, prevention of fraud and avoiding pork barrel spending.
There are three main types of FEHB programs depending on the kind of options that are allowed within the plans. Fee for service or payment for Service, preferred provider organizations as well as health plans with high deductibles. Large metropolitan cities offer quite a few fee for service plans, multiple PPOs and an equally high number of high deductible plans too. Employees and individuals wishing to enroll in FEHB can approach their colleagues and friends for advice about these plans. They can also find assistance in newspapers and magazines. General press newspapers print articles that provide assistance with FEHB enrollments. There are also specialized publications for federal employees and retired individuals. Online websites also provide cost comparisons, benefit comparisons and service comparisons between different medical insurances. Each plan under FEHB also has an associated website that provides details about the benefits and coverage. In addition, they also offer information on their panel of providers as well as drug apothecaries.
- In order for an insurance company to participate in FEHB, it needs to meet a certain set of eligibility conditions and standards that are set by the federal government. Because of this possibility, employees with the federal government have a large choice of competition insurance providers. Many of the plans provided are very similar to each other in terms of benefits and services. However, premium amounts can vary hugely.
- In contrast to Medicare, the legislation for FEHB model is very stable. Even though the statute of the FEHB model runs a few pages, details about the structuring and functions of the program are covered only within some paragraphs. The regulations applicable to FEHB are also extremely minimal and they also run for another few pages. On the other hand, Medicare statute runs on for about 400 pages. The regulations applicable to Medicare also span for about a thousand pages.
The FEHB model is considered as an epitome of national health insurance. It is also a program that could help enroll the individuals who are still uninsured.