The Federal Employees Health Benefits (FEHB) program can cost ineligible members nearly a billion dollars each year.
According to the Government Accountability Office, the Office of Personnel Management, the agency that administers the health insurance program for federal employees and retirees, does not have a clear way to identify and eliminate family members of FEHB enrollees who are mistakenly part of the program.
“The longer OPM delays its efforts to create a monitoring mechanism…
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The Federal Employees Health Benefits (FEHB) program can cost ineligible members nearly a billion dollars each year.
According to the Government Accountability Office, the Office of Personnel Management, the agency that administers the health insurance program for federal employees and retirees, does not have a clear way to identify and eliminate family members of FEHB enrollees who are mistakenly part of the program.
“The longer OPM delays its efforts to establish a monitoring mechanism to identify and remove ineligible members from the FEHB, the more ineligible members and associated ineligible payments may continue to accumulate in the program, costing the program millions or nearly a billion can cost $. year, according to OPM’s own estimates,” GAO said in its Jan. 9 report.
OPM said it has received the final report and plans to issue a more extensive response soon.
OPM’s Office of Health and Insurance Services “will evaluate potential action items, including timelines, and provide a comprehensive response to GAO within 180 days of evaluating the recommendations,” OPM spokeswoman Viet Tran told the Federal News Network.
Meanwhile, the lack of a monitoring mechanism makes the FEHB program vulnerable to fraud and improper payments involving ineligible family members, the GAO said.
“For example, a federal employee defrauded two individuals in the FEHB program who claimed to be his wife and stepchild. Individuals were not eligible and remained on FEHB health insurance for approximately 12 years. The FEHB program paid more than $100,000 in claims on behalf of these ineligible individuals,” the GAO said.
In total, the FEHB program, which covers nearly 8 million federal employees and their families, raised $59 billion in fiscal year 2021, the most recent data available. According to OPM’s Office of Inspector General, identification of ineligible custodians remains a major issue for FEHB since 2018.
In 2021, the eligibility issue gained more attention after OPM began requiring FEHB enrollees to confirm that they want to add their family members to their health insurance plan.
Prior to the 2021 requirement, OPM did not require FEHB enrollees to provide any form of verification of family members’ health insurance eligibility. Instead, OPM used “self-certification” to verify family members they wanted to add to their insurance for federal employees and annuitants, the agency’s Office of Inspector General found in an early 2020 report.
This means that OPM cannot sufficiently prevent ineligible members from enrolling in the FEHB, the OIG said. The 2020 report found that the same problem exists for the Federal Employees Dental and Vision Insurance Program (FEDVIP).
OPM has said it previously allowed self-certification because the cost of establishing a vetting process would outweigh the cost savings to prevent the addition of ineligible members.
In a more recent response to the problem, OPM created a new verification system in 2021 that added a number of requirements for FEHB enrollees. These include requiring newly hired FEHB enrollees to verify eligibility of a family member, for example, through a birth certificate as proof to add a child to the enrollee’s plan.
But the problem of improper payments in the program continued even after the 2021 review requirement was established. Note that this review did not include a way to remove current ineligible members enrolled in the FEHB prior to the requirement from the program, according to GAO.
In response, GAO recommended that OPM establish a mechanism to remove currently active but ineligible members from the FEHB. The agency must additionally “assess the risks of fraud associated with ineligible program members,” the GAO said.
Overall, OPM agreed with GAO’s recommendations, but first, the agency only “partially agreed” with GAO’s recommendation to implement a mechanism to ensure compliance with the 2021 rule. According to Laurie Bodenheimer, OPM’s Director of Health and Insurance, creating this mechanism depends on funding and the availability of staff to implement it.
In response to the draft GAO report, Bodenheimer said, “OPM has already taken steps to ensure that survey agencies and carriers consistently follow guidance on inspection practices and to provide ongoing requirements training to carriers and agencies.”
While OPM’s steps are “positive actions” to ensure compliance, the GAO said implementing a monitoring mechanism would ensure that offices and carriers can verify the compliance of family members.
Additional monitoring through a comprehensive audit “may be appropriate,” Bodenheimer added.
OPM also proposed the creation of a “General Government Enrollment and Member Support” or “GEMS” portal that could standardize the eligibility review process for the FEHB.
“OPM is seeking the authority to fund information technology developments such as GEMS through changes to mandatory funding definitions,” Bodenheimer said.