Members Ineligible for FEHB Program Can Cost OPM Nearly $1 Billion a Year, GAO Says

The Federal Employees Health Benefits (FEHB) program could spend nearly $1 billion a year on ineligible members.

The Office of Personnel Management, the agency that administers the health insurance program for federal employees and retirees, has no clear way to identify and remove family members of FEHB enrollees. that are mistakenly part of the program, according to the Government Accountability Office.

“The more the OPM delays its efforts to establish an oversight mechanism for…

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The Federal Employees Health Benefits (FEHB) program could spend nearly $1 billion a year on ineligible members.

The Office of Personnel Management, the agency that administers the health insurance program for federal employees and retirees, has no clear way to identify and remove family members of FEHB enrollees. that are mistakenly part of the program, according to the Government Accountability Office.

“The longer the OPM delays its efforts to establish an oversight mechanism to identify and remove ineligible FEHB members, the more ineligible members and associated irregular payments in the program may continue to accumulate, costing the program millions, or up to about $1 billion a year, by OPM’s own estimate,” the GAO said in a Jan. 9 report.

The OPM said it received the final report and plans to develop a broader response soon.

OPM’s Office of Health and Insurance will “evaluate potential actions, including timelines, and provide a full response to GAO within 180 days of evaluating the recommendations,” the OPM spokesperson said. ‘OPM, Viet Tran, at Federal News Network.

In the meantime, the lack of an oversight mechanism leaves the FEHB program vulnerable to fraud and improper payments associated with ineligible family members, the GAO said.

“For example, a federal employee fraudulently covered two people believed to be his wife and son-in-law in the FEHB program. The people were not eligible and remained affiliated with the FEHB health insurance for approximately 12 years. The FEHB program has paid claims totaling more than $100,000 on behalf of these ineligible individuals,” the GAO said.

Overall, the FEHB program, which covers about 8 million federal employees and their families, raised $59 billion in fiscal year 2021, the most recent data available. Identifying ineligible dependents has remained a major challenge for FEHB since 2018, according to the OPM’s Office of Inspector General.

The eligibility issue gained traction after the OPM in 2021 began requiring FEHB enrollees to verify which family members they wanted to add to their health insurance plan.

Prior to this 2021 requirement, the OPM did not request any form of verification from FEHB registrants of their family members’ eligibility for health insurance coverage. Instead, the OPM used a “self-certification” for federal employees and annuitants to verify which family members they wanted to add to their insurance, the Office of Inspector General of Washington found. the agency in an earlier report from 2020.

This meant that the OPM could not sufficiently prevent ineligible members from registering with FEHB, the OIG said. The 2020 report also found that the same issue existed for the Federal Employees Dental and Vision Insurance Program (FEDVIP).

The OPM said it previously allowed self-certification because the cost of creating a verification process would outweigh the savings of preventing the addition of ineligible members.

As a more recent response to the issue, the OPM created the new verification system in 2021, which added several requirements for FEHB registrants. These included requiring new enrollees with FEHB to verify a family member’s eligibility through, for example, a birth certificate as evidence to add a child to an enrollee’s plan. .

But the problem of improper payments in the program persisted beyond the establishment of the 2021 verification requirement. Notably, this verification did not include a way to remove ineligible current members of the program, who had already registered with the FEHB prior to the requirement, according to the GAO.

In response, the GAO recommended that the OPM create a mechanism to remove currently active, but ineligible members of the FEHB. The agency should further “evaluate the fraud risks associated with ineligible program members,” the GAO said.

In general, OPM agreed with GAO’s recommendations, but on the one hand, the agency “only partially agreed” with GAO’s recommendation to implement a mechanism to ensure that eligibility meets the 2021 rule. The creation of this mechanism depends on the availability of funds and personnel to make it happen, according to Laurie Bodenheimer, OPM’s associate director for health care and insurance.

“OPM has already taken steps to ensure guidance is consistently followed by investigative agencies and carriers regarding vetting practices and to provide ongoing training on the requirements to carriers and agencies,” Bodenheimer said. in response to a draft GAO report.

While these OPM measures are “positive actions” to ensure compliance, the GAO said implementing a monitoring mechanism would ensure that offices and carriers will be able to verify the eligibility of family members.

Bodenheimer added that additional oversight, through a full audit, “may be appropriate.”

OPM has also proposed creating a “Governmentwide Enrollment and Member Support” or “GEMS” portal, which could standardize the eligibility review process for FEHB.

“OPM is seeking approval to fund information technology developments such as GEMS by changing mandatory funding definitions,” Bodenheimer said.

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