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Proposed Rule for Health Coverage for Lawmakers, Aides

By John Reichard, CQ HealthBeat Editor

August 7, 2013 -- A proposal issued Wednesday by the Office of Personnel Management (OPM) may put to rest fears of a brain drain on Capitol Hill stemming from a pending switch of many congressional staff members from the federal health benefits program to the new health law exchanges.

But it could also create new administrative headaches and office morale issues for lawmakers, since at least some aides might be able to hang on to their familiar coverage in the Federal Employees Health Benefit Program.

That’s because the broad language in the health care law, as interpreted by the OPM, would require members to decide whether a staff member works for the “official office” of the lawmaker. If not, the staff member would be exempt from the requirement to get insurance through the exchange. For example, leadership staffers could in at least some instances be exempt from the new marketplace.

That raises the specter of congressional offices filled with employees with varying health insurance coverage.

The Office of Personnel Management on Wednesday morning announced a proposed rule that clarifies that the federal government will continue to contribute to the cost of health insurance premiums for members of Congress and congressional staff in 2014, at the same level that contributions have been made in the past through the federal employees health benefit program.

But the proposal leaves it to “the employing office of the member of Congress” to determine whether an employee meets the statutory definition of who the health care law (PL 111-148, PL 111-152) requires go to an exchange for health insurance, the personnel agency said.

The law says that staff who must use the exchanges include those who work for the “official office” of a member of Congress, whether full-time or part-time, regardless of whether they work in Washington, D.C. or outside. Enrollment in the exchanges, or marketplaces, begins Oct. 1.

The federal contribution toward premiums paid to exchange plans “is no more than would otherwise be made toward coverage under the Federal Employee Health Benefit Program,” an OPM news release states. “OPM will apply the same employer contribution amounts up to 75 percent of the total cost of the health plan premium on the Exchange, the same as for an FEHBP plan,” says a question and answer document the agency released.

Currently, members and aides get their coverage through FEHBP, which offers a choice of scores of health plans. Exchanges offer a more limited choice, but having fewer options could make selection more manageable, and the marketplaces will have new websites that could ease comparison shopping, exchange officials say.

Under the proposed rule, each member of Congress or congressional staff member would purchase plans for individual coverage in the exchange for the state where he or she resides, the OPM says. That means members would go to their home state exchanges. It’s likely that a large percentage of aides would rely on exchanges in the District of Columbia, Maryland, and Virginia.

One of the unresolved questions before the proposal was announced was whether leadership or committee staff would be required to go to the exchanges. An OPM fact sheet states that “because there is not an existing statutory or regulatory definition, OPM believes Congress is best able to make the determination as to whether an individual is employed by ‘the official office of the Member of Congress.’”

That apparently means that committee leaders would determine which of their staffers are part of their “official office” and therefore required to go to exchanges. The same is true of leadership offices. That means the determinations of where staff members get their coverage could vary from committee to committee, and among leadership offices.

“OPM’s understanding is that congressional staff often have allocated to them a percentage of work as personal staff and a percentage of work as committee or leadership committee staff,” the proposed rule says. “It also is common for the percentage to change during the year. Moreover, staff are often unaware of these percentages or budgetary source of their compensation. OPM believes that allowing the employing office to make the determination as to whether particular individuals are employed by the “official office” is most appropriate, and will allow such determinations to be made by the office of the Member of Congress, which is their employer.”

Members would have to designate by Oct. 1 of each year whether a staff member is employed by his or her “official office.” This year only, members would have until Nov. 1 to make the designation.

‘Brain Drain’ Fears
Without the normal contribution the federal government pays for the health insurance it provides to employees, members of Congress had feared that staff would have been forced to pay all or most of their health insurance costs. Lawmakers and aides said that would cause an exodus of staff to take jobs with better benefits, causing a “brain drain” on the Hill.

The issue was created by language in the health care law that requires lawmakers and aides to get their coverage in 2014 through the new insurance exchanges opening Oct. 1 in the 50 states and the District of Columbia. The language was silent on whether the federal government would continue to pay most of the insurance costs of lawmakers and aides, as it does now under the FEHBP.

“Put in plain English, I don’t think that a hardworking legislative staffer should take a $10,000 pay cut or lose their health insurance,” Rep. Robert E. Andrews, D-N.J., said last week. “It was never the intention and the rule respects that.”

But talk of exempting some staff members from going to the exchanges at all stirred controversy that lawmakers were setting one standard for the American people and another for their own employees. “What we believe is that the members of Congress and our staff ought to be treated just like the American people,” Rep. Tom Price, R- Ga., said in a news conference Aug. 2.

However, other Americans were not facing a 2014 in which the health law specifically stripped them of their employer-sponsored coverage. That would have been the case for members of Congress and their staffs without rulemaking to clarify that current federal contribution levels would continue after the switch from FEHBP to the exchanges. To the extent they would have been able to keep coverage, they either would have had to pay all or most of the cost; relatively few would have incomes that would have qualified them for tax subsidies to buy exchange plans.

Also, relatively few Americans are actually required to use exchanges because the vast majority has employer-based insurance. And only a small percentage is likely to go to the exchanges during the first year.

“Most Americans will not be covered through the exchanges,” Washington and Lee University Law School Professor Timothy Jost noted in a blog post Wednesday on the website of the journal Health Affairs. Instead, they “will continue to receive health insurance through employer-sponsored insurance or through government programs like Medicare or Medicaid.” Jost added that “only one group of Americans is required to purchase insurance through the exchanges: members of Congress and their personnel staffs” (He noted though that those who are eligible for subsidies to buy coverage must do so on exchanges.)

The Congressional Budget Office (CBO) estimates that 7 million out of 274 million non-elderly Americans will get insurance through exchanges in 2014, which is 2 percent of all non-elderly Americans. By 2020, the figure climbs to 26 million Americans, or 9 percent of the non-elderly, CBO said.

Controversy Not Put to Rest
The White House was under heavy pressure from both Democrats and Republicans to address a possible flight of aides from the Hill—but Wednesday’s proposed rule may not head off previous criticisms, while also sparking new ones.

“While the Administration has handed out waiver after waiver and exemption after exemption for the well-connected in Washington, they have done nothing to lower healthcare costs for families in Michigan,” House Ways and Means Committee Chairman Dave Camp, R-Mich., said in a statement commenting on the proposal. “If the law doesn’t work, and it doesn’t, then we ought to delay the entire law for at least one year.”

If adopted as proposed, the rule also may create administrative headaches and possible office morale issues for lawmakers who are forced to designate some staffers as exchange-bound and others as staying in FEHBP.

Also, it wasn’t immediately clear whether or not the switch to exchanges could disrupt some of the existing relationships members of Congress have with their doctors.

While many aides are expected to use exchanges that have plans with local D.C. area providers, lawmakers are expected to stick to exchanges in their home states. If the plans they pick from don’t cover D.C. area doctors, such disruptions could be another issue for supporters of the law to manage.

But the switch to exchanges also creates the possibility that at least some lawmakers and aides warm up to the exchange concept. Mila Kofman, head of the D.C. exchange, said in an interview that she’s “thrilled” that aides are coming to the exchange and that she’s aiming to make it a more consumer-friendly experience than FEHBP is. She plans Capitol Hill briefings to answer questions and smooth the transition.

The proposed rule is scheduled to be published in the Federal Register August 8 and the public will have 30 days to comment on it.

John Reichard can be reached at [email protected].  

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