OPM has acknowledged that its recent rules extending health insurance coverage to certain additional categories of employees could cause agencies to rethink their staffing structure, in light of the additional cost that would be imposed by making those employees newly eligible for FEHB along with the standard government contribution.
On average, the government pays 70 percent of the total premium cost, a consideration that some agencies raised when commenting on the draft rules that recently were finalized. Under the rules, temporary, seasonal and intermittent employees will be eligible for FEHB starting in January if they are expected to work on average 130 hours per month and for at least 90 days in the year.
Said OPM in its analysis of the rules: “Some federal agencies expressed concern about the effect on the budget of this coverage change, stating they may revisit their staffing models (such as hiring a different mix of temporary, seasonal, and intermittent staff) to accommodate the rule change. OPM recognizes that agencies will have to budget for FEHB government contributions for those newly eligible employees who elect to participate. OPM also recognizes that agencies may reconsider staffing arrangements in light of this rule change. OPM continues to believe that this coverage change is consistent with the Federal government’s role as a model employer.”
Similarly, several commenters raised concerns that employing agencies may limit appointments to fewer than 90 days or limit work hours to fewer than 130 hours in a month to avoid providing health insurance to temporary, seasonal, and intermittent employees. “OPM believes employing agencies will use available staffing authorities to meet the needs of their workload, rather than changing staffing models in light of this rule,” OPM responded.
OPM also acknowledged that agencies with large seasonal workforces will be affected more than others that do not use seasonal hiring authorities. “OPM recognizes that this is true, but continues to believe that this coverage change is consistent with the federal government’s role as a model employer,” it said.
OPM was unable to estimate the cost of the coverage expansion, saying that would depend on unknown factors of exactly how many employees would become eligible, how many of them would elect FEHB, and whether they would have qualified otherwise for certain other types of health insurance subsidies. However, it estimated that currently ineligible employees work about 300,000 work months per year, roughly 1-2 percent of all federal work months.
