When it comes to the entitlement of family members to be covered under the Federal Employees Health Benefits program carriers, agencies and OPM have operated on good faith and a light hand when it comes to oversight. However, as the old Russian proverb goes: trust, but verify.
Following that advice, OPM recently issued a Benefits Administration Letter notifying agencies that it will be conducting an audit of persons covered as family members under the FEHB program. And it advised them of their roles and responsibilities during the audit.
OPM recognizes that both agencies and FEHB carriers are responsible for family member eligibility determinations. However, inconsistencies may occur during the verification process at the time of original enrollment or when an enrollee changes from one plan to another, for example, during an Open Season.
This audit—the first in recent memory—was spurred by the fact that health insurance industry standards indicate that up to 10 percent of family members are ineligible for coverage. If this were to be the case in the FEHB program, the government would be wasting a sizeable chunk of the approximately $23 billion it pays for family benefits each year.
After the audit is conducted—it will be only a sampling—OPM will be in a better position to determine the extent of ineligible family members and their financial impact on the program.
As a first step, “Agencies and retirement systems will be responsible for providing enrollee addresses in the event that the addresses obtains from the carriers are incorrect. And, if needed, providing necessary documentation for verifying family member eligibility.”
Further, OPM will be able to determine if changes are needed in current policies and procedures used to verify family member eligibility. A decision on what to do about ineligible persons who are found to have been getting health care through FEHB—and there certainly will be some of them, whether enrolled by simple mistake or otherwise—also was left for another day.