The Federal Employees Health Benefit Act (FEHBA) of 1959 (5 U.S.C. 8901 et seq.) created the largest provider of employer-sponsored group health insurance in the United States. The Act covers more than eight million federal and postal employees, retired persons, and family members, constituting 85% of the federal government’s total employees.
Within FEHBA, each member is enrolled in a Plan that he or she selects. FEHBA Plans are created through a contract between the US Office of Personnel Management (OPM) and private insurance carriers and employee organizations. OPM is the federal agency that manages and directs the FEHBA program, approving their Plan language and negotiation of contract rates.
The FEHBP’s government wide and employee organization plans are offered nationwide. The service areas of HMOs participating in the FEHBP frequently cross state lines.
To facilitate uniform implementation of FEHB across the U.S., the FEHB Act contains a preemption provision which provides that certain FEHB contract terms “shall” be under the weight of federal law. Aspects of the Plan concerning “coverage or benefits” will preempt state law, guaranteeing equality of coverage across the United States (5 U.S.C. 8902(m)(1)). This means that when state law and federal law do not agree, federal law takes precedence. This is important in ensuring that Plan members in Michigan have the same consistent coverage as those in Massachusetts. That coverage in Kansas is the same as in Kentucky.
As a requirement of the Plan’s contract with OPM, Plans must pursue reimbursement of medical claims paid as a result of an accident of illness for which a third party is financially responsible. TPRS fulfills this obligation for the Plans we serve and ensure that the Plan’s interests are protected. Our efforts on behalf of the Plan act as a cost containment measure and helps keep premiums from increasing.
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