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This video explains how the Federal Employees Health Benefits (FEHB) Program is funded and why coverage normally continues during a government shutdown. The video also warns that if a shutdown continues, employees and retirees may experience problems with FEHB that have not occurred in previous shutdowns.
Chapters
0:00 Ralph Smith Bio/Background
0:44 FEHB Benefits During Shutdown
2:08 How FEHB Works in a Shutdown
3:22 Questions Raised About FEHB By Senator Lankford
4:50 FEHB Trust Fund Figures
5:50 Things to Watch for Regarding FEHB and the Shutdown
7:37 Conclusion
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0:00
My name is Ralph Smith and I work with
0:03
fedsmith.com.
0:04
Uh my background be might be relevant to
0:07
some of this uh topic that I'm going to
0:10
talk about today which is the FHB or
0:12
federal employee health benefits
0:14
program. I've been a federal employee
0:17
government contractor uh the spouse of a
0:20
retired federal employee and I've worked
0:22
in human resources uh off and on mostly
0:26
on for about 35 years. So I mention that
0:30
just because whether you call it human
0:32
resources, personnel office, human
0:35
capital, whatever else you choose to
0:37
call it, the topics are pretty much the
0:40
same as they have been with some changes
0:43
over the years. But today I wanted to
0:45
talk about the FHB and the shutdown. And
0:48
the reason for that is health insurance
0:51
is important to you if you're a federal
0:54
employee, whether you're working or or
0:57
not or whether you're a federal retiree
1:00
because you need your health insurance.
1:02
And normally in a shutdown, this is not
1:04
a problem. And it may not be this year,
1:07
but something has happened that raises a
1:09
couple of questions that you really
1:10
should think about and should pay
1:12
attention to because it could affect
1:14
your health insurance as this shutdown
1:17
goes on. As you know, we're now entering
1:20
a record territory. It will be as of
1:22
tomorrow, and I don't think it's going
1:23
to end before then. So, we don't know
1:26
what'll happen the longer this goes on.
1:29
And with regard to the FEB, first, it's
1:32
not a government appropriation. It's
1:34
governed by paid core with a trust fund.
1:38
The government Congress doesn't have to
1:41
issue an appropriation for it to
1:44
continue. As in past shutdowns, the
1:47
expenses for your FDB are paid by this
1:50
trust fund. And that's happened ever
1:52
since it started this time around on
1:54
October 1st. And that's likely to
1:57
continue. But a question's been raised
2:00
saying that basically it might not
2:02
continue. So you need to think this
2:04
through and pay attention because it
2:06
would affect you.
2:09
Normally you can make changes throughout
2:11
the shutdown. uh that is open season
2:15
still occurs, you can change your health
2:17
insurance plan or if a lifechanging
2:20
event occurs uh under the OPM guidance,
2:23
then you can make the change. Shutdown
2:25
doesn't affect that and the open
2:27
season's coming up pretty quickly. If
2:30
you're furoughed or at a non-pay status
2:32
because of the shutdown, you're not
2:33
expected to make premium payments while
2:36
the shutdown continues. the agency share
2:39
and your share of premiums will acrue
2:41
and they they'll be deducted from your
2:43
pay once your pay resumes which
2:46
hopefully will be soon. You don't get
2:48
the chance simply because you're
2:50
furoughed to cancel or change plans
2:53
outside the normal rules. So you have to
2:56
wait till open season for most of us to
2:58
change if you choose to change. While
3:01
the coverage continues, some
3:02
administrative functions associated with
3:04
health benefits may change. By that I
3:07
mean the people who normally administer
3:09
your health pro health benefits plan in
3:12
your agency may be furled. They may not
3:14
be there. You may not be able to ask
3:16
questions or get answers. Well, that's
3:19
going to be tough if that's the case and
3:21
good chance it will be. Now, what's
3:24
coming up now that's affected this and
3:26
how does it affect you?
3:29
Senator Langford is a senator from
3:31
Oklahoma and he sent a a letter to OPM
3:34
on October 30th raising several
3:37
questions and I'm just going to read
3:39
those questions because they're directly
3:40
relevant to this topic. First, what is
3:43
the OPM status on the federal employees
3:46
contribution trust fund?
3:49
Second, when will the trust fund hit net
3:53
zero? What is the timeline for when
3:55
insurers will be notified of the lapse
3:57
in funds? Do legal options exist to
4:00
continue paying the employer provided
4:02
contributions for health care after the
4:05
trust fund is emptied? What's the risk
4:07
federal employees face if their
4:09
federally provided health benefits are
4:11
no longer funded? That's gets to the
4:14
heart of the question. Do you still have
4:15
health care? What's the plan to ensure
4:18
federal employees will be held
4:19
financially harmless if a lapse in funds
4:22
for their health insurance occurs? Well,
4:24
these are very direct questions. They're
4:27
certainly worth asking and Senator
4:29
Langford has posted it trying to get the
4:32
answers and I suspect OPM will answer
4:34
these questions very quickly. Check back
4:37
on the FedSmith site and we'll certainly
4:39
provide answers either through a video
4:42
and or an article as soon as the
4:43
information becomes available.
4:46
But you want to pay attention to this
4:48
and obviously that's what's happening.
4:50
Now, if you're wondering how much money
4:52
is in the trust fund, which it gets to
4:54
the heart of this question as well. We
4:56
don't have specific information, but
4:58
this is an estimate based on publicly
5:01
available information that may help, may
5:03
make you feel better, may make you feel
5:05
worse, but here it is. using OPM's
5:08
publicly posted numbers that is $20
5:11
billion in the opening balance and the
5:15
annual outlays for the FE FEB of about
5:19
72 billion for the program based on
5:22
recent projections. So if you got $20
5:24
billion and your outlays are about six
5:27
billion a month that means you've got
5:29
about 3.3 months that the trust fund
5:32
will last using normal outlays as a
5:35
guide. Now whether that normal outlay is
5:38
currently
5:40
applicable or not, we don't really know
5:42
and we won't know. But we do know the
5:44
trust fund won't last that long. So what
5:47
happens? And that's what Senator
5:49
Langford is asking.
5:51
Some things to look for in your FEB that
5:55
are going to affect you. First,
5:59
plan for the fact your share of premiums
6:01
and it may not get build the usual way.
6:04
You're going to see a lump deduction
6:06
when things go back to normal, which
6:09
hopefully will be very soon and the
6:11
trust fund issue may go away, but this
6:13
is still going to happen. Right now,
6:16
you're going to see as your pay resumes
6:19
a large amount of money come out for the
6:21
amount of money that you would be paying
6:22
for your health insurance.
6:25
So, plan for it. Keep an eye on
6:27
announcements from your agency human
6:29
resources office what they're doing and
6:32
what the status is of your premium
6:34
withholdings and whether you can remain
6:36
in pay status for the purposes of
6:38
benefits. Different agencies may be
6:40
different. Some HR offices may be up and
6:43
functioning in some way. Some agencies
6:46
they may not be. Ensure that you're
6:49
eligible for the monthly government
6:50
contribution if you're still unemployed
6:53
and check your plan hasn't inadvertently
6:55
been suspended for some administrative
6:57
reason. I've worked in personnel offices
7:01
off and on for a number of years. I've
7:03
worked around them certainly for a
7:04
number of years. Mistakes happen as in
7:06
any human organization. You want to make
7:09
sure you haven't been dropped. Just make
7:10
sure you're still in this and you still
7:12
have health insurance.
7:14
If you retire or transition during the
7:16
shutdown or have changes, that is a new
7:20
lifechanging event, somebody dies, you
7:22
get married, that kind of thing. Track
7:24
the deadlines carefully and know when
7:27
your year starts. Open season's coming
7:30
up. You can change plans if you want to.
7:32
It doesn't happen right away. It'll
7:34
happen in 2026, but know where you
7:37
stand.
7:38
So, this is where we stand. We don't
7:41
know exactly what's going on with the
7:43
trust fund for the federal employees
7:45
health benefits plan. You want to keep
7:47
up with this. We'll try to keep you
7:48
advised through videos and through
7:51
articles.
7:53
That's about the extent of it. I wish I
7:56
could tell you when it's going to end. I
7:58
can't. Nobody can. Uh, Senator Senator
8:00
Thoon thinks it may happen later this
8:03
week because there's various discussions
8:06
going on involving different parties and
8:08
we hope they resolve it quickly.
8:11
It's strange or it's perhaps ironic. The
8:14
FEB
8:17
is applicable to federal employees so
8:19
you don't have to worry about your
8:20
health insurance. At the same time, the
8:24
big issue as far as the Democrats are
8:26
concerned concerns subsidies for health
8:30
insurance under Obamacare. And when
8:32
Obamacare started, of course, it was
8:34
called a plan that would prevent people
8:37
from having to worry about health
8:39
insurance. Obviously, the estimates have
8:41
been seriously
8:44
underestimated as to what the cost would
8:46
be. and SNAP payments, health insurance
8:49
benefits under Obamacare aren't being
8:52
paid at this point. Normally, you'd be
8:54
exempt from that, but as the shutdown
8:56
goes on, it looks like you're getting
9:00
into the part where it could potentially
9:02
affect you. So, pay attention. We hope
9:04
it works out for you. Thanks for
9:07
watching and we'll be thinking about
9:09
you. Please keep in touch and best of
9:12
luck.
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