From the FEHBlog’s standpoint  —

• Aggressive Chinese hackers create havoc for OPM, several FEHBP carriers, and FEHBP enrollees / federal employees.  
• Congress delays the Affordable Care Act’s 40% excise tax on high cost employer sponsored plans (a/k/a the Cadillac tax) for two years and suspends the onerous health insurer tax for 2017 on a bipartisan vote spurred by the legislators who helped rammed through the law in 2010.
• The Self plus one enrollment falls flat despite OPM and carrier communication efforts.   

It’s Christmas Eve.  Here’s a link to the acting OPM Director’s Happy Holiday’s blog post.

It turns out that the Federal Times article about Open Season actions that the FEHBlog mentioned earlier this week was prompted by an OPM press release.  Dear Federal Times, Govexec.com, and Federal News Radio, Open Season activity did not prompt OPM to hold a special Open Season early next year to allow employees to switch to self plus one.  The agency announced its plans to do last Spring. Also annuitants always can drop down an enrollment level. The news in the OPM press release was the relatively low level of Open Season transactions considering the fact that about 1 million enrollees were eligible to make the switch to self plus one. Perhaps word of mouth next month will encourage more people to switch.

Modern Healthcare reports on understandable insurer outrage about HHS’s proposed 2017 ACA notice of benefit payment parameters. The insurers are upset about HHS mandated changes to the rules governing the health insurance exchanges. While these proposed rules are not applicable to the FEHBP, the FEHBlog agrees that HHS needs to back off here.  Insurers inside and outside the exchanges are being strangled by regulations and sub-regulatory guidance which basically serve to raise premiums. The FEHBlog’s Christmas wish is regulatory calm for 2016. Merry Christmas everyone.  

The Federal Times reports this evening that “Open season for federal employees to enroll in or change their health insurance closed on Dec. 14, and OPM has projected that 600,000 FEHB enrollment transactions were processed.  The figure surpasses 2014’s mark of more than 430,000 transactions processed and was aided by the inclusion of the new Self Plus One policy for smaller households, officials said.”  Last Spring, OPM had indicated that as many as 1,000,000 enrollees were eligible to drop down to self plus one.

The American Enterprise Institute posted a thought provoking legislative alternative to the Affordable Care Act yesterday.  For example (p. 20),

The [Cadillac] tax will be assessed in 2018 [now 2020] on plans with individual premiums in excess of $10,200 and family premiums in excess of $27,500. These thresholds are set to increase with inflation. Employers pay the same tax, regardless of the income of the worker. Given that there is an economic trade-off between wages and benefits, the Cadillac tax disproportionately harms lower-income workers with generous health benefit plans. Thus, while the Cadillac tax imposes some level of cost discipline into employer-sponsored coverage, it does so in a poor manner. The better approach is to retain the discipline created by the Cadillac tax but without the painful side effects of a new excise tax. One such approach is to place an upper limit on the amount of employer-paid premiums that is tax-free to workers. 

The Centers for Medicare and Medicaid Services announced yesterday the creation of “a new online dashboard to provide information on Medicare spending on prescription drugs, for both Part B (drugs administered in doctors’ offices and other outpatient settings) and Part D (drugs patients administer themselves).”  In other drug news, the Wall Street Journal reported on Saturday about aggressive employer efforts to pave the way for effective use of high priced specialty drugs. For example,

At the University of Minnesota, employees with cancer face a new rule under the health plan. If they are starting on certain expensive drugs, they get just a two-week supply, half the usual amount. Before they can get two more weeks’ worth, a nurse at the university’s pharmacy partner has to confirm they are doing well enough.

The policy, called “split fill,” is designed to avoid paying for drug prescriptions that go half-unused if patients develop side effects and must stop them. It is part of a growing effort to rein in a drug bill the university says rose 8.9% last year, roughly double the rate for other health expenses.

“I don’t want to penalize the patients, but what the drug companies have to realize is they put us in that box” by charging such high prices, said Stephen Schondelmeyer, a pharmacy professor who advises the administration on its benefits for nearly 39,000 employees, retirees and family members. Some of the cancer drugs cost as much as $13,500 a month.

The FEHBlog certainly is not encouraging clients to tear a page out of the University of Minnesota playbook. The article does illustrate the depth of employer concerns.

Also while it’s a downer for the holiday season, Reuters reports on a spike in deaths from opioid and heroin abuse.  “Drug overdoses increased 6.5 percent in 2014 from a year earlier, killing 47,055 people. The highest rates of death from overdose were seen in West Virginia, New Mexico, New Hampshire, Kentucky, and Ohio, the CDC report said.”

Finally, Modern Healthcare and Ihealthbeat report on healthcare industry cybersecurity measures that were included in the recently approved omnibus appropriations measure.

The legislation creates a healthcare industry cybersecurity task force to be established within the law’s first 90 days. The task force will study how other industries combat cyber threats as well as the technical and other challenges that make the healthcare industry vulnerable to attacks.

It also calls for a single pipeline of actionable information on cyber threats that could be accessed in real-time and at no cost. Access to that information is currently cost-prohibitive to small and mid-size healthcare organizations, said Samantha Burch, HIMSS’ senior director of congressional affairs.

That’s welcome news. Jingle bells.

Congress has headed home for the holidays. The federal legislature will return to the Nation’s Capital to resume its session on January 11, 2016. Here is a link to the Week in Congress’s report on last week’s actions on Capitol Hill.

The President before leaving for Hawaii signed the tax extenders and omnibus appropriations bills into law.  The AP provides an interesting report on the politics of the helpful Affordable Care Act changes wrought by this law.

The President also signed an executive order giving federal employees a 1.3% raise for 2016 per Federal News Radio. “Specifically, I have determined that for 2016, across-the-board pay increases will be 1.0 percent,” [the President] wrote [to Congress]. “Also, I will make a decision by November 30, 2015, regarding an alternative plan for locality payments under 5 U.S.C. 5304a. The alternative plan for locality payments will be limited so that the total combined cost of the 1.0 percent across-the-board base pay increase and the varying locality pay increases will be 1.3 percent of basic payroll, consistent with the assumption in my 2016 Budget.”

Modern Healthcare reports not suprisingly that “Commercial health plans that cover workplace benefits for millions of Americans pay higher prices to hospitals that have little or no competition, according to a new study that raises questions about how to slow U.S. health spending amid a wave of consolidation.”  The hospitals argue that the ACA incents the health system integration.

The Hill reports that the House and Senate have both passed the omnibus appropriations and tax extenders measures. The President is expected to sign those measures into law. As the FEHBlog predicted there will be no partial government shutdown. In June the FEHBlog bemoaned the fact that the Supreme Court allowed the ACA to live another day in the King v. Burwell decision.  The FEHBlog thought that the Supreme Court action deprived Congress of leverage over the executive branch. To the contrary Congress was able to make major helpful changes to the Affordable Care Act in this end of year legislation as the FEHBlog has discussed in earlier posts this week. Jingle bells.

The FEHBlog nearly fell off his chair when he read this morning that the omnibus appropriations / tax extenders package also places a one year moratorium on the onerous health insurer tax for 2017.  The Affordable Care Act is a large scale income redistribution scheme. One of its craziest features was to impose a massive tax on health insurers which principally raises premiums for small business, people buying coverage in the exchanges and FEHBP enrollees.   Prof. Timothy Jost provides a more detailed review of the ACA provisions of the package here.

Today, the House approved the tax extenders bill on a bipartisan vote as the Hill reports.  Tomorrow, the House takes up the omnibus appropriations bill and send the package over to the Senate which is expected to pass the package right away so Congress can head home. The omnibus appropriations bill includes the protections for September 11, 2001, first responders which the third piece of must pass legislation for this month.

Yesterday, the Internal Revenue Service released more ACA guidance which really does not impact the FEHBP.  Prof. Jost review the Service’s actions here.

The omnibus appropriations and tax extenders bills are moving forward in Congress. The package does include the two year delay in the effective date of the ACA’s 40% excise tax on high cost employer sponsored coverage (from 2018 to 2020).  The first vote is expected in the House of Representatives on Friday.

Govexec.com reports that the package does not upset the 1.3% raise that federal employee and military service members expect for 2016.

The package also includes cybersecurity provisions intended to advance the following policies

• Promote responsible and voluntary information about cyberthreats
• Protect privacy by requiring companies to remove any personally identifiable information before sharing
• Provide liability protections to companies that share information in a responsible manner
• Establish the Department of Homeland security as the sole portal for companies to share information with the federal government, stopping unnecessary confusion.

About eight years ago, the FEHBlog attended a NASCAR race in Richmond Virginia. Dale Earnhardt Jr was driving a beautiful car with an etching of Elvis on the hood.  That is the essence of America. In any event, I learned from another race fan that this was the last race before the championship series and the only way that Junior could make the chase would be for him to place at least third and for two other drivers did not finish. Toward the end of the race, Junior was in third place and the two other drivers were in the pits with engine problems.  Junior’s fan in my section screamed, “It’s happening” and Junior promptly crashed.  The other two drivers wound up finishing. In other words, it’s not over until it’s over.

That lesson came to mind this morning when the FEHBlog read the Hill’s headline that Congress is on the verge of delaying the 40% excise tax on high cost employer sponsored health plans for two years (from 2018 to 2020).  The reports notes significantly that

The White House has opposed repealing the tax, but officials have signaled that President Obama would not veto the package over a two-year delay.

A two year delay would be a big relief for FEHBP carriers and other employer group health plan sponsors and insurers.

Here’s a link to the latest Hill article on the appropriations and tax extender bill negotiations. “Negotiators were settling the final details of the deal late Tuesday, setting up a House vote as soon as Thursday.”  The whole enchilada should be wrapped up this week. Congress likely will need another brief extension of the continuing resolution funding the federal government in order to complete its work.