Federal employee groups cautiously back health care bill

While federal employee groups still are examining the details of the health care reconciliation bill likely to pass this weekend -- and have reservations about parts of it -- some are coming out in favor of the measure.

The American Federation of Government Employees is concerned about the tax on high-cost health care plans included in the legislation, but "strongly supports the bill, and we are urging House and Senate members to pass it," said Beth Moten, the union's legislative and political director.

The excise tax has been a sticking point for other federal employee unions, too. The original House legislation planned to pay for some of the costs of reform by levying a tax on so-called Cadillac plans. Many observers feared that by the time the law went into effect, the cost of many plans in the Federal Employees Health Benefits Program would have risen to the level at which they would be subject to the tax. In the House, lawmakers succeeded in stripping the tax from reform legislation. The Senate added it back in.

The final version of the bill delays implementation of the tax from 2013 to 2018, and will only tax plans that cost $10,200 or more for individuals and $27,500 or more for families. And those figures could rise if the per-person cost of coverage under FEHBP's Blue Cross Blue Shield plan increases at a higher rate than inflation by the time the tax is scheduled to go into effect.

Moten said the tax was not a deal breaker for AFGE.

"We believe the excise tax is unfair to middle income Americans, but the delay in its effective date is an improvement over the original Senate bill," she said. "We'll keep working on this as we go forward."

The National Active and Retired Federal Employees Association cautioned in a briefing to its members that the formula left substantial uncertainty about when the tax might hit federal workers, and what impact it might ultimately have on their coverage.

"Carriers would likely pass the cost of the tax on to insured persons in increased premiums," the association warned.

But like AFGE, NARFE said it would work to improve the legislation whether in technical fixes or additional bills after the fact. One immediate recommendation, the association said, was to make it clear that FEHBP carriers will be required to cover enrollees' nondependent children until they turn 26. The reconciliation legislation is unclear on that point, the association said.

The bill is "far from great, but it is also better than the status quo," said Matt Biggs, legislative director of the International Federation of Professional and Technical Engineers.

Biggs' union has consistently supported a proposal that would eliminate private health insurance and cover all Americans through a single, national insurance program. The legislation the House is considering this weekend takes a significantly different approach. It mandates that Americans purchase insurance coverage and establishes competitive exchanges to give them options if they do not enroll in health plans through their employers. The bill would provide subsidies for lower-income Americans to purchase coverage.

Some employee groups, such as the Federal Managers Association and the National Treasury Employees Union, still are studying the massive bill.

"We are continuing to review this to assess its potential impact," said NTEU President Colleen Kelley.