OPM Proposal Could Change Health Care Coverage For Some Employees

A new proposed rule would allow agencies to require some employees to keep paying their health insurance premiums when they are on leave without pay.

The change under consideration would give agencies the option of requiring certain LWOP employees to pay-as-they-go to maintain their coverage under the Federal Employees Health Benefits Program; if necessary, agencies could advance a portion of employees’ basic pay to cover their FEHB contribution for the LWOP period. Employees would have to reimburse the agency for the advance pay upon returning to work.

“When assessing whether it is necessary to pay advanced employee contributions for premiums, the regulation provides that an agency shall balance the needs of the agency, including available financial resources and ease of operation, with those of its employees, including typical job series and pay grades and access to direct payment methods,” said the proposal.

While employees who go on leave without pay now can choose to keep their FEHB payments current when they’re out, generally agencies pick up the entire FEHB tab – the government and employee contributions – for employees on LWOP. Employees incur that debt, and then repay their portion of the FEHB contribution when they return to work.

The proposed rule exempts several categories of LWOP, including leave taken under the Family and Medical Leave Act, the Federal Employees Compensation Act, and the Uniformed Services Employment and Reemployment Rights Act. So, agencies could not require employees in those categories to pay-as-they-go for their health care coverage under the proposal. FMLA provides up to 12 weeks of unpaid leave to most government and private sector workers for the birth or adoption of a child, or to care for seriously ill family members; USERRA protects the jobs and benefits of employees on active or reserve military duty. 

The proposal also would not apply to employees furloughed because of a lapse in appropriations, or government shutdown.

“It seems like the exemptions swallow up the rule,” said David Ermer, a managing partner at Washington-based Ermer Law Group who represents the Association of Federal Health Organizations, a trade group of FEHBP plans. Because of that, Ermer said most people don’t have to worry about being affected by the change.

The draft rule, which the Office of Personnel Management published on Tuesday, is really aimed at helping agencies provide health care coverage to temporary and seasonal federal workers while also keeping an eye on their budgets. In 2015, a new policy requiring agencies to expand FEHBP coverage to previously ineligible workers took effect. Under that regulation, all temporary, seasonal and intermittent employees who are scheduled to work at least 130 hours in a calendar month and work at least 90 days are eligible for FEHBP coverage.

“OPM recognizes that the recent expansion of eligibility for FEHB coverage may impact an agency's budget due to the required FEHB government health benefit contributions for newly eligible employees who elect to participate in FEHB coverage and go into LWOP or other non-pay status based on the intermittent nature of the work performed,” said the proposed rule in the Aug. 30 Federal Register.

“That’s what is driving this [proposal],” Ermer said. Agencies can opt to keep paying the whole FEHB tab while employees are on leave without pay. Whether they choose to take advantage of the flexibility under the proposed rule “probably depends on the percentage of intermittent and temporary employees that they have,” Ermer said.

For example, the Internal Revenue Service and departments of Agriculture and Interior employ many temporary and seasonal workers ranging from extra staff hired during tax season to firefighters and other emergency personnel. “It’s intended to give relief to those agencies,” Ermer said.

The comment period on the proposed rule ends Oct. 31.