No Special Fix for Congress Under New Health Reform Rule

The Administration will reportedly issue regulations next week confirming that the federal government, which now contributes to the costs of health insurance for members of Congress and their staff, will continue to do so once they enroll in plans offered through the new health insurance exchanges in 2014.

Critics of health reform already are crying foul, charging that the Administration is somehow bending the rules to benefit Congress.  That’s incorrect; it’s just implementing health reform as the law intended.

Like other federal workers, members of Congress and their staff now choose among health insurance plans offered through the Federal Employees Health Benefits Plan (FEHBP), with the federal government picking up most of the premium costs.  Under health reform, however, the only health plans that the federal government “may make available” to members and their staff starting in 2014 are plans offered through the health insurance exchanges.

There’s been a lot of confusion about what this provision means, including whether the federal government could contribute to the cost of exchange plans on behalf of members and staff.  But nothing in the provision would prevent the federal government from doing so.

In fact, one month after health reform was enacted, lawyers from the nonpartisan Congressional Research Service (CRS) examined the provision and found that while its language was ambiguous, it was reasonable to assume that the federal government could continue to pay part of the cost of health insurance.

Moreover, the official description of the amendment adopting this provision from Senator Charles Grassley (R-IA), who offered it during the Senate Finance Committee’s consideration of health reform, stated that it would require members of Congress and staff to “use their employer contribution” to buy exchange plans rather than plans offered through FEHBP.  In other words, the provision assumed that the federal government would still contribute to the cost of their coverage.

The exchanges for small businesses, known as the Small Business Health Options Program (SHOP), will work in much the same way.  Small businesses that participate in the exchanges can make available to their employees one or more health plans offered through the SHOP exchanges and contribute to the cost of the premiums, as they do in the small-group health insurance market today.

And, like employees of small businesses that participate in SHOP, members of Congress and their staff generally won’t be eligible for the tax credits available to many low- and middle-income people to buy coverage on their own in the exchanges unless the employer-subsidized coverage is unaffordable.

In short, the Administration is simply implementing a small provision of health reform appropriately.