GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC. MEETING OF THE BOARD OF DIRECTORS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86-00964R000100050001-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 94
• Document Creation Date: December 14, 2016
• Document Release Date: March 27, 2003
• Sequence Number: 1
• Publication Date: February 10, 1977
• Content Type: MIN

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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
10 February 1977
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 10 Febru-
ary 1977 at 10:00 a.m. in Room 5 E 62, Headquarters. Those
present were:
Directors
F. W. M. Janney, Chairman
STATINTL
STATINTL
STATINTL
STATINTL
STATINTL
sident
Vice President
ecretary
Treasurer
Medical Advisor
Legal Advisor
Visitor
Director
The President called the meeting to order, and the newly
elected Directors were introduced and welcomed.
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STATINTL
STATINTL
]nominated. Mr. F. W. M. Janney, current
Chairman, to continue as Chairman of the Board of Directors
Chairman. I
of GEHA;
was unanimously elected.
The Chairman then passed out a list of current GEHA
Officers with the recommendation that the same slate be
reappointed, with the exception of
, who
will be retiring at the end of February, and with the addi-
tion of one cashier,
STATINTL for 1977;
STATINTL
moved that the STATINTL
following employees be appointed to their respective posts
mously approved:
seconded the nomination, and Mr. Janney
seconded the motion, which was unani-
President
Treasurer
Secretary
Assistant Secretary
Assistant Secretary
Cashier
Cashier
Cashier
Cashier
In order to fill the Vice Presidential vacancy, it was
STATINTL suggested that
replacement,
STATINTL
be STATINTL
appointed since he will have the same line authority over
the insurance program.
STATINTL"o Ie appointed as Vice President of GEHA;
seconded the motion, which was unanimously passed.
In closing the meeting,
STATINTL
STATINTL
STATINTL
STATINTL
STATINTL
STATINTL
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also informed those present of two forthcoming meetings: one
in March or April when GEHA's Securities Advisor, Mr. Hurford
of BEA Associates, will give a report; and another, in late
spring, when the Board will discuss any proposed benefit
changes or premium changes in the 1978 health benefits program.
There being no further business, the meeting was adjourned
STATINTL
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
18 April 1977
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 18 April
1977 at 10:00 a.m. in Room 5 E 62, Headquarters. Those pre-
sent were:
Directors
F. W. M. Janney. Chairman
Officers
ident
President
Treasurer
Secretary
Advisors
Medical Advisor
Legal Advisor
Visitor
Absent were:
Director
Director
After calling the meeting to order, the President re-
quested the Board's consideration of proposed benefit changes
in the Association Benefit Plan for calendar year 1978, which
must be submitted to the Civil Service Commission no later
than 30 April 1977. Proposed rate changes will be discussed
at a later meeting, he said, and these are due to the Commis-
sion by 31 July.
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STATINTL
then outlined each of the changes, as
shown in the attachments to these minutes, recommending
the adoption of items 1, 2, 3, 4C and 5. He recommended
disapproval of item 6, paying up to $50 per person per
calendar year for one routine physical examination. He
said that if this latter benefit were approved, the bi-
weekly rate for Self and Family enrollment would increase
$2.36; the added benefit would largely finance persons
with large families; and other enrollees might be encour-
aged to leave the Plan because of the sharply increased
premium. He said approval of the remaining benefits
would represent only a modest increase in premium and that
the few cents involved may not have to be passed on to the
employee.
After a short discussion, moved that bene- STATINTL
fits 1. 2, 3, 4C and 5 on the attachment be adopted;
STATINTL I Iseconded the motion, which was unanimously
approved.
Board members then agreed to holding a meeting in
late June for the purpose of receiving a briefing from
Mr. Hurford of BEA Associates on the quarterly status of
the GEHA portfolio.
STATINTL I lannounced that he and the Chairman have
approved app ications from foreign nationals for the
Contract Health Insurance Plan and that almost all were
STATINTL Demployees.
He further reported that the UBLIC plan had suffered
11 deaths since 1 January 1977, representing $154,425 in
claims. He added, however, that UBLIC is still ahead by
$158,000, premiums over claims.
STATINTL
As the final item of business, said that
with respect to UBLIC and the Contract i e Insurance Plan,
consideration should be given to changing the current
policy whereby new employees are allowed to enroll in the
plans within the first 60 days of their employment without
providing a health statement. He went on to say that with
the current Government policy of hiring the handicapped--
even cancer cases--these plans are therefore accepting
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enrollments from persons with possible terminal illnesses
who are not required to submit health statements. Such
a practice leaves the plans unprotected. He added that
most life insurance plans now require a health statement
from employees at the time of application.
then STATINTL
I
moved that all applications for enrollment in UBLIC and
the Contract Life Insurance Plan be accompanied by a health
statement, such policy to be effective on the first day of
the new contract year (UBLIC on 1 August 1977 and the
Contract Life Insurance Plan on 1 May 1977); STATINTL
seconded the motion, which was unanimously approved.
There being no further business, the meeting was
adjourned at 10:25 a.m.
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Proposed benefit changes in the
Association Benefit Plan for 1978
1) To pay maternity the same as any other illness or
injury.
Self $ .01 Self & Family $ .02
2) To eliminate the carryover deductible from major
medical.
No rate applicable
3) Anesthesia - Pay up to $SO or 30% of the amount
payable for the surgery performed.
Self $ .01 Self F Family $ .03
4) Increase hospital outpatient from $250 to:
A) $300 per person per calendar year.
Self $ .02 Self & Family $ .07
B) $350 per person per calendar year.
Self $ .04 Self $ Family $ .11
C) $400 per person per calendar year.
Self $ .05 Self $ Family $ .13
5) As a benefit separate from #4, pay 100% of outpatient
hospital charges for services and supplies rendered
at the time of a surgical operation not requiring
hospitalization as an inpatient.
No Charge
6) Pay up to $50 per person per calendar year for one
routine physical examination.
Self $ .66 Self E Family $2.36
The Officers of GEHA recommend: 1, 2, 3, 4C, and S.
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
21 July 1977
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 21 July
1977 at 2:00 p. m. in Room 5 E 62, Headquarters. Those
present were:
Directors
Officers
sident
e President
Treasurer
ing Secretary
Advisors
Medical Advisor
Visitor
John B. Hurford, Vice President,
B. E. A. Associates
F. W. M. Janney, Chairman
Legal Advisor
erector
cretary
, Director
Jr., Director
After convening the meeting, the President informed those
present that the Civil Service Commission had recently approved
GEHA's proposed benefit changes in the Association Benefit
Plan for calendar year 1978 and that proposed rates are due
at the Commission by 31 July 1977. Concerning the rates,
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said a meeting had been held with the under-
writer and it was determined that a rate increase would not
be necessary in 1978 due to the Plan's favorable experience.
In fact, he said, GEHA could expect to have a large year-end
reserve of approximately $3 million. The underwriter has,
for the second straight year, agreed to absorb the cost of
the changes in benefits which will amount to about $70,000
to $75,000 annually. expressed his pleasure at
the ability of the Association Benefit Plan to keep its STATINTL
premiums down while the rates of other plans are continuing
to rise at a rapid rate due to the increased costs of health
care. STATINTL
Next on the agenda, the Board welcomed GEHA's securities
advisor, Mr. John B. Hurford, to the meeting.
said it was GEHA's hope to realize a $250,000 return o
premium (UBLIC) which could be turned over to BEA Associates
within 45 days after the end of the contract year. Mr. Hurford
was then given the floor for presentation of a status report
on the GEHA portfolio as of 30 June 1977. He distributed
handouts to those present and reported there had been no major
change in the portfolio since his last presentation in April.
Approximately 12% of the account is in cash and cash equiva-
lents; 78% in securities, with 7% in convertibles; and the
remaining 10% in common stocks. The.overall yield is 7.1%
and the market value as of 30 June was approximately $2.8
million. In summing up this portion of his presentation, he
said that all components of the account are doing well; the
portfolio is producing $200,000 per year in income; and the
total account is up about 14% from June 1976 to June 1977 (the
first full year that GEHA has used an outside securities
advisor).
Mr. Hurford then gave an appraisal of the bond and stock
markets which he supported with numerous graphs. He reported
there is a yield spread favoring bonds and that the bond
market is reasonably attractive. BEA is monitoring this situa-
tion. With an expected rise in interest rates and a modest
deflationary trend developing, he said GEHA will want to
weight the account in long-term bonds. In closing, Mr. Hurford
said there are unrealized gains in every section of the
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portfolio and that only two securities have not shown profits.
The Board thanked Mr. Hurford for his detailed report.
There being no further business, the meeting was adjourned.
at 2:40 p. m.
STATINTL
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
20 December 1977
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on
20 December 1977 at 10:00 a. m. in Room 5E-62, Headquarters.
Those present were:
F. W. M. Janney, Chairman
Secretary
ctor
r
al Advisor
dent
After convening the meeting and introducing
a new Director, the President reviewed the
current Insurance Branch backlog of claims of four weeks, the
increasing complexity and numbers of claims, increased enroll-
ment in the plan and the resultant need for additional full-
time, reimbursable employees. advised the board
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25X1
25X1
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that there are = nsurance Branch positions. I lof 25X1
these positions are reimbursable (salar and benefits an
E are paid for by the Agency. Of the positions, are 25X1
funded by a return to the A enc of 2 1 20 of the Association
Benefit Plan's premiums. I ladvised that by the end 25X1
of 1977 the Association Bene it Plan projects a reserve fund
of $290,000 which is approved by the Civil Service Commission
for payment of administrative expenses and which is available
for payment of salaries for the proposed new employees.
I Isaid that up to 5 new full-time claims settlement
personnel and 2 clerical support personnel may be needed to
effectively deal with the Insurance Branch backlog and
increasing claims work load. After a brief discussion on
space and salar expenses for new employees, moved 25X1
that be authorized to hire additional reimbursable
employees; seconded the motion, which was unanimously
approved.
As a second order of business, briefed the 25X1
Board on UBLIC and the eligibility requirements for carrying
UBLIC into retirement. He provided a brief history of a
1973 action by the Board of Directors which approved a tem-
porary suspension of the ten year requirement for carrying
this insurance into retirement, requested that 25X1
consideration now be given to employees retiring in the DDO
as not all of these employees will have met their ten year
UBLIC requirement prior to retiring. He suggested that the
Board approve a change in UBLIC policy so that it will not be
necessary to have 10 years of UBLIC coverage prior to retire-
ment in order to continue coverage into retirement. Under his
proposal, insurance coverage and employee premium payment will
continue after retirement until age 60. At age 60 each
employee's case would be reviewed and if they meet the 10
year requirement, continuation of UBLIC (in accordance with
UBLIC retiree provisions) will be authorized. Coverage will
be discontinued for those who do not meet the ten year require-
ment by age 60. It was further suggested that this policy be
retroactive to 1 August 1976 to include those employees who
did not qualify for continued BLIC coverage at the time of
their retirement. I Imoved to adopt this new UBLIC
policy; Mr. Janney seconded the motion, which was unanimously
approved. (The Board Members were in unanimous agreement that
this change would require payment of retroactive premiums and
in no event would retroactive coverage be granted to an al-
ready deceased member or dependent.)
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The final order of business was the appointment of
Investment Committee.
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
20 April 1978
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on
20 April 1978 at 10:00 a. m. in Room 5E-62 Headquarters.
Those present were:
F. W. M. Janney, Chairman
, Secretary
edical Advisor
gal Advisor
ctor
rer
, Director
After calling the meeting to order, the President
requested the Board's consideration of the election of
Officers for 1978. moved to elect the proposed
slate of officers su m1 ec as an attachment to the agenda.
I Jseconded the motion, which was unanimously
approved. A listing of GEHA Officers for 1978 is attached.
CONFIDENTIAL Ili
25X1
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The President requested the Board's consideration of
proposed benefit changes in the Association Benefit Plan
(ABP) for calendar year 1979, which must be submitted to the
Civil Service Commission by 30 April 1978. 25X1
advised that proposed rate changes, which must be submitted
to the Commission by 31 July, will be discussed at a future
meeting. then outlined and explained each
proposed benefit c ange as shown in items 1 through 8 on
the attachment to the agenda. He explained that the pro-
posed changes are considered to be perfecting changes and
that they serve to combat rising medical charges and to keep
the A13P competitive with other Federal health plans.
recommended that the Board approve items lc
through 8 and he pointed out that the biweekly premium rate
increase for these benefits for Self Only and Self and
Family coverage would be $.20 and $.53 respectively. This
represents only a modest increase in premiums and depending
on our plan's 1978 experience, this increase may not have
to be passed on to policyholders.
After a short discussion, owed that
benefits lc, through 8 be adop seconded the
motion, which was unanimously approved. listing of
Benefit changes for 1979 is attached.
The meeting was adjourned at 10:20 a. m.
25X1
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ASSOCII& ON BENEFIT PLAN
BIWEEKLY COST TO PULi '.CYHOLDER
PROPOSED BENEFIT CHANGES FOR 1979
1. To increase the basic $100 benefit for Out-of-Hospital X-ray
and Lab to-$400 per person per calendar year.
2. To cover (under the $400 per person per calendar year hospital
outpatient basic benefit) non-surgical charges by physicians
for emergency room treatment when billed separately from hospital
charges.
3. To cover under Basic Surgical Benefits, charges by a Podiatrist
for the removal of plantar warts by Chemosurgery, Electrosurgery,
or cryotherapy.
4. To increase basic benefits for private ambulance service from
$25 to $50.
5. To increase the basic benefit for physicians medical visit unrelated
to surgery while confined in a hospital from $10 to $20.
6. To cover amniocentesis and related tests on the unborn child.
7. To cover as a basic benefit the initial reconstruction of the
breast following a mastectomy.
8. To cover up to 30 visits per person per calendar year for the
services of a psychiatric social worker under the direct
supervision of a psychiatrist.
SELF ONLY `t SELF & FAMILY
$-06
$.15
No charge
$.01
No charge
No charge
$.02
$.10
$.03
$.30
No charge
No charge
$.01
$.02
$.01
$.02
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
20 July 1978
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 20 July 1978
at 2:00 p. m. in Room 5E-62, Headquarters. Those present were:
Directors
25X1
F. W. M. Janney, Chairman
dent
rer
Secretary
irector
r
ctor (C)
Director
edical Advisor
gal Advisor
After calling the meeting to order, the Chairman turned
25X1 the meeting over to for a discussion of 1979
premium rates for the Association Benefit Plan.
advised the Board that we must submit our premium rate proposals
to the Civil Service Commission by 31 July 1978. He also
advised that he had recently met with the Underwriter of our
25X1
25X1
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The meeting was adjourned at 2:25 p. in.
plan to review our 1978 experience and projected premium rates
for 1979. As a result of this meeting and in spite of under-
writer projections in 1977 that our premium to claims ratio
for 1978 would be satisfactory, based on the first six months
experience of 1978 the ABP will have a projected deficit of
approximately$3 million by the end of the 1978 contract year.
As a partial offset to this projected negative experience our
plan credited the $1.7 million reserve carryover from 1977 to
this 1978 figure. However, the difference of approximately
$1.3 million liability is carried into the 1979 contract year.
Added to this is a projected increase in claims for 1979.
Therefore, a 36.6% increase in the ABP premium for 1979 is
required.
pointed out that the deficit for 1979 is con-
siderably reduced by our request for a $1.8 million payment to
the underwriter from the Civil Service Commissions contingency
reserve fund. He commented that although the requested. increase
in premium for 1979 is significant, it follows 3 years in which
the net-to-carrier rates were held at a constant and two
successive years of reductions in policyholder contributions.
Several Board members had questions and after discussion
concerning underwriter cost projections, claims experience,
hospital and medical expense increases and actions to be taken
to advise policyholders of the projected increase,
moved that the Board submit a request for a rate
increase for t e ABP to the Civil Service Commission for 1979.
seconded the motion, which was unanimously
25X1
The final item of business was the appointment of
F s Assistant GEHA Secretary.
move to accept is appointment. seconded e 25X1
motion, which was unanimously approved.
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
14 September 1978
A special meeting of the Board of Directors of the Government
Employees Health Association, Inc. was held on 14 September 1978
at 10:00 a.m. in Room SE-62, Headquarters. Those present were:
Directors
25X1
F. W. M. Janney, Chairman
dent
rer
Secretary
edical Advisor
Benefits and Services Division
resident, BEA Associates, Inc.
istant Secretary
nsurance Branch
cording Secretary
Absent were:
25X1 1 1, Director
irector
ector (C)
Legal Advisor
The Chairman called the meeting to order and announced that
the first order of business was the appointment of a nominating
committee to provide names for the G ection
to be held in Januar 1979. Messrs.
25X1 I Iwere appointed committee. ac
25X1 committee member, e was requested to nominate
three candidates. F entify two candidates.
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CONFIDENTIAL
25X1
25X1
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As the second and primary order of business, the Chairman
welcomed Mr. John B. Hurford to the meeting. Mr. Hurford is
Vice President of BEA Associates, Inc., Manager of the GEHA
investment portfolio. Mr. Hurford gave the Board summary sheets
which provided a review of the GEHA portfolio. He discussed the
Board's investment objectives of stability/income and advised
members that as of 31 August 1978 the market value of the port-
folio was $3,030,458.00. Mr. Hurford also discussed the
generation of income from the portfolio. Board Members agreed
25X1 with that investment income should be reinvested at
the earliest opportunity. Mr. Hurford explained the GEHA
portfolio cash reserves, U. S. Government bonds and common stocks.
He provided an extensive performance evaluation of GEHA's port-
folio with other major funds that have comparable objectives and
with funds with a wider spectrum of investment objectives.
Throughout his presentation Mr. Hurford answered questions from
Board Members.
Following a discussion of GEHA's cash and cash equivalent
holdings, it was decided Mr. Hurford could also invest these
holdings. This decision was based on Mr. Hurford's advice that
various portions of the portfolio are very liquid and can provide
GEHA with. cash on short notice.
25X1 I advised Mr. Hurford that the Board would make
$196,000 available to him for additional GEHA investment. These
monies represent the 1978 refund of premium from the UBLIC and
Contract Life insurance plans.
There was discussion of GEHA's objectives and whether they
represent a burden and secondly, in light of what Mr. Hurford
predicts for the future, should they be reconsidered? Considera-
tion was given to increasing the percentage of portfolio equities.
However, the Board decided not to alter the original objectives
or change the mix of equities and securities.
25X1 The meeting was adjourned at 10:40 a.m.
7
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
29 March 1979
(1st Meeting 1979)
A special meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 29 March 1979
at 2:00 p.m. in Room 5E-62 Headquarters. Those present were:
President
rer
Secretary
istant Secretary
istant Secretary
tor
r
The President called the meeting to order. His purpose in
convening this special organizational meeting was to introduce
new 1979/80 Board of Director members, seven of nine members
being elected for the first time to GEHA; to elect GEHA officers
and appoint legal and medical advisors to the Board of Directors.
WARNING NOTICE
INTELLIGENCE SOURCES
AND METHODS INVOLVED
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I lalso outlined Board member responsibilities and
alerted members to two important, meetings in late April and
July 1979. These meetings will concern new Association Benefit
Plan health insurance benefits and premium rates for the 1980
contract year. olicited Board members ideas and
ultimately decided on a special GEHA background and information
slide show and briefing meeting for members, also to be held in
April. In support of this meeting the Secretary was asked to
provide material to Board members.
The Board's first order of business was to elect a Chairman.
I I nominated as GEHA Chairman 25X1
of t- tie Board of Directors fur This n=--nation was seconded
by as unanimously elected.
At is porn assume control of the meeting.
The Chairman then read the slate of GEHA officers for 1979.
moved to accept the slate as read. The motion was
and was unanimously approved.
seconded by
1979 GEHA OFFICERS
President
Vice President
Treasurer
Secretary
Asst. Secretary
Asst. Secretary
Asst. Secretary
Cashier
Cashier
Medical Advisor
Legal Advisor
25X1
The Chairman provided a brief overview of GEHA investments
and asked for nominations for the investment committee. He advised
that, historically GEHA had four members serve as the Investment
Committee and that only two members 25X1
1were returning to the 19 Board o Directors.
is generated much discussion as to the need for a 4 member com-
mittee or a committee of the whole, and whether or not to appoint
committee members until the current GEHA audit report is received
and the investment portfolio performance evaluated. In view of
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25X1
the impending audit wrap up, the decision was made by the
Chairman to hold the selection of investment committee members
in abeyance.
raised a question concerning GEHA Board of
Director members liability and asked if members were bonded.
nd officers are bonded.
b
ers a
d that all mem
25X1 res onde 25X ega a. visor, as asked to prepare a paper on
Board member legal responsibilities.
25X1 I I both raised questions
concerning cancer insurance provided
background on why GEHA does not offer this as an individual
policy. He also briefl discussed the Association's Specified
25X1 Dread Disease Plan and outlined its basic provisions.
There was much discussion over is point and a question raised
25X1 by poncerning the Association's health
insurance claims backlog. I Iadvised members that for
the past year the claims bac og as been steadily reduced from
six or more weeks to the point that it now stands at only seven
days. He advised that this rate of adjudication is more competi-
tive than most other Federally sponsored plans. There was no
further discussion.
The meeting was adjourned at 2:35 p.m.
25X1
:ary
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
12 April 1979
(2nd Meeting 1979)
A special meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on _1_--2 April 1979
at 10:00 a.m. in Room 5E-62 Headquarters. Those present were:
Directors
President
urer
Secretary
f General Counsel
Benefits & Services Division
sistant Secretary
rman/Director
In the absence of the Chairman, opened the meet-
ing. He first called on , 0 ice of General Counsel
guest, who was attending the meeting in the place of GEHA Legal
Advisor, advised the Board that his office
had not ye completed e review o Board of Director member
liability. Several Board of Director members had questioned
about each members liability at the 29 March 1979 meeting.
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As a result, Chairman re uested Gary prepare a paper on
this subject for Board members. dvised members that 25X1
he would provide a verbal run down on is subject at the April
meeting.
I then moved to the primary order of business, a
briefing on EHA s responsibilities and programs. He spoke
briefly of GEHA's annual meeting in January of each year, the
make up of Board membership and the fact that unlike many other
boards, many employees seek out GEHA Board members to present
their insurance problems and ideas. presented slides
with his narrative and answered questions as they arose. He
pointed out that GEHA was established as a non-profit corporation
in 1947 and that it has grown to encompass f
which are reimbursable to the Agency from Ci i dpi aiso
identified the ten GEHA insurance plans (Association Benefit Plan,
Contract Health Insurance, FEGLI, UBLIC and WAEPA Life Insurances,
Income Replacement, Dread Disease, Flight and Accident Plan, Air
Trip and Military Air Trip Insurance) and explained the levels of
coverage and special provisions of each plan. He explained that
GEHA offers insurances which provide protection against catas-
trophic losses and that these plans are not meant to be all
encompassing, but rather a supplement to basic or private cover-
ages. This generated several questions from Board members con-
cerning the different life insurances, their active employee and
retiree benefits.
The various slides on GEHA insurances depicted the amount of
insurance in force for active employees and retirees, number of
participants and dollar amount of insurance benefits paid during
1978. Other slides revealed the level of participation in the
Association Benefit Plan (ABP) and Contract Employee Health Plan
and the 13 million dollars of benefits paid to policyholders of
the two plans in 1978. Other slides provided a six year com-
parison of ABP premium rates for self only and self and family
coverage with the rates of two other major Federal health
insurance plans - Blue Cross/Blue Shield and Aetna.
Iraised a question concerning the ABP premium
rate increase for 1979. answered that there were
several factors which impacted on the plan during 1978 and which
culminated in a rate increase. Chief among these was the sharp
increase in hospital and other medical costs during 1978 and the
increased utilization of health benefits by members. This was
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evidenced by an increase of nearly 15,000 claims in 1978 over
1977. There followed several questions and a general discussion
on rates, benefits and utilization trends. Pointed
out that the ABP had not increased the premium rate for several
years and that it was reduced in 1978 because of an increase in
the government's contribution to Federal health plans. There
were additional questions and discussions concerning the health
insurance trust liability retained by the Office of Personnel
Management (OPM) and a comparison of the experience rate between
the ABP and Contract Employee Health Plan.
dvised the Board that our Mutual of Omaha
underwriter wou e sending senior representatives to Washington
in July 1979 to provide us with their actuarial study experience
and rate projections for the 1980 contract year. Once we have
their projections the Board will meet to review and discuss the
rates before submitting them to OPM for rate approval for 1980.
I I about the age 22 cut off of
Federal health insurance benefits for dependents. He was con-
cerned that more and more dependent children are still in school
or at home at age 22 and therefore, frequently not able to get
reasonably priced or comprehensive health insurance.
responded that the 22 year old dependent cut off was a statutory
limitation imposed by Congress and that while we could alert OPM
to our concern with this restriction, it would require a ground
swell of interest by large employee unions and most participating
Federal plans to effect such a change. Additionally, he felt
that at the present time we may be experiencing a period of
legislative environment against expansion of benefits and the re-
sulting higher premiums.
Before ajourning the meeting, advised the Board
that a meeting would be scheduled for 24 pri to review new
benefits and their cost and impact on the Association Benefit Plan
for the 1980 contract year. He indicated that the Insurance
Branch had submitted several proposals to the underwriter for cost
figures and that this information will be presented to the Board
for a final determination.
I Iraised a concern involving the frequent use of
hospital emergency rooms, which pay first dollar benefits up to
a maximum of $400 per person per calendar year, in lieu of a
family physician. This generated a great deal of discussion and
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agreement that while many members do use hospital emergency room
facilities for other than real emergencies, a lack of meaningful
statistics makes it impossible to determine the extent to which
this may be defined as an abuse of the benefit. The Insurance
Branch will review available statistics to determine if any abuse
patterns are evident. There was no further discussion.
The meeting was adjourned at 11:15 a.m.
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 CONFIDENTIAL
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
24 April 1979
(3rd Meeting 1979)
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 24 April 1979
at 10:00 a.m. in Room 5E-62 Headquarters. Those present were:
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President
urer
, Secretary
ranch
Benefits & Services Division
ing Secretary
f General Counsel
sistant Secretary
Medical Advisor
25X1 Chairman opened the meeting by advising the
Board that the primary oraer of business would be the discussion
and approval of new or amended health insurance benefits for
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the Association Benefit Plan (ABP) for the 1980 contract year.
He then turned the meetin over to for a discussior25X1
of the proposed changes. emin e the Board that. 25X1
this benefits meeting was wo such meetings and
that the second meeting will be necessary to rule on Mutual of
Omaha's premium rate recommendation for the ABP and will take
place in mid-July 1979. He also outlined the procedure used
each year, whereby the Board determines health insurance benefits
for the next contract year and submits them to the Office of
Personnel Management for final approval and inclusion in the 25X1
contract between GEHA and OPM. The 1980 rate proposals will be
based on the first five months of ABP's experience and actuarial
projections for the remainder of the contract year.
indicated that if the Mutual premium proposal recommen s a rae
increase, the GEHA Board of Directors could consider reducing
the impact of such a proposal by recommending the withdrawal of
benefits proposed at today's meeting.
I advised the Board that members of the Insurance
Branc nave been working on a series of perfecting benefit
changes for the ABP. These changes are based on both policy-
holder and Branch claims adjudicator's recommendations, compari-
son of benefits offered by other major Federal health insurance
plans, and recommendations by the office of Personnel Management.
outlined and discussed the proposed ABP benefit
changes for 1980. Where applicable, he compared these to the
existing benefits and reviewed Mutual's bi-weekly cost figures.
The attached chart reflects the existing 1979 ABP benefits, the
proposals for 1980, and the projected bi-weekly premium charge
for each benefit. This generated a great deal of discussion
and questioning as comparisons were drawn with existing benefits,
other Federal plans and premium rates for each benefit were
reviewed and questioned.
With the exception of the three option proposal for treat-
ment of alcoholism (only option d was approved), all proposed
benefit changes affecting the administration of anesthetic,
services of a psychiatric social worker, services of an occupa-
tional therapist, services of licensed practical nurses, and
treatment of accidental injury to the jaw or teeth, were
unamiously approved by the Board of Directors. The alcohol
treatment proposals drew the most discussion, generating a
number of questions on present coverage, Agency statistics, and
alternative coverages. I lrecalled how previous 25X1
Boards had also reviewed is type o benefit but had not
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approved changes because of the steep cost and the high level
of inpatient hospitalization care available and covered by
our plan. He also explained that in the past, certain expensive
benefits such as maternity coverage, were approved in increments
to preclude the plan from absorbing large premium increases at
one time. Consequently, the Board agreed to recommend coverage
for acute alcohol outpatient aftercare programs associated with
alcoholic treatment programs. The Plan's experience and need
for increased levels of coverage will be reviewed during each
of the next few contract years.
I I introduced the second order of business by
:remin ing e Boar of the question they raised at the initial
meeting concerning individual Board of Director's legal liability.
At that meeting, asked legal advisor
o prepare a paper in response to this question an to
25X1
brie t e Board at a future meeting. Although Gary was unable
to attend the 24 April meeting, OGC) did attend 25X1
and he provided the Board with a briefing on his findings to
date. In summary, ladvised the Board they are held to
a fiduciary duty of care in their various Board activities; that
members must safeguard the collected monies, hold adequate
reserves, insure that the Insurance Branch and Underwriter pro-
cess claims in an orderly and responsible manner, and maintain
a reasonable standard of care. He explained that the standard
judicial formulation of a reasonable standard of care is con-
sidered to be what a reasonable, prudent person would do under
similar circumstances with his or her own money or affairs with
the information that is reasonably available to them at the time
a decision was made. This generated discussion by members on
bonding, personal liability, insurances, investment guarantees,
and the government or corporate status of GEHA. also 25X1
confirmed that he would submit a paper on Board member respon-
sibility to the Board in the near future. wrappec125X1
this discussion up by recommending that after members have read
the minutes and Bob's paper, other questions might occur and
additional discussions can be held. I Iraised the 25X1
question and there was a brief discussion of the recent hospital-
ization of a senior employee. This centered on questions
pertaining to post-stroke intensive therapy and custodial or
maintenance care. addressed these issues, explain-
ing the differences between cus odial care and treatment for
.illness or injury.
advised the Board that a number of people
in his Directorate have talked with him regarding present
insurance coverages and proposals for new coverages. Among the
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recommendations he has received are benefits for dental care,
eye glasses, physical examination, and special cancer coverage.
spoke to each of these recommendations and provided
the Board with information on past board deliberations on these
issues. He also made clear that the Plan could offer a wide
variety of special benefits but that the dollar cost associated
with these and the current restrictive mood of the office of
Personnel Management on expanded benefits would impact heavily
on such proposals. Further discussions ensued over GEHA's
insurance philosophy, the need for expanded coverages, and the
availability of other coverage through the private sector.
I requested that the Insurance Branch provide mem-
bers wi tne most recent breakdown of our Plan's hospitaliza-
tion benefit payout.
There was no further business and
the meeting at 11:10 a.m.
adjourned 25X1
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PROPOSED BENEFIT C aES FOR THE ASSOCIATION BENEFIT PLAN FOR 1980 BIWEEKLY COST TO POLICYHu._R
-1 1
(BENEFIT PROPOSALS MUST BE SUBMITTED TO THE OFFICE OF PERSONNEL MANAGEMENT BY APRIL 30, 1979)1 1
SELF ONLY SELF & FAMILY REMARKS
BASIC BENEFITS (pg. 10) 1. For administration of anesthetic the Plan pays up to
$50 or 30% of the amount payable for the operation
performed, whichever is greater.
BASIC BENEFITS 2. Plan pays for the treatment of alcoholism in accred-
ited hospitals as a basic benefit and for inpatient
and outpatient charges of medical doctors, licensed
clinical psychologists and prescription medicines
under major medical benefits.
PROPOSED: Provide coverage for state licensed
alcoholic treatment centers:
a) 30 days per lifetime or ...
$.24
$.62
b) $2,500 maximum per treatment (limit two treat-
ments per lifetime) or ...
i $.37
$.93
c) $2,500 maximum per treatment (limit three treat-
ments per lifetime) or ...
$.41
$1.02
d) As a MAJOR MEDICAL benefit, provide coverage of
up to $150 for acute alcohol outpatient after-
care programs associated with alcoholic treat-
ment programs (limit two per lifetime).
$.02
MAJOR MEDICAL (pg. 13) 3.
MAJOR MEDICAL BENEFITS (pg. 12) 4.
Plan pays for the services of a psychiatric social
worker under the direct supervision of a psychiatrist
and limited to 30 visits per person per calendar year.
PROPOSED: Increase number of visits from 30 to
unlimited.
therapist for administration of physical therapy in
accordance with a doctors specific instructions as
to type, frequency and duration.
Plan pays for services of a registered physical
 CONFIDENTIAL
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
17 July 1979
(4th Meeting 1979)
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 17 July 1979
at 10:30 a.m. in Room 6E-13 Headquarters. Those present were:
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Officers
President
Secretary
Advisor
edical Advisor
Benefits & Services Division
ng Secretary
istant Secretary
25X1 Chairman opened the meeting by advising the
Board that t e or er orbusiness would be the discussion and
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approval of premium rates for the Association Benefit Plan (ABP)
for the 1980 contract year. He then turned the meeting over to
or a discussion of the proposed rates. 0
dvised the Board that he, GEHA Officers and
members of the Insurance Branch had recently met with representa-
tives of Mutual of Omaha to review projections of ABP premiums for
1980. He explained that the underwriter is not totally unilateral
in the approach to benefit rate determinations and that they are
subject to price guidelines issued by the Office of Personnel
Management (OPM). He explained that to determine the claims
experience for 1979 and to project ahead for 1980, the underwriter
uses the first five months actual claims experience in 1979 and
that based on these expenses they project the remaining seven
months claims experience. This determines the total claims ex-
penses for 1979 and provides a base for an actuarial projection of
experience for 1980. As a result of this process, the underwriter
estimates subscriptions and interest of $16,966,000 and incurred
claims and expenses of $15,284,000 for 1979. This projects a
positive difference of $1,682,000 for the year. However, by a
formula provided by OPM, the underwriter is expected to maintain
a balance of five months average claims experience or approximately
$6,600,000. Toward this goal they expect to have on hand at year's
end only a $4,222,000 reserve. Even after this reserve is added
to the $1,682,000 residue for 1979, their five month claims
balance is less than required. Consequently, this short fall, the
expected rate of inflation and actuarial projections of health
insurance experience in 1980 result in a loss of $339,000 and the
requirement for a premium rate increase for 1980. This projected
premium increase for 1980 is necessary in spite of a projected
$358,000 payment to the underwriter from the OPM contingency
reserve. As projected, the policyholder's biweekly portion of the
Association Benefit Plan health insurance premium will increase
approximately $.66 (12%) for Self-Only and $2.25 (11%) for Self-
and-Family. 0
explained that the projected biweekly premium
increase is based on an expected increase in the Government's
contribution for 1980 of 8%. In 1979 the Government's biweekly
contribution was $11.39 for Self-Only and $27.52 for Self-and-
Family. Therefore, with the expectation of an 8% increase for
1980, the Government contribution is expected to be $12.30 and
$29.72 respectively.
0
After a number of questions and discussions regarding the
underwriter and OPM reserves, formulas, claims experience and
premiums, alerted the Board to the potential for a
counter proposal to OPM which could significantly reduce an ABP
premium increase for 1980. He pointed out the large ABP premium
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increase experienced in 1979 and recommended that the Board con-
sider ameliorating the impact of an increase on our subscribers
for 1980. To effect this he further recommended
that
considera-
tion be given to requesting a larger payment from
the
OPM
contingency reserve fund. However, he requested
the
Board
exercise caution when requesting additional funds
so
that the
reserve remains strong and our ability to call on
it
in future
years not be jeopardized.
I advised the Board that after discussion with the
underwriter and his staff, he recommended they consider requesting
an increase in the 1980 contingency reserve payment from $358,000
to $749,000. Although the approval of this amount would not com-
pletely eliminate the premium increase for 1980, it would reduce
the biweekly premium increase to approximately $.22 (4%) for Self-
Only and $1.00 (5%) for Self-and-Family. This projection is based
on the expected increase in the Government contribution of 8%.
There followed discussion on inflation, the impact of the
contingency reserve payment on the Plan's 1981 experience and the
potential depletion of the reserve. advised that the
reserve is automatically replenished by a portion of the premium
payments each year and that for 1979 this amount is expected to
be in excess of $400,000. He projected the ABP contingency
reserve to grow to $2,400,000 by 31 December 1979. 1
Members of the Board asked for a recap of the previously
discussed figures and the projection of rates for 1980. The Board
accepted the financial analysis of the underwriters and their
conclusion as to the amount of additional income required.
then answered several questions regarding benefits,
interest accumulation, and future costs and rate comparisons
between two other large Federal Employee Health Benefit Plans. E
Following this discussion oved that the
Board approve the recommendation to request an increase in the
1980 contingency reserve payment to the Association Benefit Plan
from $358,000 to $749,000. seconded the motion, which
was unanimously approved.
There was no further business and the meeting was adjourned
25X1-- at Ill: 10 a.m.
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
24 October 1979
(6th Meeting 1979)
A special meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on
24 October 1979 at 2:00 p.m. in Room 5E-62 Headquarters.
Those present were:
G Chairman
President
~rer
Secretary
1 Advisor
edical Advisor
ance Branch
D
(C)
Director
Chairman convened the special meeting
at 2:00 p.m. in icating the primary order of business was to
have Mr. John B. Hurford, Director and Vice President of BEA
Associates, Inc., brief Board of Director members on the BEA
history and organization and to review the GEHA investment
portfolio.
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At this point the meeting was turned over to
Mr. Hurford. Mr. Hurford advised the Board that BEA was
founded in the 1930's by Dr. Julian Gumperz, an economist,
and that today BEA is one of the oldest existing management
firms with more than $1.6 billion in assets and 45 employ-
ees. Mr. Hurford said that roughly one half of BEA assets
are invested in common stocks while the other half repre-
sents fixed income investments. He confirmed for Board
members that the GEHA mix of invested assets is approxi-
mately 80 percent fixed income and 20 percent common stocks.
There followed discussions on the stock market and several
general questions concerning the proper mix of stocks and
fixed income for a portfolio the size of GEHA. Mr. Hurford
indicated that he thought our 20 percent stock portfolio
had done very well over the past two years.
specifically asked Mr. Hurford if, in light of current
economic setbacks, the GEHA objective of a 10 percent per
annum return was realistic and if our 80/20 percent mix
was appropriate. Mr. Hurford responded that an expecta-
tion of a ten percent return was not out of line.
Mr. Johnson asked about the effectiveness or risk of
raising the mix of the GEHA portfolio from 20 percent
stock acquisition to perhaps 25 or 30 percent. Mr. Hurford
responded that stocks will likely become more and more
attractive in the near term and they will also provide
greater protection against inflation. Therefore the board
may wish to consider increasing the mix up to 30 percent
but. he warned against a higher percentage of stock pur-
chases at this time. He further stated that the equity
market may soon drop and this would represent an opportunity
for considering purchase of up to 25 percent convertible
bonds. Mr. Hurford said such action could still provide
safety of investment and potential for a good return.
However, at this time, the Board did not elect to change
the 80/20 percent mix of fixed income and stock purchases.
Mr. Hurford conducted a review of past and recent
GEHA investment returns and answered questions. There was
also discussion of fees. Mr. Hurford confirmed that as
originally agreed upon in 1976, management fees have
remained at one percent on the first $5 million of GEHA
assets at market value. The fee is .75 percent on the
second $5 million of assets at market value and .50 percent
on amounts over $10 million. These fees are paid quarterly.
Mr. Hurford advised the Board that the GEHA portfolio had
a market value of approximately $3.8 million as of
September 28, 1979.
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The remainder of the meeting was filled with an
interesting question and answer period between Board
members and Mr. Hurford. Topics such as personal con-
sumption and consumer cycles, two wage earner families,
dividends and interest, and inflation and recession were
discussed. Mr. Johnson concluded the questioning by
asking how much time Mr. Hurford could provide a
relatively small account such as GEHA. Mr. Hurford
explained that he considered the GEHA account a personal
and valued account and that because of the clearly
defined investment guidelines provided by the GEHA Board
of Directors he could act in the best interests of the
account with little or no difficulty.
There was no further business and the meeting was
adjourned. at 3:00 p.m.
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
6 September 1979
(5th Meeting 1979)
A special meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 6 September
1979 at 3:30 p.m. in Room 5E-62 Headquarters. Those present
were:
Directors
nt
ce President
asurer
Assistant Secretary
surance Branch
nce Branch
rding Secretary
Bruce T. Johnson, Director
rector
rector
I, Officer
Medical Advisor
Chairmani convened the meeting at 3:30 p.m.
indicating the primary or er of business was to review the
current objectives of GEHA's investment portfolio. Before
R1";--UA'3EN'3E SOURCES
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discussing this issue, to pro- 25X1
vide the Board with a status o the Association ene i Plan's
(ABP) premium rates for 1980. reported that the 25X1
Office of Personnel Management (OPM) had approved the Board's
1980 benefits changes, as well as the release of $750,000 from
GEHA's contingency reserve being held by OPM. He also reaffirmed
that, by all indications thus far, the Government's contribution
to Federal Employees Health Benefit premiums would be at least
ten percent for 1980, and stated that the 1980 ABP premium rates
for employees would not increase significantly.
Following BP status report,
returned to the primary discussion at hand, prove ing a brier
history of GEHA's previous investment policy; the reasons for
turning the portfolio over to professional management; and the
Board's current policy regarding investment objectives with BEA.
This generated discussions by members in which asked
several questions regarding taxes, the origins of the invest-
ment monies, and if the fund would be growing in perpetuity.
rovided answers to all questions and ex-
plained the nee to retain the reserve in order to fund the
current UBLIC retiree program. He touched on the OGC opinion
on Board liability sent to all Members which indicated that
Board Members as long as they acted prudently in discharging
their fiduciary responsibility were not personally liable. He
also stated that a comprehensive review to further improve the
UBLIC program in terms of greater benefits and lower premiums
was being undertaken which in time would return the reserve to
UBLIC policyholders. hen asked if a comparative
chart would be made available to Board members.
indicated that one probably could be obtained comparing UBLIC,
WAEPA and FEGLI.
After discussions in whichi asked about the
performance of BEA over the three year period BEA has managed
the GEHA account and the make up of the different components
of the account, related to the Board the exhaus-
tive search to o ain e services of Mr. John Hurford, Vice
President of BEA and suggested that the Board may wish to meet
him. It was decided that I Iwould contact Mr. Hurford
and have him visit the Board as soon as practicable to discuss
the management of the account indepth.
Following a discussion of a number of topics regarding BEA
which included a review of the qualifications of BEA, the
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mechanics of the annual review of the BEA account by the Agency's
Audit Staff, and how the Credit Union handles its investments
xplaining), it was the Board's concensus to
reaffirm the existing investment objectives.
Having no further business, the meeting was adjourned at
4:10 p.m.
Secretary
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
25 March 1980
(1st Meeting 1900)
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 25 March
1980 at 9:30 a.m. in Room 5E-62 Headquarters. Those present
were:
Chairman
Mr. Charles A. Briggs
t
President
Treasurer
cretary
Assistant Secretary
cal Advisor
visor
visor
ing Secretary
Chairman opened the meeting at 0930
hours with the e-ecrion or ,_HA Officers for 1980 as the
first order of business. The following slate of GEHA Offi-
cers and Advisors was proposed, moved upon for election,
seconded and the motion unanimously passed:
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WARNING NOTICE
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AD D METHODS INVOLVED
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PRESIDENT - Mr.
TREASURER - Mr.
SECRETARY - Mr.
ASST. SECRETARY
ASST. SECRETARY
ASST. SECRETARY
CASHIERS - Mrs.
CASHIERS - Mrs.
MEDICAL ADVISOR
LEGAL ADVISOR -
The next item of business, a discussion of the Associa-
tion Benefit Plan benefits proposals for 1981, was introduced
by the Chairman. He then turned the meeting over to
to lead the Board through each of the proposals.
After some discussion, it was decided to look at each pro-
posal, voice a position and then take a look at the whole
package.
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MI began by reminding the Board that this
benefits meeting was the first of two important meetings
dealing with the health benefits contract. He explained
that today's meeting was to discuss benefit proposals,
and the second will be to discuss premium rates. He pointed
out that the ABP benefits and premium rate proposals are
due to OPM by 30 April and 31 July, respectively. He also
indicated that we have only a few months of claims experi-
ence to date; therefore, we have no way of knowing if a
rate increase may be required by the Underwriter when they
analyze the claims experience after the first five months
of the contract year. went on to say that 25X1
claims experience for January an ebruary, however, is
running only slightly ahead of last year; and, if this
trend continues, we should expect only a modest increase,
which may be absorbed.
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The Board was also advised byl that OPM's
letter dealing with benefits proposals is always restric-
tive in its guidance and contains their typical languarige,
e.g., "For 1981 we will consider proposals for perfecting
changes that are intended to remedy inequitable situations
and resulting in no or only minimal cost." He went on to
say OPM generally will not accept dramatic changes in
benefits which are costly; they always urge cost contain-
ment measures; and that OPM asks all Plans to review their
deductible in terms of an increase as a means to offset
rising health care costs and benefits increases.
outlined that the GEHA staff, within the
spirit of the call-up letter, has identified and recommended
some modest improvements to the Plan. He also mentioned
the proposed dental and alcoholism changes which, due to
their high cost and limited benefits, are not recommended.
Each of the proposed benefits changes was discussed in
detail, and where applicable, compared them
to the existing benefits. He also reviewed the correspond-
ing biweekly cost figures provided by Mutual's actuarial
staff. The attached chart reflects the existing 1980 ABP
benefits, the benefits proposals for 1981 and the projected
biweekly premium charge for each benefit.
After thoroughly discussing each of the 1981 benefits
proposal changes it was the decision of the Board, with
the exception of labstaining vote, to approve
items 1 through 6 of the attached chart.
raised the point that there would be some merif in n
approving the proposed increase in the anesthesia benefits
in order to keep ABP increases as small as possible.
The discussion then moved to Item 7 (a-f), and prima-
rily focused on 7 (a) -- increase the ABP deductible from
$100 to $150 -- and proposal 7 (c) -- increase the deductible
from $100 to $200, with the remaining expenses payable at 85%.
It was the consensus of the Board to continue with the $100
deductible for 1981, but if there is a substantial increase
in premiums, it may be necessary to increase the deductible
for 1982. It was also agreed that if increasing the deduct-
ible were to become a real possibility, an educational
campaign should be developed to prepare ABP participants
for this anticipated change.
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Dental proposals, Item 8 (a) and (b). were ntnxt discussed,
but received no support from the Board. then 25X1
asked if any member of the Board would like to a ress the
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improved alcoholic coverage. Both and
I I reaffirmed ear ier position
a the alcoholic proposa is very expensive, provides
limited benefits and would serve only a few participants.
hen polled the official view of the Board
regarding e dental and alcoholic proposals, and it was
unanimously agreed not to include these benefits for the
1981 ABP contract. This concluded the scheduled business
of the Board.
then asked if there were a uled
business. I Iresponded by introducing las
his successor as GEHA's legal advisor and sta e a e
would be transferring to the Department of Justice.
Further discussions ensued, focusing on the need for
policyholders to question bills submitted by doctors; the
illegibility of claim form carbon copies; and the complex-
ity of the claim form itself. As a final item,
reminded the Board of the early summer meet-
ing to discuss rate increases, if any, and also pointed
out that the GEHA staff is working on a complete review
of the UBLIC plan and would be coming to the Board with
some exciting revisions.
Having no further business,
the meeting at 10:15 a.m.
adjourned
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
16 June 1980
(2nd Meeting 1980)
A special meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 16 June
1980 at 10:00 a.m. in Room 5E62 Headquarters. Those present
were:
Mr. Charles A. Briggs
nt
e President
:, Treasurer
secretary
ical Advisor
Advisor (Alternate)
'ding Secretary
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Chairman I lopened the meeting at 1000
hours, introducing the proposed changes to UBLIC as the
first item of business. The meeting was then turned over
to President who was asked to conduct the
began his presentation with a series of
overhead viewgraphs which reflected the present and pro-
posed UBLIC benefit and rate structures. He discussed
raising the benefit limit from $36,000 to $50,000, mention-
ing within the next year or two that, perhaps, the benefit
levels could be raised even higher. I hen
presented a number of viewgraphs which showed the Board
the Plan change proposals in incremental steps ranging
from the $5,000 to the $50,000 benefit levels with the re-
ductions associated with each level. He also proposed
raising the dependent coverage, at no cost to the policy-
holders, to age 22.
There was considerable discussion generated by all of
the Board members regarding the methodology used to arrive
at the rate differences between age groups. The main thrust
of these centered on the older age groups receiving less of
a reduction than the younger age groups. ex-
plained to the Board that the actuarial studies performed
by the Underwriter indicated a need to attract a larger
number of Agency employees in the younger ages. It was the
Underwriter's recommendation that the Plan should strive to
attract a better mix of participants. He went on to say that
eighty percent of UBLIC enrollees are in the 40 and above age
group; and of this grouping, over forty percent are age 50
and above. There were further questions which focused on the
differences between the WAEPA and UBLIC Plans in terms of age
mix, rates and differences in UBLIC's level benefit structure
vs. WAEPA's decreasing term benefit structure.
provided detailed answers to all these questions.
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concluded his UBLIC presentation, at which
time Mr. Briggs moved to accept, indicating that "its purpose
is laudatory and its statistics sound reasonable." The chair-
man asked for a second motion which was provided by 25X1
The motion was then unanimously passed to accept the increase
benefit level of $50,000 with the reduction in rates at all
levels and increased the dependent coverage to age 22.
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Following this motion, briefly discussed 25X1
the UBLIC promotional campaign. He a vised the Board that
it will consist of an Agency-wide announcement, 25X1
Headquarters Notice and a new brochure. en 25X1
raised a point regarding Board interaction prior to under-
taking studies of insurance Programs which have a major
impact. I also noted that the Board should
play a role in deciding the philosophy which should drive
the undertaking. It was agreed that the Board should be
offered options where appropriate to the subject. 25X1
suggested also that Board members should feel free to sugges
items which should be examined or explored.
The Board was then reminded by of the
meeting with the underwriters on 16 July to discuss the ABP's
rates and the subsequent 18 July meeting of the Board to
approve the proposed rate to OPM for 1981.
The meeting was ajourned at 10:45 a.m.
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
18 July 1980
(3rd Meeting 1980)
A regular meeting of the Government Employees Health
Association, Inc., Board of Directors, was held on 18 July
1980 at 10:00 a.m. in Room 5E62 Headquarters. Those present
were:
Mr. Charles A. Briggs
President
Treasurer
pretary
al Advisor
dvisor
Chairman opened the meeting by advising
the Board that the irst order of business would be the
discussion and approval of premium rates for the Association
Benefit Plan (ABP) for the 1981 contract year. He then
turned the meeting over to for a discussion of
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first provided background on the role of
Office of Personnel Management (OPM) in the rate setting
process as administrator of the Federal Employees Health
Benefits Pro ram and how the contingency reserve is established.
then advised the Board that GEHA officers and
members o t e Insurance Branch had recently met with representa-
tives of Mutual of Omaha to review projections of ABP premiums.
He explained that the projections are based on 4 1/2 months of
experience and are projected based on OPM formulas. He then
pointed out the Plan's projected ending special reserve held
by the Underwriter would be $2,841,00, also
pointed out the calculated rate increase would result in a
planned operating loss which would be expected to draw down the
Underwriter's special reserve to $2,106,000. Since it is hard
to predict the loss estimate, the Underwriter suggested a modest
increase in subscription resulting in a total income need of
$17,542,000. This amount represents a 7 per cent increase in
total. premiums over last year. A factor in the rate proposal
this year is OPM's request for parity in self and family rates.
I lexplained that parity could be obtained in a single
year wit considerable impact on the Plan's self enrollment rate,
or could be achieved over three years with minimal impact.
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also suggested a contingency release from OPM reserves. Last
year the OPM contingency reserve release was $750,000, and
included in the options for this year were rate proposals based
on a range of an OPM contingency reserve release from zero to
$750,000.
indicated that we might expect a 10 per cent
increase in the government contribution, but that the increase
could go as high as 12 or 15 per cent.
There was some discussion at this point as to how the
various percentage increases tie into the overall increase
and how the government contribution percentage is established.
The discussion then focused on what would be a reasonable
OPM contingency reserve release and its impact on the overall
rates. Based on this discussion, the Board voted
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on requesting from OPM a $500,000 contingency release. The
motion passed with two members opposed. These two members
preferred the $400,000 release as being more salable to OPM.
The Board then voted on and unanimously approved the
partial rate distribution proposal.
then indicated the next item on the agenda
was tn.e ee=zective date of the UBLIC changes. 25X1
addressed the Board and explained that it would be possible
to make the new rates effective the first pay period in
August for existing UBLIC participants. He explained,
however, that the brochure explaining the new coverage would
not be available until September, and there was some discus-
sion as to how present members would move to higher levels
of covera e. then requested a motion, and
proposec August as the effective date for the
UBLIC changes. The motion was passed unanimously.
The Board moved on to the last item on the agenda--new
levels of Income Replacement coverage. After a short discus-
sion, the Board approved the addition of 600, 800, and 1,000
dollar monthly benefit levels of coverage to be effective the
first pay period possible. The Board also approved publish-
ing an announcement on Income Replacement.
I Ithen reported that the GEHA annual audit
had been completed, indicating some difficulty with he EA
investment philosophy.
is examining comments made in the audit, and that this would
be addressed in a future Board meeting. There being no
further business, the meeting was ajourned at 11:15 a.m.
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
5 November 1980
(4th Meeting 1980)
A regular meeting of the Government Employees Health Association,
Inc., Board of Directors, was held on 5 November 1980 at 2:00 p.m. in
Room 5E-62 Headquarters. Those present were:
Directors
Chairman
Mr. Charles Briggs
dent
ice President
Treasurer
Secretary
ording Secretary
Chairman o ened the meeting at 1400 hours with nominations
for the Board o Directors. requested three candidates from
each Directorate and two from t e DCI area. All nominations are to be
supplied to by telephone by the end of the week so ballots
can be prin proceedings for the elections can begin.
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A discussion followed in which asked what were the terms of 25X1
reference for new Board Member can i a es. [pointed out 25X1
that since the GEHA programs affect the lives o thous an s of employees and
retirees, it is necessary to have senior people who can bring. to the Board
those abilities, experience, and judgments necessary in managing comprehensive
insurance programs involving many millions of dollars. 25X1
h
as
also interjected that GEHA is a business enterprise and a e oa
a clear responsibility to nominate individuals capable of carrying out
these fiduciary responsibilities.
The first item of business, discussion of the BEA portfolio was
introduced by the Chairman. He then turned the meetin over t
first point was to stress the importance o looking or people wi a goo
investment background in selecting new members for the GEHA Board. She
felt this type of expertise would be necessary in order to make competent
judgments regarding investments. Therefore. the sub-committee in their
review of BEA, made arrangements to have review
the entire BEA portfolio since they possessed the expertise, coy e ence
and objectivity necessary in completing the study. observed
that while there were some difference of opinion between the two men, they
had come to a remarkable agreement on a couple of items. The meeting was then
2 5X.w, turned over to agreed with the points made by
In addition, he stressed that the sub-committee had recommended a more
detailed and lengthy examination of the BEA portfolio since none of the
committee felt qualified to really conduct an in-depth analysis of the
different investment alternatives. He went on to say that the committee
felt that a response was due the auditors even if it was an interim report
acknowledging that the auditors had made some good points and that the Board
was looking into those points.
In summing up the committee's report, ade the final point that
the group observed that the general investment objective for GEHA is one
that maximizes the gain without sacrificing to any measurable extent the
security of the portfolio. To that end, it seemed logical to take a long,
hard :Look at some alternatives such as a money market fund or something
like that in the mode of the VIP, for example. The committee concluded
that they could not recommend any particular investment alternative nor
recommend the dismissal of BEA as GEHA's portfolio manager at this time.
A discussion followed in which agreed that a response
was due the auditors outlining that further study of the investment portfolio
is underway. Mr. Briggs commented that he understood that it was the Audit
Staff's desire to bring the investment portfolio to the attention of the
Board, and what they specifically want as a result is only consideration
of it by the Board. He went on to say that if the Board, in its deliberation,
concludes that the existing setup is the best one, that is a totally satis-
factory answer as far as the Audit Staff is concerned.
CCNFI ENIIA L
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hen suggested that a standing investment committee be
appointed ant at the Board authorize the chairman to hire someone like
I out of GEHA funds to conduct an indepth analysis of BEA's
per ormance to also include the Board's objectives. In addition, a report
at least semi-annually or even annually from the chairman of that committee
should be made which will become a part of GEHA's structure and will be
there for all to see.
It was the consensus of the Board that I Iwould contact
to see if he is available as a consultant to the Board or if
not interested see if has suggestions of people that might
be compotent and capable of advising the Board for the purpose of conducting
a 30-or-60-day study between now and the taking of office of the new Board.
then asked if there were any other items for discussion.
questioned whether the Plan would cover weight reduction which
was prescribed by a physician. esponded that treatment
for obesity is specifically excluded from ene its under the terms of the
contract.and, therefore, not payable.
I as concerned with the catastrophic protection that the
Plan provides beyond the 365 days for a semi-private room. In addition,
she was concerned with a program that offered insurance coverage for
dependent s u on reaching age 22 with low premiums and good coverage.
is tasked to explore both areas and report to the Board.
There was no further business, and the meeting adjourned at 2:50 p.m.
N I L
CONFIDE
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
20 March 1981
(1st Meeting 1981)
A regular meeting of the Government Employees Health Association,
Inc., Board of Directors, was held on 20 March 1981, at 2:00 p.m. in
Room 5E-62 Headquarters. Those present were:
Directors
Mr. ruce Johnson
Mr. Charles Briggs
it
sident
Treasurer
cretary
1 Advisor
visor
ce Branch
ing Secretary
The President called the meeting to order. The first order of
business was to invite a nomination for election of the chairman of
the GEHA Board of Directors.
the current Chairman, to continue as airman. Mr. Briggs seconded
the nomination, and was unanimously elected.
WARNt NOTICE
1NTEuJGENCE SOURCES
AND METHODS INVOLVED
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The meeting was turned over to and the following slate
of GEHA Officers and Advisors was proposed, ed upon for election,
seconded, and the motion unanimously passed:
President
Vice President
Treasurer
Secretary
Assistant Secretary
Assistant Secretary
Assistant Secretary
Cashiers
Cashiers
Medical Advisor
Legal Advisor
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After welcomi (Medical Advisor), (Legal Advisor), 25X1
and anew Boar Member) to the Boar 25X1
intro(uce the nex item of business, a discussion o t e sociation
Benefit Plan's pro posed benefits changes for 1982. He then turned the
meeting over to o lead the Board through each of the proposed
changes.
P6-00964R000100050001-1
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began by noting that usually a call-up letter is
triggered rom t e Office of Personnel Management that lays out the
guidance for the coming year's proposals. However, this year's call-up
letter had not been received, and he felt proceedings could not wait.
He explained that normally the call-up letter would provide guidance to
the Plan to limit their changes to what is historically referred to as
perfecting changes. He advised the Board that generally OPM would not
accept dramatic changes in benefits which are expensive, but that they
would approve benefit changes that would seem to make sense in light of
our program versus other government programs.
then focused on the specific benefit suggestions for
1982 noting that, in the absence of recommendations by the Board, the
GEHA officers have prepared some items which can be recommended, some
with a little reservation, and some that should be deferred totally to
the Board in the context of discussion.
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The first two items, adding the services of a Psychiatric Nurse
and payment for testicular rosthesis as a Major Medical Benefit, were
recommended b since there were no charges associated
with this bene it, and ey represented perfecting changes to the Plan.
The Board unanimously agreed to add these items as benefits for 1982.
then moved on to items three and four--chemotherapy coverage
anu coverage of a Podiatrist under the Plan's Basic Benefits. After
some discussion the Board unanimously approved these benefit additions
since they were modest in cost and would bring the Plan-up to par with
the Blue Cross/Blue Shield employee plan.
Before continuing further to the next items, asked if the 25X1
benefits were not changed at all what would be t e expectation in terms
of an increase in premiums. explained that the Board would
have to await first the analysis y e underwriter in May and then ultimately
the 0PM's review of all plans in July, August, and September. He added that
in March the Board. is dealing in a vacuum because they don't know what the
Underwriter's determination will be in May. Pondered if their 25X1
determinations were construed as being a bit c eapis last year. 25X1
explained that it was difficult to determine the impact of benefit increases
on the premium without knowing the May or June experience or the government
contribution. Pondered if there was any indication from the
submission of c aims t is year as to how the experience would look to the
Underwriter. interposed that Mutual has informed the Plan
that based on two mom s t ere doesn't appear to be ananomalies, but it
was much too soon to talk about trends. advice was to look 25X1
at the total, the proposed cost of the benefits, ze impact on the total
membership, and then do what was prudent.
then moved on to the next item, dental care, indicating
that his speci -ic recommendation was to defer this year. However, if
the Board felt something is needed, his recommendation was to enter it
gradually adding a new area of dental care each year.
The Board members considered different aspects of the dental coverage
in their discussion. II questioned the impact on the cost if the
dental coverage would not e treated as a Major Medical provision.
felt that the cost would soar. Mr. Johnson's thoughts were that the general
philosophic thrust was to provide insurance against catastrophic occurrence
which does not apply to the proposed dental benefits. It was suggested that
a change in he basic philosophy to encourage preventiveness may be necessary.
was not repared to make this change based on the discussion
us :ar. suggested that the Board might want to discuss an
increase in the deductible in conjunction with the dental proposals. He
explained that an increase of the deductible to $150 would result in a
premium reduction of 62 cents which could offset the cost of some dental
coverage. It was a concern that the increase in the deductible was too high.
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Further discussion on this continued later in the meeting. 25X1
summarized that the sense of the Board was to make an entry into the dental
field if an area can be found. which would give them some benefit against the
occasional catastrophic loss that people might suffer. Therefore, the Board
would defer their decision on dental care until further research could be
provided outlining major dental procedures that would represent catastrophic
coverage as a Major Medical Benefit. This information would be provided
to the Board members, and further discussions would continue by telephone
or by a short meeting.
The next item for discussion concerned the increased coverage for
alcoholism. It was agreed that while alcoholism is a problem in the
Agency, the problem is in getting the people to admit themselves for
treatment, not in having enough insurance coverage to pay for the treatment.
Therefore, the Board decided not to increase the benefits for alcoholism
coverage.
The last item of business was a discussion led by
concerning GEITA's investments. It was concluded that an investmen
committee would be appointed to consis and Messrs.
joined by e committee would meet
wit and, in advance, decide what ould look
at, i.e. investment objectives, return, yield, por o to management, etc.
would then prepare a e port for the investment committee who,
in turn would advise the Board. volunteered to contact
and be the focal point to provide with the necessary
investment data and discuss an estimate of how long it will take, as well
as, determine what would be a fair price for his services.
Having no further discussion,
at 2:50 p.m.
adjourned the meeting
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
20 April 1981
(2nd Meeting 1981)
A regular meeting of the Government Employees Health Association,
Inc. Board of Directors, was held on 20 April 1981, at 9:00 a.m. in
Room 5E-56 Headquarters. Those present were:
Directors
Mr. Charles Briggs
r. Brace o son
[ent
resident
Treasurer
Secretary
~rding Secretary
WARNING NOTICE
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AND METHODS INVOLVED
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The Chairman, called the meeting to order and before
going to the business at hand, announced that Mr. Iuld be
resigning from the Board effective 29 April 1981. then
opened the meeting to a discussion of proposed den-fa--I ene its to be
included in the Association Benefit Plan's benefits submissions for 1982
and turned the meeting over to to lead the discussion.
I egan by reading significant portions of the Office of
Personnel agement's call letter, focusing on OPM's stated interests of
Hospice Care, Dental Care, and comments from the Plan on having a biannual
vs an annual health benefits open enrollment period.
Discussion then followed to determine which of the several dental
benefits the Board had asked the GEHA Staff to have costed out during the
20 March 1981 meeting to include in our 1982 benefit proposal to OPM.
Several issues were brought up to include favoring of one class of policy-
holder vs another (i.e., dentures for older people and orthodontics for
families with children); Board philosophy on catastropic protection vs total
protection; and impact of costs vs benefits added. After a lengthy discussion,
the Board unanimously decided to propose the addition of certain specified
dental surgical procedures as a Major Medical Benefit subject to the 20%
co-insurance and adopt the addition of the "free" Hospice Care Benefit.
I ext discussed the changing of the health benefits open
seas t OPM's point of view is totally management oriented and
not the employee's. He related the concern that an employee can get locked
into a plan for two years despite extreme changes in premiums and benefits
and others who could be denied benefits for up to two years before being
permitted to sign up again. I lasked for and unanimously received
the Board's agreement to indicate to OPM our Plan's opposition to a change
in the annual health benefits open enrollment period.
As a final item of business, gave a status
report on engaging the service e investment
program. It was reported tha iad agreed to take on this task for
a fee of $2,000 and would deliver his final report by mid-May. The Board
unanimously approved the commitment of GEHA's funds up to $2,000 for
review of the investment portfolio. With no further business, the meeting
was adjourned at 9:30 a.m.
25X1
25X1
25X1
25X1
tin
Approved For Rele
" Y
A DP86-00964R000100050001-1
hn,
 25X1 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
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 Approved For R 1?e TIRILA-RDP86-00964R000100050001-1
GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
21 July 1981
(3rd Meeting 1981)
A regular meeting of the Government Employees Health Association,
Inc., Board of Directors, was held on 21 July 1981 at 10:30 a.m. in
Room 5E62 Headquarters. Those present were:
Directors
Mr. Charles Briggs
Mr. Bruce o son
t
Treasurer
cretary
t Secretary
L1 Advisor
visor
Chief/Benefits Service Division
of Omaha
ling Secretary
Chairman
welcoming
ment for
called the meeting to order and after
to the Board of Directors as the replace-
introduced the next item of business, the
discussion and approva o premium rates for the Association Benefit
Plan for the 1982 contract year. He then turned the meeting over
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GOfFJ s
 - -, ~/U'5
Approved For Release 2001I D
for a discussion of the proposed rates.
I advised the Board that we had submitted our proposed
bent i s to e ffice of Personnel Management and were now in the
second cycle of the process dealing with rates to be charged for those
benefits. He also advised that GEHA officers and members of the
Insurance Branch had recently met with representatives from Mutual
of Omaha to review projections of ABP premium rates. He introduced
Mr. Bill Holt, Vice President for Mutual's Actuarial Department, who
had been instrumental in preparing our rate proposal for 1982.
Utilizing overhead viewgraphs, presented back-
ground information and statistical data leading to proposed ABP rates
for :1982. He explained to the Board that Mutual had reviewed actual
claims through June 1981 to update their original 1981 projections.
This has resulted in a revised 1980 estimate of claims exceeding
$19 million versus the original projection of $17 million for 1981.
xplained the higher projection results from inflation
and :increase utilization at a higher rate than originally anticipated.
lso explained that. in making the 1981 projections, the
Underwriter was forced to use an arbitrary inflation rate of 12 to 13%
established by the Council on Wage and Prices rather then the actual
rate which has been running between 17 and 18%. Such limitations are
not being imposed for 1982.) He further advised that these revised
projections will result in a $3.2 million deficit for the 1981 contract
year; but that offsetting this to some degree was the 2.3 million reserve
carryover from 1980 which reduces the total loss during 1981 to $889,000.
To cover this deficit and projected claims for 1982, the Underwriter has
projected a total requirement of $25.5 million for 1982 which includes
a premium increase to $23.5 million and a contingency reserve payment
of $2.1 million from OPM.
I explained to the Board that this would result in a
48.6% increase to the total Self-only premium and a 35.2% increase to
the Self and Family premium, but that an alternate proposal by Mutual
to request an additional contingency reserve contribution of $.7 million
would help to offset the increased claims experience. Under the alternate
proposal, which requires a special request and approval by OPM, the
percentage increase would be 44.3% for Self-only and 31.3% for Self and
Family. Discussion then ensued regarding our contingency reserve balances,
the statuatory requirement to maintain the equivalent of a one-month's
premium in that reserve, and the amounts that would be available to
offset premium increases.
then went on to explain the OPM levied requirement
for rate istrl ution, i.e. each plan must establish the rates for
Self-only and Self and Family based on claims experience within those
respective categories. The options for achieving full rate distribution,
either right away in 1982 or gradually of a period of two years, were
discussed along with the resulting impact and trade-off between Self-
only and Self and Family premiums.
It was then explained what the 1982 total increases meant in terms
of out-of-pocket expenses to the employees, assuming various percentage
increases in the government contribution and full rate distribution in
1982. The Underwriter's best guess was that the government contribution
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25X1
2 CONFIDENTIAL
 Approved For Release 200
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would increase by 25%. In such an instance the employees' out-of-
pocket expenses would rise 112% for Self-only ($4.97 to $10.56)
and 53% for Self and Family ($20.49 to $31.34) assuming a $2.1 million
contingency reserve contribution; with the larger $2.8 million contribu-
tion, the expenses would rise 95% for Self-only ($4.97 to $9.69) and
42.1% for Self and Family ($20.49 to $29.12). The Chairman asked what
was happening to other government plans. I I advised that
the Underwriter's best information indicated, a the other plans were
experiencing the same dramatic increases. This led to discussions in
comparison of ABP rates with the two government-wide plans, the formula
for ascertaining the amount of government contributions, and the method-
ology employed by OPM in negotiating annual premium rates. The fact
was brought out that ABP's rates over the years have been considerably
lower than Blue-Cross who is the next largest insurer of Agency employees.
It was also pointed out that the current system does not allow sufficient
flexibility to deal with serious problems such as now being encountered.
The impact on both active and retired employees was also discussed.
It was acknowledged that we should request the higher contingency
reserve payment from OPM and a motion was made that full rate distribution
be accomplished right away in 1982. The motion was seconded and passed
unanimously.
Discussions then again took place on the OPM imposed sequence of
decision making and the fact that options for offsetting the pending
increase are taken away by the current system. The Board, for example
if given the opportunity, would probably want to consider raising the
deductible to lessen the toal impact on the employees.
acknowledged this as a valid concern and indicated this area wou he
the subject of future discussions with OPM.
There being no further business, the meeting was adjourned at
11:25 a.m.
25X1
25X1
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3 CONE!DENTIPL.
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A . i Y,.. Y...
GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
3 September 1981
(Special Meeting)
. A special meeting of the Government Employees Health Association,
Inc., Board of Directors, was held on 3 September 1981 at 9:00 a.m. in
Room 5E62 Headquarters. Those present were:
Directors
Mr. Charles Briggs, DCI Member
Mr. Bruce Johnson, DDA Member
ber
NFAC Member
Treasurer
.Secretary
lent
resident
rrding Secretary
The special meeting, called because of OPM's recent letter requesting
that the Plan resubmit its 31 July 1981 rate proposal, was opened by the
Chairman and turned over toF- or discussion.
began by explainin the OPM letter which had been sent
to all Board members. In brief, tated that OPM, after
receiving all FEHB plans rates in July, analyzed the proposals and
realized they would be over budget by 500 million dollars. Assuming that
the 1982 rates would beeexcess of 30% over 1981 rates, OPM then proposed
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25X1
25X1
 Approved For Release 2003/05/27 A DRbha .;@( 9,O QQ0100050001-1
three objectives to reduce this average:
a. raise deductible to $200.00
b. reduce co-insurance to 75%
c. move certain non-hospital basic coverages
into major medical coverage
With this preface, provided the Board with the attached
charts prepared by the GEHA staff showing the various options available
to the Board. Considerable discussion of the options followed with Mr.
providing the Board with the specific recommendation of only
offering to increase the Plan's deductible to $150.00 and standing pat
on OPM's other two objectives. This recommendation was unanimously
accepted by the Board with the understanding that if OPM did not accept
the Plan's proposal the Board would reconvene to consider other options.
With no further business at hand, the meeting was adjourned at 9:40 a.m.
Secretary
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GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
16 September 1981
(Special Meeting)
A special meeting of the Government Employees Health Association,
Inc., Board of Directors, was held on 16 September 1981 at 10:00 a.m.
in Room 5E62, Headquarters. Those present were:
Directors
Mr. Charles Briggs, DCI Member
s
NFAC Member
dent
President
Treasurer
Secretary
SD
B
ording Secretary
The Chairman opened the s ecial meeting and turned it over to Mr.
or discussion. began by advising the Board that
GEHA's proposal of 8 Sept em er a been totally unacceptable to OPM and
therefore required a resubmission by GEHA to further reduce benefits.
then asked that the attached tables prepared by the
GEHA staff be handed out to the members of the Board. There was considerable
discussion concerning the various options available to meet what was under-
stood to be the most current OPM benefit reduction quidelines. Much of
the discussion then centered on whether the Plan should fully meet OPM's
mandate or make a reasonable proposal, holding other benefit reductions
in re AoR6vi~ R s~'e1( f@3 'CIA-RDP86-00964R000100050001-1
 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
"1 117
It was the unanimous decision of the Board to go forth with a
new proposal to OPM to include increasing the deductible to $150.00;
reduce Out-Patient coverage for Mental and Nervous disorders to 70%
co-insurance, limiting the number of visits to 50 per person per
calendar year along with reducing In-Patient coverage for Mental
and Nervous disorders under Basic Benefits to 100% for the first 30
days of each confinement and 80% thereafter; and withdraw our 1982 benefit
increases proposed in April of 1981.
promised to advise the Board on OPM's reactions to this
latest proposa and reminded the Board that if OPM does
not accept the proposa a su sequent meeting would have to be called
on short notice.
With no further business, the meeting was adjourned at 10:30 a.m.
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 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
NET TO CARRIER
SAVINGS
SELF
FAMILY
Option A -
($200 Deductible)
$ .75
$2.12
Option B -
(75% Co-Insurance)
.38
.97
Option C -
(Non-Hospital Charges)
(to Major Medical - )
(x-ray & lab )
.29
.72
Option A + B -
1.13
3.09
Option A + C -
1.04
2.84
Option A + B + C -
1.42
3.81
$150 Deductible -
.41
1.18
$150 Ded. + B -
.79
2.15
$150 Ded. + C -
.70
1.90
$150 Ded. + B + C
1.08
2.87
M & N Out-patient
70% co. ins. and
limit to 50 visits
per calendar year
.20
.55
M $ N Out-patient
50% co-ins. and
limit to 50 visits
per calendar year
.55
1.55
M F N In-patient
1st 30 days at 100% -
.06
.16
80% thereafter
M $,N In-patient
1st 30 days at 100%
,0 % thereafter
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 Approved For Release 2003/05/27 : CIA=RDP86-00964R000100050001-1
1982 ADDED BENEFITS
SELF FAMILY
Chemotherapy $ .01 $ .01
Removal of Podiatrist
Restrictions .01 .02
Catastrophic
$10,000 - $5,000 .02 AS
Emergency Treatment
in Dr's. Office .01 .03
Anesthetic
was $50or30o
Increased to $50 or 400
with difference at 80%
without deductible .06 .16
Out of hospital
x-ray & lab
Increase from $400
to 100% of R&C .01 .03
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2
 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
23 September 1981
(Special Meeting)
A special meeting of the Government Employees Health Association,
Inc., Board of Directors, was held on 23 September 1981 at 1:30 p.m.
in Room SE62 Headquarters. Those present were:
25
X1
Mr. Charles Briggs, DCI Member
ber
AC Member
AC Member
resident
Treasurer.
rding Secretary
In the absence of the chairman, pened the special meeting,
indicating that GEHA's proposal of 18 September to OPM had been unacceptable.
He went on to explain that OPM, in an earlier analysis prepared by Dr.
Devine, had included the reduction of mental and nervous benefits as a
means to achieve the necessary benefits reduction requested by OPM. However,
OPM has reversed their initial opinion and advised us that our Plan must
look to other areas in which to achieve these goals.
25X1 then offered the attached options which come close to
meeting what the Plan understands to be the reductions requested by OPM.
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25X1
 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
Ek 1 i-.6 ..Y,
After considerable discussion of the options presented by 25X1
it was concluded that the Plan would propose to OPM to increase the
deductible from $100 to $200; transfer Out-of-Hospital x-ray and Laboratory
charges from Basic to Major Medical Benefits; and withdraw our 1982 benefit
increases proposed in April 198 moved to accept this 25X1
proposal and it was seconded. by th no further discussion,
the motion was unanimously passed. Having no further business, the
meeting was adjourned at 1:50 p.m.
Secretary
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 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
COST REDUCTIONS ASSOCIATED WITH
ASSOCIATION BENEFIT PLAN PROPOSALS FOR 1982
$150 Deductible
MfN Reductions
Withdraw:82 Increases
$200 Deductible.
75% Coinsurance
$200 Deductible
X-ray/Lab under lei
$150 Deductible
75% Coinsurance
X-ra /Lab under NM
Self Pamil,
Self Family
Self Family
Self Family
.73 2,01
.91 2.37
1.04 2.63
.89 2.31
Withdraw 82 Increases
(included in above)
.06 .12
.06 .12
.06 .12
Total
.73 2.01
.97 2.49
1.10 2.75
.95 2.43
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 Approved For Release 2003/05/27: CIA-RDP86-00964R000100050001-1
COST RE1Y CFIONS ASSOCIATED WITH
ASSOCIATION BENT.-FIT PLAN PROPOSALS FOR 1982
$150 Deductible
M&N Reductions
Withdraw 82.Increases
$100 Deductible
75% Coinsurance
X-ray/Lab Under 'NM
$150 Deductible
75% Coinsurance
-
$150 Deductible
X-ray/Lab Under NM
Self Family
Self Famil
Self Fmiil~
Self Family
.73 2.01
.67 1.69
.60 1.59
.41 1.18
Withdraw 8.2 Increases
j included in above)
.06 .12
.06 - .12
.06 .12
Total
.73 2.01
.73 1.81
.66 1.71
.47 1.30
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 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
2 October 1981
(Special Meeting)
A special meeting of the Government Employees Health Association,
Inc., Board of Directors, was held on 2 October 1981 at 1:00 p.m. in
Room 5E62, Headquarters with the following present:
25X1
Mr. Charles Briggs, DCI Member
NFAC Member
ent
resident
Treasurer
Executive Secretary
rding Secretary
The special meeting was opened b in the absence of
the Chairman. began by informing those present that GEHA's
last proposal of Sept em er to OPM had not been accepted. He went on
to explain GEHA was led to believe by OPM that the equivalent of OPM's
objectives' (1) 200 deductible; (2) 75% co-insurance; and (3) moving
non-hospital basic coverage to major medical would be acceptable. However,
OPM has subsequently advised that in fact all three objectives must be
met and that they are looking for reductions which amount to $1.20 for Self-
only and $3.09 for Self-and-Family. This translates into a shortfall from
GEHA's 24 September proposal of $.10 for Self only and 34 for Self
and Family. In order to meet this shortfall roposed removing
from Basic Benefits payments for doctor's medical visits unrelated to
surgery while confined to a hospital.
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25X1
25X1
 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
next shared with the Board the fact that he had made
a personal pea to senior OPM officials and that this plea was to no
avail.. A discussion ensued regard' of Director Devine's
letter of 1 October on other plans. pointed out to the
Board that those plans that don't comply will be terminated, citing that
the American Post Workers Union plan had already received a cancellation
letter from OPM and that the Union has taken OPM into court on this
issue.
hen asked if the Government's responsibility is to pay
60% a e rogram? explained the formula whereby six
plans are used to calculate the Government calculation and that the
average of the premiums of the six plans equate to the 60% government
contribution which is applied to the remaining FEHB plans but in no
event can the government contribution exceed 75% of any one plan.
Discussion then focused on proposal regarding the
doctor's hospital visits to be paid as a major medical rather than a
basic benefit. It was the consensus of the Board that this would be
the least traumatic benefit cut. moved to accept this
option, which was seconded by land unanimously passed by the
Board. The meeting was adjourn ea . p.m. with no further business
to discuss.
25X1
25X1
25X1
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CHART .ONE
SINGLE
(GOVT. CONTRIB.)
(JULY PROPOSAL )
DOTAL COST
$19.90
$28.70
$28.70
$28.70
$27.23
$27.23
$27.23
/PAYS
14.93
18.25
19.01
19.77
18.25
19.01
19.77
E. PAYS
$"4.97
$10.45
$ 9.69
$ 8.93
$ 8.98
a.22
7.46
T`C. OVER 81
$ 5.48
$ 4.72
$ 3.96
$ 4.01
$ 3.25
$ 2.49
COST
$56.13
$73.67
$73.67
$73.67
$69.71
$69.71
$69.71
,,WT. PAYS
35.64
42.77
44.55
46.33
42.77
44.55
46.33
Z. PAYS
$20.49
$30.90
$29.12
$27.34
$26.94
$25.16
$23.38
tiC. Oti 81
$10.41
$ 8.63
$ 6.85
$ 6.45
$ 4.67
$ 2.89
motion A - $200.00 Deductible
Option B - 75% co-insurance
p tion C - Non-hospital charges to Major Medical
(REDUCED ~Y OPT. A-B-C)
1981 20% 250 30% 20% 25% 30%
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 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
uIYTT' `14 r\
SINGLE
(GOVT. CO ITRIB. )
(JULY PROPOSAL )
(REDUCED BY OPT. A-B)
30%
TOTAL COST
$19.90
$28.70
$28.70
$28.70
$27.53
$27,53
$27.53
GOti~I. PAYS
14.93
18.25
19.01
19.77
18.25
19.01
19.77
,P. PAYS
x`4.97
$10.45
$ 9.69
$ 8.93
$ 9.28
$ 8.52
$ 7.76
INC. OVER 81
$ 5.48
$ 4.72
$ 3.96
$ 4.31
F
$ 3,55
$ 2.79
TO,. COST
$56.13
$73.67
$73.67
$73.67
$70.46
$70.46
$70.46
GOVT. PAYS
35.64
42.77
44.55
46.33
42.77
44.55
46.33
Y PAYS
$20.49
$30.90
$29.12
$27.34
$27.69
$25.91
$24.13
i
INC. OVER 81
$10.41
$ 8.63
$ 6.85
i
$ 7.20
$ 5,42
$ 3.64
0tion A - $200.00 Deductible
L)ton B'- 75% co-insurance
lion C - Non-hospital charges to Major Medical
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20%
 Approved For Release 2003/05/27 CIA-RDP86-00964R000100050001-1
rf-IADT TLTDC'C
va YZl\L 11LLWL
(GOVT. CONTRIB.)
(JULY PROPOSAL )
(REDUCED ~Y OPT. A - C)
20%
30% 20%
25%
30%
TOTAL COST
$19.90
$28.70
$28.70
$28.70
$27.62
$27.62
$27.62
GG.~ PAYS
14.93
18.25
19.01
19.77
18.25
19.01
19.77
E'tP. PAYS
1
4.97
$10.45
$ 9.69
$ 8.93
$ 9.37
$ 8.61
$ 7.85
N'C. OVER 81
$ 5.48
$ 4.72
$ 3.96
$ 4.40
$ 3.64
2.88
COST
$56.13
$73.67
$73.67
$73.67.
$70.72
$70.72
$70.72
GOV1. PAYS
35.64
42.77
44.55
46.33
42.77
44.55
46.33
I. PAYS
&20.49
$30.90
$29.12
$27.34
$27.95
$26.17
$24.39
INC. OVER 81
$10.41
$ 8.63
$ 6.85
$ 7.46
$ 5.68
$ 3.90
"motion A - $200.00 Deductible
motion B - 75% co-insurance
t tion C - Ncr_-Hospital chirges to Major Medical
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 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
'SINGLE
(GOVT. CONTRIB.)
(JULY PROPOSAL )
(REDUCED BY OPT. A)
20% 25% 30%
TOTAL COST
,. $19.90
$28.70
$28.70
$28.70
$27.92
$27.92
$27.92
GO PAYS
14.93
18.25
19.01
19.77
18.25
19.01
19.77
7. PAYS
$ 4.97
$10.45
$ 9.69
$ 8.93
$ 9.67
$ 8.91
$ 8.15
~C. OVER 81
$ 5.48
$ 4.72
$ 3.96
$ 4.70
$ 3.94
$ 3.18
)
TOi.
COST
$56.13
$73.67
$73.67
$73.67.
$71.47
$71.47
$71.47
GOVT. PAYS
35.64
42.77
44.55
46.33
42.77
44.55
46.33
~?. PAYS
$,20.49
$30.90
$29.12
$27.34
$28.70
$26.92
$25.14
OVER 81
$10.41
$ 8.63
$ 6.85
$ 8.21
$ 6.43
$ 4.65
Mien A - $200.00. Deductible
on B - 75% co-insurance
Dtion C - Non-hospital charges to Major Medical
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 Approved For Release 2003/05/27: CIA-RD QO 000100050001-1
SINGLE (IN 1981 - EMPLOYEE PAID $4.97)
INCREASE
GOVT. CONTRIB.
REDUCED BY OPT. A-B-C
Emp.
Pays
Inc. Over
1981
Emp.
Pays
Inc. Over
1981
Emp.
Pays
Inc. Over
1981
Emp.
Pays
Inc. Over
1981
Emp.
Pays
Inc. Over
1981
20%
$10.45
$ 5.48
$ 8.98
$ 4.01
$ 9.28
$ 4.31
$ 9.37
$
4.40
$ 9.67
$ 4.70
25%
$ 9.69
$ 4.72
$ 8.22
$ 3.25
$ 8.52
$ 3.55
$ 8.61
$
3.64
$ 8.91
$ 3.94
30%
$ 8.93
$ 3.96
$ 7.46
$ 2.49
$ 7.76
$ 2.79
$ 7.85
$
2.88
$ 8.15
$ 3.18
FAMILY (IN 1981 - EMPLOYEE PAID $20.49)
INCREASE
GOVT. CONTRIB.
REDUCED BY OPT. A
Emp.
Pays
Inc. Over
1981
Emp.
Pays
Inc. Over
1981
Emp.
Pays
Inc. Over
1981
Emp.
Pays
Inc. Over
1981
Emp.
Pays
Inc. Over
1981
20%
$30.90
$10.41
$26.94
$
6.45
$27.69
$ 7.20
$27.95
$ 7.46
$28.70
$ 8.21
25%
$29.12
$ 8.63
$25.16
$
4.67
$25.91
$ 5.42
$26.17
$ 5.68
$26.92
$ 6.4;,
30%
$27.34
$ 6.85
$23.38
$
2.89
$24.13
$ 3.64
$24.39
$ 3.90
$25.14
$ 4
l l
*Option A - $200.00 Deductible
Option B - 75% co-insurance
Option C - Non-hospital ch rges to %ffoV@A Release 2003/05/27: CIA-RDP86-00964R000100050001-1
 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
SAVINGS TO EMPLOYEES
COMPARED TO
JULY PROPOSAL
OPTION
AFB&C
$1.47
A$B
$1.17
A $ C
$1.08
$ .78
*Option A - $200.00 Deductible
Option B - 75o co-insurance
Option C - Non-hospital charges to Major Medical
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 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
GOVERNMENT EMPLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
23 October 1981
(Special Meeting)
A Special meeting of the Government Employees Health Association,
Inc., Board of Directors, was held on 23 October 1981 at 1:00 p.m. in
Room 5E62 Headquarters. Those present were:
Directors
Mr. Charles Briggs, DCI Member
ember
NFAC Member
JJFAC Member
ent
resident
Treasurer
Secretary
~tant Secretary
I lopened the meeting by advising the Board Members that
GEHA a been in ormed by OPM on 22 October of a new requirement for
further 1982 benefit reductions in addition to those already mandated.
Copies of the letter from OPM were distributed to the Board Members and
it was explained that we must effect an additional 6.5o reduction from
the last benefit proposal submitted on 2 October 1981. OPM was very
explicit in stating the reduction proposal could not be any less than 6.5%
and had to be submitted to OPM by 4:00 p.m. 23 October or the Plan faced
cancellation from the FEHB Program.
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 Approved For Release ZOO YO41 -r0Cf4-P2 ? 36-00964R000100050001-1
explained that the 6.5% equated in dollar terms to an
additional reduction for Self-only and $4.40 reduction for Self
and Family. He further explained that these additional cuts were the
result of OPM seeking to limit the Government Increase in contributions
to the FEHBP Program and he reviewed the procedure for determining' the
Government contribution. Discussion then ensued regarding OPM's legal
authorities to do this and their overall handling of this situation.
xplained that OPM is designated by law as the Administration
o ie rogram and in that capacity they were responsible for
approving the benefit and rates proposals of the various plans.
I then went on to explain the options available to the
plan to meet mandated 6.5% reduction in benefits, pointing out that
the extremely short deadline imposed by OPM is unrealistic in terms of
allowing for proper analysis and preparation of our proposal. He pointed
out, however, that it is obious the reductions will seriously erode the
integrity of the Plan. The attached options were presented at this time.
Following discussion on each of these options,the board unanimously
agreed that Option 1 should be submitted to OPM. hen made a
motion that a letter be sent for the Board of Directors to the Director,
CIA outlining in strongest terms the Board's concern regarding OPM actions
on this issue. This motion also passed unanimously.
ec~tary
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2
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 Approved For Releas 1 0 l4 P86-00964R000100050001-1
a. Change the Plan's co-insurance from 80% to 75% (net-to-
carriere reduction of $.16 for Self-only and $.46 for Self and Family).
b. Require all family members to meet the Plan's $200 deductible
(net--to-carrier reductions of $.00 for Self-only and $.21 for Self and
Family).
c. Change the Plan's in-patient surgery benefit to require a $100.00
deductible before payment as a Basic Benefit (net-to-carrier reduction of
$.45 for Self-only and $1.30 for Self and Family).
d. Limit the Plan's mental and nervous out-patient benefits to
50 visits per calendar year and subject to 50% co-insurance (net-to-
carrier reduction of $.55 for Self-only and $1.55 for Self and Family).
e. Change the Plan's inpatient hospitalization benefit to require
$100.00 deductible to be applied per confinement per person before Basic
Benefits become payable (net-to-carrier reduction of $.42 for Self only
and $1.20 for Self and Family).
Option 1 would result in a total net-to-carrier reduction of $1.58
for Self-only and $4.72 for Self and Family. explained
that this was under OPM's requirement for Self only by '.13 and over
for Self and Family by $.32 with the aggregate being over by $.19. He
further explained that the underwriter felt this approach would be
acceptable to OPM.
Option 2
a. Require all family members to meet the Plan's $200 deductible
(net--to-carrier reduction of $.00 for Self-only and $.21 for Self
and Family)
b. Change the Plan's inpatient surgery benefit to allow payments at
80% via the current 100% (net-to-carrier reduction of $.60 for Self-Only
and $1.69 for Self and Family).
c. Limit the Plan's mental and nervous out-patient benefits to
50 visits per calendar year and subject to 50% co-insurance (net-to
carrier reduction of $.55 for Self-only and $1.55 for Self and Family).
d. Change the Plan's inpatient hospitalization benefit to require
$100.00 deductible to be applied per confinement, per person, before
Basic Benefits become payable (net-to-carrier reduction of $.42 for
Self--only and $1.20 for Self and Family).
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 Approved For Release 200 Q 2t7 :'C 0964R000100050001-1
Option 2 continued
Option 2 would result in a total net-to-carrier reduction of
$1.57 for Self-only and $4.65 for Self and Family with the aggregate
total being $.ll over OPM's 6.5% reduction requirements.
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 Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
COh1FIDEi1 Tir"lt
GOVERNMENT E PLOYEES HEALTH ASSOCIATION, INC.
Meeting of the Board of Directors
1 December 1981
(Special Meeting)
A Special meeting of the GEHA Board of Directors was held
on Tuesday, 1 December 1981, at 3:00 P.M. in Room 5E62 Head-
quarters. Those present were:
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Mr. Charles Briggs, DCI Member
Member
NFAC Member
President
Secretary
rSD
IB
ording Secretary
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Chairman opened the meeting advising there were
two items of business to be conducted, the first being the election
of a new Secretary and Assistant Secretary to the Board, and the
second being a discussion of the Board's course of action with
regard to the 1982 benefits and rates proposals.
On the first item a motionwasmade, seconded, and passed
unanimously electing as the new Secretary and
s the new Assistant Secretary.
The Chairman then turned the meeting over
for discussion of the second item of business.
explained the current situation with respect to developments on
Q@/~fi~~~rA~PA~40~14-1
theme f*f
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CO3' ,1 EN L
 Approved For Release 201"4'05127,
4-DP86-00964R000100050001-1
24 November 1981 memorandum to the Board of Directors (copy attached)
and his letter to Kevin Burns of OPM also dated 24 November 1981
(copy attached) the latter of which requested restoration of the
benefit tions resulting from OPM's 21 October 1981 letter.
dvised that OPM informed him that the request had
been referred to OPM's General Counsel for review and as yet no
ruling had been made. 0 advised that he had also been in
touch with OPM's office of General Counsel (Randolph Sims) who
said Joe Morris (OPM General Counsel) had indicated that perhaps
some accommodation could be made so that it would not be necessary
for GEHA to join lawsuits as plaintiffs to get restoration of
benefits. (OPM had earlier said GEHA would not have the benefit
of an ongoing lawsuit unless a party to it.) then
said that if OPM's response to his 24 November memorandum was
negative and GEHA was told we had to sue to obtain the restoration,
then he would strongly recommend that GEHA sue. He pointed out
that there were two documented letters showing that our agreement
to comply with OPM's directives was with the stipulation that every-
one would be required to meet the 6.5% reduction. Further he
stated GEHA should have a good case if a suit was necessary.
Discussion then ensued regarding problems concerning discovery
that might be encountered in such a lawsuit. stated he
felt there would not be very much discovery because of this type
of litigation where there is usually not a full blown trial. If
OPM wants to press for unpleasant discovery then the information
could be put under seal making sure attorneys from the other suit
are cleared. It was also generally agreed that if a lawsuit is
pursued then the DCI should be advised prior to proposed action
and kept informed throughout.
pointed out that if GEHA did decide to sue, it would
probably be necessary to join one of the other lawsuits using
their independent counsel or retain independent counsel for GEHA.
The Office of General Counsel has two hats, one as advisor to GEHA,
the other representing the Agency, and OCG would be constrained
not to sue other government agencies. uggested
that if we decide to sue1the Counsel rep-resenting reasury's
lawsuit perhaps should be contacted and we would thus be retaining
a lawyer who is familiar with the issues and has experience in this
type of action. lso stated that based on past experience
he felt the Office o ecurity could decide on the clearance of
the attorney selected within a couple of weeks. A motion was
made seconded and passed unanimously that be authorized
to join suit with Treasury Department, or file suit In ependently,
against OPM regarding this insurance matter if a favorable response
to 24 November letter has not been received from
OP b b y eginning of business Friday, 4 December 1981.
The meeting was adjourned at 3:24 p.m.
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 Approved Folease 2003/05/27 : CIA-RDP86-009600100050001-1 Cv
United States
Office of
Personnel Management Washington, D.C. 20415
STATINTL
Government Employees Health
Association
P.O. Box 463
Washington, D.C. 20044
President
Over the past two months we have shared with you the severe difficulties the
Federal Employees Health Benefits Program is encountering in arriving at
acceptable benefit and rate packages for 1982. Director Devine's preliminary
analysis dated September 11, 1981, which I sent to you on September 18th
detailed many of the problems, and reiterated that significant benefit
reductions were necessary. It also now appears extremely unlikely that any
immediate legislative solution will be forthcoming, as evidenced by discussion
at the special joint Senate-House hearing on FEHB held October 19, 1981.
Consequently, the only recourse is to take administrative action to obtain
reductions in benefit levels if OPM is to stay within the budget levels set by
law.
Since the deadline for contract renewal notice is approaching, immediate
action is required both on the part of OPM and plans who wish to continue to
participate in the program. The following instructions apply. We are asking
each plan to reduce 1982 benefits and rates by at least 6.5 percent. The base
from which you should calculate your. 6.5 percent reduction is the acceptable
equivalency benefit level for 1982 which you submitted in response to our
August 21st request. OPM will accept only limited reductions in mental health
care benefits and does not wish to accept coverage for abortions except where
the life of the mother would be endangered if the fetus were carried to term.
Accordingly, your written offer of a 6.5 percent reduction in the 1982
benefits, including actuarial supporting data, must be received by OPM no
later than 4:00 p.m., October 23, 1981. The failure of any plan to submit an
acceptable offer on or before the deadline will be construed as an election by
that plan not to participate in the FEHB Program in 1982 and termination
notices will be issued forthwith.
Sincerely yours,
Kevin J. Burns
Assistant Director for
Insurance Programs
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 Approved For Release d'1061$ h1,C*A-'RDP38 60964R000100050001-1
CWFME OF THE
rucsmmr
Mr. Kevin 1. Bu ITIS
Assistant Di rector for
Insurance Proc;ran:;
Office of Personnel Management
P.O. Box 436
Washington, 0. C. 2004-1
Dear Mr. Burns:
It is our understanding that oar plans of the FEW have been granteel
exemption by court order from the a ditior,al 6.3% redurt-ion in 1982 hunefit<
mandated by your October 2.1 , 1981 letter. It is our further understanding
that other plans have been granted this tAe>zption by OPM decision. In vie
of this I strongly believe that the Association Benefit Plan should also be
permitted to operate in 1982 without the benefits reduc t. i-car,., last submitted
to you to accoiipl ish the ,iddi t lone 1 6.5% eduction.
I think the record wi it shoe that throu oo!it the prolonged and trying
negotiations we have demonstrated full cooperation and undo rstandin` of the
issues and met your demands and deadlines in good With. At the Sam;' Win,
we found it necessary u. u mate lvr to -;Wmi1; a proposra I with the clear under-.
:-standi.ng that the mandates of 0001 woiil d be app I icd fairly and uni for..d y to
all participating plans. it is e it . that spirit that we now request relit
From the 60% i cquiremont. i hope you will agree that to now release some
plans from their obligations Whsic requiring strict coopiiancc by others
denonstRtes partial ity and violation o:t proper contract negotlatlon.3. It
was certainly our understanding that all plans would be treated all- o, and
that thought was made clear in our r i t ton proposals to you throughout the
course of our negotiations. I re fc ' ` ,1 spool[ ie e11 to my letter dated
October 23, 1981 which said:
"Picnse note that trti cc p i lanc: with the instructions in
your letter of Octobcr 21, 196L is based on our understanding that
the 6.5% additional reductions cal led fo ui SKIN letter will W o
universal Iy enforced on all ca rr e qj . There tort. , t:h ii . Association
reserves the right to call for renege intro. of these additional,
reductions in the event the adAi 1, 'nna 1 KZ S ; reduction is not
oniyerSally enforced.''
Therefore, I would epos c i a to a t t I l ton coIi , i niai ion from you that the
Association Benefit Plan will Me re: tore0 For 1962 those bepefits which is
reduced as a result of your Otto' er . I , KAI toyer.
rely.
STATINTL
iistribution:
Original - Addressee
l-1)1VPei?,
1)O/Pc~.rs/`~1',
C1A-RDP8f-0098,4R10p0l 00050001-1
 ` Approved For Release 2003/05/27 : CIA-RDP86-00964R000100050001-1
2q, NOV 1981
STATINTL PROM
ems; 177,71 , ., .I LJv,
25X1
SCIB JFC?i' I leal th Benc f i *s N o f is t i ~ns
I. We have cal led a Board meet i rlp? far 2:00 PM, 1 December 19311, to
discuss with you the Tnost- recent overlt associated with the l7edcral Employees
HealthLic,nelits Proo raiii, the regilu ed r c:(u;-t i on of ber,efi t~~, , postoot 1-ng o'- the
Open Season, and various court actio{1_s t}-tat arc' taking place regarding them,.
I though it would he helpful, hoe ever, if I give you some information in
advance of the nieet1Iig
c
2. As a se Ult of a suit by cc'.i"talll 171an~,, the court has ruled that an
D en Season will be held during the Inc ltieeks l)enl.nnlag 7 December 19