FEHBP LEGISLATION (S. 1276, 101ST CONGRESS - PUBLIC LAW NO. 101-76)

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• Collection: General CIA Records
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• Document Page Count: 7
• Document Creation Date: December 23, 2016
• Document Release Date: April 25, 2014
• Sequence Number: 45
• Publication Date: August 17, 1989
• Content Type: MEMO

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17 August 1989
OCA 2934-89
MEMORANDUM FOR: Director, Office of Personnel/DA
Chief, Administrative Law Division/OGC
FROM:
Legislation Division
Office of Congressional Affairs
SUBJECT: FEHBP Legislation (S.1276, 101st Congress
Public Law No. 101-76)
1. The attached Senate Bill and Legislative transcript
(discussing the House members views of similar proposed
legislation) is provided for your information. The Bill passed
the Senate on 31 July 1989, and was approved by the House in
this version on 1 August 1989. It was presented to the
President on 4 August, and he signed it into law on
11 August 1989. This law is now referred to as Public Law
No. 101-76.
2. This legislation was devised as a method to temporarily
bailout the Federal Employees Health Benefits Program (FEHBP)
following the Aetna Insurance Company's withdrawal from FEHBP.
It provides for Federal government contributions - a dollar
amount equal to 60 percent of the specified six-plan premium
average - to FEHBP for 1990 or 1991, if no other
Government-wide indemnity benefit plan can be found to replace
the gap left by Aetna's pullout. [For this reason, it acquired
the nickname, "The Phantom Insurance Bill."] The result of
this legislation, it is hoped, will be to protect Federal
employees from increased premium costs because of Aetna's
action.
3. Please contact me at for any questions
or comments that you may have on this matter.
Attachment
STAT
STAT
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OCA 2934-89
SUBJECT: FEHBP Legislation (S.1276, 101st Congress -
Public Law No. 101-76)
OCA/LEG/ (17 Aug 89)
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One Hundred First Congress of the United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the third day of January, one thousand nine hundred and eighty-nine
An Act
Relating to the method by which Government contributions to the Federal
employees-health benefits program shall be computed for 1990 or 1991 if no
Government-wide indemnity benefit plan participates in that year.
De it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That (a)(1) in the administration
ef chapter 89 of title 5, United States Code, for contract year 1990 or
1991, in order to compute the average subscription charges under section
8906(a) of such title for such contract years, the subscription charges in
effect for the.indemnity benefit plan on the beginning date of each such
contract year shall be deemed to be the subscription charges which--
(A) -- were in effect for such plan on the beginning date of the
preceding contract year as adjusted under paragraph (2); or
(B) if subparagraph (A) does not apply, were deemed under this Act to
have been in effect for such plan with respect to the preceding contract
year as adjusted under paragraph (2).
(2) The subscription charges under paragraph (1) shall be increased or
decreased (as appropriate) by the average percentage by which the respective
subscription charges taken into account under paragraphs (1), (3), and (4)
of such section 8906(a) for that contract year increased or decreased from
the subscription charges taken .into account under such paragraphs (1), (3),
and (4) for the preceding contract year.
(b) Separate percentages shall be computed under subsection (a)(2) with
respect to enrollments for self alone and enrollments for self and family,
respectively.
(c) The provisions of this Act shall not. apply to contract year 1991, if
comprehensive reform legislation is enacted to amend section 8906 of title
5, United States Code, and such amendment is required to be implemented by
the commencement of negotiations pertaining to rates and benefits for such
contract year.
(d) Any reference in this Act to a "contract year" shall be considered to
be a reference to a contract year under chapter 89 of title 5, United States
Code.
(e) No later than 180 days after the date of the enactment of this Act,
the Director of the Office of Personnel Management shall transmit
recommendations to the Congress for comprehensive reform of the Federal
Employee Health Benefitts Program.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
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H 3188 CONGRESSIONAL RECORD ? HOUSE
dice and bigotry crimes that merit our full and
collective reproach.
We live in the best nation in the world. We
live in a nation where people of all races, reli-
gions, and ethnic groups have gathered to live
freely, democratically, and peaceably. It of-
fends my sense of America's beauty that
some .67 odd organizations, some 4,500-
5,500 Klan members, some tiny and twisted
groupings In the United States that could
never even be called a minority?could sully
the character of the United States with acts of
.cruel and misplaced hatred.
I ask my colleagues today to call to con-
science these sinister symbols of hate, and to
permit the calculation and identification of per-
nicious hate crimes which affront the integrity
of the great American melting pot.
Mr. VENTO. Mr. Speaker, I rise in strong
support of- H.R. 1048, the Hate Crime Statis-
tics Act, which I am also cosponsoring.
H.R. 1048 would require the Department of
Justice to collect data on a variety of crimes
aimed at victims based on their race, religion,
sexual orientation and ethnicity. These crimes
would include homicide, assault, robbery, bur-
glary, theft, arson, vandalism, and threats.
Data would be collected over a 6-year period
from 1991 to 1996 for research and statistical
purposes. Law enforcement agencies, as well
as Congress and State and local legislative
bodies will have access to this data which
should prove to be helfpul in focusing law en-
forcemeM resources on protecting victims'
rights.
Mr. Speaker, in recent months we have
seen an alarming increase in crimes *acted
at individuals because of their race, religion,
sexual orientation, and ethnicity. In Portland;
.OR last February, a young black Ethiopian
man was beaten to death by two youths who
were members of a neo-Nazi group known as
the skinheads. Across the Nation, police have
reported increased acts of vandalism and
desecration at Jewish synagogues, which.
have been.spray-painted with antisemitic graf-
fiti and swastikas. Violent attacks directed
aghast gay men and women are also on the
increase. All of these crimes are especially
reprehensible because they involve premedita-
tion. Their victims are not totally random, but
rather specifically targeted because of their
race, religion, ethnicity, or sexual orientation. ?
Last yew, the Minnesota Legislative Over-
whelmingly passed similar legislation, which
was signed into law by Minnesota Governor
Rudy Perpich. The Minnesota law, like H.R.
1048, does not confer any new special privi-
lege or rights to any particular group. Instead,
it simply gives the government the means of
gathering information which is necessary to
effectively respond to hate crimes. We must
send the strongest possible message that we
will be intolerant of the mindless intolerance
of hate crimes directed against any group in
our society. I urge my colleagues to join me in
voting for H.R. 1048.
Mr. BRENNAN. Mr. Speaker, today the
House will consider under suspension of the
rules the Hate Crime Statistics Act. I stand
convinced of the need for this measure.
We in this Nation are fortunate in that the
? quality of life here is the best the world has to
offer. Because the freedoms we enjoy directly
contribute to that quality, we must fiercely pro-
tect these freedoms for one and all.
When It appears that, due to discrimination
by some, certain individuals enjoy lesser free-
doms, it is our responsibility to restore equity.
We now are boing called upon to do so.
In past years, it has become evident that
some segrnents of our society are being sin-
gled out as the object of violence and criminal
activity simply because of their race, religion,
ethnicity, or sexual onentation. It is imperative
that we determine where and why these types
of crimes are occurring. Because the Hate
Crime Statistics Act will provide for the collec-
tion of data regarding crimes of hate and prej-
udice, it will allow us to eliminate this discrimi-
nation by targeting our resources against it.
In a broader sense, it will allow us to protect
the freedoms that define this great Nation. I
strongly urge my colleagues to join me in sup-
port of the Hate Crime Statistics Act.
Mr. MATSUI. Mr. Speaker, this Nation is
facing an emerging pattern of violence moti-
vated by racial hatred. A rising number of our
constituents are being brutally victimized for
no other reason than their race, religious herit-
age, or sexual preference.
Our daily newspapers have become dotted
over recent months with stories documenting
the growth of these hate crimes. The New
York Times, the Los Angeles Times, the Wall
Street Journal, and the Philadelphia Enquirer
are but a few papers that have featured such
stories.
Recent incidents include a couple that was
seriously beaten as they came out of a con-
venience store by skinheads who mistakenly
thought they were Jewish, and a cross-burn-
ing at a Tennessee high school for children of
Japanese businessmen.
Mr. Speaker, clearly this bill will not immedi-
ately stop any crimes based on prejudice. But
it will provide the statistical data needed by
our law enforcement organizations to combat
these types of activities. Hate crimes, motivat-
ed by political and social intolerance, must be
distinguished from crimes motivated by other
factors.
In looking' for an appropriate response to
this rising problem, QIcan begin by approving
H.R. 1048 on this floor today. As a nation, we
must have comprehensive, accurate, and up-
to-date statistics on .? the number of hate
crimes committed in this country. We must
know more about this despicable form of vio-
lence it we we to effectively deal with this
tragedy. This bili Is a responsible first step.
Mr. Speaker, no longer can we turn our
heads to the growing number of hate crimes
occurring on our streets by calling them isolat-
ed incidents.
I urge my colleagues to support this bill that
has the strong endorsements. of or
including the Fraternal Order of Police,
National Association of Police Organize
the American Jewish Committee, and the J
armee American Citizens League, and I
strongly encourage my colleagues to op
any amendments that may weaken its scope.
Mr. McCANDLESS. Mr. Speaker, I abhor
crime and acts of violence. Regardless of the
motivation, a violent and criminal attack is, at
the very minimum, in violation of basic human
and civil rights of the victim.
The legislation before us. H.R. 1048, the
Hate Crime Statistics Act, requires the Depart-
ment of Justice to compile and publish data
annually on the incidences of hate crimes.
Hate crimes are crimes that manifest a preju-
dice against a category of victims. While this
information may be of statistical interest. H.R.
1048 does nothing to stop crime of any
June 27, 1.989
nature; does nothing to help the victims of
crime; and it does nothing to punish those
who are guilty of crimes. This legislation only
provides statistics.
The legislation authorizes "such sums as
may be necessary," which the Congressional
Budget Office estimates to be from $1 million
to $10 million per year. At a time when we are
undertaking a major war on drugs, at a time
when the District of Columbia has come to
Congress and asked that we foot the bill for
more local police officers, at a time when we
must begin to rebuild the prison system in the
United States, I must question the propriety of
spending up to $10 million a year to keep sta-
tistics. That money is desperately needed, and
could be much more effectively used, in other
anticrime programs.
In our efforts to reduce the Federal budget
deficit, we must carefully set our spending pri-
orities. While Federal anticrime efforts must
be a high priority, statistics, no matter how
noble the cause, should be far down on the
list.
If H.R. 1048 would put an end to hate
crimes, help the victims of hate crimes, or
punish those who commit such crimes, I most
certainly would support it. But since?it does
none of those things, I must oppose it
The SPEAKER pro tempore. (Mr.
Bosco). All time has expired.
The question is on the motion of-
fered by the gentleman from New
York (Mr. Saturant] that the House
suspend the rules and pass the bill,
KR. 1048. as amended.
The question was taken.
Mr. DANNEMEYER. Mr; Speaker.
on that I demand the yeas and nays. "
- The yeas and nays were ordered.
The SPEAKER pro tempore. Pursu-
ant to the provisions of clause 5, rule
I, and the Chair's prior announce-
ment, further proceedings on this.
motion will be postponed, ?-
? GENERAL LEAVE
? Mr. SCHUMER. Mr. Speaker, I ask
unanimous consent that all Members
may have 5 legislative days in which to
revise and extend their remarks on
H.R. 1048, the bill just considered.
The SPEAKER pro tempore. Is
there objection to the request of the
gentleman from New York?
There was no objection.
RELATING TO GOVERNMENT
CONTRIBUTIONS TO FEDERAL
EMPLOYEES HEALTH BENE-
FITS PROGRAM FOR 1990 OR
1991
Mr. FORD of MicTiVin. Mr. Speak-
er, I move to suspend the rules and
pass the bill (H.R. 2705) relating to
the method by which Government
contributions to the Federal employ-
ees health benefits program shall be
computed for 1990 or 1991 if no Gov-
errunentwide indemnity benefit plan
participates in that year, as amended.
The Clerk read as follows: .
R.R. 2706
Be it enacted by the Senate and House al
Representatives of the United States of
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CONGRESSIONAL RECORD ? HOUSE
colagress assembled, That taxi)
no contract under chapter 89 of title 5,
United States Code, is entered into with an
Indemnity benefit plan (as referred to in
section 8906(a)(2) of such title) for contract
year 1990 or 1991, in order to compute the
average subscription, charges under section
8906(a) of such title for that contract year,
the subscription charges in effect for the in-
demnity benefit plan on the beginning date
of that contract year shall be deemed to
be?
(A) the subscription charges which were
in effect for such plan on the beginning
date of the preceding contract year, cs ad-
justed by paragraph (2); or
(B) if subparagraph (A). does not apply,
the subscription charges which were
deemed under this Act to have been in
effect for such plan with respect to the pre-
ceding contract year, as adjusted by para-
graph (2).
(2) The subscription charges under para-
., graph (1)(A) or (MB), as applicable with re-
spect to the contract year involved, shall be
increased or decreased (as appropriate) by
the average percentage by which the respec-
tive subscription charges taken into account
under paragraphs (1), (3). and (4) of section
8906(a) of tftle 5, United States Code, for
such contract year increased or decreased
from the subscription charges taken into ac-
count under such paragraphs (1), (3). and
(4) for the preceding contract year.
(b) Separate percentages shall be comput-
ed under subsection (aX 2) with respect to
enrollments for self alone and enrollments
for self and family, respectively.
(c) Any reference in this Act to a "con-
tract year" shall be considered to be a refer-
er.ce to a contract year under chapter 89 of
title 5, United States Code.
The SPEAKER pro tempore. Is a
second demanded?
Mr. GELMAN. Mr. Speaker,
demand a second.
The SPEAKER pro tempore. With-
out objection, a second will be consid-
ered as ordered.
There was no objection.
The SPEAKER pro tempore. The
gentleman from Michigan [Mr. Poing
will be recognized for 20 minutes. and
the gentleman from New York [Mr.
?max] will be recognized for 20 min-
utes.
The Chair recognizes the gentleman
from Michigan [Mr. Form].
Mr. PORD of Michigan. Mr. Speak-
er, I yield myself such time as I may
consume.
Mr. Speaker. I rise in support of
H.R. 2705, a measure which addresses
an unforseen emergency situation in
the Federal Employees Health Bene-
fits Program EFEHBPJ
On May 30, 1989, Aetna Life Insur-
ance Co. notified the Office of Person-
nel Management that effective Janu-
ary 1, 1990, it will no longer offer its
Indemnity benefit plan to Federal em-
ployees and retirees. That notice sig-
nalled the end of a 30-year relation-
ship with the health benefits program
and means that 187,000 enrollees will
have to enroll in another health insur-
ance plan.
The impact of Actna's decision, how-
ever, reaches far beyond those en-
rolled in the indemnity benefit plan.
Thisis because Aetna's premium is
used as part of the statutory formula
for calculating the Federal Govern-
ment's share of health premiums.
Since Aetna has dropped out of
FEHBP, the Office of Personnel Man-
agement finds itself without the six
premiums it needs to calculate the
Government contribution to health
premiums. Absent a legislative remedy
to the Aetna situation, enrollee premi-
ums could rise by more than 30 per-
cent in 1990.
H.R. 2705 is intended to provide
such a remedy to this emergency situ-
ation. The bill maintains the status
quo and, according to a cost estimate
prepared by the Congressional Budget
Office, would have no budgetary
Impact. I submit the CBO correspond-
ence to be printed in the RECoRn at
this point:
ANALYSIS or H.R. 2105 -
Relating to the method by which Govern-
ment contributions to the Federal employ-
ees health benefits program shall be com-
puted for 1990 and 1991 if no Government.
wide indemnity benefit plan participates in
that year.
Introduced on June 21, 1989 by Chairman
William D. Ford of the Committee on Post
Office & Civil Service (for himself, Mr. Ack-
erman. Mr. Gilman, and Mr. Myers of Indi-
ana).
BACKGROUND
In order to determine the Federal Govern-
ment's (employer's) share of FE/113P premi-
ums each year. the Office of Personnel
Management (OPM) is directed to deter-
mine the average total premium for six
health plans- The Government's share is
then a dollar amount equal to 50% of that
six-plan premium average.
The six plans are:
1. Service Benefit Plan (Blue Cross/Blur
Shield /Ugh option).
2. Indemnity Benefit Plan (Aetna high
option).
3/4. The two largest enrollment employee
organbation plans.
5/6. The two largest HMO*.
Since Aetna has dropped out of "%IMF,
OPM finds itself without the six premiums
It needs to calculate the Government's pre-
mium share (*2 above Is maiming). Even
without the Aetna issue. FERBP premhinis
are expected to rise by approthrustely 15
Percent. Absent a. legislative remedy to the
Aetna situation. enrollee premiums could
rise by more than 80 percent.
PROPOSAL?A PROXY PREMIUM
In order to avoid a calculation based upon
the "Big Five" instead of Big Six premiums,
and a shift of $600 million in premium costs
to enrollees. the proposal would direct OPM
to create a "mots Premium" for the nett
two years to permit a Big Six calculation.
The proposal maintains the status quo and
does not affect the budget deficit.
The proxy premium would reflect what
Aetna's premium would otherwise be had
the carrier remained in the FEIIBP and the
government share of FEBBP premiums
would be approximately the same as if
Aetna had remained in the program.
For the 1990 contract year, the proxy pre-
mium would be determined by taking
Aetna's 1989 premium and increasing that.
premium by the average increase in the
other five plans which remain part of the
Big Six.
The same formula would be used for the
1991 contract year, except that the base for
the 1091 proxy premium would be the proxy
premium OPM created for 1990 adjusted for
11 3189
the average premium ir crease for the other
five plans for 1991.
Under the proposal, the Big Six calcula-
tion would be based upon the following:
1. Service Benefit Plan (Blue Cross/Blue
Shield high option).
2. Proxy Premitun (for Indemnity Benefit
Plan)
3/4. The two largest enrollment employee
organization plans.
5/6. The two largest HMOs.
Note that the proxy premium would be
utilized only if OPM is unable to contract
with another carrier for a goverrunentwide
Indemnity Benefit Plan.
CONGRESSIONAL BUDGET OFFICE.,
DS. CONGRESS,
Washington, DC June 27, 1989..
Ron. WILLIAM D. FORD,
aiairman, Committee on Post Office and
Civil Service. U.S. Hcntse of Representa-
tives, Washington, DC
DEAR MR. CHAIRMAN: At the request of
your staff, CBO has reviewed R.R. 2705, as
introduced and referred to the Committee
on Post Office and Civil Service. The bill
would set the method by which government
contributions to the federal employees
health benefits program (FEHR) would be
computed for contract year 1990 or 1991 If
no government-wide indemnity plan partici-
pates in that year. The bill addresses a prob-
lem created by the withdrawal of Aetna
from the FMB program effective at the
end of this calendar year.
According to the method for calculating
the government share of premiums (the so-
called "Big Six" formula specified in Sec-
tions 8906(a) and 8906(b) of title 5, chapter
89, of the United States Code), the govern-
ment share is set at the lesser of: (A) the
dollar amount equal to 60% of the average
of subscription charges set by the highest
level of benefits offered by (1) the Indemni-
ty benefits plan (currently Aetna. high
option). (2) the service benefit plan (Blue
Cross/Blue Shield, high option), (3) the two
largest employee organization plans, and (4)
the .two largest comprehensive plans
(HMOs); or (B) 75% of the actual subscrip-
tion Mantes of the plan.
The proposal mandates a method for cre-
ating a proxy for Aetna's subscription
charges if the Office of Personnel Manage-
ment does not contract with an indemnity
plan to replace Aetna for contract (mlen-
dar) years 1990 or 1991. That method would
be to calculate an average by which the sub-
scription charges of the other five plant in
the "Big Six" change (from 1989 to 1990).
and to change Aetna's 1989 subscription
charges by that average change. The result
would be considered a proxy for Aetna's
1890 subscription charges for use in the
"Big Six" formula. The government share
of FE1313 premiums would then be calculat-
ed as specified in current law. The same
method would be used in similar fashion to
calculate ?the government share for 1991,
using the average change in the "Big Five"
subscription charges from 1990 to 1991 and
applying it to Aetna's subscription charges
"deemed" in effect for 1990.
CBO's baseline budget projections for goy-
errunent payments of FE1113 premiums are
based on data provided by the Office of Per-
sonnel Manageinent. The baseline assumed
continuation of the "Big Six" formula for
calculating the federal government's share
of WEB premiums. The method mandated
by H.R. 2705 for calculating that share in
the absence of an indemnity plan would
closely approximate the result that is as.
sumed In the baseline. Use of the mandated
method thus is consistent with CHO% base-
line projections of government payments of
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11 3190 CONGRESSIONAL RECORD ?HO
11.11B premium for FY 1990 through FY
1994. The proposal as drafted would there-
fore have no budgetary impact when meas-
ured against the CBO February baseline.
We will be pleased to answer further ques-
t ions about this estimate. The CHO contact
is Alan Fairbank (226-2820).
Sincerely,
ROBERT D. REISCHAUER.
To solve the dilemma facing the
health benefits Program, H.R. 2705
mandates a method for creating a
proxy for Aetna's subscription
charges. The method would be used
only in the event the Office of Person-
nel Management does not contract
with an indemnity benefit plan in
place of Aetna for contract years 1990
or 1991.
The proxy premium would replicate
the Aetna premium that would have
been in existence had the carrier re-
mained in the health program.
Mr. Speaker, H.R. 2705 is cospon-
sored by the ranking minority member
of the full committee [Mr. GnatAN1
and the Subcommittee on Compensa-
tion and Employee Benefits [Mr.
MYERS], as well as the chairman of
that subcommittee (Mr. AcKzabarr).
This bipartisan support is indicative of
the bipartisan concern we share for an
already ailing program. With program
reform in progress, this is not the time
for fiscal opportunists to take advan-
tage of a critical situation.
As I, along with Representative ACK-
ERMAN and Senators Guam and PRYOR
of the Senate Committee on Govern-
mental Affairs, wrote to OPM on June
2, 19E9, "The absence of Aetna from
the FEHBP must, by necessity, pre-
cipitate action which safeguards en-
rollees from both any further erosion
of plan benefits or unanticipated in-
creases in enrollee premiums." H.R.
2705 is the appropriate action.
I urge adoption of ER. 2705 as a
means to ensure that all Federal en-
rollees will have uninterrupted access
to high quality medical care at fair
and reasonable rates.
0 1620
Mr. Speaker, I reserve the balance of
my time.
GENERAL LEAVE
Mr. FORD of Michigan. Mr. Speak-
er, I ask unanimous consent that all
Members may have 5 legislative days
in which to revise and extend their re-
marks on H.R. 2705, the bill presently
under consideration.
The SPEAKER pro tempore (Mr.
Bosco). Is there objection to the re-
quest of the gentleman from Michi-
gan?
There was no objection.
Mr. OILMAN. Mr. Speaker. I yield
myself such time as I may consume.
(Mr. OILMAN asked and was given
permission to revise and extend his re-
marks.)
Mr. OILMAN. Mr. Speaker, I am
pleased to rise in support of H.R. 2705,
emergency legislation relating to the
unexpected withdrawal of Aetna In-
surance Co. from the Federal Employ-
ees Health Benefits Program. Earlier
this month, Aetna Insurance Co. an-
nounced that it was no longer offering
its traditional health insurance cover-
age to Federal Government employ-
ees. Aetna's plan was one of two sys-
temwide plans offering both standard
and high option insurance coverage
for tens of thousands of Federal em-
ployees. Aetna's pullout impacts the
Federal Health Benefits Program with
serious problems in terms of plan
structure and contract negotiations.
The legislation before us (H.R. 2705)
alleviates these problems on a tempo-
rary basis by creating a proxy for
Aetna's subscription charges if the
Office of Personnel Management does
not contract with an indemnity plan
to replace Aetna for the contract years
1990 or 1991.
Mr. Speaker, the committee is pres-
ently reviewing several options for
reform of the current health benefits
program. Last year, we requested the
Congressional Research Service to
devise several strategies for FEHBP
reform. CR,S issued the report last
month and the committee subsequent-
ly held hearings on the myriad issues
it presented. The legislation before us
today merely retains the status quo
until the committee has had ample
time to develop legislation for total
program reform.
I understand the administration has
begun work on their own proposal ad-
dressing the problems presented by
Aetna's withdrawal from the health
benefits program. I believe that we all
share the same goals of stabilizing
health benefit premium costs while
ensuring the best health protection
for Federal employees. The pending
legislation was drafted with these
goals in mind and our committee looks
forward to entering into discussions
with the administration in order to
solve any problems which may cur-
rently exist in the health benefits pro-
gram.
Because of the timing of Aetna's de-
cision to withdraw coupled with pend-
ing contract negotiations, a timely leg-
islative response is needed to ensure a
smoothly run and effective health
benefits open season. Time delays
could hamper OPM in its contract ne-
gotiations with the insurance carriers
while adversely impacting on the
scheduled open season.
Mr. Speaker, health insurance is of
primary concern to all Federal em-
ployees and is an important tool in re-
cruiting and retaining a qualified and
motivated workforce. The CRS report
points out that Federal employees al-
ready* pay more for health insurance
coverage than their comparable pri-
vate sector counterparts. Now is not
the time to consider alternatives that
would further increase enrollee costs
while damaging the Federal Govern-
ment's competitiveness in the work-
place. The Congressional Budget
Office has indicated that the proposed
legislation is budget neutral and is
consistent with its baseline projec-
tions. Accordingly, I urge all of our
colleagues IA
2705.
0 1630
Mr. FORD of Michigan. Mr. Speak;- -
er, I yield 5 minutes to the gentleman
from New York [Mr. ACKERMAN].
(Mr. ACKERMAN asked and was
given permission to revise and extend
his remarks.)
Mr. ACKERMAN. Mr. Speaker, I
rise in strong support of H.R. 2705.
This measure provides relief to the
Federal Employees Health Benefits
Program enrollees from an unantici-
pated premium increase due to the
Aetna Life Insurance Co.'s decision to
withdraw from the health program.
Last month, the Aetna Life Insur-
ance Co. notified the Office of Person-
nel Management that, effective Janu-
ary 1, 1990, it will no longer partici-
pate in the FEHBP. Aetna was once
the second largest carrier participating
in the FEHBP. However, over the past
decade, the Aetna plan has lost its
younger and healthier enrollees to
other plans.
As a result, Aetna was left with
older, and more expensive enrollees, a
fact which drove up its premium to
such a level that Aetna decided it was
no longer prudent to continue its par-
ticipation in the program.
Aetna's decision has created substan-
tial uncertainty with regard to the al-
location of premiums between enroll-
ees and the Federal Government be-
cause the Aetna plan was one of the
six FEHBP plans used to determine
the Government contribution. Enroll-
ee costs would increase by as much as
18 percent simply as a result of
Aetna's departure. This premium in-
crease is based upon on a projected re-
calculation of the formula used to de-
terrnine the Government's contribu-
tion to each enrollee's health plan.
This increase is apart from any escala-
tion attributable to medical inflation
or increased utilization of health care
services.
H.R. 2705 provides that the Govern-
ment contribution be calculated as if
Aetna still participated in the FEHBP.
The bill does not authorize the appro- -
priation of any additional amount to
the health program. It simply provides
protection for Federal employees, an-
nuitants and their dependents against
a significant and unanticipated premi-
um increase.
For those reasons, Mr. Speaker, I
urge my colleagues to vote in favor of
H.R. 2705.
Mr. OILMAN. Mr. Speaker. I yield 3
minutes to the gentlewoman from
Maryland [Mrs. MORELLA].
Mrs. MORELLA. Mr. Speaker, I join
with my colleagues, Mr. FORD, Mr.
ACKERMAN, and Mr. OILMAN. in sup-
port of H.R. 2705, the FEHBP "fix"
proposal. I thank the chairman and
ranking member for taking this action
so quickly?for time is critical.
We are forced to bring this legisla-
tion to the House floor because the
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CONGRESSIONAL RECORD ? HOUSE 113191
er of the Federal employ-
ealth benefit. plan's indemnity
plan, Aetna Life Insurance Co., has
notified the Office of Personnel Man-
agement tOPMl that it would no
longer participate in the Federal Em-
ployees Health Insurance Program.
Some 187.000 enrollees and their fami-
lies, mostly retirees, will be left with-
out health care coverage. These people
will be forced to select a new health
care insurance carrier.
The problem created by the pullout
is that the Indemnity plan, adminis-
tered by Aetna since 1959, is part of
the "Big Six" formula which is used to
determine the premiums paid by fed-
eral employees.
Unfortunately, for the past several
years Federal employees have been hit
with hugh health care premium in-
creases. As a result of the high level of
uncertainty, OPM commissioned a
study of the entire FEHB plan which
called for a complete overhaul of the
world's largest group insurance pro-
gram. The FEHB plan covers more
than 9 million employees, annuitants,
and dependents.
The administration has informed us
that it will soon present its own premi-
um stabilization legislation. H.R. 2705
meets the same goal that the adminis-
tration is pursuing: stabilize premiums
for Federal employees. Until we get
more information on that proporad,
support the FEHBP fix legislation
which is contained in ER. 2705. This
proposal maintains the status quo and
does not affect the budget deficit. The
Congressional Budget Office reported
that H.R. 2705 is consistent with its
baseline projections and would have
no budgetary impact.
I hope all my colleagues will support
this urgently needed legislation. We
must act quickly because the Govern-
ment is currently negotiating with the
carriers toward establishing the 1990
rates. If we fail to act on this legisla--
tion. the Office of Personnel Manage-
ment could be forced to delay the Fed-
eral employees health benefit plan
annual open season for those wishing
to change plans and avoids a potential
shift of $600 million in premium costs
to Federal employees covered under
the FEHBP.
I urge prompt consideration and pas-
sage of this important legislation.
Mr. GILLMAN Mr. Speaker, I
thank the gentlewoman from Mary-
land [Mrs. MORELLA] for her support-
ing arguments.
Mr. Speaker, I reserve the balance of
my time.
Mr. FORD of Michigan. Mr. Speak-
er, I yield such time as she may con-
sume to the gentlewoman from Ohio
(Ms. ?AKAR], a member of the subcom-
mittee which is wrestling with the per-
manent solution to this problem.
Ms. OAKAR. Mr. Speaker, I want. to
thank my distinguished chairman and-
thank the ranking member, along with
the gentleman from New York (Mr.
ACKERMAN] and others for their say on
this matter and for a quick reaction of
the implications of the big 6 provider,
Aetna's decision to withdraw from the
Federal Employment. Health Policy
Program.
Mr. Speaker, I rise In strong support
of H.R. 2705 which will bring no addi-
tional costs to this year's deficit calcu-
lations. However, if we fail to act in
support of this legislation. Federal em-
ployees could see as much as 30 per-
cent increase in their own health con-
tributions. This is in addition to the
20-percent increase they suffered last
year.
I think at this point, it is interesting
to take a look at what the Federal Em-
ployment, Health Program really is.
There are about 400 programs from
which Federal employees and most of
the retirees can choose, and it could be
said that is wonderful to have all these
options. The fact is that Federal em-
ployees, unlike the private sector, par-
ticularly the larger corporations, pay
40 percent of these premiums. 1, per-
sonally, have always felt that that.
benefit ought to be provided for as
part of the Federal employment pay
package. For while they have this op-
portunity, they have seen in the last 8
or 9 years a problem with respect to
the quality and quantity of health
care delivery, and they have seen re-
peated actions in an attempt to elimi-
nate this system and replace it with
the voucher system, et cetera.
If we do not act in this way, because
we are dealing with a very, very wide
spectrum type program, we really have
to act expeditiously and deal with this
problem of having one of the major
providers withdraw from the Federal
Health Employment Program.
CI 1640
I think time is of the essence. I know
that some will say that we should have
a chance to take a look at it and deal
with it conscientiously. I wish there
were more time. I am afraid that even
though this is a fine program and even
though it still needs improvement,
many would be very, very upset if we
do not expeditiously pasa this bill.
R.R. 2705. I think that if we were to
be faced with any kind of a stalemate
in this regard, the Federal workers,
who are always the brunt of our
budget cuts, and the Federal retirees
and career public servants, who are
the easy targets, will again bear the
brunt of our inability to act
So until we can adequately address
the flaws within the Federal Health
Benefits Program, let us have a unani-
mous vote for this legislation and
spare any apprehension or anxiety on
the part of our Government workers,
some of whom we are having a hard
time retaining because they are under-
paid and undervalued. If we do not
pass this legislation, this would just be
another blow that we would strike at
those kinds of career people in partcu-
lar.
So. Mr. Speaker, I urge the support
of this bill by the Members. I think it
Is a very, very important bill. I con-
gratulate the chairman of the commit-
tee, the subcommittee chairman, and
the ranking members for their coop-
eration, and I hope that we can over-
whelmingly support this bill and send
the right signal to the Senate and to
the administration that we had better
act quickly.
Mr. FRENZEL Mr. Speaker, H.R. 2705 con-
cerns the calculation of the Federal Govern-
ment's contribution to the Federal Employees
Health Benefits Program. This bill retains the
status quo by creating a phantom health plan
to replace Aetna in the premium calculations
now that Aetna has announced its withdrawal
from FEHB.
Mr. Speaker. the FEHB seems to have
enough cost problems already without creat-
ing a phantom plan to perpetuate those prob-
lems. I recognize that this bill is a stopgap
measure designed to approximate this year's
Government' contribution toward employee
health costs while OPM seeks to replace
Aetna. The employees and the tax payers
would be better served if Aetna's departure
from the plan forces a long, hard look at rising
health care costs both to the Government and
Its employees.
Instead of maintaining the high "big 6" av-
erage with this phantom plan, a "big 5" aver-
age would save the Government mama of
doNars by reducktg its contribution to FEHB.
While this bill does not violate the Budget Act,
regret that a chance to effect budget savings
Is being ignored by continuing to calculate a
big 6 average instead ot using the big 5 that
we left.
The gimmick of using a phsniont pion may
not viekfie the Budget Act, but it cbes viotaba
commonsense budgeting.
Mr. FORD of Michigan. Mr. Speak-
er. I have no further requests for time,
and I yield back the balance of my
Ume.
Mr. GILMAN. Mr. Speaker, I have
no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro terapare (Mr.
Vounasa). The question is on the
motion offered by the gentleman from
Michigan (Mr. Form) that the House
suspend the rules and pass the bill.
ER. 2705. as amended.
The question was taken; and (two-
thirds having voted in favor thereof)
! the rules were suspended and bill, as
amended, was passed.
A motion to reconsider was laid on
the table.
APPROVING DESIGNATION OF
THE CORDELL BANK NATION-
AL MARINE SANCTUARY
Mr. JONES of North Carolina. Mr.
Speaker, I move to suspend the rules
and pass the joint resolution (N.J.
Res. 281) to approve the designation
of the Cordell Bank National Marine
Sanctuary, to disapprove a term of
that designation, to prohibit the ex-
ploration for, or the development or
production of, oil, gas, or minerals In
any area of that. sanctuary, and for
other purposes, as amended.
The Clerk read as follows*
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