House leaders of the Committee on Oversight and Accountability are looking into the federal employee health benefits program after a watchdog report identified risk of fraud over ineligible membership.

A Jan. 23 letter sent to the Office of Personnel Management by committee Chairman James Comer (R-Ky.) follows up on a Government Accountability Office report that revealed OPM lacks a fail-safe process for identifying and removing ineligible beneficiaries. As a result, the program could be spending up to $1 billion per year in potentially improper payouts.

“This is a flagrant waste of funds and may be driving up premium costs for eligible participants,” said Chairman James Comer (R-Ky.) in his letter to OPM.

FEHB is the largest employee-sponsored health care plan in the country, offering benefits to more than 8 million federal employees, family members and others at a cost of about $59 billion in 2021. The program is dual funded by enrollees who pay into their plans and the government, which contributes 72% of the average premiums.

While OPM is the administrator of the program, it relies on more than 160 government employing offices and 87 contracts with health insurance carriers to facilitate membership.

A lack of consistent and enforced checks on ineligibility have left the program vulnerable, GAO said.

The report found that OPM could not definitively say how many ineligible family members receive benefits from the FEHB program or how much improper payments cost it, a problem that the Office of Inspector General has identified as a “persistent top management challenge.”

OPM has taken steps to clamp down on ineligible members who slip through. In 2018, the agency said employing offices and FEHB carriers may request proof of eligibility at any time, though it was not a requirement. In 2021, OPM then mandated federal employing offices to verify family members for new-hire and qualifying life event enrollments, but not during open season.

Oficials told GAO that verifying eligibility during open season has not been feasible because of the high number of enrollments during that four to five week period.

Since that guidance, the report said OPM has not implemented a way to monitor whether carriers or employing officers are complying with verification, according to GAO.

“OPM officials told us they do not have the funding necessary to perform monitoring of employing offices or carriers and have no plans to conduct this monitoring in the future,” the findings read.

OPM did not immediately respond to a request for comment.

The OIG has previously documented instances of fraud and improper payments associated with ineligible members in the benefits program, including one instance where FEHB paid claims totaling more than $100,000 on behalf of two ineligible individuals who remained on the plans for 12 years.

Molly Weisner is a staff reporter for Federal Times where she covers labor, policy and contracting pertaining to the government workforce. She made previous stops at USA Today and McClatchy as a digital producer, and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.

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