[Congressional Record Volume 143, Number 80 (Tuesday, June 10, 1997)]
[Extensions of Remarks]
[Page E1165]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


   INTRODUCTION OF LEGISLATION TO ESTABLISH A PERMANENT FORMULA FOR 
   GOVERNMENT CONTRIBUTIONS TO FEDERAL EMPLOYEE HEALTH BENEFIT PLANS

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                          HON. STENY H. HOYER

                              of maryland

                    in the house of representatives

                         Tuesday, June 10, 1997

  Mr. HOYER. Mr. Speaker, today, I am introducing legislation to set a 
permanent formula for calculation of the Federal contribution to the 
Federal employee health benefit plans. My bill would ensure that the 
Government contribution for civil servants and Federal retirees would 
remain at approximately 72 percent.
  Under existing law, the contribution is set by a formula based on the 
premiums of five of the largest plans and a sixth, so-called phantom, 
premiums that represent a large plan that dropped out of FEHBP. This 
formula, passed in 1989, has held the Federal contribution near 72 
percent but will expire at the end of calendar year 1998.
  It is estimated that failure to extend or replace this formula would 
cost an enrollee about $20 a month or $240 per year. That is 
unacceptable--especially at a time when the budget resolution asks 
Federal employees to pay an additional five tenths of 1 percent into 
the CSRS and FERS retirement systems.
  I want to thank the many people on the House Budget Committee and at 
the Office of Management and Budget who responded to my strenuous 
objections to not replacing the current formula. I am pleased that the 
budget agreement and resolution assume continuation of the 72-percent 
contribution. This legislation therefore has no budget implications 
and, according to preliminary OPM cost estimates, may actually save a 
small amount of money over the budget agreement baseline.
  This bill will calculate, each year a weighted average of the 
subscription charges for all plans. The employee's or retiree's premium 
for each plan will be calculated by subtracting 72 percent of that 
weighted average from the total charge. Unlike previous formulas, this 
bill establishes a permanent formula that will automatically adjust as 
carriers enter or leave the FEHBP Program.
  The concept of this stable fair share formula was developed by the 
Office of Personnel Management at my request. It has been refined 
through extensive discussions with Federal employee organizations, 
health plan carriers, and other interested parties. I am pleased that 
Mrs. Morella, Mr. Cummings, Mr. Moran of Virginia, Mr. Fazio of 
California, Mr. Ford, and Mr. Davis of Virginia have joined as original 
cosponsors.
  I am hopeful that, working with Mrs. Morella and Mr. Cummings, we can 
add this important legislation to the reconciliation measure as it is 
marked up in the Government Reform and Oversight Committee. I invite 
Members who share my concern about protecting this critical benefit for 
Federal employees and retirees to join us as cosponsors of this 
legislation.

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