This appropriation funds the Government's share of health benefits costs for annuitants and survivors who no longer have an agency to contribute the employer's share. The Office of Personnel Management requests the appropriation necessary to pay this contribution to the Employees Health Benefits Fund and the Retired Employees Health Benefits Fund. These trust revolving funds are available for: (1) the payment of subscription charges to approved carriers for the cost of health benefits protection; (2) contributions for qualified retired employees and survivors who carry private health insurance under the Retired Employees Health Benefits (REHB) program and (3) the payment of expenses incurred by the Office of Personnel Management in the administration of the REHB program.

Beginning in the 1999 contract year, in accordance with Public Law 105-33, the maximum government contribution will be 72 percent of the weighted average monthly premium of all plans participating in the FEHB Program, with a 75% limitation on the contribution to any specific plan.

A number of laws have been passed over the last several years to require the Postal Service to finance a share of the Government's costs toward certain postal service annuitants' health costs. The most recent action, Public Law 103-66, the Omnibus Reconciliation Act of 1993, enacted on August 10, 1993 requires the Postal Service to make three fixed annual payments of $116 million to the Employees Health Benefits Fund during FY 1996-1998 as reimbursement for costs incurred by the Government on behalf of postal retirees during the years elapsed since the Postal Service reorganization in 1971. Conferees believe that after these payments have been made, the Postal Service will have completely paid its debt for past retiree health benefits. These payments are in addition to those required by Public Law 101-508, enacted on November 5, 1990 requiring the Postal Service to make monthly contributions for a prorated portion of the Government costs, based on post-1971 service. The amount requested in this appropriation recognizes these payments to be remitted by the Postal Service for their portion of annuitants health benefits costs.

Budget Authority:

Funds appropriated to this account remain available until expended for the purpose of funding the Government’s share of health benefits costs for annuitants and survivors, who no longer have an agency to contribute the employer’s share. OPM has the authority to notify the Secretary of the Treasury of the "such sums as may be necessary" to carry out these provisions. An increase of $451,336,000 is necessary to cover the increase in obligations.

Obligations:

The overall increase in obligations for this program is made up of two parts:

An increase of $451,923,000 in FY 2000 is necessary to provide for the growing number of enrollees and the estimated impact of premium increases effective January 2000.

This appropriation also provides financing for the Government's share of health benefit costs for annuitants and survivors covered under the Retired Employees Health Benefits Program. Public Law 96-156, the Retired Federal Employees Health Benefits Act - Government Contribution, provides for increases in Government contributions toward the subscription charge for health coverage, ties to increases in the cost of Medicare Part B, for those annuitants who retired prior to July 1, 1960. The net impact of the increased rate of contributions for those enrolled with private insurance carriers and the decreases in the number of enrollees is a decrease in Government costs of $587,000.

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