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News Release

FOR IMMEDIATE RELEASE
Friday, January 23, 2004
Contact: Michael Orenstein
Tel: 202-606-2402

OPM Director Kay Coles James Announces Results of Successful FSA Program Open Season

121,342 federal employees (6 percent of federal work force) open health-care or dependent-care flexible spending account for 2004

Washington, D.C. -- Statistics released today by the U.S. Office of Personnel Management show 121,342 current federal employees elected to open a flexible spending account this year to help pay their out-of-pocket medical bills or the costs of dependent care.

The figure represents the number of individuals who elected FSA benefits for 2004 during a recent open season enrollment period and is a four-fold increase over the number of FSA account holders last year.

The addition of flexible spending account benefits increases the level of comparable benefits found in the private sector and that have been made available to federal employees during the past few years. Federal job recruiters now have competitive benefits and tools as they scout for talented individuals to enter public service. Last year, long-term care insurance, also sponsored and implemented by OPM, became available to federal employees and retirees, active and retired members of the uniformed services, and eligible family members.

“In impressive numbers, federal employees have embraced FSAs as a planning tool, one that can help increase their buying power in health care and in the care of their children and dependent parents,” said OPM Director Kay Coles James. “Federal employees are wise consumers of health care. And as I have said before, my hope is that they will educate their colleagues on the effectiveness of these accounts and encourage more of them to enroll during the next open season. Employees deserve a greater choice in targeting their health- and dependent-care dollars.”

Under the FSAFEDS Program sponsored by OPM, 116,281 federal employees elected to fund a health-care FSA by the December 15 close of the open season; 18,003 employees elected dependent-care FSAs. More than 12,871 employees will fund both a health-care and dependent-care account.

Today’s announced figure nearly quadruples the number of employees who opened FSA accounts in 2003, when nearly 31,000 individuals established early-enrollment accounts. James said the increase is attributable, in part, to growing awareness of the product and an aggressive education campaign she asked the program’s administrator, SHPS, to conduct during the recent open season. The 2003 early enrollment period was aimed at individuals familiar with FSA program benefits.

“I personally appreciate the work of National Treasury Employee Union President Colleen Kelley and her officers in publicizing and promoting this important benefit to union members,” said James. “NTEU’s communications network with members has been instrumental in the program’s successful enrollment period.”

The FSAFEDS Program lets employees contribute pre-tax income up to $4,000 each year to a health-care FSA to pay for qualified medical expenses not covered by the Federal Employees Health Benefits Program, including dental care, eyeware, prescription drug co-payments and over-the-counter medicines. Employees also may fund a separate FSA account up to $5,000 annually to cover the cost of child care or to pay for the care of qualifying parents.

OPM data show that 9,919 employees elected to contribute the maximum $4,000 to a health-care FSA in 2004, while 46,886 elected to contribute $250 to $1,000. The data also show that 8,653 employees elected dependent-care FSA coverage at the maximum $5,000. Another 2,444 employees elected coverage between $250 and $1,000.

Before the beginning of each new calendar year, employees wishing to participate in the FSAFEDS Program must commit a specific dollar figure -- subject to a $250 minimum per account and previously stated maximums -- to a health-care or dependent-care account. During the open season for 2004, employees committed $190,725,535 to health-care FSAs, while $64,102,118 was committed to dependent-care FSAs.

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Our mission is to Recruit, Retain and Honor a World-Class Workforce to Serve the American People. OPM supports U.S. agencies with personnel services and policy leadership including staffing tools, guidance on labor-management relations and programs to improve work force performance.


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