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News Release

FOR IMMEDIATE RELEASE
Tuesday, April 20, 2004
Contact: Michael Orenstein
Tel: 202-606-2402

OPM Issues Call Letter to Federal Employees Health Benefits Providers

Urges Carriers to consider adding HSAs, HRAs and HDHPs for Next Year.

Washington, D.C. - The U.S. Office of Personnel Management has issued its annual Call-Letter which provides guidance and negotiation objectives for benefit and rate proposals from health plans participating in Federal Employees Health Benefits (FEHB) programs.

The Call-Letter (attached) encourages the Carriers or underwriters to specifically consider proposing High Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) for eligible Federal employees and retirees, as well as Health Reimbursement Arrangements (HRAs) for those who are ineligible for HSAs because of their Medicare status.

The Director trusts both the intelligence and the decision-making abilities of Federal employees and understands that when they are appropriately informed, Federal employees are among the wisest consumers of healthcare in the Nation. For 2005, Federal employees will have more options that empower personal decision-making and maximize their ability to put more of their hard-earned dollars to work for their needs and those of their families - a cornerstone of the Administration's health care policies.

OPM wants you to know we sincerely appreciate the tremendous efforts you have made to build in flexibilities for Reservists and National Guard members. These heroes and their families continue to need our support and we thank you for your responsiveness. At the same time, we ask you to remember the necessity for ongoing flexibility in administering benefits and services in the event of terrorist activities.

OPM Director Kay Coles James has taken aggressive steps to keep the FEHB program on the cutting edge of employer-sponsored health benefits, and she has recognized the unique nature of the program and highlighted its nationwide accessibility and competitive dynamic which underpin its reputation as a model of excellence for employee health care.

The introduction of HSAs to the Federal team has been the source of both great excitement and significant concern among both employees and stakeholders. The Director has met with the presidents of the American Federal of Government Employees, the National Treasury Employees Union, the National Association of Retired Federal Employees, manager associations and numerous other stakeholders over the past month. As you prepare to develop products and plans which will operate within an environment marked by HSAs, understand the Director will be working closely and on an ongoing basis with stakeholders to continue listening to their concerns and seeking opportunities to address issues such as potential adverse selection. As this process continues, the Director is looking forward to an open season in which employees can choose not only their preferred plan, but also the vehicles through which they will be able to pay health costs for themselves and families - FSAs and/or HSAs.

In the call letter, Frank Titus of OPM Human Resources Products and Services and Abby Block of OPM Strategic Human Resources Policy praise the work of the FEHB carriers, and challenge them to continue to do the hard work expected of them. "We look to you to continue to explore new options and bring us your most creative ideas to meet the market demand for the best possible FEHB benefit package at an affordable cost. As we conduct this year's negotiations, we will strive to keep the FEHB Program a model of quality, competition and consumer choice."

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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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