OPM has determined that using the rebates to reduce future premiums is the most efficient and timely way to ensure that the funds benefit Federal employees and agencies that pay FEHB premiums. OPM will apply rebates to lower rates, as applicable, either in the next plan year, or will put rebates into a plan’s reserves to lower rates in subsequent years. If OPM sent rebate checks to FEHB enrollees, it would involve establishing new administrative systems at considerable cost. OPM’s approach assures that all funds from rebates go to lower premium costs rather than paying administrative expenses. Our approach uses existing staff and existing systems resulting in no additional cost. OPM has already factored the rebates into its rate negotiations with insurers for the 2014 plan year. Using these rebates to lower premiums is also in accordance with how OPM is required to use other types of rebates, refunds, and overpayments.
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