Additional Cost of Insurance and Finance for Tribal Employers

The following chapter contains more specific cost of insurance information applicable to Tribal Employers.

Making Withholdings and Contributions

Employing Offices

The full cost of enrollment must be submitted to the paymaster on a current basis for each pay period the enrollment continues. Tribal employers are responsible for paying the total premium for the employees enrolled, in arrears for the prior month’s coverage. Non-payment of premiums will result in the termination of FEHB coverage. When collecting an elected plan’s employee share from the employee’s pay, employers are supplementing themselves for the arrears total premium cost.

If a tribal employer fails to pay the full premium amount to the paymaster for any month, the tribal employer is liable for premiums until it notifies its employees of termination of FEHB coverage for non-payment of premiums or until OPM terminates the tribal employer from the FEHB Program for non-payment of premiums (whichever occurs sooner).

Under these circumstances, a tribal employer will not be allowed to reenter the FEHB Program until the Open Season of the following calendar year. For example, if a tribal employer is terminated for non-payment of premiums in June 2032, the tribal employer would not be eligible for reinstatement until Open Season of 2033 with an effective coverage date of January 1, 2034.

Prior to reinstatement, the tribal employer must pay any premium amount that may remain as an outstanding liability from the tribal employer’s previously terminated FEHB participation and must pay a reentry fee equal to the costs associated with adding the tribal employer to the FEHB Program. In addition, the tribal employer must demonstrate the ability to pay the premium by maintaining a minimum balance in its bank account equal to one month’s current premium.

Finance

Paymaster

OPM has entered into an agreement with the U.S. Department of Agriculture’s National Finance Center (NFC) to serve as paymaster.

Administration Fee

Tribal employers are responsible for paying the entire premium for their tribal employees enrolled in the Federal Employees Health Benefits (FEHB) Program. Tribal employers are solely responsible for collecting their tribal employees’ share of the premium amount. Tribal employers are required to pay, at a minimum for each tribal employee, the same percentage as Federal agencies are required to pay for active non-postal employees, which is approximately 72 to 75 percent of average premiums. For more information about shared cost and employer contribution, see Chapter 2, Cost of Insurance, Government’s Share.

Tribal Employer's Share

The tribal employer has the option to pay up to 100% of the total premium. Additionally tribal employees are responsible for the administrative fee associated with enrollment and billing functions provided by the paymaster.

The tribal employer’s contribution for tribal employees is paid by the tribal employer through an electronic funds transfer to the paymaster. If the tribal employer does not pay its contribution for its tribal employees enrolled in the FEHB Program, along with the tribal employees’ share of the contributions, and the administrative fee on the payment due date, the paymaster will notify OPM that the premium was not paid. OPM will work with the tribal employer to ensure payment. Failure to maintain current premium payment will result in cancellation of coverage. Tribal employers will be liable for all premiums payable with respect to both the tribal employer and the tribal employees’ shares of coverage until the date of cancellation.

Premiums are paid in arrears. For example, on the first business day of May a tribal employer must have adequate funds in its bank account to pay the premium amount for coverage extended during April.

The tribal employer will collect premiums from enrolled tribal employees and deposit the funds in a bank account, together with the tribal employer’s contribution, from which the paymaster will withdraw payment, on a monthly basis, to pay for the prior month’s insurance coverage. The bank account must be able to handle automated clearinghouse house (ACH) transactions such as an electronic funds transfer (EFT). Payment for a tribal employee’s coverage can be prorated based on the number of calendar days the coverage is in effect.

Tribal employers electing to purchase FEHB for their employees will be responsible for the administrative and other necessary costs associated with processing enrollments and paying premiums. The administrative fee is per tribal employee per month. This fee will pay for the tribal employee enrollment, premium collection and transmission, and billing functions provided by the paymaster.

OPM strongly recommends that each tribal employer maintain a minimum of one month’s premiums and administrative fee in its bank account in order to avoid termination of FEHB coverage for non-payment of premiums.

Billing Unit

Tribal employers may have either one or multiple billing units. Each billing unit will be assigned a four-digit billing code and will be responsible for premiums for all enrolled tribal employees listed within that unit. The entire premium for the billing unit must be available when the paymaster makes the withdrawal. Partial payments will not be accepted. Each billing unit must have a separate bank account. If OPM terminates for non-payment of premiums, it will terminate based on each billing unit. Multiple billing units per bank account cannot be used because OPM will not be able to determine which billing unit to terminate.

PADS (Pre-Authorized Debit System)

PADS is the electronic system used by the paymaster to withdraw the premium from each billing unit account on a monthly basis.

TIPS (Tribal Insurance Processing System)

TIPS is the electronic system used by the tribal employer to record all information for all enrolled tribal employees in each billing unit. A Standard Form (SF) 2809 will be completed by each tribal employee either electing to enroll in FEHB or electing not to enroll in FEHB. A Standard Form (SF) 2810 will be completed by the tribal employer to document the termination of a tribal employee’s enrollment or to transfer a tribal employee from one billing unit to another. Each Tribal HR office must enter data from each SF 2809 and SF 2810 into TIPS. TIPS will also be used to view monthly bills in advance and make any necessary changes before the paymaster makes an electronic withdrawal of the premium.

Premium Payment Procedures

The tribal employer can view the current month’s billing statement in TIPS at any time during the month of coverage. Each tribal employer is responsible for reviewing its units’ billing statements and making any necessary changes. Necessary changes include processing an SF 2810 for a tribal employee that left tribal employment or transferred from one billing unit to another during the month. Necessary changes made by the tribal employer will be reflected by adjustments to the bill. The tribal employer must pay the final billed amount regardless of who was covered during that month. Any valid discrepancies as to premium will be adjusted in the next month’s billing cycle.

Non-Payment of Premiums

Tribal employers are responsible for paying the entire premium for their tribal employees enrolled in the FEHB Program. Non-payment of premiums will result in the termination of FEHB coverage.

Tribal employers are solely responsible for collecting their tribal employees’ share of the premium amount. If a tribal employer fails to pay the full premium amount to the paymaster for any month, the tribal employer is liable for premiums until it notifies its tribal employees of termination of FEHB coverage for non-payment of premiums or until OPM terminates the tribal employer from the FEHB Program for non-payment of premiums (whichever occurs sooner).

Under these circumstances, a tribal employer will not be allowed to reenter the FEHB Program until the Open Season of the following calendar year. Open Season starts the Monday of the second full work week of November and runs through Monday of the second full work week in December. All Open Season enrollments are effective January 1st of the calendar year following Open Season.

For example, if a tribal employer is terminated for non-payment of premiums in June 2035, the tribal employer would not be eligible for reinstatement until Open Season of 2036 with an effective coverage date of January 1, 2037.

Prior to reinstatement, the tribal employer must pay any premium amount that may remain as an outstanding liability from the tribal employer’s previously terminated FEHB participation and must pay a reentry fee equal to the costs associated with adding the tribal employer to the FEHB Program. In addition, the tribal employer must demonstrate the ability to pay the premium by maintaining a minimum balance in its bank account equal to one month’s current premium.