Office of Personnel Management

Retirement and Insurance Group

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Benefits Administration Letter

Number: 96-408 Date: October 15, 1996 

SUBJECT: 1996 FEHB Open Season: Notice to Employees

___________________________________________________________________________

GENERAL

___________________________________________________

 Purpose This Letter contains a sample announcement for notifying

employees of the upcoming open season and instructions to

agencies concerning the notification.

___________________________________________________________________________

REQUIRED LANGUAGE

___________________________________________________

 OMB The Office of Management and Budget has asked that OPM

advise agencies to include the following statement in the

agencies' notifications to employees about open season:

Please note that information you provide by

enrolling in the Federal Employees Health Benefits

Program may also be used for computer matching

with Federal, State or local agencies' files to

determine whether you qualify for benefits,

payments, or eligibility in the Federal Employees

Health Benefits Program, Medicare, or other

Government benefits programs.

___________________________________________________

 TCC The FEHB law requires that, before each open season, all

employees eligible for FEHB, whether enrolled or not, be

notified of their rights under temporary continuation of coverage.
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Benefits Administration Letter 96-408 2.

In order to meet this requirement, agencies must include TCC

information in their notices to employees about open season.

We have included language in the suggested

announcement. If you prepare your own notice, rather

than using our suggested announcement, be sure to

include this TCC language.

___________________________________________________________________________

NOTICE TO EMPLOYEES

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 Agency Agencies and installations must inform their employees

 Responsibility and participating former spouses and TCC enrollees, in advance,

of the dates and purpose of open season.

The following is a suggested announcement which may be

adapted for publication by the most efficient means:

SUGGESTED ANNOUNCEMENT

SUBJECT: 1996 Health Benefits Open Season

A Federal Employees Health Benefits (FEHB) open season will be held from

November 11 through December 9, 1996.

During open season, any eligible employee who is not currently registered

may enroll; and any eligible enrollee may change from one plan or option to

another, from self only to self and family, or make a combination of these

changes.

Enrollees who wish to continue their current enrollment do not need to take

any action during this open season. However, enrollees whose plans will

not be participating in the Program after December 31, 1996, or whose plans

dropped an enrollment area having a separate enrollment code, must enroll

in a different plan to continue FEHB coverage in 1997. (See attached lists

of terminating plans and codes.) [If you don't attach the list, include the

names of the terminating plans within the text of your announcement.]

There are three basic types of plans available under the FEHB Program:

1. Managed Fee-for-service Plans - These plans reimburse you or

your health care provider for covered services after the services

are received. If you enroll in one of these plans, you may choose
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Benefits Administration Letter 96-408 3. 

your own physician, hospital, and other health care providers.

These plans are considered "managed" because they all contain

features such as precertification of hospital admissions and

utilization review of on-going care. In addition, most of the feefor-service plans have preferred provider arrangements in many

parts of the country. By using preferred providers, you can

reduce your out-of-pocket expenses and, in some cases, receive

enhanced benefits.

Fee-for-service plans include the Service Benefit Plan,

sponsored by Blue Cross and Blue Shield, and plans sponsored

by unions and other employee organizations. Several employee

organization plans are open to all eligible employees who are full

or associate members of the organizations that sponsor the

plans; other employee organization plans are restricted to certain

groups and/or agencies. (See the employee organization plan

brochures for information about membership and membership

fees, which are in addition to your biweekly or monthly

premiums.)

2. Health Maintenance Organization Plans (HMOs) - These plans

provide a comprehensive array of medical services, emphasizing

prevention and early detection of disease, through contracted

physicians, hospitals, and other providers in particular locations.

Each HMO is open to employees within the plan's enrollment

area. You cannot enroll in an HMO if you are located outside its

enrollment area. Refer to the plan's brochure if you have any

questions about the enrollment area.

3. Plans Offering a Point of Service (POS) Product - Some FEHB

plans have begun to blend their features. A number of fee-forservice and HMO plans now offer both forms of health care

delivery, known as "in network" and "out of network." In an HMO

that offers a POS product, the POS product acts like a fee-forservice plan: The HMO's enrollees may use non-affiliated (out of

network) providers if they wish, but the services will cost them

more--in terms of deductibles and coinsurance--than if they used

plan providers. 

In a fee-for-service plan with a POS product, the POS product

acts like an HMO: If they agree to let their medical care be

managed by a plan-affiliated gatekeeper physician (in network),

plan enrollees will get a better benefit, usually in the form of

richer benefits and lower copays or coinsurance.
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Benefits Administration Letter 96-408 4. 

Before open season begins, your current health plan will send you a copy

of its brochure and a notice of its 1997 rates. If you are enrolled in an

HMO, be sure to review the brochure carefully to see if there are any

changes in the plan's service and enrollment areas which would

require any action on your part.

If you are considering enrolling or making an enrollment change, contact

[location] to obtain a copy of the 1997 FEHB Guide. The Guide contains a

comparison chart that gives general information about each plan and shows

the biweekly and monthly premium rates, as well as detailed results of the

1996 Customer Satisfaction Survey and the National Committee for Quality

Assurance (NCQA) accreditation status of those plans that took the initiative

to seek NCQA review.

Do not rely solely on the FEHB Guide when deciding to enroll in or change

enrollment to a specific plan. If, after reviewing the FEHB Guide, you decide

you are interested in making an enrollment change, consult the plan's

brochure for a complete description of benefits.

Brochures for all plans will be available for your inspection at [location]. Due

to the limited quantity available, please return the brochures after you have

reviewed them. If you change health plans, however, you may keep the

brochure for that plan.

How to Enroll or Make an Enrollment Change during Open Season:

Employees who wish to enroll or change their enrollment must complete a

Health Benefits Registration Form (Standard Form (SF) 2809). These forms

are available from the [name and room number of appropriate office] and

must be completed and submitted to that office prior to the close of business

on the last day of open season. We ask your assistance in making desired

changes as early as possible in open season.

[Agencies whose employees have access to Employee Express to make

open season changes should provide information about using the system.]

New enrollments and changes in current enrollments elected during open

season generally will become effective January [first day of the first pay

period beginning on or after January 1, 1997]. If you change plans, any

covered expenses incurred between January 1, 1997, and the effective date

of the open season change will count toward the 1996 deductible of the plan

you are changing from.

Temporary Continuation of Coverage (TCC): You should be aware that

if you leave Federal employment, you will probably be eligible for TCC

(unless you are separated for gross misconduct). TCC can continue your

enrollment for up to 18 months. TCC is also available for up to 36 months
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Benefits Administration Letter 96-408 5. 

for dependents who lose eligibility as family members under your enrollment.

This includes spouses who lose coverage because of divorce and children

who lose coverage because they marry or reach age 22. 

TCC enrollees must pay the total plan premium (without a Government

contribution) plus a 2% charge for administrative expenses. There are

specific time frames in which you or your dependent must enroll for TCC.

Contact your personnel office for a copy of RI 79-27 to obtain additional

information.

Please note that information you provide by enrolling in the Federal

Employees Health Benefits Program may also be used for computer

matching with Federal, State or local agencies' files to determine whether

you qualify for benefits, payments or eligibility in the Federal Employees

Health Benefits Program, Medicare, or other Government benefits

programs.

__________________________________________________________________________

Abby L. Block, Chief

Insurance Policy

 and Information Division