High Deductible Health Plans

The following regarding High Deductible Health Plans (HDHPs) is provided as information to members. It should be noted that AFSA and all other government employees' and retirees' groups --  while respecting the rights of all to choose their own health plans based on their personal needs assessment -- strongly oppose HDHPs and related Health Savings Accounts (HSAs) because they're not in the interests of all of our members.  The concern is that draining off younger members will lead to changes in the insured groups' demographic and health profiles that will lead to serious increases in premiums for the regular plans like FSBP.   

As the number of different health benefit plans and related plans has expanded in recent times (e.g., Flexible Spending Accounts, 2007 dental and vision plans, etc.), some AFSA members may have noticed that in addition to traditional or regular standard and high option health plans combined with FSAs the alternative of High Deductible Health Plans (HDHPs) exists not only in the private sector but in some Federal Health Plans.  The basic purpose of these plans is to combine very low premiums with high deductibles while providing excellent catastrophic coverage, i.e., they are designed for healthy people who want to save money but maintain protection in case of high expenses. They also provide a tax-free health savings account (HSAs) which, unlike FSA Feds, can carry over to succeeding years if not spent. It is not possible to have both an HDHP and an FSA, as this would be a double tax benefit.

One FCS member asked the FCS VP whether HDHPs were not an attractive alternative and he noted that the Foreign Service Benefit Plan (FSBP/AFPSA) did not offer them. The FCS AFSA VP decided to email senior management at FSBP/AFSPA to directly ask why this important foreign service plan did not envisage an HDHP option, while noting that he was not "advocating" such plans just inquiring about them, their pros and cons,
and informing members.

Paula S. Jakub, VP and COO of AFSPA, responded in an email to the FCS VP (Businger) as follows:

"In our judgment our membership does not lend itself well to this type of plan.  Certainly no one with health issues, chronic conditions, exposure to unusual health risks or people with children would logically opt for such a plan.  In fact, very few people have enrolled in the HDHP's currently being offered.  Among our constituency perhaps healthy, self-only enrollees might consider trying one."

Conversations with several health providers make it clear that HDHPs are not for everyone and FEHB offerings of such plans are so far fairly limited and have not attracted a great number of subscribers.

Foreign Service Officers should be aware that there are two basic types of health plans -- HMOs and PPOs (fee for service, generally with in-network or preferred providers and out of network providers at lower reimbursement rates). There are HMOs that offer interesting HDHPs (e.g., AETNA Open Access), but their service area is restricted to the United States (in fact 37 states and DC), so overseas covrage is by definition out of
network and problematic, so only domestically-assigned FSOs need consider these kind of plans. Among PPOs that offer HDHPs are the APWU, Mail Handlers, and GEHA; the latter(GEHA)clearly covers overseas (confirmed in their website and by phone), and we have not checked the first two though I believe Mail Handlers does as well. As always, those interested must check with the individual plan, usualy by emailing throught their website or calling, and the key question is whether overseas providers are covered at in or out of network rates (are al foreign providers "preferred"?).

OPM's Primer on HDHP's
--> http://www.opm.gov/hsa/hdhppresentation.asp

A Power Point Presentation can be downloaded as well (PPT)
--> http://www.afsa.org/fcs/2007HDHP.ppt

Rates for the Various Programs Availible (XLS)
--> http://www.afsa.org/fcs/2007HDHP-info.xls

Donald Businger
Senior Advisor to the DAS/OIO and
Vice President
American Foreign Service Association (AFSA)
Tel 202-482-9162/Fax 202-482-9087
Web-Site www.export.gov/www.afsa.org

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