Explaining the administration’s proposed rule for the congressional staffer Obamacare fix

The following is a guest post by Nicholas Bagley, University of Michigan Assistant Professor of Law.

Two days ago, the Obama administration released a long-awaited proposed rule clarifying that, yes, Congress can keep paying for health insurance for its members and their staffers. Even before the rule was released, however, some critics said it was unlawful. In their view, a provision of the Affordable Care Act requiring members and staffers to get health insurance on the exchanges stripped Congress of the authority to keep contributing to members’ and staffers’ health plans. The argument was nonsense, but the story that a lawless president might try to rescue an undeserving Congress from a poorly drafted statute was irresistible.

The new rule should finally lay the story to rest. To understand what the administration has done, it helps to take a step back. When federal employees select their health plans through the Federal Employees Health Benefits Program (FEHBP), they normally choose from a list that the Office of Personnel Management (OPM) has supplied. To keep costs down and quality high, OPM includes on the list only those plans with which it has contracted directly. The federal government then kicks in money, per 5 U.S.C. §8906(b)(1), for “an employee … enrolled in a health benefits plan under this chapter.” (The relevant chapter here includes the rules for the FEHBP.) Under this arrangement, the government only pays for the costs of those plans with which OPM has contracted directly. No OPM contract, no money.

The ACA upsets this scheme for a tiny group of federal employees—members of Congress and their staffers—who must now get health plans through the exchanges. OPM, however, hadn’t planned on contracting with exchange plans. That gave rise to a novel question: can the government pay for health plans under §8906 in the absence of an OPM contract? Is an exchange plan a “health benefits plan under this chapter”? The critics think not. In their view, an employee can enroll in a “health benefits plan under this chapter” only if she selects an OPM-approved plan through the FEHBP enrollment process. Buying insurance on an exchange doesn’t cut it.

That’s one way to read the statute. But it’s not the only way to read it—and it’s not how OPM reads it. In its proposed rule, the agency points out that Congress, in §8901(6), actually defined “health benefits plans” for FEHBP purposes. That statutory definition is broad enough to cover basically any health plan, OPM contract or not (“a group insurance policy or contract, medical or hospital service agreement, membership or subscription contract, or similar group arrangement provided by a carrier for the purpose of providing, paying for, or reimbursing expenses for health services”). Given this capacious definition, OPM’s new rule just clarifies that exchange plans qualify as “health benefits plans under this chapter.” As such, §8906 authorizes the federal government to contribute to them.

That’s it. Nothing fancy. And, so far as I can tell, nothing unlawful. The critics are right to say that the “health benefits plan under this chapter” language is amenable to a narrower construction than the one OPM has given it. They’re wrong, however, that the language must be read so narrowly. As is often the case, the statute is ambiguous on the precise question at hand. And it’s a fundamental tenet of administrative law that agencies—not courts, not Congress, and not critics—get to resolve ambiguities in the statutes that they administer. End of story.

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