This fund finances payments to approved carriers for the cost of health benefits protection, as provided by chapter 89 of title 5, United States Code, and expenses of the Civil Service Commission in administration of that chapter. Budget program. Slightly more than 2.15 million employees and 310,570 annuitants are participating in this program. By the end of 1969 it is estimated that an additional 112,000 annuitants will participate in the program. For 1969 an estimated $555.3 million will be deposited into the fund from amounts withheld from employees and annuitants and $238.5 million will be contributed by the Government. An estimated $763.3 million will be paid from the fund in 1969 to approved health benefit plans. An amount equal to 3% of total contributions toward each plan, is set aside in the fund to provide a contingency reserve for that plan. The contingency reserve is used to defray future increased rates, to reduce contributions, or to provide increased benefits. Payments are made to experience rated carriers from the contingency reserve when the reserves held by the carrier are less than a stipulated amount and the plan's contingency reserve held by the fund exceeds 1 month's subscription charges. Community rated carriers may also receive additional payments from their plan's contingency reserve held by the fund, when properly justified. An estimated $10 million will be paid in 1969 from the contingency reserve to qualified carriers; however, an estimated $9 million will be held by the carriers as special reserves. In addition, an amount equal to 1% of total contributions is set aside for administrative expenses of the Commission in the administration of the program. Section 8909(b) of title 5, United States Code, provides that the Commission from time to time and in such amounts as it considers appropriate may transfer unused funds for administrative expenses to the contingency reserve of the plans under contract. In 1967 $3.9 million was transferred from the administrative expense reserve to the contingency reserve. During 1968 another $5.4 million will be available for transfer, and in 1969 slightly more than $6.2 million will become available. Financing. The fund will be financed by contributions from participants and the Government. Operating results.-Earnings will be retained to meet the cost of administration and future benefits. Revenue, Expense, and Retained Earnings (in thousands of dollars) nuitants.... -23,565 Interest revenue. -3, 167 14 Non-Federal sources: Employees' salary withholdings.. -344, 184 Annuity withholdings -44, 118 -404, 659 -62,834 -5,501 -6,000 -2,125 -1,438 -57,126 -75,078 -932 -94,500 year: U.S. securities (par). 140 156 Identification code 30-28-8424-0-8-654 1967 actual 451,397 -32,700 418,697 3. Administration: -1,800 1 Balance of selected resources are identified on the statement of financial condition. This fund finances the payment of group life insurance premiums to private insurance companies under chapter 87 of title 5, United States Code, and any expenses incurred by the Civil Service Commission in administration of that chapter as annually authorized by Congress. Budget program.-Through June 30, 1967, for the regular insurance program, a total of $1,158 million was withheld from the salaries of covered employees and $579 million was contributed by the Government. In 1969 an estimated $214.1 million will be paid into the program by employees and $107.1 million by the Government. Also, 488,832 in 1969 a new optional program for an additional $10 thousand of insurance to be financed wholly by employees is estimated to total $130.7 million in employee and annuitant withholding. Most of the difference between receipts and benefit payments under the policy is held in reserve for paying future life insurance claims. On June 30, 1967, there were total reserves of $606 million, of which $150 million was held as a special contingency reserve by the insurer, at interest, and $456 million was held by the program in the Treasury of the United States. The special contingency reserve with the insurer is reduced to $150 million at December 31 and June 30 of each year and deposited in the Treasury of the United States. 487,032 329,160 487,032 10 Total obligations...... --- -107,106 8. Contingency reserve held by in 133, 128 6 410,122 8 -1,100,000 -44,400 -46,200 -48,000 Analysis of Trust Equity (in thousands of dollars) Unpaid undelivered orders 1 Unobligated balance.................. Invested capital earnings.. Program costs, unfunded: (a) Basic program.... (b) Beneficial 333,982 17,013 39,080 150,000 150,000 150,000 surer at end of year... Through June 30, 1967, individuals whose beneficial life insurance agreements were assumed by the fund paid $31.9 million into the fund. It is estimated that in 1969 about $2.7 million will be paid into the fund by this group. Former members of beneficial associations continue to pay premiums according to the rate schedules in effect at the time their life insurance agreements were assumed by the fund, but the Government makes no current contributions to the fund for these individuals as it does for employees covered under the regular program. A contingency reserve has been established and held by the insurer at interest under the policy covering members of beneficial associations. This reserve was estimated to be $6.7 million on June 30, 1967. The Commission has determined that the contingency reserve under the beneficial association program will be held at a level of $6 million to meet adverse fluctuation in future charges. Any amount above this level at the end of the policy year December 31, 1967, and any subsequent policy year, will be returned to the fund. Financing.-Premium costs for the regular program are met by withholding from the salaries of employees 27%2 cents bi-weekly for each $1 thousand of life insurance; premiums for the optional program are met entirely by withholdings from employees salaries or retirees annuities; and premiums for the beneficial association program are met by direct payments by members. Operating results.-Earnings are retained to meet the cost of future benefits. tion...... associa Total trust equity. This fund, established in accordance with the Retired Federal Employees Health Benefits Act (Public Law 86724), finances (1) the payment of subscription charges to an approved carrier for those qualified employees and survivors who enroll in the Government-sponsored uniform health benefits plan; (2) the contribution to qualified employees and survivors who retain or purchase private health insurance; and (3) expenses of the Civil Service Commission in administration of the act, as annually authorized by Congress. Analysis of Trust Equity (in thousands of dollars) 13.0 25.1 25.3 Payment to salaries and expenses....... Total costs, funded... 94.0 Change in selected resources_ Total obligations.. Budget program. The act provides that the fund shall be available without fiscal year limitation for all payments toward the health benefits subscription charges of the Uniform Plan or contributions to qualified annuitants with private health insurance and that the amounts authorized to be contributed by the Government shall be paid into the fund from annual appropriations. 99.0 During 1969 an estimated $4.6 million will be paid into the fund by participating retired employees and survivors and $10.9 million by the Government. It is estimated that $9.2 million in subscription charges will be paid to the carrier of the Government-sponsored plan, and $5.9 million to annuitants for their private health insurance plans in 1969. 300-100-68- -59 LEGISLATIVE PROGRAM Legislation is recommended to provide assistance to State and local personnel programs. (See proposed for separate transmittal, proposed legislation, at end of this chapter.) |