Q. What will be the amount of the employer contribution for Members of Congress and congressional staff?

Q. What will be the amount of the employer contribution for Members of Congress and congressional staff?

A. The amount of the employer contribution for Members of Congress and official staff will be the same as for other Federal employees. OPM annually determines the government contribution based on the average of health plan premiums for the two types of enrollments (self only and self and family) allowed in the FEHB Program. By statute, the government contribution is the lesser of 72 percent of the weighted average of all FEHB plan premiums or 75 percent of the individual plan premium. OPM will apply the same employer contribution amounts up to 75 percent of the total cost of the health plan premium on the Exchange, the same as for an FEHB health plan. An individual with an enrollment on the Exchange for more than one person (i.e. self plus one) will receive the employer contribution amount the same as for an FEHB self and family enrollment.

Q. How are employer contributions for health care coverage premiums treated under the Affordable Care Act and for Federal tax purposes with respect to Members of Congress and congressional employees on the Exchange?
A. Under pre-Affordable Care Act law, Members of Congress and their staff are offered health insurance coverage through the Federal Employees Health Benefits Program (FEHB), which allows them to choose among various health plans that have contracted with FEHB. As with other health coverage provided in connection with employment, both employer contributions and contributions pursuant to a salary reduction election by employees towards the cost of FEHB coverage may be excluded from the employee’s income and wages for both income and employment tax purposes.

Section 1312(d)(3)(D) of the Affordable Care Act provides in relevant part that “[n]otwithstanding any other provision of law … the only health plans that the Federal Government may make available to Members of Congress” and certain congressional staff are those offered through an Exchange or provided under the Affordable Care Act. This provision effectively requires substituting, in the case of Members of Congress and the applicable members of their staffs, a choice among individual qualified health plans offered through an Exchange for their current choice among plans that have contracted with FEHB. Section 1312(d)(3)(D) of the Affordable Care Act provides that this arrangement is permissible in the case of Members of Congress and congressional staff employed by the official office of the Member of Congress explicitly stating that the requirement applies notwithstanding any other provision of law. Therefore, the arrangement described is not subject to the rule in the Affordable Care Act that prohibits an employer from providing a qualified health plan through an Exchange as a benefit under its cafeteria plan.

In addition, the generally applicable federal income and employment tax rules related to employer-provided health care coverage apply to the arrangement described in this Q&A. As a result, participation in the arrangement will not result in any income or wages to the participating employee. Moreover, contributions pursuant to a salary reduction election by employees toward the cost of coverage under this arrangement may be excluded from income and wages under the same terms that employee contributions to FEHB coverage are excluded today.

Because the arrangement described here is an eligible employer-sponsored plan and all qualified health plans on the Exchange provide minimum value, a Member of Congress or an applicable congressional employee will not be eligible for a premium tax credit if the coverage offered is affordable, within the meaning of the Affordable Care Act, for that individual.