OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS

Report No: 530
Date: 11/27/00

1. LAW NUMBER: P.L.106-394 (H.R. 2842)
2. BILL TITLE: Federal Employees Health Benefits Children's Equity Act of 2000
3. BILL PURPOSE: Authorizes the Federal Government to enroll an employee and his or her family in the Federal Employees Health Benefits Program (FEHBP) when a State court orders the employee to provide health insurance coverage for a child of the employee, but the employee fails to provide the coverage.
4. OMB ESTIMATE: P.L. 106-394 requires the Federal Government to enroll an employee in the FEHBP under family coverage when a state court orders the employee to provide health insurance coverage for his or her child, but the employee fails to provide the coverage. This will increase both government and enrollee contributions to the FEHBP Trust Fund, and increase premiums paid from the FEHBP Trust Fund to insurance carriers. The government contributions part of the premiums paid out to the carriers will increase direct spending by $10 million over the 2001-2005 period. The law also modifies application of the earnings test used in determining supplemental benefits paid by the Federal Employees' Retirement System. OMB estimates that this provision will have negligible effects over the five years.

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Net costs....................................	0	1	1	2	3	3

 

5. CBO ESTIMATE:

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Net costs....................................	0	-1	-2	-3	-4	-3

 

6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

CBO scored the reduced Federal outlays for Medicaid and the State Children's Health Insurance Program resulting from the mandatory family coverage as direct savings. OMB did not score such savings, because it considers this impact to be indirect.

7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:

	(Fiscal years; in millions of dollars)
	2000	2001	2002	2003	2004	2005
Outlay effect..............	34	790	1,435	1,570	2,092	2,046
Receipt effect............	-8	-620	-699	-747	-786	-775
Net costs....................	42	1,410	2,134	2,317	2,878	2,821

NOTE: The cumulative effect of direct spending and revenue legislation enacted to date is currently estimated to result in an end-of-session sequester. The Administration looks forward to working with the Congress to ensure that an unintended sequester does not occur.