1. Health Care Reform — Tribal Rights Under The FEHB Philip Baker-Shenk NIHB Summit April 19, 2011

2. 2 Overview WEBINAR LINK: http://hklaw.com/id55217/http://hklaw.com/id55217/ Synopsis of New Law − Health Care Reform − Indian Health Care Improvement Act − Health Tax Changes that Impact Tribes and Indians Implications and Cost Savings Opportunities for Tribes − As Health Providers − As Employers Funding Opportunities for Tribes Revenue Raising Opportunities for Tribes

3. 3 On March 23 and 30, 2010 the President signed into law two bills that make up the health reform package: − P.L. 111-148 – The Patient Protection and Affordable Care Act (H.R. 3590) − P.L. 111-152 – The Health Care and Reconciliation Act (H.R. 4872). − Extends health insurance coverage to 32 million additional people. − Permanently reauthorizes and amends the Indian Health Care Improvement Act. Health Care Reform Law

4. 4 What Does the New Indian Health Care Improvement Law Do? FEHBP. Entitles Tribes to purchase coverage for any employee of a Tribe under the Federal Employee Health Benefits Program. − Depending on regional markets and other factors, FEHB coverage could provide premium cost savings of up to 50%. Non-Beneficiaries. Tribal health providers may serve non- Indians on a fee-for-service basis under P.L. 93-638 agreements. Cost Savings and Expanded Coverage. New authorities, in combination or singly, may provide substantial opportunities.

5. 5 What Are the Tax Implications? Indian Health Benefits Income Tax Exclusion − Indian health care benefits will not be counted as part of gross income of Tribal members. − Applies to benefits and coverage provided to tribal members, their spouses, and dependent children.

6. Federal Employee Health Benefit Coverage Statute vests each tribal employer with the right to purchase FEHB coverage for its employees. 13 months since enactment but OPM has yet to issue FEHB coverage to any tribal employer. − Despite the Obama Administration at the top wanting to implement the Health Reform Act so as to broaden coverage, drive down costs and expand risk pools. 6

7. Statute Notwithstanding the provisions of title 5, United States Code, Executive order, or administrative regulation, an Indian tribe or tribal organization carrying out programs under the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450 et seq.) or an urban Indian organization carrying out programs under title V of this Act shall be entitled to purchase coverage, rights, and benefits for the employees of such Indian tribe or tribal organization, or urban Indian organization, under chapter 89 of title 5, United States Code, and chapter 87 of such title if necessary employee deductions and agency contributions in payment for the coverage, rights, and benefits for the period of employment with such Indian tribe or tribal organization, or urban Indian organization, are currently deposited in the applicable Employee’s Fund under such title. − Sec. 157 of S. 1790, enacted into law by Sec. 10221 of Pub. L. No. 111-148 (March 23, 2010). 7

8. OPM Website FEHB for Indian Tribe Employees -- On March 23, 2010, President Barack Obama signed the Patient Protection and Affordable Care Act. Section 10221 of the Affordable Care Act incorporated S. 1790, the Indian Health Care Improvement Reauthorization and Extension Act of 2009 (IHCIREA). IHCIREA amended and reauthorized the Indian Health Care Improvement Act (IHCIA). Section 409 of the IHCIA allows eligible Indian tribes, tribal organizations, and urban Indian organizations to purchase Federal Employees Health Benefits (FEHB), rights and benefits for their employees. Eligible employees of urban Indian organizations and tribes or tribal organizations carrying out programs under the Indian Self-Determination and Education Assistance Act are entitled to purchase coverage, rights, and benefits for their employees, providing the necessary contributions are paid into the appropriate trust fund(s).FEHB for Indian Tribe Employeesemployees − http://www.opm.gov/insure/health/eligibility/index.asp http://www.opm.gov/insure/health/eligibility/index.asp 8

9. Lawsuit Some Tribes are contemplating filing an Administrative Procedures Act (APA) lawsuit that seeks a court order requiring OPM immediately to sell FEHB coverage to tribal employers. − There is no federal spending cost associated with a Tribe exercising this right to purchase. 9

10. Precedent for Tribal Employer Purchases OPM already administers coverage and payments for non-federal employee participants in FEHB − USDA’s National Finance Center administers “Temporary Continuation of Coverage” (TCC) for individual enrollees after their federal employment terminates. − TCC enrollees pay the employee and employer shares of the OPM premium plus a 2% fee. 10

11. Right to Purchase “Off-the-Shelf” and “Over-the- Counter” Like a Costco or Sam’s Club − For “members” only. − Shelves are stocked and prices are set. − Only requirement is money to purchase. At checkout counter, no “consultation” is necessary. 11

12. 12 Revenue-Raising Opportunities for Tribes The Health Reform Act offer Indian Tribes some competitive advantages and prospects for significant revenue-raising activity. Revenue raising opportunities enable Tribes to make up for the fact that: − Despite solemn treaty obligations, the U.S. government now spends only one-half for Indian health care, on a per capita basis, that it spends on health care for federal prisoners. Tribal operations must be properly structured to pursue these opportunities.

13. 13 For Further Information Philip Baker-Shenk 202-457-7031 philip.bakershenk@hklaw.com