Around 4,000 federal employees in California may soon be shopping for new health insurance plan in the coming months, due to an insurer in the state being in breach of its contract with the federal government under the Federal Employee Health Benefits Program.
A report from the Office of Personnel Management Office of Inspector General said Health Net of California is refusing to allow OPM to scan its IT systems, as stipulated in their contract. They are arguing that inspectors should rely on self-administered scans rather than conduct their own. The company has provided OPM with a limited list of employees and user ID’s that have access to systems related to feds insured by them, but the IG said that data isn’t sufficient.
“Health Net’s actions are in direct violation of the company’s contract with OPM, and disregard the statutory authority of the OIG,” the agency wrote. “Of greater concern, however, is that the auditors cannot evaluate Health Nets’ IT security controls…As a result, we are unable to attest whether Health Net is acting as a responsible custodian of critically sensitive
If Health Net continues to block OPM’s access to its systems, the agency may deem them in breach of their contract with the federal government and remove it from FEHBP. “Failure to meet OPM standards for Health Benefits Carriers may be cause for OPM’s withdrawal of an approval of a health benefits carrier and termination of a contract in accordance with [federal law],” an OPM spokesman wrote.
If Health Net of California is removed from the list of insurers, affected federal employees would have an opportunity to enroll with a different insurance carrier for a health insurance plan. OPM would help any Health Net customer if it becomes known that their health or personal information was compromised.
“Our focus is on preventing security incidences and breaches. If a breach were to occur, OPM would work with the affected contractor and FEHB enrollees to mitigate damage and protect the enrollee’s data to the largest extent possible,” an OPM spokesperson said.