Federal Employees Health Benefits Program (FEHBP) Law and Legal Definition

The federal employees health benefits program (FEHBP) is a system for providing employee health benefits to civilian government employees and annuitants of the U.S. government. It is a system of managed competition in which a purchasing strategy to obtain maximum value for employees are applied using the rules of competition derived from micro economic principles. In FEHBP employees pay one-third of cost of insurance and the government will pay remaining two-third cost. Market health insurance plans intended for the benefit of governmental employees are adopted under FEHBP with the help of insurance companies, employee associations, and labor unions. The United States Office of Personnel Management (OPM) administers the FEHBP.