July 30, 2002
Magda Lynn Seymour
John Irvine
(202) 639-6419

AFGE Supports Accounting Standards

(WASHINGTON, D.C.)—The American Federation of Government Employees (AFGE) supports the application of the government’s Cost Accounting Standards (CAS) to all Federal Employees Health Benefits Program (FEHBP) plans.

Congress had given Blue Cross & Blue Shield an exemption from CAS in each of the past three years. AFGE strongly supports the rigorous application of CAS and believes that all FEHBP plans should be required to comply with the same standards. Only strict application of CAS assures that every dollar the insurance companies charge is actually spent on the FEHBP program and its beneficiaries. FEHBP, which is the nation’s largest employer-sponsored health insurance plan, provides insurance to approximately nine million current and retired federal workers and their families.

“Cost accounting standards are about corporate accountability,” said AFGE National President Bobby L. Harnage. “The standards keep contractors, including insurance companies, from allocating costs to the federal government that they incur when they serve other customers.”

In the last four years, FEHBP premiums have risen by 49 percent, far faster than the average growth of health care costs generally during the same period. Blue Cross & Blue Shield premiums have gone up by even more.

“If the Blues now say they’ll walk away from FEHBP if they’re required to be accountable for the costs they report, we’re probably better off without them,” added Harnage.

AFGE is the largest federal employees union, representing 600,000 federal and D.C. workers. Log onto for more information on AFGE.

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