[Decision Concerning Payment of Employee's Share of Health Insurance From Tobacco User Fee Fund]

A GAO decision was requested as to whether: (1) the Department of Agriculture could legally authorize payment from the tobacco user fee fund of the employee share of health insurance for seasonal tobacco inspectors when they were in a nonpay status; and (2) Office of Personnel Management (OPM) regulations, which require employees and the Government to pay their contributions to the program for each pay period during which the employees' enrollment continues, complied with the law and were reasonable. Seasonal tobacco inspectors participate in the Federal employees health benefits program. In August 1982, OPM revised its regulations to require employees to pay their contributions to the program as long as their enrollment continued, whether they were in pay or nonpay status. GAO found that the OPM decision to revise its regulations was reasonable because of the cost savings involved and because the Federal Employee Health Benefits Act did not anticipate the provision of free coverage of health insurance to employees in nonpay status. User fees are subject to the statutory restrictions applicable to appropriated funds. The Department of Agriculture uses the fees it collects to pay tobacco inspectors' compensation and fringe benefits, including the cost of the Government contribution to Federal health insurance. However, an agency may not pay more than 75 percent of the charges for employees enrolled in health insurance plans. Therefore, although the Secretary of Agriculture believes that the payment of the employee health insurance for tobacco inspectors while they are in nonpay status is necessary to carry out the program, the expenditure is prohibited under the act. Accordingly, the Department of Agriculture may not legally authorize payment of the employee share of health insurance for tobacco inspectors while they are in a nonpay status.