MyFederalRetirement – 7/28/26 – A fight that began quietly in December has turned into one of the most closely watched privacy disputes in the federal benefits world. The Office of Personnel Management wants far more detailed health claims data on the roughly 8 million people covered by the Federal Employees Health Benefits (FEHB) and Postal Service Health Benefits (PSHB) programs. Lawmakers, unions, and retiree groups say the plan is legally shaky and dangerously broad. OPM says it’s the only way to finally get serious about fraud that has been draining the program for years. Both sides have now put their arguments on the record — and the gap between them is narrower than it was in the spring, but still real.

Takeaways

• What’s changing: OPM finalized a rule (effective June 23, 2026) expanding the health claims data it collects from FEHB and PSHB insurance carriers — including more detailed prescription, provider, and billing codes.
• Why OPM says it needs this: To catch healthcare fraud, waste, and billing abuse in something closer to real time, rather than years after the fact.
• How your identity is supposed to be protected: OPM says direct identifiers (name, SSN, address) are stripped before it receives the data, and your Member ID is scrambled through a hashing process before analysts use it.
• The catch: OPM acknowledges it retains the technical ability to reverse that scrambling and re-identify records for certain “operational” purposes — which is different from data being permanently de-identified.
• Who’s pushing back: NARFE, AFGE, and congressional Democrats say pseudonymized data isn’t the same privacy guarantee as true de-identification under HIPAA, and want firmer, binding commitments from OPM.
• What hasn’t happened: Your individual medical records are not being reviewed one-by-one by OPM staff. The stated goal is pattern-level fraud analysis, not case-by-case review.
• What’s next: The public comment period on the rule closed July 23, 2026. Whether OPM tightens its privacy commitments further, or Congress intervenes, remains unresolved.

Read more here. More from OPM below.

OPM Cracking Down on Fraudulent Health Benefits Enrollment

WASHINGTON, DC — The US Office of Personnel Management (OPM) today announced a final rule to strengthen verification requirements for family member coverage in the Federal Employees Health Benefits (FEHB) Program and Postal Service Health Benefits (PSHB) Program, a major step in the administration’s broader effort to eliminate fraud, waste, and abuse across government programs.

The final rule will implement the FEHB Protection Act of 2025 as part of President Trump’s One Big Beautiful Bill by requiring verification of both qualifying life events and family member eligibility before individuals can be added to federal health plans.

The FEHB Program covers approximately 8.3 million individuals and represents one of the largest employer-sponsored health insurance programs in the nation. OPM estimates fraudulent or improper enrollments may be costing taxpayers up to one billion dollars annually through ineligible family member coverage and associated claims.

Under the final rule, enrollees seeking to add a family member to FEHB or PSHB coverage will be required to provide documentation verifying both the family relationship and the qualifying event before coverage can be approved.

The rule builds on prior OPM actions to improve enrollment integrity and follows findings from the Government Accountability Office identifying weaknesses in family member eligibility verification. Early agency audit data reviewed by OPM found nearly two percent of reviewed family members were confirmed ineligible for coverage, with additional cases lacking sufficient documentation.

The strengthened verification requirements will generate substantial long-term savings for taxpayers while improving program integrity and helping ensure federal health benefits are directed only to eligible individuals.

You can read the final rule in the Federal Register here.