History
The program was created in 1960. Employer sponsorship of health insurance in the United States became prevalent during World War II, as one of the few ways by which employers could escape wage and price control limitations on employee wages. The government originally proposed a system that would revolve around a dominant government-directed plan, but unions and employee associations, which had sponsored their own plans, protested. Reflecting the political pressure thus created, the Congress modified the Executive Branch proposal and all existing plans were "grandfathered" into the program. Thus, through what was essentially a historical accident and a political compromise, a system of competition among health plans driven by consumer choices was created.
Read more about this topic: Federal Employees Health Benefits Program
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