FEHB premiums to increase by 7.2 percent in 2011

OPM said the rise in costs is lower than the industry standard. Employees who choose family coverage will see an increase of $22.90 a month. Open season starts ...

By Jason Miller
Executive Editor
Federal News Radio

The Office of Personnel Management said today the cost of the Federal Employee Health Benefits program will rise by 7.2 percent in fiscal 2011.

This is below last year’s increase of 8.8 percent and lower than other large organizations such as PriceWatehouseCoopers, which saw health insurance premiums increase by as much as 10.5 percent, OPM said.

This means for family coverage, federal employees will pay about $11.45 per pay period more — $22.90 a month — while for self-only coverage, employees will pay $5.53 more per pay period–$11.06 per month.

“FEHB enrollees pay, on average, 30 percent of the total cost of the plan’s premiums while the government pays 70 percent,” OPM states in a fact sheet. “Each year, OPM enters into annual negotiations with each FEHB carrier, historically enabling the program to hold premium increases below industry averages and secure good benefits value for enrollees and their families.”

Colleen Kelley, president of the National Treasury Employees Union, said they were disappointed in the rate increase. Kelley, however, did praise several of the other changes OPM initiated for 2011. She specifically pointed to the coverage of employee children up until they are 26 years old.

National Active and Retired Federal Employees Association (NARFE) President Margaret Baptiste said she too was unhappy with the increase in FEHB premiums.

“The overall average Federal Employees Health Benefits Program (FEHBP) premium increase of 7.3 percent for 2011 will be difficult for federal annuitants to bear in a year when no retirement cost-of-living adjustment (COLA) is expected and when the federal employee pay raise is anticipated to be minimal or could be cut altogether,” Baptiste said. “FEHBP premiums could have been lowered if it were not for the administration’s decision to decline a payment available to other public and private employers who provide drug coverage as generous as Medicare’s. Once again, this year, the administration left $1 billion on the table — a subsidy available to and accessed by private employers in the marketplace, which could be used to lower worker and annuitant premium costs.”

OPM said open season will run Nov. 8 to Dec. 13 where employees can choose from 207 health plans.

“OPM will soon launch a new Health Claims Data Warehouse which will become a useful tool for analyzing health services data from the FEHB plans,” the fact sheet states. “The warehouse will allow OPM to better understand the health of federal employees, as well as the cost and quality of care they receive. The warehouse will give OPM the ability to manage the program so that employees and tax-payers get the best value.”

OPM also detailed changes to the healthcare plans, including five plans increasing benefits for hearing devices or other assistive devices, 16 offer testing for up to four transplant donors for bone marrow or stem cell and two plans will pilot coordination of benefits with Medicare.

Check out Federal News Radio’s senior correspondent Mike Causey column on Monday for more reaction and his take on the changes.

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