Non-postal employees and annuitants enrolled in the Federal Employee Health Benefits Program (FEHBP) can expect to pay, on average, 6.1 percent more for their health care premiums in 2018.
The Office of Personnel Management announced the rate changes Wednesday ahead of the 2018 open season, which runs from Nov. 13 through Dec. 11.
“This is a tremendous opportunity for people to look at, [whether] there are other alternatives that meet [their] needs but provide a lower premium,” Alan Spielman, director of healthcare and insurance at OPM, told reporters Wednesday. “The vast majority of FEHB enrollees have many choices of plans that provide a lower premium. We certainly caution people not to make any choices solely on the premium.”
Overall, FEHBP premiums will go up 4 percent next year. The government will contribute 3.2 percent more toward federal employees’ health care premiums in 2018, but the enrollee increase will continue to outpace it.
A formula set under law determines the share that the government and the enrollee pays toward FEHBP premiums each year. Government pays about 75 percent of a participant’s premium up to a certain cap. The cap equals 72 percent of the weighted average of the previous year’s premiums.
“To the extent that more people are concentrated in less expensive premium plans, it has a lowering effect on the government contribution,” Spielman said.
The 6.1 percent increase for participants in 2018 is slightly lower than the previous year’s premium hike, when FEHB participants paid, on average, 6.2 percent more for their health care in 2017. In 2016, enrollees paid 6.4 percent more for their premiums, the largest rate change in recent memory.
Federal employees can also expect to pay slightly more for the Federal Employees Dental and Vision Insurance Program next year, though again, premium hikes for those plans are slightly lower than last year’s increases.
Participants in the dental plan can expect to pay an average of 1.26 percent more toward their premiums, while the average vision plan premium will decrease slightly by 0.48 percent in 2018.
The FEHBP will offer 262 health care plans in 2018, more than the 245 plans participants had to choose from last year.
OPM said federal employees’ contributions in 2018 will depend on the coverage option they choose:
Self-only coverage: $5.57 more per biweekly pay period;
Self-plus-one coverage: $12.55 more per biweekly pay period; or
Self and family coverage: $12.17 per biweekly pay period.
FEHB participants have complained that OPM’s relatively new self-plus-one offering wasn’t as inexpensive as they thought. In fact, enrollees in the self-plus-one plan will pay slightly more for health care in 2018 than in 2017.
The average, total self-plus-one premium of $683.09 is still lower than the average total self and family premium of $723.70. Yet enrollees will contribute more toward their self-plus-one premiums in 2018 than participants of any other kind of plan. FEHB participants will pay 6.4 percent more, on average, for self-plus-one premiums, compared to 6 percent more for self coverage and 5.9 percent more for self and family coverage in 2018.
Spielman said 39 plans have higher premiums under the self-plus-one option than the self-and-family program.
“That’s 39 plan options out of 262, and it certainly doesn’t represent a significant number of enrollees who are in that situation,” he said. “It’s safe to say that the majority of folks who are now in self-and-family who are eligible for self-plus-one could save money by moving.”
In 2017, about 540,000 people were enrolled in the self-plus-one. That’s more than the 440,000 people who were enrolled in the program in 2016, the first full year FEHB participants had the opportunity to enroll. OPM at the time said it had hoped more federal employees and their families might take a look at their options and consider the self-plus-one program, and it’s still encouraging FEHB participants to think about making that switch in 2018.
OPM estimates there are about 400,000 people currently enrolled in self-plus-family plans and are eligible to switch to self-plus-one.
Currently, about 5-to-7 percent of FEHB participants switch health care plans during any given year, Spielman said.
Both OPM and financial planners say more federal employees can and should switch insurance plans during open season to find a cheaper option.
That kind of financial planning during open season may become more important, as health premiums continue to rise year after year.
“All federal employees should have access to quality health insurance for themselves and their families at affordable rates,” National Treasury Employees Union President Tony Reardon said in a statement. “However, ever-rising premium increases remain challenging for employees, particularly against the backdrop of small pay raises and attacks on retirement benefits, which would further strain employee take-home pay and retiree income.”
The American Federation of Government Employees also expressed their disappointment with the premium increases.
“These rate hikes mean less take-home pay for current and retired federal workers and another year of difficult decisions by many families on how to pay their bills,” AFGE National President J. David Cox said in a statement.
FEHB participants can visit OPM’s healthcare site here to review their current health care plans and review rates for others.