The enrollee share of premiums in the health-care program for federal employees and retirees will rise 6.2 percent on average in 2017, an increase about in line with the general trend for employer-sponsored health insurance, the government announced Wednesday.
The announcement of premium rates in the Federal Employees Health Benefits Program comes in advance of an annual open season, which this year will run Nov. 14-Dec. 12, during which enrollees may change plans or change types of enrollment for the following year. Also, employees who are not currently enrolled may join the program, although retirees generally may not newly join.
The increase in premiums overall averages 4.4 percent, but because of the way the formula works for setting the government and enrollee shares, the enrollee share on average is increasing by more than the government share. The government pays about 70 percent of the total premium and enrollee pays the rest; the U.S. Postal Service pays a somewhat larger share for its employees, although not for its retirees.
“We are at the lower end of what is being experienced around the country,” John O’Brien, Office of Personnel Management director of health care and insurance, said at a briefing for reporters. OPM said that two outside assessments project increases of 6 to 6.5 percent in private-sector plans.
The FEHBP, the largest employer-sponsored health insurance program in the country, is open to almost all federal employees, while federal retirees can continue coverage if they were covered for the five years before retiring.
About 4 million people, roughly evenly split between active employees and retirees, are enrolled, and about an equal number of family members — spouses and children under 26, with no cutoff for disabled children — have coverage through those enrollments.
The increases in non-postal employee premiums break down to an average of 6 percent for self-only coverage, 5.4 percent for self-plus-one and 6.6 percent for self-and-family coverage. In dollar terms, that’s an average of $5.27, $10.32 and $12.97 biweekly. Retirees pay premiums at the same level, although on a monthly basis; also, unlike active employees, retirees may not pay premiums on a pre-tax basis.
Within the averages there is a wide range of costs and changes in premiums among the plans, a few of which are holding their rates virtually steady or even decreasing them slightly. A total of 245 plans will participate in 2017, 15 of them available nationally, with the rest being health maintenance organization-type plans available regionally.
In the Washington area, a total of 31 plans will be available, officials said.
Rates for non-postal enrollees in the largest plan, the Blue Cross and Blue Shield standard option, will rise by $5.81 to $105.99 biweekly for self-only coverage, by $9.46 to $240.77 for self-plus-one and by $15.99 to $254.23 for family coverage.
The Blue Cross standard option accounts for about 40 percent of all enrollments, while a lower-cost Blue Cross option accounts for another 24 percent.
As in past years, officials attributed the rise largely to increasing prescription drug costs, which make up about a quarter of the total costs in the program, general inflation and the aging of the covered population.
There will be only minimal changes in out-of-pocket costs such as copayments and deducitbles, they said.
Full details of each plan’s terms will be in brochures to be released just ahead of the election period. Blue Cross announced Wednesday that it will increase the financial incentives for its enrollees who have diabetes to get a health assessment and monitor and control their blood sugar levels.
The most significant change program-wide will be a standard requirement to cover applied behavior analysis for children on the autism spectrum. Some plans already provide that coverage, but terms vary.
The enrollee share of premiums rose 7.4 percent on average for 2016, following four years of increases in the 4 percent range — what OPM officials called the longest stretch of increases that small on average over six years in the program’s history.
However, several organizations representing federal employees and retirees decried the latest increase.
“Like most other Americans, federal employees and retirees have seen their standard of living decline due to stagnant incomes and cost increases for basic goods and services,” American Federation of Government Employees President J. David Cox Sr. said in a statement. “This is an unacceptably high increase that will force many families to make difficult decisions about how to pay their bills.”
“While the increases in FEHBP premiums for 2017 are relatively modest, they add to already skyrocketing costs incurred by federal retirees,” said National Active and Retired Federal Employees Association President Richard G. Thissen.
Federal employees are in line for a raise averaging 1.6 percent, varying somewhat by location, in January. Federal retirees will learn in late October about a January cost-of-living adjustment to their benefits; with one month to go, the inflation count used in that calculation stands at below 1 percent.
OPM officials added that many enrollees with only one eligible family member could benefit by switching from family coverage to self-plus-one, an option introduced into the program last fall for this year. They estimate that 1 million FEHBP enrollees have just one eligible family member, but about half of them are still in the generally more expensive family coverage.
“We’re hoping that those who have not looked at self-plus-one will consider it,” O’Brien said.
However, in about 40 plans, which account for about 5 percent of enrollments, self-plus-one is more expensive than family coverage. That’s largely due to the overall higher cost of insuring the relatively high percentage of retirees and older employee couples with no eligible children who are most likely to choose self-plus-one, officials said.
The open season also is the annual opportunity to join or change options in a separate program, the Federal Dental and Vision Insurance Program. That program offers federal employees and retirees the choice of a smaller number of vision and/or dental coverage plans with no government subsidy. Rates are increasing 1.9 percent on average for dental plans and 6.3 percent on average for vision plans.
In both the FEHBP and FEDVIP programs, coverage continues year to year, subject to the new premium rates and benefits, unless the enrollee makes a change.
However, a new election is required each open season in the separate flexible spending account program, which allows active employees, although not retirees, to set aside money pre-tax to pay for certain health care and dependent care expenses. The 2017 maximums will remain $2,550 and $5,000, respectively, OPM said.
The announcement comes just ahead of the close of election periods for the two other government-sponsored insurance programs for federal employees and retirees.
In the Federal Employees’ Group Life Insurance program, active employees can newly enroll or increase existing coverage during an open season ending Friday. Open seasons in that program are rare and such changes otherwise can be made only after experiencing certain life events or on passing a medical exam.
Also, an “enrollee decision period” ends Friday in the Federal Long-Term Care Insurance Program. That offers enrollees facing premium increases in November averaging 83 percent to restructure their benefits — for example, reducing inflation protection — to soften or eliminate the increase. Most of those affected also can invoke a paid-up provision allowing them to stop paying premiums while remaining eligible for a benefit, although a much-reduced one.