The Office of Personnel Management released a 2018 Federal Employee Health Benefit plan Wednesday that includes a 6.1 percent increase, or an additional $9.04, in premium contributions for federal employees. The total FEHB premium increase will be 4 percent for 2018, 0.4 percent less than the 2017 increase.
“That 4 percent average compares favorably to certain surveys of projected cost increases in private sector employer health group coverage,” said Alan Spielman, director of healthcare and insurance at OPM.
The 6.1 percent increase for 2018 is slightly lower than the 6.2 percent employee contribution increase last year.
That increase results in federal employees paying an average of $5.57 more for self-only plans, $12.55 more for self-plus-one plans, and $12.17 more for family plans.
Premiums will increase 1.26 percent for dental plans and decrease 0.48 percent for vision plans in 2018.
Despite the lower percentage increase on premiums compared with 2017, Richard G. Thissen, president of the National Active and Retired Federal Employees Association, said that the premiums still negatively impact federal employees.
“While the increases in FEHB premiums for 2018 are modest, they continue to cut into federal employees and retirees’ take-home pay, annuity and purchasing power,” he said. “Over the last several years, federal workers have endured a three-year pay freeze and insufficient pay raises that have widened the gap between public- and private-sector pay. During this time, FEHB premiums have steadily increased, as we are witnessing with the 6.1 percent average increase for enrollees in 2018. Decreasing the purchasing power of America’s 5 million strong federal family not only impacts their quality of life, but also has an economic impact on their communities across the country.”
“The premium hikes announced today by the federal government far eclipse any increase in wages or Social Security payments next year,” American Federation of Government Employees national president J. David Cox Sr. said. “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.”
“Federal employees get the 1.9 percent pay increase, so if you do the math on the average pay level, it comes out comes out to about $60 biweekly. And this average employee [premium] increase comes out to about $9,” said Spielman of the premium to pay ratio.
In addition to premium changes, six providers will terminate their enrollment for 2018, affecting 3,213 people in parts of Illinois, New Mexico, Ohio, Texas, Virginia and Wisconsin. With the addition of one provider in 2018, federal employees will have 262 health plan choices with 15 available nationwide.
“As always, there are some plans, some options, that are terminating,” said Spielman.
For those whose plans are not offering re-enrollment, OPM will be producing a pre-Open Season letter detailing the terminating plans, and providers are required to send a notice to their members advising them of their plan’s termination.
Telemedicine benefits will also be offered on more insurance plans in order to expand access to care.
“It’s important to note that the 6.1 percent increase in enrollee share assumes no movement from where people are enrolled now,” said Spielman, adding that typically 5 to 7 percent of federal employees change their plan every year.
Spielman encouraged employees to evaluate plans on more than just premium increases when choosing their 2018 option. For example, employees enrolled in the family healthcare plan but only have one extra person on their insurance could save money by moving to the self-plus-one plan established in 2016. Though premiums for these plans increased on average by a greater percent than the family plans, most self plus one plans still cost below the family rate on the whole.
According to Spielman, approximately two-thirds of employees eligible for the self-plus-one plan have taken advantage of it so far, with about 400,000 eligible employees still on a Family plan.
Open season for health benefits will be held this year from Nov. 13 through Dec. 11, 2017.
Jessie Bur covers federal IT and management.
