September 29, 2015

Tim Kauffman

[email protected]

Unacceptable Rise in Health Insurance Premiums Will Lower Take-Home Pay for Federal Employees, Retirees

Categories: Benefits, OPM

AFGE laments 7.4% increase in enrollee share of FEHBP premiums next year


WASHINGTON – Federal employees and retirees will pay 7.4% more for health insurance premiums next year, an unacceptable increase that will eat away at their already modest take-home pay, American Federation of Government Employees National President J. David Cox Sr. said today.

“Working people in this country are falling further and further behind economically, and this is yet another stark reminder,” Cox said.

“Federal employees have endured five years of frozen or miniscule pay raises, while retirees aren’t getting a dime of additional support next year. How are they supposed to maintain their standard of living when costs for essential things like health care keep going up?”

Enrollees in the Federal Employees Health Benefit Program will pay 7.4% more on average for their insurance premiums starting in January, while the government’s share of premiums will increase 6% on average, the Office of Personnel Management announced today.

“The government is shifting more of the cost increase to enrollees, further eating away at their take-home pay,” Cox said.

Biweekly premiums will increase $5.50 for enrollees who select the self-only plan, $8.92 for enrollees who select the new self-plus-one plan, and $19.61 for enrollees who select the family plan.

“Our members take home an average of $500 a week. This is a significant and unfortunate cost that is being passed on to them at a time when they can least afford it,” Cox said.

Although OPM had promised that the new self-plus-one option would lower costs for enrollees, in some cases enrollees will be charged more for selecting the self-plus-one plan than they will if they stay in the family plan.

Overall, average premiums for non-postal employees and retirees will increase 6.4% in 2016, which is double last year’s increase and the highest increase in six years. The source of the premium increase was not adequately identified by OPM during a briefing with unions, although OPM attributed some of the cost increase to prescription drugs.

As premiums rise, the FEHBP is speeding closer toward prices that will subject plans to a so-called Cadillac surtax under the Affordable Care Act – a cost that will again be passed on to enrollees.

Premiums also are increasing an average of 2.23% for dental plans and 3.61% for vision coverage, OPM said.

Enrollees will be able to make changes to their insurance plans and options during the open season, which runs from Nov. 9 to Dec. 14.

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