Federal Employees Will Pay 4.4 Percent More Toward Health Care Premiums in 2014

Prescription Medicine
National Journal
Eric Katz, Government Executive
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Eric Katz, Government Executive
Sept. 25, 2013, 4:43 a.m.

Fed­er­al em­ploy­ees will pay 4.4 per­cent more to­ward their health in­sur­ance premi­ums in 2014, the Of­fice of Per­son­nel Man­age­ment an­nounced Tues­day.

Fed­er­al Em­ploy­ees Health Be­ne­fits Pro­gram en­rollees with self-only cov­er­age will con­trib­ute an av­er­age of $3.28 more per paycheck, while those with fam­ily cov­er­age will pay about $7.90 more.

This in­crease is steep­er than the rise in the gov­ern­ment’s por­tion of the premi­ums, which will go up 3.3 per­cent. The em­ploy­ee share is in­creas­ing faster due to the par­tic­u­lar FE­HBP plans en­rollees have se­lec­ted, OPM said. Over­all, the gov­ern­ment pays about 70 per­cent of em­ploy­ees’ premi­ums.

Total premi­ums for non-postal FE­HBP en­rollees in­clud­ing both the em­ploy­ee and gov­ern­ment por­tion will in­crease by 3.7 per­cent in 2014, OPM said. Postal en­rollees, who make up about 25 per­cent of FE­HBP, will see an over­all in­crease of 3.8 per­cent.

The over­all in­crease is slightly more than last year’s, when premi­ums rose by an av­er­age of 3.4 per­cent. Still, OPM of­fi­cials said the in­crease comes as re­l­at­ively pos­it­ive news for fed­er­al em­ploy­ees, as it marks the first time in more than 30 years FE­HBP premi­ums have in­creased less than 4 per­cent for three con­sec­ut­ive years.

The ex­act change for en­rollees will vary from plan to plan. The most pop­u­lar plan, the Blue Cross and Blue Shield Stand­ard Op­tion, will see a $1.91 in­crease — or 2.2 per­cent — for self-only en­rollees per paycheck; those with fam­ily cov­er­age will con­trib­ute $4.84 more than in 2013. FE­HBP will of­fer 256 health plans in 2014, 26 more than it offered in 2013.

Premi­ums in the Fed­er­al Em­ploy­ees Dent­al and Vis­ion In­sur­ance Pro­gram will have more fa­vor­able num­bers for feds, with dent­al cov­er­age rates in­creas­ing by less than 1 per­cent and vis­ion premi­ums de­creas­ing by 1.3 per­cent.

The re­cent string of re­l­at­ively low premi­um in­creases for FE­HBP en­rollees has res­ul­ted from pos­it­ive mar­ket trends, as well as the 2010 Pa­tient Pro­tec­tion and Af­ford­able Care Act, OPM said. ACA — or Obama­care — has cre­ated more com­pet­i­tion that drives down prices, ac­cord­ing to OPM of­fi­cials.

In a let­ter sent to FE­HBP car­ri­ers in March to kick off ne­go­ti­ations for 2014 be­ne­fits and rates, OPM high­lighted pre­scrip­tion drug costs, well­ness pro­grams and pre­vent­at­ive care as areas that should be ad­dressed for any car­ri­er look­ing to sub­mit a plan in FE­HBP. These pro­vi­sions have also helped to con­trol costs, OPM said.

While be­ne­fits will largely re­main the same in 2014, the 2010 health care re­form law has led OPM to re­quire more pre­vent­at­ive treat­ments in each FE­HBP plan. Such meas­ures in­clude screen­ing and coun­sel­ing on al­co­hol mis­use, to­bacco use in­ter­ven­tion for chil­dren and ad­oles­cents, and Hep­at­it­is C screen­ing.

In the three years pri­or to 2012, premi­ums went up by more than 7 per­cent an­nu­ally. OPM ac­know­ledged the size of the in­creases this year will likely serve as little con­sol­a­tion to fed­er­al em­ploy­ees, who have had their pay frozen for three con­sec­ut­ive years.

“We’re very sens­it­ive to it,” said John O’Bri­en, OPM’s dir­ect­or for health care and in­sur­ance, at a press brief­ing Tues­day. “It’s not something we can dance around oth­er than that’s why we worked so hard to keep the premi­ums down.”

Colleen M. Kel­ley, pres­id­ent of the Na­tion­al Treas­ury Em­ploy­ees Uni­on, said the premi­um hike is an­oth­er in a long line of hits the fed­er­al work­force has taken in re­cent years.

“High­er health premi­ums are yet an­oth­er fin­an­cial hard­ship for fed­er­al em­ploy­ees and re­tir­ees in these tough eco­nom­ic times,” Kel­ley said. “Any in­crease in premi­ums places an un­due bur­den on fed­er­al em­ploy­ees giv­en the freeze on fed­er­al pay, un­paid fur­loughs and now the threat of a gov­ern­ment shut­down.”

Jon Fo­ley, dir­ect­or of plan­ning and policy ana­lys­is for OPM, said FE­HBP of­fers a wide vari­ety of plans, in­clud­ing less ex­pens­ive op­tions that can help to “mit­ig­ate the im­pact” of the rate hike. O’Bri­en ad­ded the av­er­age in­crease may end up lower than the 3.7 per­cent fig­ure — which as­sumes all en­rollees keep their cur­rent in­sur­ance plan — as some par­ti­cipants switch to cheap­er op­tions, while very few choose more ex­pens­ive pack­ages. Typ­ic­ally, about 95 per­cent of en­rollees keep their plan each year.

Open sea­son — the peri­od in which fed­er­al em­ploy­ees can en­roll, al­ter their plan, and add or re­move de­pend­ents — will be held from Nov. 11 through Dec. 9.

FE­HBP provides $47 bil­lion in health care be­ne­fits for about 8.2 mil­lion fed­er­al em­ploy­ees, re­tir­ees and de­pend­ents.

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