Feds' health premiums to rise in 2021

The coronavirus pandemic was a driver in keeping premium hikes lower than otherwise would have been the case, according to an OPM official.

Federal employees and retirees will see an average 4.9% rise in health insurance premiums in 2021, the Office of Personnel Management announced today. The figures don't include U.S. Postal Service employee benefit plans.


The 2021 increase is, on average, lower than last year's. According to Laurie Bodenheimer, OPM's acting director for healthcare and insurance, the lower utilization of health benefits for the peak period of the COVID-19 pandemic, as many people deferred routine care and elective surgery, contributed to keeping the cost increase relatively low. According to OPM, most large employers are estimating premium contribution increases for employees at between 4% and 10%.

Overall plan costs are rising an average of 3.6% according to OPM. The federal government's contribution to health insurance premiums will rise 3%.

"But for COVID, the premium increase would have been a fair amount higher," Bodenheimer said on an call with reporters.

The 2021 plan year will see the launch of a new, 7-year contract for the Federal Employees Dental and Vision Insurance Program (FEDVIP), and there will be many new plans and options for feds to consider when open season kicks off Nov. 9. Plan participants can expect new wellness benefits that were added to plans under the new FEDVIP contract.

Feds and retirees have from Nov. 9 to Dec. 14 to make changes to their plans and to enroll and designate amounts for flexible spending accounts (FSAs). Additionally, changes to the tax rules make it possible for participants to carry over $550 in their accounts into 2021.

Bodenheimer also stressed that changes to transparency with health care providers means that plan participants can comparison shop for plans and also research in advance for possible contingencies. Beginning in 2021, she said, all plans are required to offer "robust" transparency tools with information on cost and quality. OPM is also offering "enhanced plan comparison tools" to let customers shop more effectively for plans, including high-deductible consumer-driven health plans.

A web tool coming from OPM before the close of 2022 will give information on network status of physicians across multiple specialties and urgent care at hospitals. Plan participants can find out, for example, the in-network availability of care providers at nearby hospitals to see where their coverage can be used for optimal advantage. This is part of an overall administration goal to reduce surprise billing not just for Federal Employee Health Benefit plan customers but for the entire country.

Bodenheimer said that telehealth usage and offerings are up, as a side effect of the pandemic. OPM has been encouraging carriers to waive cost sharing payments (co-pays) and pre-approval for telehealth services in response to COVID-19. "Carriers have responded nicely to that," she said.

Also on the pandemic front, insurance carriers participating in the FEHB program are required, like all carriers under recent federal legislation, to cover the costs of any FDA-approved COVID-19 vaccine within 15 days of it hitting the market.

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