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Feds' health premiums to rise in 2021

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.

Reader comments

Mon, Oct 19, 2020 Luke

If you've done ANYTHING right during your FERS years of employment, you shouldn't be hurting financially. The private sector typically does not offer a group major medical plan: you'd be paying most of $2K out of pocket with a high deductible. You can take FEHB with you when you retire at a group rate often less than $500/month for yourself. That's a good deal. Also. . .in retirement you'll have social security AND Medicare at $150/month or so. Yes, legislators have it much better. But, count your blessings: you shouldn't need the ACA if you've invested in TSP and farmed the matching contributions. It sucks that legislators are unfair to their employees. But, look at your own situation and determine if you're better off now than eight years ago and vote accordingly.

Mon, Oct 19, 2020

Absolutely because of the failed healthcare rammed down our throats by Pelosi and company!!!

Fri, Oct 16, 2020

Our premiums are so so high. I guess really plot of the dems is really to make so you can’t afford your healthcare. While they live in their mansion.

Fri, Oct 16, 2020

Spent 20 years with the govt insurance raised every year. ACA as nothing to due with it. Plus most govt employees do not quailfy for aca too much money made. SenatorGraham gets tri care. Thats for DOD only.

Fri, Oct 16, 2020

Back in the day, before the ACA, you could make the personal "CHOICE" of a catastrophic plan; paying much less than $1,700 a month with a $7,000 deductible. Not now for those that have to live with the ACA - $7,000 deductible? Basically, you have no insurance unless something catastrophic happens. GO ACA!!!

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