Open Season Coming: Here is Why Feds Should Pay Attention to Their Health Insurance

Open season is coming up. Here is why this could be important to federal employees.

This year’s Federal Benefits Open Season, which runs from Monday, November 10, 2014 through Monday, December 8, 2014. The 2014 Open Season information will be posted by OPM by the first week in November. The open enrollment period (“Open Season”) is when federal employees, retirees and annuitants can enroll, change or cancel their participation in a federal health plan.

The Federal Employees Health Benefits Program (FEHBP) premiums went up an average of  3.7% in 2014. The average increase in 2013 was 3.4%. As many readers point out, their insurance rate increase was much higher during these years so shopping for the best rate and the best insurance plan for your situation is always advisable.

We do not yet know how much health insurance premium rates will go up for 2015.

Federal employees are not directly impacted by the Affordable Care Act (aka Obamacare). That is probably a good thing for most as the average insurance rates for many covered by the new program are likely going up more than the FEHB rates will go up for the coming year. Based on preliminary data from 27 states and the District of Columbia, premiums for plans sold through the Affordable Care Act’s health insurance exchanges are set to increase an average 7.5% in 2015. Indiana is expected to see a rate increase of an average of 15.4% while Oregon will see rates decline about 2.5%.

Perhaps a bigger shock to some in the private sector will be the changes to their insurance. The Philadelphia Federal Reserve points out in its August report that 91.2% of employees are seeing their deductibles go up and no companies reporting they are lowering that figure. A total of 88.2% of workers are paying more for premiums, countered by 2.9% who will be contributing less.

Federal employees are unlikely to see the same increases as many private sector workers. While expenses have been added to the FEHB to cover more services, often because of the requirements of Affordable Care Act, the plans in the FEHB were already more comprehensive than many private company plans so the average increase is unlikely to be anywhere close to the 7.5% average noted above. (See, for example, OPM Removes Prohibition on Sex Change Coverage Under FEHB and Obesity and the Federal Employee.)

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47