Self Plus One Health Insurance: Will Your Insurance Costs Go Up or Down?

The self plus one option under the federal health insurance program will be available during the open season in 2015. It will likely benefit many in the program but some federal employees are likely to have higher premiums in 2016 as a result of the change.

The federal government is moving to implement the “self plus one” option for federal employee health insurance programs. The program will become available as an option during the open season in 2015 and become effective in 2016. As might be expected in a program as complex as the Federal Employee Health Benefits Program (FEHB), there are numerous questions that will arise from those enrolled in the program.

A new document answers at least some of the answers to common questions. As the program will not be available until the open season in 2015, employees and retirees will have time to research the options and to discuss options with their human resources office to make the most appropriate decision based on an individual’s circumstances.

The Office of Personnel Management (OPM) has issued a proposed rule to implement the new program that was part of the budget deal reported last year.

The cost of the new option is unknown for now. However, OPM notes in the regulations that those who use the self plus one are likely to have lower premiums and the premiums are likely to increase for those with the family plans are likely to pay higher premiums:

Under OPM’s policies, current enrollees with Self and Family coverage who only have one dependent are expected to have lower premiums under the new enrollment tier, while those with more than one dependent are expected to have higher premiums. A large percentage of annuitants who currently have Self and Family coverage would likely benefit from a Self-Plus One premium tier, resulting in mandatory savings to the government because the government share of annuitant premiums will decrease.”

The  Congressional Budget Office noted in a report last year that federal retirees would be more likely than active federal employees to switch to “self plus one” policies. As a result, the average cost of FEHB policies for federal retirees would be lower than under current law, and the average cost of FEHB policies for active federal employees would be higher than under current law. This is because the “self plus family” option would become more costly than under current law because the average number of people covered by policies of that type are likely to rise.

While many couples will be delighted to pay lower premiums, some federal employees will find the revised insurance plan to be less beneficial. In fact, OPM notes, some people currently in the FEHB program are likely to leave the program as insurance premiums may be less expensive outside of the FEHB as the cost of this employee benefit goes up for employees under the family health insurance program. Here are the OPM observations on this issue:

“Federal employees and annuitants choosing self and family enrollment for themselves and at least two family members would experience an increase in premiums and therefore, in some cases, may choose to switch from FEHB to an alternative health insurance option. If all such families continued with FEHB participation, the government would experience an increase in premium payments that would (in theory) exactly offset the decreases associated with two-person families switching from self and family to self plus one enrollment; however, any switching away from FEHB would mitigate the premium increases experienced by the federal government, instead potentially leading to payment increases by any contributors to the newly-chosen insurance options (an obvious example would be the employer of a federal employee’s or annuitant’s spouse if that employer sponsors the newly-chosen insurance).”

The new draft rules answer some questions often asked by readers including these items:

  • An enrollee will be able to designate one other person for coverage, although only a spouse or child who meets current eligibility rules will qualify as “The proposed regulation does not alter current FEHB family member eligibility guidelines,” according to OPM. This presumably means that a “domestic partner” will not qualify for the self plus one insurance coverage.
  • Married or legally separated federal employees, annuitants, and their children, an employee or annuitant would be allowed enroll in a self only, self plus one, or self and family enrollment, as appropriate, even though his or her spouse also has a self plus one or self and family enrollment. This could occur if the employee, annuitant, or  children live apart from the spouse and would otherwise not have access to coverage due to a service area restriction and the spouse refuses to change health plans.
  • Also, in the event an employee who is under age 26 and covered under a parent’s self plus one or self and family enrollment acquires an eligible family member, the employee may elect to enroll for self plus one or self and family coverage.
  • An enrollee with a self plus one enrollment may switch to a covered family member during the annual Open Season, upon a change in family  status, upon a change in coverage, or upon a change in eligibility if switching a covered family member is consistent with the event that has taken place.
  • With one exception, an annuitant may decrease enrollment type at any time. The exception is that an annuitant who, as an employee, was subject to a court or administrative order as discussed at the time of retirement may not, after retirement, decrease enrollment type in a way that eliminates coverage of a child identified in the order as long as the court or administrative order is still in effect and the annuitant has at least one child identified in the order who is still eligible under the FEHB Program unless the annuitant provides documentation to the retirement system that other coverage has been provided for the child.  The annuitant may not elect self only as long as he or she has one child or children identified as covered, but may elect self plus one coverage.
  • An enrolled former employee in receipt of an annuity may decrease or increase the enrollment type or change from one plan or option to another when the annuitant’s family status changes, including a change in marital status or any other change in family status.

Proposed Regulations for Self Plus One Health Insurance by FedSmith, Inc.

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