6.2% Average Health Insurance Increase for Federal Employees

The average rate increase for 2017 under the health insurance plan for federal employees (FEHB) will be 6.2% in 2017.

The average rate under the Federal Employee Health Benefit Plan (FEHB) will be going up by 4.4% for 2017 according to a press release from the Office of Personnel Management (OPM). OPM writes that The FEHB rate increase is below projected increases for the national large group market.

While we do not know the final figures, the average pay increase for federal employees is projected to be 1.6% for current federal employees. (See 2017 Federal Pay Raise and COLA Update)

We do not yet know the amount of a cost of living adjustment for federal retirees in 2017 but it will likely be less than 1/2%. (See Chances Increase for Small COLA in 2017)

Employee Increase vs. FEHB Increase for Federal Government

The American Federation of Government Employees (AFGE) quickly issued a press release noting: “It’s an unacceptably high increase that will hit millions of Americans in the pocketbook.”

While the average rate increase will be 4.4% according to OPM, participants in the FEHB will pay 6.2% more for their insurance next year. The government’s share of those premiums will be up 3.7% according to the union.

“This continuation of health care cost-shifting onto federal workers and retirees is making coverage less and less affordable and will cause many to drop coverage,” according to AFGE President David Cox.

National Active and Retired Federal Employees Association (NARFE) president Richard G. Thissen said in a press release:

Hundreds of thousands of federal employees and retirees are facing an average increase of 83 percent in their Federal Long Term Care Insurance Program (FLTCIP) premiums. And many federal retirees also likely will face a disproportionate increase in their Medicare Part B premiums – of up to 22 percent or more – in 2017. This perfect storm of rising health insurance costs will not only decrease federal retirees’ purchasing power, it will impact their quality of life….

For the seventh year in a row, the FEHBP premium increase also will take a bite out of the already reduced paychecks of federal employees. In the past six years, pay raises for federal employees have totaled a mere 3.3 percentage points. Yet FEHBP premiums have increased a total of 27.8 percentage points over the same time period.

Average Premium Increases for 2017

Biweekly premiums will be up an average of $5.27 for FEHB participants with the self-only plan. Premiums for enrollees in a self-plus-one plan will be $10.32. The average cost will be $12.97 for enrollees in a family plan. For those covered by Blue Cross and Blue Shield, the largest insurer in the federal program, rates will increase $5.81 for self-only, $9.46 for self-plus-one, and $15.99 for family coverage.

There will also be an average increase of 1.9% for dental plans and 6.3% for vision coverage according to AFGE.

AFGE also notes in its press release that, “One bright spot for next year is that all health plans in the federal program will cover Applied Behavioral Analysis, the most effective known treatment for Autism Spectrum Disorders. AFGE lobbied OPM for 10 years to require FEHBP carriers to provide this coverage.”

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