It came as a surprise to federal workers and annuitants when the Office of Personnel Management announced last month that the Federal Employee Health Benefits (FEHB) open season was coming up. Next year, the average cost of a health plan will go up by 13.5%, which is the biggest increase in recent memory. OPM also said that perks for fertility and pregnancy would be increased.
Let’s talk about how these changes might impact you in the coming year.
Premium increase
The average amount of payment that each enrollee pays is going up, but not all plans follow that trend. Self-only premiums will go down in 28 of the 144 FEHB plans that will be offered in 2024 and 2025. They will stay the same in five plans, go up less than the average 13.5% in 69 plans, and go up more than the average in 42 plans.
There have been some big changes. The Presbyterian Health Plan Standard (PS), which is offered in New Mexico, has the biggest drop in the amount of money that enrollees have to pay for premiums. In 2025, the PS is 23% lower, which means that self-only enrollees will save about $732.
The cost of CareFirst BlueChoice Blue Value Plus (B6) in the D.C. area will stay the same next year. Health Alliance HMO Standard (K8), which is offered in several states, will cost self-only enrollees $2,222 more next year because it will be 66% more expensive.
As a whole, this 13.5% rise is the biggest in the last 20 years. Only 3.8% more people joined the average three years ago. No one knows if 2025 will be an outlier or the start of a trend, but government workers and annuitants should expect to pay more in the future and for premiums to go up a lot.
How to combat higher premiums
First, the plan you choose is important. Every year, only about 5% of federal workers and annuitants change their insurance plans. Many of them stay with the same plan for years. But not all rates are going up at the same speed.
This Open Season is a great time to look into cheaper options if you haven’t already. See if there’s a cheaper plan that gives you the same access to providers and perks as your current plan.
If you work for the government, you might want to use a flexible spending account (FSA). Your health care costs more than just your health plan premium. Medical, dental, and vision bills that you pay for yourself can add up.
By putting money into an FSA before taxes, you can save about 30% on these costs. The federal FSA program is run by FSAFEDS. Earlier this year, there were problems with fraud, so new enrollments were partially stopped. In August, new security and anti-fraud measures were put in place, and enrollments began again.
About 20% of federal workers don’t use an FSA right now, which means that a lot of them are missing out on guaranteed savings for their medical costs. From November 11 to December 9, the FSA Open Season and the FEHB Open Season are the same.
Fertility benefits
All FEHB plans started covering all types of artificial insemination and the fertility drugs used in in vitro fertilization (IVF) starting this year (up to three rounds per year). Also, BCBS Standard, a national preferred provider organization (PPO) plan, provided a $25,000 benefit each year to cover the cost of IVF procedures. The cost of fertility drugs did not count toward the $25,000 cap.
Next year, government workers who want coverage for IVF will have another nationwide plan to choose from: GEHA High. Along with these choices, some local plans will add IVF coverage to their benefits in 2025.
These plans include CareFirst plans, Sentara Health (Northern Virginia), and MDIPA in the D.C. area; Kaiser plans in Colorado; Independent Health plans in New York; and Western Health and Sharp in California.
Even though IVF is now covered by more insurance plans, families who use these services will still have to pay a lot of money out of their own pockets. A single IVF cycle can cost anywhere from $15,000 to $30,000. The amount of coinsurance that a plan member has to pay varies from 15% to 50% of the total cost of the procedure, based on the plan.
This means that families may have to pay thousands of dollars out of their own pockets. If you plan to use your IVF benefits, you might want to use an FSA to help cover the costs. In 2024, you can contribute up to $3,200 to an FSA.
Maternal health
For plan year 2025, there will be more health perks for mothers. All FEHB plans will cover mental health care for women who have experienced postpartum depression. Additionally, 80% of plans will cover trained nurse midwives, 67% will cover birthing centers, 72% will cover nurse home visits, and 47% will cover doulas. Please read Section 5(a) of the official FEHB plan brochure to find out more about the perks for mothers.
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