Federal Employees Face Biggest Hike in Health Care Premiums in over a Decade

Health care premiums will spike for federal employees next year.

Employees enrolled in the Federal Employees Health Benefits (FEHB) program will see an average increase of 13.5 percent on their premiums for 2025. That is nearly double last year’s increase of 7.7 percent and is the biggest increase in well over a decade.

In dollars, FEHB enrollees in family coverage will pay an average of $26.10 more toward their premiums per biweekly paycheck. A participant enrolled in a “self-only” plan will an average of $16.24 more per pay period.

When the government’s share of insurance costs is factored in, FEHB premiums will increase by 11.2 percent on average. The cost of the government’s contribution is rising 10.1 percent.

Meanwhile, participants in the new Postal Service Health Benefits (PSHB) program will absorb premium hikes of 11.1 percent. Factoring the government’s share of the cost, the overall premium increase for PSHB is 6.9 percent. It’s the first year of PSHB which replaced the United States Postal Service’s (USPS) previous health insurance offerings.

 Dental and vision plan (FEDVIP) rates will see a minimal increase.

Federal employee groups were not happy with the price hikes.

“While employees have options for lower-cost plans, we know those often come at the expense of fewer benefits,” National Treasury Employees Union (NTEU) Doreen Greenwald said. “Federal workers should not have to sacrifice health coverage because they can’t manage the higher payments.”

Price Hike Reasons

The Office of Personnel Management (OPM) says the hikes are in line with those in the commercial market.

OPM pointed to a slew of reasons for the premium increases. Those include price hikes from providers and suppliers, higher prices for prescription drugs, and increased spending on behavioral health.

Fertility and Other Benefits

But there are some positive changes to the coverage, particularly on fertility benefits.

Starting in 2025, two national carriers (Blue Cross Blue Shield and the Government Employees Health Association) will offer comprehensive IVF coverage upwards of $25,000.  

The inclusion of this coverage was hailed by many in Congress, including Representative Gerry Connolly (D-VA), who pushed for action on the issue.

“In 2025, every FEHB enrollee, regardless of where they live and work, will be able to choose from multiple nationwide plans that offer comprehensive IVF coverage,” said Rep. Connolly.” Providing federal employees with options to start and grow their families will in turn help the government recruit and retain the federal workforce of the future.”

There are also changes on weight loss drugs. All FEHB carriers must cover at least one GLP-1 class anti-obesity drug such as Ozempic. Carriers must also offer “comprehensive behavioral therapy,” including diet and exercise regimens, to patients who are prescribed those drugs.

Additionally, FEHB plans will reimburse behavioral health services offered in primary care settings, in part as a response to challenges stemming from the COVID-19 pandemic, youth mental health, and the opioid epidemic. Plans will also reimburse for treatments for postpartum depression.

The PHSB benefits will align with FEHB benefits except for prescription drug benefits.  

Employees will have the option to select their plans when open season starts. Open season for benefits selection runs from November 11 through December 9, 2024.

There is a comparison tool on OPM’s website to help participants with their selection.