Analysis: More to choosing a federal health plan than premiums

Monday - 10/3/2011, 9:14am EDT

Ed Zurndorfer, registered employee benefits consultant

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By Jack Moore
Federal News Radio

Federal workers "dodged a bullet" when the Office of Personnel Management announced premium increases for the Federal Employee Health Benefit Program last week, an employee benefits consultant told Federal News Radio.

On average, workers will pay about 3.8 percent more for health insurance next year, even as benefits largely remain unchanged.

Those expected increases in the Federal Employees Health Benefits Program will be the smallest since 2008 — premiums rose more than 7 percent last year alone.

But Ed Zurndorfer, a registered employee benefits consultant, told the Federal Drive with Tom Temin and Amy Morris there's more to choosing a health plan — which feds will do beginning next month — than only looking at premium increases.

"I think federal employees and retirees dodged a bullet," with the small premium increase, Zurndorfer said. For example, the increase is only about one-third of that faced by workers in the private sector.

But, just because premiums only edged up ever so slightly, "that doesn't mean that other costs are not going up," he said.

Employers are increasingly shifting costs to the employees in the form of co-insurance or co-pays, he explained.

"Employees are paying more out of pocket for their visits to the doctors, for prescription drugs, for medical equipment — anything that involves medical expenses, employees tend to have more costs out of pocket," Zurndorfer said.

And with that in mind, there are some considerations employees should take into account before choosing a plan.

For example, people who didn't require frequent doctor visits last year and are otherwise well might consider selecting a high-deductible health insurance plan, Zurndorfer said,

This makes them eligible for a health savings account, which is similar to a retirement account, but is used to pay for out-of-pocket medical expenses.

"Granted, it's not an easy task to choose a health insurance plan," Zurndorfer said. "But there's more to it than just looking at premium increases. You've got to know what the plan will be covering."

The Office of Personnel Management posts information online about the various health plans available to federal workers ahead of "open season," which begins Nov. 14 and runs through Dec. 12.

"So, employees have some homework to do," he added, "and that's what open season is about."

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