Health premiums: Easy on the wallet

Wednesday - 9/28/2011, 2:04am EDT


After more than a year of being frozen, furloughed, teased and targeted by hostile politicians, federal workers, retirees and their survivors have some relatively good news: Premiums in the Federal Employee Health Benefits Program next year will go up an average of 3.8 percent. That's a lot better than the 7.3 percent average increase in January of this year and much less than the rise some experts had predicted.

Federal workers are in the midst of a two-year pay freeze, and federal retirees have not had a cost of living adjustment since 2009, so even a modest increase in FEHBP premiums reduces their take-home.

The average 2012 increase for nationwide fee-for-service plans will be 3.2 percent while the average rise in 2012 will be 6.7 percent for local health maintenance organizations. Officials said that 206 health plans will participate in the FEHBP program next year. It covers more than 8 million people from newborns to 100-plus year old retirees or their surviors.

The open season will run from Nov. 14 through Dec. 12.

According to the Office of Personnel Management, the average premium increase will amount to $2.32 biweekly for nonpostal feds, who purchase the self-only option, and $6.18 biweekly for those who buy family coverage. The government will continue to pay about 70 percent of the total premium for regular federal employees and retirees. Postal workers, thanks to their union contract, pay a much smaller share of their plans' premiums.

To check out premium changes for your health plan, click here.

Federal and postal retirees and/or their survivors pay the same premiums in the same health plans but on a monthly basis.

Just over 280,000 young adults (through age 26) joined the FEHBP last year through the president's health care changes. Previously the limit for dependent children was age 22. Officials said the influx of younger people had no impact on premiums but some experts say that in the future the addition of a large number of mostly healthy premium-payers will be a plus for the program.

OPM, which runs the FEHBP, said that 1.6 millions participants have optional dental coverage and 775,000 are in optional vision benefit plans.

The government will continue to offer pre-tax Flexible Spending Accounts to active-duty personnel, but not to retirees. Under an FSA, individuals can earmark up to $5,000 to be used to be paid for uncovered drugs or services, and $5,000 to help pay for daycare. That money is not considered taxable income by the IRS. Efforts to extend the FSA option to retirees — federal and nonfederal — have fallen flat because of the revenue loss to the Treasury.

Furlough Bullet: Federal workers have dodged another one. For now. But the last-minute compromise worked out between the cranky House and the creaky Senate lasts only until November when the nail-biting starts all over again. Today at 10 a.m. on our Your Turn radio show Steve Bauer, executive director of the Federal Employees Education and Assistance Fund talks about what the feds-helping-feds charity had to deal with this year and the help it gave furloughed FAA workers.

Also joining us on the show, Federal Times writer Steve Losey, will talk about the where and when of the next shutdown threat and the good news about health premiums. If you have questions or comments email them to me at: mcausey@federalnewsradio.com

That's 10 a.m. on your computer or if you are stuck in traffic in the DC area, 1500 AM or your car radio.

And if you have questions email them to me at mcausey@federalnewsradio.com or call in during the show at (202) 465-3080. The show will be archived here.


By Jack Moore

While pirates in days of yore wore earrings for many reasons (most of them superstitious) the golden hoops adorning a buccaneer's ear could also serve a more practical purpose. Pirates who manned a ship's cannons would hang little balls of wax (not the ear kind!) from them to use as earplugs, according to Life's Little Mysteries.


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