The average government contribution will increase by 5.0%, while the enrollee share will increase by 7.7%, due to the way the cost-sharing formula works. Image: Dilok Klaisataporn/Shutterstock.com
By: Reg JonesThe Federal Benefits Open Season for 2024 will be held from November 13 through December 11. It will allow federal employees, annuitants and survivors, like you, to review your current health benefits coverage and, if you desire, enroll in or change your current coverage to one the 158 plan available in 2024.
The overall average increase in premium rates will be 5.8%. That is the figure OPM likes to tout, but it’s not the figure that really matters to enrollees. The average government contribution will increase by 5.0%, while the enrollee share will increase by 7.7%, due to the way the cost-sharing formula works. If you want to see the actual dollar premium change for each FEHB plan choice and enrollment type, go to https://www.opm.gov/healthcare-insurance/healthcare/plan-information/premiums.
OPM’s explanation: “The largest contributor to the 2024 premium increase reported by FEHB carriers is increases in medical trend, which measure the change in costs and utilization of service. Carriers specifically noted increases in cost and utilization to specialty and brand drugs, emergency room care, and outpatient care as primary drivers of increased trend.”
Rising costs for prescription drugs have been a main driver of premium increases for years, accounting for about a quarter of all costs in the program. OPM has taken a number of steps in that time to try to slow that growth and for 2024 there is yet another.
According to OPM, “New for the 2024 plan year is an opportunity for eligible enrollees to receive additional savings and enhanced benefits through a Prescription Drug Plan (PDP) Employer Group Waiver Pan (EGWP) offered by 10 FEHB plans. This is in addition to the 28 FEHB plans offering a Medicare Advantage Prescription Drug Plan (MA-PD) EGWP in 2024. This change is projected to reduce total FEHB costs by approximately 2.8%, resulting in a more moderate overall rate increase when compared to similarly sized employer groups.”
OPM recommends that “You should review this information carefully to find out the specific changes to your share of the premiums.” However, cost is only one factor in deciding which plan you should choose. As OPM points out, “Enrollees should evaluate all available information to include plan quality and specific coverage information to make the best decision for themselves and their families.”
OPM provided historical information about the annual premium increases over the last five Open Season years. Of specific interest to you will be the average enrollee premium increases for most federal employees and annuitants:
2024 7.70%
2023 8.70%
2022 4.10%
2021 4.90%
2020 5.75%
Let me close with a reminder to Postal Service employees and annuitants. While they will remain enrolled in the FEHB program for 2024, next year’s open season will be the first for the new Postal Service Health Benefits program that will launch in 2025.
Former head of retirement and insurance policy at the Office of Personnel Management, and longtime FEDweek contributor, Reg Jones is known throughout the federal workforce community as an authority on pay and benefits.
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