The increase follows jumps of 7.7 and 8.7 percent in the FEHB on average over the last two years, which themselves had been the largest in more than a decade. Image: MargJohnsonVA/Shutterstock.com
The enrollee share of FEHB premiums for non-postal federal employees and retirees will rise 13.5 percent on average for 2025, OPM has said, while the increase for Postal Service employees and retirees in the new Postal Service Health Benefits program will be 11.1 percent for plans mirroring those in which they are currently enrolled in the FEHB.
The increase follows jumps of 7.7 and 8.7 percent in the FEHB on average over the last two years, which themselves had been the largest in more than a decade. As always, there will be variation within the overall average, with higher increases in some plans and the costs in a small number essentially flat or decreasing a bit.
The difference in premium rates between the FEHB and the PSHB is largely due to the latter program being integrated with Medicare, shifting some of the costs of postal retirees onto that program.
Nearly two-thirds of the 4.1 million current FEHB enrollees—about an equal number of family members also are covered–are in one of two plans of Blue Cross/Blue Shield. In Blue Cross/Blue Shield Basic, biweekly rates for active employees will be $113.16 for self-only, $303.61 for self and family, and $274.14 for self-plus-one. Those are increases of $17.42, $41.01 and $35.51 biweekly, respectively.
Biweekly employee rates in Blue Cross/Blue Shield Standard meanwhile will be $174.81 for self-only, $424.65 for self and family, and $384.14 for self-plus-one. Those are increases of $24.02, $53.97 and $47.30, respectively.
Retirees pay the same total premiums, except on a monthly basis rather than biweekly.
The jump drew criticism from federal employee organizations, which in general have been supportive of the administration on pay and benefits matters. “These increases are unwelcome news that will no doubt cause sticker shock for federal and postal employees and retirees across the country,” said the National Active and Retired Federal Employees Association, which urged shopping among plans for 2025 health coverage.
The NTEU union said that “While employees have options for lower-cost plans, we know those often come at the expense of fewer benefits. Federal workers should not have to sacrifice health coverage because they can’t manage the higher payments.”
The total average increase is 11.2 percent in FEHB and 6.9 percent for comparable PSHB plans, but because of the way the cost-sharing formula works, the increase in the enrollee share is larger than the increase in the employer share, which covers about 70 percent of the total cost of premiums.
The FEHB open season for changing existing plans or levels or types of coverage—or, for active employees but not retirees, to newly enroll—will be November 11-December 9.
The same dates apply to postal service employees and retirees, although the launch of the new PSHB program adds some considerations. If they make no election, they will be continued by default in the PSHB plan from the same carrier they now have in the FEHB, where the carrier is participating in the PSHB (where the carrier participates but doesn’t provide all the same options, default enrollment will be in the closest option in terms of cost and coverage).
Where their current FEHB plan is not participating in the PSHB, postal employees and retirees who do not make an election will be enrolled by default in the lowest-cost national plan that does not charge an association or membership fee.
The open season also applies to the FEDVIP vision-dental insurance program, except that in that program retirees may newly enroll. Average premiums in FEDVIP, where enrollees pay the full premium cost, will increase by 3 percent for dental plans and by 1 percent for vision plans. FEDVIP continues to apply to postal employees and retirees as before.
In both FEHB and FEDVIP, an existing enrollment will continue next year unless changed. That is the most common outcome, with only single-digit percentages typically changing plans annually.
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See also,
How Do Age and Years of Service Impact My Federal Retirement
The Best Ages for Federal Employees to Retire