The United States Office of Personnel Management (OPM) today announced insurance premiums for the year 2002 for the Federal Employees Health Benefits Program (FEHBP), which covers roughly nine million employees, retirees and their families.

Nationwide reports have indicated that some private companies are facing premium increases of 13-50 percent (USA Today, August 27, 2001) and many have said that it is likely they will increase employees' share of the burden to pay for health insurance next year. While the government is seeing its own premium increase of 13 percent, the FEHB plans remain among the most reasonably priced in the nation.

According to the Director of the Office of Personnel Management, Kay Coles James, OPM negotiated at length for the smallest premium increases feasible, without reducing benefits significantly or asking enrollees to pay substantially more money out of their pockets each time they need heath care.

"I strongly believe it is important to maintain a comprehensive benefits package for federal employees and retirees," said James. "We had two primary objectives throughout these negotiations; to deliver a plan that provides among the most options of any in the nation and to do so at a reasonable cost."

Reflecting industry trends, the overall average FEHB increase will be 13 percent, with premiums for Health Maintenance Organizations increasing an average 14 percent, while the more traditional Fee-for-Service plans will see an average increase of 13 percent.

The new health benefits premiums go into effect in January 2002. FEHBP enrollees who have self-only coverage will pay roughly $4.32 more biweekly, while those with family coverage will pay $11.57 more biweekly.

Factors contributing to the premium increase include the utilization of prescription drugs and medical services, advances in medical technology and a covered population that continues to age. These are consistent with trends seen elsewhere.

"These increases reflect nationwide trends," said James. "While I am not pleased that FEHBP premiums are going up in January, we can say with certainty that the FEHBP continues to be a strong model. The FEHBP has important features, including choice of health plans and competitive benefit packages, as well as no pre-existing condition limitations or waiting periods. Also, in sharp contrast with trends in the private sector, the FEHB plans continue to cover all eligible retirees and their spouses."

There is a significant program change in the largest plan in the FEHB Program. The Blue Cross and Blue Shield Service Benefit Plan is merging its High Option into Standard Option and will add a new Basic Option.

During the FEHBP open season, which runs from November 12 to December 10, eligible federal employees and retirees can stay with their current health plan or select a new one. Enrollees are encouraged to use the FEHBP website www.opm.gov/insure/health to review Open Season information and to select the health plan that best meets their needs. Federal enrollees can review the Open Season guide and health plan brochures on the web site.

About 180 health plan options will be available to program enrollees next year. Seven fee-for-service plans are available to any enrollee worldwide, and many enrollees can choose a local HMO. In the Washington, DC area, there are 11 plans from which to choose.

Our mission is to ensure the Federal Government has an effective civilian workforce. OPM supports U.S. agencies with personnel services and policy leadership including staffing tools, guidance on labor-management relations and programs to improve work force performance.