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<\/p>\nYour health costs are likely going up next year. Most FEHB plans raised their premiums for 2027, and some are changing benefits in ways that could push your out-of-pocket spending higher.<\/p>\n
The good news: Tax-advantaged accounts can offset a real chunk of that increase, and higher contribution limits will give you more opportunities to save.<\/p>\n
Here\u2019s everything you need to know about how to take advantage of those accounts and navigate the changes in FEHB.<\/p>\n
Premium increase<\/p>\n
The average enrollee share of premium will increase 10.9% next year, but that\u2019s just the average. Some premiums are going down; self-only enrollees in Kaiser Permanente High \u2013 Mid-Atlantic will pay 3.7% less. The GEHA Standard premium is staying the same. And some are increasing well above the average; self-only enrollees in MHBP Standard will pay 63% more.<\/p>\n
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You can check your premium on the carrier website, on the last page of the FEHB plan brochure, or on the OPM Open Season site.<\/p>\n
Government share of premium<\/p>\n
The maximum government contribution will increase next year, and it\u2019s determined by calculating the 72% program-wide weighted average premium by enrollment type. Federal employees and annuitants either receive this max contribution or 75% of their premium paid, whichever is less.<\/p>\n
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Each of the 118 FEHB plans available in 2027 offers three enrollment types: self & family, self-plus-one, and self-only. How you enroll affects how much the government contributes to your premium. Next year, it will pay 75% of the premium for 64 plans if you enroll as self & family, 58 plans if you enroll as self-plus-one, and 59 plans if you enroll as self-only. Many local HMOs around the country will receive the 75% government contribution, in addition to the following national plans:<\/p>\n
Aetna Advantage & Direct
\nAPWU Consumer Driven Option
\nBCBS FEP Blue Focus
\nCompass Rose Standard
\nGEHA Elevate, HDHP, & Standard
\nSAMBA Standard<\/p>\n
On the other hand, the maximum government contribution may not come anywhere close to paying 75% of the premium. For example, the maximum government contribution for Aetna Open Access (JR) only covers 29.7% of the self & family premium, leaving you on the hook for the other 70.3%.<\/p>\n
Available plans<\/p>\n
There will be 14 fewer plans in FEHB next year. This year there were 132 plans and next year there will be 118. These departures will impact roughly 39,000 federal employees and annuitants, and if you\u2019re currently in any of the following plans, you\u2019ll be auto-enrolled in Compass Rose Standard if they don\u2019t make any changes during Open Season:<\/p>\n
Blue Care Network of Michigan High Option
\nHealth Net of California High Option (Northern CA)
\nHealth Net of California Basic, High, Standard Options (Southern CA)
\nIndependent Health HDHP & High Options
\nUnitedHealthcare Choice Primary (AZ, NV, OR, WA)
\nUnitedHealthcare Choice Plus Primary (AZ, NV, OR, WA)
\nUnitedHealthcare HDHP (AL, AZ, AR, CO, FL, LA, MS, NV, NC, OR, TN, WA)<\/p>\n
However, the highest number of FEHB members will be impacted from the termination of two nationwide MHBP plans: Value and Consumer Option. Federal employees and annuitants enrolled in either of those two plans will be auto-enrolled into MHBP Standard.<\/p>\n
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There is a plan merger that will move UnitedHealthcare members enrolled in either Choice Plus or Choice Plus Advanced in several states (AL, AR, DC, FL, GA, IL, IA, KY, LA, MD, MS, MO, NC, PA, TN, TX, VA) to another UnitedHealthcare plan, Choice Plus Primary, next year.<\/p>\n
Presbyterian, which offers three health plans in New Mexico (High, Standard, Wellness), has reduced their service area by 28 counties. Plan members that remain enrolled next year and live outside of the current service area will have to be comfortable traveling to the remaining service area for full benefits, otherwise they\u2019ll only have access to emergency services.<\/p>\n
Sharp Health Plan in the San Diego area has added a basic option, and it\u2019s the only new plan in the FEHB program next year.<\/p>\n
Finally, Health Alliance Plan in Michigan has expanded their service area and has added 12 counties.<\/p>\n
Benefit changes <\/p>\n
Your plan benefits could change next year, and this could have a bigger impact on your healthcare expenses than a premium increase. Find the official plan brochure and read Section 2, \u201cChanges for 2027,\u201d to see how your plan is changing.<\/p>\n
Here\u2019s a sample:<\/p>\n
MHBP Standard is increasing the plan deductible and catastrophic limit, raising members\u2019 cost share for doctor visits, and changing from a fixed copay for emergency care and inpatient hospital ($200) to a 10% coinsurance.
\nUnder BCBS Basic, the catastrophic limit and the copays for emergency room, inpatient hospital, maternity hospital stay, and inpatient mental health are all increasing.
\nFor BCBS Standard, the deductible, catastrophic limits, and inpatient hospital and inpatient mental health copays are all increasing.<\/p>\n
One other big benefit change for next year that impacts all FEHB plans is the prior authorization to receive approval for GLP-1 weight loss drugs. OPM now requires Intensive Behavioral Therapy both before and during treatment with a GLP-1 medication. More information on this new requirement can be found in the plan brochure and on the carrier website.<\/p>\n
Ways to save: Consider high-deductible health plans<\/p>\n
Employees looking for a cheaper option should consider High-Deductible Health Plans (HDHPs). These plans tend to cost less as their premiums tend to be lower than popular PPO plans and a portion of the premium is contributed to a health savings account (HSA) as a premium pass-through.<\/p>\n
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Employees can also choose to make additional contributions to their HSA, and they should because these are triple-tax-advantaged:<\/p>\n
Tax-free going in: Contributions made through payroll deduction or as a lump sum lower your taxable income. Depending on your tax bracket, that can save you roughly 30% on every dollar you contribute.
\nTax-free growth: You can invest your HSA balance, and any interest or investment earnings grow tax-free.
\nTax-free going out: Withdrawals are tax-free when used for qualified medical expenses.<\/p>\n
The contribution limits from both what the plan puts into the HSA and your own voluntary contributions will rise next year to $4,500 for self-only enrollees and $9,000 for self-plus-one or self & family enrollees.<\/p>\n
Ways to save: Flexible spending accounts<\/p>\n
Every federal employee will have some predictable healthcare expenses next year, from copays to dental and vision care to prescription drug refills and over-the-counter pharmacy items. What if you could cut your out-of-pocket healthcare costs for these expenses by roughly 30%?<\/p>\n
You can! The FSAFeds<\/a> program is the answer, yet less than 20% of federal employees participate.<\/p>\n Here\u2019s how it works: Federal employees can contribute up to $3,500 to a healthcare FSA next year. Contributions come out of your paycheck pre-tax, lowering your taxable income, so every dollar is sheltered from federal, state, and FICA payroll taxes. Depending on where you live, that can add up to more than 30% in tax savings when you use your FSA to pay for qualified healthcare expenses.<\/p>\n The only catch is the \u201cuse it or lose it\u201d rule, so make sure to budget carefully. If you contribute more to the FSA than you use, you run the risk of losing funds. However, you don\u2019t have to be perfect. If you stay enrolled in FSAFeds, you can roll over up to $700 in unused funds into the next plan year, but any balance above that is forfeited. If you\u2019ve never used an FSA, a low-risk way to start is to contribute just $700. Even if you spend none of it, you can roll over the full amount as long as you stay enrolled.<\/p>\n And it will be even easier to use the FSAFeds program next year. For the first time ever, FSAFeds will have a debit card that you can use to pay for qualified healthcare expenses. Previously, you\u2019ve had to pay for your eligible healthcare expenses out of your own pocket and wait for reimbursement.<\/p>\n In summary<\/p>\n Since most federal employees won\u2019t receive a raise next year, any premium increase will mean a smaller paycheck. Some FEHB premiums are rising faster than others, and because this is a guaranteed expense, it\u2019s worth assessing whether your current plan is still a good value or whether switching could save you money. But don\u2019t just look at premiums alone; a plan with a lower premium may carry higher out-of-pocket costs, which can cancel out the savings, so strike a balance between the two.<\/p>\n If you\u2019re losing your FEHB plan, make a proactive choice during Open Season to ensure that you\u2019re enrolled in the one that\u2019s the best fit and not the default.<\/p>\n Less than 20% of federal employees are enrolled in the FSA program, and that number should be much higher. It\u2019s a guaranteed way to save money on your healthcare expenses, and it\u2019s never been easier with the new debit card available next year.<\/p>\n If you have questions about FEHB coverage, how Medicare works with FEHB, or anything else healthcare related you\u2019d like to learn more about, you can submit them here<\/a>.<\/p>\n Kevin Moss is a senior editor with Consumers\u2019 Checkbook. Checkbook\u2019s 2027 Guide to Health Plans for Federal Employees will be available by the first day of Open Season, November 9th. Check here<\/a> to see if your agency provides free access. The Guide is also available for purchase<\/a> and Federal News Network readers can save 20% by entering promo code FEDNEWS at checkout.<\/p>\n Copyright
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