Enrollees in the Federal Employees Health Benefits (FEHB) program are gearing up for a significant increase in their health insurance premiums in 2025. Starting in January, federal employees and annuitants will experience an average 13.5% rise in their healthcare premiums, marking the largest annual increase in a decade, according to data from the Office of Personnel Management (OPM).
Reasons Behind the Premium Increase
The upcoming premium hike follows previous increases of 7.7% in 2024 and 8.7% in 2023. According to OPM, the 13.5% increase reflects changes in the healthcare market over the past year. Contributing factors include rising costs from healthcare providers and suppliers, increased utilization of prescription drugs, and higher spending on behavioral health. These pressures mirror industry-wide trends affecting other programs in the commercial healthcare market.
OPM stated, “The premium increases are due to the impact of price increases by providers and suppliers, increased utilization of certain prescription drugs, and behavioral health spending. Industry-wide cost pressures affect FEHB and Postal Service Health Benefits (PSHB) rates similarly.”
In terms of dollar amounts, FEHB participants will pay an average of $26.10 more toward their biweekly health premiums in 2025.
FEHB vs. PSHB Premium Increases
While FEHB enrollees will see a 13.5% increase in their share of premiums, Postal Service Health Benefits (PSHB) program participants will face a slightly lower increase of 11.1%. When weighted with the government’s share of the premium, the overall increase for FEHB is 11.2%, compared to 6.9% for PSHB. The PSHB’s lower increase is partly attributed to Medicare integration required under the Postal Service Reform Act and different cost profiles of the two programs.
Impact on Federal Employees and Open Season
The premium hike comes at a time when the National Treasury Employees Union (NTEU) is advocating for a 7.4% federal pay raise in 2025 to help employees cope with rising costs. NTEU National President Doreen Greenwald expressed concern, stating that the higher premiums would strain employees’ paychecks. “Federal workers should not have to sacrifice health coverage because they can’t manage the higher payments,” Greenwald said.
The announcement of the premium increases coincides with the upcoming FEHB Open Season, which runs from November 11 to December 9. This period allows participants to review and adjust their healthcare plans for the upcoming year. In 2025, enrollees will have a wide variety of options, with 64 plans and a total of 130 plan choices available through 42 health carriers.
Expanded Fertility and Behavioral Health Coverage
OPM also revealed several key benefit enhancements for 2025, particularly in the areas of fertility treatments, obesity medications, and behavioral health services. Blue Cross Blue Shield and GEHA will offer comprehensive coverage for in vitro fertilization (IVF), including a $25,000 benefit for IVF treatments. Additionally, carriers are required to cover at least one GLP-1 drug for obesity, as well as two oral anti-obesity drug options. Behavioral health services, particularly those provided in primary care settings, will also receive enhanced coverage.
These improvements, especially in fertility treatments, reflect the federal government’s efforts to support employees in building their families. OPM Acting Director Rob Shriver emphasized that this expansion is essential for attracting and retaining younger federal workers, many of whom consider fertility benefits a priority.
Looking Ahead: The Right to IVF Act
The expanded fertility coverage has garnered support from Democratic lawmakers, with the recent introduction of the Right to IVF Act. This legislation seeks to mandate comprehensive IVF coverage for all FEHB plans. According to Rep. Gerry Connolly (D-Va.), the bill is a significant step toward ensuring that federal employees have the support they need to start families on their own terms.
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As federal employees brace for the largest health premium increase in a decade, the added financial burden is expected to impact their decisions during the upcoming Open Season. However, the expansion of key benefits, such as fertility treatments and behavioral health services, represents a positive step toward improving the overall quality of healthcare options available to federal workers and their families.
