Federal employees enrolled in a health insurance plan under the Federal Employee Health Benefits program can expect to see the costs of their health insurance increase by about 2.4 percent for 2022, according to numbers released by the Office of Personnel Management on Sept. 29.
Based on the legally mandated division of costs between the government and employees, that cost increase results in an average 3.8 percent increase for employees and a 1.9 percent increase for the government.
“Quality health insurance has never been more important, and OPM is ensuring all eligible enrollees have the information they need to make informed decisions about their coverage,” OPM Director Kiran Ahuja said in a news release. “The global pandemic underscores the responsibility an employer has to provide their workforce with quality, affordable, and dependable health care options. As the largest employer in the United States, the federal government is proud to lead by example with a wide choice of health insurance plans from the FEHB and FEDVIP that deliver the quality coverage every employee deserves.”
Should feds receive the 2.7 percent pay increase President Joe Biden intends to implement for 2022, the average health insurance premium costs for feds will amount to approximately 4.8 percent of their salary, according to OPM, a slight increase on the average 4.7 percent of salary cost to feds in 2021.
“Clearly the administration did a better job holding down the employees’ share of premium costs in the FEHB program for 2022, and we commend that progress,” said National Treasury Employees Union National President Tony Reardon in a statement. “But we will encourage our members to prepare for price increases and use the upcoming open enrollment season to evaluate all of their options to decide which plan is best for themselves and their families.”
Federal employees are not guaranteed to see exactly the average cost increase on their personal plans, as some plan costs may end up lower or higher in 2022, due to enrollment numbers, average annual costs, the age of those enrolled and other factors. Feds who switch plans between 2021 and 2022 could therefore see a higher or lower increase than the average, no increase at all, or even cost savings.
“While higher costs for coverage may be unavoidable, federal employees and retirees should be aware that they have many options to choose from during open season. Although most enrollees will see an increase of less than five percent if they reenroll in their current plans, it’s still important to reevaluate your options. NARFE encourages all participants to thoroughly review the plans to select the one that best fits their needs,” said National Active and Retired Federal Employees Association National President Ken Thomas in a statement.
According to OPM, the cost increase for insurance was largely driven by medication prices, chronic illness costs and medical innovation. Costs related to COVID-19 and increased demand for mental health services also drove up prices, and OPM reported that COVID-19 cost the FEHB program about $1 billion in 2020.
But the pandemic also served to decrease medical insurance costs, as many insured people delayed medical procedures and used their insurance less in the early months of the pandemic.
Vaccines and the mandate for federal employees to receive them are also expected to decrease overall COVID-19 costs in 2022, as the federal population will be less likely to experience a severe coronavirus infection.
Feds will have 275 available plans for next year, one less than in 2021, with the same 18 nationwide plans open to feds in any part of the country.
The remaining 257 plans are available in certain parts of the country and represent 192 health maintenance organization plan choices, 37 high deductible health plan choices and 28 consumer-driven health plan choices.
Those options represent a shift away from HMO plans — which provide lower costs for in-network providers but rarely cover out-of-network services — and toward HDHP plans — which offer lower premiums but higher deductibles.
Of the 23 new plan offerings from existing FHB carriers, 20 are HDHPs, and the new carrier, Healthkeepers Inc. of Virginia, is also offering an HDHP plan.
Feds also have the choice of 18 fee-for-service plans — which directly pay healthcare providers or reimburse enrollees for services rendered — and 28 consumer-driven health plans — which set limits on medical spending before an enrollee’s share of the costs goes up.
FEHB providers will also have to introduce a new feature in 2022 to notify enrollees when a medication requiring prior authorization is set to expire.
Prior authorization is a process insurers require for certain medications that may have less costly alternatives, pose dangerous side effects, may be used for purely cosmetic purposes, or are designed for very specific age groups and medical conditions.
When a doctor writes a prescription for such medications, the insurer institutes a review process to determine whether they will cover the medication.
Patients on maintenance medications must get the prior authorization for such medications reviewed periodically or it will expire, and the new 2022 requirement means that FEHB carriers will have to notify enrollees 45 days before such an expiration occurs.
Open season for the FEHB program begins Nov. 8 and runs through Dec. 13.
Jessie Bur covers the federal workforce and the changes most likely to impact government employees.