Unions Seek to Prevent Fed Employees Health Benefits Premium Hike

October 11, 2015

A few days ago, the U.S. Office of Personnel Management (OPM) today announced premiums for the 2016 Federal Employees Health Benefits (FEHB) Program will rise by an average of 6.4 percent.

OPM is offering a new Self Plus One enrollment type in the FEHB Program that will provide coverage for an enrollee and one designated eligible family member. All FEHB plans will offer a Self Only, Self Plus One, and Self and Family enrollment type beginning in 2016.

On average, enrollees with Self Only coverage will pay $5.50 more each pay

period; enrollees with Self and Family coverage will pay $19.61 more per pay period. Those who opt for Self Plus One coverage will pay $8.92 more per pay period than they previously paid for Self and Family coverage. The Government contributes approximately 70 percent of the total cost of a plan’s premium.

“I am pleased that OPM has implemented the new Self Plus One choice for the 2016 plan year. This will give enrollees an opportunity to select coverage just for themselves and their spouse or child,” said OPM Acting Director Beth Cobert.

Federal employee unions including NARFE and NTEU were obviously not as pleased as Director Cobert at the hike in premiums for the health benefits program.

NTEU Seeks Congressional Action to Prevent FEHB Premium Hike

The National Treasury Employees Union (NTEU) issued a statement noting that this 6.4 percent increase in premiums further underscores the need for Congress to act on cost-saving prescription drug contracting and benefit management reforms for FEHB.

OPM attributed the higher rate of increase in large part to increased prescription drug utilization.

“NTEU views prescription drug reforms as an essential way to better control drug spending in FEHBP, which would reduce costs for federal employees and retirees,” NTEU National President Tony Reardon said. “FEHBP enrollees are paying more than they should.”

Specifically, what the NTEU is asking for is support for Rep. Stephen Lynch’s (D-Mass.) legislation—H.R. 2175. The bill would provide OPM with enhanced oversight and contracting authority to ensure that FEHB participants are receiving the best possible drug prices.

The bill also requires that Pharmacy Benefit Managers (PBMs) operate as middlemen to negotiate prescription drug prices with drug companies and pharmacies on behalf of individual FEHB plans, and return any rebates, incentives, and other price discounts obtained from drug manufacturers to FEHB.