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Health Care Premium Increases Ease in 2013 for Federal Employees

The increase for the Federal Employees Health Benefits Program is down from this year's 3.8 percent average increase and sharply lower than 2011, when premiums rose by an average of 7.3 percent.

September 21, 2012
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Health insurance premiums for the program that covers federal employees and retirees will increase an average of 3.4 percent next year, according to the U.S. Office of Personnel Management.

The increase for the Federal Employees Health Benefits Program — the nation's largest group plan, which covers 8.2 million people — is down from this year's 3.8 percent average increase and sharply lower than 2011, when premiums rose by an average of 7.3 percent.

It also is the smallest increase since 2008, when premiums increased an average of 2.1 percent, according to OPM.

The 3.4 percent average premium increase is in line with the 4 percent average premium increase in 2012 that the Kaiser Family Foundation found in a survey of more than 2,000 employers.

Federal officials attribute the easing of cost increases to several factors, including competition among insurers offering coverage in the federal program.

"I am pleased that we were able to keep the average increase low again this year," OPM Director John Barry said in a statement. "Once again, we successfully used our market leverage and previous years' experience to negotiate the lowest premium rates without sacrificing benefits."

Next year, 230 health plans will be offered to federal employees and retirees. Many plans, though, operate only in specific geographic areas.

Federal employees can make their 2013 health plan selections between Nov. 12 and Dec. 10. On average, the federal government pays just over 70 percent of the premium.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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