As health plan enrollment season gears up, premiums for federal employees and retirees will increase on average about 3.8 percent – less than half of the increase they saw last year.

Photo by feck_aRt_post via Flickr

Last year, plan costs increased an average of 7.3 percent. But an official at the federal Office of Personnel Management (OPM) said today that “lower than anticipated utilization of health care services by our enrollees and, to a lesser extent, moderation in prescription drug costs due primarily to brand name drugs coming off patent and thus greater use of generic drugs” kept health costs down and allowed the rise in premiums to moderate.

The federal government is the largest employer in the country. More than 8 million federal workers, retirees and dependents are enrolled in the Federal Employee Health Benefits program (FEHB). The plan next year will offer 206 health plan options.

According to information released by OPM today, the new rates mean that individual coverage will increase, on average, $2.32 per bi-weekly paycheck and family coverage $6.18.  However, in the most popular plan, Blue Cross and Blue Shield standard, the individual coverage premium will fall on average $0.81 and family coverage will be down $0.72 per pay period.

No significant changes in benefits were announced, but the federal government share of premiums will increase by 4 percent.

Open season, or the period when federal workers can change their coverage or sign up for new coverage, runs from Nov. 14 until Dec. 12.