Federal health program is headed for calmer waters in 2011

As this open season draws to a close, however, federal workers should focus on last-minute health coverage selections for next year before turning to potential changes in insurance choices for 2012. Enrollees have until Dec. 13 to switch health insurance plans for 2011.

According to Walton Francis, author of Consumers' Checkbook Guide to Health Plans for Federal Employees, FEHBP enrollees can expect minimal adjustments in the next year. The limit on flexible spending accounts will drop from $5,000 to $2,500 in 2012, but that will affect only those who have higher spending needs, he said. Most health reform changes take effect in 2014, and ferment in the health insurance industry will be disruptive mainly to the private sector because many private plans don't meet health reform requirements and FEHBP is more advanced on a lot of those issues, he added.

Observers have said the recent substantial increases in employee contributions to health premiums in the private sector indicate most large employers are putting less into health plans than the federal government. Employers increasingly are requiring higher cost-sharing through co-payments and deductibles, a trend that has affected federal employee and retiree health plans incrementally, they note.

The Office of Personnel Management in October announced the average premiums government workers pay under FEHBP will increase 7.2 percent in 2011. Federal employees' health insurance premiums increased an average of 8.8 percent, or $9.21 per pay period, this year, following a 7.9 percent increase in 2009. The two premium hikes were the largest since 2005.

Francis would not speculate on possible premium increases for 2012, though he said FEHBP will likely continue to be a better value than private sector programs.

Federal employees will see one other definite change next open season. OPM on Thursday issued a final rule altering the kinds of plans health care companies can offer through FEHBP. Effective immediately, insurers can choose between two plans and a high-deductible option, or three regular plans. Companies previously could offer only two regular options and a high-deductible plan.

FEHBP enrollees will not have to remember new dates for the 2011 open season, however. In a Federal Register notice published in April, OPM proposed switching the period during which employees can change their benefits to run from Nov. 1 to Nov. 30. Open season currently lasts from the beginning of the second full work week of November to the end of the second full work week of December. In its final rule, OPM said the timeframe will not change next year because Nov. 30 could fall on a weekend, rather than a weekday, and a shift could adversely affect Medicare enrollees, who can modify coverage until Dec. 15.

But as this open season comes to an end, federal employees should make elections for 2011 with the information already available to them, Francis said. It's important that anyone choosing a different plan fill out and submit form SF-2809, he said.

"This is the day to make up for your procrastination," he said.