Federal Workers Face Higher Health Premiums

Federal workers face a fourth consecutive year of double-digit increases in their health insurance premiums in the open enrollment period that starts Monday.

The Office of Personnel Management (search) announced in September that premiums for insurance plans beginning Jan. 1 under the Federal Employees Health Benefits Program (search) would increase an average of 10.6 percent.

One labor union said the increase will actually be more than 11 percent for most government workers with single coverage and more than 12 percent for most with family coverage.

But a personnel office spokesman said the increases are small in comparison with rates for workers in the private sector.

"It's important to note that the [government] premium increases have been lower on average than the average premium increase nationally," said OPM spokesman Mike Orenstein. "Some of it has to do with the efforts of OPM Director Kay Coles James to hold the feet of health care plans to the fire."

But a federal employees' union called the premium increases unreasonable.

"Whatever the reasons, these continued double-digit increases not only are unfair to federal workers, in that they outstrip any pay increase they receive, they [also] serve as a serious impediment to successful recruiting and retention efforts by the federal government," said Colleen M. Kelley, president of the National Treasury Employees Union (search) in a prepared statement.

About 1.8 million federal employees nationwide will be affected by the increases, according to OPM.

Kelley's union has pledged to "redouble its efforts" to fight for legislation that would increase the government's share of the cost of employees' health-care plans. The government currently picks up 72 percent of the tab, but a bill in the House would require the government to pay 80 percent of employees' insurance premiums.

House Minority Whip Steny Hoyer, D-Md., who sponsored that bill, sent a "Dear Colleague" letter to House members Thursday, asking for their support.

"These sharp increases in health insurance premiums for federal employees and retirees are unacceptable," Hoyer said in the letter. "The average employee would save approximately $509.08 per year under my legislation."

But other groups say the rising cost of health care is affecting employees across the board -- in the public and private sectors -- and that federal employees should share some of the burden.

"[Private businesses] have the added burden of having to deal with layoffs and pay cuts," said Pete Sepp, spokesman for the National Taxpayers Union (search).

"I think that the federal employee health benefit plan is actually being held up as a model of cost efficiency compared to Medicare, which ... means that despite the increases, there are much worse managed health programs," Sepp said.

Capital News Service contributed to this report.