Federal workers will see the largest increase to their health care premiums in recent memory next year

Federal employees and retirees will pay an average of 13.5% for more on their health care premiums in 2025, a figure that is nearly double last year's increase and marks the largest price hike in recent memory.

The government’s share of Federal Employees Health Benefits Program premiums will increase by an average of 10.01%, bringing the overall premium increase to 11.2%. In 2024, civilian federal employees were estimated to pay an average of 7.7.% more on premiums than the previous year, a slight decrease from the 8.7% rate hike in 2023, the largest the program had seen in a decade.

On average, federal workers enrolled in “self-only” plans will pay an additional $16.24 per biweekly pay period, while feds in “self plus one” insurance plans will pay $33.73 more per pay period. Employees enrolled in family coverage will pay an average of $26.10 more per pay period next year.

Under the Federal Employees Dental and Vision Insurance Program, the average premium for dental plans will increase by 2.97%, while vision plans will increase by an average of 0.87%.

2025 marks the first year of the Postal Service Health Benefits Program, which replaces the U.S. Postal Service’s previous health insurance offerings—as well as the mandate to prefund future retirees’ health benefits. As part of the shift to the new program, USPS employees will see their portions of premiums increase by an average of 11.1% next year, while the government’s portion will increase by 5.1% on average.

On a biweekly pay period basis, Postal Service workers enrolled in “self-only” plans will see their premiums increase by $10.04 in 2025, while those in “self plus one” plans will increase $29.93 on average per pay period. USPS employees enrolled in family insurance coverage will see their premiums increase by $30.68 on average next year.

The FEHBP and PSHBP’s annual open season, in which federal and postal employees can choose from a variety of regional and national insurance carriers and coverage plans, will run from Nov. 11 through Dec. 9. Among the drivers of this year’s premium increases are price increases from both providers and suppliers, increased use of some prescription drugs and increased behavioral health spending.

OPM and the White House on Wednesday announced that beginning next year, multiple national—and often several regional—FEHBP and PSHBP insurance carriers offer comprehensive IVF coverage to the tune of $25,000 or more. Also new in 2025 are requirements that all FEHB carriers cover at least GLP-1 class anti-obesity drug, such as Ozempic or Wegovy, for weight loss treatments, alongside two additional oral anti-obesity drugs. Carriers must also offer “comprehensive behavioral therapy,” including diet and exercise regimens, to those prescribed those drugs.

Wednesday’s announcement that OPM had negotiated expanded fertility coverage came as welcome news to federal employee groups and Democrats in Congress, who have been lobbying for expanded access to IVF after the Alabama Supreme Court briefly banned the treatment last spring.

“I applaud the Biden-Harris administration for taking this decisive action that I’ve called for to ensure all federal employees have access to IVF coverage—because everyone deserves the ability to access the fertility treatment they need to build their families, no matter where they live,” said Sen. Tammy Duckworth, D-Ill. “While this is welcome news, any future president could reverse this decision—so it’s critical we permanently protect and expand access to IVF nationwide and ensure no patient or doctor is criminalized simply for trying to start or grow their family.”

“In 2025, every FEHB enrollee, regardless of where they live and work, will be able to choose from multiple nationwide plans that offer comprehensive IVF coverage,” said Rep. Gerry Connolly, D-Va. “Additionally, every FEHB plan will be required to cover the prescription drugs required for three cycles of IVF annually, ensuring every enrollee in the country is able to choose a plan with fertility coverage. Providing federal employees with options to start and grow their families will in turn help the government recruit and retain the federal workforce of the future.”

Stacey Young, president of the Department of Justice Gender Equality Network, an employee association made up of nearly 2,000 employees at the Justice Department that has been on the forefront of lobbying OPM to require additional fertility coverage from insurers, said 2025’s additions will help retain a highly qualified and diverse workforce.

“President Biden, Vice President Harris, and OPM have again shown their commitment to federal employees' reproductive healthcare needs,” she said. “Many DOJ GEN members, like countless workers across the federal government, have endured hardships without adequate IVF coverage. We expect that the expansion of access in 2025 will provide many more of our nation's public servants with the ability to grow their families, and to do so without extreme financial struggles.”

But the rate increase is a bitter pill to swallow for other employee groups, particularly given the 2% average pay raise feds are slated to receive in January.

“This is the highest health insurance premium increase in more than two decades and will stretch employees’ paychecks beyond what they can afford,” said Doreen Greenwald, national president of the National Treasury Employees Union. “I call on President Biden and Congress to take immediate action on providing federal employees with an average 7.4% increase as called for by the FAIR Act.”

William Shackelford, national president of the National Active and Retired Federal Employees Association, urged federal employees and retirees to look closely at their coverage options during this year’s open season.

“These increases are unwelcome news that will no doubt cause sticker shock for federal and postal employees and retirees across the country,” he said. “But that sticker price may not be what you pay if you compare plans and shop for a more affordable alternative. All FEHB and PSHB plans offer comprehensive coverage, so it’s difficult to make a bad choice. But you can leave money on the table if you don’t compare costs and options.”