Increase in FEHB premiums


Q. My Illinois United Health Care of the Midwest increased by $261 per month to $742 a month. I don’t understand this, and I called them for an explanation, but no one could provide one. Isn’t this increase abnormal?

A. Federal Employees Health Benefits plans are experience-rated. This means that an important element in the premiums they charge is the actual expenses they incurred in a previous year. Then there are two other factors that affect premiums: changes in the benefits they are required to cover; and the formula used to determine the share that the government pays. The latter is set at 72 percent of the weighted average cost of all FEHB plans, not to exceed 75 percent of the cost of any specific plan. I don’t know which of these factors caused your plan’s premiums to increase so dramatically.

Fortunately, the government’s annual health benefits open season gives you an opportunity to shop for another plan that may meet your needs at a better price.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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