Q. Due to the Affordable Care Act, the numbers of people with increased health care risks will be able to get health insurance. The insurance companies are not restricted from charging as much as it takes to provide the coverage and make a great profit. Will these additional costs be passed on to those now covered by Federal Employees Health Benefits, including retirees? Also, the federal employees’ pay and retirees’ cost-of-living adjustments are frozen!

A. Your fears are unfounded. Plans in the FEHB program are experience-rated. This means that premium rates are adjusted according to a plan’s actual costs during the previous year. What happens elsewhere has no effect on those rates.

P.S. You are wrong when you state that “federal employees’ pay and retirees’ cost of living are frozen.” This year, employees are receiving a 1 percent pay increase, and retirees not only are receiving a cost-of-living adjustment this year but they also received them in 2012 and 2013.


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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 fedexperts@federaltimes.com.

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