2021 FEHB Program Changes

In recent years, there have been significant program-wide changes to the FEHB program. The recent change that has been probably the most important to Federal employees was coverage of adult children until age 26.

For this year and last year together, there are four major changes. First, OPM has approved the addition of 18 new plan options for 2020. Seven of these will be available in the DC metro area, either as local or national plans. Our ratings show that some of these are very good values. Second, OPM negotiated with GEHA to give that carrier the important role of being the nation-wide “Indemnity Benefit Plan” as laid out in the FEHB statute. Two of the new offerings last year are the GEHA indemnity plans: Elevate and Elevate Plus. Third, OPM has allowed UnitedHealthcare to offer large Part B premium rebates for enrollees willing to join one of its FEHB plans along with one of its Medicare Advantage plans. This creates major premium savings for enrollees. Fourth, the COVID crisis has brought about major changes in FEHB, Medicare, and other health insurance to provide Telehealth services to enrollees. There are two broad categories: telehealth appointments with your own doctors in place of physical appointments, and advice from a panel of doctors chosen to deal with many circumstances online. Quite apart from protecting against the virus, these meetings offer major conveniences in many circumstances, such as when physical travel to your physician is inconvenient or impossible. Some of these reforms are COVID-specific, but it is likely that they will persist and become a new tool for medical service.

There have been other major changes in recent years, but few as important as these. For example, the FEHB statute now requires each plan to offer separate premiums to families with only two members (“self plus one”) and to families with two or more members (“self plus family”). Couples with no dependents and single parents with one dependent can enroll in either variation, depending on which premium is less costly. Plan benefits are usually identical under both and enrollees in most plans can save several hundred dollars in premium costs.

Finally, OPM has asked plans to adopt cost-saving coordination with Medicare, a reform that saves money for the program because Medicare usually pays first, which reduces FEHB premiums, and also offers savings for annuitants because their out-of-pocket costs are reduced. Most national plans already have such “wraparound” benefits. Dozens of local plans have now added them. Most annuitants now can enroll in a wide range of all plan types—PPO, HDHP, CDHP, and HMO—that provide these savings. OPM now also allows plans to reimburse enrollees for part of the cost of Medicare Part B premiums, and use of this technique is growing as shown by the UnitedHealthcare plans that reimburse Part B premium costs if annuitants with Parts A and B join their local Medicare Advantage plan while simultaneously retaining their FEHB enrollment. Other plans are using other techniques to encourage Part B enrollment, and Blue Cross Basic and other plans now reimburse some of the Part B premium costs.