Military retirees, federal employees will pay more for health insurance in 2021

Photo credit NMCLL Public Affairs

Federal employees and military retirees, get set to pay more for your health insurance in 2021.

The Office of Personnel Management announced on Oct. 14 that federal employees and military retirees will pay an average of 4.9% more in health care premiums next year.

Plan costs are rising at an overall average of 3.6%, but that is lower than last year, according to OPM. The federal government's contribution is expected to increase by 3%. 

 “Our team has worked diligently throughout the year with healthcare providers and carriers to secure top-tier health benefits for federal employees, retirees, other eligible individuals, and their families,” said OPM Acting Director Michael J. Rigas.

Most large employers are estimating premium contribution increases for employees at between 4% and 10%.

"But for COVID, the premium increase would have been a fair amount higher," acting director of OPM healthcare and insurance Laurie Bodenheimer told reporters during a call Wednesday morning. 

Federal Benefits Open Season begins Nov. 9 and ends Dec. 14. It allows federal employees and other eligible individuals, such as military retirees using Tricare and other federal plans, the opportunity to review their Federal Employee Health Benefits and Federal Dental and Vision Insurance Program (FEDVIP) plan options, make changes and enroll for the upcoming benefit year that begins Jan. 1, 2021.

The plan year also marks the beginning of a new 7-year contract for FEDVIP.

Tricare Select members must now pay to stay enrolled

Federal employees may also use open season to elect to make pre-tax contributions to health care and/or dependent care flexible spending accounts under the Federal Flexible Spending Account Program. Click here for more information.

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The 2020 Tricare Open Season also begins Nov. 9 and continues through Dec. 14.  This year, there is an important change to the “Select” plan that requires proactivity to ensure the continuation of health insurance coverage.

Those enrolled in Tricare Select will be placed into one of two categories as of Jan. 1. Group A includes those individuals (family members, retirees, qualified survivors) who became affiliated with the uniformed services through enlistment or appointment before Jan. 1, 2018. All other Select enrollees fall into Group B.

Group A beneficiaries will be required to pay a new enrollment fee starting in January. They are being asked to contact their regional contractor before the end of Tricare Open Season to set up a monthly allotment, if feasible. Beneficiaries will be dis-enrolled for failure to pay the new enrollment fee. 

Tricare Select Group A out-of-pocket costs and resulting coverage are as follows:

  • Individual monthly enrollment fee, $12.50, or annual, $150
  • Family monthly enrollment fee, $25, or annual, $300
  • Deductibles: $150 individual or $300 family
  • Catastrophic cap: $3,500, an increase from $3,000

All sponsors have the option of doing nothing and continuing with their current plan or transitioning to a different category of Tricare coverage.

Reach Julia LeDoux at
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