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1. The Great Premium Hike: How 2025’s FEHB Increase Rewrites Your Budget
If you’re like me, you probably braced yourself for the annual health insurance premium increase—but nothing could have prepared us for the 2025 FEHB premiums. The Office of Personnel Management (OPM) has confirmed a jaw-dropping 13.5% average increase for our share of Federal Employees Health Benefits (FEHB) premiums. That’s not just a number on a chart; it’s the steepest hike in nearly two decades, and it’s about to hit every federal employee and retiree right where it hurts: the wallet.
Sticker Shock: What Does a 13.5% Premium Hike Mean?
Let’s break it down. For most of us, this translates to an average of $26.10 more per biweekly paycheck—that’s over $678 a year, assuming you’re paid every two weeks. Even if you’re already brown-bagging lunch and skipping the daily coffee run, this is a serious chunk of change. The 2025 FEHB premium increase doesn’t just nibble at the edges of our budgets; it takes a big bite.
2025 FEHB premiums: +13.5% enrollee share
Average biweekly cost: +$26.10
Government contribution: +10.1% (not keeping pace with our share)
Dental premiums: +2.97%
Vision premiums: +0.87%
While dental and vision plans are seeing only modest increases—2.97% and 0.87% respectively—it’s the core health insurance premium hike that’s rewriting our financial plans for 2025. If you’re feeling the pressure, you’re not alone. As Doreen Greenwald of the National Treasury Employees Union put it:
“It’s a double whammy: historic health insurance increases and an insufficient pay raise. Employees are taking the hit.”
Why Is This Happening?
OPM’s guidance points to rising healthcare costs nationwide, but the numbers tell a story of growing federal employee budget pressure. The government’s share of FEHB premiums is only rising by 10.1%, leaving the rest for us to cover. This gap means more of our paychecks are going to health insurance, even as pay raises struggle to keep up.
A Painful Trend Continues
This isn’t a one-off. The 2025 FEHB premium hike follows a 7.7% increase in 2024 and an 8.7% jump in 2023. For many of us, it feels like every year brings a new record—and not the kind we want to celebrate. The steady climb of health insurance premium increases is forcing a lot of tough choices about coverage, out-of-pocket costs, and even basic household spending.
For federal employees and retirees, the message is clear: 2025’s FEHB premium increase isn’t just a number—it’s a major shift in how we budget, plan, and protect our families’ health. The maze of options and rising costs means we have to be more vigilant than ever about our choices and our wallets.
2. The Real Villains: Why Are Health Insurance Premiums Soaring?
If you’re like me, you probably opened your 2025 FEHB premium notice and did a double take. The sticker shock is real: a 13.5% average health insurance premium increase for enrollees, the largest jump in almost 20 years. But what’s really driving these numbers? Let’s pull back the curtain on the true premium increase factors—because it’s not just “inflation” anymore.
Prescription Drug Cost Increase: The GLP-1 Effect
One of the biggest culprits behind this year’s health insurance premium increase is the explosion in prescription drug costs. The Office of Personnel Management (OPM) specifically called out GLP-1 anti-obesity medications—think Ozempic and Wegovy—as top cost escalators. These drugs are game-changers for many, but their price tags are staggering. Last week, a colleague shared how their plan’s preferred pharmacy price for a single medication tripled overnight. These are the ripple effects we’re all feeling.
It’s not just the cost per pill, either. More people are using these new treatments, and plans are scrambling to keep up. As one industry insider put it:
'It’s not just prices going up—it’s the treatments changing. The way we access care is evolving, and the plans are trying to catch up.'
Behavioral Health Spending Increase: Demand Spikes
Another major driver is the surge in behavioral health spending. Since the pandemic, demand for mental health and substance use services has soared. More outpatient visits, therapy sessions, and telehealth appointments mean higher costs for FEHB plans. While this is a positive sign that people are getting help, it’s also adding to the premium hike. OPM’s data shows behavioral health utilization is up sharply, and that’s directly reflected in what we pay.
Rising Provider Prices and Outpatient Procedures
Hospital bills and outpatient procedures are also getting pricier. Providers are charging more for everything from routine checkups to complex surgeries. Even outpatient care—which was supposed to be a cost-saver—has seen price inflation. These rising provider and supplier prices are a key premium increase factor that’s hard to ignore.
Government Contribution Rates: Not Keeping Pace
Here’s where it really stings: while the government is increasing its share of FEHB premiums by 10.1%, that’s still less than the 13.5% jump for enrollees. The gap means more of the health insurance premium increase lands on our shoulders. OPM sets government contribution rates based on healthcare usage data and cost inflation, but the numbers just aren’t keeping up with the reality on the ground.
Key cost drivers: Provider price hikes, prescription drug usage (especially GLP-1s), increased behavioral health spending
Government’s share: 10.1% increase vs. 13.5% for enrollees
Ripple effects: Pharmacy prices, outpatient costs, and mental health services all up
Bottom line: the real villains behind our soaring premiums are a mix of new drug therapies, higher demand for behavioral health, and relentless provider price hikes. The government’s contribution helps, but just isn’t enough to shield us from the full impact of these trends.
3. Open Season Survival: Strategies for Picking (and Surviving) Your 2025 Plan
Let’s be honest—this year’s FEHB open season is not one to sleep through. With premium hikes averaging 13.5% (and some plans jumping even higher), the stakes are real for federal employees and retirees. The open season dates for 2024 are November 11 to December 9, and yes, I’ve set three alarms to remind myself. If you’re like me, you know that auto-renewing your plan could cost you hundreds more in 2025. So, how do you navigate the maze and come out ahead?
Mark Your Calendar—This Year, It’s Critical
First things first: Open Season is your annual window to review, compare, and change your health, dental, and vision plans. The dates—November 11 to December 9, 2024—are non-negotiable. Miss it, and you’re locked in until next year unless you have a qualifying life event. I can’t stress enough how important it is to set reminders. I even have a sticky note on my monitor that says, “Don’t just auto-renew!”
Not All FEHB Plans Are Created Equal
Here’s the good news: Not every FEHB plan is raising premiums by double digits. Some plans are seeing smaller increases, and a rare few are actually dropping their rates. The average increase is $26.10 more per biweekly paycheck, but your actual hit depends on your plan. This is why reviewing your FEHB plan options for 2025 is more important than ever. Don’t assume your current plan is still the best deal—dig into the details and compare!
“Every year, I find a hidden gem plan with lower costs—don’t just auto-renew.”
Retirees: You Can Switch, But Not Newly Enroll
If you’re retired, you can still change your FEHB plan during Open Season, but you can’t newly enroll if you’re not already in the program. This is a crucial distinction. For retirees, this window is your only chance to adjust coverage and potentially offset those premium hikes. The same goes for FEDVIP (dental and vision)—both are open for changes during the same period, with more modest increases (2.97% for dental, 0.87% for vision).
Actionable Tips: Survive and Thrive This Open Season
Use Plan Comparison Tools: OPM’s comparison tool lets you see side-by-side costs, coverage, and out-of-pocket estimates. Don’t skip this step.
Talk to the Office Expert: Every workplace has that one person who knows the ins and outs of federal employee enrollment changes. Buy them a coffee and pick their brain.
Check for Hidden Gems: Some plans quietly offer better value, especially if your needs have changed (think: new prescriptions, more behavioral health coverage, or upcoming procedures).
Review FEDVIP Too: Even if medical premiums are the headline, dental and vision changes can add up. Compare those options as well.
Remember, changing plans could substantially offset out-of-pocket increases. Don’t let sticker shock freeze you—be proactive, compare, and choose wisely during the 2024 FEHB open season.
4. The Shifting Tides: Pay Raises, Policy Shakeups, and Retirement Planning Curveballs
If you’re a federal employee or retiree, you already know that every year brings a new set of twists in federal employee pay policy and retirement benefits analysis. But 2025 and beyond are shaping up to be a real rollercoaster. Let’s break down what’s happening with the federal employee pay raise 2025, the latest policy shakeups, and the curveballs heading for retirement planning.
2025 Federal Employee Pay Raise: A Modest 1% (Unless You’re Law Enforcement)
After months of rumors about a possible pay freeze, the administration finally revealed its hand: most civilian federal employees will get an average 1% pay raise in 2025. That’s right—just one percent. For those in law enforcement, there’s a targeted boost of 3.8%, aiming to match the raise for uniformed military service members. But for the vast majority of us, it’s a far cry from what’s needed to keep up with rising FEHB premiums and inflation.
General pay raise for 2025: 1% for most jobs
Law enforcement: 3.8% targeted raise
To put it bluntly, this increase won’t come close to offsetting the sticker shock many of us are feeling from health insurance hikes and the general cost of living. The federal employee pay policy remains a hot topic, with many workers frustrated that their paychecks just aren’t keeping pace.
Retirement Benefits Analysis: The “Diet COLA” Strikes Again
For retirees, the annual cost-of-living adjustment (COLA) is always a big deal. The 2026 COLA projections are out, and they’re a mixed bag:
CSRS retirees: 2.5% to 2.6% projected COLA
FERS retirees: 2% to 2.1% projected COLA
Here’s the kicker: FERS retirees are once again facing the infamous “diet COLA.” By law, when inflation is between 2% and 3%, FERS COLA is capped at 2%, even if the actual inflation rate is higher. CSRS retirees get the full adjustment, but for the majority under FERS, this cap means their retirement benefits lose purchasing power year after year. It’s a long-standing frustration that shows no sign of going away.
Shutdown Wobbles: The Threat Is Real
As of late September 2025, Congress still hasn’t passed new funding bills. The threat of a government shutdown is more than just background noise—it’s a real risk. I’ll admit, I used to roll my eyes at shutdown warnings, thinking they were just political theater. That changed the year I spent a holiday season on unpaid furlough. That lesson stuck with me. As I always say:
During shutdowns, back pay is cold comfort when rent’s due.
Retirees will still get their payments, but many services and processes stall. For active employees, the uncertainty can be financially and emotionally draining.
Between modest pay raises, “diet COLA” frustrations, and the ever-present threat of shutdowns, federal workers and retirees are navigating some truly shifting tides in 2025 and beyond.
5. Wild Cards and the Kitchen Sink: New Legislation, Agency Oddities, and What to Watch
If you’ve been following federal employee enrollment changes and the evolving FEHB plan options for 2025, you know that the only constant in federal service is change—and the fine print. This year, the “wild cards” are coming fast and furious, from agency shakeups to legislative curveballs that could reshape retirement coach federal benefits and more. Let’s break down what’s happening, what it means for you, and what to keep an eye on as you navigate the maze.
First, some rare good news: the IRS, after months of uncertainty, has officially canceled its planned mass layoffs. Instead of shrinking further (after already losing about a quarter of its workforce), the agency is pivoting to strategic hiring and targeted reassignments. They’re even rescinding some deferred resignation offers from the earlier “fork in the road” program. For federal employees worried about job security, this is a welcome—if unexpected—upside. It’s a reminder that agency plans can change on a dime, and that flexibility remains a key survival skill in federal careers.
Meanwhile, the Office of Personnel Management (OPM) is shaking things up with its performance award overhaul. The new approach? Bigger bonuses, but for fewer folks. Agencies now have until September 8, 2025, to submit their compliance plans, and the message is clear: performance will matter more than ever. For some, this could mean a shot at a more substantial reward; for others, it may feel like the stakes just got higher. OPM is also centralizing its guidance for chief human capital officers, making it easier to find the latest rules and updates on opm.gov. And in a surprise move, the 2025 Federal Employee Viewpoint Survey (FEVS) has been canceled, with plans to retool and relaunch it in 2026. If you’re someone who relies on these surveys for a pulse on morale and agency culture, you’ll have to wait another year for fresh data.
On the legislative front, a couple of key bills are worth watching. The Federal Retirement Fairness Act (HR 1522) remains in committee, but if it passes, it would allow employees who started in temporary positions to “buy back” that time for FERS retirement credit. This could be a game-changer for many, especially those who’ve spent years in non-deduction service. Another bill, the Federal Employee Performance and Accountability Act, could usher in a pay-for-performance pilot with sharper rewards—and penalties—tying pay more closely to performance metrics. And for military retirees, the Forward Act could open the door to continued TSP contributions after separation, a twist that would reshape the retirement landscape for certain veterans.
All told, pending legislation and agency policy changes add yet another layer of uncertainty to federal careers. As we look ahead to 2025 FEHB premium increases and the ever-shifting benefits landscape, remember: staying informed and adaptable is your best defense. Because in federal service, the wild cards are always in play—and the rules can change when you least expect it.
