Federal Employees Facing Health Insurance Premium Increases
Federal employees and pensioners are bracing for another significant rise in health insurance premiums this year for both the Federal Employees Health Benefits (FEHB) and the Postal Service Health Benefits (PSHB) programs.
As announced by the Office of Personnel Management, FEHB members will see an average premium increase of 12.3%, starting January 2026. This translates to roughly $26.40 more per payment period.
This upcoming hike of 12.3% comes on the heels of several notable increases in recent years for FEHB participants. Interestingly, the federal workforce experienced a growth of about 13.5% in the 2025 plan year, marking the largest year-over-year jump in a decade. Looking ahead, there’s a predicted rise of 7.7% for 2024 and 8.7% for 2023.
The PSHB program, which serves over 2 million USPS employees, pensioners, and their families, is also set for a significant premium boost next year. PSHB members will be paying, on average, about 11.3% more, equating to around $21.51 extra per pay period.
The federal government contributes approximately 75% of enrollees’ premiums, but there’s a cap at 72% of the previous year’s average federal health insurance premiums.
Considering the government’s share of FEHB costs has risen by approximately 9.2%, overall premiums will increase by 10.2%. Similarly, PSHB premiums have grown by 9% in total, including an 8% increase in government contributions.
Open Season and Government Shutdown Implications
With the current government shutdown causing added uncertainty, federal employees are feeling the pressure as they approach the open season announcements. The threat of future premium hikes for government health insurance programs looms over them, especially in light of potential wage losses due to funding lapses.
If the shutdown extends into November, the Office of Personnel Management has stated that the open season will proceed as usual. Medical benefits for federal and postal service employees will remain intact during this period, although premium payments will be on hold until the closure ends.
During open season, participants in FEHB, PSHB, and the Federal Employees Dental and Vision Insurance Program (FEDVIP) are allowed to make changes to their plan options. These decisions can take place regardless of furloughs or even during a shutdown since financing comes from trust funds rather than direct appropriations, ensuring no interruption in funding.
However, it’s worth noting that the OPM is currently operating with a significantly reduced staff compared to previous years. By year’s end, the federal workforce is expected to shrink by about 1,000 employees—roughly one-third of its size—due to extensive changes prompted by the Trump administration’s policies.
This year alone, OPM’s medical insurance office has experienced a loss of 80 employees through retirements, attrition, and other means.
This summer, OPM’s Office of Inspector General cautioned that these staffing issues could jeopardize PSHB’s central registration platform, which is crucial for all participants looking to access benefits and adjust health insurance options during the open season.
A report from the Government Accountability Office also highlighted that staffing shortages at OPM resulted in the suspension of critical fraud risk assessments in the FEHB program.
Looking Ahead to 2026
Annual premium rates for federal health insurance programs typically see an increase. For 2026, enrollees’ premiums will rise by an average of 12.3% to 11.3%, albeit with some plans experiencing lower or higher cost adjustments.
This notable rise in federal health insurance premiums stands in stark contrast to President Trump’s proposed 1% federal pay increase for most civilian employees in 2026.
Shane Stephens, OPM’s associate director for health care and insurance, remarked that while premium increases aren’t as steep as they were in 2025, “we recognize that growing healthcare costs need a sustainable approach.”
Stevens mentioned efforts are being made to tackle rising costs, focusing on reducing waste and fraud while adopting a “more proactive, preventative, health-first direction.” He acknowledged that substantial changes won’t occur overnight but emphasized the commitment to enhancing quality care and accessibility for those who serve the American public.
Thursday’s announcement comes about a month before the open season, during which FEHB and PSHB enrollees can renew their health insurance options for 2026. This open season will take place from November 10 to December 8.
Any adjustments made during open season will take effect on January 1, coinciding with the start of the 2026 plan. Additional information and resources can be accessed on the OPM websites for both FEHB and PSHB participants.
This is breaking news and will be updated with further information.
