Federal employees and annuitants are preparing for significant increases in health insurance premiums, starting in January 2026. The Office of Personnel Management (OPM) announced that the Federal Employees Health Benefits (FEHB) program will see an average premium increase of 12.3%. This amounts to approximately $26.40 more per pay period for participants.
Upcoming Premium Increases for FEHB and PSHB
The upcoming rise in health insurance costs follows previous adjustments. In 2025, FEHB enrollees experienced a 13.5% premium increase—the largest in over a decade. This follows increases of 7.7% in 2024 and 8.7% in 2023.
- 2025: 13.5% increase
- 2024: 7.7% increase
- 2023: 8.7% increase
The Postal Service Health Benefits (PSHB) program, which serves over two million USPS employees and their families, also faces an average premium increase of 11.3% for 2026. In dollar terms, this translates to about $21.51 more per pay period.
Government Contributions and Overall Costs
The federal government typically covers around 75% of a participant’s premium, but the contribution for FEHB is rising by about 9.2%. This means the overall premium increase will be about 10.2% after accounting for government contributions. For PSHB, premiums will rise by 9% overall, influenced by an 8% increase in government funding.
Impact of Government Shutdown
This premium increase announcement comes amid uncertainties surrounding a potential government shutdown. Despite the current political climate, OPM confirmed that Open Season for health insurance changes will proceed as planned from November 10 to December 8, 2025.
During a shutdown, health benefits for federal and postal employees remain intact, although premium payments will be paused. Participants enrolled in the FEHB, PSHB, and the Federal Employees Dental and Vision Insurance Program (FEDVIP) can change their plans during this time.
Staffing Challenges at OPM
OPM is facing significant staffing shortages, with projections indicating a loss of about 1,000 employees by the year’s end. This reduction follows recent organizational changes under the previous administration. The inspector general’s office has expressed concerns that these staffing challenges might lead to operational failures in managing health insurance programs.
Looking Forward to 2026
As we approach 2026, the substantial premium increases for health insurance programs reflect ongoing challenges in federal benefits management. Despite the average increases of 12.3% for FEHB and 11.3% for PSHB, OPM aims to address the issues through strategies targeting waste and improving healthcare accessibility.
Shane Stevens, OPM’s Associate Director of Healthcare and Insurance, noted that while recent increases are significant, they are not as high as those seen in 2025. OPM remains committed to balancing healthcare quality and affordability for federal employees and annuitants.
For participants seeking more information, resources will be available on OPM’s website leading up to Open Season.
