Federal health insurance premiums will see another significant increase in 2026

Federal employees and annuitants are heading into another year of sharp increases in their health insurance premiums, both under the Federal Employees Health Benefits (FEHB) program and the Postal Service Health Benefits (PSHB) program.

The Office of Personnel Management announced Thursday that FEHB participants will pay an average of 12.3% more for their insurance premiums starting in January 2026 – or in dollars, an average of $26.40 more per pay period.

The upcoming premium increase of 12.3% follows several significant premium increases in recent years for FEHB enrollees. Federal employees saw an average raise of 13.5% for plan year 2025 – the largest year-over-year increase in more than a decade. The federal authorities also recorded an increase of 7.7% in 2024 and 8.7% in 2023.

The PSHB program, which is open to more than 2 million USPS employees, annuitants and family members, is also expected to see a large increase in premiums for 2026. PSHB enrollees will pay an average of 11.3% more for their 2026 premiums. In dollar terms, that’s about $21.51 more per pay period.

The federal government covers approximately 75% of a participant’s premium – and no more than 72% of the weighted average of federal health insurance premiums from the previous year.

Taking into account the state’s share of FEHB costs, which increases by approximately 9.2%, premiums will increase by 10.2% overall. PSHB premiums increase overall by 9%, including the share of the cost paid by the government, which increases by 8%.

Open Season during a shutdown

For this year’s announcement, federal employees face more uncertainty than usual. Upcoming premium increases for government health insurance programs are compounded by the current shutdown, as well as the possibility of missing paychecks if the expiration of credits extends.

If the closure extends into November, OPM said the Open Season will continue as normal. Health benefits for federal and postal enrollees continue throughout the shutdown, but premium payments are suspended for the duration of the shutdown.

Additionally, FEHB, PSHB, and Federal Employees Dental and Vision Insurance Program (FEDVIP) participants – whether furloughed, excepted or exempt – can still change their plan options during the open season, even if closed. OPM funds these programs through a trust fund, rather than appropriations, which means funding should not be interrupted.

But at the same time, OPM now operates the FEHB and PSHB programs with significantly lower staffing levels than in previous years. Due to the Trump administration’s reforms to the federal workforce, the agency is on track to lose 1,000 employees, or about a third of its total workforce, by the end of the calendar year.

OPM’s Health and Insurance Office, which manages FEHB, PSHB, FEDVIP and other insurance programs, has lost a total of 80 employees this year due to retirements, attrition, the Deferred Resignation Program (DRP) and probationary layoffs.

Over the summer, OPM’s Office of Inspector General warned that these staffing shortages, coupled with funding issues, put PSHB’s central enrollment platform at risk of operational failure. All PSHB participants must use the online platform to access their benefits and change their health insurance options during Open Season.

A separate Government Accountability Office report released earlier this year also found that recent OPM staff vacancies led to a suspension of fraud risk assessments in the FEHB program.

Looking towards 2026

Premium rates for federal health insurance programs inevitably increase to some extent each year. Although the premium for enrollees increases on average to 12.3% and 11.3% for 2026, some plan options will result in smaller cost increases, while others will have larger increases.

The sharp increase in federal health insurance premiums also contrasts with the 1% federal wage increase that President Donald Trump is proposing for most general plan employees in 2026.

OPM Associate Director of Health and Insurance Shane Stevens noted that premium increases are not as large as they were for 2025, showing “some positive movement.”

“That being said, we recognize that increasing health care spending at this point is not a sustainable path,” Stevens said in a blog post Thursday. “As we evaluate the overall health/spending equation in the United States, we see an alarming trend.”

Stevens said OPM seeks to address rising costs by cracking down on waste, fraud and abuse in programs, as well as moving toward “a more proactive and preventative health-focused focus.”

“Of course, none of these initiatives will happen overnight,” Stevens said. “But we are committed to improving the quality of life and quality of care for our members while ensuring that health care remains accessible and affordable for those who work (or have worked) for the American people.”

OPM’s announcement Thursday comes about a month before open season, the time of year when FEHB and PSHB enrollees can update their federal health insurance options for plan year 2026. This year’s open season runs from November 10 to December 8.

Any changes made during the open season will take effect when plan year 2026 officially begins on January 1. More information and resources are available on the OPM website for FEHB and PSHB participants.

If you would like to contact this reporter about recent changes in the federal government, please email draw.friedman@federalnewsnetwork.com or contact Signal at drawfriedman.11

Copyright © 2025 Federal Information Network. All rights reserved. This website is not intended for users located in the European Economic Area.