A federal employee paying $8,000 a year for family coverage will pay about $872 more in 2027 if their plan rises by the reported 10.9% average. That's $33.54 out of every biweekly paycheck. An annuitant with the same plan pays an extra $72.67 a month, taken from the annuity before it hits the bank. The $8,000 baseline is illustrative, not a specific plan's rate. The arithmetic travels, though: every $1,000 a year you pay now becomes $1,109.
And 10.9% is an average. Plenty of plans will land above it, which is why the weeks before open season matter more this year than most.
By the Numbers
- 10.9%: the average 2027 FEHB premium increase, as reported by FNN.
- $109: added annual cost for every $1,000 of premium you pay today at the average rate.
- $872: added annual cost at an illustrative $8,000 family premium, or $33.54 per biweekly pay period.
- $327: added annual cost at an illustrative $3,000 self-only premium.
- 72% / 75%: the government's share of the weighted average premium, and the ceiling on its share of any single plan's premium (5 U.S.C. § 8906).
- 5 years: continuous FEHB coverage generally required immediately before retirement to carry coverage into retirement.
How it works
FEHB runs under 5 U.S.C. chapter 89, with OPM's regulations at 5 C.F.R. part 890. Private carriers (Blue Cross Blue Shield, GEHA, Kaiser, regional HMOs, employee organization plans) negotiate rates with OPM each spring and summer. OPM typically publishes the results in the fall, ahead of open season.
The split between you and the government comes from § 8906(b). Uncle Sam pays 72% of the weighted average premium across all plans, but never more than 75% of the total premium of the plan you actually chose. You pay the rest.
That formula has a consequence people miss. The government contribution is tied to the average, not to your plan. If your plan's premium rises faster than the average, the government's dollar share doesn't chase it. The extra lands on you, so your percentage increase can run higher than the plan's headline increase. If your plan is cheaper than average, the 75% ceiling protects you: you always pay at least 25% of a plan's total premium.
Know, too, what the reported figure might be measuring. An average across plans, enrollees, or total premiums can differ from the change in what you personally pay. Your own rate, published by OPM and your carrier, is the only number that counts.
Pay-side mechanics:
- Employees pay biweekly, 26 times a year, normally through premium conversion under Internal Revenue Code § 125. That makes premiums pre-tax for federal income tax, so a premium hike shrinks your paycheck by less than the raw dollar amount.
- Annuitants pay monthly, deducted from the annuity, and generally don't get the pre-tax treatment. Every premium dollar is an after-tax dollar.
New rates take effect in the first pay period of 2027 for employees and in January for annuitants.
Postal Service employees and retirees are no longer in FEHB. Since 2025 they've been in the Postal Service Health Benefits (PSHB) Program, with its own plans and rates. The reported 10.9% is an FEHB figure.
A worked example
Take a hypothetical GS-12 employee, call her Dana, enrolled in a Self and Family plan. The numbers below are round assumptions, not any carrier's actual rates.
Step 1: Today's cost. Dana pays $307.69 per pay period, or $8,000 a year.
Step 2: The average increase. At 10.9%, her biweekly share goes to about $341.23. Annual cost: $8,872. That's $872 more.
Step 3: The tax cushion. Because her premium is pre-tax, her paycheck falls by less than the full amount. In the 22% federal bracket, the after-tax hit from federal income tax alone is roughly $680 (ignoring payroll-tax effects). Still real money.
Step 4: Compare. Suppose Dana's plan comes in above average at 14%. Her annual cost is $9,120, or $1,120 more. Now suppose a competing plan costs $6,500 a year today and rises 14%, to $7,410. Switching saves her $1,462 a year against staying put at the average-increase scenario in Step 2.
Step 5: Check what the cheaper plan costs when you use it. Premium is only part of the bill. Compare the deductible, the catastrophic out-of-pocket limit, the network, and whether her prescriptions and her kid's pediatrician are covered. A $1,462 savings disappears fast if she's moving to a plan with a $3,000 deductible and she has a surgery planned.
Dana's example can flip either way. The point is that a few hours in November can be worth four figures.
Who is affected, and by how much
Everyone enrolled in FEHB, but not equally.
Family enrollees carry the largest dollar exposure. At an illustrative $8,000 a year, the average increase is $872. Larger households and higher-cost plans feel it most.
Self-only enrollees pay less in dollars but the same in percentage. At $3,000 a year, the average increase is $327. Self Plus One sits in between.
Employees on high-cost national plans may see the steepest jumps if their plan runs above the average. FNN reports that many plans will rise more than 10.9%.
Annuitants take the hit differently. Their premium comes out of a fixed income, and cost-of-living adjustments don't always keep pace. Consider an illustrative FERS retiree over 62 with a $3,000 monthly annuity. For 2026, the CPI-W increase was 2.8%, and FERS retirees received 2.0% because of the diet-COLA rule. Apply that 2.0% to $3,000 and the raise is $60 a month. Meanwhile, that retiree's $8,000-a-year family premium rises $72.67 a month. The premium increase is bigger than the COLA. The 2027 COLA isn't known yet, so treat this as an illustration of the mechanism, not a forecast.
FERS retirees under 62 generally get no COLA at all, apart from certain categories like disability and law enforcement retirees. For them, a premium increase is a straight pay cut.
Retirees with Medicare have another option to check. Some plans coordinate with Medicare Parts A and B in ways that cut costs or offer Part B premium reimbursement. Compare those features alongside the rate.
How to estimate your own
Start with three numbers: your current biweekly or monthly premium, your plan's 2027 rate from your carrier or OPM's rate tables, and your expected health use (visits, prescriptions, planned procedures).
Multiply the biweekly difference by 26 for employees, or the monthly difference by 12 for annuitants. Then compare two or three rival plans on total expected cost, which is premium plus what you're likely to pay out of pocket.
The FEHB value guide lets you run these numbers side by side so you can see what the plan costs per year, not just per paycheck.
FAQ
When do the new rates take effect? For employees, the first pay period of 2027. For annuitants, January 2027. Open season elections made in the fall carry the same effective dates.
Can I change plans outside open season? Generally only after a qualifying life event: marriage, divorce, birth or adoption, loss of other coverage, or a move out of your plan's service area. The window runs from 31 days before to 60 days after the event. A premium increase alone doesn't qualify.
Does 10.9% apply to my plan? Not necessarily. It's an average. Your plan could go up less, or a lot more. Check your carrier's published 2027 rate for your enrollment code and your plan.
Can I keep FEHB in retirement? Generally, if you've been continuously enrolled in FEHB, as an employee or family member, for the five years immediately before retirement, or since your first opportunity to enroll if that's less. Dropping coverage during that stretch can cost you the right to carry it into retirement, so think hard before cancelling to save on premiums.
Does this affect postal workers? Postal employees and retirees are in PSHB, not FEHB, and their rates are set separately.
Bottom line
The 10.9% average is a starting point, not your bill. Pull your plan's 2027 rate, compare it against two or three alternatives, and weigh the deductible and out-of-pocket maximum alongside the premium. At roughly $109 more for every $1,000 you pay now, the stakes run into the hundreds of dollars a year for most households and over $1,000 for those on high-cost family plans. Open season is the only routine window to act. After it closes, you're mostly locked in for the year.