An important note about premiums
John Hancock Life & Health Insurance Company, as contractor under the FLTCIP, is required to regularly monitor FLTCIP experience and propose corrective action to OPM when experience indicates that it may be needed. Due to emerging program experience, there is a strong likelihood that premium rates for many FLTCIP enrollees may need to increase. At this time, there is no anticipated premium increase for the current FLTCIP 3.0 enrollees.
Premiums are not guaranteed. The premium for your group (for example, those with the same plan design or set of benefits) may only increase if it is determined to be inadequate. While the group policy is in effect, OPM must approve an increase in premium.
An important note about the premium stabilization feature (PSF)
The PSF is designed to reduce the potential need for future premium increases, and, under certain conditions, the PSF amount may be used to offset your future premium payments or provide a refund of premium death benefit. The PSF percentage is used to calculate the amount of premium paid that may be available under the PSF.
As outlined in the FLTCIP 3.0 Benefit Booklet, the PSF percentage may be adjusted, with U.S. Office of Personnel Management (OPM) approval, due to actual and projected FLTCIP experience.
The PSF percentage for all FLTCIP 3.0 enrollees changed from 35% to 20%, effective February 1, 2022. Due to emerging program experience, it is possible that the PSF percentage may be reduced further in 2023. If the PSF percentage reaches its minimum of 10%, and an additional adjustment is needed, a premium rate increase would then be necessary.
You can view more details and illustrations of the PSF starting on page 32 of Book One: Program Details and Rates.