Federal employees and retirees face a 10.9 percent average increase in their share of Federal Employees Health Benefits (FEHB) premiums for 2027. At nearly the same time those rates became public, the Office of Personnel Management (OPM) announced more than $500 million in anti-fraud savings across FEHB and the Postal Service Health Benefits (PSHB) programs. For enrollees facing another increase, the two announcements raise an understandable question: how much are improper payments contributing to the cost of coverage?
The available figures show that preventing improper payments can reduce program costs. They do not establish how much of the 2027 premium increase is attributable to fraud, waste, abuse or ineligible enrollment. Understanding what each number measures helps explain what the new oversight efforts could mean for employees, retirees and their families.
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What the Reported Savings Include
OPM’s announcement describes carrier-reported results for calendar year 2025, developed with the special investigation units that insurance carriers maintain for FEHB and PSHB plans.
The reported total combines three different categories:
| Category | Amount | What it represents |
|---|---|---|
| Claims stopped or reduced before payment | $237.7 million | Reported savings from preventing or reducing payments |
| Losses prevented through billing and policy changes | $271.9 million | Estimated costs avoided |
| Recovered after payment | $21.9 million | Money returned after claims had been paid |
| Sum of the three categories | About $531.5 million | OPM’s headline figure is “more than $500 million” |
Only the $21.9 million represents money recovered after payment. The other categories reflect claims stopped or reduced and estimated losses prevented. These distinctions matter because the combined amount is not a measurement of all fraud occurring in the programs.
The figures are also retrospective. They cover 2025, offering a reference point for evaluating subsequent oversight changes rather than evidence of what the White House Task Force to Eliminate Fraud, established in March 2026, has accomplished.
What Those Dollars Could Mean
In a June blog post, OPM Director Scott Kupor described annual spending on the programs as approximately $80 billion. Adding the three reported categories gives about $531.5 million, or roughly 0.66 percent of that figure.
Kupor also pointed to expert estimates that abuse in large health programs like FEHB can run 3 to 5 percent. Applied to $80 billion, that would represent $2.4 billion to $4 billion annually. His post does not identify the study underlying that range, and the estimate should not be treated as a verified measurement of FEHB and PSHB losses.
These comparisons provide context, but they cannot directly explain the 10.9 percent increase enrollees face. The savings figures concern overall program costs, while the 10.9 percent figure measures the average increase in the enrollee share of premiums. They also cover different periods.
The practical distinction is between reducing costs and reducing the premium itself. Preventing improper payments can leave premiums lower than they otherwise would have been, even when rising health care costs still produce an increase. The announced results do not show how much higher or lower 2027 premiums would have been without those efforts.
Ineligible Family Coverage Is a Separate Concern
Ineligible family-member coverage has been an oversight issue for years. In its July 2025 report, the Government Accountability Office (GAO) reiterated OPM’s earlier estimate that covering ineligible family members could cost FEHB up to $1 billion annually.
GAO also noted that ineligible coverage can result from fraud or error. A person remaining on an enrollment after losing eligibility does not, by itself, establish intentional fraud.
The June 2026 final rule on family-member verification provides a different set of estimates. OPM reported that agencies reviewed more than 19,000 cases in 2024 and confirmed almost 2 percent of the family members involved as ineligible. Counting nonresponses and insufficient documentation, the share potentially deemed ineligible could reach 4.36 percent.
OPM used those findings to project savings from the new verification requirements. Its central estimate was a reduction equivalent to approximately 0.018 percent of total 2025 FEHB and PSHB premiums, with annualized savings of about $18 million over the following decade.
That small percentage does not represent the total premium effect of all existing ineligible family-member coverage. The calculation assumes approximately 100,000 family members would be verified annually under the requirements being evaluated. It excludes the effects of the separate comprehensive eligibility audit required by law.
| Measure | Figure | What it measures |
|---|---|---|
| Sum of reported 2025 anti-fraud results | About $531.5 million | Carrier-reported savings, recoveries and estimated prevented losses |
| Estimated annual cost of ineligible family-member coverage | Up to $1 billion | OPM’s earlier estimate cited by GAO |
| Projected premium reduction from the new verification requirements | About 0.018 percent | Estimated effect of the requirements evaluated in the June rule |
| Annualized premium savings from those requirements | $9.6 million to $26.4 million; central estimate $18 million | Projections using a 3 percent real discount rate |
The estimates address different questions and should not be added together or treated as interchangeable. In particular, the verification rule’s projected savings do not establish how much could be saved by identifying ineligible individuals throughout the existing enrollment population.
What Changes When You Add a Family Member
The verification rule took effect July 2, 2026. It requires proof of eligibility whenever an enrollee adds a family member, including during open season. Previously, proof was required for qualifying life events and initial enrollment, while offices and carriers could request it at other times.
For enrollees, the immediate consequence is straightforward: adding someone during open season now requires documentation. My Federal Retirement has covered the requirements in the new proof-of-eligibility rule and open-season verification.
The rule does not change which relatives qualify. Under OPM’s family-member eligibility guidance, coverage generally extends to a spouse and eligible children under age 26. Children age 26 or older may qualify when they are incapable of self-support because of a disability that began before age 26.
Parents and domestic partners do not qualify under an enrollee’s family coverage. A grandchild must meet the requirements for coverage as a foster child. A former spouse cannot remain covered as a spouse under the enrollee’s plan, although some former spouses can obtain their own enrollment through spouse equity provisions.
Documentation depends on the relationship and circumstances. Examples include marriage and birth certificates, adoption decrees, foster-child certification, applicable tax returns and medical certification for an adult child incapable of self-support. Enrollees should follow the specific instructions from their employing office, retirement office or carrier.
If adequate documentation is not provided, the family member can be removed. The rule provides a 60-day period to request reconsideration of a removal decision.
The Broader Audit Has a Separate Timeline
The FEHB Protection Act, Section 90101 of Public Law 119-21, requires a comprehensive family-member eligibility audit during the three-year period beginning July 4, 2026, one year after the law’s enactment. OPM’s June rule says the agency is preparing for that audit, but the rule does not spell out its operational procedures or include its economic effects in the projected savings.
That distinction matters when assessing what the verification changes could accomplish. Checking newly added family members and reviewing people already enrolled address different parts of the eligibility problem.
OPM is also expanding its use of claims-level information to identify potentially improper payments. That effort has generated congressional and privacy concerns, discussed in what OPM’s data rule means for enrollees.
What to Review Before Open Season
Open season for 2027 coverage runs November 9 through December 14, 2026. Enrollees who cover family members can prepare by reviewing both eligibility and plan costs before making changes.
- Review everyone currently covered. A finalized divorce or a child reaching age 26 can end eligibility, although qualifying adult children incapable of self-support may remain covered. Contact the appropriate office or carrier about removing anyone who no longer qualifies.
- Check the enrollment type. If your household’s coverage needs have changed, compare Self Only, Self Plus One and Self and Family premiums for each plan you are considering, because the price gaps between enrollment types vary by plan.
- Gather documentation before adding a family member. Confirm which documents your office or carrier requires rather than assuming one document will satisfy every situation.
- Investigate coverage options for someone losing eligibility. Depending on the circumstances, Temporary Continuation of Coverage or spouse equity enrollment may be available.
- Compare the full cost of your plan. Review the 2027 premium rates, deductibles, copayments, prescription coverage and provider network. The OPM open-season website provides additional information and tools.
The anti-fraud announcement documents meaningful reported savings, but it does not answer how much fraud contributes to the premium increase facing any particular enrollee. For employees and retirees, the immediate decisions remain choosing suitable coverage, confirming family-member eligibility and understanding the costs of the available plans.