Federal Retirees Lobbying To Join Health Insurance Premium Conversion Program
An expected low cost-of-living adjustment for next year, coupled with rising health plan premiums, has prompted federal retirees to step up lobbying efforts for legislation that would allow them to pay for health insurance premiums with pretax money, the Washington Post reports. The COLA rate for federal retirees in January 2003 is expected to be 1%, which will not be enough to cover the cost of their health insurance premiums under the Federal Employees Health Benefits Program, the Post reports. Health plan premiums rose about 13.3% this year and are expected to "soar again next year." The National Association of Retired Federal Employees is urging lawmakers to allow retirees to participate in the "premium conversion" program, which was enacted by the Clinton administration and allows active-duty workers to pay for health premiums with pretax money. Retirees are not currently eligible for the program.
NARFE President Frank Atwater said that the possibility of a low COLA and high health premiums "makes early enactment of the premium conversion legislation even more critical to annuitants." NARFE is backing legislation sponsored by Rep. Thomas Davis (R-Va.) and Sen. John Warner (R-Va.) that would allow federal civilian and military retirees to pay their monthly health insurance premiums using pretax money. However, the legislation could encounter resistance in the House Ways and Means and the Senate Finance committees because the panels usually are "reluctant to open the tax code to change, particularly late in a congressional session," the Post reports. In addition, allowing retirees to participate in the program raises the issue of whether it should be open to private sector retirees who participate in employer-sponsored group health plans (Barr, Washington Post, 8/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.