- The Washington Times - Tuesday, May 21, 2002

Active and retired federal workers can expect a double-digit increase in health insurance premiums next year.

Those who subscribe to the misery-loves-company theory can take some comfort in the fact that any premium increase will also hit Senate Majority and Minority Leaders Tom Daschle, South Dakota Democrat, and Trent Lott, Mississippi Republican, as well as other members of Congress, congressional staffers and political appointees who oversee the giant federal employee health benefits program.

The year 2003 premium increases which won't be announced until summer's end will take a bite out of the pay raise (either 2.6 percent or 4.1 percent) in the works for feds or the much smaller 1 percent to 2 percent cost-of-living adjustment for retirees.

Despite the premium increases, federal workers, especially retirees, will be better off than many of their private sector counterparts. A growing number of companies are either dropping health coverage or forcing workers to pay a bigger chunk of premiums. Virtually all private companies drop retirees from coverage at age 65, if not before.

The federal government pays an average of 72 percent of the total premium (each employee/retiree having about a dozen plans to choose from), and coverage is for life.

Nobody expects premium increases to decline or remain flat, but key members of Congress hope to hold them down by encouraging more health maintenance organizations to join the federal program and by introducing options such as medical savings accounts.

May we borrow your pension?

When the Clinton administration "borrowed" four times from the federal retirement fund and the G-fund of the federal 401(k) plan, government unions were silent.

But now that the Bush administration is doing the same thing, some of the unions are up in arms.

Actually it's a paper tiger. Until Congress raises the debt ceiling (which it will) the government can't incur any new debt. That means it temporarily stops paying interest on things such as the retirement fund and the G-fund until the ceiling is raised or until additional revenue arrives.

By law all gains that are lost delayed by the action are made whole again, so federal workers and the unions that represent them lose nothing.

More on the non-crises can be found at the Thrift Savings Plan's Web site (www.tsp.gov) and on the National Association of Retired Federal Employees Web site (www.narfe.org).

Remember, the federal retirement fund pays handsome benefits to former members of Congress and congressional staffers. And it covers current members of Congress, too, who are not going to let the government or anybody else drain their funds by a single penny.

Retiree premium break

Support continues to build in Congress to extend to retirees a tax break now enjoyed by federal workers.

Currently, active feds pay premiums with pre-tax dollars. That lowers their taxable income and reduces their tax bill from $300 to $500 per year. But retirees don't have that option. Yet.

Insiders believe the break, which has bipartisan congressional and White House support, may be tucked inside an appropriations package this fall.

401(k) plan gets better

The Federal Thrift Savings Plan, which allows workers to defer taxes on 7 percent to 12 percent of income, just got better.

The Federal Retirement Thrift Investment Board says that later this year it will introduce daily valuation. That means investors can apply for and get loans more quickly, in addition to shifting from one fund to another in a matter of hours rather than weeks.

Account holders also will be able to see the daily dollar value of their accounts and their share totals.


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