- The Washington Times - Tuesday, October 29, 2002

Federal and postal workers who are "saving" money by not paying premiums to their federal health program have two things in common: Nerves of steel and heads made of pine. Make that teak, because teak is denser.

Those who ignore the cradle-to-grave Federal Employees Health Benefits Program also have another thing in common: A working nonfederal spouse whose company (at least for now) provides them with health insurance.

The mixed-marriage couple (one a fed, one a nonfed) use the nonfed's coverage. Maybe because the premiums are lower although that's changing fast. Many private plans are going up 20 percent to 50 percent next year (compared with an average of 11 percent for the feds), and many companies no longer provide insurance for workers and almost none allows retirees to keep it.

And that's the rub. Because someday you will retire.

Federal workers can keep health insurance for themselves and their spouse, for life. If they follow one simple rule: They must have been covered by one of the federal health plans (any one will do) for the five years before retirement to retain coverage.

If you don't obey the five-year rule, then you are going to be without health insurance at a time and an age when you need it most. Medicare is OK. Medicare with any of the federal health plans is the best deal in America.

The federal health program is universally appreciated by just about everybody in the country except the people eligible for it. The Clinton administration wanted to extend it to otherwise uninsurable nonfeds, as part of its national health program. It was the best system they could find.

Fortunately for feds (because their premiums probably would have skyrocketed) that didn't happen. But it would have been a blessing for people who don't have, can't get or can't afford coverage anywhere else.

There are several reasons that some people who could (or think they could) make a lot more money elsewhere stick with the government. Not career feds, but high-ranking types, political appointees or Senate or House members who lose the election but scramble for another federal posting. Why: Patriotism, to be sure. The wish to serve.

But the one nobody talks about is that they are often in a position where they must be covered by the federal health program or face crippling bills.

There's nothing wrong with that, but it underscores the fact that very smart people have made the FEHBP a key part of their career plan.

So if you're a fed and you don't have coverage, sign up for one of the plans (any plan will do) and keep it for at least five years before you retire. Spouses come and go. Jobs disappear. So do benefits, like health insurance. But federal health insurance protection is forever if you do the right thing at the right time.

For feds only CD

Civil servants looking for a supersafe haven for their extra cash or savings should check out the government's Voluntary Contributions program.

Money invested in the VC program (it can be done by check in increments of $25 or more) is pretax. That means that when withdrawn you pay money only on the earnings. Next year the VC program will pay a flat 5 percent. That's a very, very good return in times of low inflation. And it's backed by the U.S. government.

The VC is open only to feds under the old Civil Service Retirement System. And it's not related to the Thrift Savings Plan.

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