- The Washington Times - Tuesday, September 24, 2002

If you consider your life insurance premiums wasted because you are still breathing, or your fire insurance policy a bust because your house is still standing, you are going to hate the new federal health insurance flexible-spending account.
Available to federal workers but not retirees next July, the FSA will allow up to $3,000 of pre-tax salary per year to pay for uncovered services such as dental work. And another $5,000, also pre-tax, will be allowed for child or elder care. Both reduce your taxable income.
The bad news is, it's a use-it-or-lose it deal. If you don't spend the money that year, it's gone.
It's not like a medical savings account (MSA) that permits you to roll over a portion of any unspent money from year to year.
Some private sector workers who have FSAs love them. Feds could benefit through payment for things their health plan won't cover, like certain dental services. But it's important you know what is and is not an FSA. The sign-up period begins next May, with coverage starting in July.

Retiree health premiums
Although retired federal and postal workers and their dependents get the same health coverage and pay the same premiums as active duty feds, they do lose some perks.
One of them is the ability to pay their increasing health insurance premiums, which can run several thousand dollars a year, with pre-tax dollars. That's called premium conversion, and it's available to active duty feds. It saves the typical employee about $400 annually in taxes.
Friends of federal retirees in Congress (remember, politicians retire, too) hope to deliver soon a premium conversion package as part of a veto-proof appropriation bill. Once that happens, backers are likely to push for a similar tax-break for long-term care insurance.

Bogus buyout rumor
Washington area federal offices are being bombarded by e-mail passing on a fake "news" report about a special federal buyout program. It sometimes has the heading "Interesting News."
According to the "news" item, the government will offer everybody under the old Civil Service Retirement Option up to $65,000 as a bonus to retire by 2003. The deal, according to the false report, would also sweeten pension benefits by adding 5 years of age, and service time, to each eligible employee.
Too good to be true? Exactly.
The report is just what people want to hear. And it has been doctored to include the names of fake senators and representatives, plus phony House and Senate bill numbers. Bottom line: It's not true.
The Inspector General's Office of at least one federal department is trying to track the source of the fake buyout report. If you get the e-mail, don't believe it, and don't pass it on.
One more time. It's a fake.

HMO home on the range
Sam K., a fed from Tulsa, takes issue with the Office of Personnel Management, which said that federal health insurance premiums will go up an "average" of 11.1 percent next year.
That's based on the averages of the biggest plans in the program and on the assumption that a number of feds and retirees will come from high cost to lower cost plans during the open season. It runs from Nov. 11 to Dec. 9, and, yes, Blue Cross will remain in the federal program for 2003.
Here's what Sam has to say.
"Numbers sure are wonderful, aren't they? I'm sure OPM is right proud of that average 11.1 percent premium increase. It does sound pretty good, doesn't it? At least until you compare it to reality. As a member of the LAST SURVIVING Health Maintenance Organization (HMO) in Oklahoma, I'm going to enjoy a 46.6 percent increase in my biweekly premium next year. Fortunately the next pay increase should cover it."

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