- The Washington Times - Monday, March 5, 2007

Most people in the Washington area, in addition to speaking more or less standard English, use a dialect unique to the federal-military community. Knowledge of both is helpful — and time-saving.

For example: An IT specialist with a major federal contractor or a project manager with a local biotech company seeking companionship might include, in his or her want list, the term ISO FEHBP. Translation, if you just arrived in town: I want to meet somebody covered by the federal health program.

The FEHBP (Federal Employee Health Benefits Program) has always been a good deal. But with people living longer, and more companies abandoning health insurance for retirees, the cradle-to-grave (and then some) FEHBP has never looked better.

In order to take FEHBP coverage into retirement, the only requirement is that the postal or federal worker have been covered by any of the plans in the program for the five years immediately proceeding retirement. The so-called “five-year rule” can be waived in very, very rare cases.

Many employees who used their private-sector spouse’s health insurance during their federal careers, have found out too late about the five-year rule. Some of them wind up working longer for Uncle Sam just to satisfy it.

Unlike private companies that still offer health insurance, Uncle Sam’s program is a guarantee that can’t be beat for retirees. The former feds can go into the same health plans (regardless of age, health or pre-existing conditions) and pay the same premiums as younger, healthier workers in the same plan. They can cover spouses, children under age 22 and in many cases ex-spouses (who pay the full premium) and grandchildren.

As it does for active-duty federal and postal workers, the government picks up the bulk of the total FEHBP premium. On average it pays about 72 percent of the total premium for white-collar federal workers, and an even larger percentage (thanks to their unions) of the premium for postal workers. That 72 percent sharing level remains constant even if premiums go up, as they do, each year.

Rep. Steny H. Hoyer, Maryland Democrat, has introduced a bill that would make it an even better deal. Under his plan, federal agencies would pay 80 percent of the total premium for FEHBP enrollees.

Active-duty feds enjoy a perk called premium conversion, or, in Potomacland, PC. PC means they pay their premiums in pre-tax dollars giving the Internal Revenue Service less to bite at and saving them anywhere from a few hundred to nearly $1,000 per year in taxes. But the PC perk is available only to workers, not to retirees.

So along comes Rep. Thomas M. Davis III, Virginia Republican, with a bill that would continue the PC benefit to federal-postal workers when they retire. He and others say the tax savings is only fair, and would encourage retirees to buy better health insurance that would shift more of the cost of their higher medical costs to insurance companies instead of the taxpayers.

Both the bills — because of their costs to the Treasury — are long shots.

Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or [email protected]


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