Monday, April 26, 2004

Is the U.S. government, like many financially strapped private-sector operations, going to eliminate health coverage for its retirees? Short answer: very unlikely.

Last week, the Equal Employment Opportunity Commission voted 3-1 to allow firms to eliminate or cut back health insurance benefits for workers who qualify for Medicare at age 65. Many firms already do this, although up until this ruling they have run the risk of being hit with age-discrimination lawsuits.

Uncle Sam’s health program, the Federal Employees Health Benefits Plan, is unlikely to change for one simple but practical reason: Its 9 million participants include members of the House and Senate as well as retired politicians and even ex-presidents.

Using their FEHBP, they can get VIP treatment at Walter Reed Army Medical Center or Bethesda Naval Hospital, or wherever else they want to go, at bargain-basement rates. So can their families and, in many instances, former spouses and in some cases grandchildren.

Congress wrote the FEHBP law and ensured that no matter how much premiums go up, the taxpayers pay 72 percent of the total premium.

Lifetime coverage of eligible retirees and spouses is a major reason — often the overriding one — that so many defeated politicians get themselves appointed to a government job. It also is why professional fed-bashers and proponents of minimalist government wangle their way into any government job, maybe even a make-work project, to get in the five years of service they need to qualify for lifetime FEHBP membership, which covers many things Medicare doesn’t.

In fact, it is possible that the last remaining health plan in the United States that covers its Medicare-eligible retirees will be the federal-congressional health program. So if you work for a hard-pressed, cheapskate outfit, you may want to polish your resume and pursue federal employment.

Buyouts, early outs

Workers in a dozen agencies are hearing rumors that offers to take early retirement — at any age with 25 years of service or for folks 50 or older with 20 or more years of service — also might include a $25,000 buyout. The problem is, it’s hard to tell whether it is real or just the rumor mill recycling wishes.

At one point, the Office of Personnel Management tracked buyouts, although it wouldn’t spill the beans until they had been approved. But now that ability seems gone with the downsizing winds and the fact that Congress has given virtually every executive branch agency an easier route to less-costly buyouts.

Retirement planners and benefits counselors say the same thing: Be prepared to act quickly should a buyout/early-out offer come your way. In many instances, agencies will give employees a month or two to depart, but only a couple of days to accept or reject a buyout.

Workers holding out for some kind of retirement sweetener (the rumor has been around for years) should wise up. It’s not going to happen. And feds who have been waiting for the buyout amounts (now a maximum of $25,000 before deductions reduce it to $17,000 in take-home) to grow — that isn’t going to happen, either. A decision to go or stay shouldn’t be made on what might happen, because in the 11-year history of buyouts none of it has happened.

• Mike Causey, senior editor at, can be reached at 202/895-5132 or

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