Even within the federal family, there are sibling jealousies of the Mom-always-liked-you-best variety. In this case, some workers say that Uncle Sam favors folks in his largest operation by paying a much larger share of their ever-growing health premiums.
On one side are the feds who launch NASA rockets, Pentagon IT experts, Interior Department auditors and other white-collar civil servants. On the other side are workers who sort and deliver the mail and sell you stamps.
So, if you are tired of paying high health-insurance premiums and sick about increases coming next year, here’s a tip: Join the service.
The U.S. Postal Service, that is.
Although the USPS is losing money, handling fewer letters (can you say e-mail and Twitter?) and trying to get thousands of workers to take early retirement, it continues to pay a much larger chunk of its employee health premiums than does the Justice Department, General Services Administration or most other federal agencies.
At a time when health premiums and medical costs are soaring — despite deflation in the general economy — having a good, affordable health plan is the perk de jour. And the Postal Service is once again leading the way.
Under the complex, self-adjusting formula used to determine the government’s share of employee health premiums, most federal agencies pay just over 72 cents of each employee or retiree premium dollar.
But the USPS again next year will pay a larger share of its employee premiums. That means that postal workers will pay less — often much less — for the exact same coverage as their counterparts in other federal operations.
Example: Blue Cross-Blue Shield’s popular self-only service benefit plan will raise its total biweekly premium to $248.42 in January. The total premium for family coverage will be $561.10 every two weeks. The total premium for postal and nonpostal workers will be the same. But
If you work for the USPS, your share of the total Blue Cross premium next year will be $57.53 for single coverage, and you will pay $132.83 biweekly for a family plan. By contrast, nonpostal workers at Justice, IRS, Transportation, OPM and the Labor Department will pay $80.81 (single coverage) and $185.06 (family coverage) each pay period.
The difference holds true in each of the other 200 plus plans in the federal service. The total premium (and benefits) for all the plans are the same for postal and federal workers. But because Uncle Sam pays a larger share of the total, postal clerks and letter carriers pay a lot less.
So if you are willing to give up taking the census, being an air traffic controller or serving in Congress and are ready and able to push stamps, sort mail and dodge neighborhood dogs “who never bite,” head for your nearest postal-service recruiting office.
Otherwise, accept that life — even in government — isn’t fair.
Flexible Spending Accounts
Thousands of government workers save a lot of money each year by using pretax dollars to buy medically related items and services not covered by their health insurance. Flexible Spending Accounts (FSAs) allow employees to set aside anywhere from $250 to $5,000 each year to cover these expenses; they fund their accounts through regular payroll deductions but can draw on an account earlier, even if they haven’t fully funded it.
You decide how much to put in an FSA account in 2010 by looking at your out-of-pocket drug and medical related purchases this year. And you have until March of the following year to spend down your account or lose whatever is left in it.
Both the Senate Finance Committee and the House Ways and Means Committee, hungry for new revenue sources, are taking aim at FSA limits. They are considering cutting them in half, from $5,000 to $2,500. If that happens, it’s possible that Congress would come back next year and lower the FSA limit again.
Alaska, Hawaii pay changes
Federal workers in Alaska, Hawaii and U.S. territories like Guam would lose their tax-free cost-of-living allowances under language now in the defense-authorization bill. In return, the feds would be put under a locality pay system that covers other civil servants in 30-plus pay zones, from Washington-Baltimore to San Francisco-Oakland-San Jose.
While the tax-free payments (now as high as 25 percent) are delicious at the time, feds pay for it when they retire. The COLAs are not counted as salary, and federal annuities are based on length of service and salary. That means that when feds in the 49th and 50th states retire, those 25 percent COLAs are not used in the pension-producing formula. Result: Many who lived well on their federal salary and COLA find they can’t afford to stay where they worked.
Congress is expected to approve a plan — which would boost tax revenue — to phase out the tax-free 25 percent COLAs over a three-year period, replacing them with fully taxable salaries based on national and locality pay adjustments.
• Mike Causey’s Federal Report runs Mondays. Contact him at email@example.com or 202/895-5132.