Retiree Premium Conversion


2/22/07: NTEU President Colleen Kelley today called on Congress to approve legislation that would extend to federal civilian and military retirees the same right that current federal workers have to pay health insurance premiums on a pre-tax basis.

The House legislation, H.R. 1110, introduced by Rep. Tom Davis (R-Va.) with 28 co-sponsors, would provide a benefit for federal and military retirees that active federal workers have enjoyed for more than five years. NTEU was instrumental in successfully pressing the Office of Personnel Management to make active federal employees eligible for this benefit.

“NTEU strongly supports this premium conversion bill, which could save participants an average of $820 a year,” said NTEU President Colleen M. Kelley. She noted that during the past six years, cost-of-living adjustments for federal retirees have ranged between 1.3 and 3.5 percent—even as health care premiums have risen in most years by double-digits. “Those who served their country in military or civilian work,” the NTEU leader said, “should be permitted to pay their health insurance premiums with pre-tax dollars just like their fellow active employees are permitted to do.”

In introducing the legislation, Rep. Davis noted that while the amount of savings is likely to be modest, extension of this important benefit could have a substantial impact on those living on fixed incomes.

Similar legislation was introduced in the last Congress and drew 340 House co-sponsors; it was not, however, enacted prior to congressional adjournment.