GovernmentExecutive.com

Legislation that would allow federal retirees to pay their health insurance premiums with pre-tax dollars faces a powerful opponent in House Ways and Means Committee--Chairman Bill Thomas, R-Calif., according to several congressional observers and insiders.

Last year, the bill had 342 co-sponsors in the House and flew through the House Government Reform Committee, but Thomas reportedly blocked the legislation from consideration in the Ways and Means Committee. Thomas has told his constituents that it would be "unfair" for federal retirees to have this benefit when some in private industry did not, according to Theresa McClain, a retired federal employee and a constituent in Thomas' California district.

The National Association of Retired Federal Employees has estimated that the bill could save the average federal retiree more than $400 each year.

Thomas' office did not return calls about the premium conversion bill, but several congressional observers said his objections stem from the inequity with sections of the private sector and the potential cost of the plan. During a March 2 press conference, Government Reform Committee Chairman Tom Davis, R-Va., and Sen. John Warner, R-Va., endorsed the bill and said they would attempt to push it through the Ways and Means Committee.

"It's not a huge surprise that Chairman Thomas is lukewarm on this proposal," said Drew Crockett, a spokesman for the House Government Reform Committee. "Chairman Davis has to keep the pressure on Chairman Thomas and will explain how this is a fair and equitable proposal."

NARFE Legislative Director Judy Park said that her organization has contacted Thomas several times regarding premium conversion. She said that NARFE wants to work with Thomas, and she noted the widespread congressional support the bill already has received.

"We have support from the majority of both parties and a majority of the members on Ways and Means," Park said. "The strategy is going to have to be to get them to put pressure on Thomas."

Park said she disagreed with Thomas' concerns.

"Why just for the federal community? Why not for everyone?" Park said. "Well, why not? They can do that, but we are seeking it for the federal community."

She also said that the cost would be "peanuts compared to some of the things that have been done."

Park also noted that concern for the private sector has not stopped lawmakers from receiving the benefit: "I don't want to rub noses in it, but members of Congress have it."

COMMENTS

• Private sector retirees don't have the option to have health insurance premiums deducted pre-tax from retirement pay because the tax code prohibits it. Only "employees" are allowed to elect pre-tax health benefits. Retirees are not employees, they are former employees. GovExec.com reader Posted March 10, 2005 9:51 PM
• With all the govt benefits Thomas gets, I would think he would let civil service retirees at least have this small one. I worked 20 years for the private sector and 20 years for civil service. Because of this my social security check has been cut to a mere $355.00 month. I will not be able to draw any of my husband's social security ($1200) when he dies. We had to purchase a life insurance policy to take care of me following his death. My retirement check is $940.00 after my $260 ins premium plus another $135 they take out because I have to have my husband as a beneficiary to include him on the insurance. Then one has to add income tax deductions. I think the govt owes me a little on this one! Your thoughts!? Jacquelyn West Posted March 10, 2005 4:08 PM
• I think this benefit will help the federal retirees in a way that many of us can not even conceive. It will lower their monthly bills by about $36 a month according to what they are projecting for yearly savings. At that point in life people are on a fixed income and any break is helpful. All the proposed bills to help lower prescriptions, etc this is another great way to help out retirees. I have to say "SO WHAT" if it only helps federal retirees. They gave up their life/time to work for the federal government versus working for the private sector (and possibly making more $$) so they should get a little something in return for their hard work and dedication. I say push it through and pass the bill. GovExec.com reader Posted March 10, 2005 10:32 AM