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Key developments in the world of federal employee benefits: health, pay, and much more.

Tough Times

There's no question that federal employees are feeling vulnerable, given the continuing debate over proposals targeting their pay and benefits. Civilian workers are still working under a two-year pay freeze and the Obama administration's deficit reduction plan would raise employees' pension contribution levels in the near future. But perhaps the news isn't all bad -- and some say it could be worse .

The Bureau of Labor Statistics is set to release the Consumer Price Index figures -- the basis for cost-of-living adjustments for federal retirees. The latest estimates put the COLA for 2012 at 3.6 percent.

There hasn't been a COLA increase since 2008, when it rose 5.8 percent. This year's jump, if there is one, will take effect on Dec. 1, and will be reflected in retirees' first annuity payments in January 2012.The increase will take effect automatically, unless Congress opts to block it through legislation, which observers say is unlikely.

Matt Biggs, legislative and political director at the International Federation of Professional and Technical Engineers, said current feds are not eligible for the COLA increase and will remain under the pay freeze through next year. The lack of a COLA essentially has placed federal retirees in a similar position, he said.

At the same time, the average increase in what federal workers pay for their health insurance plans next year will hit its lowest point since 2008. The premiums for employees will rise just 3.5 percent, less than half of the 7.2 percent boost in 2011. Costs for dental and vision coverage in 2012 will rise less than 1 percent and 1.6 percent, respectively. These increases also are lower than previous years.

OPM officials have said the average premium increase could be even smaller than projected as employees switch to less expensive plans to save money. Individual participants in the Blue Cross Blue Shield Standard Option, the government's largest plan, actually will see a decline in premiums.

So tell us -- how will these developments affect you?

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