Federal retirees are looking to build on the momentum they have gained
over the course of this year when Congress returns to its legislative work
this week. Most of the retiree issues have been long in the making, but
one -- tied to a proposed Medicare drug prescription benefit -- is new
and, perhaps, more urgent.
The priority issue in the long-running category is "premium
conversion." It allows federal employees -- but not retirees -- to pay
their health insurance premiums with pretax money, saving more than $400 a
year for the typical enrollee.
Retirees, who are not allowed to participate because of the tax code,
have been working to get in on the premium conversion program since the
benefit was started in 2000. Legislation to extend the benefit to retirees
cleared the House civil service subcommittee in July, the first movement
on that proposal since federal retirees took up the issue.
The National Association of Retired Federal Employees, which has
lobbied heavily on the tax break, expects that the House Government Reform
Committee, chaired by Rep. Thomas M. Davis III (R-Va.), will
take up the premium conversion bill within weeks. Davis is an architect of
the House bill, which has 289 co-sponsors.
The bill, however, is under the jurisdiction of the House Ways and
Means Committee, which could prove to be a more formidable hurdle. The
tax-writing committee could object to the plan not only because of its
potential cost in lost tax revenue -- estimated at $7 billion over 10
years -- but also because of the precedent it would set for private-sector
retirees to seek the same benefit, at a much higher cost.
NARFE is asking its members to call Rep. Bill Thomas (R-Calif.),
the Ways and Means chairman, and urge him to get involved in the issue.
NARFE, which has 400,000 dues-paying members, also is building alliances
with postal and military coalitions in a bid to get the bill to the House
floor, said Dan Adcock, NARFE's assistant legislative director.
A more pressing issue for retirees, however, may be legislation to add
a prescription drug benefit to Medicare. The House and Senate have passed
separate bills and are in negotiations over a compromise.
But NARFE fears that the government, like any other employer, could use
the Medicare expansion as a reason to reduce or modify existing
prescription drug benefits for retirees.
Most federal retirees continue in the Federal Employees Health Benefits
Program, which provides a drug benefit, even after becoming eligible for
Medicare. The current prescription drug benefits under FEHBP are generally
considered more generous than those under consideration for Medicare.
On July 8, the House, at Davis's urging, quickly passed a bill to
guarantee that federal retirees would continue to get the same
prescription drug benefits as active employees. Since then, NARFE has been
urging senators to take up similar legislation suggested by Sen. Daniel
K. Akaka (D-Hawaii). Sens. Susan M. Collins (R-Maine),
Joseph I. Lieberman (D-Conn.) and Peter Fitzgerald
(R-Ill.) will play important roles on the issue for federal
The congressional maneuvers will come as the Labor Department prepares
to calculate the next cost-of-living adjustment for federal annuities. In
mid-October, the government will announce the adjustment to be paid in
January, based on an inflation index covering the previous 12 months.
Preliminary estimates indicate the COLA probably will be in the 2
percent range. That will not be much comfort to many retirees, who are
bracing for a possible sharp increase in their health insurance costs. The
new FEHBP premiums will be announced later this month.Retirements
Dianne Tatham Kaskey, director of operations, warfare systems
engineering, at the Naval Sea Systems Command, retires Sept. 3 after 33
years of federal service. She began her career with the FBI as a
Taylor Vinson, senior attorney at the National Highway Traffic
Safety Administration, retires Sept. 3 after more than 36 years of federal
service. He is the agency's longest serving employee and, among many
accomplishments, was responsible for writing standards for motorcycles,
vehicle lighting and vehicle importation.
Betty F. Davis, executive assistant to the president of the
Inter-American Foundation, retired March 31 after 42 years of government
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