ON FEDERAL EMPLOYEE BENEFITS AND RETIREMENT PROGRAMS
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ON FEDERAL EMPLOYEE BENEFITS AND RETIREMENT PROGRAMS
At a hearing held today by the House Subcommittee on the Federal Workforce, National Active and Retired Federal Employees Association (NARFE) President Margaret L. Baptiste testified that “the compensation we receive, both as employees and retirees, is an investment in a system that makes federal service attractive as a career for millions of talented and skilled Americans.”
“Our primary legislative objective is to preserve the retirement and insurance benefits we earn as part of the total compensation package of careers in federal service,” Baptiste said. She explained that new challenges would put pressure on the federal budget, but that it was also imperative that the government continue to honor its commitments to its workers and retirees.
NARFE’s President praised Rep. Tom Davis (R-VA), who also testified at the hearing, for introducing and supporting H.R. 1110, the NARFE-backed bill to extend to retirees the health tax benefit of premium conversion which executive and legislative branch employees have had for several years. “This clarification of the tax code would be a modest step in making annuitants’ Federal Employees Health Benefit Program (FEHBP) premiums more affordable,” she said.
In addition, Baptiste said the Office of Personnel Management (OPM) does a good job of negotiating health premiums, but is not doing all it can to lower FEHBP costs because they have declined a payment available to other public and private employers who provide drug coverage as generous as Medicare.
She also raised concerns about the Administration’s plan to boost anemic participation in Health Savings Accounts (HSAs) by offering them in two large system-wide FEHBP plans. If large plans use their brand loyalty and marketing resources to make HSAs more popular, premiums for comprehensive plans could increase because relatively healthy enrollees with higher incomes could be siphoned off into HSAs.
“HSAs are a solution in search of a problem; prescription drugs, the greatest cost driver in FEHBP, are a problem in search of a solution,” Baptiste testified. She said that FEHBP plans should be allowed to buy prescription drugs at the Federal Supply Schedule discount.
Moreover, Baptiste asked the subcommittee to support budget neutral legislation which would offer federal workers increased survivor annuity benefit amount options. And, she said a 1986 budget law -- which unfairly reduces the retirement annuities of those who worked part-time toward the end of their careers -- should be fixed for current employees and retirees.
NARFE’s President voiced support for OPM’s proposal to allow agencies to reemploy federal retirees on a limited part-time basis without offset of their annuity from salary and the agency’s recommendation to permit federal workers to contribute bonuses into their 401(k) style-Thrift Savings Plan accounts.
Baptiste concluded by applauding the subcommittee’s bipartisan “support of federal employee benefits and retirement programs as an investment in the federal government’s most valuable asset – its human capital.” She committed NARFE to work with Subcommittee Chairman Danny Davis (D-IL), the panel’s members and the Administration to ensure that federal benefit and retirement programs remain competitive, innovative and a model for other employers to follow.
