Future Federal Retirees May Pay More for Health Insurance
On March 8th the 100+ member Republican Study Committee released a five year plan to balance the budget for FY 2007 (or as they identify the plan ‘Contract On America, RENEWED’. Among items in the RSC’s 75-page plan is a proposal offered last year, as part of Operation Offset, to require future retirees with less than 30 years of service to pay higher Federal Employees Health Benefits Program (FEHBP) premiums. For example, for each year less than 30 years, new annuitants would have to pay 2 percent more of their FEHBP premium costs.
Read excerpt from RSC proposal plan below:
“Base Federal Retirees’ Health Benefits on Length of Service. Federal retirees are generally allowed to continue receiving benefits from the Federal Employees Health Benefits (FEHB)
program if they have participated in the program during their last five years of service and are eligible to receive an immediate annuity. More than 80 percent of new retirees elect to continue health benefits. This proposal would reduce health benefits for new retirees who had relatively short federal careers, although it would preserve their right to participate in the FEHB program. This could make the government’s mix of compensation fairer and more efficient by improving the link between length of service and deferred compensation, and would also help bring federal benefits closer to those of private companies. This proposal was included in the RSC’s “Operation Offset” in 2005.”
According to the federal Report by Mike Causey
“Federal employees could find themselves paying 20 percent more — or a total of $130 million extra a year — for their government-backed health insurance after retirement than what current retirees pay. The typical federal retiree would pay about half of his or her health care premiums, or an average of about $1,500 a year more than what retirees pay now.”
”The National Association of Active and Retired Federal Employees, whose membership includes working feds as well as current retirees, says the plan would cut further into annuities that already are much lower than pre-retirement income. ”
“ The RSC is not a standing committee, but the more than 110 House Republican members help make policy and legislative proposals. Lowering the government share of health care premiums for “short-service” feds is one of the proposals in a 65-page document on ways to balance the budget.”
According to the RSC, which describes itself as a group of more than 100 House Republicans organized for the purpose of advancing a conservative social and economic agenda, the proposal would save the government $6.3 billion over 10 years.
Hopefully, RSC’s proposal will not turn into reality for future retirees.