Fed workers get benefits boost with budget deal

The budget deal President Clinton worked out with Congress includes legislation favorable to government workers. Unfortunately in this case federal workers' gain will be taxpayers' loss.

The budget compromise contained broad guidelines for spending within specific accounts. The details however were left to congressional committees and subcommittees with the understanding that the resulting legislation had to be consistent with the president's priorities. The Civil Service Task Force a caucus of Senate and House legislators who represent the interests of federal employees successfully crafted legislation that should make federal employees happy.

That legislation found its way into the budget by way of an amendment inserted by the House Government Reform and Oversight Committee. The amendment creates a new formula for dividing premiums between the government and employees or retirees subscribing to the Federal Employees Health Benefits Program (FEHBP).

Under existing law the government contribution is set by a complex formula based on the premiums of five of the largest plans and a sixth "phantom" plan. This phantom plan was developed when Aetna previously one of the six largest FEHBP carriers left the program some years ago. When Aetna left Congress decided to save time and not change the formula. Instead the government estimated what Aetna would have charged if it had remained in the FEHBP and cranked that into the calculation. Sounds nutty but that's what they did.

This phantom formula has held the government's contribution near 72 percent since 1989 but it was set to expire in 1998 as a result of legislation enacted in 1993.

According to estimates from the Office of Personnel Management failure to extend or replace the current formula would have cost federal employees approximately $23 per month from their pay and annuities and the government's share of the total premium would drop from 72 percent to approximately 63 percent - good for taxpayers but not particularly good for federal workers.

The reconciliation amendment does not continue the phantom plan but alters the way government contributions are calculated. The calculation will now take into account the premium charged by all FEHBP carriers not just the "big six." The premium changes made by each plan will be divided by the number of plan participants producing an average premium change figure per employee or annuitant. This number will then be used to calculate the government contribution.

By adopting this approach proponents say the program will more accurately reflect changes in health benefit premiums while still encouraging federal employees to shop for the best deal. That is because the maximum government contribution to any one plan will remain capped at 75 percent and premiums will not rise as they would have without this amendment.

Now we all know that this is good news for federal employees but how can proponents have the audacity to label this the "Fair Share" formula? Fair for whom? Certainly not for the average nonfederal working stiff who is struggling to make ends meet.

Maybe this is why Congress is also considering a tax cut - to mollify those who would question why federal workers are getting a break on their health benefit premiums when the rest of the country is struggling under "managed care."

Don't get me wrong I am not opposed to this amendment because it helps federal employees and retirees like me. But let's recognize this for what it is: a special-interest rider tacked onto the budget bill by the Civil Service Task Force.

-- Bureaucratus is a retired federal employee who contributes regularly to Federal Computer Week.


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