FEHBP beneficiaries won't face higher health care tax...yet

Pressure from federal employee unions pushed lawmakers to give rank-and-file feds same deal on health excise tax as state/local counterparts

Feds spoke out loud and strong against a Democratic agreement that would have left beneficiaries of the Federal Employees Health Benefits Program subject to a proposed tax on high-cost health insurance plans five years sooner than many other groups with high-cost plans.

Labor’s original deal with Democrats — announced Jan. 14 — postponed the tax’s effective date to 2018 only for beneficiaries of state and local employee plans and those in plans that are negotiated through collective bargaining agreements, which the FEHBP is not.

But pressure from federal employee unions and other organizations representing feds this week pushed lawmakers to give rank-and-file federal employees the same deal. Democratic leadership revealed the change on Jan. 20.

Dan Adcock, of the National Association of Active and Retired Federal Employees, credited the turnaround to a swift response from a broad coalition of federal employee groups. Adcock told FederalDaily that NARFE President Margaret Baptiste, for example, began pressing the White House and congressional leadership to give FEHBP beneficiaries parity the same day the deal was announced, and immediately mobilized a grassroots effort to rally its members.

In a statement, National Treasury Employees Union President Colleen Kelley extended particular thanks to a number of D.C.-area lawmakers — including House Majority Leader Steny Hoyer, D-Md.; Rep. Gerald Connolly, D-Va.; Rep. Chris Van Hollen, D-Md.; and Sen. Barbara Mikulski, D-Md. — for “ensuring that the people who serve our country each and every day were included in the exemption.”

The altered agreement still must be reviewed, and could be changed by lawmakers as Congress continues to work on a final version of the health care bill. In addition — with the Republican gain of a Senate seat in the special Jan. 19 election to fill the vacant seat left by the late Sen. Edward Kennedy — even larger changes could be in store now that Democrats have lost their filibuster-proof majority.

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Federal Daily, an 1105 Government Information Group site, features news and resources for federal and postal employees.

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