Jim Webb champions pre tax dollars for retiree health insurance

Senator Jim Webb (D-VA) Thursday introduced “The Federal and Military Retiree Health Care Equity Act” to allow federal and military retirees to pay their premiums under the Federal Employee Health Benefit Program with pre-tax dollars.

Since 2000, active federal employees have been afforded the opportunity, known as “premium conversion,” to use pre-tax dollars to pay their premiums under the FEHBP. The benefit is also available to many private sector employees and state and local government employees.

Webb’s bill, cosponsored by Sens. Daniel Akaka (D-HI), Jim Bunning (R-KY), Richard Burr (R-NC), Ben Cardin (D-MD), Susan Collins (R-ME), Chris Dodd (D-CT), Richard Dubin (D-IL), John Kerry (D-MA), John Rockefeller (D-WV), and Mark Warner (D-VA), would change Section 125 of the Internal Revenue Code to extend this benefit to retired federal workers.

“This is a matter of basic fairness. Our federal and military retirees deserve access to the same quality, affordable health care they received prior to leaving government,” says Webb. “It’s about time that we pass this important legislation, which has enjoyed overwhelming, bipartisan support for four Congresses. I’m committed to moving this legislation forward in this Congress.”
The legislation has the support of the following organizations representing federal and military retirees: National Association of Retired Federal Employees, The Military Coalition, National Treasury Employees Union, National Association of Postmasters, Professional Aviation Safety Specialists, National Association of Postal Supervisors, National Federation of Federal Employees, National Association Government Employees, National Rural Letter Carrier Association, National Postal Mail Handlers, American Foreign Service Association, and the American Postal Workers Union.

“Federal and military retirees lose ground every year health insurance premiums skyrocket,” says NARFE President Margaret Baptiste. “The Premium Conversion legislation that Sen. Jim Webb has sponsored would help retirees and survivors living on fixed incomes keep pace with rising health insurance costs."

“We commend Sen. Webb for honoring the service and sacrifices of federal civilian annuitants as well as active duty military personnel and retirees by proposing they receive tax relief which would help them to bear escalating health care costs.”

Now introduced in the Senate, the bill has been referred to the Senate Committee on Finance for consideration. Congressmen Chris Van Hollen (D-MD), Gerry Connolly (D-VA), Jim Moran (D-VA), and Frank Wolf (R-VA) introduced companion legislation, H.R. 1203, on February 25 in the House of Representatives.