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Retirees Could Use Pre-Tax Dollars for Premiums
‘Health Care Equity Act’ Introduced in the Senate

APWU Web News Article #022-09, Feb. 27, 2009

Federal and military retirees could pay their health insurance premiums with pre-tax dollars under the “Federal and Military Retiree Health Care Equity Act,” which was introduced in the Senate on Feb. 26.

Sen. Jim Webb (D-VA)

The bill, S. 491, was introduced by James Webb (D-VA), and would extend to retirees a benefit active federal employees have enjoyed since 2000.

The benefit, known as “premium conversion,” allows the use of pre-tax dollars to pay for premiums in the Federal Employee Health Benefit Program. If signed into law, the measure would change Section 125 of the Internal Revenue Code and grant retired federal workers a benefit that is also available to many state and local government employees, as well to many workers in the private sector.

“This is a matter of basic fairness,” Webb said in a press release. “Our federal and military retirees deserve access to the same quality, affordable health care they received prior to leaving government…this important legislation [has] enjoyed overwhelming, bipartisan support for four Congresses. I’m committed to moving this legislation forward in this Congress.”

APWU Legislative and Political Director Myke Reid applauded Webb’s act. “Allowing retirees to pay healthcare premiums with pre-tax income has been one of the APWU’s top legislative goals. We’re optimistic that this Congress can get it done.”

Co-sponsors of Webb’s bill are 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 Durbin (D-IL), John Kerry (D-MA), John Rockefeller (D-WV), and Mark Warner (D-VA).

Companion legislation, H.R. 1203, was introduced in the House of Representatives on Feb. 25 by Reps. Chris Van Hollen (D-MD), Gerry Connolly (D-VA), Jim Moran (D-VA), and Frank Wolf (R-VA).

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