Keep an Eye on Retirement, FEHB

Suggestions that the administration’s desire to limit the federal deficit by looking at both entitlement and discretionary spending has caused alarm bells to ring in employee organizations. In the federal employee benefits area, the two major sources of potential entitlement program savings are the retirement program and the Federal Employees Health Benefits program. Over the years numerous proposals have been raised to limit spending on each. In the retirement program, most of the focus has been on limiting or delaying inflation adjustments, raising employee contributions or changing the benefits formula. On health insurance, proposals have centered on limiting the government’s expense by tinkering with benefits, the cost-sharing formula, or both. While such proposals in the past typically have been either ultimately defeated or much scaled back, employee advocates are preparing to refight the same battles.