The House civil service subcommittee has held a hearing to examine whether federal retirees should be included in the “premium conversion” arrangement that allows active employees, but not retirees, to pay Federal Employees Health Benefits program premiums with pre-tax dollars. The hearing was a significant step, since it was the first to examine the issue since the premium conversion arrangement was created in late 2000. While the civil service panel members expressed sympathy for the concept and indicated that their panel would approve the bill, the major impediment to enactment always has come from the congressional keepers of the purse strings. The bill would cost an estimated $7 billion over 10 years. Budget leaders also fear that allowing federal retirees the tax break would open the doors for extending similar permission to private sector retirees, at a much higher cost in lost tax revenue.