Premium Conversion Takes a Step

By: fedweek

The House Oversight and Government Reform Committee has approved HR-1110, a bill that would allow federal retirees to participate in the premium conversion arrangement through which active employees may pay their FEHB premiums on a pre-tax basis. That tax break does not apply to retirees because of a provision of the tax code. Passage through the committee is a necessary step but now the bill moves to the House Ways and Means Committee, which in prior years has sat on the measure even after similar approval by the government reform panel. Members there have raised concerns about the potential cost in lost tax revenue as well as the precedent that the measure would set for extending the same break to private sector retirees, at a much higher cost.