Visit to Cafeteria May Be Ahead

The House civil service subcommittee this week will begin hearings into a concept that has long been discussed as a possible improvement to federal employee benefits: creation of “cafeteria”-style choice. In such arrangements, now fairly common in the private sector, employees have a set amount of money available for various types of benefits and they direct those funds toward the benefits most important to them. In most cases, the money is pre-tax, effectively making those benefits more affordable. Currently, the only such arrangement in general use in the government is the “premium conversion” arrangement in which active employees (although not retirees) can pay their Federal Employees Health Benefits program premiums with pre-tax money. Several quasi-independent agencies, such as the U.S. Postal Service, have wider-ranging plans in place, allowing employees for example to designate pre-tax money toward child care costs.