Attention on Capitol Hill and in the WH to federal employee benefits might not turn out favorably. Image: Raymond Well/Shutterstock.com
Every so often a Presidential administration or a member of Congress “discovers” some long-recognized and never-hidden anomaly in the federal employee benefits package and denounces how outdated and unfair it is.
The Obama administration for example discovered that the maximum federal employee buyout amount had not been increased from the $25,000 amount set at the beginning of that program two decades earlier. To its credit, it pushed to increase the maximum to $40,000 as a kind of inflation catch-up. It succeeded, but only for the Defense Department employees and only temporarily.
The Trump administration in turn discovered that DoD employees were being treated more favorably than those of other agencies and, to its credit, recommended using the higher amount government-wide. It failed, and the amount since has reverted to $25,000 across the board.
Going back farther, the Bush administration discovered a hole in the federal benefits package for short-term disabilities, to supplement leave benefits for conditions keeping people away from work that don’t qualify for workplace injury/illness compensation benefits.
More recently the Biden administration discovered a difference in children’s coverage eligibility between the Federal Employees Health Benefits Program and the sister Federal Dental and Vision Insurance Program. Under the former, children remain eligible until turning age 26, while under the latter eligibility cuts off at 22 and there are other conditions, as well.
(That’s the result of the former program, but not the latter, having piggybacked on the nationwide standard for an age 26 cutoff on health insurance in general under the Affordable Care Act. In its policy, FEDVIP still follows the rules that had applied to the FEHB for decades before that law’s passage.)
In its budget proposal for the fiscal year starting October 1, the Biden White House proposed sweetening the FEDVIP eligibility rules to match those of the FEHB. It also proposed raising the lifetime maximum student loan reimbursement amount to $100,000 from the $60,000 amount in effect for many years.
There are other examples of anomalous/outdated/unfair policies:
• The death gratuity payment and funeral allowance for federal employees who are killed in the line of duty or die as a result of an injury sustained at work, are $10,000 and $800, respectively, figures that have not changed since the mid-1990s.
• The coverage maximums on children and for a spouse under the Federal Employees’ Group Life Insurance program, $12,500 and $25,000 respectively, haven’t been raised in nearly as long.
• The death benefit under the FEGLI “standard” option is $10,000, the same as for who knows how long. One hint: there is a special provision for full-time employees whose salaries are below $8,000 annually.
There is merit in calling for something to be done about such policies, and it is perhaps too harsh to dismiss such calls as nothing but political grandstanding. But pointing them out is not the same as fixing them.
For example, the Bush administration dropped the idea of short-term disability insurance after seeing the potential price tag, even though employees would have borne the entire cost. While the Trump administration called for increasing the buyout amount to match the level at DoD, it never followed through in the legislative process needed to make it happen. And the Biden administration similarly has not mounted a push for its proposals on FEDVIP and student loans.
That’s neglect by both parties over many years.
Or is it maybe benign neglect? There is a point of view that it is actually the latter, that the less attention the Capitol and the White House pay to federal benefits in general, the better.
The thinking goes like this: Any time federal benefits undergo review, it triggers a comparison with the offerings of the private sector and provides an opening for those who believe the federal benefits are too generous. They would not miss that opportunity to move against those benefits, in particular retirement and health insurance—the two that are the most expensive in budgetary terms and also the most valuable to employees and retirees.
That would mean reviving proposals always simmering on the back burner to make the retirement benefits package less valuable in any of a myriad of ways and to shift more costs of the FEHB from the government onto enrollees.
Next in line for that kind of scrutiny could be federal employee job security (there is a bill pending to turn all federal jobs into “at will” status); telework (the House already has passed a bill to revert to pre-pandemic practices); protections from political pressure (many Republicans favor a return of Trump’s abortive “Schedule F”); and on down the line.
Maybe that concern is overstated. But given what could happen if federal benefits attract attention in the current political and budgetary environment, benign neglect may not be such a bad thing.
5 Steps to Protect Your Federal Job During the Shutdown
Over 30K TSP Accounts Have Crossed the Million Mark in 2025
The Best Ages for Federal Employees to Retire
Best States to Retire for Federal Retirees: 2025
Primer: Early out, buyout, reduction in force (RIF)
See also,
OPM Guidance Addresses Pay Issues arising During, After Shutdown