Taxes & Insurance

Since October 2000, active federal employees have been able to pay their Federal Employees Health Benefits program premiums with pre-tax money through a payroll withholding arrangement called premium conversion. However, this does not apply to retirees because of provisions in the tax code. Thus, FEHB is effectively more expensive for retirees than for active employees who participate in premium conversion. Premium conversion may be extended to retirees through an act of Congress.