Van Hollen, Wolf and Connolly Introduce the Federal and Military Retiree Health Care Equity Act

Press Release

Bill Provides Much Needed Health Care Premium Tax Relief to Federal Retirees and Military Personnel

Today, Congressman Chris Van Hollen (D-MD), Congressman Frank Wolf (R-VA), and Congressman Gerry Connolly (D-VA) introduced the Federal and Military Retiree Health Care Equity Act. The legislation would allow federal civilian and military retirees to pay their monthly health care premiums using pre-tax dollars; the current law allows premium conversion for active federal employees and private sector workers. Also, it would allow active duty military members to apply a pre-tax rebate to the supplemental insurance premiums most purchase to cover gaps in TRICARE. Estimates have shown that premium conversion would result in a savings of approximately $820 per participant each year.

This bill has broad, bi-partisan support, and has been endorsed by the National Active and Retired Federal Employees Association (NARFE), the Military Coalition, the National Treasury Employees Union, the Military Officers Association of American, the National Association of Postmasters of the U.S., the Professional Aviation Safety Specialists, the National Federation of Federal Employees, the National Association of Government Employees, the National Rural Letter Carrier Association, the National Postal Mail Handlers Union, the American Foreign Service Association, the American Postal Workers Union, the National League of Postmasters and the American Federation of State, County and Municipal Employees. Similar legislation will be introduced today in the U.S. Senate by Senator Jim Webb (D-VA).

"There is no question Americans are suffering from the astonishingly high costs of health care. This is a heavy burden for anyone, but it is especially difficult for individuals living on a fixed income. I am proud to work with Congressman Wolf and Congressman Connolly on this bi-partisan legislation that would help federal civilian and military retirees save hundreds of dollars every year. Not only will this have a real positive impact on thousands of Marylanders and Americans, but this savings will translate into money that will immediately go back into our economy," said Van Hollen.

"I am proud to support this legislation to extend premium conversion benefits to our nation's federal retirees," Wolf said. "By allowing federal retirees to pay for insurance with pre-tax dollars, we can help make health care more affordable and help retirees offset some of the rising insurance premiums. I know that many of my constituents in Virginia's 10th District will greatly benefit from this legislation."

"In these trying economic times, the need has never been greater to make health insurance more affordable for federal and military retirees," Congressman Gerry Connolly said. "Federal and military retirees lose ground every year as health insurance premiums skyrocket and this premium conversion bill will provide them with much needed tax relief. It is a matter of equity. Our federal retirees deserve the same right to pay for their health insurance premiums with pre-tax dollars as current federal employees."

"On behalf of our nation's 2.3 million federal annuitants, I am happy to give the National Active and Retired Federal Employees Association's (NARFE) strongest endorsement to the premium conversion bill introduced today by our good friend, Congressman Chris Van Hollen, that would help retirees and survivors living on fixed incomes to bear the burden of escalating health care costs," NARFE President Margaret Baptiste said. "We are grateful to Congressman Chris Van Hollen, Congressman Frank Wolf and Congressman Gerry Connolly for championing this important legislation," said Baptiste. "Introduction of the premium conversion bill is only one of many steps in a lengthy journey," she added, "but a very positive one nonetheless. And, because of the importance of this bill to federal civilian and military retirees, NARFE is determined to keep pushing until we reach the finish line - enactment."

"Federal retirees have watched their savings dwindle as their costs, particularly for health care, have risen by double digits. Rep. Van Hollen appreciates the strain this puts on retirees who can only stretch their dollars so far. His legislation allowing retirees to pay health care premiums with pre-tax dollars, as active employees do, is an important matter of fairness and another strong selling point for federal agencies in their recruitment and retention efforts," said NTEU President Colleen M. Kelley.

"Our nation's Postmasters commend Rep. Van Hollen for introducing legislation that would treat health benefit premiums similarly for active and retired Federal employees. It makes absolutely no sense to grant different tax treatment for exactly the same health benefits, depending on whether the individual is working or retired. If the benefit is tax-preferred, it should not discriminate based on employment status," said Dale Goff, President of the National Association of Postmasters of the U.S.

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