House leader to seek boost in health premium subsidy

House Majority Leader Steny Hoyer, D-Md., on Tuesday said he plans to introduce a bill again that would raise the amount the government contributes to federal employees' health care premiums.

The measure would raise the percentage of premiums covered by the government from 72 percent to 80 percent. This would in turn reduce the burden on Federal Employees Health Benefits Program enrollees, whose premiums increased an average of 2.3 percent this year -- a much smaller jump than in years past.

"Let's at least try to enhance the take-home pay of our federal employees. . . . it will help recruit and retain the people in the federal service that we need," Hoyer told an audience of more than 300 National Treasury Employees Union members at the start of the union's three-day legislative conference.

Hoyer pointed to a 1980s study that concluded FEHBP did not compare favorably to health care plans offered in the private sector. Since, then, Hoyer said, the dynamics have changed, and the federal plan is now highly regarded. But he cautioned that FEHBP "has not gotten better. . . . what has happened is the private sector plans have gotten worse."

The Maryland lawmaker introduced a similar bill last session of Congress (H.R. 633), which did not make it out of the Government Reform Committee. But he has more clout now that he is majority leader.

Hoyer's renewed effort comes as the Bush administration signaled through a proposal in the fiscal 2008 budget that it would like to reduce the amount the government contributes to FEHBP premiums for new retirees who worked for the government less than 10 years.

A new report from the Congressional Budget Office on the budgetary implications of various policy options noted that the government could save money by decreasing the share of premium costs covered by 2 percentage points for every year of service fewer than 20.

The report stated that about 14 percent of the nearly 85,000 federal retirees who continue in FEHBP each year have careers shorter than 20 years. Reducing the government's share of premium costs for these employees would result in savings of about $770 million over 10 years, CBO said.

Hoyer also pledged in his speech that Democrats would pass all of the appropriations bills on time this year so that the annual federal pay raise is not "left on the table."

Hoyer said the government has failed to comply with the 1990 Federal Employees Pay Comparability Act, which aims to pay federal employees close to what they would receive in the private sector.

The "president has done something good" by backing pay equity between members of the uniformed services and civilian personnel, Hoyer said. But the essential step, he argued, is ensuring that the federal pay raise provides employees with at least 95 percent of what their counterparts in the private sector earn.

Hoyer also addressed ongoing concerns over a Bush administration initiative encouraging agencies to let contractors bid on federal jobs. He said contracting out government work may show savings in the short term, but costs eventually escalate to beyond what they would have been if federal employees remained in the jobs.

"If we're going to privatize … if the taxpayer and the country are going to be protected, we need to make sure that federal employees have the right to compete for that job on a fair and even basis," Hoyer said.

Finally, Hoyer praised NTEU for its work on a lawsuit challenging proposed Homeland Security Department labor relations reforms. A federal court has ruled that the proposed system would illegally curtail collective bargaining rights by giving managers the ability to cancel negotiated agreements.

"We have put the administration back legally where we couldn't put it politically," Hoyer said.

In an address to union members, NTEU President Colleen Kelley outlined priorities similar to Hoyer's, including fair pay for federal employees, affordable health care and an end to outsourcing of government work. She also backed the elimination of pension offsets that reduce the Social Security benefits some federal retirees are entitled to receive from their spouses, a return to stronger labor-management partnerships and an expansion in the number of employees designated as law enforcement officers and thereby eligible for more generous retirement benefits.

The legislative conference will include Capitol Hill lobbying visits by NTEU chapter leaders and will conclude with a luncheon address on Thursday by Rep. Chris Van Hollen, D-Md.