Feds are left out of excise tax compromise

[The Straight Story]

Feds are left out of excise tax compromise
By Alex M. Parker [e-mail] January 15, 2010

Federal employee groups fear that they are being left out of a health care reform compromise forged by unions and lawmakers to alleviate the effects of a proposed excise tax on insurance plans.

The deal, posted on the Web sites of the AFL-CIO and the National Education Association, would raise the premium threshold level at which a 40 percent tax kicks in, and exempt dental and vision coverage from the tax; both provisions apply to federal and civilian workers.

But a proposed delay in when the tax takes effect -- from 2013 to 2018 -- does not apply to most federal employees' health care plans.

"That's one of the things we're scratching our heads about right now," said Dan Adcock, legislative director for the National Active and Retired Federal Employees Association. "We're concerned that the tentative agreement could leave out federal workers and retirees."

The five-year window applies to health care plans that are part of collective bargaining contracts, as well as the plans of state and local government workers. Even though many federal workers are union members, in all but a few cases, their health care plans aren't part of the bargaining contracts, and the unions aren't involved in negotiating for those benefits.

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