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Retiree Pre-Tax Healthcare

What is it?
By law, federal retirees are not allowed to pay their health insurance premium with pre-tax dollars as federal employees are authorized. Federal employees pay their health insurance premiums with pre-tax dollars through a program called Health Benefit Premium Conversion. There is a legislative effort to allow federal retirees to pay their health insurance premiums with pre-tax dollars. In 2009, bills were introduced in the House of Representatives and Senate to amend the Internal Revenue Code of 1986 to allow federal civilian and military retirees to pay health insurance premiums on a pretax basis.

What has the Army done?
This is an initiative under the Army Family Action Plan (AFAP). Not allowing federal civilian and military retirees to pay health insurance premiums on a pre-tax basis is a financial burden on retirees. The AFAP recommendation is to authorize federal retirees to pay health insurance premiums on a pre-tax basis.

What continued efforts does the Army have planned for the future?
The Secretary of the Army and the Chief of Staff of the Army will continue to testify before Congress on the importance of the legislation to Army federal retirees. The Army monitors the status of the following legislation:

  • House Resolution 1203 was introduced and referred to committee on February 25, 2009. The resolution has currently been referred to the Committee on Ways and Means, the Committees on Oversight and Government Reform, and the Armed Services Committee.
  • Senate Resolution 491 was introduced and referred to the Senate Committee on February 26, 2009. The resolution has been read twice and referred to the Committee on Finance.

Why is this important to the Army?
Allowing federal retirees to pay their health insurance premium with pre-tax dollars reduces the financial burden on federal civilian and military retirees by extending an established benefit that is currently afforded to federal employees.

 
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