Unless Congress overturns the president’s proposed 2-year pay freeze, federal workers will be forced to pay higher 2011 health premiums out of the equivalent of a 2010 paycheck. And in 2012 their take-home pay would decrease even more.

For federal retirees it is even tougher. They haven’t had a cost of living adjustment since January, 2009. And they won’t get one in 2011 either!

Fortunately (if you can call it that) the bad pay news hit this week, during the federal health insurance open season. That means you still have time (until Dec. 13) to shop and find an affordable health plan for 2011. Most federal workers and retirees have about 20 health plans to choose from. Some of the premiums next year will remain flat. Blue Cross’s popular standard option is going up 7 percent while others premiums will rise as much as 30 percent.

Walton Francis, editor of CheckBook’s Guide to Health Plans for Federal Employees says most feds can save $1,000 to $2,000 next year in premiums and out of pocket costs if they pick the best plan for them. Savings like that would, in many cases, offset the pay raise people will NOT be getting. He cites plans like Aetna CD-HD (consumer driven, high deductible) plan, Blue Cross basic (not standard), Kaiser standard, GEHA standard and HD, and Mail Handlers HD which could save family enrollees $1,000 to $2,500 next year.

Francis says the Mail Handlers Value Option still has the lowest premium ($860 for self only) making it a good deal for young, healthy low wage earners. But he said Kaiser standard $990 per year, “is a much better buy.”

Setting up a Flexible Spending Account “can save almost anyone two or three hundred dollars next year, and many a lot more than that,” he says. FSAs are deducted from your paycheck on a pre-tax basis. They can be used for a variety of prescription drugs and other medical supplies (and copayments) not covered by your health plan.

If you have a family of three, he says your average savings next year would be $2,500 if you picked APWU CD plan and that you could save anywhere from $1,400 (GEHA standard PPO) to $1,900 in Blue Cross basic or the MD-IPA HMO plan. Francis says savings for a single person enrolling in any of those plans would range from $1,500 to $600.

Francis was our guest yesterday on our Your Turn with Mike Causey radio show. He spent an hour covering everything from Medicare, to the little-known Health Savings Accounts (which he loves). If you missed it or want to hear it again, it is archived on our home page. You can click here to listen now.

Exempt From Pay Freeze

Kris of the IRS, like many other feds, says “can you explain why members of Congress and employees of the Postal Service will be exempt from the freeze?”

Yes: Short answer is that since the 1970s the highly-unionized postal workers have bargained separately over wages and some working conditions. The USPS is not a high-wage federal operation and it’s been having money problems for years. The contract between the USPS and the American Postal Workers Union expired yesterday. The postal service is seeking concessions. So while postal workers are “exempt” from the freeze, they aren’t exactly basking in sunshine either.

Lisa C, a postal worker in Portland, wants to know if members of Congress will get a raise next year?

Short answer: No. No raise over their dead bodies. The last thing understandably nervous members of Congress, whether lame ducks or goslings, need would be the bad publicity and public outrage of a congressional pay raise.

More questions about the proposed pay freeze? You may find the answers here, or send them on! mcausey@federalnewsradio.com

Nearly Useless Factoid
by Suzanne Kubota

“Military personnel were 28 percent more likely to report having trouble falling asleep or staying asleep during deployment, when compared with those who had not yet deployed,” reports LiveScience. And that may well be the nuffiest NUF ever.

MORE PAY AND BENEFITS NEWS
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The White House deficit commission released a plan Wednesday that contains policies that would impact federal pay and benefits. Vote in our poll about whether or not you agree with the recommendations.

More answers to your pay freeze questions
Have questions about how the pay freeze affects you? Check out our Q&A.

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