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Washington, D.C.—The long-time advocacy by the National Treasury Employees Union (NTEU) on behalf of a program to allow federal workers to set aside money on a pretax basis for certain medical and dependent care expenses has led to the first full-year open season during which employees can choose to participate in the program.

An early sign-up opportunity last July, when the program became effective, attracted more than 31,000 enrollees.

NTEU President Colleen M. Kelley was joined by Office of Personnel Management (OPM) Director Kay Coles James at a press briefing today at NTEU’s headquarters on Flexible Spending Accounts (FSAs). The 2004 open season will run through Dec. 8—the same time period covering an open season for enrollment or changes by participants in the Federal Employees Health Benefits (FEHB) Program.

“I applaud OPM and Director James for their leadership in making this important benefit available to federal workers,” President Kelley said. “I believe it will be an important tool in the government’s continuing efforts to recruit and retain the high-quality employees that are so critical to the delivery of services to the American people.”

FSAs, which are widely available in the private sector, permit employees to set aside money from their paychecks before it is taxed to pay for out-of-pocket medical and dependent care expenses

Annual savings could reach into the thousands of dollars, depending on an employee’s tax bracket and the amount of money set aside.

In late October, an IRS ruling made the FSA program even more beneficial. Effective next Jan. 1, participants will be able to use their accounts to pay for non-prescription medicines. Until that decision, drug reimbursement was limited to the purchase of prescription drugs.

NTEU worked for a number of years to bring FSAs to the federal workforce. Initially, FSA participants were going to have to pay the administrative costs of the program, but after NTEU raised serious questions about the fairness and necessity of making them do so, Director James issued a memo to all federal agencies encouraging them to pay these costs. All major Cabinet-level departments have chosen to pay such costs. In addition, Congress has now passed legislation requiring agencies to pay these fees on their employees’ behalf.

President Kelley noted that since the FSA and FEHB open seasons are running concurrently, information provided by health insurers on likely out-of-pocket medical expenses to be incurred in various health care plans should make it easier for FSA participants to determine the right amount of money to set aside for those expenses as well as dependent care costs.

In addition, she said, employees selecting an FSA for 2004 will have the option of signing up for an automatic reimbursement feature that will allow them to have out-of-pocket expenses reimbursed without the need to file claim forms.

As the largest independent federal union, NTEU represents some 150,000 employees in 29 agencies and departments.