Home Media Center News Releases

Washington, D.C.—In the face of a double-digit increase in federal health insurance premiums for the fourth year in a row, the nation’s largest independent union of federal workers will redouble its efforts to secure legislation that would increase the government’ share of employee health care costs, the leader of the nation’s largest independent union of federal workers said today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) was reacting to the announcement by the Office of Personnel Management (OPM) of an average increase of 10.6 percent in Federal Employees Health Benefits (FEHB) Program rates for 2004. The average increase for 2003 was 11.1 percent.

OPM blamed the rate increases on increased utilization, medical cost inflation and increased prescription drug costs.

“Whatever the reasons,” President Kelley said, “these continued double-digit increases not only are unfair to federal workers in that they far outstrip any pay increase they receive, they serve as a serious impediment to successful recruiting and retention efforts by the federal government.”

One way to ease the burden on employees and improve government hiring efforts, she said, is by passing legislation that would increase the government’s contribution toward employee health care benefits to an average of 80 percent—which is the figure commonly paid by other large employers, including many state and local governments.

President Kelley noted with approval the OPM announcement that FEHB, which is the nation’s largest health insurance plan, would offer 17 new plans in 2004. However, she expressed reservations about two new consumer-driven plans, calling them “too closely-related” to Medical Savings Accounts (MSAs), which reward individuals for not using health care services.

Under consumer-driven plans, she said, those with high medical expenses or chronic illnesses can find that they must pay a higher percentage of their medical expenses from their own pockets than if they were enrolled in one of the more traditional health plans. NTEU has voiced its strong opposition to such plans in the past.

On a related matter, the union leader said that the 10.6 percent FEHB premium increase, which translates into an average monthly increase of $24 for health insurance for the average federal employee with family health coverage, “makes it all the more imperative” that Congress approve a minimum 4.1 percent pay raise for federal workers.

Both a key Senate committee and the full House of Representatives have approved such a pay increase for federal civilian employees in 2004, which would match the proposed 4.1 percent increase slated for members of the military.

The administration, however, continues to support only a 2.0 percent increase for the federal civilian workforce.

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