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Washington, D.C.—President Colleen M. Kelley of the National Treasury Employees Union (NTEU) today praised the announcement by the Office of Personnel Management (OPM) that federal employees will not have to pay to participate in a new program that will allow them to save money on out-of-pocket health and dependent care costs. NTEU has long advocated for a Flexible Spending Account (FSA) program for federal employees.

Under the FSA program, employees are permitted to deduct specific amounts from their pretax earnings to be used for such costs. As qualifying expenses are incurred, the employee is reimbursed from his or her own pre-tax money.

OPM has encouraged agencies to pay the administrative fees associated with the FSA program from the FICA and Medicare tax savings they will accrue by not paying these taxes on salary amounts employees place in FSAs. NTEU, which had advocated that solution, objected several weeks ago when OPM said that under a contract with a private company to administer the program, federal employees would have to pay to take part.

President Kelley noted at that time that neither the Postal Service, which has administered an FSA for many years, nor private sector employers charge their workers to participate in FSA programs.

President Kelley also applauded OPM’s announcement that it would begin accepting employees’ enrollments today and has extended the FSA open season until June 27. The FSA program will still begin July 1 for employees at most federal agencies.

Employee deductions of up to $3,000 will be allowed for the health care account; the dependent care account can be used to set aside as much as $5,000 to cover such costs as child care expenses.

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