Newly Re-Elected NARFE Leaders Face a ‘Perfect Storm’ of Rising Premiums Hitting Federal Retirees

By on September 8, 2016 in Retirement with 40 Comments

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With members of the National Active and Retired Federal Employees Association facing a number of issues that could negatively impact federal retirees, delegates have re-elected Richard Thissen as their national president and Jon Dowie as their national secretary/treasurer.

NARFE National President Richard G. Thissen

NARFE National President Richard G. Thissen

“NARFE has been a strong advocate for federal employees and retirees for 95 years. I am excited to have this opportunity to lead the Association as we continue to fight on behalf of our nation’s active and retired civil servants,” said Thissen in a NARFE press release.

With the re-election of Thissen, NARFE is focusing on four big issues between now and the end of 2016:

  • WEP reform bill
  • Postal reform
  • Federal retiree COLA
  • Federal Long Term Care Insurance Program

WEP Reform

NARFE continues to make progress on H.R. 711, the bill to reform the Windfall Elimination Provision (WEP), according to Jessica Klement, NARFE’s Legislative Director. “There is a will in the Congress to get it done,” she explained.

Although NARFE continues to support the bill in its original form, the association is open to changes that will let everyone “get on board” with the reform that will provide some relief for both current beneficiaries through a reduced WEP penalty, and for future Social Security recipients.

Medicare and Postal Reform

NARFE’s main concern with postal reform is the requirement that current retirees to participate in Medicare in order to keep their FEHBP benefits.

For the 76,000 current postal retirees who do not have Medicare, NARFE believes that forcing them into Part B is bad in principle and sets a bad precedent.

“Once you retire, the rules for retirees should not change,” stated Klement.

In NARFE’s opinion, changing the rules after postal workers retire sets a bad precedent for all federal retirees that, if written into law, could be applied in the future to other plans, such as health insurance and retirement benefits.

The bill currently being considered by the House Committee on Oversight and Government Reform is most likely to be considered by the full House either in September or during the lame duck session after the November elections. Whatever passes in the House will be the substance of any Senate bill and be acceptable to the President, so making changes to the House bill is critical.

In shaping the legislation, postal unions may be more focused on saving post offices from closure and protecting current postal employees from layoffs rather than fighting for the rights of retirees.

2017 COLA

Although the final amount of the Federal retiree cost of living adjustment (COLA) will not be known until October, NARFE continues to be concerned that a small COLA increase will allow Medicare trustees to pass along a large increase in Medicare Part B premiums for federal retirees not protected under the “hold harmless” clause.

The Medicare trustees have calculated that a 0.2 percent COLA (which could result in an average increase of less than $10 per month) will allow them to raise the Medicare Part B premium from the current $121.80 to $149 per month or higher, depending on retirees’ income level.

The recently announced increases in the Federal Long Term Care Insurance Program continue to concern both current federal employees and retirees, and remains on NARFE’s priority list for this year.

FEHB Premium Increases

What isn’t known yet are increases in FEHB for 2017.

In 2016, FEHB rates rose an average of 6.4 percent. If health insurance premiums post a similar increase this year, along with a possible 22 percent rise in Medicare Part B rates, and Long Term Care Insurance rates that are averaging 83 percent, federal retirees might have to make some difficult choices in 2017.

“You could have a perfect storm of increases in FLTCIP, Medicare Part B, and FEHB rates all hitting retirees in January,” explained Klement.

Unfortunately, long term care insurance enrollees must make their premium decision by September 30th, before they know the amount of their COLA or how other insurance increases will affect them next year.

The amount of COLA, if any, along with Medicare Part B premiums, won’t be known until October, and OPM is considering delaying announcement of FEHB increases until after Congress recesses.

For the newly re-elected leaders of NARFE, these sizeable rises in retiree expenses mean a rocky start to their new two-year terms.

© 2016 Michael Wald. All rights reserved. This article may not be reproduced without express written consent from Michael Wald.


About the Author

Michael Wald is an independent economics analyst and writer based in the Atlanta area. He specializes in topics related to business, labor, and human resources. Prior to his retirement from the U.S. Department of Labor, he served as the agency’s Southeast Regional Director of Public Affairs and Southeast Regional Economist.