Bills to allow pre-tax insurance payments introduced

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Bills to allow pre-tax insurance payments introduced



Senator John Warner (R-VA) and Congressman Tom Davis (R-VA) have reintroduced their bills (S.484 and H.R. 994, respectively) that would allow certain insurance premiums to be paid with pre-tax dollars.

The bills would affect active and retired service members and survivors who pay Tricare Prime enrollment fees, Tricare Standard supplement insurance premiums and Tricare dental premiums.

The bills would also allow federal retirees to pay Federal Employees Health Benefits Plan (FEHBP) premiums with pre-tax dollars. This "premium conversion" plan deducts premiums from paychecks before federal and state income taxes are calculated.

This saves the beneficiary anywhere from 25 to 40 percent of the premium cost in taxes, according to calculations by the Military Officers Association of America.

This benefit has been extended to current Federal employees who participate in FEHBP since 2000 and is already available to employees of the vast majority of large private sector firms. ...(Air Force Retiree News)