What Is Fehb

The great downsizing has begun

Who out there thinks they will recognize the federal workforce a year from now?

As agencies scramble to come to terms with impending budget cuts in the next fiscal year, offers for early-outs and buyouts have begun to pop up. This week alone, both the Education Department and the Government Accountability Office have announced their intention to offer early-outs and cash incentives.

With fiscal pressures mounting, it’s not unreasonable to expect more offers to emerge in the weeks and months ahead. And given the antipathy shown toward feds by many in this Congress, it’s a fair guess that plenty of feds are ready to take those offers.

The biggest downsizing news to hit in the last few days, of course, belongs to the U.S. Postal Service, which wants Congress to let it void no-layoff provisions in its union contacts so it can get rid of 120,000 more employees by 2015 than it would lose through projected attrition.

USPS also is seeking permission to pull its employees out of the Federal Employees Health Benefits Program, as well as get them out of the federal government’s retirement systems. USPS asserts that it can do a better job running those programs for its employees.

Perhaps it can. But we were more intrigued by a phrase that appeared consistently throughout two white papers USPS sent to lawmakers suggesting the changes. The phrase may hold a clue as to how things will proceed — in a broader sense — from this point forward. The papers frequently cite “the private-sector comparability standard.”

For example: “The Postal Service does not believe that FEHB meets the private-sector comparability standard…a legislative change that allows the Postal Service to establish its own health benefits program would allow the Postal Service to fully incorporate private-sector best practices, saving money while also providing comparable benefits to employees.” In almost identical words, USPS makes the same case for exiting the two federal retirement programs.

Are FEHB premiums qualifed HSA expsenses? - FederalSoup.com

I think after age 65 you cannot contribute to an HSA but you can spend out of it tax free for the qualified medical expenses.  At age 65, you can then use the HSA funds to pay for Medicare premiums and I think the FEHB premiums.  Before 65, you cannot pay for the FEHB from the HSA funds (not tax free no matter what).  But the IRS might consider our FEHB premiums as medigap policies. Your Question Was:
I have a question about qualified expenses for tax-free withdrawals from an HSA account. If a person is over 65 and retired and the person is paying premiums for Federal Employee Health Benefits (FEHB), then are those premiums HSA qualified expenses? (Note that retirees cannot pay FEHB premiums with pre-tax dollars.) IRS Pub 969 seems to say that these are qualified expenses.


The Answer To Your Question Is:
Thank you for using our e-mail service. For the purpose of this response we will assume you are discussing a U.S. citizen who files Form 1040 yearly. Generally, health insurance premiums are not qualified medical expenses for your HSA unless the person is over age 65 and has paid the employee share for an employer provided health insurance for employees or retirees. It appears the premiums for FEHB are a qualified expense; they can use their HSA account to pay the premium due to their age. It appears there are no restrictions as long as they have met the age requirement for Medicare and the premiums are not a Medigap policy. We hope this information is helpful.

God Is Not Great, How Religion Poisons Everything

Tender is the night

The World Is Flat, A Brief History of the Twenty-First Century

U Is for Undertow

What Color Is Your Parachute? 2011, A Practical Manual for Job-Hunters and Career-Changers