With only 10 working days left in the Federal Employees Group Life Insurance open enrollment period, federal workers have been given an unusual warning -- from an unusual source -- about FEGLI premiums. This is the first time in about nine years that workers have had a chance to increase their coverage.
What's unusual about the "don't get ripped off" by FEGLI warning is its source.
The alert wasn't issued by private-sector insurance companies seeking more of the lucrative term life business of millions of civil servants.
Instead, the check-your-wallet warning comes from none other than Rep. John L. Mica (R-Fla.), former chairman of the House civil service subcommittee. That subcommittee, of the House Government Reform and Oversight Committee, has jurisdiction over the federal life insurance program. The program is run by the Office of Personnel Management. The government pays a fee to Metropolitan Life Insurance Co. to handle claims.
Mica, who moved to another subcommittee chairmanship this year, says many federal workers can get comparable coverage at a lower cost from any of a half-dozen competing private-sector insurers. His "Buyer Beware!" flier, distributed to congressional offices this week, compared FEGLI premiums with those offered by two private insurers. Mica said House rules prevent him from naming the companies. But any federal employee who checks out "insurance" in the Yellow Pages can find established firms offering term life coverage.
Although the warning comes from a high-ranking member of Congress, insurance companies -- especially those in the Washington area eager to play show-and-tell with Uncle Sam -- must be delighted with it.
Mica and many other Republican members of Congress have long sought to have more outside competition in the life insurance program. Mica's flier said "it is incredible that after 45 years of a single product monopoly in term life insurance, OPM can't offer the 2.7 million federal and postal employees and 2.2 million civilian retirees competitively priced life insurance premiums and readily available life insurance products."
Mica says OPM "derailed my efforts at life insurance reform in favor of conducting a study. What they found is that you want something better. You have until the end of the month. Take it from me, you don't have to wait for an OPM study to get a better offer from private markets."
The flier ends: "WARNING: BEWARE OF INFLATED FEDERAL EMPLOYEES GROUP LIFE INSURANCE PREMIUMS."
In the examples cited by Mica, private insurers offer biweekly rates that can save workers from 1 cent to 13 cents per $1,000 of coverage.
Mica's warning goes beyond life insurance premiums. It also was designed to emphasize what happens, according to GOP members of Congress, when the government runs a benefits program.
Republicans and Democrats each want a long-term care insurance program for federal workers and retirees.
Democrats want OPM to negotiate premiums and benefits. Republicans want the marketplace -- competition among insurers -- to set levels of premiums and benefits. Each side claims a victory by the other would mean higher rates or an inferior product for workers and retirees.
Mica's salvo at the life insurance program is clearly designed to illustrate his belief that private competition means a better deal. A union official who tangled with Mica when he was chairman of the civil service subcommittee, says the warning was motivated more by "his vendetta against OPM . . . than any concern about insurance premiums."
FEGLI is a real value for workers who otherwise can't get life insurance. But many experts say its premiums are too high for younger and middle-age workers with healthy lifestyles.
Monday's column noted that lawyers (and key support staff members) in the chief counsel's office of the Federal Aviation Administration had picked the American Federation of State, County and Municipal Employees as their bargaining agent. The FAA has been freed from many civil service constraints and can now bargain over pay as part of a new "core compensation" system.
The FAA's administrator recently assured agency employees, in writing, that none of them would suffer or take a pay cut because of the core compensation program. But the lawyers realized that there could be a different plan and a different administrator in the future. That's why they decided to unionize now.
Mike Causey's e-mail address is email@example.com
Thursday, June 17, 1999