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By Stephen Losey - Staff writer
Posted : Wednesday Feb 25, 2009 17:56:23 EST

Military and federal civilian retirees would be able to pay their monthly health care premiums with pre-tax dollars under a bill introduced Wednesday.

Active federal employees now pay their premiums with pre-tax dollars under the so-called premium conversion benefit. One of the bill’s sponsors, Rep. Gerry Connolly, D-Va., said extending the benefit to retirees is only fair.

“In these trying economic times, the need has never been greater to make health insurance more affordable for federal and military retirees,” Connolly said in a statement. “Federal and military retirees lose ground every year as health insurance premiums skyrocket, and this premium conversion bill will provide them with much-needed tax relief.”

Lawmakers say expanding premium conversion to retirees would save each participant $820 per year.

The bill would also allow active-duty military members to apply a pre-tax rebate to the supplemental insurance premiums many service members purchase to cover gaps in Tricare coverage.

The Federal and Military Retiree Health Care Equity Act is co-sponsored by 15 other lawmakers. Sen. Jim Webb, D-Va., plans to introduce a similar bill in the Senate.