Norton Bill Provides Major New Insurance Benefit for Federal Workers (09/29/2010)

Norton Bill Provides Major New Insurance Benefit for Federal Workers

September 29, 2010

WASHINGTON, DC -- Congresswoman Eleanor Holmes Norton (D-DC) introduced a bill today to offer federal employees disability insurance at no cost to the federal government. Disability insurance replaces a portion of the income of a person unable to work because of a non-work related injury or illness. "Without disability insurance, workers who become disabled and cannot work, are at risk for financial ruin, even if they are only out of work for a few months," Norton said. "Although federal employees do have good health insurance, it does not replace lost income when they are unable to work. My bill provides an important safety net for federal employees who desire this protection."

Unlike many private employers, the federal government does not offer its employees disability insurance. The government provides non-work related disability benefits to federal employees, but these benefits do not protect the income of employees who become disabled but are able to return to work before one year, or have not been employed by the federal government for at least 18 months. Under current law, federal employees hired before 1984 who become disabled for more than a year are eligible for disability retirement if they have five years of creditable civilian service, while federal employees hired after 1984 who become disabled for more than a year are eligible for disability retirement if they have been employed for more than 18 months.

Congresswoman Norton began investigating disability insurance when she learned that many federal employees in fact purchase such insurance as individuals, but they pay higher premiums in the individual private marketplace than they would under Norton's bill because they do not have the purchasing power of the federal government. Moreover, federal employees, like any other employee trying to buy individual private disability insurance, may be denied coverage altogether because of pre-existing conditions, which would not be permitted under Norton's bill. Norton's bill like the existing federal employee benefits for dental and vision insurance, would require federal employees to pay 100 percent of premiums.