MEETING WITH DEPARTMENT OF LABOR RE: FLEXIBLE BENEFITS PLAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00530R000701650016-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 27, 2016
• Document Release Date: March 13, 2013
• Sequence Number: 16
• Publication Date: September 21, 1988
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2013/03/13: CIA-RDP90-00530R000701650016-1
MEMORANDUM FOR THE RECORD
FROM:
Chief, Flexible Benefits Branch
21 Sept 88
SUBJECT: Meeting with Department of Labor Re: Flexible Benefits Plan
1. On Monday, 19 December 1988 a meeting was held with the Department of
Labor (DOL) in their downtown headquarters to discuss Flexible Benefits
Programs. Attending the meeting were Larry Goodwin, Director of Personnel,
Cecilia Banks, Deputy Director Personnel, Tony Spehar, Chief of Benefits, and
Mike Griffen, Comptroller's Office from DOL, Tom Leuter, GAO and
and I, CIA.
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2. The meeting was precipitated by some information I had received
several days ago that DOL was seeking, from OPM, approval to launch a
demonstration flex program. The purpose of the meeting was to exchange
information on proposed programs and to obtain any possible views from GAO
regarding these efforts.
3. Basically the DOL flex program proposal consists of allowing employees
to begin health premium deductions on a pre-tax basis and to elect to
participate in two flexible spending accounts - one for unreimbursed medical
expenses and the other for dependent care. Both of these accounts would have
a limit of $5000. The Agency proposal, which is more conservative, has a
$5000 maximum on dependent care expenses but limits unreimbursed medical
expenses to $2500. We choose the lower amount because of a concern about
meeting Section 89 guidelines involving discriminatory benefits for higher
paid personnel. DOL thinks that it can argue that they are exempt from this
provision since they engage in collective bargaining with their workforce. (A
possible loophole according to
4. Since DOL is a Title V Agency, their proposal is based on their
staying in the Federal Employees Health Benefits Program (FEHBP), unlike the
Agency proposal which is based on withdrawal and establishing a customized
menu of benefits. Their intention is to set up a control igroup of 500
employees outside the program and a testbed of 500 who would be in the program
and to compare the results and relative benefits.
Declassified in Part - Sanitized Copy Approved for Release 2013/03/13: CIA-RDP90-00530R000701650016-1
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5. At this point DOL has submitted their proposal to OPM and are awaiting
approval. The attached copy of an internal OPM memorandum contains some
interesting data. First it is interesting that the Director, (And suggested to
DOL that they might want to include in their proposal some additional benefits
not included in FEHB (single premium life insurance and short term
disability). Secondly, it surfaces two all important questions, i.e.:
a. Can a flexible spending account be established allowing pre-tax
treatment of employee health premiums and unreimbursed medical
expenses.
b. Can Can annuity computations and allowances continue to be 'based on gross
pay before salary reduction.
While we already have affirmative answers to these questions from OCG,
(who has coordinated them with IRS), this memo nicely gets the issues in the
open for the Title V Agencies. If OPM agrees with our opinions, and it is
difficult to see how they could not, we will be in an even stronger position
to defend the program to NAPA and the oversight committees.
6. Near the close of the meeting I. told Mr. Goodwin that his predecessor,
Frank Yeager, was one of our senior NAPA project leaders. He indicated that
he had lunch with Mr. Yeager every .couple of weeks and would mention his
program and our meeting at their next lunch. I offered to send him any
unclassified material we had discussed which would help them in their effort.
7. Following our meeting Mr. Spehar called and asked whether they could
know more about our program. I invited him to review our new unclassified
vu-graphs on Tuesday, 27 September.
Declassified in Part - Sanitized Copy Approved for Release 2013/03/13: CIA-RDP90-00530R000701650016-1
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Declassified in Part - Sanitized Copy Approved for Release 2013/03/13: CIA-RDP90-00530R000701650016-1
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