3.5% pay increase for federal workers

I understand that we are receiving higher pay but I also wonder how much of that extra $$$$ will be going towards a higher premium rate for our health insurance? This article does a good job summing up the issues regarding federal pay and its increase:

Federal employee pay always generates interest and controversy. Are federal employees paid too much? Not enough? Should all federal employees get an automatic pay raise each year as long as they are still showing up for work? Should their pay be more closely tied to performance?
In looking through articles on the FedSmith site covering the past several years, the ones with the most comments, the most controversy and the most traffic are almost always those concerning pay. The only topic that comes close was an article a couple of years ago announcing an extra and unexpected day off during the Christmas season.
Here is some good news about the 2008 pay raise. The House has approved the Financial Services Appropriations bill for 2008. It contains authorization for an average federal pay raise of 3.5% in 2008. That does not mean the figure will be final or that you will know the actual amount of your raise until late this year or early in 2008. It does mean that the 3.5% average pay raise has is on a path to be the final, approved figure.
Taxpayers often resent federal employees when they consider the pay and benefits they receive. When most Americans read or hear that the average federal employee compensation (including pay and benefits) is about $106,000, you can expect to see a jaw dropping photo opportunity followed by an irate explanation of how the federal government is ripping off the honest, average American taxpayer who will only take in about $53,000 (including pay and benefits). (Here are the 2007 GS pay rates.)
And, when many or most federal employees read that same statistic, you can expect an expression of disbelief from some; a statement from others that federal employees are better educated, have more expertise and work harder and are actually underpaid for the work that the do; or that the statistics are the product of a conspiracy to make federal employees look bad and must have been compiled by someone working for OPM or the Bureau of Labor Statistics or the Cato Institute with a political agenda lurking somewhere in the spreadsheet.

The reality is that a conclusion about whether federal employees are paid too much or too little depends on several factors. The most important of these are the financial interests of the person making the judgment; the job and geographic location of the federal employee; the relative financial status of the person receiving the information; the person's knowledge (or lack thereof) about how the government works and how it is structured; and the underlying political ideology of the person evaluating the information.

"The work that these men and women do is critically important, and their compensation and treatment in the workplace needs to fairly reflect that. I commend the House of Representatives for approving these provisions, which not only recognize the value of the federal workforce, but will no doubt strengthen the government's ability to recruit and retain the best and the brightest." (I whole-heartedly agree)