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Testimony TimeMOAA and The Military Coalition address SBP, concurrent receipt, health care, force levels, and family issues in armed services committee hearings. On April 5, Col. Steve Strobridge, USAF-Ret., director of MOAA’s Government Relations Department and cochairman of The Military Coalition (TMC), presented TMC testimony about personnel and compensation issues before the Senate Armed Services Personnel Subcommittee. Also testifying were Joyce Raezer of the National Military Family Association and Deirdre Holleman of The Retired Enlisted Association.
MOAA Testimony Highlights
* Increase Army and
Marine Corps staffing. * Fix Survivor Benefit Plan inequities. * Expand concurrent * Improve Reserve health care and retirement. * Upgrade health care
* Increase family support funding. * Authorize flexible spending accounts. In March, similar testimony was provided to the House Armed Services
Military Personnel Subcommittee. A panel of DoD and service
personnel leaders also testified at the same hearings.
Testimony by DoD and service personnel leaders focused on
recruiting and retention issues—urging increases in bonuses and
other lump-sum payments to meet recruiting and retention goals.
Officials also downplayed the significance and severity of
recruiting shortfalls, even while acknowledging that meeting
recruiting goals continues to present a challenge, especially for
the Guard and Reserve. A Premium MomentWarner, Davis push pre-tax health premium payments.
Why Deny Troops Pre-Tax Savings?
Flexible spending accounts and pre-tax premium payments offer hundreds
or thousands of dollars in annual savings. A person in the 28-percent
federal tax bracket with a 4 percent state income tax must earn $1,470
before income and payroll taxes to pay each $1,000 of covered expenses
in post-tax money.
“Premium conversion … is an important benefit that must rightfully be extended to our annuitants, and I am proud to again take the lead on this important legislation,” said Davis. “This is an equity issue,” Ryan added. “We are one team [civil service and military] with the same mission—service to the nation.” To urge your senators and representative to cosponsor these bills, please visit MOAA’s Web site at http://capwiz.com/moaa/issues/bills. Click on the links to S. 484 and H.R. 994, (scroll down to “Health Care Issues”) and enter your ZIP code in the box. MOAA also is actively seeking both premium conversion and flexible spending accounts (FSAs) for military servicemembers. Ninety percent of private sector employers, and more recently the federal civil service, allow their employees to pay dependent and health care expenses on a pre-tax basis. FSAs let employees set aside pre-tax money from every paycheck for those specific purposes. Exempting this money from federal and state income tax and Social Security and Medicare payroll taxes saves employees 20 percent to 40 percent or more, depending on tax rates. DoD, however, has yet to keep pace with changing expectations of the workforce by implementing family-friendly services such as FSAs. If the Office of Personnel Management can offer FSAs to federal civilian employees, and virtually all large corporations can do so for millions of private sector employees nationwide, servicemembers should have the same options. Given the tremendous personal and financial sacrifices servicemembers’ families are making in supporting their country, they deserve nothing less. As the largest employer in the country, it seems reasonable for DoD to get in step with the rest of the industry and the federal civilian workforce. Key Issues MovingCongress considers death benefits, VA funding, and Reserve tax credits.
Don’t Split Hairs on Death Benefits
MOAA agrees with service leaders’ testimony that the same survivor
benefit rules should apply for all active duty deaths. Survivors whose
sponsors died of service-connected causes are no less deserving if the
death didn’t occur in combat.
The Senate version of the Budget Resolution also included Sen. Mary Landrieu’s (D-La.) plan to provide significant tax credits for employers who make up pay differentials for employees whose military pay is lower than their civilian salary. Landrieu’s initiative would provide such employers tax credits equal to 50 percent of the salary differential payment. It also would provide tax credits to help compensate employers who have to hire temporary workers during periods when the permanent employee is mobilized. House and Senate leaders now will have to negotiate these and other differences between their respective versions of the resolution in hopes of winning full congressional passage of a compromise resolution. At press time, they still had hopes of accomplishing that by the end of April. The House also approved its version of the FY 2005 Emergency Supplemental Appropriations Act (H.R. 1268) before the Easter recess, including better benefits for families of people killed on active duty. The House bill would increase the military death gratuity to $100,000 and increase military life insurance coverage to $400,000. Currently those coverages are limited to $12,000 and $250,000, respectively. The House plan would provide retroactive benefit increases to survivors of certain servicemembers killed on active duty since Oct. 7, 2001—the official start date of the war on terrorism. It would pay the extra $88,000 death gratuity when the death on active duty was a “direct result of an injury or illness ... incurred in Operation Enduring Freedom or Operation Iraqi Freedom, as determined under regulations prescribed by the secretary of defense.” The additional $150,000 insurance coverage (in the form of a special death gratuity) would be paid to families of servicemembers who died as a direct result of illness or injury incurred “in performance of military duty” as determined by the secretary of defense. Military officials we’ve spoken to are concerned about the prospect of being forced to make hair-splitting decisions in defining what deaths meet the “performance of duty” criteria—such as how to determine whether a heart attack suffered in bed was a result of the stress of military duty. MOAA and uniformed services leaders had urged Congress to authorize the benefits for all servicemembers who died in the line of duty—the more traditional rules that assume active duty deaths are duty-related in the absence of misconduct or other disqualifying circumstances. At press time, the Senate was expected to take up action on the supplemental appropriations measure in April, following the Easter recess. SBP Needs CosponsorsContact your legislators to end inequities.
Push Your Legislators for SBP
Col. Lee Lange, USMC-Ret., deputy director of MOAA’s Government Relations Department, explained how survivors lose a dollar in SBP benefits for every dollar of Dependency and Indemnity Compensation (DIC) paid by the VA when the death is caused by military service. In many cases, these survivors are left with annuities of only $993 a month. The briefings also highlighted how Congress penalized older retirees by delaying the effective date of 30-year, paid-up SBP coverage until 2008. Retirees who signed up for SBP in 1972 will end up paying six years longer and 34 percent more SBP premiums than a member of the same grade and years of service who retired in 1978. Sens. Bill Nelson (D-Fla.) and Jon Corzine (D-N.J.) have joined to sponsor legislation (S. 185) that would fix both problems, effective Oct. 1, 2005. In the House, Rep. Henry Brown’s (R-S.C.) H.R. 808 would end the SBP-DIC offset. Rep. Jim Saxton’s (R-N.J.) H.R. 968 would move up the effective date of paid-up SBP. The latter two bills also would make the changes effective Oct. 1, 2005. We need a flood of grassroots input to push legislators to cosponsor these bills. Visit MOAA’s Web site at http://capwiz.com/moaa/home and click on “Cosponsor SBP Fixes” to send your senators and representative an MOAA-suggested message. Alternatively, call MOAA’s toll-free Capitol Hill hot line, (877) 762-8762, and ask your senators to cosponsor S. 185 and your representative to cosponsor both H.R. 808 and H.R. 968 Reserve Health Care Kick-OffDoD announces April implementation.DoD has issued new rules for TRICARE Reserve Select (TRS), its
new health coverage plan for eligible members of the Selected
Reserve (members of the National Guard or Reserve components who
regularly train).
Servicemembers still serving on active duty after the April 26
implementation date must sign a TRS agreement prior to release from
active duty.
MOAA thinks Congress should expand TRS eligibility to cover all
members of the Selected Reserve, and is hopeful this can be
accomplished in upcoming consideration of this year’s Defense
Authorization Bill. Focus on “Chapter 61”Bill seeks equity for combat-disabled early retirees.
Fighting for Fairness
MOAA is seeking full concurrent receipt for combat-disabled retirees
forced to retire with less than 20 years of service and for those rated
“unemployable” by the VA.
Currently, only servicemembers who served long enough to retire independent of any disability are eligible for Combat-Related Special Compensation. A servicemember with 20 years of service and a 10 percent combat-incurred disability has no retired pay offset for that disability. But a 100 percent combat-disabled servicemember forced to retire with 19 years and 11 months of service loses $1 of retired pay for each $1 received from the VA. Bilirakis’ new bill would protect the share of retired pay such members earned by service. It would exempt from the VA offset an amount of retired pay equal to 2.5 percent of highest 3-year average basic pay times years of service. A servicemember who is disability-retired for combat wounds with 15 years of service would retain 37.5 percent of high-3 average basic pay from DoD in addition to his or her VA disability compensation. In other concurrent receipt news, DoD still has not announced whether otherwise qualifying disabled retirees with “unemployable” ratings from the VA (and therefore paid at the 100 percent disabled rate) will be accorded immediate full concurrent receipt along with retirees specifically rated 100 percent disabled by the VA. MOAA will report any decision when it is announced, and has asked Congress to act if DoD won’t do so. Few Rxs Will Have $22 CopaymentKey panels consider initial formulary recommendations.The TRICARE Uniform Formulary (UF) is coming this summer.
Patients can avoid incurring the higher copayments if their
physician documents that there is a medical necessity for a
particular patient to have the drug (e.g., because of adverse
reactions to other drugs). In that case, the $9 copayment still will
apply. New Age IssuesSaxton, Corzine reintroduce Reserve retirement bills.
Citizen Soldiers or Soldier Citizens?
The 55-year-old reserve retirement system assumed reservists would have
full civilian careers and retirement benefits. Now, that system needs
updating to recognize that vastly increased mobilization demands will
crimp reservists’ retirement credits.
In addition, Sen. Lindsey Graham (R-S.C.) has introduced his own “Guard and Reserve Readiness and Retention Act” (S. 337), which would reduce the reserve retirement age on a sliding scale. A reservist with 34 years of service could retire at 53; someone with 32 years of service at 54; and so on up to age 60 for those who have 20 qualifying years of service. Graham, a colonel in the Air Force Reserve, chairs the Senate Armed Services Subcommittee on Personnel, which should give the initiative more visibility than in the past. When it was built in 1948, the reserve retirement age of 60 was picked to coincide with the federal civilian retirement age. Now, federal civilians can retire at age 55, depending on years of service. Back then, its builders assumed reservists and guardmembers would have full-time civilian careers, with full civilian retirement coverage. But over the past 15 years, reserve call-ups have increased exponentially. Now Guard and Reserve members are told to expect an extended call-up (18 to 24 months) every six years. That can take 25 percent of their working lives. Inevitably, this pace of activation will cut their civilian retirement coverage, 401(k) contributions, and promotion and career opportunities. More than 430,000 Guard and Reserve members have been mobilized since Sept. 11, 2001. MOAA thinks the reserve retirement system must be updated to recognize the 21st century realities of Reserve service and sacrifice. — Contributors are Col. Steve Strobridge, usaf-Ret., director; Col. Mike Jordan, USAF-Ret.; Col. Lee Lange, USMC-Ret.; Col. Bob Norton, USA-Ret.; Sue Schwartz, DBA, RN; Cmdr. René Campos, USN-Ret.; Cmdr. John Class, USN-Ret.; Cynthia Dougherty; and Maria Tutino, MOAA’s Government Relations Department. |
