Pay & Benefits Watch Pay & Benefits WatchPay & Benefits Watch
Key developments in the world of federal employee benefits: health, pay, and much more.

Forever Young

Federal employees with grown children who have yet to leave the nest soon might be able to rest a little easier. An effort to move up the effective date of a health care reform provision allowing adult dependents to stay on their parents' health insurance plans longer is gathering steam.

This week a senator followed House lawmakers' lead by introducing a bill that would let the children of federal employees remain on their parents' health insurance until age 26, starting this year. Under the health reform law President Obama signed in March, the cutoff age would have increased from 22 to 26 in January 2011 for Federal Employees Health Benefits Program participants, due to laws that prevent the Office of Personnel Management from making midyear changes.

The benefit could help more than 2 million federal employees, according to Sen. Ben Cardin, D-Md., sponsor of the Senate bill. Cardin's legislation has gathered more than 10 co-sponsors, including Republican Sen. Susan Collins of Maine.

Cardin said the Congressional Budget Office has confirmed the measure will not cost anything.

The National Treasury Employees Union strongly supports the Senate bill and a version introduced in the House by Rep. Chris Van Hollen, D-Md.

"NTEU has worked hard to see health care coverage provided to dependents up to age 26," said Colleen Kelley, president of the union. "I am hopeful these measures will get the necessary support in the House and Senate, and that the change can be implemented in time to help federal families seeking this coverage this year."

Van Hollen said the bill will speed "emotional and financial relief for families in the often uneasy transition period from high school and college to the working world."

Rep. Gerry Connolly, D-Va., co-sponsored the House bill. "With college and high school graduations fast approaching, this legislation will ensure that federal employees can keep their sons and daughters on their health care plans now and save thousands of out-of-pocket dollars," he said.

TSP Jitters

Investors in the Thrift Savings Plan historically have been reactive to sharp dips in the Dow Jones industrial average, and their response to last week's bizarre stock market crash and rebound proved that again.

On May 6, the Dow plummeted 1,000 points, or about $1 trillion in market value, in about 20 minutes. Federal employees responded to the unexplained crash by shifting money around. Participants made 10,126 interfund transfers the day of the crash, and by the next day, the number had nearly doubled to 20,450. Investors seemed to be calming down early this week; they made 15,514 transfers on Monday and were down to 7,232 on Tuesday.

"At virtually every monthly meeting, board members bemoan the fact that some of our 4.3 million participants will react to day-to-day market movements," said Thomas Trabucco, director of external affairs for the Federal Retirement Thrift Investment Board. "They always reinforce that this is not limited to the TSP and is unfortunate, because these types of plans are designed for long-term investing rather than short-term trading or speculating in the markets."

The board continues to advise participants to wait out ebbs and flows in the market.

Pentagon Pay

Defense Secretary Robert Gates last weekend lamented growing Pentagon personnel costs during a speech in Kansas. But lawmakers don't seem to be on the same page yet.

During the House Armed Services Committee's markup of the fiscal 2011 National Defense Authorization Act on Wednesday, Rep. Susan Davis, D-Calif., chairwoman of the military personnel subcommittee, highlighted several pay provisions in the initial version of the policy bill.

One would mandate a 1.9 percent pay raise, 0.5 percent higher than President Obama's budget request.

"This is the 12th consecutive year of pay raises above [the Employment Cost Index] and this raise will further reduce the gap between military and private sector pay raises from a high of 13.5 percent during fiscal 1999 to 1.9 percent," Davis said.

She also advocated for increases in two types of critical combat zone compensation benefits -- hostile fire pay and family separation allowance -- which, Davis said, have fallen behind in value due to inflation since the last adjustment in 2004.

Committee Chairman Rep. Ike Skelton, D-Mo., worked to include a pilot program designed to extend the careers of officers by providing career-broadening assignments as well as new educational opportunities.

The bill still has a long way to go, and pay and benefits-related provisions are likely to change in the process. Government Executive will be tracking them closely.

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