TRICARE's High Price Tag Comes Under Scrutiny

• By Kellie Lunney
• January 17, 2013
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The military’s massive health insurance program offers millions of service members, retirees and their dependents quality care at relatively low cost. That’s what the government aimed for when it created the Civilian Health and Medical Program of the Uniformed Services in 1966, now known as TRICARE. But the price of that success has been high for Uncle Sam: The $53 billion program now consumes 10 percent of the Pentagon’s nonwar budget.

TRICARE premiums for beneficiaries have not kept up with inflation and the overall increase in health care costs during the past two decades. Congress agreed to raise TRICARE Prime annual enrollment fees for retirees in 2011 -- the first time the fees have gone up since 1995. Active-duty service members and their dependents do not pay for health care under TRICARE Prime.

Retired TRICARE Prime beneficiaries now pay between $39 and $79 more in annual fees than they paid nearly two decades ago. At the end of 2012, Congress rejected an Obama administration proposal to tie TRICARE fees to retired recipients’ income and impose higher co-payments for pharmacy drugs. Instead, lawmakers capped pharmacy co-pays beginning in 2014, aligning them with the annual retiree cost-of-living adjustment. Also nixed ...

Mass Confusion Over Mass Transit

• By Kellie Lunney
• January 10, 2013
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In last week’s column, I talked about some pay and benefits-related issues that took effect on Jan. 1 (and a few that didn’t). The boost in the mass transit subsidy attracted a lot of interest from federal readers, many of whom commute to work on public transportation.

Congress included a provision in the fiscal cliff deal that restores parity between the mass transit subsidy benefit and the current parking benefit for commuters. The mass transit benefit fell to $125 per month in 2012 because Congress failed to extend it; the new law increases that to $240 per month through 2013, matching the current parking subsidy for commuters. But the legislation makes the increase retroactive to Jan. 1, 2012, leaving many people confused as to what that means, practically speaking.

It’s still not clear what the retroactive portion of the provision means, so the Obama administration (most likely through the Internal Revenue Service) will have to issue guidance clarifying the situation. Employers with participants in the program who made both pre- and post-tax elections likely will be able to recalculate pre-tax elections back to the retroactive date, said Jody Dietel, chief compliance officer for WageWorks, a California-based company ...

Pay and Benefits, Post-Holiday and Post-Cliff

• By Kellie Lunney
• January 3, 2013
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The last week has been a blur for everyone tuned into the fiscal cliff drama. The marathon legislative sessions on Capitol Hill between Christmas and New Year’s Day produced lots of federal compensation news but because of the evolving nature of the debate, it was tough to keep track of what actually squeaked through.

Here’s a recap of what happened this past week regarding some federal pay and benefits:

• House-backed pay freeze extension: The big federal compensation news this week was the last-minute legislation the House passed to extend the salary freeze on civilian feds through 2013. Republican lawmakers managed to push through a bill on New Year’s Day that would block a scheduled salary increase for federal employees this spring, as well as prevent a raise for lawmakers from taking effect. But the new Congress convenes at noon on Thursday, making Senate action on the pay freeze extension legislation extremely unlikely.
  
  That means the 113th Congress will have to start from scratch on any legislation that addresses federal pay. The current civilian federal pay freeze expires on March 27, when the continuing resolution funding the government runs out. It’s highly likely that Republican lawmakers in ...

Diet COLA Likely for Retirees

• By Kellie Lunney
• December 20, 2012
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In last week’s column, I talked about the possibility that a fiscal cliff deal could include switching to a less generous formula for calculating cost-of-living adjustments for retirees. This week, that became a probability.

President Obama and House Speaker John Boehner, R-Ohio, are still trying to agree on a mutually satisfactory combination of tax revenue increases and spending cuts to avoid the looming fiscal cliff. As of 4:04 p.m. on Dec. 19, it remained to be seen whether a) there will be a deal before the New Year, or b) if there is a deal, what it will include and how specific (or not) said deal will be. But both sides reportedly agree on one thing, as I reported Monday: Retirees are going to see lower increases in their future COLAs.

A switch to the chained CPI, as it’s known inside the Beltway, over time would result in lower COLAs for retirees, including federal and military retirees. The change also would affect veterans’ benefits and disability insurance benefits. COLAs currently are determined using a formula that takes into account increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers, but some experts argue ...

Chained to the Fiscal Cliff?

• By Kellie Lunney
• December 13, 2012
• comments

Here we are again, back in that old, familiar Washington place known as Down to the Wire.

With 19 days left until the end of the year, and even less time for cutting a deal on the fiscal cliff, President Obama and Republican House Speaker John Boehner reportedly are in their second round of the deficit reduction offer-counteroffer game.

The Republican and Democratic proposals aren’t long on specifics but both sides seem to be drawing on ideas they (and others) have floated before. Boehner’s opening parry after the White House released its first “offer,” included reducing federal pay and benefits as a way to help shrink the deficit. His second counteroffer reportedly is similar to the first one. (Second verse, same as the first.) Specifically, Republicans have called for extending the federal pay freeze, decreasing the government workforce by 10 percent through attrition and requiring feds to contribute more to their pensions. The pension proposal also is something Obama supports, although the contribution amounts from feds would be smaller under the administration’s plan.

Still, it’s looking more like any deal made before the New Year will be broad, and quite likely, short-term. In other words, there ...