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TRICARE Fee Hikes, Government Shutdown Fears, Contractor Sick Leave, and More

A weekly roundup of pay and benefits news.

Beginning Oct. 1, some TRICARE beneficiaries will see their enrollment fees increase slightly as part of the annual adjustment.

TRICARE Prime beneficiaries with single coverage will pay $4.68 more for their annual enrollment fee in fiscal 2016 – an increase from the current fee of $277.92 to $282.60. Those with family coverage will see an annual increase of $9.36, from the current fee of $555.84 to $565.20 in fiscal 2016. The yearly increase is based on the annual cost-of-living adjustment for retired military pay.

So who is not affected by the annual increase? Active-duty service members and their dependents do not pay for health care under TRICARE Prime. Surviving family members of those who died on active duty, and medically-retired service members and their dependents are exempt from enrollment fee increases as a result of a 2014 rule. And TRICARE for Life beneficiaries, the health care program for military retirees age 65 and older, do not pay annual enrollment fees.

Beneficiaries can pay their fees annually, monthly or quarterly. However, annual payments are not encouraged because TRICARE does not have a refund policy.

Prime enrollment fee increases aren’t the only TRICARE changes taking effect on Oct. 1. As we reported in August, TRICARE beneficiaries will have to obtain refills for certain drug prescriptions through the mail, or at military treatment facilities starting next month, under a new interim final rule from the Defense Department. The new policy affects refills of non-generic prescription “maintenance medications,” or drugs that people take on a regular basis for chronic conditions, such as high cholesterol or blood pressure. The change does not apply to medications for sudden infections or illnesses.

The change, mandated by the 2015 National Defense Authorization Act, aims to save money for the department and TRICARE enrollees by avoiding the higher drug co-payments associated with many prescription medications in retail pharmacies. The department estimated that the change will save the government roughly $88 million annually, while TRICARE beneficiaries will save about $16.5 million per year because of cheaper co-payments.

Speaking of Oct. 1, that’s the day the government will shut down if Congress can’t push through a measure to continue funding agencies into the next fiscal year. Federal workers and their advocates are rightly worried about the real possibility of a closure, which means furloughs for much of the workforce. Of course, Congress has always voted to provide back pay for furloughed federal employees after the government reopens, but that doesn’t automatically negate feds’ anxiety over the whole ordeal. As we reported this week, avoiding furloughs and delayed paychecks is a top priority for federal employee unions, but they also are concerned about other possible attacks on pay and benefits.

Sequestration returns on Oct. 1, threatening to unleash more furloughs in fiscal 2016, and any deal to offset the automatic budget cuts could include reductions to federal retirees’ benefits. Meanwhile federal advocates, particularly the American Federation of Government Employees, continue to worry about legislative efforts to make it easier to fire all employees at the Veterans Affairs Department as well as potential future attempts to do the same across government.

AFGE also is upset over the Pentagon’s plans to move ahead with reducing headquarters staff. On Aug. 24, Deputy Defense Secretary Robert Work sent all military departments and services a memo titled “Cost Reduction Targets for Major Headquarters,” ordering preparation for a 25 percent cut in appropriations from 2017-2020 for all major Defense headquarters activities, the Office of the Defense Secretary, the Joint Staff, and the Defense agencies and field activities. According to the memo:

OSD staff and the Defense Agencies and Field Activities, which took the majority of their previous reduction target in support contractor costs, will also have a 25 percent reduction target in funding for authorized civilian personnel as part of the overall reduction in funding (with the same credit for reductions previously taken).

Despite the depressing talk of another government shutdown and staff cuts at the Pentagon, contract employees received some good news this week. President Obama on Labor Day issued an executive order requiring federal contractors to provide up to seven days of sick leave for employees. The order, which would affect some 300,000 workers full- and part-time, would credit one hour of sick leave for every 30 hours worked, up to seven days annually. The time could be used to care for one’s self, a family member or domestic partner, including victims of domestic violence. Because the order must still go through public comment, it won’t take effect until 2017 under new contracts, according to a White House factsheet.

Not everyone was happy about the E.O. though. The Professional Services Council, which represents federal contractors, issued a statement criticizing Obama for his raft of executive orders related to federal contractors, including the latest one. “Among other things, we are concerned that the executive order might run directly counter to the ways in which some of the most progressive companies in the country are today addressing leave and benefits overall,” said Stan Soloway, president and CEO of PSC, in a statement Tuesday. 

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