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Key developments in the world of federal employee benefits: health, pay, and much more.

TRICARE Drug Co-Pay Hike on Horizon

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Some TRICARE beneficiaries will pay higher co-pays for prescription drugs beginning Feb. 1

Those affected will pay anywhere from $4 to $19 more for brand name and nonformulary medications that are not filled at military clinics or hospitals. The fiscal 2013 Defense Authorization Act mandated the increases, but it could have been worse. Congress decided to reject the Obama administration’s proposal that would have doubled and tripled what beneficiaries spend on pharmacy drug co-payments.

The co-payments for generic drugs filled at the pharmacy remains $5. There is no co-pay when generic prescriptions are obtained through home delivery, or mail-order.

The law also caps pharmacy co-pays beginning in 2014 so that such fees are in line with the annual retiree cost-of-living adjustment. The costs associated with the modest fee increases would be offset by a five-year pilot program requiring TRICARE for Life recipients to obtain maintenance drug refills through the mail, which is cheaper than obtaining them through retail pharmacies.

Here’s the breakdown:

  • $13: The amount affected beneficiaries will pay for a three-month supply of brand-name drugs obtained through home delivery, up from $9.
  • $17: The co-pay for a month-supply of brand-name drugs purchased at a retail pharmacy, up from $12.
  • $43: The new co-pay for a three-month supply of nonformulary medications filled through the mail, up from $25.
  • $44: The amount beneficiaries will pay now for a three-month supply of nonformulary medications purchased at a pharmacy, up from $25.
Go to TRICARE’s web page on pharmacy costs for more information.

Sequestration Education

Many federal employees still don’t know how the impending automatic governmentwide spending cuts will affect their pay and benefits. Seventy percent of respondents to a recent Government Executive poll said they didn’t know how sequestration would affect their compensation, while 84 percent said that their agency had not provided any guidance on the matter beyond the generic information the Office of Management and Budget disseminated to department officials. Sixty-nine percent of respondents said they believed their agency would furlough employees; 38 percent said they expected to be among the furloughed. More than 4,000 readers responded to the poll.

See the Jan. 24 Pay and Benefits column for more information on how sequestration and other budget matters can affect federal pay and benefits.

Electronic Payments

The government continues to embrace technology, albeit at a slower rate than the private sector. Those receiving federal benefits via paper check have to switch to electronic payments either through direct deposit or a debit card by March 1. The program, however, is being phased in with respect to certain benefits. For example, Thrift Savings Plan participants will continue to receive their payments the way they currently do, at least for the time being. Click here to find out how to switch to e-payments.

Kellie Lunney covers federal pay and benefits issues, the budget process and financial management. After starting her career in journalism at Government Executive in 2000, she returned in 2008 after four years at sister publication National Journal writing profiles of influential Washingtonians. In 2006, she received a fellowship at the Ohio State University through the Kiplinger Public Affairs in Journalism program, where she worked on a project that looked at rebuilding affordable housing in Mississippi after Hurricane Katrina. She has appeared on C-SPAN’s Washington Journal, NPR and Feature Story News, where she participated in a weekly radio roundtable on the 2008 presidential campaign. In the late 1990s, she worked at the Housing and Urban Development Department as a career employee. She is a graduate of Colgate University.

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