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

Trump Administration Targets Federal Compensation, Telework

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The Trump administration’s new management agenda, released earlier this week, has significant implications for federal pay and benefits.

The agenda frames the issue by noting that “it is important to appropriately compensate personnel based on mission needs and labor market dynamics,” something the existing compensation system fails to do. The document then repeats the fiscal 2019 budget proposal to forgo an across-the-board pay increase while realigning “incentives by enhancing performance-based pay and slowing the frequency of tenure-based step increases.”

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The White House has asked lawmakers to create a $1 billion “interagency workforce fund” in fiscal 2018 for “targeted pay incentives” for employees. To that end, the Office of Management and Budget said it will work with Congress to overhaul statutes and regulations in need of updating.

In addition to pay reforms, the management agenda also reiterated a proposal to alter retirement benefits. Office of Personnel Management Director Jeff Pon said that requiring feds to wait five years to vest into their pensions “just doesn’t make sense” for the modern workforce. The administration has proposed moving away from pensions altogether and toward a defined-contribution only system.

While many former government management officials praised Trump's new agenda, federal employee representatives were less than thrilled with some of the specifics. Tony Reardon, president of the National Treasury Employees Union, said the reforms displayed a "lack of understanding" of the real workforce issues facing agencies, such as understaffing, inadequate compensation and insufficient training.

Also this week, the House voted to extend into 2018 a rule that would make it easier for lawmakers to eliminate federal jobs and cut employee pay. Republicans brought back what is known as the Holman Rule at the beginning of the 115th Congress, but it had been scheduled to remain in place for only one year.

The rule, which had been banned since 1983, enables lawmakers to reduce the number of federal workers at specific agencies or cut their compensation as a provision of or an amendment to an appropriations bill. They can cut the rolls or compensation for employees only at the agencies covered by the specific spending bill in which the provision or amendment is included. The salary reductions can target only those employees whose salaries are paid from the Treasury.

As Eric Katz wrote on Wednesday, Congress never successfully used the Holman rule in 2017 despite efforts to target Congressional Budget Office personnel and union officials. Rep. Gerry Connolly, D-Va., accused House Republicans of sneaking in the rule extension. “This archaic tool, also known as the Armageddon Rule, is nothing more than a backdoor way for Republicans to dismantle the federal workforce and carry out political vendettas at the expense of career civil servants,” he said.

While Republicans may or may not be trying to dismantle the workforce, some administration officials are trying to dismantle telework programs.

Wednesday’s snowstorm that closed government offices in the Washington, D.C., area showed how important the issue is to many federal employees. The option ensured that many  continued to work despite the closure. The alternative work arrangement also got a boost in a recent Office of Personnel Management work-life survey of nearly 64,500 federal employees, where 35 percent of respondents said they engage in telework in some form. Of those, 76 percent said the arrangement increased their desire to stay at their agency, while 72 percent said it led to better job performance. Nonetheless, several agencies are attempting to scale back telework programs.

One major cutback unfolded in January when the Agriculture Department issued a new policy that reduced allowable teleworking days per week from four to one, or two per pay period. The Commerce Department also is cutting back on the practice. At the Education Department, a new collective bargaining agreement forced on employees does not have any provision for telework.

“We had several employees who were on 100 percent telework agreements,” said American Federation of Government Employees spokeswoman Ashley De Smeth. “Now that there’s no telework provision [in the contract], they’ve had to scramble to get to the facility they report to, and they don’t even live in the same town.”

AFGE has filed an unfair labor practices charge against Education, and federal employee unions are also fighting Agriculture’s new policy. Rep. Gerry Connolly, D-Va., is also critical of the cutbacks. “This is yet another move by the Trump administration that harms federal employees at no benefit to citizens,” he told Government Executive’s Charles S. Clark. “It will hinder the efficiency of our 21st-century workforce.”

In perhaps more positive benefits news, military retirees covered under TRICARE will switch to a new dental insurance program for next year, OPM has announced. The TRICARE Retiree Dental Program will end on Dec. 31, 2018, and enrollees in that program will transfer to the Federal Employees Dental and Vision Insurance Program, OPM said.

The switch will affect 1.63 million beneficiaries of the TRICARE Retiree Dental Program, OPM said. They will need to elect a FEDVIP plan during the next open season, which will run from Nov. 12 through Dec. 10, 2018, concurrently with the TRICARE open season. They will not automatically be switched over to a new plan. The new coverage will take effect in 2019.

FEDVIP will now also be open to an additional 1.3 million retired beneficiaries who are not enrolled in the TRICARE Retiree Dental Program, OPM said. Active duty family members enrolled in a TRICARE health plan will have the option to purchase vision insurance through FEDVIP for the first time as well. This will be on top of the routine eye examination benefit already offered under TRICARE Prime and TRICARE Select, and will include coverage for eyeglasses and contact lenses.  

“OPM is thrilled to offer a variety of quality vision and dental plans to our military retirees and their families, and for the first time, an option for vision insurance to active duty family members,” OPM's Pon said in a statement. “We look forward to providing FEDVIP to the military, their families, and retirees.”

Visit the TRICARE.benefeds.com page for more information on the benefits changes.

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