March 24, 2008
A summary of daily news relevant to the federal workforce produced by the Partnership for Public
Service.
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OPM Seeks Enhanced Hearing Benefits in Federal Health Plan
Government
Executive
By Brittany R. Ballenstedt
The Office of Personnel Management is calling on federal health insurance carriers to begin offering enhanced hearing benefits to adults.
In its annual "call letter," sent on March 11, OPM encouraged insurance carriers under the Federal Employee Health Benefits Program to boost
insurance coverage for adults who have hearing problems or need hearing aids.
FEHBP rolled out dental and vision benefits to federal employees in 2006. Last year, many carriers also opted to provide enhanced hearing benefits
to children up to age 22, all with little or no increase in premiums, OPM wrote.
Sending out the call letter kicks off the season of negotiations over 2009 benefits and rates in FEHBP. OPM said it plans to complete the
negotiations by Aug. 15, allowing for federal employees to select new health care options during the annual open season that occurs in the fall.
The letter also asked insurance carriers to submit ideas on how to coordinate FEHBP coverage with Medicare for federal retirees. The proposal
calls for carriers to offer a suboption for Medicare-eligible annuitants with the same premium as the high, standard and basic options of most plans.
For most federal retirees 65 and older, Medicare serves as the primary payer for insurance claims, and FEHBP is the secondary payer. FEHBP plans
often waive deductibles, co-payments and co-insurance for retirees who pay premiums for Medicare Part B.
The call letter suggests that insurers considering creating "premium pass-through" accounts that would enable a portion of a retiree's FEHBP
premium to be credited toward Medicare premiums. "The uniform contribution amount should provide an adequate incentive for eligible members, but need
not represent the full amount of Medicare premiums," the letter said.
Margaret Baptiste, president of the National Active and Retired Federal Employees Association, expressed concern about the suboption proposal,
noting that creating a plan specifically for Medicare-eligible federal annuitants could open the door for separate retiree plans with substantially
higher premiums than those under FEHBP.
"In the 48-year history of the program, there has never been a separate FEHBP plan based on retirement status or age," Baptiste said.
She also expressed concern that the cost of the "pass-through" accounts could result in benefit cuts or higher deductibles, co-payments and
co-insurance for federal retirees and their survivors.
OPM's letter also called on carriers to provide proposals to expand the availability of high deductible health plans and the health savings
accounts that accompany them. "These consumer-driven options continue to increase in popularity, and we will work with you on flexible approaches to
make them more available to the federal population," the letter said.
FEHBP started offering high deductible plans in 2005, and the number of carriers offering the them went up from 29 in 2007 to 32 this year
Baptiste criticized OPM's call for expanded high deductible plans, noting that the option has attracted only a small portion of federal workers
and retirees. NARFE has long opposed such plans, arguing that they could result in higher premiums and reduced benefits for employees and retirees
enrolled in traditional health plans.
2008 Federal 100: Doers with Vision
Federal Computer Week
By
Christopher J. Dorobek
This is the 19th year for Federal Computer Week’s Federal 100 awards program.
That means members of the 2008 Fed 100 class join 1,800 previous winners who have been recognized for their work.
Each year, the list of winners has a personality of its own. Some years, the Fed 100 awards present an opportunity to recognize remarkable work
that comes out of tragedy, calamity or disaster. In 2002, for example, government and industry responses to the terrorist attacks of Sept. 11, 2001,
largely determined the winners. And the 2006 awards recognized good work done in response to Hurricane Katrina.
The past year, however, was not defined by any particular event. We are thankful for that. Yet, in some ways, it can be more difficult to go above
and beyond in our day-to-day lives than in response to a crisis.
It is also particularly challenging to be a leader in a government moving toward
transition.
This year’s Fed 100 winners comprise a fascinating group. They are not only leaders but also doers. They are people who have refined
strategic outlooks, but they are also adept tacticians. The 2008 Federal 100 award list is interesting because it covers such a wide gamut of people
and positions.
Top leaders of the community — from government and industry — are represented along with people who are on the front lines.
If a common thread runs through the 2008 list, it is people who were willing not only to change but also to embrace change. We all acknowledge
that the pace of change keeps getting faster, and many benefits come from that faster pace as agencies become more agile and are able to share more.
But it can be difficult for an organization the size of most government agencies — let alone the entire government — to keep up with
that pace. Many of the people profiled in the following pages represent a special breed of visionaries — people who see how to get things
done.
To view the entire list, click
here
Troops Are Paid Fairly, But Differently, Study Shows
The Washington Post
By Stephen Barr
It is one of the most politically sensitive questions on Capitol Hill: Are the troops getting paid the right amount?
A new Defense Department study suggests that the answer is yes, when basic pay, cash allowances, free health care, pensions and tax breaks are
taken into consideration.
When those elements are combined, military officers and enlisted personnel are compensated as well or better than 80 percent of their counterparts
in the private sector of similar ages and educations, the study said.
That runs contrary to popular perceptions, shaped in the late 1970s, when military pay fell behind private-sector wages, and reinforced in the
early 1990s by reports that several thousand military families relied on food stamps to make ends meet.
Congress became concerned about such perceptions and realized that pay comparable with the private sector is critical to maintaining an
all-volunteer force, so it began pumping up military salaries.
Over the past decade, Congress usually has set military pay raises at one-half of a percentage point above the average annual private-sector wage
increase. Since 2001, the Pentagon calculates, average basic pay has grown by 32 percent.
But there is more to military compensation than pay, and the Pentagon's study, released this month, emphasizes the importance of benefits -- a
departure from previous pay studies, known as quadrennial reviews of military compensation.
The study was headed by Jan D. "Denny" Eakle, a retired brigadier general who served for 29 years in the Air Force. When she retired, she was
deputy director of the Defense Finance and Accounting Service, which is responsible for paying more than 5 million people.
One of the study's goals is to help educate military personnel about compensation so that they better understand what kind of income they will
need to maintain their standard of living if they leave the armed forces, Eakle said in an interview.
The study begins with regular military compensation -- basic pay, housing and food allowances and an estimate of the federal income tax advantage
gained by receiving tax-free allowances. It then adds an estimated value for the free health care received by the military, the value of retirement
benefits and additional savings for being able to avoid state and Social Security taxes.
"Military members who focus solely on cash compensation will tend to systematically undervalue the compensation package they receive," the study
said.
For example, an officer who is a college graduate with four years of service and who decides to leave the military will need to carefully review
job offers, Eakle said.
In 2006, that officer would have had an income of $66,000 in pay and non-taxable cash allowances. The officer would need to earn at least $72,000
in the private sector "in order to have the same take-home pay," she said.
"Virtually every private-sector company, if it offers benefits, makes sure people understand what the benefits are worth," Eakle said. "In the
Department of Defense, we have not done that very well, if at all."
The study recommends that the Pentagon adopt the more comprehensive approach to measuring military compensation. But the troops may be skeptical
of the idea.
Cindy Williams, a research scientist in the security studies program at the Massachusetts Institute of Technology, said the department already
provides members of the armed forces with an annual explanation of their compensation. But, she noted, "I have heard military families refer to that
as the 'lie sheet.' "
"The fact is that the structure of military pay is so different from the structure of pay in the private sector, that it is very difficult for
people serving in the military to understand just what their pay is," Williams said.
Steven P. Strobridge, director of government relations at the Military Officers Association of America, agreed that the annual compensation
statement "upsets military people," especially those who are repeatedly deployed overseas and feel they are making sacrifices, financially and
emotionally.
"When anyone says we need to educate people on what a good deal they have, you have to be careful," he said.
The association prefers that Congress stick with its practice of providing annual raises that slowly but steadily narrow the difference in
military and private-sector average wages, rather than "fuzz the issues" by assigning values to military benefits, Strobridge said.
Based on the Labor Department's employment cost index for measuring wage growth, he said that military personnel would need a 6.8 percent pay
raise next year to catch up with the private sector.
The White House has proposed a 3.4 percent military pay raise in 2009, but Rep. Gus Bilirakis (R-Fla.) has introduced a bill calling for 3.9
percent. Key House leaders have signaled that they want to provide more than what the White House requested but have not said how much more.
Eakle said the study shows, however, that any debate should not be about a pay gap and whether it exists. "That is really not looking at the big
picture," she said. "It's not about pay comparability as much as being able to do a true comparison to the private sector."
