March 20, 2008

A summary of daily news relevant to the federal workforce produced by the Partnership for Public Service.

1. Panel Urges New Administration to Go Slow on Pay Reform
2. Federal Diary: OPM Gives Health Insurers an Earful on Hearing Benefits
3. CBP Will Head to Washington in Search of Border Patrol Recruits

Panel Urges New Administration to Go Slow on Pay Reform

National Journal
By Rafael Enrique Valero

The next president should tread carefully when it comes to revamping the federal government's pay scale, said a panel of senior managers, union officials and industry representatives last week during an event sponsored by the Partnership for Public Service.

"I think the General Schedule system is an anachronism," said Scott Cameron, former chief human capital officer at the Interior Department and current director of enterprise management solutions in the global public sector practice at the international accounting and tax firm Grant Thornton. But Cameron recommended a gradual migration away from the GS system to avoid "knock-down drag out" battles with Capitol Hill and the unions: "I would not advise the new administration to launch a frontal assault on it, because I don't think it's worth the expenditure of political capital."

Cameron joined 17 workforce management professionals to discuss ideas and develop recommendations for the next commander-in-chief and Congress on issues including the General Schedule pay scale, contracting, performance-based pay and training for federal managers.

Reforming the government's pay system dominated most of the March 12 discussion. Critics argued that the General Schedule rewards longevity rather than merit, and hinders the recruitment of highly skilled employees, while supporters said it promotes pay equality. Chris Mihm, managing director of strategic issues at the Government Accountability Office and event moderator, asked panelists if the GS system was dead. "I don't even think it's sick," said Jacque Simon, public policy director of the American Federation of Government Employees. "It has done a marvelous job at eliminating pay discrimination based on race, gender and age."

Other pay-for-performance critics cited benefits such as recruitment and retention bonuses and student loan repayment as flexibilities allowed under the federal pay scale that provide important incentives to retain high-caliber employees.

"Part of the concern in my view about moving to another system, is about trust" between unions and government managers applying pay-for-performance metrics, said Matt Crouch, president of the Presidential Management Alumni Group, an organization that champions private sector-style merit pay. While acknowledging that unfair pay decisions do occur in the private sector, Crouch added that industry has "an overall metric of profitability." In other words, he said, "If I don't like you, but I need you to make my profit, I'm going to think twice before I short your pay. We don't have that measure in the government." Some agencies, including the Defense Department, have opted out of the GS system in favor of a pay-or-performance scale.

Lynn Jennings, vice president for strategic initiatives at the Council for Excellence in Government, said great leadership is the key to a strong workforce rather than any particular pay structure. "You can have the General Schedule system, pay-for-performance, a system in between, but unless you have good leaders implementing [it] and your employees think it's fair, you'll be in the same position," she said.

In addition to pay reform, panelists also discussed the costs and benefits of government contracting. "The value of contractors, of course, is that you can expand very rapidly and then when you're done with them you can contract very rapidly," said Ron Sanders, chief human capital officer at the National Intelligence Directorate. "Use them as a buffer between you and the rest of the outside world to protect that core [workforce]."

Crouch complained about the current costs associated with government contractors. Recent union victories in Congress, such as preventing health benefits from being counted against federal employees in competitions, and the right of employees to recompete contracts before they are opened to public competition, have leveled the playing field. "We've driven up the transaction cost so incredibly high," he said. "That what is required for a company to successfully compete for a government contract, deliver the results that the government wants, oh, and not charge billions of dollars to do it, has become harder and harder."

Cameron agreed. "It's wonderful to have competition. But competition can end up being more expensive," he said.

OPM Gives Health Insurers an Earful on Hearing Benefits

The Washington Post
By Stephen Barr

After teeth and eyes, it's time for ears.

The federal employee health insurance program yesterday urged health insurance companies to strengthen their coverage for adults who need hearing aids or have problems hearing.

The health insurance program rolled out enhanced benefits for dental and vision services to federal employees in 2006, and Linda M. Springer, director of the Office of Personnel Management, said hearing benefits are "an area where we need to do more," starting in 2009.

The federal workforce has a large number of aging baby boomers who will be in need of professional services to help them cope with hearing loss and the sense of isolation that often accompanies it, Springer said.

"This is an area that has not gotten the attention it deserves," she said.

Last year, OPM asked insurance companies to increase coverage of hearing benefits for newborns and children, noting that hearing loss is one of the most common congenital birth defects. Some companies increased those benefits, at little or no additional cost to enrollees, OPM said.

Springer's request for improved hearing benefits for adults came at the start of a two-day meeting of health insurance representatives from companies that participate in the Federal Employees Health Benefits Program, which is administered by OPM. FEHBP, as the program is known, provides medical insurance and health coverage to about 8 million government employees and their family members. It permits federal employees to purchase coverage from national health carriers, such as Blue Cross and Blue Shield, from health maintenance organizations, such as Aetna and Kaiser Permanente, and from groups representing government employees, such as postal unions.

Democratic presidential contenders Hillary Rodham Clinton and Barack Obama have used the federal employee program, which also covers members of Congress, as a model for their promises to put health insurance within reach of any American who needs coverage. John McCain, the all-but-certain Republican presidential nominee, has called for broad changes in the nation's health insurance system that include features of the federal program.

In her remarks yesterday, Springer noted that presidential candidates have talked of "opening up" the federal employee health program to the public but said OPM is steering clear of campaign politics. "Our job is to ensure the federal plan is the best it can be," she said.

OPM outlined its goals for 2009 in a "call letter" sent March 11 to the health insurance companies. The letter, made public yesterday, informed the companies that OPM wants to wrap up contract negotiations for next year's health benefits package by mid-August.

The letter also asks the insurance companies to submit proposals for a pilot program to see if there are better ways to coordinate coverage between the FEHBP and Medicare.

For most federal retirees who are 65 and older, Medicare serves as their first payer on insurance claims. FEHBP plans usually waive their hospital and medical deductibles and co-insurance for federal retirees who pay the Medicare premium for doctors and outpatient services, known as Part B.

By proposing a pilot program, OPM hopes that insurance companies will come up with other ideas on how to combine or coordinate coverage between the FEHBP and Medicare, other than just waiving co-payments.

The call letter suggests that the insurance companies consider setting up accounts so that a part of each retiree's FEHBP premium could be passed along to pay for Medicare premiums. That might lower overall premium costs for retirees but also might require insurance companies to accept more financial risk.

The National Association of Active and Retired Federal Employees said yesterday that it was troubled by the proposal because creating a pilot for Medicare-eligible federal retirees could open the door for establishing a separate FEHBP plan based on retirement status or age. That has never been done before in the program and might result in higher premiums for retirees, the association said.

But Nancy H. Kichak, an associate director at OPM, said retirees would pay the same premium in any Medicare pilot as they would in a counterpart FEHBP plan. Under the proposed pilot, retirees "are not going to lose benefits by doing this," she said.

CBP Will Head to Washington in Search of Border Patrol Recruits

Federal Daily

Customs and Border Protection (CBP) this weekend will expand its Border Patrol hiring efforts from traditional recruiting grounds in border states, and head to Washington, D.C., as it seeks to fill more of the 6,000 additional Border Patrol agent slots it hopes to add this year. A recruiting team from CBP, the largest uniformed law enforcement agency in the country, will be in the capital on March 22 to answer questions and help candidates through the application process. Border Patrol recruits earn between $36,000 and $46,000 in their first year, and can earn up to $70,000 within three years of service. Successful candidates complete a screening process that includes a written examination and interview, demonstration of language aptitude or Spanish proficiency, a physical fitness test and a medical examination, followed by 16-and-a-half weeks at a basic training academy in Artesia, N.M.