Weekend Reading on Your Federal Benefits 19-18.jpg

(for the week of May 5th – May 11th)

You’re too busy during the week to keep up on all the news around your employee benefits and pay. My weekly summary of the most interesting and relevant news stories could help you and includes my comments and insights.

By the way, if you’ve read something about your employee benefits that you think is important or interesting, share it. And, let me know about news sources that you follow. Have a great weekend.

George Ray
Federal Benefits Online

In this week’s Federal benefits news, OPM proposes changes to your Federal benefits and the National Active and Retired Federal Employees Association has something to say about it, a court rules on a forced Federal retirement issue, and we get a deeper dive into changes coming to your healthcare plans. Let’s get started.

Note: There have been lots of articles this week recognizing and praising you for what you do each and every day for the American people. I hope that you’ve seen these stories and have also been involved in events that recognize the value of your service during this year’s Public Service Recognition Week (#PSRW). It’s not much, but I’d also like to add my thanks too for all that you do. So, thank you!

OPM Proposes Changes to Bring Federal Benefits Closer to Private Sector

From Fedsmith.com

Don’t say I didn’t warn you. For months, I’ve been suggesting that changes to your benefits are likely coming—and soon. Now, it even appears that it’s going to be an ‘inside job’.

This week, the Office of Personnel Management’s new director sent a letter to Speaker Paul Ryan with proposed cuts to retirement benefits that the current administration and Congress have been seeking. Dr. Jeff Pon announced (during Public Service Recognition Week no less!) that he (and OPM) will push for eliminating the Special Retirement Supplement (SRS), increasing the deductions from your paycheck to fund your FERS retirement plan, modifying the retirement calculation to use a ‘High-5’ rather than ‘High-3’ average pay, and reducing or eliminating Cost of Living Adjustments (COLAs) for retirees.

If you’d like a deeper dive into the current thought behind this, Dr. Pon and OPM’s Deputy Director for Management, Margaret Weichert are interviewed during this Partnership for Public Service town hall event titled “Renewing America’s Civil Service”. Here’s the link: Pon Hints at Major Changes Coming to Federal Compensation System

As you likely know by now, the basis for this is to bring Federal benefits more in line with benefits in the private sector. It makes sense, even though those private sector employees aren’t happy about what’s happened to their benefits either. The article’s author, Ralph Smith of Fedsmith, suggests that we not panic as this proposal from OPM is still a long way from being enacted. But like in the classic horror movie, this time the threatening call is coming from inside the house.

NARFE Issues Statement in Response to Proposed Cuts to Earned Benefits

From Narfe.org

It was difficult to choose from all the news stories this week about OPM’s proposal. And, the announcement coming from OPM didn’t go unnoticed by the National Active and Retired Federal Employees Association’s (NARFE) President Richard Thissen who noted the poor timing of the announcement by saying “As we kick off Public Service Recognition Week, a time to honor Federal employees who serve and protect our country day in and out without applause or fanfare, it’s especially disappointing to see the Office of Personnel Management (OPM) pursue $143.5 billion in cuts to earned Federal retirement benefits.”

Some are expressing surprise at how rapidly OPM’s new director has seemingly changed the focus from performance management, rewarding outstanding work, initiating hiring reform, and modernizing IT infrastructure to creating cost savings by eliminating or reducing retirement benefits. As mentioned in Thissen’s statement, it would be unfair to take benefits from those who have already earned them. As this progresses, my belief is that we will likely see changes made for new employees, and grandfathering provisions to protect those who have already accrued benefits. But, at this point, it’s still anyone’s guess where this will go.

Court Rules on Forced Retirement Standards

From Fedweek.com

What if a series of incidents in your workplace forced you into a situation where you felt you had no choice but to retire or resign? One employee who found himself in this situation, and ultimately left Federal service, filed an appeal with the Merit Systems Protection Board (MSPB) but found his case ruled in favor of his agency. Not satisfied, he appealed his case to the Court of Appeals for the Federal Circuit and won.

The court told the MSPB that this employee’s retirement was involuntary when all the facts of the case were considered as a whole. It informed the MSPB that they improperly viewed the evidence in the case as a series of separate developments rather than ‘as a series of escalating events’. Reviewing the situation collectively, rather than dismissing the incidents one-by-one as the board did, results in circumstances where the individual would feel unable to exercise free choice and thus feel compelled to get out (in this case, by retiring). This decision could make it easier for those who are wrongly treated to have the facts of their situation viewed as a whole.

Change is Coming to Health Plans

From Govexec.com

Last week I highlighted some changes being made to your Federal Employees Health Benefits (FEHB) program that you’ll likely notice during Open Enrollment later this year. This week, regular columnist at Government Executive, Tammy Flanagan, makes a deep dive into those changes.

You may recall that OPM has asked healthcare vendors to now offer three plans (like a high, standard, and value-based option) or two plan options plus a high deductible health plan. Currently, 83 health plan carriers offer a total of 262 health plan options. And, about 18,000 health plan participants switch their healthcare plans in any given year according to OPM. To help you further understand the types of plans available, Tammy provides definitions from Section 8903 of the US Code for a Service Benefit Plan, an Indemnity Benefit Plan, an Employee Organization Plan, and a Comprehensive Medical Plan. To further clarify, she uses actual carriers (like Aetna, Blue Cross, and GEHA) to provide examples.

OPM expects the change will help all healthcare vendors to adjust premiums, improve quality, and promote their brands to compete with the larger carriers in the program. This should have positive benefits for you and your family when choosing and using your plan.

See you next week. Thanks!

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