Weekend Reading on Your Federal Benefits 27-18.jpg

(for the week of June 30th – July 6th)

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 benefits news for Feds, we learn how to reduce our health insurance costs, peek at the new tax return on a postcard, read OPM’s instructions on implementing the recent Executive Orders, and get the facts on Leave Without Pay. Let’s get started.

A Healthy Tax Advantage

From Govexec.com

Federal employees have access to many ways to lower their tax bill, including an account that regular Government Executive columnist Tammy Flanagan focuses on in this week’s article. The Health Savings Account (or HSA) has been getting more publicity and has seen greater adoption by employees because of its ability to help them to better control their health care costs.

One way to get some control over rising premiums is by using a high-deductible health plan (HDHP). As the name says, your deductible will be higher. But that means that the premiums you pay will be lower. By agreeing to raise the deductible amount that you will pay out of your pocket, the insurance company will lower the amount of premium you’re charged since their risk is lower.

Contributing to a Health Savings Account can be done using pre-tax dollars from your paycheck which will also lower your current tax bill. So, the combination of lower health insurance premiums and the use of pre-tax dollars to pay for out-of-pocket costs (like your deductible) could help to lower your healthcare costs. This works particularly well if you don’t get sick much and if you have some savings that you can access to pay any additional costs after you’ve exhausted your HSA money to cover your deductible.

Tammy discusses additional tax benefits and how to report your HSA contributions on IRS Form 8889 to be filed along with your tax return each year, although that could possibly be a little harder since the . . .

Treasury Department Unveils New 1040 Form

From Fedsmith.com

I just filed this under the ‘I’ll believe it when I see it’ category when it was first announced. File your taxes on a form the size of a postcard? What? Yeah, sure. Well, this week we got an actual picture of the front and back of the new 1040 Form for filing our 2018 taxes next year, and while it is small, it’s not really the size of a postcard. It’s more like a half-sheet of paper, more or less. If it were post-card size, the data collection areas would be too small to write inside.

We haven’t seen what’s happened to any of the other forms that we typically must include. Some of us file the Schedule A and Schedule C and even more forms. You might also notice there’s no place to staple your W-2’s to it either. And, it won’t get mailed like postcard unless you want your income, name and address, and Social Security number hanging out there for anyone to see. It’s still going to need to be placed into an envelope.

Some have argued that the reason it can be so small is that there are no deductions left to take. Maybe there’s some truth to that. A bigger question is how much use it will get and does it even matter? eFile.com says that over 126 million taxpayers filed electronically last year. That’s 92% of all taxpayer returns and that number is expected to grow. So maybe this story is really a non-story.

OPM Tells Agencies with Expired Union Contracts to Start Moving on EO Implementation

From Federalnewsradio.com

My favorite reporter at Federal News Radio, Nicole Ogrysko, provides an excellent summary of a story that we’ve been following since the end of May. It deals with the three Executive Orders that the President issued to make firing nonperforming employees easier, curb union power, and diminish the use of ‘official’ time by union representatives. On Thursday, OPM released three separate documents that provide more details and guidance on how the Executive Orders are to be executed, and the Federal unions, who are already not happy, are about to get even more not happy.

In agencies where collective bargaining agreements have expired, the new rules will apply immediately. As a result, the Housing and Urban Development (HUD) agency told representatives with the American Federation of Government Employees (AFGE) to vacate HUD property by July 15th. Many agencies have already begun preparing other changes to take effect as their union contracts come up for renewal.

But the President’s orders have not been without criticism—from many different individuals and groups. Almost two dozen House Democrats and 21 Republicans, along with almost all Senate Democrats have written to the White House to request the orders be rescinded. Lawsuits from at least 15 unions have been rolled up into a consolidated case expected to be heard by a Federal judge in late July. That’s a case that many Feds and their agencies will want to follow.

Leave Without Pay and Creditable Service

From Fedweek.com

Over at Fedweek, Reg Jones provides useful information on a situation that many Federal employees would prefer not to find themselves in --- Leave Without Pay (LWOP) status. There are times when you must be granted LWOP. It’s mandatory. And there are times when getting it is optional.

The Family and Medical Leave Act entitles you to up to 12 weeks of unpaid leave during any 12-month period to take care of family and medical needs. And if you’re called into active military duty, you cannot be denied access to LWOP. Disabled veterans are also entitled to it for needed medical treatment.

Optional LWOP means the decision to grant it is up to your agency. You might request it to get training that your agency is not able to pay for. You may also go into Leave Without Pay status if you’re are awaiting a decision on a worker’s compensation award or disability retirement.

What I’ve found in my training sessions with employees is that they are not aware that you can be in a Leave Without Pay status for up to 6 months in a calendar year with no effect on your time accrued towards retirement or your status for Reduction-in-Force (RIF) retention purposes. Not getting paid is not an ideal situation, but it can be beneficial to have some flexibility if you really need it.

See you next week. Thanks!

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