Weekend Reading on Your Federal Benefits 8-18.jpg

(for the week of February 17th – February 23rd)

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, we know that you’ll get paid for the shutdown, discuss what civil service reform proposals missed and whether retirement is dead, look at changing the cost sharing in your health insurance, and discover that life events just happen sometimes. Let’s get started.

OPM Addresses Pay for Federal Employees Affected by the Last Shutdown

From Fedsmith.com

Okay, let’s just get this out of the way right up front. (It didn’t make the last issue because it came out as I was putting the issue together.) Although the last shutdown was very brief and had only minor effects for the American people, it did have an impact on your pay that Congress has addressed. OPM released a memo through their Chief Human Capital Officers Council (CHCOC) website that you can read here. It explains that because the shutdown began on Friday, February 9th and didn’t end until the President signed the order in the late morning on the following Monday (during most employees’ regular tour of duty), you actually missed out on some of your pay that day.

But it was fixed for you by Congress, as they have with previous shutdowns. The memo recommends that due to any confusion, agencies should exercise some flexibility, and take into account ‘the facts and circumstances applicable to an individual employee or group of employees, including the directions or lack of directions given by the employing agency and the reasonableness of the actions taken by the employee’.

White House Proposals for Civil Service Reform: What They Missed

From chiefhro.com

The administration has recently proposed a number of changes to reshape the Federal workforce and how its workers are paid. We talked about a few of the changes in the last issue. Jeff Neal at chiefhro.com discusses some of the things that he believes were missed in the proposed changes.

Firstly, there’s an assumption that failures within the government are eroding our trust. While that may be true, what’s missed is the fact that most Americans believe that failures are due to lack of political leadership rather than the work that Federal employees perform. Surveys, like the Pew Research survey Jeff links to, indicate that Americans generally have favorable opinions of agencies and the work that they do.

There has also been talk of modifying (eliminating) certain Federal employee benefits (most relating to your pension) to bring benefits in line with the private sector. But the private sector, which has mostly eliminated defined benefit plans (i.e., pensions) and provided most workers with only a defined contribution plan (a 401k savings plan similar to the TSP) has been criticized for shifting the burden of saving for retirement to its workers (while at the same time hoarding cash or providing record profit-sharing distributions to shareholders). Should the Federal retirement system be changed to be more like the private sector (which many consider to be failing its workers), or should we really be having a larger discussion about retirement instead? I agree with Jeff that a bigger discussion is what’s really needed. It’s always a good idea for us to take a look outside our regular news and social feeds, so let me point you toward this piece in Inc. magazine (probably not a magazine you read regularly) that argues It's Time to Say It: Retirement Is Dead. This Is What Will Take Its Place

New Formula for FEHB Premium Sharing Proposed

From Fedweek.com

Would changing the amount of cost-sharing the government provides for your Federal Employees Health Benefits (FEHB) insurance cause you to choose your carrier and your plan more wisely? A current proposal thinks so. But this isn’t new, it’s been brought up before (of course it has). Currently, the government’s contribution toward your healthcare premiums is around 72% (it can go as high as 75%). The proposal would create a range of 65 – 75%. Would you like the government to take on more of the share of the costs? Just choose a better plan. The idea is to motivate employees to look for the most cost-effective solutions while also incentivizing healthcare vendors to compete on price and quality, but there’s concern that it would shift more of the premium onto enrollees. As with most of the pay and benefits proposals being pushed to decrease the budget and deficit, this one is a two-edged sword.

When Life-Changing Events Happen

From Govexec.com

“Life events happen”. I like it. I think that would be a more politically correct bumper sticker than the one that I usually see about how stuff happens (but then who’s still being politically correct these days?). Over at Government Executive this week, regular contributor Tammy Flanagan writes about one of the topics that always seems to generate questions during my benefits briefings – that is, changes to your insurance coverages due to life events. For the most part, you can make changes to your Federal Employees Health Benefits (FEHB) coverage, your Federal Employees Group Life Insurance (FEGLI), and the Federal Employees Dental and Vision Insurance Program (FEDVIP) during an Open Season. Life insurance open seasons are rare (as in Once in a Blue Moon rare), but an Open Season for your health insurance happens every year.

Must you wait until Open Season to make changes? Not necessarily. If you encounter a Qualifying Life Event or QLE, you can make changes at the time the event occurs. But it can be confusing. There are quite a few life events that you could encounter that are considered ‘qualifying’. Here’s a list from OPM’s website.

The other concern, particularly on health insurance, has to do with the ‘five-year rule’ which requires you to have FEHB coverage for the five years immediately preceding your retirement to continue your coverage into retirement. Tammy relates a situation provided to her through an email about a retiring employee who made changes to her FEGLI coverage which initially caused the employee to lose her coverage. It shouldn’t have happened though and was able to be corrected when re-processed as a Qualifying Life Event. Oh, those darned QLEs.

See you next week. Thanks.

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