What’s Inside:

• Insight by Mike Causey: Don't Look Now…
• AFGE Lays Out Key Issues for 2010
• Unions Want Role in Developing Telework Policy
• DIC Beneficiary Payments Higher Than Those of Civilian Survivors
• LTC Provider Sends Wrong Info To FLTCIP Enrollees
• Informed Investor: Making the Most of the FEHBP Open Season
• Rulings Roundup: Retiree Wins Bid to Reduce Former Spouse’s Benefit
• Federal Benefits Q&A

Insight By Mike Causey: Don’t Look Now …

They say that when you are in the writing business and you start quoting yourself, you maybe should get out of the writing business. But what do they know? So...

A couple of issues back we advised you in this very space that the National Security Personnel System, thought to be a dead duck, might have some of the properties of Count Dracula. He—at least in the Bela Lugosi version I grew up with—couldn’t be killed except by a stake driven into his heart. That is no mean trick, by the way.

My point about NSPS is that all the dancing taking place on its grave might be a tad premature. Like shooting the Wolfman (Lon Chaney Jr.) with a non-silver bullet.

What I said in that column, in so many words, is that the law that “eliminated” NSPS—the National Defense Authorization Act—left open a six-month window during which Congress and/or the administration could come up with a revised NSPS, or a totally new system revolving around merit pay. And I said it was “unlikely that such a plan will be drafted, much less approved, but it does open up the possibility that something like the NSPS, maybe ‘Son of NSPS,’ using different rules and criteria COULD return to life in another form.”

More important than that six-month escape hatch, we noted, is that the Obama administration seems definitely committed to revamping federal personnel rules to drag the civil service into the 21st Century. While officials agreed that NSPS was flawed and unpopular, most also said that changes must be made—in hiring and training, in the way feds are ranked, and certainly in the way they are paid.

Turns out that was correct. A task force (or forces) has been formed with the Office of Personnel Management at the center of the action. Top-flight personnel from a dozen agencies have been detailed for 90 days to come up with procedures to speed up the hiring process, give greater emphasis and support and cash to training programs, and come up with a new system (that maybe relies on rank-in-person rather than job-related rank) and possibly radical new ways to reward employees with raises and bonuses. It also would have what one participant called “take aways” (as in denying raises, denying within-grade step increases and even taking away annual leave) from people who don’t shape up within six months of getting a formal warning.

The changes, a source said, will probably start modestly with the hiring process. That could even be done, at least in part, this year. The others will be tougher and harder to sell to Congress, federal unions and—to the extent they really count in the process—the general public.

The man who fixed the zoo

Persons familiar with the task force say that OPM Director John Berry (who has an MPA from the Maxwell school) is dead serious about the overhaul. And about making it easier to hire people, keep them, and chop off deadwood within months, not after years of haggling.

Berry, you may recall, came to OPM after serving as director of the National Zoo here in Washington. Before that, he served at Interior and Treasury. Before that, he was the long-time go-to guy for Rep. Steny Hoyer, D-Md., who now holds the No. 2 position—majority whip—in the House. In a word, Berry is connected like few others.

When Berry went to the zoo, there were no other job applicants. He was asked to take the job, insiders say, because the prestigious institution had become a shambles. Mini-scandals and some major goofs abounded.

A now-retired, former long-time zoo employee told me that “we thought it was unfixable, but John [Berry] turned it around.”

Berry wanted to stay at the zoo, but he got a personal call from President Obama to take over the OPM job. With a mandate—still unclear—for change.

So how well did he do at the zoo, and how deeply did he change operations and the climate there? Remember, there was one candidate for the job when he took it. That candidate was himself.

Today, sources say, there are several hundred top applicants for the top zoo job. That must say something about something ...

The bottom line

The Obama administration is working up a civil service reform proposal which, if enacted into law, would be the biggest sea change in government in 50 years. Maybe more.

Top people from more than a dozen agencies, large and small, have been detailed to a hush-hush task force. They have been tasked with coming up with a legislative proposal dealing with hiring and recruiting, new career tracks and a new way of rewarding top-notch feds and of punishing (short of firing) those who aren’t pulling their weight.

Details of the program are being closely guarded. Different people have heard about different things. So the picture we get is much like the old story about the blind men describing an elephant. Their descriptions, by necessity, depended on which part they were touching.  Figuring out what the new proposal will look like, or when it will be unveiled, is speculation, at best. What we do know is that the backers are dead serious.

President Obama has (at least twice) asked Director Berry to attend cabinet meetings. That is rare, if not unique. He’s told Berry that he wants the civil service to be fixed so that the government “is a fun place to work again.” He’s going back to the Kennedy administration’s ask-what-you-can-do-for-your-country approach that caused many bright young people to flock into government.

So, stay tuned. Even though we don’t know how this will shape up, remember: Whatever it is, you read it here first.

:: Back to Top ::

AFGE Lays Out Key Issues for 2010

Federal employees—and the unions that represent them—got an early holiday present when President Obama last month signed the National Defense Authorization Act and set into motion a range of measures that bolster federal employee benefits.

Among other things, the new law updates work rules for reemployed annuitants, allows employees in the Federal Employees Retirement System to begin crediting unused sick leave toward annuity calculations, and extends locality pay to feds in “non-foreign” areas such as Alaska and Hawaii. In addition, the law includes a provision that many believe is the final step in abolishing the controversial National Security Personnel System.

With so many victories accomplished at the stroke of a pen, FEND has been asking federal employee unions, “What’s next?”

FEND recently spoke with American Federation of Government Employees Legislative and Political Director Beth Moten.

Q&A With AFGE’s Beth Moten

Your union, along with other federal employee unions, just made a number of gains in the passage of this year’s National Defense Authorization Act. What do you think you did right that made your gains in the NDAA possible—including the end to the National Security Personnel System?

Moten: Many of those [gains] were years in the making. The legislation that created NSPS was enacted in 2003, and we have really been fighting against it ever since. In 2008, in the defense authorization bill, we repealed part of NSPS—the part of it that, essentially, had made collective bargaining and employee appeal rights completely dependent on management’s new programs. These were anti-employee and anti-union. We got rid of these bad labor relations and employee appeals processes, and returned to what’s available to all federal employees under Title V. We continued to work very hard on the rest, the NSPS pay system. It took about a year to have enough data to show that that system was discriminatory. Let me say one thing. President Obama promised us, in writing, during the campaign that he would evaluate NSPS and he would not support a discriminatory pay system. That’s what he promised us. Once he got into office, we set about the business of making sure that [his administration] lived up to that promise. And in fact they did. They created a panel that had to evaluate it. They did research to see exactly what had been done. Once it was clear from their own research that the system was taking money away from people making less than $60,000 and giving it to people making over $100,000, I think it was obvious to everybody that this kind of system could not stand. It had to be repealed. We did an awful lot to get here, and it was an incredible grassroots effort. We had to build the data, and talk to people on Capitol Hill about the injustices of it all the time. But the major comment we have here is that many people were very, very unhappy under NSPS, and they thought it was a terrible precedent for the rest of the government, and they worked very hard to bring it down.

What do you think about the NDAA legislation itself? It seems there is a six-month window in which, technically speaking, NSPS could rear its ugly head again. Do you think this might happen, or not?

Moten: They [DoD] are supposed to begin the transition from the NSPS pay system to the General Schedule upon enactment—which occurred [Oct. 28]. So the six-month window you mention is supposed to just give them that opportunity, while they are transitioning that workforce out of NSPS back into GS. It gives them six months to see if they can come up with a pay system that could stand the light of day. And that would have to go back to Congress, and Congress would have to actively authorize it. Congress would actually have to agree that it was a good idea, and say yes and authorize it. It’s hard for me to imagine that anyone will come up with something that is going to be fair and transparent and non-discriminatory in that period of time. They need to go back to the General Schedule, and use the flexibilities that are already available under the GS to address any performance issues.

So, they have the chance—and we agree that it is unlikely to be a priority—but it is possible that there could be a sort of “son of NSPS” that is tried out and offered to Congress in the next six months?

Moten: That’s right. We have to be vigilant. We have to make sure that as soon as they issue any sort of proposal that we are ready with a response, and demonstrate what we think is the right thing to do.

We know you at AFGE have said that there are already flexibilities under GS that offer opportunities for all kinds of performance awards. But management seems to say there should be a new system that could better reward performance. Recently, OPM Director John Berry spoke at the Maxwell School at Syracuse, and he again tried to address how pay for performance could be tried in a different way without rewarding cronyism. He suggested instead of the “complicated” system of grades and steps, as we have now, there could be a simplified system—as there has long been in the building and other trades—where you are an apprentice, then a journeyman, then an expert. Have you any thoughts about this, as a system you could conceive of?

Moten: We are in dialogue with John Berry and his staff about these ideas. I think that at this point these are just concepts that he is throwing out there as trial balloons. He knows this stuff is very complicated, and that the devil is always in the details. But we like the idea of the three levels—of apprentice, journeyman and expert—because we think that it sets things up so that employees would be able to see a career path that really would make a difference in their economic life. What people hate is to get stuck in a dead-end job, and not have any opportunity for advancement. Too many of these jobs in the federal government are just stuck at the GS-7 level, where you are never going to get anywhere further along. So we would like to see a situation where there are more career ladders, and calling it apprentice, journeyman and expert is basically a career ladder, and we are very much in favor of that sort of effort, to make sure that people have the opportunity to improve their economic status.

What are some of AFGE’s future priorities—we understand that one of the top priorities is full union rights for Transportation Security Officers at TSA. If so, why is it so important?

Moten: I would say that’s our No. 1 priority at this point. We need to get this done. We are having conversations with the administration, and talking to people on Capitol Hill. There are different ways to accomplish this. This is all still in the development stages, how exactly to do it. But it is clear to me that TSOs will get collective bargaining rights—and they will get them very soon. It will take a little more time. This can be done either through an action by the TSA administrator, whose title I think is definitely going to [become] Assistant Secretary for Homeland Security, or the change in status can be legislated.

What other items are high on your agenda?

Moten: We are working on the 2010 pay raise. Pay parity with the military is very important to us. At the moment, I think honestly we are looking at someplace around 2.9 percent. The House legislation [has a] 2 percent raise, which the president put in his budget. We are aggressively trying to get that up as high as we can. People are going to need it—especially in light of these premium increases in the Federal Employees Health Benefits Program.

Anything else on the employee health care or health insurance fronts?

Moten: We are also working very aggressively—here in Washington and at the grassroots level—on the national health insurance issue. We are supporting the House bill. So that’s an ongoing thing that we really hope will be finished before Christmas. We are working closely with the AFL-CIO on this.

Any other major priorities?

Moten: We are working to try to do more research on contracting out, and we’re doing that through the House defense appropriations bill. And we are trying to increase the funding for correctional officers staffing in the Bureau of Prisons. Those prisons, as you have probably heard, have gotten to be extremely dangerous places to work. We have succeeded in getting more money for the agency in the last few years, but we can’t get them—so far—to spend it on staff. They always seem to have some other priority that takes precedence, and that is putting our members’ lives in danger.

What are you going to do to change that dangerous situation for your members at the BOP? Is it a pay shortage and a staffing shortage?

Moten: Well, I think we have a lot of ways to work this. We will work on that with the administration, and as aggressively as we can on Capitol Hill. We will attempt to testify on this. We will try to meet with the attorney general. President Gage is raising this with the Office of Management and Budget. We are working all over the place on the BOP funding issue. I’ve got data on this, and what we are focused on now is getting more officers into those prisons, because the ratio between officers and inmates is not a good one.

What would the health care bill mean for feds? As you know, a lot of people in the private sector act like feds have it easy. But you’ve been smacked with huge premium increases this year. What sort of health bill would you want to see, in the end?

Moten: We are supporting the House health legislation, because it would create a public option. We are supporting it because we think the financing mechanisms—the [tax] on the extremely wealthy—is the way to fund it, as opposed to what we’ve seen that has been offered in the Senate Finance Committee bill. And we’re looking at all of the reforms of the insurance industry—the ban on pre-existing conditions—that would be very important. Generally speaking, we strongly support the House health insurance legislation. Meanwhile, we are working to get the proposed excise tax on insurance plans eliminated from the Senate bill. That’s our focus in the Senate right now. We are concerned that, under the new system, some plans in the FEHBP might approach the threshold that could trigger the excise tax—which could result in some benefit cuts for our members. To get back to your central question here, that people seem to have this impression, which is sometimes [said] by politicians—that FEHBP is a great program and everybody ought to have it—the truth is, it is not a great program. As big as it is, I believe 9 million strong, it ought to be an extraordinarily good program at a bargain basement price. But it’s not, because it is divided into 250 different plans, and we lose all our bargaining power. In addition to that, we don’t think that OPM has done a good job of negotiating with the different carriers. We are working with the Berry administration at OPM to try to put some teeth into their negotiations, so that they will be able to get a better price for us next year.

Why did they divide the program into 250 different plans, which lost all their bargaining power, as you put it?

Moten: You know, that [decision] even precedes me, and I have been doing this 25 years. I think they probably thought that this is the right thing to do, and they let different companies participate. The result is they let everybody in the gate, and it’s extremely confusing for federal employees, who have to make a decision every other season. I think I was reading that they have 27 choices alone in the D.C. area. To have to go through 27 different plans to make a judgment is not an easy thing.

Back to the TSOs. How does it work that they don’t have full rights, but they are members of the union? We also noticed recently that AFGE Local 1040 in Dallas confronted a bad policy on unscheduled leave at the TSA there. If you took three unscheduled leaves in three months you got a warning letter, and AFGE had it rescinded. How does that work? That is, your relationship with the TSOs, who do not have full rights? And how did you get management to stop that—writing letters?

Moten: The reason they don’t have full rights is because right after 9/11, when the decision was made to federalize airport screening, the legislation was written in an extremely hasty and highly conservative way. They wanted to go ahead and create TSA, but the Bush administration was unwilling to make them Title V federal employees. We fought vigorously for that, but there was such a rush—and the administration fought so hard against it—that we weren’t able to get that done. While they never have had true collective bargaining rights, we have aggressively organized and they are allowed to join the union. Although frankly, lots of people have been disciplined—and even fired—for their union activity. We have, though, 12,000 members there. As a result of this, we have been able to create a legal team and a labor relations team who have helped our TSOs on the ground—who have helped our members file administrative appeals. We don’t think what is available is particularly fair. But we are using what is available to try to push back against the agency and get these situations turned around. Real collective bargaining rights would make this system a lot fairer, and that’s what we need to have. That’s where we are headed right now.

What about Title 38 law, 7422, involving the medical professions? Please explain to our readers the issues here.

Moten: The issue here is that under Title 38 law, these folks are under a different collective bargaining statute than Title V, Chapter 71. Essentially they [management] have a loophole, called “direct patient care.” We’re not allowed to bargain or grieve over issues that can be considered direct patient care. This was originally enacted because they didn’t want the union to be able to negotiate over what kind of medicines would be administered to veterans, or what sort of medical procedures would be applied to veterans in hospitals—which of course we wouldn’t want to negotiate anyway. Those were not negotiated. Unfortunately, under the Bush administration the loophole grew very, very large. It was exaggerated to the point where if there is a mistake in someone’s paycheck, and the employee tries to grieve that, management will link it to “direct patient care” and won’t allow it to be grieved. Nurses and doctors working under Title 38 in VA hospitals end up feeling like they can’t get their problems addressed, say, even when they want to talk about [the fact that] there aren’t enough nurses on an ICU unit—because management considers it to be about direct patient care. The issues that would make it a lot easier for our people to take good care of veterans are also not being dealt with. We are working on this with VA right now, with a labor group right now, to see if we can narrow this problem. These discussions are ongoing.

Your union has about 600,000 members. Is there any place you can grow?

Moten: Yes, there is. We are always doing internal organizing. And there are places inside agencies that are not in our units. That’s where we are moving and adding on, places where we have strong units and we are adding to them. It’s all over the government—we’re doing it at Social Security, DoD, Justice.

Any disappointments with the Obama administration so far?

Moten: I don’t think I can come up with one at this point. They have had a pretty big agenda themselves. And we have built some good relationships there. We don’t necessarily see eye to eye every time, but we have an ongoing dialogue with people and we are making a great deal of progress.

To see more about AFGE, go to: www.afge.org.

Discuss this news topic at www.FederalSoup.com. Click on the "Inside the News" Forum.

:: Back to Top ::

Unions Want Role In Developing Telework Policy

The Obama administration may have embraced the concept of telework, but that willingness is not translating into more feds teleworking, unions say.

So this month, about a half dozen unions offered Office of Personnel Management Director John Berry a hand in developing policies that would help ratchet up the numbers of teleworking feds. They noted that only about 5 percent of federal employees currently telework, a fraction of those who are eligible.

The coalition of seven unions—including the International Federation of Professional and Technical Engineers, the National Association of Government Employees and the National Federation of Federal Employees—sent Berry a letter requesting a seat at the table as agencies work to develop federal telework policies and expand telework options.

As part of his telework initiative, Berry earlier this year announced the creation of an advisory group of key telework program managers who would help formulate standards for agency policies and programs.

The unions say they need a role in that process.

“Creating and implementing a successful telework program would obviously require the involvement of the unions representing federal workers,” the letter said. “We can provide unique insights into identifying employees that are best suited for telework.”

The letter also offered a short list of initial suggestions to get the ball rolling. The unions said a successful telework policy should:

• Inform feds and their unions of available teleworking options.
• Provide resources to train managers on telework policies and enlist employee input.
• Train eligible employees to ensure teleworking productivity and success.
• Ensure that IT procurement policies dovetail with the goal of increasing telework.
• Review successful teleworking programs annually so those programs can be replicated.

“We are hopeful that given your support for telework we can finally put in place a working telework program,” the unions told Berry. “Our labor organizations would like to work with you to ensure that your efforts of providing meaningful telework opportunities to federal workers are a success.”

In testimony this spring, Nancy H. Kichak, OPM associate director for strategic human resources policy, also noted that telework had not grown fast enough among federal agencies. “From 2007 to 2008, the numbers of employees who are teleworking did increase, but only incrementally,” Kichak said. “This is indicative of a longer-term pattern of very slow progress.”

For example, the overall number of federal workers participating in telework programs increased only from 94,643 in 2007 to 102,900 last year. And almost half of the 78 executive branch agencies studied had not fully integrated telework into their continuity of operations planning, according to a recent OPM report, “Status of Telework in the Federal Government, 2009.” [See Sept. 28 issue of FEND for more details on the report.]

To see the letter, go to www.FederalDaily.com/extra/iftpe.pdf. Also see: http://www2.opm.gov/News_Events/congress/testimony/
111thCongress/05_14_2009.asp.

Discuss this news topic at www.FederalSoup.com. Click on the "Inside the News" Forum.

:: Back to Top ::

DIC Beneficiary Payments Higher Than Those of Civilian Survivors

Department of Veterans Affairs Dependency and Indemnity Compensation program beneficiaries receive monthly payments that are generally higher than payments provided through federal retirement programs to survivors of comparably paid federal employees, according to a Government Accountability Office report.

The DIC program provides monthly payments to the survivors of those who die as a result of a service-connected disability or while on active duty in the military. In Fiscal Year 2008, VA paid more than $4.7 billion to about 354,000 surviving spouses.

Survivors receive basic DIC payments at a generally flat rate, currently $1,154 per month, regardless of their spouse’s military rank, GAO said. And that flat rate generates some inequities. For example, a $1,154 monthly flat-rate payment replaces less of an officer’s military pay than it does the pay of servicemembers in lower pay grades. A Navy lieutenant earned about $6,000 per month in 2009. If the lieutenant died on active duty, the surviving spouse would receive the basic DIC benefit—$1,154—which replaces only about 19 percent of the lieutenant’s pay, GAO said.

GAO found that the most common beneficiary was an older female spouse of a totally disabled veteran who, in 2009, received $1,154 per month—compared with $2,823 per month paid in VA disability compensation to the disabled vet prior to death. In these cases, DIC replaced about 41 percent of prior compensation.

GAO also found that the amount paid by DIC to survivors of disabled vets and servicemembers is generally higher than the amount paid by Civil Service Retirement System and Federal Employees Retirement System programs to survivors of comparably paid federal employees.

According to GAO, for example, DIC would pay $1,400 to the surviving spouse of an Army sergeant who was severely disabled for a prolonged period before dying in 2009 (the example includes an extra $246, assuming the sergeant was totally disabled for eight years). In contrast, the surviving spouse of a federal employee, also disabled before his or her death and with the same years of experience and salary as the Army sergeant, would be eligible for a monthly CSRS payment of $606, said the report.

Disability benefits for federal employees are provided through their retirement and workers’ compensation programs and payment amounts are generally tied to the employee’s salary, the report said. The maximum CSRS survivor benefit is 55 percent of the retired employee’s monthly payment. CSRS also provides payments to the survivors of covered employees who die while employed, with survivors receiving a percentage of the employee’s calculated retirement annuity. FERS offers similar survivor benefits, but the maximum is 50 percent of the retired employee’s monthly payment, the report said.

While DIC serves to replace some of the financial support lost due to a service-connected death, the law does not define a specific percentage of income that DIC should replace, the report said. Also, the report pointed out that DIC is not a pension program, and there is no consensus among experts on an adequate or ideal replacement ratio for survivors.

To see more, go to: www.gao.gov/highlights/d1062high.pdf.

:: Back to Top ::

LTC Provider Sends Wrong Info To FLTCIP Enrollees

Some enrollees in the Federal Long Term Care Insurance Program will be getting even more time to make changes in their LTC plans after the company that offers the insurance found calculation errors in information it had sent to thousands of plan enrollees.

The firm that offers the insurance—Long Term Care Partners, a subsidiary of John Hancock Life & Health Insurance Co.—told the Office of Personnel Management that the company had sent material containing incorrect premium information to about 71,600 FLTCIP enrollees. The firm later told OPM it would send those enrollees another letter to notify them of the erroneous information—and then in December mail out personalized forms containing accurate information.

At the same time, LTC Partners said it would extend the decision period to March 15 for those who had received the information. The mistake comes at a time when many LTC policyholders—already shocked by news of premium hikes—had been given two additional months to decide whether to accept reduced benefits or a premium increase of as much as 25 percent.

“Getting accurate, easy to understand information to our enrollees in a timely manner is my top priority,” said OPM Director John Berry. “All companies participating in this program must take steps to ensure that similar errors are avoided in the future.” To see more, go to: www.opm.gov/news/opm-and-long-term-care-partners-work-to-correct-letters-to-enrollees,1490.aspx. To see the letters, go to: www.ltcfeds.com/documents/letters-landing-page_print.html.

:: Back to Top ::

Informed Investor: Making the Most of the FEHBP Open Season

Between now and Dec. 14, 2009, federal employees who are currently enrolled in the Federal Employee Health Benefits Program will need to decide whether to change or retain their health insurance plan for the 2010 plan year.

The FEHBP offers several types of plans for employees. While premium costs will be increasing for most FEHBP plans for 2010 (employees pay on average 28 percent of the total premiums), premium cost is only one factor in selecting a health insurance plan. Employees should be aware of the plan choices and what kind of benefits each plan provides. The following is a list of FEHBP plans and what they provide:

• Fee-for-Service plans. These are non-preferred provider organization, or PPO, plans that either pay the medical provider directly or reimburse the insured after the insured files an insurance claim for each covered medical expense. The insured has the choice of health care providers. FFS plans tend to be more expensive and usually require additional paperwork.
• Fee-for-Service plans with a PPO. This FFS option allows the insured to see medical providers who participate in the plan and usually reduce their fees to plan participants. The insured typically pays fewer out-of-pocket expenses when using a PPO provider. The insured usually will not have to file claims or paperwork with a PPO provider. But going to a PPO hospital does not guarantee PPO benefits for all services received in the hospital. For example, lab work and radiology services within the hospital may not be covered by the PPO agreement with the hospital. Also, enrolling in an FFS plan does not guarantee that PPO providers (doctors and hospitals) will be available in the insured’s area.
• Health Maintenance Organizations. These health plans provide medical care through a network of physicians and hospitals in a particular geographic or service area. HMOs coordinate the health care service the insured receives without the insured filing or completing paperwork or being billed for covered services. Eligibility to enroll in an HMO is determined by where the insured lives. Some HMOs are affiliated with, or have arrangements with, HMOs in other geographic or service areas. This is beneficial for non-emergency care outside of the insured’s service area. Most HMOs provide a comprehensive set of services as long as the doctors and hospitals are affiliated with the HMO.
• HMO Plans Offering a Point of Service Product. Within an HMO, the POS product gives the insured access to providers who are not part of the HMO network. The insured usually pays more for services of a provider outside of the HMO network.

The following are POS plans that have features similar to both the FFS plans and the HMOs:

• Consumer Driven Health Plans. These plans offer a wider range of approaches to give the insured more incentive to control the cost of either the insured’s health benefits or health care. The insured has greater freedom in spending health care dollars up to a designated amount and will receive full coverage for in-network preventive care. The catastrophic limit is usually higher compared to other plans. Included with many CDHPs are health savings accounts or health reimbursement accounts.
• Higher Deductible Health Plan. An HDHP is a health insurance plan in which the enrollee pays a deductible of at least $1,200 for self-only coverage or $2,400 for self and family coverage. The annual out-of-pocket expenses, including deductibles and copayments, cannot exceed $5,950 for self-only coverage or $11,900 for self and family coverage. HDHPs have first dollar coverage (no deductible) for preventive care and higher out-of-pocket copayments and coinsurance for services received from non-network providers. HDHPs offered by the FEHBP establish and partially fund HSAs for all eligible enrollees. (HSAs will be discussed in next week’s column.)

Employees also can make the following changes to their health benefits during the FEHBP open season:

• Change enrollment from “self and family” to “self only.” Married federal employees who are both enrolled in the FEHBP and who no longer have any dependents eligible for the FEHBP may determine that two self-only plans are less costly than one self and family plan.
• Change the primary name for insurance coverage. Married federal employees who have self and family coverage in which one spouse will be retiring during 2010 could save some money by having the insurance under the working spouse’s name. FEHBP premiums are deducted from an employee’s paycheck on a pretax basis (premium conversion) whereas premiums are deducted from an annuitant’s check on an after-tax basis.
• Elect out of premium conversion. For those employees who expect to have significant out-of-pocket medical, dental and/or vision expenses during 2010, choosing to have FEHBP premiums deducted on an after-tax basis may result in additional tax savings. Assuming an employee itemizes on his or her income taxes, FEHBP premiums deducted from an employee’s paycheck using after-tax dollars could be added to an employee’s other medical expenses, possibly resulting in additional tax savings.

:: Back to Top ::

Rulings Roundup: Retiree Wins Bid to Reduce Former Spouse’s Benefit

Rodney G. Davis, a federal retiree under the Civil Service Retirement System, won a recent bid to reduce the survivor benefit that had been designated for a former spouse.

Davis retired in January 2008, and at that time he designated his current spouse for a “maximum survivor annuity.” But the Office of Personnel Management soon afterward notified him that, under a 2005 divorce decree, his former spouse remained designated to receive the maximum permissible survivor benefit—a full 55 percent of the total gross annuity available.

But Davis—appealing at first to OPM—objected, interpreting the same 2005 divorce decree to offer the former spouse far less. Davis noted that the decree specified, in part, that his former spouse receive only “thirty-five percent of the defendant’s Civil Service Retirement System Benefits which were accumulated during the parties’ marriage (from April 12, 1985, to the date of the entry of this Decree) by the defendant in connection with his employment,” a quote backed by official documents in the case.

The decree added that the former spouse was to receive another 35 percent of the proceeds of Davis’s Thrift Savings Plan, and the same portion of the designated survivor benefit.

Davis accepted that up to 35 percent of the survivor benefit would go to his former spouse—but he argued that “the balance of the annuity should be paid to his current spouse.”

OPM, however, denied Davis’s appeal, arguing that the “the divorce decree did not specifically address the amount of the survivor benefits to which the appellant’s former spouse was entitled.”

Davis appealed yet again, to the Merit Systems Protection Board. This time, he offered an additional piece of evidence in his favor: a March 18, 2009, court order specifying that his former wife’s survivor annuity payment “would be 35% of the maximum survivor annuity,” prorated to reflect the duration of the marriage.

The MSPB administrative judge in the case, however, ruled against Davis. The judge found, again, that the original decree did not limit the ex-wife’s survivor benefit—and, therefore, the former spouse was entitled to the full maximum amount—55 percent of the gross annuity, rather than the roughly one-third portion of that amount that Davis claimed.

The AJ also found that the 2009 court order “did not meet MSPB’s regulatory criteria” and could not even be considered in the case.

Davis filed another appeal, with the full MSPB.

On the issue of the second court order’s validity, the board found against Davis. MSPB wrote that because that order was issued after the appellant’s retirement—and did not represent the “first order dividing marital property”—it could not hold sway in this case, under rules specified in 5 C.F.R. § 838.806(b).

On the larger issue of just how much his ex-wife would get from his annuity, the appellant prevailed. The board ordered that the appellant’s former spouse should receive no more than “35 percent of the prorata share of the maximum survivor annuity,” rather than the amount the AJ had specified, the full maximum.

In reversing the AJ’s order, the full board relied on its reading of the original divorce decree and found that that document clearly limited the first wife to 35 percent of the maximum possible payout.

MSPB ordered OPM to make the required change to the appellant’s annuity accounts within 20 days of its decision in the case.

(Davis v. OPM, Docket No. DA-0831-09-0253-I-1, 10/29/09)

Probationary CBP Employee Loses Bid for Appeal Rights

Carlos A. Ramos, a non-preference eligible employee with the Department of Homeland Security’s Customs and Border Protection unit, lost a recent administrative appeal of his termination from his job.

Ramos, who served in the Navy for several years and received an honorable discharge in 1996, took a job in federal service again as a Customs and Border Protection Officer in the last decade. CBP hired him under authority of the Federal Career Internship Program.

Under such internship authority, employees normally hold appointments for approximately two years—some end up being hired as permanent employees, while others do not.

By the time Ramos was terminated, he had served for approximately 16 months.

The internship hiring law, as noted in official documents in the case, “confers no rights to further Federal employment in either the competitive or excepted service upon the expiration of the internship period.” Yet, the documents also note that the appellant’s termination letter “erroneously informed him” that he had appeals rights before the Merit Systems Protection Board.

Ramos appealed to that panel, but an administrative judge denied the appellant’s case, claiming no jurisdiction.

Ramos appealed again—to the full MSPB.

His appeal was turned down. “The Board’s jurisdiction cannot be expanded by an agency’s misstatements or erroneous notice of appeal rights,” the board wrote in support of its denial, citing precedent (OPM v. Richmond, 1990).

The appellant’s termination stands.

(Ramos v. MSPB and DHS, U.S. Court of Appeals for the Federal Circuit, Docket No. 2009-3126, 11/6/09)

:: Back to Top ::

Federal Benefits Q&A

Question: “I retired as a Civil Service Retirement System retiree six years ago and never did anything with my Thrift Savings Plan account. It is now time for me to do something about it (because of my age) and was wondering what would be the best thing to do: Take the lump sum, or receive a monthly amount? For tax purposes, which would be the smarter move?”

Answer: To minimize your overall tax bite, the best way to withdraw your TSP account is to request monthly payments. The amount that you receive each month will be determined in one of two ways: (1) a fixed dollar amount that you receive each year; or (2) an amount based on life expectancy. The TSP will determine that amount. When you reach age 70.5, you will be required to withdraw a minimum required amount (as determined by the TSP) each year.

Readers are encouraged to ask questions related to general employee benefits—such as CSRS, FERS, the Thrift Savings Plan, tax and estate planning, insurance, Social Security and Medicare—at the “Federal Benefits Q&A” forum at www.FederalSoup.com.

:: Back to Top ::

Maxine Lunn, General Manager
Phil Piemonte, Managing Editor
Nathan Abse, Staff Writer
Frank Klimko, Contributing Writer
Mike Causey, Columnist
Edward Zurndorfer, Columnist

Published by 1105 Government Information Group; Anne Armstrong, President

1105 Government Information Group is part of 1105 Media, Inc.; Neal Vitale, CEO

SUBSCRIPTION RATES: Newsstand: $5.00
1 year - $97, 2 years - $184, 3 years - $262

For electronic delivery, phone (703) 891-8552 or email sitelicense@FederalDaily.com

Call customer service at 1-800-989-3363, or mail to: Federal Employees News Digest, 3141 Fairview Park Drive, Suite 777, Falls Church, VA 22042

The Comptroller General has ruled that federal agencies and departments may buy Federal Employees News Digest publications with government funds. This decision is No. B-185591. Federal Tax ID 20-4583700

NOTICE:  WARNING CONCERNING COPYRIGHT RESTRICTIONS The copyright law of the United States (Title 17, United States Code) governs the making, dissemination, and reproduction of any Federal Employees News Digest publication.  Criminal copyright infringement is investigated by the FBI and may constitute a felony with a maximum penalty of up to five years in prison and/or a $250,000 fine.  Unlawful dissemination or reproduction of protected information may give 1105 Government Information Group a civil right of action against you and your employer, if applicable. To report copyright violation or unauthorized distribution of this document, please call (703) 891-8552 or email sitelicense@FederalDaily.com

Copyright ^© 2009 by 1105 Media, Inc. All rights reserved. Reproduction in whole or in part in any form or medium without expressed written permission of 1105 Government Information Group is prohibited. For our private policy, click here. Mail requests to “Permissions Editor,” c/o Federal Employees News Digest, 3141 Fairview Park Drive, Suite 777, Falls Church, VA 22042 or editor@FederalDaily.com.

The information in this newsletter has not undergone any formal testing by 1105 Media, Inc. and is distributed without any warranty expressed or implied. Implementation or use of any information contained herein is the reader’s sole responsibility. While the information has been reviewed for accuracy, there is no guarantee that the same or similar results may be achieved in all environments. Technical inaccuracies may result from printing errors and/or new developments in the industry.

This publication’s subscriber list, as well as other lists from 1105 Media, Inc., is available for rental. For more information, please contact Edith Roman Associates: Phone: 800-223-2194; E-mail: info@edithroman.com; Web: www.edithroman.com