Monthly Archives: November 2017

Pay and Benefits Affected During a Shutdown?

shutdownThe current continuing resolution is set to expire at the end of the day on December 8, so talk of a government shutdown is starting back up.

Earlier this week, President Trump and congressional leaders had a meeting scheduled. Then, the president tweeted, “I don’t see a deal”, so the House Minority Leader Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) canceled their meeting at the White House.

Congressional aides say the most likely scenario is a 2-week extension in December that would give lawmakers more time to negotiate.

“We hope that whatever final deal is reached, it restores agencies’ funding to levels that provide for smooth and adequate operations for our 326 ports of entry, the appropriate policing of the financial and banking system, an efficient and effective tax collection process, strong enforcement of environmental laws, and so many other vital government services,” National Treasury Employees Union President Tony Reardon said.

If, however, a deal does not happen and the government does shutdown, keep the following in mind.

Pay

Those furloughed during the shutdown in 2013 did receive back pay for the 16 days the government remained closed. Congress included a provision in its October 13 spending bill that authorized furloughed employees to receive “their regular standard rate of compensation for the period of such lapse in appropriations, as soon as practicable”.

Several congressmen have already said they want to make sure federal employees get paid in the event of a shutdown.

Reps. Don Beyer (D-VA) and Rob Wittman (R-VA) introduced the Federal Employee Retroactive Pay Fairness Act, which guarantees federal employees receive back pay in the event of a shutdown.

“Federal employees shouldn’t suffer because Congress refuses to end its govern-by-crisis mentality,” Wittman said. “Preparing the retroactive pay legislation sends a signal to our federal workers that they won’t be forgotten in the unfortunate event of a shutdown. While this legislation minimizes the impacts of funding uncertainty, my focus remains on returning Congress to a regular schedule of budgeting and passing appropriations bills.”

Excepted Positions

Those who perform “emergency work involving the safety of human life or the protection of property will be “excepted” from shutdown furloughs.

Federal employees whose salaries are funded through annual appropriations will be asked not to work.

Most political appointees aren’t subject to furloughs because they aren’t a part of the Title 5 leave system, so they will continue work during a shutdown.

Generally, agency legal counsels/sr. managers determine who serves in “excepted” or “non-excepted” functions. Each agency also determines when and how it will notify employees of their status.

“Excepted” employees who work during a government shutdown generally get paid after Congress passes and the president signs another continuing resolution or appropriations package.

To check out more about what happens to other benefits, check out the post below.

 

 

In the Event of a Government Shutdown, Do I Still Get Paid?

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Federal Employee Health Benefits Open Season

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The Federal Benefits Open Season is in full swing. This is the time of year federal employees and retirees can review their health, dental, vision, and tax saving needs and make changes to, or enroll in, the right plan for your current situation. You may make changes until December 11.

Federal Employee Health Benefits (FEHB)

The FEHB Program covers over 8.2 million federal employees, retirees, and their families.

In 2018, there will be 262 health plan choices available, with 15 available nationwide. If currently enrolled in “Self and Family” but you only have 1 eligible family member, you may want to change to “Self Plus One”. This could save you money.

On OPM’s Quality Page, you can also check out plans in your zip code to see how they compare to your current plan. OPM selects the most relevant measures available, including prenatal care, blood pressure control, timeliness of processing claims, and overall plan satisfaction.

Federal Employees Dental and Vision Insurance Program (FEDVIP)

In 2018, FEDVIP will offer 10 dental plans, 6 of which are nationwide.

Four vision plans are offered, all available nationwide.

Some highlights of these plans include FEDVIP offering adult orthodontia and in-network Class A dental services (oral exams, prophylaxis, topical application of fluoride) for free. You can enroll in a “Self Only” vision plan for under $4 a pay period.

Federal Flexible Spending Account Program (FSAFEDS)

Most employees are eligible to enroll in FSAFEDS; however, retirees are not. For those that are eligible, FSAFEDS offers 3 accounts to choose from—a healthcare account, a limited expense health care account, and a dependent care account. Participation in these accounts allows you to lower your taxable income by setting aside pre-tax money to pay for eligible health, dental, vision, and dependent care expenses such as copays, prescription drug costs, orthodontics, eyeglasses, and child/elder care.

There is also now a “carry over” where enrollees can carry over up to $500 of unused Healthcare FSA money into the following year. To take advantage of the carryover of 2017 funds, you must re-enroll for 2018.

FSAFEDS also offers paperless reimbursement for your Healthcare FSA through many of the FEHB and FEDVIP plans. Meaning when you file claims with your FEHB or FEDVIP plan, FSAFEDS will automatically reimburse your eligible out-of-pocket expenses. Almost no paperwork is involved and in many cases, you receive your reimbursement before your bill is due.

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Merging Healthcare Systems?

healthcareThe Department of Veterans Affairs is looking at the possibility of merging its health system with the Pentagon’s as part of its effort to expand private health care.

Curt Cashour, a VA spokesman, said the plan is a potential “game changer” that would “provide better care for veterans at a lower cost to taxpayers”.

A spokesman for the Democrats on the House Veterans Affairs Committee. Griffin Anderson said the proposal was developed without input from Congress and it would amount to a merger of the VA’s Choice and military’s TRICARE private health care programs.

However, veteran’s groups say this cost-saving measure could threaten the viability of VA hospitals and clinics. News of these ideas has stirred alarm from veterans groups, who said they hadn’t been consulted. Sharp criticism came from Congressional Democrats who said they would oppose any VA privatization effort that forces veterans “to pay out of pocket for the benefits they have earned with their heroism”.

“Today, we see evidence that the Trump administration is quietly planning to dismantle veterans health care,” said House Minority Leader Nancy Pelosi. “House Democrats will fight tooth and nail against any efforts to diminish or destroy VA’s irreplaceable role as the chief coordinator, advocate, and manager of care for our veterans.”

Some healthcare experts expressed surprise that the VA would consider a TRICARE merger. The 2 programs usually serve very different patient groups—older, sicker veterans treated by VA, and healthier service members, retirees, and their families covered by TRICARE.

TRICARE is insurance paid by the government but uses private doctors and hospitals. VA provides its care through medical centers and clinics owned and run by the federal government; however, veterans can see private doctors through VA’s Choice program with referrals by VA if appointments aren’t readily available.

Carrie Farmer, a Sr. policy researcher on military care at Rand Corp. (who has conducted wide-ranging research for VA) said, “My overarching concern is these are dramatic changes in the way healthcare is delivered to veterans. They haven’t seen studies on what the consequences are in terms of both costs and quality of care.”

Cashour confirmed that VA Secretary David Shulkin was working with the White House and the Pentagon to explore “the general concept” of integrating VA and Pentagon health care, building upon an already planned merger of electronic healthcare records between VA and the Pentagon. “This is part of the president’s efforts to transform how government works and is precisely the type of business like commonsense approach that rarely exists in Washington,” Cashour said.

So far, 4 of the nation’s largest veteran organizations—American Legion, Veterans of Foreign Wars, AMVETS, and Disabled American Veterans—called this merger a “non-starter” if it sought to transform VA care into an insurance plan.

“VA is a health provider and the VFW would oppose any effort to erode the system specifically created to serve the healthcare needs of our nations’ veterans by reducing VA’s role to a payer of care for veterans,” said Bob Wallace, executive director of VFW’s Washington office.

Louis Celli, director of veterans affairs and rehabilitation for the American Legion noted that something similar occurred with TRICARE. Military retirees were promised free care from military base hospitals, but then TRICARE began offering insurance to use private sector care, and TRICARE beneficiary co-pays are now rising. The precedent the TRICARE model sets is not something we would accept on the VA side,” he said.

A spokeswoman for Rep. Phil Roe of Tennessee, Republican Chairman of the House Committee, said he planned to proceed with his bipartisan legislative plan to fix Choice without integrating TRICARE.

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Arbitration in the Federal Government

arbitration

Collective bargaining occurs in both the public and private sectors, however, it’s not the same. The fundamental issues of pay, benefits, management rights, and more are all fixed by Congress.

5 USC, Chapter 71, Sections 7121-7123 requires all collective bargaining agreements provide a provision for a grievance procedure and binding arbitration. However, these procedures must still operate subject to rules governing arbitrability, such as the arbitrator is bound to follow MSPB procedures and regulations. The arbitrators used in federal grievances come from the same body of arbitrators that the private sector uses. They generally have more exposure to the private sector than the public and when deciding adverse action, they typically look to whether managements’ action meets a “just cause” standard.

Agencies are authorized to subject employees to adverse actions “only for such cause as will promote the efficiency of the service”—5 USC § 7513(a). Therefore, efficiency of service is a critical component of disciplinary actions.

Deborah Morgan v. U.S. Postal Service (1991) gave a definition of “the efficiency of the service”. MSPB noted that “an adverse action promotes the efficiency of the service when the grounds for the action relate to either an employee’s ability to accomplish his duties satisfactorily or some other legitimate government interest.”

Just Cause

Just cause is a common standard in labor arbitration used in the private sector labor union contracts in the U.S. It is used as a form of job security. Another definition, from Blacks Law Dictionary, defines it as “good cause”, meaning there is a legally sufficient reason for the action to have occurred and the burden is placed on the grievant to show why his/her request should be granted to overturn an action. Just cause provides protections against arbitrary or unfair terminations or other forms of inappropriate workplace discipline.

7-Part Standard

In 1964, arbitrator Dr. Carroll Daugherty developed a seven-part standard where the discipline or discharge of an employee is analyzed and can be upheld as a just cause action if management can favorably answer the following 7 questions:

The employee knew of the employers’ policy

  • Agencies have a legal and contractual right to manage its workforce with rules and policies. However, the agency has an obligation to inform the employees about their meaning and application.

The employer policy is reasonable

  • The workplace rule/policy must not be arbitrary or discriminatory and must be related to the employers’ stated goals/objectives.

Was there a sufficient investigation?

  • Did the employer investigate before deciding about taking disciplinary or adverse action?

Was the investigation fair and objective?

  • The employer has an obligation to conduct a fair, timely, and thorough investigation that respects the employees’ rights to union representation and due process.

Substantial evidence exists that the employee violated policy

  • Did the investigation disclose any substantial proof/evidence that the employee was guilty of violating/disobeying a direct rule/order?

The employees’ policy has been consistently applied

  • Did the employer apply all rules, regulations, and penalties evenly and without discernment to all employees?

Discipline was reasonable and proportionate

  • Was the degree of discipline administered reasonably related to either the seriousness of the employees’ offense or to the record of past service?

The general rule is if an employer can satisfy these 7 factors, then their defense of a grievance will have a greater probability of being sustained.

To see more on these 7 standards, click here.

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Thrift Savings Plan–Loans

loans

So far in this series, we have covered the basics of the Thrift Saving Planemployee and agency contributions, and the differences between Traditional and Roth TSP accounts. The next couple of posts will look at loans, withdrawals, and refunds in your TSP account, with this post covering loans.

Loans, Withdrawals, and Refunds

Once you leave federal service, you can take money out at any time. The IRS may impose an early withdrawal penalty tax on the disbursement depending on your employment status and how you receive the funds. There are three ways to get money out of your TSP:

  • Loans
  • In-service withdrawal—withdrawal while still employed by the federal government
  • Post-separation withdrawal—withdrawal after separation from the federal government

Loans

Loans are only available to participants who are actively employed by the federal government, in pay status and have contributed their own money. When you take a loan, you are borrowing your own contributions and earnings on those contributions. TSP also charges a processing fee for each loan, which is deducted from the amount of the loan you receive.

When you borrow from your account, you miss earnings that may have accrued on the money you borrowed. Also, if you have an outstanding loan when you leave federal service, you must pay it back within 90 days or the outstanding balance will be treated as taxable income.

There are two types of loans—general purpose and loans to purchase or build a primary residence.

A general-purpose loan must be repaid within 5 years and primary residence loan within 15 years. You may only have one of each type of loan outstanding at any time. The loan amount is limited to your own contributions and earnings on those and you can’t borrow less than $1,000 or more than $50,000. You must also wait 60 days from the time you pay off one loan until you’re eligible to request another loan of the same type.

Repayment

Repayment is made through payroll deduction. If your agency doesn’t deduct your loan payment from your pay, you must submit payment directly to TSP because you are responsible for your own payments.

Consequences of Repayment Failure

If you fail to repay your loan according to your Loan Agreement, TSP will report the loan as a taxable distribution to the IRS. You will owe income taxes on the taxable amount of the outstanding balance of the loan and possibly and have an early withdrawal penalty tax as well. However, you won’t owe income tax on any part of your outstanding loan amount that consists of tax-exempt or Roth contributions. You will owe taxes on the earnings on any tax-exempt contributions that were part of your Traditional balance.

If you default on a TSP loan, you will owe taxes, for that year, on the taxable amount you did not repay, including any qualified Roth earnings. Paying taxes on qualified earnings means you must pay taxes today on an amount you would otherwise be entitled to receive tax-free at retirement.

The following apply to Roth earnings:

  • If the taxable distribution is declared because you separate from service, any qualified Roth earnings won’t be subject to tax. However, Roth earnings not qualified will be.
  • If the taxable distribution is declared for another reason, your Roth earnings will be taxed, even if they were already qualified (or eligible to be paid out tax-free).
  • Note: If you have 2 TSP accounts, you must close any loan in the account you are moving before the accounts can be combined.

Harris Federal Law Firm helps federal and Postal employees nationwide with federal disability retirement cases. If you have an injury or illness that keeps you from performing your essential job duties, you may qualify for Federal Disability Retirement. Give us a call at 877-226-2723 or fill out this INQUIRY form today.

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More Options for Tuition Assistance

tuition

The Office of Personnel Management has announced that it has entered into agreements with four additional schools to offer tuition discounts for federal employees.

The Catholic University of America Metropolitan School of Professional Studies, Pace University iPace Program, Park University, and Utica College are the new academic institutions. The terms of the agreements include reduced tuition rates and/or scholarships provided to federal employees. Some agreements extend the benefits to spouses and legal dependents.

Some programs at these institutions address some of the federal governments’ mission critical occupation skills in the areas of Acquisitions, Human Resources, Financial Auditing, Economics, IT with an emphasis on Cybersecurity, and Science, Technology, Engineering, and Mathematics (STEM).

Federal Academic Alliance program

This program now has 15 participating colleges and universities. Under the program, discounted tuition rates ranging anywhere from 5-70% and/or scholarships are provided to federal employees.

Other recent schools to collaborate with OPM include Penn State World Campus, Central Michigan University, and Excelsior College.

“This Federal Academic Alliance provides feds and their families with access to opportunities to earn a variety of bachelor and master degrees,” said OPM Acting Director Kathy McGettigan. “We will continue to provide the federal workforce with opportunities to obtain the education they need to meet today’s federal workforce challenges. The alliance will also help agencies close critical skills gaps, enabling the federal workforce to fulfill its mission to serve the American people.”

Click here for more information and a full list of participating academic institutions.

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VA is Hoping to Clean Up Management

accountabilityThe VA Management Alignment Act would require the department to report to Congress on its organizational structure, including details on the “roles, responsibility, and accountability” of its “elements and individuals”. This report would also include results from previous studies, such as two assessments required by the 2014 Veterans Access, Choice, and Accountability Act. Findings from one of these reports found the Veterans’ Health Administrations structure “intensely, unnecessarily complex”.

For years, the VA has landed on the Government Accountability Offices’ high-risk list due to deficiencies in “inadequate oversight and accountability” and “inadequate training”. Since these findings were first released in 2014, the VA’s inspector general has published several investigations identifying systemic problems at medical facilities across the country.

This bill would ask VA to include recommendations for legislation in its report, which it would have 6 months to draft. Improving accountability is a major focus for the VA. Earlier this year, President Trump signed a measure hoping to improve department accountability and speeding up the disciplinary process for VA employees. This new report would include a list of leaders at every VA office, region, and medical facility.

Rep. Derek Kilmer, D-WA, introduced the measure. “Stories and reports about manipulated wait times and mismanagement in our VA system proved that systemic reforms were needed. We are calling on the VA to address management challenges and improve care, so veterans get the services they have earned,” he said. He also added that the VA struggles to implement new policies “due to a severe lack of clarity regarding the roles, missions, and accountability of sr. leaders and organizations within the agency.”

“There has to be a clean, transparent, and enforced relationship between the leaders and layers of the VA,” he said. “We need all the rowers in the boat paddling in the same direction, not beating each other over the heads.”

The American Federation of Government Employees, representing 230,000 VA employees, has generally opposed accountability bills and reforms proposed by the Commission on Care because union officials see it as a disproportionate focus on rank-and-file employees of management. However, AFGE has endorsed the new bill, as well as the American Legion.

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Veteran’s Benefits Need to Improve

benefitsVA Secretary, David Shulkin, is calling for a new way of thinking about veterans’ benefits. “I want to see an ongoing dialogue with stakeholders about rationalizing veterans’ benefits—a veteran benefit advisory board that can bring clarity to what we’re trying to do for our veterans and what’s best, and how we can do that in the best way,” Shulkin said.

This new advisory board will help VA focus on key aspects of Veterans Benefits Administration programs, such as providing financial security for those who are severely disabled, providing mental and physical well-being to veterans, offering economic and professional opportunities, and helping them reintegrate back into civilian life.

“We need more incentives for achieving wellness and independence,” Shulkin said. “This should be a system that focuses on veterans’ abilities, not on their disabilities. VA needs to transform into an organization where we are veteran advocates and we facilitate them getting benefits, not being the gatekeeper of benefits decisions.”

He went on to say, “Let me be clear though, this isn’t about taking away benefits from veterans. This is about making benefits work better for veterans and transforming the Department of Veterans Affairs to do better for years and for generations of future veterans. I think they deserve no less than that.”

He believes veterans’ benefits is an area the department can do better in and they need to have a far less complicated system in place. He also said the whole benefits program has never received a full systematic review.

“The system, it appears to me, puts VA in an adversarial relationship with veterans, where they have to come to us and ask, rather than we are trying to help them.”

Mandatory VA spending for benefits has increased by more than $80 billion over the past 30-40 years; $13.7 billion in 1980 to $95.3 billion in 2017. Prior to 2004, military veterans couldn’t receive DOD retirement benefits and VA Disability compensation at the same time. By 2013, 59,000 DOD retirees received concurrent benefits, along with Social Security, totaling more than $35 billion. Administrative costs have also risen. In 2000, the cost was $1 billion; now, $5 billion.

“We have to make simpler benefit determinations,” he said. “Frankly, we’re spending too much on admin costs and we have to let veterans know what they can expect. They shouldn’t have to constantly be refilling claims to get what they deserve. We must emphasize service-connection disabilities, so we aren’t compensating veterans for age-related issues. We have to focus benefits on enabling independence, so veterans can succeed on their own because that’s what I think leads towards feeling a sense of well-being.”

The department has started implementing changes. They recently launched the Rapid Appeals Modernization Program (RAMP), which will let veterans choose from several paths to resolve pending claims. The goal of this program is to give veterans the earliest possible resolution of their pending claims with the VBA.

Later this month, the department will begin making VA benefit determinations for military members on the day they leave service.

In the future, he wants VA to make instant decisions, like the way we can check our credit scores immediately.

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ELTP’s–Guidance Issued

guidance

It’s unusual to have simultaneous emergency leave transfer programs (ELTP) is effect at once, but due to recent events, that’s currently the case. Because of this, OPM has issued guidance to federal agencies on managing these programs. The ELTP’s were put into place in response to Hurricanes Irma, Maria, Harvey, and the California wildfires.

What is an ELTP?

An ELTP is a program that allows employees in executive and judicial branches, or agency leave bank, to donate unused annual leave for transfer to other federal employees adversely affected by major disaster or emergency.

Leave if for employees who need additional time off from work without having to use their own paid leave.

Donations are made directly or through adversely affected family members.

Receiving Additional Leave

Those adversely affected and want to receive extra leave through this program must apply in writing to their employing agency.

Agency’s Role

Agency’s with employees adversely affected by one of the “approved” disasters will usually determine whether, and how much, donated annual leave is needed by their employees and which of their employees have been adversely affected.

OPM Guidance on Multiple ELTP’s

Under the ELTP statute, 5 U.S.C. 6391(b), an ELTP must be established for a specific disaster or emergency, and employee donations of annual leave must be directed to a specific established ELTP.

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Traditional vs. Roth TSP

roth

Previous posts in this series have looked at the basics of the TSP and employee contributions and agency contributions. Now, we’ll compare and contrast the Traditional and Roth TSP.

Traditional vs. Roth TSP

Here we’ll look at the differences between a Traditional and Roth TSP.

Traditional TSP

A Traditional TSP is one where you defer paying taxes on your contributions and earnings until you withdraw them. If you’re a member of the uniformed services and making tax-exempt contributions, your contributions will be tax-free, only your earnings will be subject to tax at withdrawal.

Roth TSP

Here, you pay taxes when you make your contributions and get your earnings tax-free at withdrawal if you meet the requirements to qualify.

Note: When you are automatically enrolled in TSP, you begin making Traditional contributions. If you want to make Roth contributions, you must elect to do so.

Below is a table comparing Traditional and Roth contributions.

roth

*Image courtesy of tsp.gov

**If your earnings aren’t qualified, you can defer paying taxes on them in many cases by transferring your payment to a Roth IRA or Roth account maintained by an eligible employer plan.

Retirement Age and Penalty Tax

If you receive a TSP withdrawal payment before you reach 59 ½, you may have to pay a 10% early withdrawal penalty tax on any taxable part your distribution not transferred or rolled over. This penalty is in addition to regular income tax you owe. However, there are exceptions:

  • If you leave federal service during or after the year you reach 55 (or the year you reach 50 if you’re a public safety employee), the 10% penalty tax doesn’t apply to any withdrawal you make that year or later.
  • Note: Disability retirement from OPM may not exempt you from the early withdrawal penalty tax. The IRS requirement is stricter, and you must substantiate your claim with the IRS.

Harris Federal Law Firm helps federal and Postal employees nationwide with federal disability retirement cases. If you have an injury or illness that keeps you from performing your essential job duties, you may qualify for Federal Disability Retirement. Give us a call at 877-226-2723 or fill out this INQUIRY form today.

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