Monthly Archives: November 2018

Veterans Protected from Overpayments?

overpaymentsLegislation recently introduced would protect veterans from overpayment debt from errors made by the Veterans Affairs Department regarding monthly benefits. Congressman John Delaney (D-Md.) introduced the bill, known as the Veteran Debt Fairness Act (H.R. 7144). Jon Tester (D-Mt.) introduced a similar legislation in the Senate earlier this year (S. 2341).

Veterans are currently subject to incurring unexpected expenses if the VA inadvertently issues overpayments on their monthly benefits. This is at no fault of the veteran. When this happens, the VA can withhold a veteran’s benefit, with no limitation, including monthly disability payments. The payments are not identified immediately because they are on an automatic monthly schedule, meaning larger debts accumulate over time. Delaney says this can lead to “undue hardships” for veterans.

“Our veterans have sacrificed enough for our nation,” he said. “The least we can do is ensure they don’t have their financial wellbeing threatened by other peoples’ errors. This is just one small way we can show our appreciation for their service and provide some certainty in their financial planning.”

This bill would require the VA to:

  • Conduct audits to determine the frequency of VA errors resulting in overpayments and how vacancies at the Veterans Benefits Administration affect that;
  • Provide veterans with a way to update dependency information of their own eliminating a common delay that can affect a veterans’ benefits; and
  • Conduct a secondary review when the overpayment total is above $2,500 and creates an administrative 120-day process through which veterans can dispute debt.
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Choosing the Best Plan

season

With the deadline of this Federal Employee Health Benefits Open Season fast approaching, now is the time to make any changes to your plan(s). Ending on Monday, December 10, Open Season is the time to sign up for or make changes to your government health care plan.

But how do you know what the best option is?

There is a lot to consider: premiums, out-of-pocket costs, physician networks, and catastrophic limits. You should weigh these carefully and by doing so, you should be able to make an informed decision that could potentially save you hundreds or thousands of dollars.

There are 280 plans available, so choosing one can be an overwhelming task. There is help though—Consumers’ Checkbook has its annual Guide to Health Plans for Federal Employees available. The guide provides ratings on all plans available, both locally and nationally. It provides overall ratings and ratings broken down by different factors, such as insurance value, out-of-pocket cost limits, premiums, and more. It also rates the various standalone plans available through the Federal Employee Dental and Vision Program.

These ratings should only serve as a starting point, not the be all, end all. Federal employees still need to carefully examine their needs and the plan details.

“The data we have presented should help you to quickly and easily narrow your choice to 2 or 3 of the plans out of the dozens you are offered,” the group wrote. “At this point, compare the brochures of these carefully. Underline key points, or parts of the plans that confuse you, and compare these points among the plans.”

You can also visit www.GuidetoHealthPlans.org for more information.

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Update on OPM Retirement Claims Backlog

backlog

The Office of Personnel Management Inspector General released a report that shows OPM has work to do in meeting its goals for keeping down its backlog of retirement applications. The agency has said it has a goal of improving “retirement services by reducing the average time to answer calls to 5 minutes or less and achieve an average case processing time of 60 days or less.”

Here is what the IG had to say of OPM’s efforts:

“OPM appears to remain focused on its internal process improvements and external outreach towards other Federal agencies to meet their goal. However, while Retirement Services appears to have met its average case processing goal for FY2018, with an average processing time of 59 days, its claims backlog as of September 2018 was 17,628, more than 4.5% higher than at the same time a year ago. In addressing the average call answering time, Retirement Services stated that an average time to answer calls in FY2017 was 9.7 minutes, but it increased to 12 minutes in FY2018, more than double the strategic plan goal of 5 minutes or less. Again, no data was provided to Retirement Services’ average time to answer calls.

In order to alleviate the excessive busy signals and long wait times, Retirement Services provided more automated services via Services-On-Line, a redesign which went live on June 10, 2018, featuring a new technology stack with responsive design that is compatible with any hand-held design, and provides a more customer-friendly experience and efficient processing of transactions.

In continuing its efforts, Retirement Services plans to:

  • Continue to integrate improvements for correspondence and claims processing;
  • Enhance reporting tools to monitor and address Retirement Services workloads;
  • Utilize overtime to assist with timely processing;
  • Work with the OCIO to investigate technological capabilities to help improve processing time and reduce wait times;
  • Continue to provide Federal retirement policy technical assistance to all OPM offices and Congress;
  • Perform on-going audits of agency submissions;
  • Provide monthly feedback to agencies and payroll offices and alert them of trends and improvement opportunities; and
  • Identify training needs for agencies, develop job aids and online training modules, and conduct workshops on the retirement application process.

OPM must continue to work to obtain the necessary resources to ensure that the needs of its customers and stakeholders are met.”

This has been an ongoing battle for OPM, so we’ll see if the new year brings changes.

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Dismissal and Closure Procedures

dismissal

As the weather gets colder and the chance for inclement weather rises, the Office of Personnel Management updated its policies and procedures regarding the dismissal of federal employees for emergency situations. OPM defines this as, “The inability to safely travel to an approved work location may result in ‘closure’ of a federal office (i.e., closed to the public and non-emergency employees) for the full day or authorization of a delayed arrival.”

Weather and Safety Leave

This type of leave was granted in the Administrative Leave Act of 2016 and was previously granted as an administrative leave of an excused absence. The final regulations on this were issued in April 208.

Telework

This is stressed under the new weather and safety leave type. OPM encourages agencies to use telework as much as possible during these situations to ensure continuity across government operations. OPM also encourages agencies to review their telework agreements to ensure they are in place should an unexpected situation arise.

The agency also said other agencies won’t be able to provide weather and safety leave to a telework participant who is not prevented from working safely at an approved telework site during severe weather or emergency situations. Typically, telework participants won’t receive weather and safety leave, since they aren’t prevented from performing work at an approved location due to weather or other safety-related emergencies.

As with most regulations, there are some exceptions, such as unexpected weather or unsafe telework sites. The new policy has changed to include these and now states:

“Previously, OPM guidance stated that only those employees with telework agreements containing express language requiring them to work during a closure situation could be denied administrative leave. Under OPM’s weather and safety leave regulations, all telework program participants will be ineligible for weather and safety leave when a closure is announced except in rare circumstances when one of the exceptions under 5 CFR 630.1605(a)(2) applies. Employees participating in a telework program must telework, take other leave (paid or unpaid) or paid time off (as approved by the agency), or a combination of both unless an exception applies.”

The revised guidance also covers topics like how weather and safety leave apply to emergency and non-emergency employees.

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Happy Thanksgiving!

 

Happy Thanksgiving! We are so very thankful for all of you!

As a reminder, our offices will be closed Thursday and Friday. We will re-open Monday, November 26 at 8:30 am.

Enjoy the holiday!

New FSA Contribution Limits

limits

The Internal Revenue Service raised the annual contribution limit for Flexible Spending Accounts for 2019 to $2,700, $50 over the 2018 limit. This is the annual employee pre-tax maximum contribution allowed under the Health Care Flexible Spending Account and Limited Expense Health Flexible Spending Account available to federal employees.

HCFSA

This pre-tax benefit account is used to pay for eligible medical, dental, and vision care expenses not covered by your health care plan. With this account, you use pre-tax dollars to pay for qualified health care expenses.

The money you contribute to an HCFSA isn’t subject to payroll taxes, so you end up paying less in taxes and have more take-home money. You decide how much to contribute to your HCFSA based on what you plan to spend in the upcoming year on out of pocket health care expenses. Since the money in your HCFSA isn’t subject to payroll taxes, you typically save an average of 30% on your eligible health care expenses.

Note: You cannot use an HCFSA to pay for health or life insurance, long-term care insurance or any other insurance premiums, or cost of temporary continuation of coverage.

LEX HCFSA

This is an option if you’re enrolled in a Federal Employee Health Benefits high deductible health plan (HDHP) and have an HSA. This option is also available is your spouse is enrolled in a non-FEHB HDHP and an HSA.

IRS rules do not allow you to contribute to an HSA is you are covered by any non-qualifying health plan, such as a general purpose HCFSA.

You and your spouse remain eligible to participate in both a LEXHCFSA and an FSA by limiting FSA reimbursements to qualifying dental and vision care expenses. Participating in both plans allows you to maximize your savings and tax benefits. The money you contribute to a LEX HCFSA isn’t subject to payroll taxes, so you take home more.

Open Season is currently underway until December 10. More information can be found at fsafeds.com.

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Federal Salary Council Recommendations

recommendationsThe Trump administration will soon get a series of recommendations from the Federal Salary Council that outlines how the government might begin to change the way it makes key decisions about employee pay. The council is advancing 5 options, after several months of debate, to the president’s pay agent, comprised of the Labor Secretary and Directors of the Office of Personnel Management and the Office of Management and Budget. These options are being considered when comparing federal pay to the private sector.

Recommendations:

  1. Continue to use the current methodology
  2. Adopt a salary method that “reduces the extent of statistical modeling”
  3. Use other human capital data on attrition and acceptance rates, such as make future salary-based decisions
  4. Develop a method that compares both federal employee pay and benefits to those of the private sector
  5. Find a way to conduct a comprehensive, periodic review of total compensation for federal civilian, white-collar employees.

The first 3 options don’t require a law change but the latter 2 would.

Union Reactions

Federal employee unions who sit on the council include the American Federation of Government Employees, the National Treasury Employees Union, and the National Federation of Federal Employees. They do not agree with the alternatives and voiced their concerns.

The council “is not meant to be a platform for the president’s own views as expressed by his appointee,” AFGE policy director Jacque Simon said. “This year’s workgroup report, however, is a clear attempt to politicize what has been for the last 26 years a technical, apolitical report that has followed the law’s instructions regarding measurement of pay disparities and boundaries of pay localities.”

The unions are concerned the council is using itself as a vehicle to advance the administration’s preference for pay-for-performance over across-the-board pay increases.

The also adamantly defend the Bureau of Labor Statistic’s model to measure discrepancies in pay between the public and private sectors.

“We do not advocate for throwing anything out,” Jill Nelson, the council’s vice chair said. “We are looking more at having more factors on the table. How they’re considered, that will all work its way out, but they are still elements. They should at least be there for consideration.”

New Pay Localities Coming Soon

The council did agree on important changes to the locality program. OPM said it intends to finalize Birmingham/Hoover/Talladega, AL; Burlington/South Burlington, VT; San Antonio/New Braunfels/Pearsall, TX; VA Beach/Norfolk, VA as new locality pay areas in time for the first paycheck of 2019.

The president has the final say and must physically set pay rates for these areas.

The agency has also approved Des Moines, IA as a separate locality pay area for 2020. It also recommended Imperial Co, CA as an “area of application” to the Los Angeles area.

The pay agent must still approve these recommendations and OPM must propose and finalize changes with new regulations; then the president must approve them.

To read more about this, click here.

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VA Pension Regulations Amended

amended

The Veterans Affairs Department announced it has amended its regulations governing entitlements to VA pension and Parents’ Dependency and Indemnity Compensation. These changes are to ensure that only veterans with a legitimate need for benefits would receive them. The VA’s pension program provides monthly benefit payments to eligible wartime veterans and their survivors with financial need.

Updated October 18, the pension regulations establish the following:

  • A clear net worth limit for income and assets for veterans to qualify for a pension.
  • A 36-month look back period to review asset transfers at less than fair market value that reduces net worth and pension entitlement.
  • Updated medical expense definitions for consistency with VA internal guidelines.
  • A 5-year penalty period to be calculated based on a portion of covered assets that would have made net worth excessive.

The pension “helps veterans and their families cope with financial challenges by providing supplemental income through the Veterans Pension and Survivors Pension Benefit Programs,” according to VA’s pension website.

Eligibility requirements are as follows:

  • Veterans must have at least 90 days of active duty, including 1 day during a wartime period. If the active duty occurred after September 7, 1980, the veteran must have served at least 24 months or the full period that he/she was called up (with few exceptions).

Eligible veterans must also be:

  • 65 or older with limited or no income, OR
  • Totally or permanently disabled, OR
  • Patient in a nursing home receiving skilled nursing care, OR
  • Receiving Social Security Disability Insurance, OR
  • Receiving Supplemental Security Income.

VA Secretary Robert Wilkie said, “The amended regulations bring consistency to the pension for veterans and survivors with financial need. They will help maintain the integrity of and provide clarity to our needs-based pension program.”

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New Withdrawal Options for TSP

savings

There will be significant changes made to the Thrift Savings Plan. Effective September 2019, these changes will focus on withdrawal options that have previously lacked flexibility. Because of that, many have looked for alternative options that offer more accessibility and control to their retirement savings.

Changes

Here are the changes you can expect to see:

Multiple Age-Based Withdrawals

Current: Participants have the opportunity for only one partial withdrawal in-service or post-separation.

Upcoming: For that 59 ½ or older, multiple age-based in-service and post-separation partial withdrawals will be allowed. You can’t make more than one every 30 days, and you’re limited to 4 per calendar year.

Traditional, Roth, or Both for Withdrawals

Current: If you have both a Traditional and a Roth balance, the only way to take a withdrawal is on a pro rata basis.

Upcoming: You can choose whether your withdrawal comes from your Roth balance, Traditional balance, or a proportional mix of both. You can still do a pro rata basis. This applies to all types of withdrawals.

Required Minimum Distributions (RMD’s)

Current: Full withdrawal election is required after you turn 70 ½ and are separated from service.

Upcoming: You will no longer be required to make a full withdrawal election after you turn 70 ½ and are separated. You will, however, still need to have IRS RMD’s.

Installment Payments—Monthly, Quarterly, Annually

Current: Only monthly installment payments are available and only you can change the amount of your payment once during Open Season.

Upcoming: If you’re separated, you’ll also be able to choose quarterly or annual payments, and you’ll be able to stop, start, or make changes to your installment payments anytime.

For more information, check out tsp.gov.

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Stamp Price Increase Ahead

stamp

On November 13, the United States Postal Service regulator approved the largest ever price increase for the stamps, a 10% jump, bringing the cost of sending a letter up to 55¢. The jump was approved after the Postal Regulatory Commission determined the Postal Service’s proposal complied with requirements, such as ensuring any price surge is not more than inflation.

Prices will increase across the agency by an average of 2.5%, the inflationary cap. The price for a regular, first-class mail stamp will outpace that rate. Packages sent as Priority Mail will see costs rise by 5.9%, while Priority Mail Express will have a 3.9% increase.

The new prices will go into effect January 27, 2019.

On “competitive products” such as packages and shipping, the regulatory commission must also ensure USPS is covering all of its costs without cross-subsidization from its “market-dominant products” like regular, First-Class Mail. The PRC also said USPS proposals for both classes of mail “meet all statutory requirements.”

The 5¢ increase on stamps is the largest since 1991 when USPS raised the price 4¢ to $0.29, a 16% increase.

For years, USPS has sought more autonomy to set higher prices for its products. In 2016, PRC forced the Postal Service to roll back its prices after allowing for an emergency increase higher than the rate of inflation, citing the economic recession. That decrease has cost the agency hundreds of millions of dollars each quarter, USPS said. Since then, Postal Management has requested that it have full control over setting prices as it sees fit. PRC has denied that request in a proposed new system but allows for price increases that outpace inflation.

The USPS Board of Governors, when announcing its proposed rate increases for 2019, said they believe “these new rates will keep the Postal Service competitive while providing the agency with needed revenue.”

There was some quick pushback to the announcement from some of the Postal Service’s biggest customers. Steve Kearney, executive director of the Alliance of Nonprofit Mailers, called the proposal “surprising and shocking” saying his member organizations would have to “quickly review their mailing budgets for next year.”

President Trump has criticized the Postal Service for undercharging many of its large customers, mainly Amazon, for shipping services. He signed an Executive Order creating a task force to recommend changes to USPS operations, including its pricing structure. That task force has delivered its preliminary recommendations to the president and is working on their final report, which is expected before the end of the year.

USPS Loses $3.9 Billion in FY2018

This comes at a time when the USPS saw a $3.9 billion loss in FY2018, a 44% larger drop over the previous year, despite a $1 billion revenue increase. Ongoing volume losses of 3.6% led to a “controllable loss” of $2 billion, more than double from its previous year. Outside expenses such as funding for retiree health benefits attributed to that. The agency declined to make required payments of nearly $7 billion to pay for future retirees’ pensions and healthcare.

For the first time in 5 years, the Postal Service failed to turn a profit on controllable operations. The increase in stamp price would have added close to $1.7 billion in revenue if it were in place in FY2018, said Chief Financial Officer Joe Corbett.

Postmaster General Megan Brennan said without changes, USPS will continue to see losses at “an accelerating rate”. “Simply put, we cannot generate revenue or cut enough costs to pay our bills,” she said.

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