Action in Congress

June 1, 2004

Reserve Income Protection

A House panel shaping its version of the 2005 defense authorization bill approved new income protection for the Guard and Reserve.

If enacted into law, the “income replacement” provision endorsed by the House Armed Services Committee would allow involuntarily mobilized reservists to receive extra pay—$50 to $3,000 per month—to cover losses in average monthly income. To be eligible, a reservist must have: 12 continuous months on active duty, or 18 months of active duty during the previous 60 months, or been mobilized within six months of a previous active duty tour.

The estimate for the first year’s cost of this new provision is $57 million. The high cost, the House panel believes, would encourage the services not to keep reservists mobilized long enough to qualify.

Rep. John M. McHugh (R-N.Y.), chairman of the committee’s Total Force Subcommittee, said the income replacement provision was part of the “most significant reshaping of reserve enlistment and retention incentive bonuses and pays in years.”

More Total Force Actions

Other Guard and Reserve personnel initiatives in the bill included:

Equal Incentives. The reserve components would have bonus and incentive authorities identical to those for active duty members.

More Full-Time Support. Guard and Reserve slots for full-time support personnel would rise by 2.1 percent and for military technicians by 3.3 percent.

Reserve Health Care. A $300 million increase in health care spending in 2005 would make permanent two temporary gains in reserve health care access approved by Congress last year. One opened Tricare to Guard and Reserve members 90 days before the date they are to report for active duty. Another provides reservists up to 180 days of Tricare coverage following separation from active duty.

Tricare Test. The panel extended by three years a test that opened Tricare to drilling reservists who are unemployed or lack employer-sponsored health care. The intent is to show whether better access to care actually will improve medical readiness, recruiting, and retention.

Compared to active duty members, Guard and Reserve troops are given smaller and fewer re-enlistment bonuses; are ineligible for critical skill bonuses; face tighter payment rules on monthly special pays; and, by law, can’t sign re-enlistment contracts while overseas, which denies them a tax advantage many active duty members receive while in a war zone.

“There shouldn’t be a difference,” said Lt. Gen. James E. Sherrard III, testifying before retiring as head of Air Force Reserve Command. Sherrard and fellow reserve leaders said in April disturbing disparities in treatment exist for mobilized troops serving alongside active duty forces.

Sherrard said the issue is “fair and equitable treatment.”

Thomas F. Hall, the Pentagon’s point man for reserve affairs, took exception. He maintained, “There is a difference in the type of service, and being unequal is not necessarily unfair.”

DOD Wants War-Related Changes

The Bush Administration in April sent Congress a host of new legislative initiatives. Here are two that Pentagon leaders believe would improve management of active and reserve military forces during the global war on terrorism:

Involuntary Call-Up for Training. This proposal would remove a Cold War-era law that prohibits DOD from ordering reservists to active duty solely for training. Under current law, a reservist must be mobilized for deployment before being sent for whatever refresher training is needed. When the law was crafted, the Pentagon expected to have time to call up reservists and train them properly before sending them off to war.

Now, the Administration seeks more open access to Guard and Reserve personnel to provide them individual or collective skill training at any time. The post-mobilization rule, officials say, can slow deployments, harm unit cohesion, and overwhelm training pipelines.

Longer FEHBP Relief. The Administration is attempting to eliminate a health care problem faced by reservists who are employed, as civilians, by a federal agency. The legislation would extend by six months the period during which federal agencies, on behalf of employees called to active duty, may pay premiums under the Federal Employees Health Benefits Program.

Currently the time period is 18 months. With some reservists now serving two years on active duty, that period expires too soon. Without relief, families of these employees, many of whom are faced with significantly reduced income while on active duty, face another financial burden or might have to leave FEHBP altogether, perhaps entering the military health care system.

DOD Issues Final CRSC Guidance

After a four-month delay, Pentagon officials in April issued final policy guidance on the new Combat-Related Special Compensation program. Disgruntled military retirees with disabilities had accused the Bush Administration of foot-dragging in implementing a program it had opposed. Defense officials, in a written statement, said they were merely “taking time to develop a good policy that will be as favorable to the retirees as the law allows.”

Congress, last year, passed legislation that provided a partial lifting of the century-old ban on retirees drawing both full retirement pay and VA disability compensation for service-connected injuries or illnesses. The initial CRSC program went into effect in June 2003. It was designed to replace lost retired pay for retirees with 20 or more years of service who had combat-related disabilities of 60 percent or higher or who had disabilities tied to a Purple Heart medal.

Effective Jan. 1, Congress expanded CRSC to restore any lost retired pay tied to combat-related disabilities of 10 percent or higher.

The Pentagon in December was to produce a revised application to reflect the expanded eligibility. It did so in mid-April.

The initial rules had brought in some 25,000 applications DOD-wide. Col. Gary Cook, president of the Air Force Informal Physical Evaluation Board, said officials expected the expanded eligibility to produce “somewhere between 50,000 and 100,000” new applicants.

Pentagon officials said that despite the delays in launching the process, all payments would be retroactive to the effective date.

The Air Force has received more than 10,000 applications and approved nearly 60 percent. It had placed many applications on hold until DOD issued formal guidance on how to handle awards for retirees deemed individually unemployable by the Department of Veterans Affairs or eligible for Special Monthly Compensation.

With DOD finally issuing guidance and a revised application, Air Force CRSC officials said the logjam should ease.

Air Force retirees can get more information on CRSC by calling 800-616-3775 or 866-229-7074 or on the Web:

Pentagon Urges Restraint

Pentagon leaders continued to urge lawmakers to adopt restraint in enhancing entitlements for both active and reserve forces and military retirees. (See “Action in Congress: Worries Over Entitlements,” May, p. 26.)

Thomas F. Hall, DOD head of reserve affairs, advised Congress not to approve new, costly entitlements, specifically initiatives to lower, from 60 to 55, the age at which reserve retirement pay begins. Also on Hall’s list of problem areas was the move to provide reservists and their families more access to Tricare, whether or not the reservists have been activated.

Hall noted that a Rand study on changes in reserve retirement shows that they have only a small impact on recruiting and retention. Yet dropping the threshold age (from 60 to 55) at which benefits begin would cost $7 billion over 10 years.

Sen. Saxby Chambliss (R-Ga.), chairman of the Senate Armed Services Personnel Subcommittee, questioned whether Rand had considered the expense of losing experienced reservists for lack of a better retirement plan.

Hall countered that, although the Rand study is only at its halfway point, preliminary data “tell us that our younger Guardsmen and Reservists serving today … heavily discount deferred compensation.” In other words, the reserve retirement plan is not that important to them.

“If the topline [dollar] remains the same, and we only have a certain amount of money to spend, … we [should] target it towards those serving and bearing the brunt today,” said Hall.

SBP Fix Moves Forward

The House Armed Services Committee in May took what Rep. John M. McHugh (R-N.Y.) called “the first meaningful step” toward ending a sharp drop in military survivor benefits that occurs at age 62.

Since the Survivor Benefit Plan began in 1972, benefits have fallen from 55 percent down to as low as 35 percent at age 62, when the surviving spouse presumably becomes eligible for Social Security. The committee version of the 2005 defense authorization bill would phase out that reduction, starting in 2009, and eliminate it by 2014.

McHugh conceded the delay would disappoint SBP reform advocates. He said the committee could not find money to help SBP beneficiaries sooner.

Meanwhile, several House Democrats had joined with veterans and service organizations, including the Air Force Association, to launch a discharge petition to force a floor vote on legislation that would end the SBP offset immediately. (See “AFA in Action,” p. 84.)

House Democratic Leader Nancy Pelosi (Calif.), Rep. Chet Edwards (D-Tex.), and Rep. Bob Filner (D-Calif.), on March 30, announced a new petition to bring to a floor vote H.R. 548, which was submitted last year by Rep. Jeff Miller (R-Fla.).

On April 27, Edwards formally submitted the discharge petition. By May 6, the petition had 201 of the 218 signatures needed to force the bill out of the House Armed Services Committee for a floor vote.

Miller’s 2003 bill has 310 co-sponsors, almost half of them Republicans.

DOD Launches “Standard” Help

Users of Tricare Standard, the military’s traditional fee-for-service health insurance plan, should see evidence soon of more Defense Department support for their preferred leg of the Tricare program.

Lawmakers mandated in the 2004 defense bill that the Pentagon launch a program to ensure that military families and retirees who use Tricare Standard have better information and have adequate access to civilian providers. A first step in that effort came in late March, when the Pentagon turned in to Congress its plan for an “Active Outreach Program.”

The six-page report outlines an effort to better educate both beneficiaries and civilian physicians on the Standard option and to evaluate the level of satisfaction with Standard.

Standard beneficiaries have complained in recent years that fewer physicians accept them as patients. Of those who do, too many don’t accept Tricare reimbursement and Standard patient shares as payment in full for their care, leading to higher out-of-pocket costs for beneficiaries.

Evidence of such a trend has been anecdotal rather than statistically based, leaving Congress sympathetic but, like defense health officials and Tricare support contractors, not fully convinced that large numbers of Standard users are being denied access to affordable care.

To help define the problem, lawmakers ordered three steps:

DOD must conduct a phone survey of civilian health care providers in Tricare market areas to measure willingness to accept new Standard patients and to participate in Standard by accepting Tricare maximum allowable charges rates as adequate.

The US comptroller general must review DOD procedures to ensure access to Standard benefits.

DOD must execute a new communication plan focusing on Standard users.

According to the Pentagon, the new outreach effort will be part of the planned switch over, beginning this summer, from 11 regions to three and a reduction in contracts from seven to three. All military beneficiaries will receive information packets this year, explaining their benefits under Tricare. The mass mailing will mark the first time since Tricare began in 1993 that the system has reached out to all those eligible, including more than two million Tricare Standard users.

One recent addition to the Tricare Web site, a database of physicians who recently have filed Tricare Standard claims, received a vote of thanks from the Military Coalition. It is searchable by zip code, so it at least provides a “fighting chance” to figure out what doctors in a given area might accept Tricare, said Sue Schwartz, testifying for the coalition.