5 Things to know about the chained CPI
fehbp reform proposals
retiring abroad paradise with strings attached P.28
Volume 89 â€˘ Number 08
All Members Urged to Contact Congress During August, “Advocacy Month”
Five Things to Know About the Chained CPI
The Affordable Care Act Affects Congress, Staff
Sept. 16-20 Is NARFE Call Congress Week
10 Obama Names Archuleta to be OPM Director
11 Draft Regulations Issued on Phased Retirement
11 OPM Issues Flag Law Regs 12 “Federal Family” Chart 14 NARFE Bill Tracker 16 House Committee Chair
Releases Draft Postal Bill for Study
retiring abroad. Ever dreamed about retiring in a foreign country? Some federal employees have done just that. But there are challenges to living the dream. Here’s what is involved.
From the President
44 Managing Money 46 The Informed Citizen
FEHBP REFORM PROPOSALS. The president’s FY 2014 budget includes a plan to “modernize” the Federal Employees Health Benefits Program.
Questions & Answers
48 For the Record: TSP AUG
On the Web P.7
visit us online at:
5 THINGS TO KNOW ABOUT THE CHAINED CPI
FEHBP REFORM PROPOSALS
Investments, COLA Chart
50 NARFE News 56 The Way We Worked
like us on facebook:
NARFE National Headquarters follow us on twitter:
RETIRING ABROAD Paradise With Strings Attached P.28
ON THE COVER
Illustration by Bill Pragluski, Critical Stages, LLC
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AUGUST 2013 | Volume 89 | Number 08
Editor Margaret M. Carter Assistant Editor Ken Fanelli Editorial Administrator Toni Vallario Graphic Design Charlene Gridley Editorial Board Joseph A. Beaudoin, Paul H. Carew, Elaine C. Hughes, Richard G. Thissen Editorial Office: narfe magazine, 606 North Washington St., Alexandria, VA 22314-1914; Phone: 703-838-7760; Fax: 703-838-7781; Email: email@example.com Advertising Sales: Warren Berger, Media People Inc., 122 East 42nd St., Suite 725, New York, NY 10168; Phone: 212-779-7172, ext. 223; Email: firstname.lastname@example.org NARFE for the Visually Impaired On the Telephone: This publication can be heard on the telephone by persons who have trouble seeing or reading the print edition. For more information, contact the National Federation of the Blind NFB-NEWSLINE® service at 866-5047300 or go to www.nfbnewsline.org. On Tape: Issues of narfe magazine are also available on cassette through the National Library Service for the Blind and Physically Handicapped. To find out about availability in your area, call 800-424-8567 and ask for the Reference Section. The Association, since July 1970, has been classified by the IRS as a tax exempt labor organization [not a union]; however, dues and gifts or contributions to the Association are not deductible as charitable contributions for income tax purposes.
National Active and Retired Federal Employees Association NATIONAL OFFICERS JOSEPH A. BEAUDOIN, President; email@example.com PAUL H. CAREW, Vice President; firstname.lastname@example.org ELAINE C. HUGHES, Secretary; email@example.com RICHARD G. THISSEN, Treasurer; firstname.lastname@example.org
REGIONAL VICE PRESIDENTS
REGION I Arthur Pike (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) Tel: 207-764-4468 Email: email@example.com REGION II Evelyn Kirby (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) Tel: 410-604-1141 Email: firstname.lastname@example.org REGION III Donald Stewart (Alabama, Florida, Georgia, Mississippi, Puerto Rico, South Carolina and Virgin Islands) Tel: 305-442-6388 Email: email@example.com REGION IV Paul E. Johnson (Illinois, Indiana, Michigan, Ohio and Wisconsin) Tel: 812-306-5137 Email: firstname.lastname@example.org REGION V Carol R. Ek (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) Tel: 620-241-1131 Email: email@example.com
Here’s How to Contact Us… If you want to:
Join NARFE Call (toll-free): 800-627-3394 or go to: www.narfe.org Change or update your membership record Call (toll-free): 800-456-8410 Email: firstname.lastname@example.org
REGION VI Jerome S. Smith (Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas) Tel: 903-534-5849 Email: email@example.com REGION VII Frank Impinna (Arizona, Colorado, New Mexico, Utah and Wyoming) Tel: 303-482-1747 Email: firstname.lastname@example.org REGION VIII Helen L. Zajac (California, Guam, Hawaii, Nevada and Republic of Philippines) Tel: 707-644-7565 Email: email@example.com REGION IX Lanny G. Ross (Alaska, Idaho, Montana, Oregon and Washington) Tel: 360-692-9741 Email: firstname.lastname@example.org REGION X William F. Martin (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) Tel: 540-872-3345 Email: email@example.com
For any other NARFE matter:
Call NARFE Headquarters: 703-838-7760 Email: firstname.lastname@example.org Fax: 703-838-7785 Write: NARFE 606 N. Washington St. Alexandria, VA 22314
narfe (ISSN 1948-4453) is published monthly by the National Active and Retired Federal Employees Association (NARFE), 606 N. Washington St., Alexandria, VA 22314. Periodicals postage paid at Alexandria, VA, and additional mailing offices. Members: Annual dues includes subscription. Nonmember subscription rate $45. Postmaster: Send address change to: NARFE Attn: Member Records, 606 N. Washington St., Alexandria, VA 22314. To ensure prompt delivery, members should also forward changes of address without delay. Because of the volume involved, NARFE cannot acknowledge nor be responsible for unsolicited pictures and manuscripts, although every reasonable precaution is taken. All submissions become the property of NARFE. Copyright © 2013, NARFE. Advertisements in the magazine are not endorsements of products and/or services by NARFE, unless officially stated in the ad. We shall accept advertising on the same basis as other reputable publications: that is, we shall not knowingly permit a dishonest advertisement to appear in narfe, but at the same time we will not undertake to guarantee the reliability of our advertisers.
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From the President
Silence is not golden
he hearing of members of Congress is most acute when they are listening to their constituents. A whole stack
of briefing papers provided by lobbyists in Washington doesn’t carry the same weight as messages from voters in their home district or state. That is why the participation of every NARFE member in “NARFE Grass-Roots Advocacy Month” is so important. During August, members of Congress go back home to check in with their constituents. They want to hear from you. They need to hear from you. Preservation of your earned benefits depends on it. This issue contains advice on how you can be a NARFE advocate this month. I want to especially draw your attention to the “Federal Family” chart on p. 12. It is one of the best graphics we carry
every year. It lists the numbers of active and retired federal and postal employees by state. Tear the page out and bring it with you when you go to see your member of Congress. Better yet, give the magazine to him or her. (I’ll mail you a replacement narfe magazine – just send me a request.) This month, we want NARFE members to meet with their legislators, if possible. Next month, we have designated September 16-20 as Call Congress Week. Watch for further news on this additional advocacy effort and get involved! In our feature story this month, Walt Francis, a leading expert on the Federal Employees Health Benefits Program, provides an analysis of legislative proposals for reform of the program. Congress will need more details before moving forward with any changes, but we must ensure that the proposed “self-plus-one” option doesn’t harm others in the program and that wellness initiatives don’t come at the expense of privacy. On quite a different subject, this month’s cover story provides lots of good information about retiring abroad. While vacationing, you’ve probably wondered what it would be like to live in whatever locale – foreign or domestic – you are enjoying as a tourist. Here’s a look at what it takes to reside overseas as a federal retiree.
Joseph A. Beaudoin NARFE national President email@example.com
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ADVOCACY MONTH all members urged to contact congress
ugust is “NARFE Grass-Roots Advocacy Month.” With members of Congress in their home districts and states, the period from August 3-September 8 is a prime
opportunity for NARFE members to talk to their legislators about NARFE issues. While many NARFE chapters may not meet during August, NARFE members can – and should – participate in grass-roots activities as individuals. Members of Congress must hear from NARFE members during this time to help preserve the earned health and retirement benefits of federal workers, retirees and survivors. Here is some advice on how to make the most of Advocacy Month. Go to Community Events. Community events are an excellent opportunity to speak with elected officials. You will only have a few minutes to speak with the legislator, so make your statement short and to the point. Tell your legislator what you do/ did as a federal employee, what the Chained CPI reductions would mean to you (see story, 6
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p. 7) or what the attacks on federal employees have done to government services. When you attend a community event, make sure to wear something showing off your NARFE membership – a button or T-shirt, for example. NARFE members might be able to walk in parades or set up tables at community fairs. Not only is this an opportunity to tell prospective members about NARFE, but it shows that federal workers are active in their communities. Attend Town Hall Meetings. Town hall meetings provide an opportunity to speak with members of Congress, their staff and the community. Again, wear something that shows you are a NARFE member and a federal employee, retiree or survivor. Even if you do not ask a question, this provides visibility and
reminds attendees that the federal community is paying attention. Take materials to leave with the member of Congress’ staff. The Protect America’s Heartbeat Toolkit (www.narfe.org/heartbeat/ toolkit.cfm) contains fact sheets and other information. You can access town hall schedules at www.narfe.org (under “NARFE Legislative Activists” on the Legislation Home Page) or by contacting your legislators’ offices. Send Letters, Emails. Go to NARFE’s Legislative Action Center at www.capwiz.com/narfe and ask your members of Congress to vote against the Chained CPI. You also can print the letter and mail it to the legislators’ district offices. Be sure to personalize the letter. Share your story and what you do/ did as a federal employee. And tell your representative and senators how much you will lose under the Chained CPI. (You can get an estimate by using NARFE’s Chained CPI calculator, available at www. narfe.org). —By Sarah Weissmann, Grass-Roots Program Manager
five things to know about the chained cpi 1. There’s a good chance it could become law. President Obama and more than 100 House Republicans support budgets that would use the Chained CPI rather than the current measure, the CPI-W, to determine cost-of-living adjustments (COLAs) to Social Security benefits, federal civilian retirement annuities and military retired pay. 2. It’s a lot of money. The estimated difference in COLAs resulting from a switch to the Chained CPI is 0.3 percent per year, which doesn’t sound like a lot, but means annuities would be 3 percent lower after 10 years, 6.2 percent lower after 20 years and 9.4 percent lower after 30
percent of spending for the general population. Meanwhile, health care costs are rising faster than other goods. In 2012, health care inflation was 3.7 percent, while the CPI-W indicated the average price of consumer goods increased 1.7 percent. 4. It hides a decrease in your standard of living. Proponents of the Chained CPI claim it provides a better measure of inflation by taking into account how consumers substitute one item when the price of another item increases; for example, by switching from steak to chicken when the price of steak rises. Accounting for this type of substitution, however, fails to measure lower standards of
The Chained CPI would lower annuities 3 percent after 10 years, 6.2 percent after 20 years and 9.4 percent after 30 years. years. For a typical Civil Service Retirement System retiree with a $31,440 per year annuity, the total loss would add up to more than $77,000 after 30 years. 3. It’s not a more accurate measure of inflation. Neither the Chained CPI nor the CPI-W accurately reflects changes in consumer prices experienced by the seniors who rely on the measure to adjust their incomes appropriately. For example, while health care accounts for about 12 percent of spending for those age 62 or older, it accounts for only 5
living that result from substituting a less desirable alternative. Seniors, in particular, as a result of living on a fixed income, often find such substitution impractical, as they are already buying lower-priced goods. 5. There’s still time to prevent the change. Call your members of Congress to make sure they oppose a move to the Chained CPI. Even generally supportive members of Congress seem willing to accept the change under the right circumstances. They need to hear from you.
advocacy action Clip and Save Your COLA! Send coupons to NARFE some who support switching to the Chained CPI would have you believe that the impact on seniors would be small. The impression they give is that seniors would just have to clip a few more coupons to make up the difference in benefits. Not so, says NARFE. Under the Chained CPI, the average Civil Service Retirement System annuitant would lose $48,000 in benefits over 25 years, according to NARFE’s calculations. To illustrate how many cents-off coupons it would take to recoup that level of loss, NARFE’s Legislative Department is seeking enough coupons to equal $48,000. They can be any coupon for any store, as long as the savings are expressed as a dollar amount and not a percentage discount. Please send your unwanted coupons to NARFE Headquarters, 606 N. Washington St., Alexandria, VA 22314, attention “Coupons Campaign.” Help NARFE show Congress that the Chained CPI will mean more to seniors than just clipping a few more coupons. It’s a big deal!
—By John Hatton, Deputy Legislative Director w w w. n a r f e . o r g
the affordable care act affects congress, staff
or most federal employees, the full implementation of the Affordable Care Act (ACA), also known as “Obamacare,” will mean little change. For employees of
most executive branch agencies, the Federal Employees Health Benefits Program (FEHBP) will remain as it always has – something of a model for state insurance exchanges mandated by the ACA. For active employees, the annual Federal Benefits Open Season will mean business as usual. And for annuitants, the promise of retiree coverage remains sound.
sonnel Management was reportedly preparing draft regulations that could settle the issue of both the government contribution and retirement eligibility for those Hill staff and members. Or they could further muddy the water and provide motivation for a legislative fix, one that leaves congressional Republicans uneasy. House Republicans have already voted to repeal the health care reform law on 37 occasions and, presumably, do not want to be accused of amending the law to benefit one group of enrollees – particularly when that group is members of Congress and their staffs. Absent some resolution before the launch of the exchanges in October and the start of Federal Benefits Open Season in November, expect to see long-time members of Congress and their staffs flee for the exits rather than foot the full bill for their families’ health insurance. In the words of NARFE President Joseph A. Beaudoin: “It would be a shame for the inartfully drafted provision to motivate a flood of retirements by members of Congress and their staffs. Congress cannot afford this type of brain drain any more, and perhaps somewhat less, than other agencies of government.”
But for congressional employees and their House and Senate bosses, the implementation of the ACA decades-long careers if they do not could mean some stark changes. meet the requirement to have had Under a provision authored by FEHBP coverage for the last five Sen. Charles E. Grassley, R-IA, years of their federal careers. starting on January 1, 2014, the The same question also affects only health plans available to those who might be subject to members of the House and Senate involuntary separation (that is, and “all full-time and part-time those members of Congress who employees employed by the official lose an election). Members of office of a member of Congress, Congress are eligible for federal whether in Washington, DC, or annuities at age 50 with 20 years outside of Washington, DC” will of service or at any age with 25 be those plans created by the ACA years of service. or offered through the exchanges A quirk of the drafting of the established by the law. ACA also leaves unclear whether Left unanswered, and the cause all congressional employees will of increasing anxiety on Capitol be treated alike. For example, one Hill, is the question of whether remaining gray area is whether members of Congress and staff employees hired by congressional will have access to an employer committees or those who serve contribution (similar to the Fair in the offices of the elected House Share formula that currently and Senate leaders are excluded covers the tab for more than 70 from the ACA mandate. percent of an annual employee At press time, the Office of Per—By Alan Lopatin, legislative counsel premium) during their time as an active worker electing an “exDOMA Decision Story in September Issue change plan.” The U.S. Supreme Court decision overturning Section 3 of the And for those “lifers” on the Hill, Defense of Marriage Act was released as this issue was going to also still unclear is the issue of press. The September issue of narfe magazine will include a rundown whether new congressional annuiof what the decision means for federal employees and retirees. tants will be allowed to take FEHBP coverage into retirement, following 8
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mark your calendar: Sept. 16-20 is narfe call Congress week
uring the week of September 16, NARFE is asking all members to contact their members of Congress and ask them to oppose the Chained CPI. With the end of the fiscal year on September 30, and the prospect of another year of sequestration looming, NARFE anticipates the push for a “grand bargain” on the budget will be strong this summer and early fall. The Chained CPI, which was included in President Obama’s fiscal year 2014 budget, is expected to be 2013-14_PAC_Coupon:2013 Coupon part of the negotiations. A vote
is likely to be held in September. NARFE members must speak up to oppose the Chained CPI during this time. Chapters holding meetings during the week of September 16 should take a few minutes and have their members call during the meeting. Members who have cell phones can use their phones and – hopefully – will share them with members who do not have cell phones. Calling from the meeting is a good way to guarantee a strong response and ensure that legislators hear from NARFE 3/26/13 3:42 PM Page 1 members. NARFE will provide a
script as the date gets closer. Whether you call from a chapter meeting or from home, it is easy to reach the Capitol switchboard using NARFE’s toll-free number, 866-220-0044. If you have problems using the toll-free number, you also can call 202-224-3121 or the local office for your member of Congress. Mark your calendars to call Capitol Hill during the week of September 16 when Congress will be debating your benefits. Remember, silence is approval. —By Sarah Weissmann, Grass-Roots Program Manager
NARFE-PAC CONTRIBUTION FORM Name:______________________________________ NARFE Member Number: _______________________ I would like to make a one-time contribution of: $100 Gold (qualifies for Gold 2013-14 NARFE-PAC lapel pin and a blue NARFE-PAC LEADER hat)
$50 Silver (qualifies for Silver 2013-2014 NARFE-PAC lapel pin) $20 Basic (qualifies for Basic 2013-2014 NARFE-PAC lapel pin) Other: ______ -orI would like to be a Sustainer and make a monthly credit card contribution to NARFE-PAC of: $25/month $10/month
Please find my check or money order enclosed payable to NARFE-PAC Please charge to my credit card (required for monthly contribution) Credit Card Information Type: MasterCard Visa Discover AMEX Card #: ________________________________ Expiration Date: ____ / ____ Name on Card:__________________________ Signature: ______________________________ Date: __________________________________
Other: ______/month (minimum of $10) Monthly contributions qualify you to receive a NARFE-PAC Sustainer lapel pin along with a blue NARFE-PAC LEADER hat.
I do not want to receive any gifts for my contribution marked above.
Mail to: National Active and Retired Federal Employees Association Attn: NARFE-PAC 606 North Washington St. | Alexandria, VA 22314
Only members of the National Active and Retired Federal Employees Association may contribute to NARFE-PAC. NARFE will neither favor nor disadvantage anyone based on the amount of a contribution or the failure to make a voluntary contribution to this political action fund. NARFE-PAC contributions are not deductible for federal income tax purposes.
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Obama Nominates archuleta to be next opm director
resident Obama has nomi- paign and was the first Latina to nated Katherine Archuleta serve in that role on a major presito be director of the Office dential campaign. She also served of Personnel Management (OPM), as chief of staff for former Labor following former director John Secretary Hilda L. Solis and for Berry’s departure in April. If her former Transportation Secretary nomination is confirmed by the Federico F. Peña. Senate, she would be the first HisPeña described Archuleta as “very straightforward, not afraid panic to serve as OPM director. to make tough decisions, parObama said Archuleta “brings to the Office of Personnel Manage- ticularly in the personnel arena,” ment broad experience and a deep during an interview with National Public Radio. During her time as commitment to recruiting and chief of staff for Peña, she helped retaining a world-class workforce cut staffing in the Department of for the American people.” Transportation by nearly 10 perShe most recently worked as 2013_Cong_Dir_Ads_Layout 3 copy 6/7/13 for 1:42 PM cent, Page according 1 to Peña. the national political director NARFE President Joseph A. Obama’s 2012 re-election cam-
Beaudoin said the Association “looks forward to swift Senate action” on the nomination. “In the midst of a three-year pay freeze, increased pension contributions for new hires, furloughs of half of the federal workforce, and a new wave of retiring federal employees, it is important to build on former Director John Berry’s strong leadership at OPM,” Beaudoin added. At press time, no confirmation hearings had been scheduled by the Senate Committee on Homeland Security and Governmental Affairs. —By Jason Freeman, legislative staff assistant
CONGRESSIONAL DIRECTORY for the 113th Congress (2013-2014)
Special insert with NARFE-specific information and data to be used for grass-roots advocacy.
Order your copy of the new Congressional Directory today! Clip and mail to: NARFE Congressional Directory, 606 N. Washington Street, Alexandria, VA 22314-1914 Name __________________________________________________________________________ Address ________________________________________________________________________ City_______________________________________________State _______ZIP_____________ Member ID# (As it appears on NARFE magazine label) ________________________________
o Charge to my credit card
_________ / ________ (mm)
Name on card (print) ____________________________________________________________ Signature __________________________________________________ Date _______________
Also order online at www.NARFE.org 10
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$20 each (includes shipping and handling)
VA sales tax __________
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VA residents add 6% tax ($1.20) per book
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*Please allow 2-3 weeks for delivery
NARFE2013(2):Layout 2 copy 1
Myth: Federal employees continue to live high on the hog, increasing the deficit while the private sector has faced high unemployment, reduction of profits and salary freezes.
OPM also issues Flag law regs
Reality: In the past three years, federal employees have contributed $114 billion to reducing the deficit through a three-year pay freeze (saved $99 billion) and increased pension contributions for new hires (saved $15 billion). This does not include the money lost to federal employees who are getting smaller paychecks because of furloughs.
OPM also has issued proposed regulations to implement the Civilian Service Recognition Act, which authorizes the head of an executive branch agency to furnish a U.S. flag to a family member or other appropriate representative of a federal employee who dies in the line of duty. Acting OPM Director Elaine Kaplan urged all agencies “to make full use of this authority to honor those federal employees who have made the ultimate sacrifice in support of our nation.”
and are seeking SECURITY, FUN and VALUE
OUR 3 DAY , UT
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IGHT • 2N
—By Jessica Klement, Legislative Director
SERVED THEIR COUNTRY OR COMMUNITY
MYTH vs. REALITY
phased retiree’s time must be spent mentoring; • Treat phased retirees as fulltime employees for purposes of the Federal Employees Health Benefits Program and the Federal Employees’ Group Life Insurance Program; and • Include provisions for phased retirees to return to full-time employment. NARFE President Joseph A. Beaudoin hailed the issuance of the draft regulations. “Our nation cannot afford to lose its most experienced employees to sudden or early retirements,” Beaudoin said. “The phased retirement program is a smart way to ensure the next generation of the federal workforce is prepared to build on the achievements of today’s dedicated federal employees.” It is likely NARFE will submit comments within the 60-day comment period.
he Office of Personnel Management has issued draft regulations to implement a phased retirement option for current federal employees. Phased retirement first became law with passage of the Moving Ahead for Progress in the 21st Century Act (P.L.112-141) in July 2012. Released in June, the regulations would: • Allow employees to partially retire by working half of their current schedule and collecting an annuity equal to 50 percent of what they would have received if they fully retired; • Require that 20 percent of the
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the federal family Civilian annuitants, Employees and Postal Employees The chart is a snapshot in time that updates counts that appeared in the September 2012 issue of narfe magazine. Please note, federal and U.S Postal Service (USPS) employee categories are based on place of employment, not residence. Use these numbers in communications with elected officials. Employee State Annuitants* Alabama 44,886 Alaska 6,409 American Samoa 34 Arizona 42,927 Arkansas 19,069 California 162,188 Colorado 39,286 Connecticut 10,927 Delaware 7,542 District of Columbia 35,796 Florida 129,140 Georgia 65,063 Guam 1,739 Hawaii 17,984 Idaho 11,804 Illinois 53,729 Indiana 28,592 Iowa 16,141 Kansas 19,269 Kentucky 25,963 Louisiana 21,006 Maine 10,651 Maryland 127,438 Massachusetts 31,171 Michigan 35,089 Minnesota 22,431 Mississippi 19,552 Missouri 42,787 Montana 10,574 Nebraska 10,296 Nevada 18,255 New Hampshire 9,450 New Jersey 39,975 New Mexico 22,371 New York 71,541 North Carolina 57,758 North Dakota 5,029 Northern Mariana Islands 11 Ohio 57,793 Oklahoma 36,657 Oregon 26,426 Pennsylvania 82,188 Puerto Rico 8,627 Rhode Island 5,723 South Carolina 33,610 South Dakota 8,234 Tennessee 35,998 Texas 129,610 US Virgin Islands 495 Utah 27,465 Vermont 3,490 Virginia 112,222 Washington 51,671 West Virginia 14,433 Wisconsin 21,229 Wyoming 4,694
Survivor Annuitants* 14,004 1,305 33 11,338 6,006 51,511 9,853 3,814 1,908 7,980 38,241 18,898 851 6,740 2,762 14,962 8,179 4,829 5,378 7,564 5,976 3,305 30,656 11,677 8,917 6,350 5,944 11,462 2,278 3,148 4,236 2,866 14,600 5,570 23,870 15,833 1,401 11 17,243 11,598 6,925 26,117 2,761 2,517 10,137 2,019 10,312 38,909 149 7,472 949 30,006 14,350 3,435 5,742 1,040
Monthly Annuities ($000s)* $140,169 $18,510 - $124,765 $50,175 $500,448 $121,528 $33,083 $25,708 $139,529 $402,228 $194,973 $4,381 $61,430 $33,538 $160,480 $79,003 $43,665 $54,275 $68,269 $58,377 $29,365 $522,100 $96,523 $99,293 $62,834 $54,381 $120,946 $29,999 $28,163 $53,720 $29,018 $137,476 $65,340 $203,392 $173,865 $13,017 - $177,889 $103,142 $79,234 $244,492 $20,114 $17,807 $97,206 $21,664 $103,564 $379,070 $1,003 $80,813 $9,823 $439,306 $159,252 $41,112 $56,516 $12,718
Federal Employees** 40,871 12,301 113 41,754 14,348 168,041 40,037 8,753 3,325 162,164 90,427 78,522 2,897 25,021 8,824 48,745 24,660 9,077 17,418 26,140 21,063 10,861 135,052 28,804 30,166 18,256 18,863 38,794 10,116 10,959 12,465 4,677 26,189 25,515 67,430 45,182 6,357 200 52,023 38,861 20,090 66,747 11,004 7,315 22,520 8,610 28,648 144,299 703 29,266 4,797 148,747 57,035 16,110 16,120 5,782
USPS Employees*** 8,672 1,516 10 9,227 5,406 64,207 10,625 8,225 1,854 5,303 33,709 17,267 105 2,307 2,509 29,900 12,071 7,641 6,764 7,818 7,894 3,383 12,910 16,227 21,157 12,490 4,820 15,003 2,122 4,566 4,246 3,086 22,080 3,120 44,090 18,011 1,790 10 23,299 6,624 6,666 28,851 2,590 2,617 7,297 2,114 11,944 40,373 181 4,605 1,617 16,091 11,733 3,908 11,905 1,092
Total Annuitants and Employees 108,433 21,531 190 105,246 44,829 445,947 99,801 31,719 14,629 211,243 291,517 179,750 5,592 52,052 25,899 147,336 73,502 37,688 48,829 67,485 55,939 28,200 306,056 87,879 95,329 59,527 49,179 108,046 25,090 28,969 39,202 20,079 102,844 56,576 206,931 136,784 14,577 232 150,358 93,740 60,107 203,903 24,982 18,172 73,564 20,977 86,902 353,191 1,528 68,808 10,853 307,066 134,789 37,886 54,996 12,608 5,149,087
*Office of Personnel Management, April 2013 (American samoa and Northern Mariana Islands: combine for total annuitant count; breakouts not precise) **OFFICE OF PERsonnel Management, March 2013 (excludes intelligence community and certain other positions) ***POSTAL REGULATORY COMMISSION, MAY 2013
narfe bill tracker The NARFE bill TRACKER is your monthly guide to the congressional legislation that NARFE is keeping an eye on. Check back each issue for updates. ISSUE
Bill Number / Name / What Bill Would Do Sponsor H.R. 26: Deferred Benefits Adjustment Act of 2013 / Rep. Nydia M. Velázquez, D-NY
Provides for the inReferred to the House dexation of deferred Committee on Oversight and annuities, including Government Reform survivor annuities, and for individuals becoming subject to the Federal Employees Retirement System by election. Terminates the entitlement of a survivor who remarries before age 55 (currently, who remarries at any age) to an annuity based on the service of a deferred annuitant who dies before establishing a valid claim for a Civil Service Retirement System annuity.
H.R. 249: Federal Employee Tax Accountability Act of 2013 / Rep. Jason Chaffetz, R-UT
Makes any person who has a “seriously delinquent tax debt” (an outstanding tax debt for which a notice of lien has been filed in public records) ineligible for federal employment or to continue serving as a federal employee.
H.R. 517: To provide that four of the 12 weeks of parental leave made available to a federal employee shall be paid leave / Rep. Carolyn B. Maloney, D-NY
Allows federal employReferred to the House ees to substitute any Committee on Oversight and available paid leave Government Reform for any leave without pay available for either the birth of a child or placement of a child with the employee for either adoption or foster care. Makes available four administrative weeks of paid parental leave in connection with the birth or placement involved.
H. Con. Res. 25: Fiscal year 2014 Budget Resolution / Rep. Paul D. Ryan, R-WI
Among other things, re- Passed the House on 3/21/13 duces the federal workforce by 10 percent through attrition and increases the amount that federal employees contribute toward their retirement.
Paid Parental Leave
Retirement Calculations/ Contributions
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Latest Congressional Action(s)
Approved by the House Committee on Oversight and Government Reform on 3/20/13 Failed to pass the House on 4/15/13
Bill Number / Name / Sponsor
Latest Congressional Action(s)
H.R. 933: Fiscal Year 2013 Continuing Appropriations Act / Rep. Harold Rogers, R-KY
Funds the federal govern- Signed into law on 3/26/13 ment for the remainder of (P.L. 113-6) fiscal year 2013 (through September 30, 2013) at sequestration levels. Freezes federal pay for a third year (2013).
H.R. 1367: FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act / Rep. Stephen F. Lynch, D-MA
Provides the Office of Personnel Management greater oversight authority over the prescription drug contracting and pricing methods of the Federal Employees Health Benefits Program (FEHBP). It requires that pharmacy benefit managers, who currently contract with individual insurance plans to provide FEHBP prescription drug benefits, return 99 percent of all rebates, market share incentives and other monies received from pharmaceutical manufacturers for FEHBP business and caps prescription drug prices paid by the FEHBP.
Referred to the House Committee on Oversight and Government Reform
H.R. 1780: To provide that the only health plans that the federal government may make available to the president, vice president, members of Congress and federal employees are those created under the Patient Protection and Affordable Care Act or offered through a health insurance exchange / Rep. Dave Camp, R-MI
Removes federal employees from the Federal Employees Health Benefits Program (FEHBP) and places them in the health exchanges created under the Affordable Care Act.
Referred to the House Committees on Oversight and Government Reform, Energy and Commerce, and Administration
What Bill Would Do
H.R. 1795: Social Security Fairness Act of 2013 / Rep. Rodney Davis, R-IL GPO/WEP
Repeals both the GovernReferred to the House ment Pension Offset (GPO) Committee on Ways and and the Windfall EliminaMeans tion Provision (WEP). S. 896: Social Security Referred to the Senate Fairness Act of 2013 / Sen. Finance Committee Mark Begich, D-AK
(continued on p. 16) w w w. n a r f e . o r g
narfe bill tracker ISSUE
(continued from p. 15)
Bill Number / Name / Sponsor H.R. 630: The Postal Service Protection Act / Rep. Peter DeFazio, D-OR
316: The Postal Service postal reform S. Protection Act / Sen. Bernie Sanders, I-VT
What Bill Would Do Eliminates the future retiree health benefit prefunding requirement, protects six-day mail delivery and prevents the closure of rural post offices.
Latest Congressional Action(s) Referred to House Committees on Oversight and Government Reform and Judiciary Referred to the Senate Committee on Homeland Security and Governmental Affairs See story, below
House Committee chair issues draft Postal bill for study
ep. Darrell Issa, R-CA, chair of the House Oversight and Government Reform Committee, has released draft legislative language to reform the United States Postal Service (USPS). Issa is seeking feedback on the draft prior to introducing a bill, according to the committee’s website. NARFE’s agenda for the 113th Congress is guided by the Legislative Program compiled and approved at NARFE’s 32nd Biennial National Convention in August 2012. The Legislative Program lays out the following principles as they relate to the Postal Service, and these are the principles to which NARFE will adhere as postal reform legislation is considered in Congress: • NARFE supports legislation to maintain six delivery days per week by USPS nationwide. • NARFE will join with other federal and postal organizations to seek legislation to keep small post offices open throughout the United States. • NARFE supports legislation to relieve the USPS of its overly burdensome requirement to prefund over 10 years (from 2007 to
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2016) its future retiree health care obligations that are estimated to accrue over the next 75 years. • NARFE supports legislation to allow the Office of Personnel Management to make payments for any refund due to the USPS from the Civil Service Retirement and Disability Fund (CSRDF), on the condition that such payments would not result in the reduction of federal annuities paid to retirees and survivors. Most of the NARFE proposals were not included in the draft legislative language released by Issa, with the exception of the prefunding requirement. The postal reform draft would allow USPS to prefund retiree health care over an additional 40 years, in place of the current 10. NARFE supports this proposal. More information on the draft proposal can be found at: http:// oversight.house.gov/Postal ReformAct/. The draft released by Issa differs significantly from legislation already introduced in both the House (H.R. 630) and the Senate (S. 316) to reform the Postal Service. (See NARFE Bill Tracker, above.)
Referred to committees in both chambers, these bills are unlikely to move, however, due to a lack of bipartisan support. NARFE supports these bills, which include provisions approved by the NARFE membership. —By Jessica Klement, legislative director
Legislative Resources • Legislative Hotline: A weekly update of legislative news, compiled by the NARFE Legislative Department staff, distributed via email and available by phone (toll-free) at 877-217-8234 and online at www.narfe.org. • Legislative Action Center: A one-stop site to send a letter to Congress, and more, at www.narfe.org.
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Call TruHearing today: (877) 379- 4522 ALL APPOINTMENTS MUST BE SCHEDULED THROUGH TRUHEARING. FOR A FULL LIST OF PRICING VISIT OUR WEBSITE AT TRUHEARING.COM. *Members can save hundred's to thousands. Savings depend on model(s) chosen. Visit our website at www.truhearing.com for full pricing and product comparisons. THIS IS NOT INSURANCE. TruHearing provides discounts through contracted health plans and enrolled employer groups for hearing aid sales and professional services at selected hearing care providers. Professional services for fitting, programming and three NARFENB0513R1
adjustment visits, are included in the price of the aids. The customer is obligated to pay for testing, and all other post-fitting hearing care services, but will receive a discount from those health care providers who have contracted with TruHearing. FOR FLORIDA, OKLAHOMA, AND NEVADA RESIDENTS: The Member may cancel membership within 30 days, and receive a full refund of fees. The Member must return hearing aids within 30 days
of purchase to receive a full refund of the purchase price. In Florida and Nevada, the DMPO does not make payments directly to providers. As with all Members nationwide, fitting fees, programming fees and first three adjustment visits are included in the price of the aids. There is no MemberPlus primary membership fee for Washington State residents. ALL CONTENT ÂŠ2013 TRUHEARING, INC. ALL RIGHTS RESERVED.
Questions & Answers
The following Questions & Answers were compiled by NARFE’s Federal Benefits Service Department staff. NARFE does not provide legal, financial planning or tax advice or assistance.
active employees FERS Annuity Supplement
When the Office of Personnel Management (OPM) calculates the Federal Employees Retirement System (FERS) Annuity Supplement amount, is it based on only the Social Security taxes withheld during federal employment, or do payments made during employment in the private sector also figure in?
If you are eligible, the FERS Annuity Supplement represents the Social Security benefits you would receive as part of your total FERS retirement package if you were eligible to receive them the day you retired. It continues until you reach age 62, the earliest age at which you are entitled to your actual Social Security benefits. Individuals who retire on FERS disability or under the Minimum Retirement Age (MRA) +10 provision cannot receive the supplement. The supplement approximates the amount of Social Security 18
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benefit you earned under FERS service only – not the amount of your total Social Security benefit, which includes earnings from all of your Social Security-covered employment. By the way, the administration’s budget proposal for fiscal year 2014 does away with the FERS Annuity Supplement for new hires in the government.
In the last edition of narfe magazine, you published a great article discussing Federal Employees Health Ben-
efits Program (FEHBP) benefits. One of the proposals under consideration is adding a new “selfplus-one” category. If this takes effect, will the family option still be available? We have an adult residing with us who has a chronic illness, and we presently have family coverage in order to provide his benefits as approved by OPM.
Yes, the family option will continue. There are no proposals to eliminate that option from the FEHBP.
Survivor annuity decision
I will be retiring soon under the Civil Service Retirement System (CSRS). My husband and I have agreed that we should not elect full survivor benefits for him and use that money for other things. However, he is covered on my
health plan, and I know that I need to elect a survivor benefit to protect his health insurance. I would like to elect a small benefit for him. How does this work?
You have a wide range of choices for a survivor benefit because you are under the CSRS. Of course, you do have to get your spouse’s consent if you elect less than a full survivor benefit. You may elect as little as $1 a month to protect this benefit for him, or 55 percent of your full annuity for the highest amount allowable by law. You probably will want to look at the cost before you make up your mind. You will pay 2-½ percent for the first $3,600 of your basic annuity and 10 percent for the remainder. For example, if you elect $3,600 as your base, this will cost you $90 a year. Divide by 12 to determine your monthly deduction. You may want to leave a benefit that would pay for part of his health insurance.
I am thinking of retiring in the next several months after 27 years of federal employment. I am in the Federal Employees Retirement System (FERS). I have gone through my service benefits office and received an estimate of my benefits package upon retirement. Is there a checklist with time frames, etc., of what I should be doing during these final months of employment in preparation for retirement?
If you still have your copy of the April 2013 issue of narfe magazine, please see p. 27, where we carried checklists for FERS and Civil Service Retirement System (CSRS) employees, provided to us by the Office of Personnel Management (OPM). The checklists are designed to help federal employees ensure that their retirement paperwork is complete and ready for processing. The checklists also are available on the NARFE website, www. narfe.org. Log in as a member, click on Departments at the top of the Member Home Page and select “Federal Benefits” from the drop-down menu, then click on “OPM Retirement Guide and Checklists.”
retirees Seeking Annuity Adjustment
My monthly annuity with survivor benefits should be $1,000 more than what I am getting. I have sent the Office of Personnel Management (OPM) documentation to this effect but still have not had the annuity adjusted. What do I need to do to get this corrected?
With OPM under pressure to reduce its inventory of new retirement cases, its available staff is being used primarily to adjudicate the incoming cases of new retirees. Meanwhile, other work has gotten a lower
priority. Though it is unlikely that OPM can expedite the review of your case before others, we can assure you that if OPM agrees there was an error in the computation of your annuity, it will make the necessary adjustment and pay you the difference back to your annuity commencement date.
Insurance for spouse without annuity
I retired under the Civil Service Retirement System (CSRS) in November 1989 with 28 years and two months to my credit. My retirement fell under an abolishment process that allowed me to collect my portion of retirement contributions. This reduced my annuity in perpetuity. I also waived survivor benefits for my wife. She has never been a federal employee. She is, however, currently covered under our Kaiser Health Insurance family plan in the Federal Employees Health Benefits Program (FEHBP). I recognize that my spouse will no longer be entitled to my pension should I predecease her. Will she, though, be able to continue her coverage under our current Kaiser Health Insurance family plan under the FEHBP should she survive me? If not, what are my options?
Without a monthly survivor benefit, your wife’s coverage under your FEHBP health plan terminates, subject to a 31-day extension, at midnight on the day you die. w w w. n a r f e . o r g
Questions & Answers
Shortly after your death, the Office of Personnel Management will send her a Standard Form 2810 (Notice of Change in Health Benefits Enrollment), which will show the date the insurance coverage terminates. It will also provide information on her right to convert to an individual policy offered by the plan you were enrolled in at your death. Typically, conversion plans offer fewer benefits, and the individual must pay the full premium because there is no government contribution. Of course, if your wife is covered under Medicare and has Part A (Hospital Insurance) and Part B (Medical Insurance), she can continue to be covered under those programs and may even want to consider enrolling in Part C (Medicare Advantage) and Part D (prescription drug coverage) to provide additional coverage.
Awaiting arrival of Survivor paperwork
My husband passed away last month, and I need to change his annuity. I requested the paperwork from the Office of Personnel Management (OPM) but have yet to receive it. How long does it take for OPM to send paperwork to surviving spouses? And how long after returning the completed forms should I expect to wait before I start receiving his annuity? (I’m having a very hard time trying to get through to OPM.)
There are many factors involved in processing a survivor annuitant’s case − not the least of which is the staff resources assigned to handling cases of deceased annuitants.
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OPM must first convert the retiree’s case to a survivor case. It must then review the deceased’s retirement records to determine the proper payee and amount of benefits. Depending on OPM’s workload, it may take several weeks to determine this and get death benefit applications out to the respective survivors. The latest data we have is from 2012, when, on average, OPM mailed applications to Civil Service Retirement System (CSRS) survivors within 23 days of being notified of the death and within 35 days to Federal Employees Retirement System (FERS) survivors. Of course, these are averages and the time may be shorter or longer depending on the case. If the deceased annuitant’s records indicate that the party who is entitled to monthly survivor benefits is the same as the surviving spouse who notified OPM, then it makes every effort to place that surviving spouse into its Survivor Express pay system as soon as possible. In this way, a benefit is paid even if the paperwork to apply for those benefits has not been sent. That said, OPM has monthly pay cycles, and whether the payment is received the first of the next month or the following month is dependent on when in the cycle the payment was first authorized.
Reduction in Survivor Annuity?
I am a Civil Service Retirement System (CSRS) annuitant. I took a reduced annuity. Should I predecease my wife, she would receive a survivor annuity. She also would be eligible for Social Security based on my Social Security entitlement. Would
her survivor annuity be reduced by the amount of Social Security she receives? Since she is well over 60 years old, would her annuity be affected should she remarry?
The answer to both questions is no. Your wife’s survivor annuity is unaffected by either receipt of Social Security or remarriage after age 55.
Earning Limit Applies to Fers supplement
I just read the federal benefits Q &A in the June issue of narfe magazine. A recent widower wrote to ask if he would lose the Federal Employees Retirement System (FERS) Annuity Supplement if he began drawing on his late wife’s Social Security benefits at the age of 60. You responded that when he became eligible to draw his own Social Security benefits, he would have to choose between the two Social Security benefits since you cannot receive both. I have tried to reach OPM to find out why my FERS Annuity Supplement was stopped when I turned 60 and started to receive some of my deceased husband’s Social Security benefits. It appears that there are no longer OPM customer service personnel to answer calls. When I phoned the number listed on the letter I received from OPM, the voice mail refers me to the OPM website. I can’t find the answer to my question there either.
We would need to look at the letter you received from OPM to help you. Normally, the only issue that would cause you to lose your FERS Annuity Supplement is the
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Questions & Answers
earnings limitation test, which states that your supplement will be reduced $1 for every $2 you earned over the $14,640 earnings limitation for 2012.
GPO Affects Benefits
I worked in a public school system and now receive a small pension. I soon will be eligible for Social Security benefits, though this may be reduced because of the state teacher’s pension that I receive. My husband retired from the Department of Defense and receives his pension, but he never worked enough quarters to receive Social Security. Would he be eligible to receive ben-
ROXC3093NARFEbackyardHalfpg.indd1 1 aug 2 013
efits based on my Social Security earnings?
He probably would be eligible, but under the Government Pension Offset, any spousal benefit for which he is eligible would be reduced by twothirds of his monthly civil service annuity. This could result in no benefit being paid to him.
Effect of Pharmacy settlement on FEHBP
I am a Civil Service Retirement System (CSRS) retiree and have Blue Cross/Blue Shield health insurance in the Federal Employees
Health Benefits Program (FEHBP). For years, I have filled my asthma prescription at a local pharmacy. I also would use a $10 coupon from the manufacturer to offset the $170 patient fee. Under the pharmacy’s rules, I would receive a $10 gift card after 20 prescriptions. Recently, the pharmacist said that the corporate office informed them that because my health insurance was taxsupported, I was ineligible to use manufacturer coupons and could no longer receive the promotional $10 for maintaining my prescription there. I explained that I paid for my insurance and that it was part of my retirement. The pharmacist claimed that they were just
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Questions & Answers
NARFE at Your Service following Office of Personnel Management rules. Would you explain why this is so?
The situation with your pharmacist may be the result of a Department of Justice settlement under the False Claims Act with Walgreens, a large nationwide pharmacy chain. In its April 2012 announcement of the settlement, the Department of Justice stated that the FEHBP was included under the act’s definition of a federal health care program. The act prohibits pharmacies from offering incentives, such as gift cards, gift checks and other similar promotions, as inducements to beneficiaries of govern-
ment health programs to transfer their prescriptions. NARFE has sent two letters to the Department of Justice arguing that the FEHBP was specifically excluded in the law from this prohibition on incentives, but we have yet to receive a response. When we do, we will inform members about the outcome.
800-456-8410. To obtain an answer to a federal benefits question, NARFE members should call 703-838-7760 and ask for the Federal Benefits Service Department; send your question by postal mail to NARFE Headquarters, ATTN: Federal Benefits; or submit it by email to fedbenefits @narfe.org.
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NARFE service officers are available to answer questions and to assist in helping with a variety of benefit matters. Check your chapter newsletter for the name and phone number of your service officer. For the nearest service officer, call NARFE (toll-free) at:
NARFE Service Centers also are available in some areas. Use the Service Center listings on the NARFE website,
It’s Time to Travel with other NARFE Members!
Transatlantic + Mediterranean Cruise Plus...Italy Tour
on Save s thi ing sition! o p e R e Cruis
Departs: April 26, 2014
Norwegian Cruise Line needs to get the NCL Epic from Miami to Barcelona! Fly into Miami (one-day and night) and enjoy a city tour before boarding the newest and largest ship in NCL’s fleet, the Epic. Discover a variety of dining options and world-class entertainment as you sail to ports in: Funchal, Madeira, a mountainous isle with beautiful beaches; historic and vibrant, Barcelona, Spain; Marseilles, France; the popular summer vacation resort of Palma de Mallorca, Spain and Naples, Italy. Disembark in Civitavecchia where you will begin your journey through Italy. Visit Rome (two-nights), including Vatican City; travel the region of Tuscany to Florence followed by the amazing city of Venice and see the Grand Canal. Then head inland to Verona, offering examples of Medieval and Renaissance art and architecture; Lake Garda, Italy’s largest lake and Milan where you will depart for home after seeing all the city’s highlights. * Per person, based on double occupancy. Price based on inside cabin, upgrades available. Plus $299 tax/service/ government fees. Airfare is extra.
Rose Parade &
Coastal California Tour
Departs: Nov. 4, 2013 & Feb. 19, 2014
Departs: December 29, 2013
Discover remarkable scenery, dreamlike beaches and the “spirit of aloha” on the islands of - Oahu, Hawaii, Maui and Kauai. This tour will be accompanied throughout by one of our friendly Polynesian Tour Directors who add a unique cultural perspective to your experience. Featured highlights: a city tour of Honolulu, world-famous Waikiki Beach, Punchbowl Crater and Pearl Harbor, the Wailua River Boat Cruise, Fern Grotto, The Old Whaling Capital of Lahaina, the Iao Valley, Hilo Orchid Gardens, Black Sand Beaches, Volcanoes National Park, Thurston’s Lava Tube and more.
Begin in the “City of Angels” that includes a tour of Los Angeles, Hollywood and Beverly Hills. Attend a VIP presentation on the history and traditions of the Rose Parade, plus an exclusive, pre-parade, after public hours, float building and viewing at the Rosemont Pavilion with included dinner. Then on Wednesday, January 1, 2014, observe the Rose Parade from your reserved YMT grand stand seats!
Includes: quality hotels, inter-island flights, baggage handling, tour director, special events and escorted sightseeing on all four islands. * Price per person, based on double occupancy. Add $199 tax/ service/government fees. Plus $150 for 2/19/14 departure date. Alternate departure dates available in 2013 & 2014. Seasonal rates may apply. Airfare is extra.
On Friday, January 3, depart for Central California. Visit the beach community of Santa Barbara and its Camino Real Mission; the Danish Village of Solvang; tour the world renowned Hearst Castle, with its considerable collection of art and antiques and travel the scenic Big Sur and famous Highway One, to Monterey. Your last stop is San Francisco with a city tour including a trip over the Golden Gate Bridge and back, plus a ferry trip and tour of Alcatraz Island. * Price per person, based on double occupancy. Add $159 tax/ service/government fees. Airfare is extra.
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All appointments must be scheduled through TruHearing. MemberPlus Membership fee waived * Price shown does not include cost of comprehensive hearing exam. Examination Â§The Service Benefit Plan will pay a hearing aid benefit up to $2,500 total every 3 calendar years and testing for fitting of hearing aids is covered under the Service Benefit Plan. The for adults age 22 and over, and up to $2,500 total per calendar year for members up to age Insured may need to submit for reimbursement. Service Benefit Plan members get 22. Do not rely on this communication piece alone for complete benefit information. All benefits the TruHearing MemberPlus membership fee waived through December 31, 2014. are subject to the definitions, limitations, and exclusions in your Service Benefit Plan brochure. The $108 is the regular yearly cost for the TruHearing MemberPlus membership. Must be Blue365ÂŽ Discount Program offers access to savings on items that you may purchase directly from a Service Benefit Plan member to access TruHearing MemberPlus discounted pricing. independent vendors, which may be different from items covered under your Service Benefit Plan or State and local taxes and/or fees may apply. Prices and products subject to change. any other applicable federal healthcare program. For hearing aids, acupuncture, chiropractic and vision services, you must exhaust your Service Benefit Plan benefits first. To find out what is covered The Blue Cross and Blue Shield Association is an association of independent, locally operated Blue Cross and Blue Shield Plans.
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through 12/31/2014 (a $108 value). under your policy, contact the Service Benefit Plan. The products and services described herein are neither offered nor guaranteed under any local Blue company’s contract with the Medicare program. In addition, these items are not subject to the Medicare appeal process. Any disputes regarding these products and services are not subject to the Service Benefit Plan’s Disputed Claims process. Blue Cross and Blue Shield Association (BCBSA) may receive payments from Blue365 vendors. Neither the Service Benefit Plan, BCBSA, nor any local Blue company recommends, endorses, warrants or guarantees any specific Blue365 vendor or item. The Service Benefit Plan reserves the right to change, modify, or terminate any item and vendors made available through Blue365, at any time.
Paradise With Strings Attached
Illustration by Bill Pragluski, Critical Stages, LLC
By David Tobenkin
Retirement in Rome agrees with Reuben Snipper. Asked if retiring abroad in Italy last year had met his expectations, Snipper, a former U.S. Department of Health and Human Services (HHS) researcher and policy analyst, does not mince words. “You must be kidding. I’m retired in Rome! A wonderful city with great food, wine, weather, and sights to see and explore,” Snipper says. “My wife is working at a job she loves [at a Rome-based United Nations agency], we found a lovely apartment in an interesting and convenient neighborhood, and the Italians are warm and friendly,” he adds. “The only thing that has taken longer than I expected is learning Italian. At the 10-month point, I am finally able to carry on some limited conversations.” What could be more enticing than the lure of retiring abroad? Federal employees may dream of sipping a frosty beverage by the beach, stretching annuity dollars farther in a less expensive locale and enjoying a slower lifestyle. Or perhaps they imagine residing in an exotic First World destination, which during working years could only be visited for a week or two at a time on vacation. But other federal retirees have found their retirements abroad to be less than carefree. Rob Montague, also a former HHS employee, says life was good for him after he retired to Brazil in 2003. But in 2006, he returned to the United States after a change in the exchange rate threatened his financial security there. “I loved living in Brazil and had no intention of returning to the U.S. permanently, but the dollar crashed far beyond any worst-case scenario I had anticipated,” Montague says. “I had to return to the U.S. after three years because I could no longer afford to stay in Brazil. It turned out to be a bad choice to retire to a country where the rate of exchange can swing so widely.”
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The bottom line is that federal retirees who enjoy a rewarding retirement abroad as expatriate Americans likely will have earned it through extensive planning far beyond that required for a domestic retirement. A number of challenges – many involving financial matters such as accessing federal benefits – await retiring federal employees. And even if such issues are addressed, as with all major life decisions, risks remain. Of the 1.9 million retired federal employees receiving benefits in June 2013, only 14,552 (or less than 1 percent) lived outside of the United States, according to Office of Personnel Management (OPM) data. But the number of federal retirees who moved abroad for retirement is even smaller than that because many overseas annuitants are foreign nationals. For example, the foreign country that is home to the greatest number of federal retirees is Panama, where 5,141 of the 14,552 live. Many of those retirees are Panamanian citizens who spent their careers working for the United States in the Panama Canal Zone. Rounding out the top 10 countries with federal retirees, based on OPM’s numbers, are the Philippines (1,053 retirees), Germany (952), Canada (629), Japan (553), France (484), United Kingdom (423), Italy (417), Greece (406) and Thailand (368). Several of these countries, including the Philippines and Germany, had major U.S. military facilities that employed many local citizens.
eciding to Live Abroad Federal employees already know that preparing for retirement is demanding. Preparing to retire abroad increases multifold the issues that must be addressed, among them immigration questions, including residency status; access to federal benefits; banking and other financial matters, including property ownership; and medical care, costs and insurance coverage. The first order of business is determining if you really want to live in, rather than visit, a foreign country. Many retirees and consultants say it is vital that those seeking to retire abroad spend an extended period in the country as a resident, rather than as a tourist, to accurately gauge the challenges and tradeoffs involved in permanently moving there and to find out what living there is really like. Another consideration should be the availability of a support network, such as relatives or friends
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living there or connections gained through employment there. If such connections are weak, those considering retiring abroad should ask themselves whether they will be willing and able, at an older age, to invest the time and energy required to forge new relationships abroad. The size and cohesion of the U.S. expatriate retiree population in the location are often significant factors to consider. And they may want to think about how relations with family in the United States will be maintained, an issue that usually increases in importance with age. When queried by email, NARFE members discussing their experience living abroad in retirement also say that the ability to speak the foreign language can be an enormous factor in satisfaction, as well as in health care and financial considerations. Learning to speak the local language fluently was among the top recommendations made. It is a good idea to find out as much as possible about the foreign location, and from a wide variety of sources. Foreign embassies in the United States; U.S. embassies abroad; foreign legal, financial and tax experts; and current American expatriates in the foreign country are all valuable sources of information. See the sidebar, p. 33, for country-specific information available online from the U.S. Central Intelligence Agency and the U.S. Department of State. Based on NARFE-member comments, a very large factor for many who decided to retire abroad is having family connections there or having worked there for a substantial period. On the other hand, many say they were simply looking for a warmer, cheaper or more interesting place to retire. Prospective expatriate retirees should be aware that moving abroad means signing up for foreign cultural and legal norms. Says one former U.S. Department of Defense counselor who retired in the Bavaria region of Germany: “It helps to speak German and value a very civil way of life.”
mmigration Issues For those who think retiring abroad may be a possibility, a preliminary issue to consider is that, for an extended stay, some foreign governments will demand proof of sufficient income to avoid becoming a burden upon their country. For many of these, demonstrating a flow of federal retirement benefits will satisfy that requirement. An annual showing by expatriates
of evidence of federal pensions in the amount of $1,000 to $2,500 per month will satisfy many Latin American governments, says Dan Prescher, special projects editor at International Living magazine (see sidebar for website), which examines global locations for expatriate living, retiring and investing. Another immigration issue is whether a retiree wishes to become a citizen or permanent resident of the foreign country, which in some countries is the key to accessing certain national health plan and other benefits but may involve more obligations as well. In many cases, showing ancestry in the country or marriage to a foreign national spouse may help acquire such status. “Immigration is strict, and one must prove self-sustainment to the immigration officer to get a visa, especially health insurance,” says one U.S. Department of Defense retiree who lives in Germany. Gathering key U.S. documents before heading abroad and retaining them afterwards can be vital: “Bring along a copy of your birth certificate, without which you cannot open bank accounts and transact other business,” says one Department of Labor retiree who moved to Brazil in 2003 and now spends half the year there.
ccessing Benefits Obtaining federal annuity and Social Security payments abroad generally is not a problem, but there are some wrinkles. With federal annuity payments now being made via paperless deposits in many countries, receiving payments, notices and communications electronically is easier than ever. There also are an increasing number of OPM online services that make securing and managing financial benefits abroad, and maintaining necessary communications with OPM, easier and more secure than in the past. Thrift Savings Plan (TSP) account holders can now sign into the TSP website and send and receive messages behind the firewall, thereby maintaining security of communications, says Kim Weaver, director of external affairs for the Federal Retirement Thrift Investment Board, which administers the TSP. Weaver says that there are no other special considerations that apply to those retiring abroad. To avert problems, however, federal employees considering retiring abroad may find substantial
legwork is still necessary. For one, it is vital that soon-to-retire and retired employees keep their postal and email addresses up to date with OPM, the U.S. Treasury Department, the Thrift Savings Plan and the U.S. Social Security Administration (SSA). There are some important notifications that are sent to retirees, such as the annual TSP Participant Statement, the form 1099-R from OPM showing pension and annuity distributions, and the notice of required minimum distributions from the TSP, to name a few, notes Tammy Flanagan, senior benefits director at the National Institute of Transition Planning, Inc. (NITP), a Rockville, MD-based provider of seminars on benefits for federal employees. Receipt of some important documents by mail can be risky, given that many foreign countries’ mail systems are far less speedy and reliable than the U.S. Postal Service. Fortunately, an increasing share of relevant federal documents and information is being sent or made available to federal employees and retirees by the Internet. Ensuring good communications, consultants say, means testing communications methodologies to make sure they work. U.S. citizens residing outside the United States, as well as citizens of certain foreign countries, will continue to receive their Social Security benefits no matter how long they are outside the United States (see sidebar for website to download SSA brochure). SSA considers as outside of the United States those individuals remaining outside the United States and its territories for a minimum of 30 consecutive days. They remain classified as such until they spend 30 consecutive days back inside the United States and its territories. All Social Security beneficiaries, including U.S. citizens, living abroad must complete and return a periodic questionnaire to continue receiving ben-
Moving abroad means signing up for foreign cultural and legal norms.
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efits. There also are a variety of changes that must be reported to the SSA independent of the questionnaire to continue receiving benefits, including changes of address, work outside the United States, and divorce or marriage. U. S. citizens may receive Social Security benefits outside the United States in most countries. The SSA website offers a tool that can help those considering living abroad determine if they can receive Social Security payments there (see sidebar for website). Address changes may be made through correspondence to the U.S. Embassy or consulate in the foreign country or the Social Security Administration.
inancial Matters Taking receipt of benefits abroad usually is not too difficult. Many expatriate federal retirees maintain a bank in the United States, directing that federal payments be deposited there, and then withdraw funds from a local bank using debit cards or cash transfer services such as Zoom. The alternative, setting up banking abroad, has its own challenges, as the U.S. federal government has become aggressive in pursuing U.S. citizens with foreign bank accounts. This has resulted in some overseas banks not wanting to deal with U.S. citizens for fear of the scrutiny that may be involved, says Bob Leins, a certified public accountant with NITP. In addition, foreign accounts create U.S. tax consequences as well as additional reporting requirements. A separate Foreign Bank Account Reporting is required for a citizen or resident of the United States with at least one foreign account and an aggregate value of all foreign financial accounts exceeding $10,000 at any time during the calendar year, notes Serena M. Hubbell, a senior manager in Ernst & Young LLPâ€™s Human Capital Group. Noncompliance with this filing will carry severe penalties. Bank fees can be a big deal, and securing lower foreign transaction and conversion fees should be a goal. Another caution in dealing with foreign banks is that they may not have deposit insurance, as do U.S. banks. If the bankâ€™s fortunes decline, deposits may be at risk. Even worse, some foreign governments, like that of Cyprus, have actually tapped private bank deposits to address their national deficits. Expatriate retirees also should be aware that it may take more time for funds to clear abroad than in the United States.
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Another financial issue, noted by a NARFE member quoted earlier, is that currency-swing issues and inflation can be enormous threats to retireesâ€™ financial security. Some countries, such as Panama and Ecuador, address this by making the U.S. dollar their national currency, while many others use the U.S. dollar in parallel with their national currency or peg the value of their currency to the U.S. dollar. Prospective expatriate retirees should add this to the list of financial issues to be researched. Another area that retirees will want to research carefully is foreign property ownership. The ability for noncitizens to own property, what property rights are conveyed and for what period, how that property will be taxed, whether it can be sold or assigned, and many other issues should be carefully examined before signing on the dotted line. Another important question is what a U.S. retiree abroad will do if unexpected expenses outstrip retirement benefits. The options for working in the foreign country may be quite limited, often turning on the residency status of the individual, with many countries limiting or prohibiting noncitizen employment in whole classes of occupations. A bright note in this area is that the Internet has opened up new U.S. work opportunities for some retirees.
ax Considerations Taxation issues are a major, and sometimes overlooked, consideration in foreign retirement decisions. Questions include whether and how the expatriate retiree will be taxed by the United States and the foreign government. Retirees will almost certainly want professional counsel by an accountant or tax attorney with international expertise in U.S. federal, state/local (where applicable) and foreign taxation. At the federal level, U.S. citizens or permanent residents of the United States (green-card holders) are required to file U.S. income tax returns while abroad, Hubbell says, adding that most income tax treaties provide protection from double taxation. Generally, such treaties call for each country to credit the amount of tax paid to the other country. The tax implications also extend to gifts to U.S. citizens and estate tax on transfers of worldwide assets. Renouncing U.S. citizenship or relinquishing a green card will be the only way to eliminate the U.S. annual income tax filing requirement. How-
Internet Resources: Central Intelligence Agency: “The World Factbook,” https://www.cia.gov/library/publications/the-world-factbook/
ever, the Heroes Earnings Assistance and Relief Tax Act (the “HEART Act”) statute U.S. Department of State: aims to deter high-net-worth U.S. citizens and • “Travel.State.Gov,” http://travel.state.gov/travel/travel_1744. long-term residents from taking those steps html to avoid the payment of U.S. taxes. It imposes INTERNATIONAL LIVING MAGAZINE: http://internationalliving.com an immediate exit tax on both the U.S. and Social Security Administration: foreign assets of individuals who relinquish or • “Your Payments While You Are Outside The United States,” give up their citizenship status or who give up www.socialsecurity.gov/pubs/10137.pdf their green-card status, Hubbell notes. Some • “Payments Abroad Screening Tool,” www.socialsecurity. other financial consequences may apply to gov/international/payments_outsideUS.html those subject to the HEART Act, she says. State income taxes also may play a role. Office of Personnel Management: Most states tax on the basis of domicile. If you “Important Facts About Overseas Coverage,” http://www. have not abandoned your domicile, the state opm.gov/healthcare-insurance/healthcare/plan-information/ will tax you as if you never left, says Hubbell. important-facts-about-overseas-coverage/ Many states provide detailed criteria on how to Blue Cross and Blue Shield Service Benefit Plan: change your domicile. One easy fix is to estabBlue Cross and Blue Shield Service Benefit Plan 2013 Brolish a legal residency and change your domicile chure, http://www.fepblue.org/downloads/2013-service-benefitto a state with no state income tax and then plan-brochure_100512.pdf move outside the United States, Hubbell says. Federal Employees Dental and Vision Insurance There is also the question of the foreign program: country treatment of U.S. annuities, including Plan brochures: http://www.opm.gov/healthcare-insurance/ whether the new country taxes the annuity and dental-vision/plan-information at what rate, notes NITP’s Leins. Many foreign governments will not tax U.S. citizens on such Federal Long Term Care Insurance Program: U.S. annuities, Leins says. Tax treaties may Eligibility to apply and use long-term care insurance benefits have pension/annuity articles and provisions overseas, http://www.ltcfeds.com/help/faq/eligibility that will allow for tax relief, Hubbell adds. _general.html “A federal employee retiring in the United Kingdom has to be aware that tax returns have to be filed for both countries,” says one former year 2012 from income taxable by the InterU.S. Department of State employee who moved to nal Revenue Service, in addition to the excluthe United Kingdom a year after retiring in 2001. sion or deduction of certain foreign housing “There is a U.S./UK tax treaty applicable.” He notes amounts, says Leins. There are two tests that that while he would be in the 25 percent tax bracket can be met to be able to qualify for the FEIE. in the United States, he is in the 40 percent tax And there is more to consider than just bracket in the United Kingdom. income tax. Some countries that have very low For retirees who wish to work abroad after retireincome-tax rates may impose high sales or use ment, taxation of income earned abroad – by the taxes, Hubbell notes. foreign country and the United States – also should be considered. If a retiree works in the foreign retireealth Care Concerns ment destination country, that country may tax the With respect to health benefits, retiree’s foreign earnings. However, as noted above, one important consideration is that many countries have tax treaties with the United Medicare is not available overseas. States to avoid double taxation. Further, the United Some retirees say they return to States allows for an exclusion of income earned the United States for medical proabroad after meeting applicable qualifications, notes cedures to be able to use it. Leins. For example, those who qualify may use the However, retirees abroad say that they have been Foreign Earned Income Exclusion (FEIE) to exclude able to access Federal Employees Health Benefits up to $95,100 of income earned abroad for calendar Program (FEHBP) benefits overseas, though there
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Paradise With Strings Attached
are a variety of challenges and considerations. OPM offers important facts about overseas coverage on its website (see sidebar for website). OPM advises, for example: “You should not be enrolled in an HMO if you are living overseas, except when the overseas geographic location is part of an HMO’s service area (such as Guam or Puerto Rico).” Many retirees say that their FEHBP Blue Cross and Blue Shield coverage works well. “If you travel or live outside the United States, Puerto Rico and the U.S. Virgin Islands, you are still entitled to the benefits described in our Blue Cross and Blue Shield Service Benefits Plan (SBP) brochure,” says Eric Lail, a Blue Cross and Blue Shield Association spokesperson (see sidebar for website). “Unless otherwise noted in the overseas section, the same definitions, limitations and exclusions also apply.” Even if an insurance plan will cover a retiree abroad, however, there also is a question of whether the foreign health care provider would be willing to put up with extensive U.S. paperwork necessary for payment, note some retirees. Practical considerations also apply. How comfortable will an expatriate retiree feel seeing a doctor if he or she cannot speak the native language and the doctor does not speak English? Some retirees say they come home for major medical treatments for that reason. The quality of service abroad is another issue. Many retirees sing the praises of foreign medical systems; some do not. “We used German physicians in various fields and German hospitals as ‘private’ patients,” says Siegfried Lehnigk, a former research physical scientist with the U.S. Army, who retired in 1989 in Germany until returning to the United States in 2009 to be with his son and his family. “We paid our bills in euros out of our German bank account, mailed paid bills to Blue Cross Blue Shield in the United States for reimbursement and received checks from them in dollars. There were absolutely no problems; the treatment as patients was much better than in the U.S.; and the cost was much lower, which Blue Cross Blue Shield liked.” The Federal Employees Dental and Vision Insurance Program (FEDVIP) dental and vision plans are available to those retiring abroad. If members of the eligible federal family live outside of the United States, they can enroll with a nationwide/ international plan such as Aetna, GEHA, MetLife or United Concordia. However, retirees should be 34
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aware that the international provision of benefits, handling of claims payments and availability of provider networks differ among plans, says Brian Frankenfield, director, BENEFEDS Enrollment & Service Operations at Long Term Care Partners, which administers BENEFEDS.com, a secure website enabling federal employees and family members to enroll in and manage their FEDVIP coverage. He recommends that retirees consult individual plan brochures for the most updated information every year (see sidebar for website). The availability of health services under foreign national plans is also a consideration, often depending on the immigration status of the retiree. Some foreign systems, such as that of Portugal, will allow buying into the national plan. Others, such as the United Kingdom, cover anyone residing in the country and paying taxes. The ultimate test of acculturation abroad, however, may be less one’s willingness to retire abroad, than whether one is willing to die there. Some long-term care insurance plans do not allow payments to cover long-term care and endof-life costs abroad. The Federal Long Term Care Insurance Program (FLTCIP) does allow such coverage and will pay for benefits up to 80 percent of the benefit amounts shown on a policyholder’s schedule of benefits, as described in FLTCIP information (see sidebar for website). As described there, some other limitations also apply to those receiving benefits abroad. Financial issues aside, as the active years of retirement yield to less healthy ones, when access to family often grows increasingly important, the idea of declining and dying away from relatives in a foreign locale, even if well-attended, may test the resolve of many. Some NARFE members say they plan to come back to the United States before that happens. But those who do retire abroad should realize that when the time comes, they may not have a choice in the matter. —David Tobenkin is a freelance writer based in the greater Washington, DC, metropolitan area.
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OPM Seeks to 'Modernize' program
Is the Legislative PlatterToo Editor's Note: We asked Walton Francis, an independent expert on the Federal Employees Health Benefits Program (FEHBP), for his views on pending FEHBP reform proposals. These are his opinions and are not necessarily those of NARFE. In President Obama's fiscal year 2014 budget, the Office of Personnel Management (OPM) proposed five legislative changes to “modernize” the Federal Employees Health Benefits Program (FEHBP) and to have it “follow the best practices in the large employer market.” There are other reforms that the administration could have proposed but did not. 36
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By Walton Francis
Full, Half Full or Half Empty? In April, the House Committee on Oversight and Government Reform held a hearing on these reform proposals. Members from both sides of the aisle were critical of OPM’s failure to provide more information on the details of these proposals and their likely effects, but were clearly receptive to considering some of these changes. NARFE, which submitted written testimony to the committee, is urging Congress not to act without getting more specifics. “NARFE is pleased to see OPM taking steps to improve the FEHBP, a program already considered a model in the health care world,” said NARFE President Joseph A. Beaudoin. “But we caution that more information is necessary before moving forward with legislation.” w w w. n a r f e . o r g
FEHBP Reform Proposals
Despite the lack of details, it is apparent that the proposals could have both positive and negative effects on federal employees and annuitants. The president’s budget estimates savings for all these reforms together of $8.4 billion over the next 10 years. This is less than 2 percent of the roughly $550 billion that will be spent on the FEHBP over those years.
The OPM Proposals
likely advantage the Blue Cross and Blue Shield Service Benefit Plan (BC/BS), which has a higher share of annuitants with Medicare. So far, OPM has provided no details, not even a table showing how premiums would change, by plan, if this reform had been in place this year. OPM says this change follows the “best practices in the private sector.” But the private sector doesn’t put retirees in the same plans as workers.
The OPM proposals would: Create a New “Self-Plus-One” Enrollment Category. The FEHBP has only two categories of premiums, “self-only” and “self and family.” The idea of adding “self-plus-one” is that couples or single parents with one child shouldn’t have to pay the same amount as large families. But family size varies by age. At younger ages, when health care costs are lowest, families are largest. By the time parents reach 50 or 55 years of age, most are empty nesters. So young couples without children, or a young parent with one child, would join the same premium pool as older couples. Medical care costs vary widely by age. Children average about $1,500 a year; adults ages 25-34, about $3,000 a year; adults ages 5564, about $7,500; and adults age 65 or more, about $11,000 a year. Years ago, OPM actuaries calculated that the higher costs of the older enrollees would make a self-plus-one premium higher than a family premium. However, retired couples with Medicare coverage cost less because Medicare pays first, and there may now be just enough of these couples to change the calculation. Splitting the families into two groups doesn’t change the overall cost of care for those families. Yet the president’s budget shows this reform saving the government $5.8 billion over 10 years. Most likely, this means that the premiumsharing formula would cost larger families this much more than smaller families gain, an overall benefit reduction. Among plans, this also would
Cover Domestic Partners of Federal Employees and Annuitants. OPM proposes to cover domestic partners of federal employees (but not current retirees). This reform would cover both same-sex and oppositesex couples. This mirrors an increasing trend in the private sector to cover both categories. Obviously, this reform will provide many couples peace of mind and financial protection. This is the only proposal that clearly adds to the competitiveness of federal benefits in attracting new employees. The budget projects a 10-year cost of $600 million for these changes. Participation will depend on two major factors. First, most such couples are likely to already have individual insurance through their work. In such cases, it will often be to their advantage to keep two self-only enrollments rather than cover both in the FEHBP. Second, if one is unemployed or a low earner, joining a plan through the new state health exchanges created under the Affordable Care Act often may be advantageous because the federal tax credits for lower-income persons are very generous. How this proposal will play out in the larger political and social context remains to be seen. The U.S. Supreme Court decision on samesex marriage will have major implications but presents issues in states that do not recognize these marriages, and will require administrative action by OPM. Also, the court decision has no direct bearing on opposite-sex partners, who are not recognized in federal benefits programs like the FEHBP.
Following is my assessment of the proposals.
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Allow OPM to Contract for New Health Plans. For 50 years, the federal law governing the FEHBP has allowed only three categories of health plans: two “governmentwide” plans (BC/BS and, once, Aetna), about a dozen employee association and union plans that are grandfathered because they existed when the program was created, and an unlimited number of “comprehensive” plans – mostly local health maintenance organizations (HMOs). There was a brief period when new union plans were allowed to join, but none of those plans lasted more than a few years. OPM has been creative in allowing new options and new kinds of plans. For example, APWU, GEHA and MHBP now offer high-deductible or consumer-driven plans. Similar Aetna plans are available almost nationwide. But OPM has not been able to find another company willing to sign up as a “governmentwide” plan, and the law imposes significant barriers to other new plans. Meanwhile, BC/BS enrollment has crept up, year by year, from about 40 percent of total enrollment 30 years ago to about 60 percent today. In comparison, BC/BS has only about a 50 percent market share in the entire insurance marketplace. OPM would allow a new category of plan, “regional PPOs” – regional preferred provider organizations – to compete anywhere in the nation. United, Aetna and Humana have indicated a desire to sponsor such plans. The problem this would create is that such plans might (and presumably would) “cherry pick” areas where medical costs are lower than average, whereas BC/BS and the other national carriers (GEHA, the NALC Health Benefit Plan, etc.) would have to price their premiums based on their enrollees in both higher- and lower-cost areas. This “adverse selection” problem has long bedeviled the FEHBP. For example, GEHA once attracted most of its enrollees from lower-cost areas, until its success led to a more balanced enrollment. HMOs have found it all but impossible to compete with the national plans in high-cost areas such as Boston and Northern California. The proposal is contentious. BC/BS argues that
OPM has not shown the effect on premiums if the self-plus-one option is added. this could raise its costs to noncompetitive levels and, on balance, raise rather than lower FEHBP premiums. Again, without specifics it is difficult to assess the merits of the OPM proposal. There are ways to reduce the potential for cherry picking, such as requiring new PPO plans to cover multiple states, or limiting the number of new plans in order to see results before allowing a larger expansion. The budget projects negligible savings from this proposal, probably through the inability to predict long-run effects. The proposal needs development and careful analysis, but some way to bring in new plans seems, to most objective observers, to be a long-overdue reform. This was the proposal that stimulated both the most concern and the most support in the House hearing. “Streamline” FEHBP Pharmacy Contracting. This proposal would replace prescription drug benefits in individual plans with a “one-size-fits-all” drug benefit that OPM would design and negotiate. The budget shows tiny savings (about $1.6 billion out of the estimated $160 billion FEHBP will spend on drugs in the next decade). Drug costs are about 30 percent of FEHBP spending, but this seemingly high percentage results simply from the million-plus annuitants for whom Medicare pays most hospital and physician costs, but not drug costs. FEHBP plans already use the same methods of controlling drug costs as in other insurance plans, such as “tiering” drug benefits to reward use of generics. OPM claims high bargaining power with the pharmacy benefit management (PBM) companies that contract with most health plans. But these are huge companies. The largest, Express Scripts, covers about 150 million “lives” (persons). CVS Caremark covers about 85 million lives. Since
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FEHBP Reform Proposals
BC/BS already brings about five million federal lives (and many more nonfederal lives) to the bargaining table, it is unclear how OPM could do any better. Also, the history of government contracting – across many agencies and many decades – does not give confidence that OPM could outperform FEHBP plans in bargaining with PBMs. The major ways to save more substantially would be to reduce coverage of name brand drugs or to increase enrollee cost sharing for drugs. Either would represent a major benefit reduction, with no way for federal employees or annuitants to use the Federal Benefits Open Season to get the drugs they prefer or to lower drug costs. Moreover, a separate drug plan would take out of plan hands the single most effective way to reduce health care costs: managing pharmacy benefits to reduce hospital costs. OPM has presented no details on these and other issues. Adjust FEHBP Premiums for “Wellness.” The final OPM proposal is to give it authority to set plan premiums higher or lower depending on enrollee performance on unspecified “wellness” requirements. These requirements presumably would be set by OPM and imposed on all plans and all enrollees. Wellness programs are in vogue among some private insurance plans. Many companies have promoted their “success” in rewarding employees for achieving wellness goals. There is, however, no credible experiential evidence that such programs actually improve health or reduce overall health costs. In fact, a recent article in The Wall Street Journal concluded that “workplace wellness programs don’t work.” Free gym memberships attract people who want to use gyms and would have done so anyway, for example. FEHBP plans already provide many wellness benefits that are touted in the private sector, such as nurse hotlines, tobacco cessation services, cancer screenings and dietary advice, without premium penalties. Adjusting premiums for tobacco use raises serious questions about monitoring, enforcement and privacy; hasn’t been shown to reduce costs; and is inherently intrusive. Finally, penalizing enrollees for behavior that they cannot
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FEHBP plans already provide many wellness benefits. easily control is arguably unfair. Unless a wellness requirement actually reduces plan costs, premium reductions for one group of enrollees necessarily increases premiums by the same aggregate amount for those enrollees who are not able or willing to participate. OMB estimates that this proposal will save a net amount of only $1.3 billion over the next decade. But premium rewards and penalties would presumably be set much higher or lower than that. Again, we have no specific details on which to judge this proposal.
Reform Proposals That Were Left on the Cutting Room floor
Other important reforms that I think could achieve far more savings and provide greater enrollee benefits than the proposed reforms were not presented in the budget or discussed at the hearing. These are to: • Exempt the FEHBP from the Labor Department’s Affirmative Action Program. A federal court recently ruled that the Labor Department’s Office of Federal Contract Compliance Program (OFCCP) can regulate as subcontractors all health care providers who participate in FEHBP plans, overriding an OPM exemption. OFCCP requirements are immensely complex and burdensome. One hospital estimates that data collection alone costs it in excess of $50,000 a year. There are one million health care providers in the United States, almost all participating in FEHBP plans. Few of these are currently regulated by OFCCP. If compliance costs as little as $20,000 a year, on average, total annual costs of this scheme could reach $20 billion. Health care providers are already subject to civil rights laws on race, sex and disability discrimi-
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FEHBP Reform Proposals
nation, and are regulated by the Department of Justice and the Equal Employment Opportunity Commission. A year ago, Congress enacted a law exempting TRICARE providers from OFCCP jurisdiction. Doing the same for the FEHBP may be the only way to stop this scheme, while saving consumers $200 billion over the next 10 years and avoiding substantial disruption to FEHBP plan networks. • Reduce Adverse Risk Selection. As BC/ BS pointed out in its testimony at the House hearing on admitting new plans, the proposal creates a possible “risk-selection” problem. But the current program does this, too. Many plans attract a disproportionate number of enrollees who have either better or worse health, such as younger or older enrollees. This shows up in premium costs, and distorts the choices enrollees make. For example, even though the Kaiser plans are able to contain costs better than most other plans, some of them have attracted a disproportionate number of annuitants without Medicare. Even with good care management, costs are still much higher than average, and some plans cannot keep premiums low enough to attract younger enrollees. I believe that such problems can be reduced by varying the government share of each plan’s premium based on the predictable costs of its enrollees, determined by their age and Medicare status. This would lower enrollee premiums by rewarding enrollment in plans that better control costs. • Improve Medicare Coordination. The design of neither Medicare nor the FEHBP sensibly reflects the existence of the other, even after 50 years of uneasy coexistence. Unfortunately, the solution chosen by OPM and the plans over the years creates a major problem. All but one of the national plans in the FEHBP promise that if the enrollee has both Medicare Parts A (hospital) and B (physician), all hospital and physician care will be “free.” This creates major problems. First, enrollees have to pay two sets of premiums to get this extra coverage. Second, it creates incentives for wasteful overutilization of medical care. The best estimates are that “free” care raises medical costs by about 20 percent – $4,000 for a 65-year-old 42
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couple. One option to avoid this problem would be to give free dental plan enrollment instead of free physician visits to any annuitant enrolled in Medicare Part B. Another reform option would be to offer the same free dental enrollment to all annuitants enrolling in Medicare Advantage while suspending (not ending) FEHBP coverage. • Use Medicare Part D to Reduce FEHBP Prescription Drug Costs. Medicare’s prescription drug plans filled a major hole in that program. But most FEHBP plans have no explicit promise to help those who enroll in Part D. GEHA pays half of any drug costs not paid by Part D. If all plans were required to add a cost-saving benefit such as GEHA’s, and most annuitants enrolled in Part D, FEHBP drug costs could be reduced by billions of dollars a year, and tens of billions over the next decade. Most of this would simply shift costs to Medicare – from the taxpayer’s left pocket to the right pocket. But if FEHBP plans paid the Part D premium instead of providing free physician visits, the net result would be savings for Medicare, for the FEHBP and for annuitants.
Without more details, it is impossible to judge these proposals. As just one example important to NARFE members, both the self-plus-one and domestic partner proposals would be very different if they covered employees but not retirees. The congressional hearing ended with two clear messages: 1. OPM needs to provide far more information to justify its proposals; and 2. Favorable action is likely for proposals whose details make sense. — WALTON FRANCIS IS THE PRINCIPAL AUTHOR OF CONSUMER CHECKBOOK’S ANNUAL“GUIDE TO HEALTH PLANS FOR FEDERAL EMPLOYEES & ANNUITANTS” AND HAS TESTIFIED BEFORE CONGRESS ON BOTH FEHBP AND MEDICARE ISSUES.
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getting SS benefits while working
t’s become commonplace for people to work well past age 62, the earliest age at which you can collect Social Security benefits. While it’s possible to collect Social
Security benefits while working, you should first have an understanding of the impact employment income may have on the amount of benefits you receive and how much tax you will pay on them.
Full retirement age (FRA) is the age at which a person is entitled to full Social Security retirement benefits. (The Social Security Administration has a chart that correlates the year of birth with FRA at www. socialsecurity.gov/retire2/retirechart.htm.) Benefits started before an individual reaches his or her FRA will be actuarially reduced; however, if benefits are started after an individual reaches full retirement age, an 8 percent delayed retirement credit (DRC) will be applied for each year, up until age 70, that benefits are delayed. In addition to the actuarial reduction, if you are working and begin collecting Social Security benefits prior to your FRA, your benefits will be reduced $1 for every $2 you earn over the annual income limit. In 2013, that limit is $15,120. In the year you reach your FRA, your benefits will be reduced $1 for every $3 you earn over $40,080, and only income earned in the months prior to 44
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your FRA count toward this limit. Only wages from employment, or net profit if you’re selfemployed, count as earnings; pensions, annuities, investment income, interest, and veterans or other government or military retirement benefits do not count. It’s important to note that if your Social Security benefits are reduced due to excess earnings, the money isn’t lost forever. Once you reach your FRA, your Social Security benefits will be recalculated to give you credit for any months in which your benefits were reduced due to excess earnings. Also, after you reach your FRA you can earn as much as you want without any reduction to your Social Security benefits. As for taxes, depending on your income, up to 85 percent of your Social Security benefit may be subject to federal income taxes. There are two thresholds that factor into how much of your Social Security benefits will be taxable.
By Mark A. Keen,
Once the first threshold is met ($25,000 for singles and $32,000 for married couples), up to 50 percent of Social Security benefits become taxable. Once the second threshold is met ($34,000 for singles and $44,000 for married couples), up to 85 percent of a Social Security dollar will become taxable. Considering the low thresholds, it’s likely part of your Social Security benefit will be taxable even when you’re retired. However, as long as you are working, you may be able to reduce the amount of your Social Security that is subject to taxation. For example, you may reduce your income by contributing, or increasing your contribution, to the Thrift Savings Plan (TSP) or other employersponsored retirement plan. In 2013, anyone over the age of 50 may contribute $23,000 to the TSP or a 401(k) plan, which may help to reduce the amount of Social Security that’s taxed. If you’ve exhausted all options for reducing taxable income, and you are secondguessing your decision to start Social Security, you may be able to stop your benefits. If you are younger than your FRA, and it’s been less than 12 months since you started benefits, you may “withdraw” your application and stop benefits. If you do this,
MONEY MEMO NARFE offers an online retirement calculator and other financial planning tools. Find out more at www.narfe.org/ federalbenefits.
you must repay all benefits you and your family received based on your retirement application, including any Medicare premiums, tax withholding and garnishments that were withheld from benefits. Withdrawing your application is a doover, and once it’s done, it’s as if you never applied for Social Security at all. After you reach your FRA, you still have the
ability to withdraw benefits (assuming you meet the 12-month requirement), but you also have the option of “suspending” your benefits as well. Unlike withdrawing your application, you are not required to pay back what you received, and your Social Security simply stops. The upside is that you will then receive the 8 percent DRCs for each year you continue to forgo benefits. The decision of when to start Social Security is not a simple one – especially when employment is involved. Before you apply for Social Security, be sure to have a complete understanding of how working affects benefits. Mark A. Keen, CFP®, is partner, Keen & Pocock, 10300 Eaton place, Fairfax, VA, and an investment adviser representative and registered principal of The Strategic Financial Alliance, Inc. (SFA). Securities and advisory services are offered through SFA. Email: firstname.lastname@example.org.
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The Informed Citizen
Benefit Threats amid Broken government
s if divided government didn’t have enough problems, alleged scandals have further complicated the fundamental ability of the federal government to collect revenue, authorize programs and appropriate funds within deadlines. While negotiations continue to both resolve a potential debt crisis and pass a single, omnibus appropriations bill, NARFE members must deal with the continuing threat of a switch to the Chained CPI and the dismantling of the risk pool of the Federal Employees Health Benefits Program. NARFE members must employ all the tools at their disposal, including electronic messages delivered via our Legislative Action Center, traditional postcards and letters (as I wrote in my July column), and especially direct meetings with lawmakers during the upcoming
summer congressional recess (see story, p. 6). The importance of meetings cannot be overstated. Meetings with senators and representatives while they are among their constituents distinguish NARFE from other groups. Federation, district and chapter officers have been plan-
ADVOCACY CLIP & SAVE
U.S. Capitol Switchboard: 866-220-0044 White House Comment Line: 888-225-8418
NARFE Legislative Action Center: www.capwiz.com/narfe U.S. House of Representatives: www.house.gov U.S. Senate: www.senate.gov White House: www.whitehouse.gov Library of Congress Legislative Database: http://thomas.loc.gov Cong. District/State Office Profiles/Maps: www.CongressMerge.com
Postal ZIP Codes for Congress U.S. House of Representatives: 20515 U.S. Senate: 20510 (Room/suite numbers are not needed.)
If you would like a profile of your congressional delegation, send a self-addressed, stamped envelope to NARFE Congressional Profile, 606 N. Washington St, Alexandria VA 22314-1914. Please indicate your congressional district (for example, CA-53).
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By Christopher Farrell, Legislative Representative
ning to conduct such meetings, so please contact them and offer to help. Not sure where to start? Consult the Protect America’s Heartbeat Toolkit at www.narfe. org/heartbeat. Tools for the Tasks Just as our Legislative Action Center makes sending an email message easy and certain to be received, the information provided in this column in July and items provided in the box below make the sending of postcards simple yet powerful. As daunting as a visit to a congressional office may seem, resources on the CongressMerge website make even that task straightforward. Using www.CongressMerge.com, you can find maps for your representative’s district office(s) and for the state offices of your senators. Week for Phoning Congress Finally, because the stakes are so high, NARFE is asking all members to participate in our September Call Congress Week. Please plan now to use a convenient day during the week of September 16 to phone your representative and both senators using the NARFE toll-free number for the Capitol switchboard, 866-220-0044. A script is forthcoming, but the focus will be on opposing the Chained CPI. Your participation during the summer recess, August 3-September 8, and beyond is vital.
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For the Record
Thrift Savings Plan Monthly Returns
The TSP funds retreated in June with the exception of the G Fund. The I Fund was the worst performer for the second month as rising interest rates and a strengthening dollar impacted performance. The F Fund declined as investors reacted adversely to comments from the Federal Reserve on future monetary policy. It is the only TSP fund to have a negative return for the year. Although down for the month, the C and S Funds still have strong year-to-date returns.
—by TRACEY RAY, chief investment officer of the Thrift Savings Plan
LAST 12 MO
Countdown to COLA
he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.2 percent in May. To calculate the amount of the 2014 cost-of-living adjustment (COLA), the indices of July, August and September 2013 will be averaged and compared with the 2012 third-quarter average of 226.936. That percentage increase, if any, determines the COLA. The May index of 229.399 is up 1.09 percent from the base. Benefits awarded under the Federal Employees’ Compensation Act (FECA) to individuals suffering work-related injuries or illnesses are adjusted according to each calendar year’s percentage change in the CPI-W. May’s index is 1.55 percent higher than the December 2012 base index of 225.889. The CPI represents purchases of food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services. Included are various government fees, such as water charges, auto registration fees, and sales and excise taxes.
LAST 12 MO
THIS CHART is provided as a service to NARFE members who enrolled in the Thrift Savings Plan while employed by the federal government. Retirees are not eligible for enrollment. These returns are net of the effect of accrued administrative expenses and investment expenses/costs. Percentages in () are negative. Source: tsp.gov.
G Fund: Government securities (specially issued to the TSP) F Fund: Government, corporate and mortgage-backed bonds C Fund: Stocks of large- and medium-size U.S. companies S Fund: Stocks of small- to medium-size U.S. companies (not included in the C Fund) I Fund: International stocks of 21 developed countries L Fund: Invested in the G, F, C, S and I Funds (The proportion of L Fund balance invested in each of the individual TSP funds depends on the L Fund chosen.) 48
Funds retreat in june; only g fund posts increase
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Monthly % Change
% Change from 226.936
June July August September
Donate to NARFE Programs Support Alzheimer’s Research
Your charitable contribution is tax-deductible to the fullest extent allowed by law.
Write your chapter number on check; make it payable to: NARFE-Alzheimer’s Research
Enclosed is my NARFE-Alzheimer’s contribution: $ Every cent that is contributed is used for research. Please circle: Mr. Mrs. Miss Ms. and mail to: Name: Alzheimer’s Association Address: 225 N. Michigan Ave., 17th Floor City: State: ZIP: Chicago, IL 60601-7633 Chapter Number: Credit Card Information: MasterCard Visa NARFE members contributed for If you have any questions, write to: Discover AMEX Alzheimer’s research: $11 Million Fund National Committee Chair Card Number: Jane Rodgers, P.O. Box 234 Expiration Date: (mm)/ (yy) Wadesville, IN 47638-0234 *Total as of May 31, 2013 3-Digit Security Code: 100% of all contributed funds go to Name: (please print) Email: email@example.com
$10,371,902* Alzheimer’s research.
Join the Silver CIrcle Clip this contribution form and mail to: NARFE Silver Circle, 606 N. Washington St. Alexandria, VA 22314
•For a contribution of $25 or more, you will receive a Silver Circle pin, and your name will be listed in narfe magazine with other contributors. •For a contribution of $1,000 or more, your name will be placed on the “Wall of Fame” at NARFE Headquarters.
YOUR CHARITABLE CONTRIBUTION IS TAX-DEDUCTIBLE TO THE FULLEST EXTENT ALLOWED BY LAW.
Enclosed is my Silver Circle contribution: $ ID # (ID # may be found on your narfe magazine label or your NARFE membership card)
Name: Address: City: Silver Circle contributions are NOT deductible for federal income tax purposes.
Installment Plan Wall of Fame 12-month installment plan
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Please mail coupon and check to: FEEA 3333 S. Wadsworth Blvd., Suite 300 Lakewood, CO 80227
All donations go to the NARFE General Fund to support NARFE programs and operations.
My check is enclosed
(Please make check payable to NARFE Silver Circle.)
Please charge my credit card Card type MasterCard Visa Discover AMEX Card Number: Expiration Date: (mm)/ (yy) Name: (please print)
Make check payable to: NARFE-FEEA Disaster Fund or NARFE-FEEA Scholarship Fund.
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Please check appropriate box(es). To make credit-card contributions, call 800-338-0755. Scholarships are available to children, grandchildren and great-grandchildren of federal civilian retirees and current federal employees who are NARFE members. NARFE-FEEA Disaster Fund
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VA retiree says, Thanks, NARFE!
A YEAR-PLUS OF WINNING PICS
ongratulations to the winners of the annual NARFE Photo Contest! The winning photos appear in the 2014 NARFE Photo Contest Winners Calendar. The calendar has been expanded this year to encompass 16 months. It will be mailed to members in August – earlier than usual. The winners are listed below in alphabetical order, along with the page on which their photo appears in the calendar. Also listed are entries that were selected to appear on NARFE spring notecards. Photos for the 2015 calendar will be accepted beginning August 1. The contest closes on Feb. 15, 2014. Contest guidelines are available on the NARFE website, www.narfe. org. Log in as a member, click on “Special Programs” in the left panel, then select “Photo Contest Calendar.” For more information, please email firstname.lastname@example.org. 2014 Photo Calendar Con-
test Winners are: Marybeth Andersen, Rochester, NY, Chapter 124, August 2014; Ann Arnhart, North Richland Hills, TX, Chapter 1583, October 2013; Arthur Arnold, Duluth, MN, Chapter 106, February 2014; Shelby P. Berta, Rochester, IL, Chapter 402, July 2014; Colleen A. Brady, Johnstown, PA, Chapter 1130, December 2013; Ronald W. Carmichael, Southport, NC, Chapter 1894, Front Cover; John A. Evans, Alexandria, VA, Chapter 232, March 2014; Ronald J. Fanelli, Downingtown, PA, Chapter 377, May 2014; David W. Fischer, Centerville, OH, Chapter 1927, Back Cover; Al Giencke, Plymouth, MN, Chapter 150, June 2014; Phyllis Maguire, Burke, VA, Chapter 893, January 2014; Sara E. Martin, Denver, CO, Chapter 81, September 2013; Robert C. Peterson, Summerville, SC, Chapter 1082, December 2014; Colleen Quinn-House, Ellicott City, MD, Chapter 1734, November 2014;
Fanelli joins editorial staff
in Alexandria, VA. He holds a bachelor of arts degree from American University in Washington, DC, and a master of science degree in nonprofit manageKen Fanelli ment from Eastern University in St. Davids, PA.
Ken Fanelli has joined the NARFE editorial staff as assistant editor. He succeeds Donna St. John, who retired. Prior to joining NARFE, he was manager of resource development for the Club Managers Association of America
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NARFE member Mary Hill, a retired Department of Veterans Affairs (VA) nurse, recently contacted NARFE to report that she had just received a check for back pay, because she had followed up on information in a 2009 article in narfe magazine about a Court of Federal Claims decision affecting some VA employees. “I still can’t believe it,” she said. “Thanks to NARFE for publishing the article.”
Elaine Rahn, Sullivan, WI, Chapter 490, October 2014; Stewart Seman, Hinsdale, IL, Chapter 1106, November 2013; James C. Wilkinson, Grand Junction, CO, Chapter 351, September 2014; and William Witmer, Lakewood, CO, Chapter 1085, April 2014. Photos selected for the 2013 Spring Notecards were submitted by: Linda M. Armstrong, Danbury, WI, Chapter 1581; Norman Collin, Port Charlotte, FL, Chapter 2194; Edwin A. Doucette, Riverside, CA, Chapter 188; Ronald J. Fanelli, Downingtown, PA, Chapter 377; and John W. Petty, Pasadena, MD, Chapter 1519.
For chapter photos, see our Out and About Photo Gallery at www.narfe.org/narfemagazine.
Greater Outdoors Several members spotted the error in our “The Way We Worked” feature in the June issue (p. 64). We said that the U.S. Forest Service “manages America’s ‘great outdoors,’ covering 92 million acres.” The correct number of acres is 193 million. narfe regrets the error.
Active and Retired Federal Employees ...
JOIN NARFE TODAY!
National Active and Retired Federal Employees Association The only organization dedicated solely to protecting and preserving the benefits of all federal workers and retirees, NARFE informs you of any developments and proposals that affect your compensation, retirement and health benefits, AND provides clear answers to your benefit questions.
Who Should Join?
Three Easy Ways To Join 1. 2. 3.
N A R F E M E M B E R S H I P A P P L I C AT I O N n YES. I want to join NARFE. n Mr. n Mrs. n Miss n Ms. Full Name ________________________________________ Street Address ____________________________________ Apt./Unit ________________________________________
I am a (check all that apply) n n n n n
Active Federal Employee Active Federal Employee Spouse Annuitant Annuitant Spouse Survivor Annuitant
n Please enroll my spouse
City _______________________ State _____ zIP ________
Spouse’s Full Name ________________________________
Phone (__________) _______________________________
Spouse’s Email ____________________________________
NARFE respects the privacy of our members. Personal information is used to provide content and relevant communications to our members, and will not be sold or rented to third parties without your express permission.
Choose Your Membership Type o Local Chapter Close-to-Home Membership — $45 Aﬃliation with the NARFE chapter closest to your home. Receive narfe magazine each month; attend meetings, often with invited speakers; network; and get involved in grassroots lobbying eﬀorts. $45 first-year dues X __________ = __________ Per Person # Enrolling Total Dues
PAYMENT OPTIONS n Check, Money Order or Bill Pay (Payable to NARFE) n Bill me (NARFE membership will start when payment is received.) n Charge my: n MasterCard n VISA n Discover n American Express Card No. _____________________________________
(First-year dues include national and chapter dues.)
Expiration Date _________ /_________
Chapter Aﬃliation (if known, otherwise enroll me in the chapter closest to my zIP code). Chapter #___ ___ ___ ___
Name on Card _________________________________
o eNARFE Chapter Online Membership — $40
NARFE’s electronic chapter. Receive narfe magazine by mail each month, and all other communications by email and on eNARFE.org. Get important updates and legislative action alerts, and have access to the eNARFE blog. $40 first-year dues X __________ = __________ Per Person # Enrolling Total Dues
MAY WE THANK SOMEONE? If applicable, please provide the name, membership and chapter number of the member who introduced you to NARFE: Recruiter’s Name __________________________________ Recruiter’s Membership ID __________________________ Recruiter’s Chapter Number _________________________
MAIL THIS APPLICATION TO NARFE Member Records / 606 N. Washington St. / Alexandria, VA 22314-1914
NARFE’s Dues Withholding Program What is dues withholding? It is a dues-payment method that gives NARFE members (retirees) the option of having their annual NARFE membership dues deducted from their annuities on a monthly basis. How does it work? One-twelfth of your total dues is automatically deducted from your monthly annuity. Your monthly deduction is determined by the following formula: (National dues ÷ 12) + (Chapter dues ÷ 12) = Total Monthly Deduction
Advantages • Save 15% off your annual membership dues! • Sign up your spouse and double your savings! • You’ll never get another dues reminder from us! • Your monthly payment is affordable and convenient! • You may cancel your dues at any time! Application process It takes 60-90 days to process your application. Once the process is complete, you will receive a special membership card distinguishing you as a NARFE dues-withholding member.
To learn more about dues withholding, call 800-627-3394. Retirees, spouses of retirees and annuitant survivors are eligible for dues withholding.
NARFE Dues Withholding Application for Retirees ■ YES. I want to enroll in NARFE’s Dues Withholding Program (Annual dues of $34 plus Chapter dues of record to be withheld annually.) Social Security Number (9-digit number)
Civil Service Annuity Number
(Include prefix, CSA or CSF) (Include any applicable suffix)
■ Mr. ■ Mrs. ■ Miss ■ Ms. Full Name _______________________________________
NARFE MEMBERSHIP INFORMATION
Street Address ___________________________________
NARFE Membership ID ____________________________________
Apt./Unit________________________________________ City _________________________ State _____ ZIP _____ Phone (__________) ______________________________ Email ___________________________________________ Date of Birth _________ /_________ / ____________________ dd
NARFE Chapter Number____________________________________
■ YES. I Also Authorize My (NARFE Member) Spouse’s Dues To Be Withheld From My Annuity. (Additional annual dues of $34 plus Chapter dues of record to be withheld annually.) If YES, enter spouse’s information below. Spouse’s Name ___________________________________________ Spouse’s Membership ID ___________________________________
AUTHORIZATION (Withholding will begin in 60-90 days). No payment should be forwarded with application. I authorize the United States Office of Personnel Management to make appropriate deductions from my annuity payments, not to exceed the amount certified by the National Active and Retired Federal Employees Association as the amount of dues for which I am annually obligated, in accordance with elections I make below, and to pay the deducted sum to the National Active and Retired Federal Employees Association (NARFE). This authorization shall also apply to any and all dues changes certified by NARFE membership in accordance with elections I make below: Please allow 60-90 days for processing. I understand that this authorization shall be valid until NARFE receives and processes my written notice of cancellation in accordance with its agreement with the Office of Personnel Management and that any disputes regarding this authorization shall be a matter between NARFE and myself. I hold the Office of Personnel Management harmless for any erroneous allotment deduction made pursuant to this authorization. ___________________________________________________________________________ _______________________________
Signature of Annuitant or Survivor-Annuitant
Dues payments and gifts or contributions to NARFE are not deductible as charitable contributions for federal income tax purposes. MAIL THIS FORM TO: NARFE, ATTN: Member Records, 606 N. Washington St., Alexandria, VA 22314-1914 www.narfe.org 800-627-3394 email@example.com Do not send money with this form
We’ve got the
Answers! A limited number of the 2012 4th Edition of NARFE’s Questions & Answers book are still available.
Get answers to your questions about general retirement issues and topics such as: • Annuity Computations • Court-Ordered Benefits • Disability Benefits/Compensation • Federal Employees’ Group Life Insurance • FERS Annuity Supplement • Health Benefits • Long-Term Care • Medicare • Re-Employment • Social Security • Survivor Benefits • Taxes • Thrift Savings Plan • And more …
All taken from the pages of narfe magazine. And all written expressly for federal annuitants and employees. Plus a Bonus Section containing reprints of key articles from narfe magazine!
Order your copy of NARFE’s Questions & Answers today! Clip and mail to: NARFE Q&A Book, 606 N. Washington Street, Alexandria, VA 22314-1914 Name __________________________________________________________________ Address ________________________________________________________________ City __________________________________________State ______ZIP ___________ Member ID# (As it appears on narfe magazine label) __________________________
o Charge to my credit card
Card # _________________________________________________________________ Exp. Date
________ / _______ (mm)
Number of Books
____ x $10 = __________
(includes shipping & handling)
Tax (if applicable) = _______ Virginia residents must add 6% tax (60 cents per copy)
Total cost = ______________ Make checks payable to NARFE
Name on card (print) ____________________________________________________ Signature ____________________________________________ Date _____________
Also order online at www.NARFE.org — NO PHONE ORDERS PLEASE
NARFE Member Perks
are designed to provide NARFE members with a quality option in their search for commonly used products and services. NARFE makes no guarantee on any products and services listed, and encourages its members to shop and compare before making a decision on any financial matter.
NARFE Premier Federal Credit Union 800-328-1500 www.NARFEpremierfcu.org As a member of NARFE, you have the privilege of joining NARFE Premier Federal Credit Union, which has been serving members since 1935. We offer extensive services at competitive rates to members nationwide. Your savings are federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. For more information, call the number above, email firstname.lastname@example.org or visit the website.
NARFE Insurance Services 800-233-5764 www.narfeinsurance.com Designed and administered by Marsh U.S. Consumer, a service of Seabury & Smith, Inc., exclusively for NARFE members: Senior Whole Life, Term Life, Medicare Supplements, Hospital Income Plan, Short Term Recovery Insurance, Pet Insurance, Accidental Death & Dismemberment, Cancer Care, Enhanced Dental Insurance and Long Term Care. Go to the website for more information on these programs.
GEICO 800-368-2734 NARFE members with good driving records may be eligible for quality automobile insurance from GEICO. Ask about the NARFE discount available to members in many states. Call today for your free, no-obligation rate quote. Be sure to mention that you’re a NARFE member! • Discount amount varies in 54
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some states • Discount not available in all states or in all GEICO companies • One group discount applicable per policy.
Federal Long Term Care Insurance Program 800-LTC FEDS www.LTCFEDS.com Long-term care is expensive, and it’s not covered by traditional types of insurance plans. With benefits designed specifically for the federal family, the Federal Long Term Care Insurance Program offers a smart way to help protect your savings and assets, and remain independent should you need long-term care services someday. Visit LTCFEDS.com today.
Wyndham Hotel Group 877-670-7088 As a member of NARFE, you will receive up to 20% off the “Best Available Rate” at participating locations. Call and give the agent your special discount ID number, 8000002694, at time of booking to receive discount. Whether you are looking for an upscale hotel, an all-inclusive resort or something more cost-effective, we have the right hotel for you... and at the right price. So start saving now. Call our special member-benefits hotline 877-670-7088 and reserve your room today at one of these fine hotels: Wyndham Hotels and Resorts®, Days Inn®, Ramada Worldwide®, Super 8®, Wingate By Wyndham®, Baymont Inns and Suites®, Hawthorn Suites® By Wyndham, Microtel Inns and Suites®, Howard Johnson®, Travelodge® and Knights Inn®.
Government Employees Travel Opportunities® 877-867-3639 www.getravelop.com/narfe Offers government employees, retirees and their families 7-night stays for only $349 on accommodations worldwide. Book online and save on your next vacation stay.
Choice Hotels International 800-258-2847 www.choicehotels.com With 6,000 hotels in the United States and throughout the world, Choice Hotels® offers something for everyone. Join the Choice Privileges® rewards program and earn points with every qualifying stay toward free nights, Airline Rewards, gift cards and more. As a NARFE member, receive 20% off your next stay at participating hotels when you use Special Rate ID 00801967. This offer is subject to availability and cannot be combined with any other offer. Advance reservations required.
Alamo Drive Happy® with Alamo® where NARFE members receive year-round discounts. Call 1-800-462-5266 and reference Contract ID 262544.
National You Drive A Hard Bargain. Receive up to 20% off rentals at National Car Rental. To make a reservation call National Car Rental at 1-800-CARRENT® and reference Contract ID 5282909.
Avis The employees/owners of Avis offer guaranteed low rates and quality services to members of NARFE. Call 800-331-1441 and mention ID# A991900.
NARFE General Store 855-99NARFE (855-996-2733) www.narfegeneralstore.com Official NARFE name badges, customizable logo products and plaques.
MASA 800-423-3226 Medical Air Services Association has been the industry leader in prepaid emergency assistance services for more than 30 years. NARFE members have experienced MASA’s “peace of mind” services since 2001. Now NARFE members are entitled to even more: air ambulance transportation, helicopter transportation, ground ambulance, vehicle return, mortal remains transport, and much more! Call MASA Today. It Could Save Your Life!
preventive health screenings, will conduct the following screenings using state-of-the-art ultrasound technology in your neighborhood: 1. Stroke/Carotid Artery 2. Abdominal Aortic Aneurysm 3. Atrial Fibrillation 4. Peripheral Arterial Disease. You will receive a confidential written report within 21 days. Life Line Screening and NARFE encourage you to share these test results with your doctor. All four screenings cost just $135. To schedule an appointment, please call the number above and give the operator code number BKHN075 or visit the website. Coverage may vary and may not be available in all states.
hearing benefits Moving services
NARFE Member HomeBenefits 800-666-9203 http://narfe. myhomebenefits.com • Earn thousands in cash-back rewards when you buy or sell a home* • Shop competitive mortgage rates, receive discounts on closing costs, plus take advantage of your VA Loan Benefits • Receive preferred pricing on interstate moving services with the nation’s most trusted moving company – Allied Van Lines! *State restrictions apply. Call or visit website for details.
Bekins Van Lines 800-248-4810 www. email@example.com All NARFE members will receive discounted pricing for all interstate shipments. Discount will apply to packing and moving services and valuation protection. All intrastate shipments, local moves and international moves will be competitive based on your geographical location. Please mention you are a NARFE member and ask for Traci.
TruHearing 877-360-2442 Two discount programs to choose from: ValueAdd® or MemberPlus®. Similar to a warehouse membership, MemberPlus saves hundreds more for a $108 yearly membership. MemberPlus also includes: • 45-day, money-back guarantee on membership fee and all purchases • 48 batteries, 3-year warranty, and one-time loss and damage for 3 years (small manufacturer deductible applies) on each purchased hearing aid • Guest membership for up to four extended family members (siblings, parents, etc.) for only $79 each • Combine with an existing health plan hearing benefit to maximize savings.
Ivy Bridge College 877-615-9246 http://ivybridge.tiffin.edu/ narfe Want to earn your associate’s degree before you transfer to a four-year school? Ivy Bridge College offers a variety of degree programs that will help put you on the right track. No matter which program you choose, an education with Ivy Bridge will provide you with a solid foundation for a rewarding future. NARFE members and their families can enjoy an exclusive 5 percent savings on tuition at Ivy Bridge, a unique online institution that provides a highly supported pathway to a bachelor’s degree. To learn more, call or visit the website.
Visit TruHearingMemberPlus.com for more information, or call 877360-2442, Mon-Fri, 9 a.m.-9 p.m. ET.
NOT A MEMBER? health screening
GO ONLINE: It’s easy to join online at www.narfe.org. Click “Join NARFE.”
Life Line Screening 800-324-9906 www.lifelinescreening.com/ NARFE
TURN TO PAGE 51: Fill out the Membership Application and mail it to NARFE to receive all the perks of being a NARFE member.
Life Line Screening, America’s leading provider of community-based
Call (Toll-Free) 800-627-3394.
w w w. n a r f e . o r g
The Way We Worked
these sisters did House work On April 8, 1924, the five Dunn sisters gathered on the terrace of the House Office building with their lunchtime snacks for a photo that appeared in The Washington Post. The sisters occupy a unique place in the history of the U.S. House of Representatives as all five â€“ Goldie, Vera, Billie, Marguerite (Marge) and Jean â€“ simultaneously worked as secretaries for various House members. Photo courtesy of The Library of Congress and Erin Hromada, manager of Historical Operations, House History Office, U.S. House of Representatives; in collaboration with the Society for History in the Federal Government (SHFG), bringing together government professionals, academics, consultants, students and citizens interested in understanding federal history work and the historical development of the federal government. Website: http://shfg.org/shfg/. 56
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Did you know? When the photo above was taken, there was only one House Office Building, now named the Cannon House Office Building. Finished in 1908, it was joined by the Longworth House Office Building, completed in 1933, and the Rayburn House Office building, completed in 1965. A fourth building, the Ford House Office Building, was acquired by Congress in 1975.
o N tra on C
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ng Sou Bett er nd er Ba a tte nd FREE ry Car Li Charger fe
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All my friends have new cell phones. They carry them around with them all day, like mini computers, with little tiny keyboards and hundreds of programs which are supposed to make their life easier. Trouble is… my friends can’t use them. The keypads are too small, the displays are hard to see and the phones are so complicated that my friends end up borrowing my Jitterbug when they need to make a call. I don’t mind… I just got a new phone too… the new Jitterbug Plus. Now I have all the things I loved about my Jitterbug phone along with some great new features that make it even better! GreatCall® created the Jitterbug with one thing in mind– to offer people a cell phone that’s easy to see and hear, simple to use and affordable. Now, they’ve made the cell phone experience even better with the Jitterbug Plus. It features a lightweight, comfortable design with a backlit keypad and big, legible numbers. There is even a dial tone so you know the phone is ready to use. You can also increase the volume with one touch and the speaker’s been improved so you get great audio quality and can hear every word. The battery has been improved too– it’s one of the longest lasting on the market– so you won’t have to charge it as often. The phone comes to you with your account already set up and is easy to activate.
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locked in for years at a time and won’t be subject to early termination fees. The U.S.-based customer service is knowledgeable and helpful and the phone gets service virtually anywhere in the continental U.S. Above all, you’ll get one-touch access to a friendly, and helpful GreatCall operator. They can look up numbers, and even dial them for you! They are always there to help you when you need them.
Call now and receive a FREE Car Charger – a $24.99 value. Try the Jitterbug Plus for yourself The rate plans are simple too. Why pay for for 30 days and if you don’t love Available in minutes you’ll never use? There are a variety it, just return it for a refund1 of the Silver and Red. of affordable plans. Plus, you don’t have to worry product purchase price. Call now – helpful about finding yourself stuck with no minutes– that’s the problem Jitterbug experts are ready to answer your questions. with prepaid phones. Since there is no contract to sign, you are not
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Jitterbug Plus Cell Phone
Call today to get your own Jitterbug Plus. Please mention promotional code 46874.
We proudly accept the following credit cards.
IMPORTANT CONSUMER INFORMATION: Jitterbug is owned by GreatCall, Inc. Your invoices will come from GreatCall. All rate plans and services require the purchase of a Jitterbug phone and a one-time set up fee of $35. Coverage and service is not available everywhere. Other charges and restrictions may apply. Screen images simulated. There are no additional fees to call Jitterbug’s 24-hour U.S. Based Customer Service. However, for calls to an Operator in which a service is completed, minutes will be deducted from your monthly balance equal to the length of the call and any call connected by the Operator, plus an additional 5 minutes. Monthly minutes carry over and are available for 60 days. If you exceed the minute balance on your account, you will be billed at 35¢ for each minute used over the balance. Monthly rate plans do not include government taxes or assessment surcharges. Prices and fees subject to change. 1We will refund the full price of the Jitterbug phone if it is returned within 30 days of purchase in like-new condition. We will also refund your first monthly service charge if you have less than 30 minutes of usage. If you have more than 30 minutes of usage, a per minute charge of 35 cents will apply for each minute over 30 minutes. The activation fee and shipping charges are not refundable. Jitterbug and GreatCall are registered trademarks of GreatCall, Inc. Samsung is a registered trademark of Samsung Electronics Co., Ltd. ©2013 Samsung Telecommunications America, LLC. ©2013 GreatCall, Inc. ©2013 by firstSTREET for Boomers and Beyond, Inc.
Dr. Scholl’s is a registered trademark of MSD Consumer Care, Inc. © 2013 MSD Consumer Care, Inc. All rights reserved. MagicCling™ is a trademark of Haband Company.
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Soft padded microsuede insole
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EVA heel insert absorbs shock
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Haband #1 Bargain Place, Jessup, PA 18434-1834 Card # ________________________________________Exp.: ______/_____ Mr. Mrs. Ms.____________________________________________________ Address ___________________________________________ Apt. # ______ Visa City & State _____________________________________ Zip ___________ MC Phone/Email ___________________________________________________ AmEx Send ____ pairs. I enclose $________ purchase price plus $7.99 Discover ® Network toward shipping. In GA add sales tax.
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