5.8 Percent COLA for 2009
10/16/08 - The Federal government announced that the Cost Of Living Adjustment (COLA) for 2009 for military retired pay, Social Security and other federal annuitants will be 5.8%. It compares to an increase of 2.3% in 2008, and 3.3% in 2007, and is the largest COLA since 1982. The COLA is based on the change in consumer prices from the July-September quarter of each year compared to the same period the preceding year. (Benefit payment COLAs have been tied to inflation since 1975.)

No Medicare Part B Premium Increase Next Year
9/19/08 – The standard monthly premium for Medicare Part B coverage will remain $96.40 a month, the Centers for Medicare and Medicaid Services announced (the standard rate applies to individuals with income less than $85,000 a year). This is the first time since 2000 that there has not been an increase, and is due to increased reserves in the Medicare trust fund. This resulted from a reimbursement to the fund of more than $9 billion that had been used to cover benefits that should have come from the separate Medicare Part A fund.

Medicare Reimbursement Rate Cut Stopped
7/15/08 - Congress quickly overrode President Bush’s veto of legislation that stops a 10.6% cut in reimbursement payments to doctors caring for Medicare patients. The veto was over the issue of the provisions in the bill reducing payments to private insurance companies under the Medicare Advantage program. The White House was concerned that this could result in reduced services for some Medicare patients in rural areas. The House voted 383 to 41 to override the veto, while the Senate voted 70 to 26. Still absent is a permanent fix to the reimbursement rate, which is governed by an odd formula more than a decade old that mandates lower payment rates when demand for physician services increases more than projected. Only last-minute legislation enacted the past several years has prevented Medicare physician rate cuts from taking effect. NAUS urges Congress to work on a long-term fix to this important issue affecting healthcare access for TRICARE For Life and other Medicare patients.

“Premium Conversion” Update
8/08 - Since 2000, Federal civilian employees have been able to pay their health insurance premiums with pre-tax dollars. HR 1110, introduced by Rep. Tom Davis (R-VA), would extend this so-called “premium conversion” benefit to military retirees and active duty servicemembers. As of August 2008, this bill has 337 cosponsors. Retirees would be able to pay their healthcare premiums through a pre-tax deduction from their annuities, and the bill would allow active duty personnel to deduct TRICARE enrollment fees and certain supplemental policy premiums from their taxable income. Estimates are this would result in an average savings of $820 a year for retirees.

Cap Lifted on Military Retired Pay
Retiring military personnel with 30 years or more of service no longer have their retirement pay capped at 75% of base pay because of changes that were enacted in the 2007 National Defense Authorization Act. For example, a member who served 32 years would receive 80% of their base pay and a member who served 42 years would receive 105%. More details about the new retirement pay schedule are available from the Defense Finance and Accounting Service.

Retired Officers Have Edge Over Civilian DoD Employees
7/08 - The Defense Department is increasingly turning to retired military officers to fill its top civilian ranks. The number of retired servicemembers pursuing civilian jobs in DoD increased after 2003, when former Defense Secretary Donald Rumsfeld waived a rule that made retirees wait six months before they could take a civilian DoD job. A few years earlier, in 1999, the so-called dual compensation penalty ended, allowing retirees who work for DoD to draw both their full retirement and civilian salaries. In 2003, retired military employees in DoD GS-14, -15 and Senior Executive Service levels ranged from 12-16%. Now they range from 20-26%, nearly doubling in just over 4 years. Retired officers are often viewed as more qualified than career civilians because of their education, training and leadership experience. The Pentagon is working to improve its civilian employees’ training opportunities and increase their experience to make its career civil servants more competitive with military retirees.

Social Security to Pay Using Debit Cards
4/08 - The Treasury Department will begin offering Social Security payments on debit cards this spring, hoping that many of the estimated 4 million recipients who do not have bank accounts will take advantage of the debit card service.  The commissioner of the Department’s Financial Management Service, Judith Tilman, said the debit card program could save more than $40 million a year in printing and mailing costs.  The payments will be made via Commercia Bank’s Direct Express debit cards.  Those who decide to use the cards will have the Social Security payments deposited in their Direct Express card accounts, and then be able to withdraw cash at ATMs and banks.

Supreme Court Declines Review of USFSPA
6/07 - 26 years after Congress spelled out divorce courts’ rules for dividing military retired pay, the Supreme Court declined, without comment, to grant a Writ of Certiorari that asked the Court to review the Uniformed Services Former Spouse Protection Act (USFSPA) for its constitutionality. NAUS joined with a few other Military Coalition member organizations in submitting an amici curiae (“friend of the court”) brief in support of the writ. The Court’s decision does not reflect its view on the constitutionality of the USFSPA, as only one to two percent of the numerous petitions received each year are accepted for review.

100,000 Disabled Retirees Owed Back Pay
Approximately 100,000 disabled retirees are due retroactive pay. The underpayment occurred as DoD and VA officials implemented a complex series of laws, starting in 2003, to end the ban on “concurrent receipt” of both military retirement and VA disability compensation. Military columnist Tom Philpott credits discovery of this underpayment to several retirees, including NAUS' own Board of Directors Member Col Win Reither, USAF (Ret). Thanks, Win!

Those eligible for back pay have combat-related injuries and illnesses, or service-connected disabilities that the VA rates as at least 50 percent disabling. All of them also had military careers lasting 20 years or longer. As many as 20,000 recipients of Combat-Related Special Compensation (CRSC) and 78,000 recipients of Concurrent Retirement and Disability (CRDP) are owed back pay. 

NOTE: Be sure to check out our TRICARE/Health Care News section for other news affecting uniformed services retirees.