FEDweek Issue: Wednesday, September 22, 2004 FEDweek is the largest information resource in the federal government with now over one million weekly readers. To Subscribe, Go to http://www.fedweek.com/subscribepopup.htm *********************************************************** Valuable Information for the Federal Family
Federal Job Search http://www.fedweek.com/Jobs/default.asp Job Bulletin Board http://www.fedweek.com/Jobs/default.asp Brand New Federal Manager's Daily Report--FREE Daily Electronic Briefing http://www.fedweek.com/subscribepopup.htm ********************************************************** In This Week's Issue 1. Congress Nears Approval on Raise 2. White House Voices Opposition 3. The Federal Life Insurance Open Next Thursday, September 30th http://fedweek.sparklist.com/t/294947956/821888/303/0/ 4. High-Level Raise Looks Line 2.5 Percent 5. Contracting Wrangle Continues 6. Invitation from Government Executive http://fedweek.sparklist.com/t/294947956/821888/313/0/ 7. Report: Ending TSP Open Seasons Would Boost Investments 8. Contribution Rates Build Over Time 9. Uncertainty Remains on Civil Service Bills 10. Experts' View: Crediting Military Service http://www.fedweek.com/experts/default.asp. 11. Guidance on Epilepsy as Disability http://www.fedweek.com/HotFreeNews/default.asp 12. 'Don't Count On' Late FEGLI Choice 13. Fill Out that Form Carefully 14. Federal Legal Corner: Retaliatory Job Reference http://www.passmanandkaplan.com 15. End of Fiscal Year 2004 This Month (Next Week) http://www.fedweek.com/Publications/default.asp ******************************************************** 1. Congress Nears Approval on Raise Final Votes in both the House and Senate are expected this week on the Transportation-Treasury appropriations bill for fiscal 2005, both versions of which specify a 3.5 percent raise for federal employees in 2005, rejecting the White House's recommendation for a 1.5 percent raise. During preliminary voting on its version (HR-5025) the House defeated an attempt to bar health savings account plans in the Federal Employees Health Benefits program, a new type of plan that will be offered in 2005 featuring a high deductible and tax-favored accounts to pay the deductible and certain other eligible medical costs. 2. White House Voices Opposition In a policy statement, the White House has said the 3.5 percent raise "exceeds the President's request by $2.2 billion, and provides a percentage increase that exceeds inflation, the statutory base pay increase, and the average increase in private-sector pay, measured by the employment cost index. A higher across-the-board pay raise would not allow the federal government to target pay raises to attract employees with critical skills." The administration also objected to provisions that would restrict the ability to adjust locality pay areas, to require the departments of Defense and Homeland Security to provide the same raises going to other federal employees and to give blue-collar employees raises of at least the amount being paid to general schedule employees in an area. It also said it is "very concerned" that Congress is set to reject its request for $300 million for the "human capital performance fund" to reward good performers. However, the statement did not threaten a veto over any of those provisions. 3. The Federal Life Insurance Open Next Thursday, September 30th http://fedweek.sparklist.com/t/294947956/821888/303/0/ This is an extremely rare opportunity for federal employees to join the federal program or increase the amount of their current FEGLI coverage without evidence of insurability. Let's face it -- most of us don't like to think about life insurance, plus it can be an extremely complicated subject. That is why WAEPA http://fedweek.sparklist.com/t/294947956/821888/303/0/ a non-profit association and an original sponsor of FEDWeek, is providing a variety of life insurance tools to assist you in making an informed life insurance purchase decision. At WAEPA's site you will be able to view the seven avoidable life insurance mistakes, calculate and compare your life insurance premiums, determine how much insurance coverage you need, and view WAEPA's top ten list. Here is a quick example. In making your decision for additional life insurance you should consider any immediate financial needs due to an anticipated event in the coming year such as the purchase of a new home, the pending birth of a child, or a teenager entering college. However, please be aware that if you have or plan to join the federal program or increase the amount of your current FEGLI coverage during this Open Season, these changes will not be effective until September 2005, almost a year from now. However, you don't have to wait an entire year to protect your family. Consider purchasing life insurance from WAEPA. Here are just a few of the advantages that WAEPA offers: HIGHER LEVELS OF COVERAGE FOR YOU. WAEPA coverage is available from $25,000 up to $500,000. (The federal program is based on your salary -- not your individual needs). HIGHER LEVELS OF COVERAGE FOR YOUR SPOUSE. WAEPA offers coverage from $10,000 up to $250,000. (The maximum under FEGLI Option C is $25,000). SIGNIFICANTLY LOWER PREMIUMS. For example, a federal employee age 46 could purchase $50,000 of coverage from WAEPA for $80.00 per year. The same amount of FEGLI Basic coverage would cost $195.00 per year. $20,000 of WAEPA dependent coverage would cost $44.00 per year, while $20,000 of FEGLI Option C would cost $62.40 per year. In this example, the total WAEPA premium equals $124.00 per year, which is less than half of the total FEGLI cost of $257.40. PREMIUM REFUNDS. As a non-profit association, WAEPA has returned over $19,000,000 in premium refunds since 1996. During this period individual WAEPA members have received refunds totaling 21 months of premiums -- that is almost two years of free insurance! ADDITIONAL BENEFITS. Unlike the federal program, WAEPA offers life insurance coverage to domestic partners as well as non-dependent adult children of WAEPA members. FLEXIBILITY. You might not be aware but many federal employees carry life insurance coverage from both WAEPA and FEGLI. It's your choice. Also, you don't need a special Open Season to apply for or increase your WAEPA coverage. Plus, with WAEPA, unlike the federal program, your level of coverage is not impacted if you retire or leave federal service. To learn more about life insurance and WAEPA's programs, visit http://fedweek.sparklist.com/t/294947956/821888/303/0/ or call toll free 1-800-368-3484 to speak to a WAEPA customer service representative. Once again, WAEPA -- serving those who have served! 4. High-Level Raise Looks Line 2.5 Percent Meanwhile, the House has defeated a procedural attempt to block a 2.5 percent raise slated in January 2005 for members of Congress, federal judges and the executive schedule salary system for top political appointees. The raise, which is set according to a different measuring period than that used for general schedule raises, would have the effect of increasing the pay caps that apply to career employees in several high-level pay systems. The greatest number of potentially affected employees are senior executive service members, but administrative law judges, and senior scientific and professional employees, among others, also are affected by the caps. Unlike in past years when senior execs who were up against pay caps got raises automatically with a raise for the executive schedule rates to which those caps are linked, raises for SESers now are linked to performance measures. 5. Contracting Wrangle Continues Also during voting, the House dropped for technical reasons a provision that generally would have barred conversion of federal jobs to contractor performance unless the in-house side first got a chance to reorganize to improve efficiency and unless the contractor bid would save at least 10 percent or $10 million. In its policy statement, the White House threatened to veto the measure if the final version contained such a restriction. However, an already-enacted spending bill covering the Defense Department--where about two-thirds of contracting-out is done--already contains such a provision, as do pending spending bills for several other agencies. And the Senate version of the bill would go farther, by barring use of the revised contracting-out guidance that the administration issued last year--effectively reinstating those provisions as well as some others. A similar amendment will be offered in the House. In other action on spending bills, the House voted to block the IRS from using contractors for debt collection, and the Senate joined the House in voting to bar the Department of Homeland Security from contracting for processing of immigration applications and benefits. 6. Invitation from Government Executive If you are a federal manager or supplier to the federal government, you may be eligible for a complimentary subscription to Government Executive -- the government's authoritative business magazine. As you may know, Government Executive is the twice-monthly publication that delivers top-flight analysis for people just like you -- the leaders who help make federal agencies and programs run. Covering issues like pay and benefits, working conditions, and technology innovations, it has made for "required reading" for decision-makers for over 35 years. Complete Government Executive's simple online application at http://fedweek.sparklist.com/t/294947956/821888/313/0/ today to take advantage of this vital information source. A few short questions, and you may be well on your way to receiving Government Executive's signature intelligence free of charge. To receive the special November issue, featuring stories on the Army and on federal technology, make sure to subscribe by October 5. 7. Report: Ending TSP Open Seasons Would Boost Investments Ending the twice-yearly open seasons in the Thrift Savings Plan would encourage more federal employees to invest more money and earlier, with those under the FERS system also getting the benefit of earlier government contributions, the Congressional Budget Office has said. CBO made those observations in the context of a cost estimate on a bill (HR-4324) awaiting a House vote that would abolish the open seasons, which currently are the only times that employees can either join the TSP or change their ongoing investment amounts. The Senate has passed a similar bill (S-2479). As with the Senate bill, the CBO estimated that the change would decrease tax revenues by some $23 million over 10 years while increasing government outlays for matching funds by an additional $30 million in that time. 8. Contribution Rates Build Over Time In making its estimate, CBO cited data on TSP investor behavior showing a "tendency for participants to increase their contributions over time. CBO assumes that allowing greater flexibility would generally lead participants to increase their contributions slightly sooner than they would have otherwise. On average, participants increase their contributions by roughly 0.2 percent of pay each year." It noted data showing that new employees contribute an average of 5 percent of pay in their first year of participation, 6 percent after five years and 8 percent after 14 years. In preparing its estimate, CBO predicted that the increases would take place earlier than under the current system, causing the increases in agency outlays for matching contributions and lost tax revenue as employees shielded more of their salaries from taxation. 9. Uncertainty Remains on Civil Service Bills The TSP open season bill is among several measures whose prospects have been muddled by the resignation of Rep. JoAnn Davis, R-Va., as head of the House civil service subcommittee. Without someone filling that post--and no replacement appears to be imminent--higher leadership will have to take on the role of pushing those bills. Another major pending civil service measure considered to have a chance of enactment is S-129, which would expand agency use of certain monetary incentives for employees while also allowing employees to receive compensatory time off for travel during off-duty hours and revising a provision of CSRS retirement law that has the effect of discouraging employees from switching to part-time work later in their careers. Also up in the air is legislation (S-2657) to create a vision and dental benefit package for federal employees and retirees. 10. Experts' View: Crediting Military Service Active duty time spent in the Armed Forces of the United States can be added to your civilian service, thus increasing the amount of your retirement annuity, writes benefits expert Reg Jones. "There are two hurdles to clear on the way to having your military service credited to your civilian account," he writes. You'll find his column at http://www.fedweek.com/experts/default.asp. 11. Guidance on Epilepsy as Disability The Equal Employment Opportunity Commission has put out guidance on when epilepsy qualifies as a disability for purposes of the Americans with Disabilities Act. For excerpts from the guidance, which is directed both toward employees and agency managers, go to http://www.fedweek.com/HotFreeNews/default.asp in the hot free info section of our website. 12. 'Don't Count On' Late FEGLI Choice There are some circumstances in which agencies may accept belated elections in the current Federal Employees Group Life Insurance open season--which ends next Thursday (September 30)--but the Office of Personnel Management advises "don't count on it." Elections on the special open season election form, FE-2004, generally must be submitted to agency human resource offices by that date. However, within six months after the open season ends (meaning by March 31, 2005), an agency may determine, after considering an employee's request for a belated enrollment, that an employee was "unable to make a timely election due to circumstances beyond his/her control," such as being called to active military duty this month, or having been overseas on such duty all month. The employee would have 31 days after being notified of the agency determination to make his or her open season election. OPM added that applications must actually be received by the human resources office by September 30--not just postmarked by that date--and that even an event such as an extended hospitalization may not qualify for a delayed election. 13. Fill Out that Form Carefully When making a FEGLI open season election, an employee must sign for all coverage he or she wants. This includes signing for all existing coverage (if the employee wants to keep that coverage), in addition to signing for new coverage. For example, an employee who has Basic insurance and 5 multiples of Option C, who wants to add five multiples of Option B, must complete the FE-2004 election form by signing for the existing coverage (Basic and five multiples of C), as well as the new coverage (five multiples of B). If the employee signs for only Basic and the new Option B coverage, he/she cancels the existing Option C coverage. Said another OPM guidance, "Despite our displaying this information prominently on the FE-2004 election form and other open season material, we know that some employees will complete the FE-2004 incorrectly and sign only for Basic and the new coverage being elected, thereby inadvertently canceling their current Optional coverage." In such cases, it said, agencies are authorized to correct an employee's error and reinstate the erroneously cancelled Optional coverage, if the employee notifies hi or /her personnel office of the mistake before the end of the second pay period following the one in which the open season election became effective. In most cases, this would be the pay period ending October 15, 2005. 14. Federal Legal Corner: Retaliatory Job Reference On August 27, a U.S. appeals court clarified the types of actions that may be illegal under Title VII discrimination laws. In Hillig v. Rumsfeld, No. 02-1102 (10th Cir. 2004), the court ruled that likely harm to future job opportunities -- without actual harm -- can make an employer's retaliation illegal. Ms. Hillig settled two discrimination complaints with her employer, Defense Finance Accounting Service (DFAS). Later, Ms. Hillig applied for a job at Department of Justice (DoJ). Her DFAS supervisors, one of whom was the subject of Ms. Hillig's EEO complaint, gave DoJ harmful information about Ms. Hillig. A jury found that the damaging references were retaliatory, but that Ms. Hillig did not prove that she would have received the job offer even if DFAS had not provided a harmful recommendation. The trial court found that Ms. Hillig did not suffer an "actual tangible injury." The trial court reasoned that the poor reference was not an "adverse employment action" because Ms. Hillig did not show that the reference, by itself, was the cause of her not getting the job. The court of appeals disagreed, reversed, and reinstituted the jury's $25,000 award to compensate her for the retaliation, even though the retaliation did not cause her to lose the job opportunity. The court ruled that "harm to future employment prospects" is sufficient to prove that an employer's actions are illegal. The court focused on DFAS's action as well as the resulting harm. The court also distinguished two types of harm resulting from a discriminatory action: "tangible harms," such as a hiring, firing, non-promotion, or change in salary or benefits; and intangible harms which have a "significant risk of humiliation, damage to reputation, and a concomitant harm to future employment prospects." Hellig, citing Berry v. Stevinson Chevrolet, 74 F.3d 980, 986-87 (10th Cir. 1996). The court noted that actions with a minimal impact on future job potential are not severe enough to be illegal. Thus, the court concluded that an action that does more than de minimis harm to an individual's future employment prospects can be illegal even if the individual does not show the act resulted in the denial of a particular job or a particular employment prospect. ** This information is provided by the attorneys at Passman & Kaplan, P.C., a law firm dedicated to the representation of federal employees worldwide. For more information on Passman & Kaplan, P.C., go to http://www.passmanandkaplan.com. ** 15. End of Fiscal Year 2004 Next Week *********************************************************** The Brand New In-Print 2005 CSRS & FERS Retirement Planning Guides Are Now Available For Immediate Shipment! Plus--Get FEDweek's Social Security and Medicare for Federal Employees & Retirees FREE! We are Fully Stocked and Ready for Your Federal Agency And Library Bulk Orders Immediately . 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Here are some of the key features and updates that these 2005 retirement planning include: A step by step guide to embarking on the retirement journey A description of the new long-term care program, with explanations of potential traps for those close to retirement A quick reference guide to benefits your survivors would stand to receive on your death A description of how Tricare-for-Life might replace FEHB as your health benefits provider Details on how to carry retirement and other benefits into retirement and how you can change those benefits after retirement An easy to follow guide to understanding annuity statements How the new TSP investment, rollover, withdrawal and other rules will affect you before and after retirement Latest information on COLA rates and policies, payments to survivors and other benefit rates The latest information on Social Security benefit rates and eligibility rules The latest information on FEGLI, FEHB, service crediting for retirement purposes and other vital retirement-related issues ALSO IN THESE 2005 CSRS & FERS RETIREMENT PLANNING GUIDES: How to calculate your annuity (with plenty of easy-to-follow examples) Eligibility requirements Different retirement types (regular, early, deferred, special disability) Credit for military service Deposits and redeposits Cost of living adjustments The effect of divorce on annuities Social Security The Thrift Savings Plan Taking health and life insurance into retirement Annuity taxes Survivor benefits And much more! *********************************************************** Go to http://www.fedweek.com/Publications/default.asp to place your order now and get your FREE Social Security/Medicare Handbook for Federal Employees & Retirees Handbook shipped to you immediately. *********************************************************** Other Ways to Order: You may also call our toll-free order line at (888) 333-9335 to place your order for these retirement planning guides: The 2005 CSRS Retirement Planning Guide The 2005 FERS Retirement Planning Guide Or you may also mail your order with payment of $13.95 ($9.95 plus $4.00 s&h) to: FEDweek P.O. 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