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Active Duty/Reserve Issues

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Active Duty/Reserve Issues

Take Defense out of Sequestration

Budget cuts mandated by the Budget Control Act of 2011 pose a threat to national security and will substantially impact service members’ readiness, pay and benefits. These automatic cuts, known as sequestration, require that 50 percent of the federal budget cuts come from the Department of Defense (DoD), even though DoD only makes up 17 percent of the overall national budget.

The Joint Chiefs of Staff recently spoke to the Senate Armed Services Committee (SASC), echoing FRA’s concerns and warning of dreadful consequences if DoD is hit by additional sequestration cuts in FY 2016. SASC Chairman Sen. John McCain (Arizona), said, “If we in Congress do not act, sequestration will return in full in fiscal year 2016, setting our military on a far more dangerous course.” He is concerned that sequestration could push our military into a slow state of decline.

Chief of Naval Operations Admiral Jonathan Greenert warned that a new round of sequestration cuts would require a re-examination of the national defense strategy, pointing out the falling retention rate among the Navy’s highly trained sailors. He also noted that the service’s fleet is older than it has ever been and suggested the existing plan for the Ohio-class submarine program could be at risk if more automatic cuts occur.

Marine Corps Commandant Gen. Joseph Dunford said the Marines are investing in new hardware at “historically low levels.”

SASC Ranking Member Sen. Jack Reed (Rhode Island) said he knows the service chiefs “will manage” with whatever funding and cuts they are dealt.

FRA wants the DoD excluded from sequestration, and shipmates can use the Action Center ( to express their concerns on this issue to their legislators.

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Secretary of Defense Hagel’s Farewell

Secretary of Defense Chuck Hagel was honored in a farewell ceremony in Fort Myer, Virginia, on Wednesday, January 28, 2015. When Hagel was appointed Secretary of Defense in 2013, he became the first former enlisted man to lead the Pentagon. In early March, he is expected to be replaced by Ashton Carter.

Hagel started off his speech by thanking service members and their families. He also asked U.S. troops to secure the military’s reputation as “the most admired and trusted institution in our country.” He stated that “Of all the opportunities my life has given me … I am most proud of having once been a soldier. The lessons from my time in uniform about trust, responsibility, duty, judgment and loyalty to your fellow soldier — these I have carried with me throughout my life.” President Barack Obama, Vice President Joe Biden and U.S. Army Gen. Martin Dempsey attended the event.

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Military Experience in the 114th Congress

The number of House members in the new 114th Congress with military experience declined from 84 to 81. The number of senators with military experience increased from 19 to 21. This is the first Congress in a many years without any World War II veterans and, for the first time, a female veteran (Senator Joni Ernst of Iowa) is serving in the U.S. Senate.

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New Sergeant Major of the Marine Corps

On February 20, 2015, Sergeant Major Ronald Green became the 18th Sergeant Major of the Marine Corps — the top enlisted Marine in the Corps and Commandant Gen. Joseph Dunford’s senior enlisted adviser. Green’s dynamic leadership style is known throughout the ranks of the Marine Corps, and his experiences during peacetime and combat make him well suited for the job, Dunford said in a statement.

Green has spent 31 years in the Marine Corps and is an artilleryman by training. He served as a drill instructor at Marine Corps Recruit Depot Parris Island, South Carolina. He was selected to the rank of sergeant major in December 2004. He served in Iraq in 2005, deploying with Marine Light Attack Helicopter Squadron 169 as a unit sergeant major. He later completed a deployment to Afghanistan.

Green has previously advised general officers as sergeant major of Marine Forces Europe and of Headquarters and Service Battalion at Headquarters Marine Corps, Henderson Hall in Arlington, Virginia, and as sergeant major of Marine Forces Europe and Africa in Stuttgart, Germany.

The post of Sergeant Major of the Marine Corps was established in 1957 to serve as the senior enlisted advisor to the Commandant, the first such post in any branch of the United States armed forces. The Sergeant Major of the Marine Corps is selected by the Commandant, and typically serves a four-year term, though his service is at the pleasure of the Commandant.

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Retiree Issues

MCRMC Releases its Much-Anticipated Report

The Military Compensation and Retirement Modernization Commission (MCRMC) was established as part of the FY 2013 National Defense Authorization Act to review the current compensation and military retirement system and make recommendations for modernizing the system. The Commission completed its review and recently released its final report that included 15 major recommendations aimed at improving the cost-effectiveness of benefits related to military service. Despite early assurances that the proposed recommendations would not impact current beneficiaries, the Commission’s proposals will impact those who currently serve, have served and will serve in the future. Among the Commission’s most worrisome recommendations are proposals to replace all TRICARE programs (except for TRICARE-For-Life or TFL) with a selection of commercial insurance plans and a plan to restructure the military retirement system for future retirees.

As this issue of FRA Today goes to press, FRA’s Legislative Team is carefully reviewing the impact of the proposed changes and members of the National Headquarters staff are in continuing dialogue with the Commission. In addition to meeting with members of the MCRMC, FRA also expressed its position on the Commission’s recommendations in statements to the House and Senate Armed Services Committees (HASC, SASC), which held separate hearings on the report. (FRA’s statements are posted on the Testimony page of the FRA website:

The Commission claims that TRICARE is no longer fiscally sustainable and suggests replacing the current TRICARE program (except TRICARE-for Life) with a plan similar to the Federal Employee Health Benefit Program (FEHBP). Like FEHBP beneficiaries, retirees would be allowed to choose from a selection of commercial insurance plans and Military Treatment Facilities (MTFs) would be considered in-network providers under this system. Beneficiaries would be required to pay 20 percent of all health care costs, and premiums would be allowed to increase every year. Beneficiary family members would not be covered under the plan and would be provided a Basic Allowance for Health Care (BAHC) to cover the cost of premiums and deductibles for an average health care plan. Reserve Component members who are mobilized would also receive a BAHC in lieu of TRICARE coverage. This recommendation, if enacted, would shift a substantial portion of health care costs to beneficiaries, a proposal that FRA adamantly opposes. FRA believes that health care costs for retirees have been prepaid with 20 or more years of arduous military service.

Another major recommendation is to provide a “blended” retirement benefit to future service members and future retirees. The current defined benefit plan, which vests after 20 years of service, would be replaced by smaller defined benefit plan (from 50 percent to 40 percent of military base pay). There would also be a new defined contribution plan known as a Thrift Savings Plan (TSP) that would be similar to a civilian 401(k) retirement account. The government would provide a 1-percent employer contribution and an employee’s contribution would be matched by the employer up to 5-percent of pay. The TSP would be transferrable to other civilian jobs if the service member should leave the military before he/she serves for 20 years.

Sen. John McCain (Arizona), SASC Chairman, echoed FRA’s concern that such a plan would be a disincentive for long military careers and Rep. J. Randy Forbes (Virgrnia) referenced FRA’s statement when asking if the proposed TSP benefit could create a future retention crisis. Rep. Joe Heck (Nev.), chairman of the HASC Personnel Subcommittee, questioned how the commissioners sought to strike a balance between adopting meaningful reforms while “keeping the faith” of those who serve in uniform.

These MCRMC recommendations are just that – recommendations – and they have not been introduced as legislation. FRA also met with HASC and SASC Personnel Subcommittees to discuss the MCRMC report and is closely monitoring the legislative process as it applies to these recommendations.
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President Submits FY 2016 Budget Request to Congress

President Obama submitted his Department of Defense (DoD) FY 2016 budget request, which is 7 percent above sequestration-mandated spending caps. Despite this, the proposed budget seeks to slow the growth of military compensation and benefits by including provisions FRA opposed last year. The Administration’s proposed budget includes:

• Capping military pay increases at 1.3 percent for FY 2016;

• Creating an annual enrollment fee for new TRICARE for Life (TFL) beneficiaries;

• Merging TRICARE Standard, Prime, and Extra into one consolidated health care plan;

• Requiring all retirees to use home delivery or a Military Treatment Facility (MTF) for maintenance drugs;

• Increasing TRICARE annual fees and pharmacy co-pays for retirees under age 65;

• Creating a small co-pay ($10) for retirees using MTFs;

• Requiring active duty family members to pay a co-pay for TRICARE services;

• Reducing Base Allowance for Housing payments by 6 percent; and

• Cutting the commissary budget from $1.3 billion to $400 million in three years with only stateside commissaries being cut.

The Association will oppose these budget-driven pay and benefit cuts and is reviewing other issues addressed in the DoD budget proposal.

FRA staff members are also examining the proposed budget for the Department of Veterans Affairs (VA) and met to discuss how the proposed spending plan will impact shipmates. Much of the VA budget is now on a two-year (advanced funding) cycle and the proposed budget increases funding for disability claims processing by $166 million. FRA will closely monitor the VA and DoD budgets as they move through the legislative process.
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Permanent “Doc Fix” Discussed in House Subcommittee

The Senate Finance Committee’s Subcommittee on Health recently held a hearing to discuss reforming the Sustainable Growth Rate (SGR) that determines reimbursement rates for doctors who see Medicare and TRICARE patients. The threat of significant cuts to those rates has been looming for several years and the temporary “doc fix” has forestalled any changes until April 1, 2015. Congress needs to renew the current plan or make a permanent one by this deadline, or physicians will experience a 22 percent reduction in the reimbursement rates they receive from Medicare and TRICARE. If such cuts are allowed to take place, FRA believes many of these providers will stop seeing Medicare and TRICARE patients.

The cost of making a permanent adjustment has been estimated at $130 billion over 10 years and the subcommittee has been tasked to find offsets for the estimated cost. FRA strongly supports a permanent solution by establishing sufficient reimbursement rates to ensure beneficiaries have continued access to quality medical care. Members are urged to use the FRA Action Center ( to ask their elected officials to make the “doc fix” permanent.
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Pharmacy Co-pay Increase Takes Effect

New co-payments for prescription drugs covered by TRICARE went into effect on February 1. The FY 2015 National Defense Authorization Act (NDAA) requires TRICARE to increase most pharmacy co-pays by $3. The old and new co-pay rates are given below.

At the in-network retail pharmacies (offering up to a 30-day supply of medications):

• Co-pays for generic formulary drugs increased from $5 to $8,

• Co-pays for brand-name formulary drugs increased from $17 to $20, and

• Co-pays for non-formulary drugs increased from $44 to $47.

For home delivery (offering up to a 90-day supply of medications):

• Co-pays for formulary brand name drugs increased from $13 to $16, and

• Co-pays for non-formulary drugs increased from $43 to $46.

Drugs from military pharmacies and generic drugs from TRICARE Pharmacy Home Delivery still cost beneficiaries nothing.

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Concurrent Receipt Bills Introduced

Rep. Gus Bilirakis (Florida) introduced the “Retired Pay Restoration Act” (H.R. 303), which would expand the eligibility of retirees so those with disability ratings of less than 50 percent would be able to receive service-connected disability from the VA. The measure would also provide full retirement pay for retirees eligible for Concurrent Retirement and Disability Payments (CRDP). Currently, only CRDP disability disabled retirees with a rating of 50 percent or more are eligible for concurrent receipt of this benefit and their full military retired pay. Rep. Sanford Bishop (Georgia) has also introduced comprehensive concurrent receipt reform (H.R. 333) that includes disabled retirees with CRDP of less than 50 percent and CRDP (Chapter 61) for those who were medically retired with less than 20 years of service.

Members are urged to use the FRA Action Center ( to contact their representative to ask their support for these proposals.

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