October 2011 Magazine by NARFE

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For Active and Retired Federal Employees

RETIREMENT LIFE

OCTOBER 2011, Volume 87, Number 10

LEGISLATIVE REPORT 8 12 14

Analysis: Balanced Budget Amendment USPS Proposes Layoffs,Withdrawing From Federal Benefit Plans Civics 101: Organizing for Power

COVER STORY 16

The Supercommittee Cuts. As a congressional “supercommittee” seeks ways to cut another $1.5 trillion from the federal deficit, NARFE refocuses its advocacy efforts. Members will play a big role as the Association continues its vigorous defense of federal pay, retirement and health benefits.

DEPARTMENTS 38 44 47 50

Cover design by Charlene Gridley Illustration by Claire Fraser, Imagezoo.com, Fotosearch

COLUMNS 6 Message From the National President

22 Managing Money 24 Live Well 26 Benefits Checkup

SPECIAL SECTION 30 Open Season Report

Questions & Answers NARFE News

NARFE Resources

Out & About

NARFE-PAC Coupon . . . . . . . .20

For the Record: TSP Investments, COLA Chart

NARFE-FEEA Coupon . . . . . . .44 Membership Application . . . . . .45 DuesWithholding Application . .46 Alzheimer’s Coupon . . . . . . . . .47 NARFE Member Perks . . . . . . .48

‘Like’ us on Facebook (NARFE National Headquarters) visit us online at www.narfe.org

NATIONAL OFFICERS

Here’s How to Contact NARFE ...

JOSEPH A. BEAUDOIN, President; natpres@narfe.org PAUL H. CAREW, Vice President; natvp@narfe.org ELAINE HUGHES, Secretary; natsec@narfe.org RICHARD G. THISSEN, Treasurer; nattreas@narfe.org

If you want to: • Join NARFE Call (toll-free):

800-627-3394 or 800-456-8410 Or go to: www.narfe.org

If you want to: • Change your address • Check your membership status • Find out dues owed • Provide a death notification Call (toll-free):

800-456-8410 E-mail:

memberrecords@narfe.org If you want to: • Add your e-mail address to your record (to receive GEMS e-mail messages, the Legislative Hotline and NARFE NewsWatch): Call (toll-free):

800-456-8410 E-mail:

memberrecords@narfe.org

REGIONAL VICE PRESIDENTS REGION I (Acting) Augie Stratoti (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) Tel: 603-889-1073 E-mail: augrs@juno.com REGION II Ronald P. Bowers (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) Tel: 410-308-0420 E-mail: narferbowers@msn.com REGION III Donald Stewart (Alabama, Florida, Georgia, Mississippi, Puerto Rico, South Carolina and Virgin Islands) Tel: 305-442-6388 E-mail: dejs33149@aol.com REGION IV Paul E. Johnson (Illinois, Indiana, Michigan, Ohio and Wisconsin) Tel: 812-306-5137 E-mail: pejohnson@tds.net REGION V Carol R. Ek (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) Tel: 620-241-1131 E-mail: ek617@att.net

REGION VI Jerome S. Smith (Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas) Tel: 903-534-5849 E-mail: retiredjer@aol.com REGION VII Betty Lucero-Turner (Arizona, Colorado, New Mexico, Utah and Wyoming) Tel: 719-583-0910 E-mail: blturner2311@aol.com REGION VIII Helen L. Zajac (California, Guam, Hawaii, Nevada and Republic of Philippines) Tel: 707-644-7565 E-mail: hlz17@aol.com REGION IX Lanny G. Ross (Alaska, Idaho, Montana, Oregon and Washington) Tel: 360-692-9741 E-mail: lannyjean@comcast.net REGION X William F. Martin (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) Tel: 540-872-3345 E-mail: narfe2065@hughes.net

E-mail: memberrecords@narfeorg

If you want to:

• Hear the Legislative Hotline Call (toll-free):

877-217-8234 If you want to: • Get materials to recruit members: Call (toll-free):

800-627-3394 E-mail:

rr@narfe.org

For any other NARFE matter: Call NARFE Headquarters

703-838-7760 E-mail: hq@narfe.org Fax:703-838-7785 Write: NARFE 606 N. Washington St. Alexandria,VA 22314

NARFE MAGAZINE Volume 87,Number 10 Editor, Margaret M. Carter Assistant Editor, Donna J. St. John Editorial Administrator, Toni Vallario Graphic Designer, Beth Bedard Contributing Designers, Charlene Gridley, Jim Richards Editorial Board: Joseph A. Beaudoin, Paul H. Carew, Elaine Hughes, Richard G. Thissen Editorial Office: NARFE, Attn: NARFE magazine, 606 North Washington St., Alexandria, VA 22314-1914; Phone: 703-838-7760; Fax: 703-838-7781; E-mail: rl@narfe.org Advertising Sales: Warren Berger, Media People Inc., 122 East 42nd Street, Suite 725, New York, NY 10168; 212-779-7172, ext. 223; E-mail: wberger@mediapeople.com

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 866-504-7300 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.

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. Non-member subscription rate $45. Postmaster: Send address change to: NARFE Attn:Member Records,NARFE 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. Contents of this magazine are copyrighted © 2011.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.

OCTOBER 2011 | NARFE

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A Message From the National President

The NARFE Family

had originally planned to write this column for the August issue of NARFE magazine. But as threats to our retirement security and the federal workforce in general escalated in June and July, I opted to dedicate my column in the last two issues to the threats and our “Protect America’s Heartbeat” campaign. I hope you took the time to read the details about these threats and the campaign, and were able to join us in our fight, either with a donation, active participation in contacting members of Congress or both. In reviewing options for this month’s column, what I wanted to write about for August is still appropriate today. This has been a devastating year in terms of weather throughout the country. It seemed that every week during April and May, we saw images of a natural disaster striking somewhere in the United States, as tornadoes, floods, severe thunderstorms and wildfires resulted in death and destruction. While the major focus was on the tornadoes that destroyed much of Joplin, MO, in May, other twisters hit the South and Midwest, and flooding along the Missouri and Mississippi Rivers and their tributaries inundated hundreds of thousands of acres of farmland and many small communities. It occurred to me that some of those affected are NARFE members and, therefore, part of the NARFE family. These NARFE members need our help. Ironically, the Friday before the Joplin tornadoes, I received an e-mail from Steve Bauer, executive director of the Federal Employee Education & Assistance Fund (FEEA). Steve is a great friend of NARFE as well as a NARFE member, and he wrote to bring me up-to-date on donations to the NARFE-FEEA Disaster Fund so far this year. He added in his note: “Thankfully, the fund still has a healthy balance … but I do expect more applications from the tornadoes and the re-

cent flooding.” Shortly after his e-mail, the tornadoes struck Joplin. In the months since then, other natural disasters have occurred, including Hurricane Irene. And when they have occurred, NARFE has been there to help our members. From May 1, 2010, to this writing, FEEA disbursed more than $22,000 in NARFE member-donated funds to almost three dozen members in nine states. A third of the checks went to members in Alabama, while other checks went to members in Arkansas, Iowa, Mississippi, Missouri, North Carolina, North Dakota, Tennessee and Virginia. What this has meant, of course, is that the amount of funds available has been reduced. So I am asking for your contributions to help us continue to assist NARFE members. Please make a donation to the NARFE-FEEA Disaster Fund. A coupon can be found on p. 44 of this issue of NARFE magazine. As long as the check is made out specifically to the NARFE-FEEA Disaster Fund, the donation is tax-deductible. Your contributions help immensely, and NARFE members appreciate the assistance. One member from Leeds, AL, put it this way in a note to FEEA: “Thank you, NARFE and FEEA, for all you do on behalf of NARFE members.” A member in Mississippi who received help after his home was destroyed by Hurricanes Katrina and, later, Gustav several years ago made a $500 donation to the Fund. This is what I mean when I talk about the NARFE family. We are here to help each other, so please give whatever you can to the NARFE-FEEA Disaster Fund to help our members in need.

WE ARE here to help each other,so please give whatever you can to the NARFE-FEEA Disaster Fund.

Joseph A. Beaudoin natpres@narfe.org

OCTOBER 2011 | NARFE

Measu r Impres es An si Inches ve 15 Wide

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LEGISLATIVE REPORT

Analysis:Balanced Budget Passage Imperils Amendment Fed Retirement

ll eyes are on the additional $1.5 trillion in cuts that the 12-member congressional “supercommittee” is

required to propose under the debt-limit compromise (see story, p. 16). However, another part of the

new law that has gained less attention could have more permanent consequences. It is a requirement that Congress, no later than De-

cember 31, vote on whether a balanced budget amendment should be added to the U.S. Constitution. If approved by supermajorities in Congress (two-thirds majority in each chamber) and ratified by three-fourths of the states, the amendment has the potential to require unprecedented cuts in federal government programs, threaten the economy and prevent the Social Security and federal civilian and military retirement trust funds from paying benefits to eligible beneficiaries. While NARFE supports efforts to balance the budget and reduce the national debt, the Association maintains that a balanced budget amendment is unnecessary because Congress already has the authority to control spending. In June, the House Committee on the Judiciary approved a balanced budget amendment (H.J. Res. 1), which would cap federal spending at 18 percent of the Gross Domestic Product (GDP). The GDP is the total market value of goods and services produced by workers and capital within U.S. bor-

ders during a given period (usually one year). Federal spending is currently 24 percent of the GDP. Under current policies, that figure will fall as the economy recovers, but then start rising again as baby boomers age and as interest rates return to normal.

ALTERNATIVE PROPOSED Under H.J. Res. 1, the first year in which the federal budget would have to be balanced would probably be fiscal year 2018. To reach balance by that deadline, not even the Budget Resolution approved by the House in April, which would reduce spending by $5.8 trillion over the next decade (including $375 billion in federal retirement cuts), would satisfy the requirement of the amendment. A more likely example of the cuts needed to comply with the amendment’s deadline is the Republican Study Committee’s (RSC) alternative budget

Programs ■ The House is scheduled to be

in recess from October 17-21. The Senate will be in recess the week after,October 24-28. ■ October is“NARFE National

Chapter Meeting Month” (see story,p.44). Take this time to review what your chapter can do to further NARFE’s“Protect America’s Heartbeat” campaign. ■ October also is National

CybersecurityAwareness Month,an annual event that seeks to encourage everyone to protect their computer networks and our nation’s critical cyber infrastructure. The National Cyber Security Alliance has important information on how to be safe online at its website, www.staysafeonline.org.

LEGISLATIVE HOTLINE Toll-free! (24 Hours): 877-217-8234 Legislative Action Center: www.narfe.org OCTOBER 2011 | NARFE

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Legislative Report resolution, which would reduce federal spending by more than $9 trillion over 10 years and achieve balance in 2020 (two years after the constitutional amendment’s likely 2018 deadline). The RSC budget would reduce nondefense discretionary spending by about 70 percent in 2021. Discretionary spending is the part of the federal budget that pays for the day-to-day operations of government, including salaries and expenses of federal workers. Those day-to-day operations include providing veterans medical care, homeland security, education and environmental protection; protecting the nation’s food and water supply; supporting medical research; and delivering services for disadvantaged or abused children, the frail elderly and individuals with severe disabilities. The RSC plan also contains the House Budget Resolution plan to privatize Medicare and require beneficiaries to pay an increasingly higher percentage of the Part B premium. The plan also would raise the Medicare eligibility age from 65 to 67and Social Security retirement to age 70. The RSC, formerly known as the Conservative Action Team, is a group of 178 House conservatives, led by Rep. Jim Jordan, R-OH.

THREAT TO RETIREMENT PROGRAMS Payments from the Social Security and federal civilian and military retirement trust funds would be affected by the balanced budget amendment’s requirement that federal spending in any year be offset by revenues collected in that same year. According to a July 2011 report on the amendment by the nonpartisan Center for Budget and Policy Priorities (CBPP): “By design, the Social Security trust fund is building up reserves – in the form of Treasury securities backed by the full faith and credit of the United States – which will be drawn down to help pay benefits when the number of retired baby boomers peaks in the late 2020s and early 2030s. Currently, Social Security holds $2.6 trillion in Treasury securities, and the Social Security Trustees project that this figure will grow to $3.7 trillion by 2023. But under the balanced budget amendment, it would essentially be unconstitutional for Social Security to draw down these savings to pay promised benefits. Instead, benefits could have to be cut because all spending would have to be covered by tax revenues collected during that same year.” The CBPP report continues: “More precisely, Social Security would be allowed to use its Treasury securities to help pay benefits only if the rest of the federal budget ran an offsetting surplus (or if the House and Senate each mustered three-fifths of the votes to permit deficit spending).” In addition, the CBPP report said, “The military retirement and civil service retirement systems, which have their own

STORY HIGHLIGHTS ■ A balanced budget amendment could prevent the

Social Security and federal civilian and military retirement trust funds from paying benefits. ■ NARFE maintains a balanced budget amendment is unnecessary because Congress already has the authority to control spending. trust funds, would be affected in the same way. Because all expenditures would have to be covered by taxes collected in the same year – and the use of accumulated savings, thus, would be unconstitutional – these trust funds would not be able to draw down their accumulated balances unless the rest of the budget ran offsetting surpluses.” The payment of Social Security benefits will grow significantly because the number of older Americans in the general population is projected to nearly double by 2030. Unlike Social Security, however, the Civil Service Retirement and Disability Fund (CSRDF) will not be required to draw on its reserves to pay benefits. That is because the amount of annuities paid to federal retirees is expected to remain stable because the size of the workforce is anticipated to remain stable. In fact, the size of the federal retiree population is a function of the size of the federal workforce, not the population as a whole. Therefore, despite the fact that actuarial projections indicate that the CSRDF will be able to meet its financial obligations in perpetuity, if the amendment were ratified, cash needed to redeem Treasury Securities in the CSRDF – in which the proceeds would be outlayed to pay annuities to retirees and survivors – would be limited to the amount of taxes collected in the same year.

EFFECTS ON THE ECONOMY Beyond the retirement trust funds, a balanced budget amendment could undermine the government’s ability to cushion a recession. An economic downturn often results in higher unemployment. In addition, even employed consumers spend less because their confidence is shaken about their own prospects. If consumption drops, job loss gets worse, and fewer income taxes are collected from businesses and individuals. However, what economists call “automatic stabilizers” – spending on unemployment insurance, food stamps and Medicaid – help to keep purchases of goods and services from falling more. A balanced budget amendment effectively suspends automatic stabilizers because it would require other federal spending to be cut or taxes to increase to pay for them.

By Dan Adcock,Legislative Director Legislative Counsel Alan Lopatin contributed to this article. OCTOBER 2011 | NARFE

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Legislative Report

USPS Proposes Layoffs,Withdrawing From Federal Benefit Plans

he U.S. Postal Service (USPS) released legislative proposals on August 12 that would allow it to lay off 120,000 postal workers, and remove its 480,000 annuitants and 600,000 employees from federal retirement and health benefit plans. It proposes to replace the federal benefit plans with its own plans. The USPS projects it will not be able to meet all of its financial obligations at the end of the fiscal year, September 30, and claims this justifies the cost-cutting proposals. In response to the proposals, NARFE President Joseph A. Beaudoin said: â&#x20AC;&#x153;Like many Americans, I am concerned about the financial straits of the U.S. Postal Service. I am also deeply troubled by attempts to plow through these challenges by taking away the proven and stable employment benefits that our postal workers earned. Removing the federal health and

STORY HIGHLIGHTS â&#x2013; The U.S.Postal Service wants congressional okay to

lay off 120,000 workers and remove employees and retirees from federal health and retirement plans. â&#x2013; NARFE: This wouldâ&#x20AC;&#x153;undermine the vital serviceâ&#x20AC;? workers provide to the nationâ&#x20AC;&#x2122;s infrastructure.

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OCTOBER 2011 | NARFE

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Legislative Report CIVICS 101:

THE INFORMED CITIZEN

Organizing for Power

edistricting is the process of drawing electoral boundaries for federal, state and local government elected offices and occurs at least every 10 years in response to population changes determined by the results of the decennial census. Paying close attention to how states adjust their congressional districts is crucial to the grass-roots legislative efforts of national advocacy organizations like NARFE. At press time, redistricting was complete in 16 states. California’s new redistricting commission had approved a final map. In 27 other states, the legislature (22) or a commission (five) was still wrestling with competing interests. Once enacted into law, court challenges can be expected. However, the remaining battles in state legislatures and the courts must be settled prior to the deadline for individuals to file their candidacy for elected office. NARFE chapters and federations must plan ahead in order to effectively incorporate changing boundaries into our advocacy mission.

M-114 The semi-annual Membership Roster (NARFE form M114) provides each of NARFE’s 1,395 chapters with the names, addresses and congressional districts of all members. Once congressional redistricting is complete, NARFE will update the congressional district assignments in NARFE’s membership records. Subsequent M-114 reports will show, in the two-digit field marked “CD,” the prospective congressional district assignment of each NARFE member. Thousands of members will find themselves in a different congressional district than before the decennial census.

CHAPTERS AND DISTRICTS Local press reporting will hopefully equip residents, citizens and voters with maps showing district boundaries. While this coverage and other media assist individual voters in preparing for primary and general elections, NARFE officers and activists will have a larger assignment – determining in which congressional district or districts their members reside. Federation officers will have an even more important organizing imperative: reorganizing whole and partial chapters by the congressional district of their members and selecting a single person to serve as the Congressional District Liaison.

STORY HIGHLIGHTS ■ As redistricting is completed, NARFE tools (M-

114) make redistricting an organizing opportunity. ■ Chapters must be reconciled with congressional

districts,and each congressional district must have a Congressional District Liaison. SPLITS Some chapters that previously were entirely within a single district will be split into two (or more) districts. Conversely, some previously split chapters will be united in a single district. Chapter leaders will need to coordinate advocacy efforts with new amalgamations of chapters based on shared congressional districts. For instance, chapter “x” might get a meeting with the local congressman, but a month later, chapter “y” is denied a meeting because NARFE (e.g., chapter “x”) just had “face time” with the lawmaker. Coordination avoids such embarrassments and shows the depth of our united front. Chapters in major cities have members in many congressional districts at the same time that they share districts with nearby chapters. Uniting and coordinating these members into a well-oiled advocacy machine is crucial.

FOR INSTANCE: ‘SUPERCOMMITTEE’ NARFE members in six states and six congressional districts have a special opportunity to protect the earned benefits of all current and future federal retirees because their senator or representative is a member of the deficit “supercommittee” (see story, p. 16). Indeed, high-stakes disputes over the budget will continue to threaten our earned compensation for the foreseeable future. NARFE leaders, working with legislative staff, should use redistricting as an opportunity to organize federations by congressional districts, which should include the appointment of Congressional District Liaisons.

REDISTRICTING WEB SOURCES The Cook Political Report provides a gateway to state-bystate redistricting information. Use www.cookpolitical. com/node/10516 to keep track of the process, including links to maps in states that have produced one.

By Christopher Farrell,Legislative Representative OCTOBER 2011 | NARFE

The Supercommittee

CUTS Will Federal Health and Retirement Benefits Be the Low-Hanging Fruit? by Dan Adcock, Legislative Director

he debt-limit compromise enacted in August required the creation of a “supercommittee,” which is charged with developing a proposal by the end of this year for reducing the federal deficit by an additional $1.5 trillion over the next decade. (The debt-ceiling compromise already targeted $2.4 trillion in reductions over a 10-year period.) House and Senate leadership appointed 12 law-

makers to serve on the committee. (See supercommittee, p. 17.) “The supercommittee will not be immune

from political pressure, since all of them are elected officials,” said NARFE President Joseph A. Beaudoin. “That means, there will be a tendency to protect popular programs with large constituencies, like Social Security and Medicare – which we also support. As a result, relatively smaller programs, like federal civilian retirement, become the lowhanging fruit. We have to fight back to prevent being singled out,” he added.

NARFE’s “Protect America’s Heartbeat” advocacy and communications campaign is likely to refocus its efforts on the supercommittee members. The Association was especially pleased with the appointment of Rep. Chris Van Hollen, D-MD, a long-time NARFE ally and champion of federal employee and annuitant interests. Although NARFE officers and activists should continue to contact their

own members of Congress about the threats to their earned benefits in the coming months, NARFE members who are represented by a supercommittee member have a special responsibility to write, call and meet with their legislators as soon as possible. At press time, while the committee had not yet met, members had started reviewing other deficit-reduction plans, particularly the December 2010 report OCTOBER 2011 | NARFE

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Congressional Supercommittee Members from the House

Rep. Jeb Hensarling Rep. Xavier Becerra D-California R-Texas (Co-chair)

Rep. Dave Camp R-Michigan

Rep. James E. Clyburn D-South Carolina

Rep. Fred Upton R-Michigan

Rep. Chris Van Hollen D-Maryland

Sen. Rob Portman R-Ohio

Sen. Patrick J. Toomey R-Pennsylvania

Members from the Senate

Sen. Patty Murray D-Washington (Co-chair)

Sen. Max Baucus D-Montana

of the National Commission on Fiscal Responsibility and Reform (the “Fiscal Commission”), which included recommendations to cut federal retirement, cost-of-living adjustments (COLAs), the Federal Employees Health Benefits Pro-

Sen. John Kerry D-Massachusetts

Sen. Jon Kyl R-Arizona

gram (FEHBP) and pay. The panel is required to report legislation by November 23 (with a majority vote) that would reduce the deficit by at least $1.5 trillion over 10 years through spending cuts or rev-

Congressional Budget Schedule

ollowing are key dates in the congressional timetable to pass deficitreduction proposals and fiscal year 2012 appropriations bills. • August 2: Budget Control Act of 2011 enacted • August 16: Deadline for appointing supercommittee • September 6: Congress reconvenes • October 1: Appropriations bills must be passed, or the government will shut down • October 24-29: Congressional recess • November 23: Supercommittee required to report bill with $1.5 trillion in cuts • December 23: Congress required to approve supercommittee bill • January 15, 2012: If supercommittee bill is not enacted, automatic cuts occur.

enue increases. The House and Senate would be compelled to consider the supercommittee’s bill by December 23. Given that no amendments would be allowed, federal-friendly lawmakers could not remove objectionable provisions from the bill and would have no other recourse than to vote against it. But even if Congress approves the measure, the president retains veto power. Regardless of the reason, if the committee’s legislation does not become law by January 15, 2012, the debtcompromise law would trigger automatic across-the-board spending cuts (also known as “sequestration”), starting in January 2013. Fortunately, federal civilian retirement, including COLAs, the FEHBP and federal worker pay would be exempt from the automatic cuts, but federal agency salary and expense accounts would not be protected, which could bring unpreceOCTOBER 2011 | NARFE

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dented pressure to bear on agency budgets.

GOVERNMENT SHUTDOWN LOOMS Beyond the second round of cuts required by the new law, budget hawks in Congress will have another opportunity to extract more spending reductions in the fiscal year 2012 appropriations process. Indeed, the spending bills must be enacted by the start of the new fiscal year on October 1, or the government could shut down. This could be a replay of an impasse over fiscal year 2011 funding that nearly led to a shutdown in April. In one encouraging sign of compromise, House Majority Leader Eric Cantor, RVA, has publicly announced House leadership intentions to follow the guidelines of the debt-limit agreement in moving forward on fiscal year 2012 appropriations in September. This puts him at odds with Tea Party members of his caucus, who have pledged to continue to challenge nearly every element of government spending.

Legislative Counsel Alan Lopatin contributed to this article.

NARFE Nevada representatives delivered letters to the in-district office of Sen. Harry Reid. From left: Bill Dwyer, Chapter 423; Jim Mackie, Chapter 2031; Janice Miller, Reid’s liaison for senior issues and outreach; Rob Elliot, Reid’s Southern Nevada regional director; and Bruce Bacon, Nevada Federation immediate past president.

Nevada NARFE Chapters Write, Deliver Letters to Senators NARFE’s Nevada chapters, called to action through NARFE’s “Protect America’s Heartbeat” communications and advocacy campaign, recently wrote nearly 1,000 personal letters to their representatives in the U.S. Senate – Senate Majority Leader Harry Reid (D) and Sen. Dean Heller (R). The letters described the work NARFE members have done for our country, spanning many federal agencies and numerous presidential administrations.They were personally delivered by NARFE leaders to the indistrict offices of Reid and Heller. Nevada chapters also heavily recruited participants for NARFE’s National Call-In Day July 27, in which members phoned members of their congressional delegations and the White House. In addition, they hand-delivered issues of NARFE magazine to their legislators’offices, and submitted letters to the editors of local newspapers to inform the lawmakers and shed light on the issues active and retired federal employees face.

I support NARFE¥PAC, the Retirees? Fund for the Future Enclosed is my NARFE-PAC contribu tion: $

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Federal law requires political committees to report the name, mailing address, occupation and name of employer for each individual whose contributions aggregate in excess of $200 in a calendar year.

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Signature Date 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 non-partisan political action fund. NARFE-PAC contributions are not deductible for federal income tax purposes.

OCTOBER 2011 | NARFE

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Managing Money

Replicating TSP Investments By Mark A. Keen, CFP®

n several occasions recently, I was asked how someone can go about replicating the Thrift Savings Plan (TSP) within his or her individual retirement account (IRA) or other type of investment account. While TSP funds are unique to the TSP and cannot be bought outside of the TSP, most of the TSP fund options track standard indexes. So, to copy the TSP fund options, you have to know which indexes the TSP tracks and then find a suitable investment that tracks the same index. First, let’s look at what an index is. A stock index is simply a group of stocks chosen to represent the stock market or a specific portion of the stock market. A stock index can be U.S. based, foreign based or a combination of both. A bond index is similar but is composed of bonds instead of stocks. One of the most widely quoted stock indexes representing U.S. stocks is the S&P 500, which tracks the stocks of 500 of the most widely held U.S.-based companies. An example of a foreign stock index is the Morgan Stanley Capital International Europe, Australasia, Far East Index (MSCI EAFE), which tracks stocks across 21 developed foreign countries. To invest in a similar fashion to the TSP, find an investment that tracks the same index as the TSP fund you are looking to replicate. The TSP funds and the indexes they track are: • The C Fund tracks the S&P 500; • The S Fund tracks the Dow Jones U.S. Completion Total Stock Market Index; • The I Fund tracks the MSCI EAFE; and

• The F Fund tracks Barclays Capital U.S. Aggregate Bond Index. The G Fund does not seek to replicate the performance of any index. Rather, the G Fund invests exclusively in a nonmarketable, short-term U.S. Treasury security specially issued to the TSP. In short, the G Fund cannot be replicated outside of the TSP. To learn more about TSP investment options and their associated risks, see my column in the May 2010 issue of NARFE magazine, pp. 24-25, or visit the TSP website at www.tsp.gov. You cannot invest directly in an index, but you can buy shares of an index mutual fund or exchange traded fund (ETF) designed to track a specific index. Although mutual funds and ETFs may track the same index, it’s important to note that they are two distinctly different investment vehicles. Without getting too bogged down in the details, simply note that ETFs are bought and sold just like stocks on the American Stock Exchange. In either case, there are dozens of mutual funds and ETFs tracking the same indexes that the TSP funds track, so finding an appropriate investment should not be a problem. Vanguard introduced the first index fund in 1976 when it created the Vanguard 500 fund, which is designed to track the S&P 500. Since then, index investing has become increasingly popular, and many other mutual funds and ETFs have been created with the objec-

tive of tracking the S&P 500, among other indexes. Two of the more popular S&P 500 fund options are the Vanguard 500 fund (ticker symbol: VFINX) and the Fidelity Spartan 500 Index fund (FSMKX). There are many ETFs that track the S&P 500 as well, but the more common ones are the so-called “Spiders” (SPY), the iShares S&P 500 Index Fund (IVV) and the Vanguard 500 Index ETF (VOO). There are not as many investment options tracking the S Fund’s index, the Dow Jones U.S. Completion Total Stock Market Index. In fact, there are only two mutual funds that track this index: the Fidelity Spartan Extended Market Index Fund (FSEMX) and the USAA Extended Market Index Fund (USMIX). Although not exactly the same, Vanguard’s Extended Market Index Fund (VEXMX) has a similar strategy and would be a good substitute if you’re a Vanguard fan. Vanguard also offers the Extended Market Index ETF (VXF). Like the S&P 500 Index, the MSCI EAFE index is widely followed, and has many mutual funds and ETFs tracking it. Among the more popular options are the Fidelity Spartan International Index Fund (FSIIX) and the Vanguard Developed Markets Index Fund (VDMIX). ETF options include the iShares MSCI EAFE Index Fund (EFA) and the Vanguard MSCI EAFE ETF (VEA). Finding an investment that tracks the Barclays Capital U.S. Aggregate

FIND an investment that tracks the same index as theTSP fund you are looking to replicate.

OCTOBER 2011 | NARFE

Bond Index also is easy to do. Mutual fund options include Fidelity’s Spartan U.S. Bond Index Fund (FBIDX) and Vanguard’s Total Bond Market Index Fund (VBMFX). On the ETF side, Vanguard’s Total Bond Market ETF (BND) and iShare’s Barclays Aggregate Bond Fund (AGG) are two popular options. I’ve stayed primarily with Fidelity and Vanguard because they offer enough variety that you can have one account with them and find investments similar to all four of the TSP funds that can be simulated outside of the TSP. Other fund companies may offer funds that track one or two of the indexes, but not all four. Regardless of which fund company you decide to go with, be sure to compare the minimum initial investment amounts and expenses of the funds. Fi-

delity’s index funds tend to be less expensive than Vanguard’s, but Fidelity’s index funds also have higher minimum initial investment amounts. For example, Fidelity’s Spartan 500 Index fund has a $10,000 minimum initial investment and an annual expense ratio of 0.10 percent, whereas Vanguard’s 500 fund has an investment minimum of only $3,000 but an annual expense ratio of 0.17 percent. In most cases, the ETF version is less expensive than the comparable mutual fund. For example, Vanguard’s 500 ETF is 0.06 percent versus 0.17 percent for the mutual fund version. Note, however, that because ETFs trade like stocks, there may be a transaction fee to buy or sell an ETF, which can certainly add to the cost. If you think ETFs are the way to go for you, be sure to

compare several brokerage firms. With the explosion in popularity of ETFs and competition among companies, many brokerage firms have a list of ETFs that you can trade with no transaction fees. The TSP’s low cost is hard to beat. But with a plethora of low-cost, indexbased investment options to choose from, you can come darn close to constructing a portfolio of investments similar to the TSP with little cost difference.

Mark A. Keen, CFP®, is president and owner of Bennett Financial Advisors, 3600 Chain Bridge Rd., 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. E-mail: mkeen@tributaryadvisors.com.

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Medicare Basics By Marilyn S. Radke, M.D.

edicare is a federal health insurance program that helps with the cost of health care for people who are: • Age 65 and older; • Under age 65 and receiving Social Security disability benefits for a certain amount of time (generally 24 months) for certain disabilities; and • Any age and have endstage renal disease, which is permanent kidney failure needing dialysis or a transplant. Medicare has four parts that cover certain costs, as follows: • Part A – Hospital Insurance: Helps cover inpatient care in hospitals, skilled nursing care facilities (for a limited time), hospice and at home (under certain conditions). In hospitals, it pays for general nursing, semiprivate room, meals, and most services and supplies. It does not, however, cover privateduty nursing, private room (unless medically necessary), television and telephone. There is usually no monthly premium (fee) when you turn age 65 because most people or their spouses paid Medicare taxes at work. • Part B – Medical Insurance: Helps cover medical services, including doctors’ services, outpatient and other medical services (flu shots, diabetes screening), not covered by Part A. There is usually a monthly premium, and you may pay a late enrollment penalty if

you do not choose to enroll (through Social Security or the Railroad Retirement Board) when you are first eligible. • Part C – Medicare Advantage Plans: Are private health plans that people can join to get their Medicare benefits. The plans are managed by private insurance companies, and include Medicare Health Maintenance Organization Plans, Medicare Preferred

insurance and other private companies. If you join Original Medicare (described below) and want prescription drug coverage, you need to choose and enroll in a PDP. If you join a Medicare Advantage Plan, you will probably receive prescription drug coverage (for an extra cost) through that plan if it is offered. The federal government manages Original Medicare, which lets you go to

THE MEDICARE Prescription Drug Plan (PDP) helps pay for prescription medicines.PDPs are run by insurance and other private companies. Provider Organization Plans, Medicare Private Fee-for-Service Plans, Medicare Special Needs Plans and Medicare Medical Savings Accounts. They cover hospital costs (Part A), medical costs (Part B) and usually prescription drug costs (Part D). They may offer vision, hearing, dental, health and wellness programs, and other services not covered by Medicare. Co-payments may be lower than in Original Medicare (described below); however, you may have to see doctors that belong to the plan or go to certain hospitals to get services. You must have Medicare Part A and Part B, and you must pay the monthly Part B premium to Medicare to join a Medicare Advantage Plan. You also may need to pay a monthly premium to the Medicare Advantage Plan for prescription drug coverage and other extra benefits the plan may offer. • Part D – Medicare Prescription Drug Plan (PDP): Helps pay for prescription medications. PDPs are run by

any doctor, hospital or other health care provider who accepts Medicare. You usually pay a fee for each service approved by Medicare. Medicare pays its share of an approved amount up to certain limits, and you pay the rest. If you join Original Medicare and want prescription drug coverage, then you must choose and join a PDP. You also may wish to purchase Medigap, a private insurance policy to fill in gaps in Original Medicare coverage, such as out-ofpocket costs for Medicare coinsurance and deductibles, or for services not covered by Medicare.

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or more information, write to The Centers for Medicare & Medicaid Services, 7500 Security Blvd.,Baltimore,MD 21244-1850;or call 800-MEDICARE; or visit the website at www.MyMedicare.gov.

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Persons covered by both Medicare and the Federal Employees Health Benefits Program (FEHBP) do not have to purchase a Medigap policy, according to the Office of Personnel Management, because the FEHBP and Medicare coordinate benefits to provide comprehensive coverage for a wide range of medical expenses, including prescription drug coverage. For persons covered by both an FEHBP plan and Medicare, coverage and payments are coordinated automatically between the programs. For those who are still federal employees, the FEHBP plan is the primary insurer and pays its share of covered benefits before sending the remainder of the bill to Medicare for payment. For federal retirees covered by both, Medicare is the primary insurer and coordinates payments with the FEHBP plan. Medicare does not cover cosmetic surgery, health care you get while traveling outside of the United States (except in limited cases), hearing aids, most hearing exams, long-term care (including nursing home care), most eyeglasses, most dental care and dentures. A Medicare Advantage Plan may cover some of these services. Medicare is a separate program from Medicaid. State medical assistance (Medicaid) programs are managed by state governments, and each state has its own rules about who is eligible and what is covered under its Medicaid program. Medicaid provides hospital and medical coverage for people who have a low income and little or no resources. You may qualify for both Medicare and Medicaid. Consider calling your state medical assistance office if you have questions about Medicaid.

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Benefits Checkup

Choosing the Right Health Plan By Vanessa Craddock

pen Season for the Federal Employees Health Benefits Program (FEHBP) is quickly approaching, and now is the time to review your present health insurance coverage to make sure your current health plan will still be adequate in the coming year. What to consider? Your medical needs, of course. Has anything changed with your health or that of a family member? Has anything changed with your plan for the new year? Here are some basic guidelines that should be helpful during Open Season. First, what is the right health insurance plan for you? There are three basic types in the federal program — fee-for-service, health maintenance organizations and the high-deductible health plans: • Fee-for-service (FFS) plans are characterized by the freedom you have to make choices in your health care. With an FFS plan, you can choose your doctors; use preferred providers; consult specialists without a referral; use coverage nationwide; and enjoy prescription drug coverage, including pharmacy and mail order. In addition, you can elect between high and low options — high-option coverage has a higher premium, but the annual deductibles, out-of-pocket expenses and co-payments for prescription drugs are generally lower. • Health maintenance organizations (HMOs) vary based on where you live. They are characterized by a managed-care system. With an HMO, you choose a primary care physician, and use doctors and facilities in a network. You generally have less freedom

to make your health care choices, but you benefit by smaller co-payments for doctor’s visits and prescription drug coverage. HMOs have no annual deductible. • High-deductible health plans (HDHP) are relatively new to the federal program (since 2005), and the characteristics are quite different from the other types of plans. Potentially, HDHPs can save you money, but with those savings come certain risks. When you enroll in an HDHP, the plan will provide you with a health savings account (HSA), which your plan contributes to monthly, and it’s yours to use for medical expenses. The money in your HSA can roll over from year to year, and these accounts earn interest, which accumulates tax-free. This money can be used to pay for out-of-pocket health care expenses, such as deductibles

and co-payments, if necessary. You also are allowed to contribute tax-free dollars, up to a certain amount each year, to your HSA. If you are age 55 or older, you may even make limited catch-up contributions to the HSA as long as you aren’t enrolled in Medicare. If you are covered by Medicare, TRICARE or your spouse’s health insurance in a non-HDHP, you cannot have an HSA. You can have a health reimbursement arrangement (HRA). HRAs are similar to HSAs, except that you cannot make deposits into the HRA, interest is not earned on an HRA, and the amount in an HRA is not transferable if you leave the HDHP. But there are risks associated with HDHPs. Deductibles, or amounts you must pay first before your insurance starts to kick in, can be significant. The minimum is $1,200 for self-only, and $2,400 for family coverage. Second,

ONCE YOU CHOOSE the right type of plan,you should compare the costs.

Checklist for Open Season: 1. What medical needs do I anticipate having next year? 2. What type of health plan would be best for me and my family? 3. What are the 2012 costs for my plan? 4. Am I including all eligible family members? 5. Am I in the proper type of enrollment? 6. Am I eligible to take my health insurance into retirement? Keep in mind that you must be enrolled in the Federal Employees Health Benefits Program (FEHBP) for the five continuous years of service immediately preceding retirement or since your first opportunity to enroll,if less than five years,to keep coverage after retirement.

OCTOBER 2011 | NARFE

Hawaiian Kings Tour 15 Days

Weekly Departures

from $1768*

YMT specializes in Hawaii and has had its own office in Honolulu since 1967! This Kings Tour is so popular YMT offers over 60 departures throughout the year. Start with your escort meeting you at the Honolulu airport. Spend 5 nights in Waikiki Beach (Honolulu) on Oahu; 3 nights on Kauai; 2 on Maui; 1 night in Hilo and 3 in Kona, on Hawaii (‘the-big-island”). Escorted sightseeing includes a city tour of Honolulu and Pearl Harbor, the Wailua River Boat Cruise, The Old Whaling Capital of Lahaina, the Iao Valley, Hilo Orchid Gardens, Rainbow Falls, Black Sand Beaches, Volcanoes National Park and more. Includes: fine resort hotels, taxes, inter-island flights, baggage handling, escort, & sightseeing. *Add $300 per person January departures. Add $200 per person February - March departures.

Elegant Danube River Cruise 12 Days

from $2298*

Join other NARFE members departing April 24, 2012

Enjoy the YMT chartered, 4-star ship, the “TUI Melodia”! Round trip cruise from Passau … PLUS tour Germany! Start in Munich, Germany for one-night. Then travel to Schwangau and a guided tour of the famous Neuschwanstein (Disneyland) Castle and Rothenburg o.d. Tauber for an overnight stay. The following day you will leave for the Czech Republic stopping in Plzen, where Pilsner beer was created with an included brewery tour; followed by Bohemia and Prague. Spend the next day sightseeing before you embark. Your cruise includes the Danube’s highlights including Melk and Vienna, Austria (the classical city of music); Esztergom and Budapest Hungary; Bratislava, Slovakia; and Linz, Austria; before returning to Passau. Travel back to Munich with additional sightseeing, before flying home. Your “brand new” ship the TUI Melodia, constructed in 2011, offers a state-of-the-art, experience!

Tour Classic Greece, then Cruise the Aegean Islands & Turkey 14 Days

from $2198*

Travel with other NARFE members departing April 29, 2012

Start in Athens, Greece for a 5-day land tour. Explore Athens and visit the Acropolis and the Parthenon, and see the treasures in the New Acropolis Museum. Discover Temple of Apollo at Delphi, and at Olympia see the original stadium, home to the Olympic Games for over 1000 years! Next enjoy a 7-night Aegean Islands & Turkey cruise aboard the stylish yacht-design ship the MV Cristal. Visit magical Istanbul, Turkey – a city build on two continents; plus “port” at Izmir, Turkey; Patmos, Mykonos, Rhodes, Crete, and Santorini; Greece. Spend a final day and night in Athens before returning home. Price includes outside cabin on cruise portion.

Best of Italy + Salzburg & Vienna, Austria Rome – Pompeii – Amalfi Coast – Florence – Pisa – Verona – Venice

15 Days

Join other NARFE members departing May 2, 2012

from $2398*

Enjoy three days in Rome with an included city tour of Ancient Rome and tour of the Vatican and Sistine Chapel. Two nights in Sorrento allows included sightseeing of the excavations of famous Pompeii and a tour of the beautiful coastal drive of Amalfi and the cliffs. Your next two nights are in the Tuscany region with included sightseeing in Florence, Pisa and Verona followed by two nights in Venice with sightseeing. Next, Austria with two nights in Mozart’s birthplace Salzburg with a Sound of Music excursion and two nights in Vienna, Austria with a city tour and Danube River Cruise. Includes 12 breakfasts, 9 dinners & English-speaking escort throughout.

Alaska Cruise Plus…Amtrak Coast Starlight Train Tour

13 Days

Travel with other NARFE members departing June 22, 2012

from $2098*

Start in Seattle with a city tour. Board the NCL Star for a 7-night Alaska cruise to Ketchikan, Sawyer Glacier, Skagway, and Prince Rupert, BC. Next board the Coast Starlight train to San Francisco. Travel by day through Washington and Oregon’s spectacular scenic vistas. Enjoy your Amtrak sleeper-roomette at night (includes VIP lounge). Arrive in Napa and visit two of the area’s premier wineries. Spend two nights in San Francisco (stay near Fisherman’s Wharf ) with included sightseeing.

*Price per person, based on double occupancy. Airfare is extra.

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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 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 is a registered trademark of GreatCall, Inc. Samsung is a registered trademark of Samsung Electronics America, Inc. and/or its related entities. Copyright © 2011 GreatCall, Inc. Copyright © 2011 by firstSTREET for Boomers and Beyond, Inc. All rights reserved.

Benefits Checkup catastrophic out-of-pocket limits are higher than they are for traditional health insurance. And last, to get the best value from the plan, you must use health providers in the plan network. If you need a lot of medical care, you may not save money under the HDHP at all. Before joining one, make sure you are in good health and can afford to help fund the HSA, should you need to pay out-of-pocket expenses. Once you choose the best type of plan, you should compare the costs. How much are premiums, co-pays, coinsurance and prescriptions for your plan in the upcoming year? Last, check your enrollment coverage. Include in your coverage all eligible family members — current spouse, which includes valid common law, and children: natural, step, foster, adopted, even grandchildren, in some cases, up to age 26. Keep in mind that disabled children incapable of self-support due to a physical or mental condition may stay covered beyond age 26, if certain conditions are met. If you and your spouse are federal employees or retirees, perhaps two self-only enrollments would be best, if no children are involved. Remember: 2011 Open Season is November 14-December 12. For detailed information, see NARFE’s Open Season Report, beginning on p. 30. Make sure your federal health insurance benefits actually work for you!

Vanessa Craddock is an independent human resources professional, providing training and consulting for federal employees. During her tenure with the Office of Personnel Management, she worked as a certified federal benefits specialist, trainer, course developer and manager. She has more than 25 years of experience in federal benefits administration. OCTOBER 2011 | NARFE

Positive word-of-mouth— advertising you can’t buy! TruHearing is a national vendor that provides discounts on hearing aids through the Blue365 Program

In a recent survey, health plan members gave the following grades to TruHearing: Consumers’ Experience Expectations? 86% said TruHearing had met or exceeded their expectations Likelihood to Recommend to Family and Friends? 86% said they would recommend TruHearing Give TruHearing a chance to exceed your expectations on purchasing a hearing aid. If you want to use your $1,000 (per hearing aid) FEP covered benefit, TruHearing will handle all your insurance billing coordination — it doesn’t get any easier than that!

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Call TruHearing for: Free screening (you must call TruHearing to schedule your appointment) 80 Free batteries for up to five years (40 batteries per aid per year) when purchasing your hearing aid through TruHearing and reenrolling with FEP each year Free copy of “The Guide to Better Hearing” DVD $25 rebate per hearing aid unit on your first purchase under this TruHearing discount program

* Hearing aids are a covered benefit under the BCBS Service Benefit Plan for adults age 22 and over, limited to $1,000 per hearing aid per ear per 36-month period. Children, up to age 22, are limited to $1,000 per ear per calendar year. Member cost sharing applies. The Blue Cross and Blue Shield Association is an association of independent, locally operated, licensed Blue Cross and Blue Shield companies. Blue365® offers access to savings on items that you may purchase directly from independent vendors, which may be different from items that are covered under your Service Benefit Plan policy or any other applicable federal healthcare program. For hearing aids, certain hearing tests, and vision services, please remember to use your Service Benefit Plan benefits. To find out what is covered 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, they 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, nor BCBSA, or 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 items and vendors made available through Blue365, at any time.

PEN SEASON REPORT 2011 Preview Editor’s note: This is the first of a threepart series that will be continued in the November and December issues. he 2011 Open Season for the Federal Employees Health Benefits Program (FEHBP), the Federal Employees Dental and Vision Insurance Program (FEDVIP) and the Federal Flexible Spending Account Program (FSAFEDS) runs from Monday, November 14, to Monday, December 12, 2011.

ABOUT BENEFITS AND PREMIUMS Because this issue of NARFE magazine went to press in early September, official announcements regarding next year’s benefits and premiums, and changes to the Open Season processes, were not available for inclusion. Contract negotiations between the Office of Personnel Management (OPM) and FEHBP plans are conducted in private. OPM will not release information about any plan’s benefits or premiums for contract year 2012

until it completes negotiations with all of the participating plans. After the changes for 2012 are announced by OPM in September, this information will be included in the November and December issues of NARFE magazine.

PAPER BROCHURES NOT AUTOMATICALLY SENT As announced in the July issue of NARFE magazine, health plans this year will not automatically mail plan brochures to individuals currently enrolled in their plans. Instead, plans will contact enrollees to offer an option of obtaining their benefit brochure online or requesting a paper copy. To get a paper copy of the brochure, enrollees must follow the instructions the health plan provides. However, OPM will mail its annual Open Season notice to all annuitants and survivors. Anyone who does not receive the Open Season notice by November 14 should call the Open Season contractor at 800-332-9798. Agency personnel or administrative offices will provide information and in-

structions about Open Season to current employees. Those with Internet access can use OPM’s website, www.opm.gov/insure, to obtain additional information. The site has an easy-to-use menu to select and download information on the benefit programs. Changes in benefits and premiums for the 2012 year should be available online by the beginning of Open Season on November 14.

CHANGES YOU CAN MAKE DURING OPEN SEASON Health Insurance (FEHBP) During Open Season, employees, annuitants, survivor annuitants,

Effective Dates of Changes, Enrollments, Cancellations • FEHBP Annuitants and Survivors. For changes and re-enrollments: January 1, 2012. The new premiums will be deducted beginning with the February 1, 2012, annuity payments. • FEHBP Federal Employees. For enrollments, changes and re-enrollments: beginning of the first pay period after January 1, 2012. • FEDVIP Annuitants and Survivors. For enrollments, cancellations and changes: January 1, 2012. The new premiums will be withheld from annuities beginning with the February 1, 2012, payment. • FEDVIP Federal Employees. For enrollments, cancellations and changes: beginning of the first pay period on or after January 1, 2012. • FSAFEDS. The effective date is January 1, 2012.

OCTOBER 2011 | NARFE

Before long, it’ll be her turn.

You’ll want to be there. We make taking care of your health easy, so you won’t miss those big events in life. Because when you choose GEHA, you get free generic drugs by mail (most new prescriptions), free LabCard® services and free preventive care exams and screenings in-network. You’ll also pay low copays for office visits and eye exams. Visit www.geha.com to learn more. Or chat with GEHA President Richard Miles at noon Eastern time on October 25 at www.geha.com. (877) 549-GEHA • www.geha.com Connect with us: Facebook.com/GEHAhealth Follow us: Twitter.com/GEHAhealth Watch us: Youtube.com/GEHAhealth Thiis is is a br b iief ef de descr crip rip ipt ption of the thhe ffeat eaatur eat uurre res of of Gove o rrnnme ov nment en Em en Empplooye yee eess Heal eaal a th th Ass A soci oc ati ation, on Innc. on, Before Be Bef or mak ore makin ma king a fi f nal all de d cis cision ion on,, pplea lea eaase se rea r d tthhhee G GEEH GEH HA fed ede ddeerall brooch chur ure ree, RI RI 71-0 -006. -0 006. 06 Al be All benef neffits ne i are arre ssub ubbjject ub ect too th thee defi fiinition nittions, ion io onns, s, lim miita taat atio tion ioons aan and ndd exclu exclusio clusio clu si ns si seett foorth set rt inn th t e feed ede deer eral ral bbrroc ochhure uree.

PEN SEASON REPORT former spouses and those in receipt of benefits from the Department of Labor, Office of Workers’ Compensation Programs, already enrolled in the FEHBP may change plans, options, type of enrollment (self-only or family) or make any combination of these changes. Annuitants and survivor annuitants who suspended FEHBP coverage to enroll in TRICARE, TRICARE-For-Life, the Uniformed Services Family Health Plan, a Medicare Advantage Health Maintenance Organization (HMO) plan, CHAMPVA, Medicaid or as a Peace Corps volunteer may re-enroll in the FEHBP during Open Season.

Eligible active federal employees who are not enrolled may enroll or reenroll during Open Season. Annuitants and survivors who are not enrolled generally may not enroll or re-enroll. Dental and Vision Insurance (FEDVIP) During Open Season, eligible employees, annuitants, survivors and compensationers may enroll in the program or, if already enrolled, change plans, options, type of enrollment or make any combination of these changes. Open Season also is the only time you can voluntarily cancel your FEDVIP enrollment. Your FEDVIP enrollment continues year to year unless you change or cancel during Open Season.

Flexible Spending Accounts (FSAs) During Open Season, federal employees may sign up for FSAs for the 2012 plan year under the Federal Flexible Spending Account Program (FSAFEDS). FSAs allow employees (but not retirees) to set aside pretax money that can be used for certain health and dependent-care expenses. Unlike the FEHBP and FEDVIP, enrollment in FSAFEDS does not carry over from year to year, so employees must re-enroll each year. To enroll, employees must go to www.fsafeds.com or call 877-372-3337.

Retirement Benefits Service Department

Important Questions for Open Season Will my current health plan continue to participate in the Federal Employees Health Benefits Program (FEHBP)? Don’t assume that FEHBP plans remain participants or have the same coverage every year. The FEHBP frequently adds new plans and drops others, particularly health maintenance organization (HMO) plans. In addition, medical expenses covered by a plan this year may not be covered next year and vice versa. HMO plans might change the area of coverage, dropping some ZIP codes and adding others. You also will need to know if your HMO plan has split into two separate plans, with separate premiums and areas of coverage. This could result in your being automatically enrolled in the new plan, unless you make an Open Season election to stay with your original plan. The best way to stay on top of upcoming changes is to read the information available to you from your health plan

and from the Office of Personnel Management (OPM). This means that you need to keep your mailing address current with both the plan and OPM so the information you request arrives in a timely manner. Remember: Starting this year, health plans in the FEHBP will no longer mail you automatically their plan brochures for the new year. You can request that a brochure be mailed to you. All FEHBP plan brochures can be viewed and printed by you at the following: www.opm.gov/insure/health/planinfo/ index.asp. Or you can call your plan using the information on the back of your health plan identification card.

What should I do if I don’t understand something in a plan’s brochure? Don’t ignore plan features that are unclear to you. Contact the FEHBP carriers directly to clarify plan features and eliminate future misunderstandings. This is very important whenever a plan offers a

new option or a new benefit. Contact information can be found at the OPM website listed in the previous answer.

Am I correct in believing that OPM’s online comparison chart gives me all of the information I need to select a health plan that best meets my needs and the needs of my family? The comparison chart available online at OPM’s website provides a good summary of the plans available to you and the services that the plan pays for. Even so, OPM cautions you not to rely exclusively on the comparison chart or hearsay about health plans. Do an independent review of your family’s and your health care needs – and how well individual plans meet those needs. Be sure to review your plan brochure and the brochure of any other plan you are interested in for upcoming changes. Compare the benefits offered with your health care needs and those of your covered family members. OCTOBER 2011 | NARFE

premium rates alone. Keep in mind that premiums are but one aspect of your health care costs; benefits are equally important. Don’t forget to check the plans’ records Review deductible, coinsurance and of service and reimbursement, and the co-payment features. Some plans have availability of preferred provider organseparate deductibles for “major medizations (PPOs) in your area for contract ical” and specialized-care expenses. year 2012. Remember: A plan’s PPOs Some plans may substitute coinsuralso can change from one year to the ance for co-payments. Carefully review next; and, if you use a nonpreferred health plans’ “catastrophic protection provider, it would cost you more in colimits” and which of your out-ofpays and/or coinsurance. Also be sure pocket costs count toward those limits. If Medicare (Parts A and B) is your to read and understand the plans’ coprimary insurer, review your FEHBP ordination of benefits policy if you plan brochure to see if the plan waives have other insurance coverage, such or discounts any of your deductibles, as Medicare or TRICARE. coinsurance or co-payments. RememIs it true that the safest way to select ber: A co-payment is a flat amount; a health plan is to go by the least ex- coinsurance is a percentage of the cost. UHC3225 2011NARFEadOCT Page 1 If prescription drug coverage is a pensive premium available 8/16/11 to you? 2:40 PM major part of your health care, then Don’t figure the cost of a health plan on

Are there other aspects of health plans’ day-to-day business that I need to consider when choosing a plan under the FEHBP?

Affordable Progressives Are Here.

you want to look at a plan’s out-ofpocket expenses for generic as well as brand name or specialty drugs. You also should pay attention to the difference in amounts and costs for ordering prescriptions by mail, and the costs for using your neighborhood retail pharmacist. Double-check your understanding of the total costs before enrolling in a plan. Evaluate each plan in light of your past medical history and your anticipated medical needs for the coming year. Also make the same considerations for your eligible family members.

Are there other cost-related implications that I need to consider when making a decision about a health plan? Don’t forget to consider a plan’s catastrophic coverage feature – a limitation

No Premium cost increase for 2012!

The average retail price for no-line bifocal or multifocal lenses can be as much as $440.00. However, if you’re enrolled in a High Option Plan from UnitedHealthcare Vision, these same lenses will cost only a $65.00 copay! Whatever your individual or family need is we have an industry-leading vision plan for you. FEDVIP Open Season: November 14 -December 12

2012

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NARFE | OCTOBER 2011

UnitedHealthcare Vision® coverage provided by or through UnitedHealthcare Insurance Company, located in Hartford, Connecticut, or its affiliates. Administrative services provided by Spectera, Inc., United HealthCare Services, Inc. or their affiliates. Plans sold in Texas use policy form number VPOL.06 and associated COC form number VCOC.INT.06.TX.

PEN SEASON REPORT on the maximum out-of-pocket expenses that you might have to pay in a calendar year. Also, be sure you understand what counts as an out-of-pocket expense. All out-of-pocket expenses do not count toward the catastrophic protection limit. Consumer-driven health plans and high-deductible health plans (HDHPs) tend to have higher catastrophic protection limits, along with lower monthly premiums.

What is an HDHP/HSA? HDHP stands for high-deductible health plan. Anyone who is enrolled in an HDHP may be eligible for a health savings account (HSA) or health reimbursement account (HRA). Medicareeligible enrollees cannot open an HSA. HDHP monthly premiums may be lower than traditional fee-for-service or HMO plans. However, such coverage may not be appropriate for retirees or those with higher annual medical costs. HSAs and HRAs allow HDHP enrollees to set money aside to pay for out-ofpocket health care costs. HDHP enrollees are encouraged to be prudent about their health care treatment and expenditures.

How will an HDHP/HSA or an HDHP/ HRA help the FEHBP member? An HDHP/HSA or HDHP/HRA provides insurance coverage and catastrophic coverage, and a tax-advantaged way to help save for future medical expenses. They provide greater flexibility and discretion over how to use your health care dollars. However, if you or a member of your family get very sick, you would have to meet your health plan’s catastrophic protection limit, which could be as much as $10,000 out-of-pocket in a calendar year.

My health plan will continue to participate in the FEHBP next year. What do

I have to do if I want to stay with my present enrollment? Don’t do anything if you are satisfied with your present health insurance coverage. Your present coverage is automatically continued unless you make a change, or unless your plan or

rolled for 2011, OPM may enroll you in the plan’s other option, if it is approximately equivalent to the option being terminated, and you do not choose a new plan for 2012.

I am going to change my current

REMEMBER: STARTING THIS YEAR, health plans in the FEHBP will no longer mail you automatically their plan brochures for the new year. You can request that a brochure be mailed to you. option is terminated. For retirees and survivors: If your monthly health benefits premiums for 2012 are more than your monthly annuity, and you do not change to a lesscostly plan or option during Open Season, OPM will send you instructions on what you must do. One option is to keep your current plan but pay the premiums directly to OPM instead of having them deducted from your annuity.

My health plan will not be participating next year. What happens if I do not change to another plan before Open Season ends? If your current plan will not be participating in the FEHBP in 2012, you may elect a new plan during Open Season. For active federal employees: You must elect a new health plan, or you will not have any FEHBP coverage in 2012. For retirees and survivors: OPM will enroll you automatically in Blue Cross/Blue Shield (Standard) if your plan is leaving the FEHBP for contract year 2012, and you do not choose a new plan. If your plan terminates the option of the plan in which you are en-

FEHBP coverage. How will I obtain my new plan identification cards? New plan identification cards are generated by the health plan – not by your employing agency or OPM. The plans usually issue the cards within 30 days from the date they receive your enrollment change from your agency or OPM.

How do I make sure that my spouse is covered by the FEHBP in the event of my death? In order to retain FEHBP coverage, the surviving spouse (if not also a federal employee or retiree) must be eligible to receive a survivor’s annuity benefit and be covered by a family enrollment at the time of the death of the retiree. Survivor’s annuity benefits for a post-retirement marriage must be elected within two years of the marriage. (Note: If you are a retiree and you remarry the person who was your spouse when you retired, and that spouse at retirement waived his or her entitlement to a survivor’s annuity, you cannot elect a survivor’s annuity for that same spouse based on the remarriage to that person.) For active federal employees: Upon OCTOBER 2011 | NARFE

In 2012, we’re giving you 10,000 reasons to smile!

We’ve raised the annual maximum limit for our High Option to $10,000, effective in 2012. To learn more about how The MetLife Federal Dental Plan can help you save money on dental care, visit our website at federaldental.metlife.com Open Season to elect your dental coverage begins on November 14, 2011 and ends on December 12, 2011. Start enjoying more reasons to smile today!

Like most group accident and health insurance policies, MetLife dental insurance policies contain certain exclusions, limitations and terms for keeping them in force. Contact MetLife for more information. Metropolitan Life Insurance Company, New York, NY 10166. © 2011 MetLife, Inc. © 2011 Peanuts. L0811201907(exp1012)(All States)(DC,GU,MP,PR,VI) 1107-2605

PEN SEASON REPORT your death, your spouse would be covered by your FEHBP plan if he or she is eligible for a survivor’s annuity and you are enrolled in family coverage at the time of your death. For active federal employees, survivor’s benefits are determined by operation of law; there is no requirement for active federal workers to elect survivors’ annuity benefits for their spouses in order to protect the spouses’ future FEHBP entitlement.

If I have FEHBP plan coverage, do I need to sign up for Medicare Part D prescription drug plan benefits as well? Your prescription drug benefits under the FEHBP are generally better than, or at least as good as, the prescription drug benefits under Medicare. Most retirees do not need to sign up for Medicare Part D. The OPM contract year 2012 FEHBP plan brochures will each contain a statement telling you that your FEHBP prescription drug

PEN SEASON REPORTS NOVEMBER: 2012 Premiums

DECEMBER: Plan Changes and Prescription Drug Guide

ROC2098NARFEhalfAds.indd 36

benefit is superior to or at least as good as Medicare’s. If you subsequently decide to sign up for Medicare Part D, the plan brochure statement from OPM will excuse you from any Medicare Part D late-enrollment penalty.

Can I find information concerning my FEHBP plan on the Internet? Information on the 2011 Open Season will be posted on the OPM insurance website, www.opm.gov/insure. The OPM site will provide links to the health plan brochures for 2012 before Open Season begins on November 14. Your Open Season notice from OPM also will provide you with other sources.

Retirement Benefits Service Department

2/22/11 1:25:30 PM | NARFE OCTOBER 2011

Questions & Answers NOTE: The following Questions & Answers were compiled by Retirement Benefits Service Department staff. These are real questions received by the Department and real answers, based on the members’ personal circumstances. The answers are not universal and may include information that is relevant to the correspondent’s particular situation. NARFE does not provide legal advice or assistance, does not provide financial planning advice or assistance, and does not provide tax advice or assistance. For legal, financial planning or tax advice/assistance, NARFE recommends members contact an attorney, financial planner or certified public accountant/tax adviser.

ACTIVE EMPLOYEES Lump-Sum Annual Leave

ANNUAL LEAVE QUESTION: How is an annual leave buyout calculated? Is it“accumulated hours x current hourly wage”? Is it considered unearned income? I also have heard that 40 percent is taken out in taxes for this. Response: Lump-sum annual leave payments are calculated using the hourly rate of basic pay you would have received had you remained on the agency’s rolls. Therefore, if you were to retire before the annual pay adjustment becomes effective, any hours before that would be computed at the old rate and those after at the new rate. Any step increase that would have occurred after you retired would not be included. For tax purposes, lump-sum payments are treated as earned income. Check with your agency to find out

what other deductions may be withheld from your lump-sum annual leave payment.

SS EARNINGS LIMIT QUESTION: When I retire, will my Social Security benefit be reduced if my Federal Employees Retirement System annuity is more than the yearly limitation of $1,180 a month? Response: The Social Security earnings limit applies only to earnings from wages or self-employment — not what you receive in your annuity. In 2011, the earnings limit is $14,160 a year, or $1,180 a month, if you are under full retirement age.

at the time of retirement but can reinstate it at a later date.If this is correct, how do you do it? Response: Yes. You can suspend your FEHBP coverage rather than cancel it if you are covered by TRICARE or TRICARE For Life. Go to www.opm.gov/ insure/health/eligibility/tricare.asp and click on “Frequently Asked Questions.”

REPAY BUYOUT? QUESTION: How soon could I return to federal service after taking a $25,000 buyout? Response: You must wait five years. If you return before that, you would have to repay the amount you received, plus accrued interest, to your former agency.

SPOUSE & HEALTH COVERAGE QUESTION:I will retire early in 2012 and will choose a lifetime annuity. I will not opt for a survivor’s benefit for my husband. But can I still carry him under my Federal Employees Health Benefits Program (FEHBP) plan? Response: You can continue to include him under the family option of your FEHBP plan. But if you were to predecease your husband, he would lose that coverage unless he is a federal employee or retiree who would be eligible to continue that coverage in his own right.

TAXES & BENEFITS QUESTION: I am under the Federal Employees Retirement System (FERS) with the Department of Defense. I plan to retire in December 2016 at age 61. At that time,I will have 35 years of service. I will be age 62 in February 2017.I am trying to estimate my take-home pay from Social Security and FERS. Do I have to pay federal taxes on FERS and Social Security,as well as state taxes? What about Social Security taxes and Medicare?

QA &

SUSPEND FEHBP? QUESTION: I am retiring in 2012. I have coverage under the Federal Employees Health Benefits Program (FEHBP) and TRICARE at present but plan to sign up for Medicare before retiring. I don’t think I will need the FEHBP coverage after retirement but would like to keep my options open.I understand that you can request that your FEHBP coverage be suspended

Response: To find out what the taxes will be on your FERS annuity, see IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits, available at www.irs.gov/pub/ irs-pdf/p721.pdf. For tax treatment of Social Security Benefits, the Social Security Administration has a fact sheet titled “Taxes and Your Social Security Benefits” at www.ssa.gov/planners/taxes.htm. To find out how your annuity OCTOBER 2011 | NARFE

50 Beloved Songs of Faith By special arrangement with America’s leading record companies we proudly present one of the most beautiful and needed music treasuries ever made. Yes! You get 50 of America’s favorite stars and groups singing your all-time favorite songs of faith. Your spirits will

soar as you hear each of these famous stars sing of the joy and comfort they’ve found in God’s love. Every song is a cherished favorite and every performer is one you know and love. Read the list of classic hymns and gospel songs below!

The Most Inspirational Gospel Collection Ever Offered! Great Speckled Bird How Great Thou Art May The Good Lord It Is No Secret Roy Acuff Jim Roberts Bless And Keep You Jim Reeves Kate Smith I’ll Fly Away Brighten The Corner Bless This House Charley Pride Anita Kerr Sweet Hour Of Prayer Perry Como Jim Nabors Standing On The Promises Rock Of Ages In The Garden Johnson Family B.J. Thomas The Bible Tells Me So Loretta Lynn Roy Rogers & Church In The Wildwood Old Rugged Cross Take My Hand, Dale Evans Mike Curb Congregation Ray Price Precious Lord Peace In The Valley Eddy Arnold When They Ring Family Bible Floyd Cramer Those Golden Bells George Jones Wings Of A Dove David Houston I Need Thee Every Hour Jesus Loves Me Dolly Parton Scott Singers Lily Of The Valley Tennessee Ernie Ford I Love To Tell The Story Wayne Newton What A Friend We The Family That Prays Pat Boone Have In Jesus Blessed Assurance Porter Wagoner Norma Zimmer & Me And Jesus George Beverly Shea Will The Circle Be Jim Roberts Tammy Wynette & In The Sweet Bye Unbroken George Jones Bringing In And Bye The Carter Family The Sheaves Abide With Me Johnny Cash Beyond The Sunset Burl Ives Don Hustad Chorale Amazing Grace Red Foley Precious Memories Willie Nelson He Touched Me Crying In The Chapel Jimmy Dean Blackwood Bros. Quartet One Day At A Time Elvis Presley I Saw The Light Cristy Lane Nearer My God To Thee Beautiful Isle Of Hank Williams, Sr. Jack Halloran A Beautiful Life Somewhere Male Chorus Someone To Care Statler Brothers The Three Suns Jimmie Davis Jesus Is Coming Soon Swing Low, Just A Closer Walk Oak Ridge Boys Softly And Tenderly Sweet Chariot With Thee Guy & Raina Doris Ackers Anita Bryant When The Roll Is Called Up Yonder Help Me Whispering Hope The Lord’s Prayer Marty Robbins Larry Gatlin The Browns Mormon Tabernacle Choir

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NAME ADDRESS CITY

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Questions & Answers NARFE SERVICE OFFICERS are available to answer questions and to would be treated in your state, you’ll have to check with your state taxing authority. Social Security deductions are taken only from earnings acquired through wages or self-employment — not annuities or other sources of income. Because you have already paid for Medicare Part A coverage through payroll deductions, there won’t be any further payments required unless you have earnings from wages or self-employment. If you elect to be covered by Medicare Part B, you would have to pay the premiums for it.

NEW SPOUSE BENEFIT QUESTION: If I am single at retirement and later get married,can I add my new spouse under my federal health insurance plan? If not,how long

assist in helping with a variety of benefit matters. Check your chapter newsletter for the name and phone number of your service officer. Call NARFE toll-free at

800-456-8410 for the nearest service officer. NARFE Service Centers are also available in some areas. Use the Service Center listings on the NARFE Web site, www.narfe.org.

do I have to wait to do so? Are there any additional costs for adding someone to your plan after retirement? Response: If you marry after retirement, you can change your enrollment under the Federal Employees Health Benefits Program from selfonly to family coverage from 31 days before to 60 days after the marriage. After you do that, your premiums would be those for family coverage rather than self-only.

RETIREES ELIGIBLE FOR ANNUITY? QUESTION:I am age 65.I was in the military for three years and then worked for 2-1/2 years as a civilian for the U.S.Army. In 2010, I worked at a Department of Veterans Affairs (VA) medical center for 16 months. While at the VA,I paid a deposit for my military service so it would count toward my retirement.Do I have enough fed-

OCTOBER 2011 | NARFE

COME, HAVE

FUN WITH US!

NARFE now offers an online retirement calculator and other financial planning tools for members only.Find out more about this new membership benefit at www.narfe.org. eral service to be able to draw a retirement annuity? If not,how much additional time would I need?

wait until you are age 66 to enroll, you would have to pay a penalty.

Response: Based on what you have stated, you are not eligible for a retirement benefit because you did not have at least five years of creditable civilian service. However, it doesn’t hurt to apply anyway. Go to www.opm.gov /forms and download a copy of the Office of Personnel Management (OPM) form 1496A, Application for Deferred Retirement, for service under the Civil Service Retirement System; or RI 92-19, Application for Deferred or Postponed Retirement, under the Federal Employees Retirement System. After filling it out, mail it to OPM, Retirement Services and Management Group, P.O. Box 45, Boyers, PA 16017-0045.

RETROACTIVE BUYOUT?

MEDICARE PARTS A & B QUESTION: I am currently obtaining health care from the Department of Veterans Affairs (I am a disabled vet).I will be age 65 in November.When I turn age 65,I know that I will be eligible for Medicare Part A. Will I also be eligible for Part B? If I am eligible for Part B,would I have to pay for this benefit? If I hold off applying for Social Security until age 66,would I still be eligible for Parts A and B? Response: You will automatically be eligible for Medicare Part A at age 65 at no cost to you. You already paid for that coverage through payroll deductions while employed. If you enroll in Medicare Part B, you would have to pay the monthly premiums. There are no exceptions to this requirement. If you NARFE | OCTOBER 2011

QUESTION: I retired at the end of December 2010.My agency is now offering a buyout for early retirement. Am I eligible for the buyout bonus? I meet the age and service requirements for voluntary early retirement. Response: No. You cannot benefit from the buyout after you have already retired. The sole purpose of a buyout is to entice employees to leave or retire.

DROP FEHBP? QUESTION: I currently have Medicare,TRICARE and Blue Cross/Blue Shield (BC/BS) coverage. I was told that I should drop my BC/BS coverage because I would have the same coverage without the extra expense.I am confused and need your advice. Response: We can tell you that many retirees with TRICARE and Medicare Parts A and B have suspended – not dropped — their coverage under the Federal Employees Health Benefits Program (FEHBP) and are satisfied with the results. By suspending your coverage, you protect your right to re-enroll in the FEHBP if you later lose TRICARE coverage.

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NEW erage.Now that we are age 65,we are keeping our FEHBP insurance and signing up for Medicare Part A because it is free. Is there any reason to purchase Medicare Part B as well? It seems to me that it would just be paying for double coverage that we already have.

Neutronic Ear is the easy, virtually invisible and affordable way to turn up the sound on the world around you. “I’m 96 years old, and I think Neutronic Ear is a great product. I had a digital hearing aid that cost over $2000, but I lost it in the supermarket. There’s nothing wrong with my hearing, I can hear sounds just fine, like a car door shutting or a plane going overhead, but when someone talks to me, I can’t understand the words. My daughter has what I call a “Lauren Bacall” voice– very low, and I just can’t hear her. It’s embarrassing to have to constantly say “Excuse me” and although people say they don’t mind repeating themselves, I think they are only saying that because I’m 96! With Neutronic Ear I can hear and understand her. If I need to, I can turn up the volume. I’m originally from Missouri, and Neutronic Ear has sure “Shown Me” that it works. Thank-you. – G. Austin, MA

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To obtain an answer to a retirement benefits question, call 703-838-7760 and ask for the Retirement Benefits Service Department; send your question by postal mail to NARFE Headquarters, ATTN: Retirement Benefits; or submit it by e-mail to retbenefits@narfe.org.

Correction

he response to the question titled “Reduced Annuity” on p. 30 of the June issue was incorrect. The correct response is: Your annuity will be reduced by 5 percent for every year you are under age 62.

80237

1-877-699-6857

Response: Only each individual can determine if it’s worth it to pay for Medicare Part B as well as FEHBP insurance coverage. You’ll have to assess your medical needs, not just for the present but also for the future. Generally speaking, and with the exception of prescription drug coverage, Medicare Part B duplicates the coverage of your FEHBP plan. You should compare the benefits provided by your FEHBP plan and Medicare Part B. You can find information on the pros and cons of enrolling in Medicare Part B in a fact sheet titled “Frequently Asked Questions” on the NARFE website, www.narfe.org. Click on Retirement Benefits in the left panel on the Main Home Page, then click on the link under Retirement Benefits in the right panel.

you need a hearing aid, please consult a physician.

OCTOBER 2011 | NARFE

NARFE News October Is‘National Chapter Meeting Month’

ctober is “NARFE National Chapter Meeting Month.” NARFE is urging chapters to make a special effort to reach out to members and invite them to attend the October meeting. National Chapter Meeting Month was the brainchild of former Region V Vice President Perry Baker. It was approved by the National Executive Board in 2000 as a way to revitalize NARFE chapters. At the time, member attendance at chapter meetings was dwindling, and it was thought that if chapters set aside at least one month to

present a special program, members might attend. For several years, NARFE Headquarters received reports about such programs resulting in meeting membership increasing dramatically. Then chapters stopped focusing on October as National Chapter Meeting Month, and attendance slowed. With so much work to be done to defend federal benefits, chapter leaders are again urged to create special programs for October and publicize them to members and prospective members. History shows that this can increase meeting attendance and get new

Celebrate NARFE’s 90th! NARFE has 90thAnniversary merchandise for sale: • 90th Anniversary Book, DISCOUNTED to $6! • 90th Anniversary PowerPoint Presentation,$5. • 90th Anniversary Lapel Pin,$3.

rs of Service Celebrating 90 Yea

To order,go to www.narfe.org,click on Leadership at the top,then click on NARFE 90thAnniversary Merchandise.

1 1921-201

people involved in chapters. ■

Passages WALLACE W. ROEPKE FORMER FLORIDA FEDERATION PRESIDENT Wallace W. Roepke, immediate past president of the Florida Federation, died August 16 in Sarasota, FL,at the age of 82. Born and raised in Minnesota,he served in the U.S. Air Force during the KoreanWar and worked for the U.S. Bureau of Mines. He retired in 1991 and joined NARFE the same year. In addition to his service as president of the Florida Federation, he was president of Sarasota Chapter 242 and was active in NARFE legislative advocacy. He is survived by his wife,Nancy; two children; six grandchildren; and two great-grandchildren.

NARFE-FEEA PROGRAM FUND CONTRIBUTION FORM

YES! I would like to help with my contribution. Please check appropriate box(es). To make credit-card contributions,call 800-338-0755. Scholarships are available to children and grandchildren of federal civilian retirees and current federal employees who are NARFE members.

❏ ❏

NARFE-FEEA Disaster Fund NARFE-FEEA Scholarship Fund

Amount $ Amount $

Name

Make check payable to: NARFE-FEEA Disaster Fund or NARFE-FEEA Scholarship Fund. Please mail coupon and check to:

FEEA

Address City

YOUR CHARITABLE CONTRIBUTION IS TAX DEDUCTIBLE TO THE FULLEST EXTENT ALLOWED BY LAW.

State

ZIP

3333 S. Wadsworth Blvd., Suite 300 Lakewood, CO 80227

OCTOBER 2011 | NARFE

Join

NARFE

Who can join?

Today!

To apply:

Membership is open to civilians in any agency of the federal or D.C.* governments including: • Retirees • Active federal employees • Spouses and former spouses of active and retired federal employees • Former employees eligible for deferred annuity • Survivors of those eligible to join NARFE

Check out eNAR FE, our new electronic m embership option, at www.NAR FE .org

• Complete the application below. • Enclose payment information, bill pay, check or money order payable to NARFE, or request to be billed. • Or go to our Web site at www.narfe.org. • Or call us at 800-627-3394 and join today! *Prior to October 1, 1987

Enrollment includes membership in a local chapter and the national association, plus a subscription to NARFE’s monthly publication, NARFE magazine.

NARFE MEMBERSHIP APPLICATION For Active and Retired Federal Employees 1. Choose all that apply: Retiree Spouse Survivor

Active employee Former spouse Former employee

2. Also enroll my spouse __________________________

www.narfe.org

Contact Information:

Full Name: Mr./Mrs./Miss/Ms.

full name

3. Please enroll me in NARFE chapter ______________

Street Address

4. __________ $45 x __________ Membership Fee # of People Per Person Enrolling

City/State/ZIP

= __________ Total Payment

Total payment (check, bill pay or money order payable to NARFE) Bill me (Membership starts when payment is received) Charge to my credit card The first year membership fee includes national and chapter dues.

Credit Card Information: MasterCard Card type: Discover

VISA AMEX

Card no. ___________________________________________ Expiration Date ________________ (MM)

(YY)

Name on Card (Print) ________________________________ Signature ____________________________ Date __________ NARFE | OCTOBER 2011

Apt./Unit

Phone Number E-mail Address Date of Birth Spouse’s Date of Birth (if applicable) Recruiter’s Membership and Chapter Number

MAIL TO:

NARFE Member Records 606 N. Washington St. Alexandria, VA 22314-1914 Fax: 703-838-7783

1Q 45

NARFE Dues Withholding Application Retired Federal Employees Only If you are a Retired Federal Employee and you would like your NARFE dues to be deducted from your annuity payments, fill out the form below.

Dues Withholding Application (Retirees Only) Fill out this form completely and mail to: Attn: Member Records, NARFE, 606 N. Washington St., Alexandria, VA 22314 (Do Not Send Money With This Form). (Please Print) —

—

Civil Service Annuity Number

Social Security Number (9-digits)

(Include prefix CSA or CSF) (Include any applicable suffix)

(Mr., Mrs., Miss, Ms.) Address

Telephone

City, State, ZIP

E-mail

Date of Birth

NARFE Membership Number

NARFE Chapter Number

Authorization 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:

Do You Authorize Your Spouse’s Dues to Be Withheld from Your Annuity? If YES, enter your spouse’s name and membership number below.

Name

Number

❑ Yes

❑ No

You authorize: Annual NARFE dues of $34.00 plus Chapter dues of record to be withheld annually.

I understand that this authorization shall be valid until NARFE receives & processes my written notice of cancellation in accordance with its agreement with the Office of Personnel Management & that any disputes regarding this authorization shall be a matter between NARFE & 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

Date

Dues payments & gifts or contributions to NARFE are not deductible as charitable contributions for federal income tax purposes.

OCTOBER 2011 | NARFE

Out & AW bout ith the Chapters

Rep. Robert C. Scott attended a meeting of Peninsula Chapter 682 in Newport News, VA, and left with a gift of a NARFE mug.

Leaders of Texas Federation’s District 12 met via video conference with members of Sen. John Cornyn’s legislative staff in Washington, DC. From left to right: John Creswell, Dorothy Creswell, Jane Keller, George Rotblut and Sam Pantoja. On the video screen are Keith Franks and Michelle Chin of Cornyn’s staff.

Advocacy Month

hotos are beginning to come into NARFE Headquarters documenting NARFE members meeting with their members of Congress and staff during August, “NARFE Grass-Roots Advocacy Month.” For additional photos, visit our online gallery at www.narfe.org. Click on NARFE magazine.

Officers and members of the Maryland Federation’s Legislation Committee met with Sen. Benjamin L. Cardin. From left to right: Ted Jensen, Gary Roundtree, Evelyn Kirby, Sen. Cardin, Ronald Bowers (Region II vp) and James Cowie.

To submit a photo: E-mail it to rl@narfe.org or send it by postal mail to NARFE Headquarters, ATTN: Out & About. NARFE members contributed for Alzheimer’s research:

SUPPORT ALZHEIMER’S RESEARCH

$10 Million Fund

$9,323,606* *Total as of July 31, 2011 100% of all contributed funds go to Alzheimer’s research. If you have any questions, write to: National Committee Chairman Barb L. Pretzer, 4817 Rockridge Ct. Manhattan, KS 66503 E-mail: bpretzer@ksu.edu

Enclosed is my NARFE-Alzheimer’s contribution: $ ___________. Every cent that is contributed is used for research. Please circle:

Mr.

Mrs.

NARFE-Alzheimer’s Research and mail to: Alzheimer’s Association 225 N. Michigan Ave., 17th Floor Chicago, IL 60601-7633 NARFE | OCTOBER 2011

Ms.

Name _______________________________________________________________ Address _____________________________________________________________ City _______________________________ State _________ ZIP ______________ Chapter number _______________________ Credit Card Information: ❑ Visa

Your charitable contribution is tax deductible to the fullest extent allowed by law. Write your chapter number on check; make it payable to:

Miss

❑ MasterCard

❑ Discover

❑ AMEX

Card Number: __________________________________________________________ Expiration Date:________(mm)/_________(yy) 3-Digit Security Code: _________ Name on Card: (print) ___________________________________________________ Signature:_________________________________________ Date: _______________

NARFE Perks NARFE 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 below and encourages its members to shop and compare before making a decision on any financial matter.

MOVING SERVICES

INSURANCE NARFE INSURANCE SERVICES

NARFE MEMBER HOMEBENEFITS 1-800-666-9203 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 interesete moving services with the nation’s most trusted moving company – Allied Van Lines! *State restrictions apply. Call or visit website for details.

BEKINSVAN LINES 1-800-456-6832 (M-F, 8 a.m.-5 p.m. CT) narfe@bekins.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, locals and international moves will be competitive in cost based on your geographical location. Mention you are a NARFE member and transportation agreement #00930.

VACATION RENTALS

Endless Vacation Rentals® As a member of NARFE, you will receive 10% off the “Best Available Rate” at vacation rental properties booked at www.evrentals.com/narfe or by calling 1877-670-7088, prompt 3, and providing promotion code 20672 at time of booking.

1-800-233-5764 Insurance plans designed and administered exclusively for NARFE members. Call for information on Whole and Term Life, Hospital Indemnity, Accidental Injury and Death Plan, Dental Plan and Cancer Care Plan. For information on Long Term Care call the Long Term Care Unit at 1800-358-3795.

TRAVEL CRUISE SALE! Unbeatable Deals on Royal Caribbean Cruises Bahamas: 5-days/4-nights from $199 Bermuda: 8-days/7-nights from $599 Caribbean: 8-days/7-nights from $469 Europe: 11-days/12-nights from $499 Transatlantic: 15-days/14-nights from $499 There has never been a better time to book Your Next Cruise Vacation!

GEICO: 1-800-368-2734 NARFE members with good driving records may be eligible for quality automobile insurance from GEICO. Ask about the NARFE discount now 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 some states • Discount not available in all states or in all GEICO companies • One group discount applicable per policy.

EMERGENCY SERVICES SINCE 1974 1-800-423-3226 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!

1-800-607-4538 www.NARFEtravel.com

HEARING BENEFITS TRUHEARING The TruHearing program can save you hundreds of dollars: • Free hearing screening • 45-day, money-back guarantee • 3-year warranty • Free one-year supply of batteries • 1,400 hearing professionals nationwide • 12-months, no interest financing (available upon approved credit)

Call to schedule your appointment

877-360-2442 Operators available Mon-Fri 9 a.m.-9 p.m. (East Coast time)

OCTOBER 2011 | NARFE

HOTELS

CAR RENTALS

CREDIT UNION

CHOICE HOTELS INTERNATIONAL 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. To book, visit choicehotels.com

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-CAR-RENT® and reference Contract ID 5282909.

NARFE?S OF FICIAL CREDIT UNION 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 800-3281500, e-mail jparish@narfepremierfcu.

CREDIT CARD AVIS:1-800-331-1441 or call 800-258-2847.

WYNDHAM HOTEL GROUP As a member of NARFE, you will receive up to 20% off the “Best Available Rate” at participating locations when you travel. Call and give 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 memberbenefits hotline 1-877-670-7088 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

NARFE | OCTOBER 2011

The employees/owners of Avis offer guaranteed low rates and quality services to members of NARFE. Mention ID# A991900.

HEALTH SCREENING

LIFE LINE SCREENING Life Line Screening, America’s leading provider of community-based 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 1-800-324-9906 and give the operator code number: BKHN075 or visit www.lifelinescreening. com/NARFE. Coverage may vary and may not be available in all states.

Bank of America now offers the officially approved credit card program for NARFE, featuring the Platinum Plus® MasterCard® with WorldPoints. This is the only credit card that helps support NARFE every time you use it to make a purchase–at no additional cost to you. Call toll-free 1-866-438-6262 Use NARFE’s full name, not NARFE. Use priority code: UABEWD.

NARFE MERCHANDISE NARFE GENERAL STORE

Order Official NARFE Name Badges. Coming soon, customizable NARFE logo products and plaques. See MEMBER PERKS on the NARFE Web site, or go to: www.narfegeneralstore.com. Toll-Free Phone: 877-866-0102 Fax: 301-371-6824

For the Record The chart below tracks the CPI-W, the monthly inflation change, and the cumulative percentage gain for the next CSRS and Social Security COLA. CPI-W October 2010 November December January 2011 February March April May June July August September

214.623 214.750 215.262 216.400 217.535 220.024 221.743 222.954 222.522 222.686

MONTHLY % CHANGE % CHANGE FROM 215.5 +0.1 +0.1 +0.2 +0.5 +0.5 +1.1 +0.8 +0.5 -0.2 +0.07

TSP Stocks Fall For 4th Month ByTracey Ray

or the fourth month in a row, all of the Thrift Savings Plan stock funds declined, and the declines accelerated in August. The C Fund and the I Fund had their worst months since May 2010. And not since February 2009 has the S Fund performed so poorly. All of the damage was done during the first six business days of August, as stocks plunged on fears of a global slowdown and in reaction to the downgrade of the rating on U.S. government debt from AAA to AA by a prominent bond-rating agency. As of August 8, the C Fund had fallen 13.3 percent; the S Fund had declined 18.2 percent; and the I Fund had lost 15.4 percent. By month’s end, the C and S Funds had more than halved those losses, but troubles in euro land weighed on the rebound of the I Fund.

Tracey Ray is chief investment officer of the Thrift Savings Plan. 50

-0.4 -0.4 -0.1 +0.42 +0.95 +2.10 +2.90 +3.46 +3.26 +3.34

Prices Rise Slightly in July

he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.07 percent in July. To calculate the 2012 cost-of-living adjustment (COLA), the indices of July, August and September 2011 will be averaged for a thirdquarter determinant, which will be compared with the 2008 thirdquarter base of 215.495 (because of price deflation in the past two measurement years, the 2008 third-quarter average is still the point of comparison). The July index of 222.686 is up 3.34 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. July’s index is 3.45 percent higher than the December 2010 base index of 215.262. ■

Thrift Savings Plan Investments* Month G Fund September 0.17% 2010 October 0.18% November 0.17% December 0.20% 0.24% 2011 January February 0.22% March 0.26% April 0.25% May 0.25% June 0.21% July 0.22% August 0.19% Last 12 Months 2.60%

F Fund 0.17% 0.36% (0.57%) (1.05%) 0.13% 0.26% 0.06% 1.28% 1.31% (0.30%) 1.59% 1.45% 4.75%

C Fund 8.92% 3.80% 0.01% 6.68% 2.37% 3.42% 0.04% 2.96% (1.13%) (1.67%) (2.04%) (5.44%) 18.46%

S Fund 11.47% 4.48% 3.00% 7.38% 1.23% 4.52% 2.06% 2.94% (1.27%) (2.35%) (3.14%) (8.12%) 22.84%

Month 2010 September October November December 2011 January February March April May June July August Last 12 Months

L 2020 5.54% 2.29% (0.49%) 4.08% 1.35% 2.15% (0.03%) 2.37% (0.74%) (0.84%) (0.94%) (3.69%) 11.26%

L 2030 6.77% 2.78% (0.56%) 4.96% 1.57% 2.60% (0.05%) 2.83% (0.97%) (1.10%) (1.25%) (4.63%) 13.17%

L 2040 7.76% 3.16% (0.64%) 5.67% 1.75% 2.95% (0.08%) 3.20% (1.15%) (1.30%) (1.49%) (5.37%) 14.67%

L Income 2.00% 0.92% (0.05%) 1.49% 0.63% 0.90% 0.17% 1.01% (0.05%) (0.18%) (0.14%) (1.10%) 5.72%

I Fund 9.81% 3.63% (4.84%) 8.12% 2.41% 3.33% (2.23%) 6.03% (2.90%) (1.16%) (1.60%) (9.03%) 10.33% L 2050

3.28% (0.15%) 3.57 (1.39%) (1.48%) (1.75%) (6.16%)

*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.

OCTOBER 2011 | NARFE

Technology Simplified

WOW…A Computer Designed For YOU, Not Your Grandchildren! NEW Just plug it in!!! …It’s easy to read. It’s easy to see. It’s even easier to understand and use!

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Have you ever said to yourself “I’d love screen. This is a completely to get a computer, if only I could figure new operating system, without out how to use it.” Well, you’re not alone. the cluttered look of the normal Computers were supposed to make our lives computer screen. The “buttons” on simpler, but they’ve gotten so complicated the screen are easy to see and easy to that they are not worth the trouble. With all understand. All you do is touch one of them, of the “pointing and clicking” and “dragging from the Web, Email, Calendar to Games– and dropping” you’re lucky if you can figure you name it… and a new screen opens up. out where you are. Plus, you are constantly It’s so easy to use you won’t have to ask your children or grandworrying about viruses, spam and freeze-ups. If this sounds “I love this computer! children for help. familiar, we have great news for Until now the It is easy to read and to you. There is finally a computer very people who that’s designed for simplicity use! I get photo updates could benefit most and ease of use. It’s the WOW from my children and from Email, and Computer, and it was designed grandchildren all the Internet are the with you in mind. ones that have had the time.” the hardest time This computer is easy-to-use, –From Janet F. accessing it. Now, worry-free and literally puts the thanks to the world at your fingertips. From the moment you open the box, you’ll realize WOW Computer, countless older Americans how different the WOW computer is. The are discovering the wonderful world of components are all connected; all you do is the Internet every day. Isn’t it time you took plug it into an outlet and your high-speed part? Call now, and a patient, knowledgeable Internet connection. Then you’ll see the product expert will tell you how you can

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