Issue 2008-07 — July, 2008

This newsletter is published monthly by the Military Retiree Assistance Office outside Osan Air Base in Pyeongtaek, Korea. It is provided primarily for the information of retirees of all services and their families living in the Republic of Korea (South Korea). The information contained herein may not necessarily reflect the views or official positions of the Department of Defense, the U.S. military services and their component commands. If you are receiving this newsletter directly by e-mail, it is because you have subscribed to it and confirmed the subscription. To subscribe or unsubscribe, please follow the instructions contained at the end of the newsletter. All issues of the newsletter are maintained in HTML and Text formats on an index at the Retiree Activities Office web site. The index allows direct access to each news item in each newsletter. Contact the MRAO: in Korea 031-663-0319; outside Korea 82-31-663-0319; e-mail: mrao@rao-osan.com

Korea Retirees' Schedule of Events

• Jul 1 – For USAG-Yongsan, your Retirement Services Officer will be at Yongsan in the Soldier Support Center, Bldg 4034, Room 140, from 0900-1300.
• Jul 4 – U.S. Independence Day, the Retirement Services Office and the Military Retiree Assistance Office will be closed.
• Jul 8 – For USAG-Red Cloud, your Retirement Services Officer will be at the Camp Casey Soldier Support Center (Maude Hall), Room 139, from 0900-1300.
• Jul 14-25 – Military Retiree Assistance Office closed for vacation.
• Jul 22 – For USAG-Daegu, your Retirement Services Officer will be at Camp Henry's Education Center, Bldg 1820, from 1000-1300.

New Retirement Services Officer

Tarita Harris is leaving the Retirement Services Officer (RSO) position effective Jul 1. Her husband has received orders to depart Korea. Replacing Tarita as RSO is Mr. Roger Brown who has been serving as Site Manager for the Military Personnel Division at Camp Casey. Roger will continue to provide the same benefits interface with Jack Terwiel that Tarita has been providing.

Korea Retirement Services Office

MRAO Summer Vacation

The Military Retiree Assistance Office will be closed Jul 14-25 for summer vacation. During this period, I ask that you please limit your calls to true emergencies.

Korea Retirement Services Office

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In This Issue

• Medical Care Matters

  • DoD Pharmacy to Electronically Publish Uniform Formulary

  • Gray Area TRICARE Bill

  • TRICARE Fees Overseas

  • Court Limits Agent Orange Benefits

  
  

• Pay Matters

  • IRS Statute of Limitations

  • CRSC Processing Begins — Have You Applied?

  
  

• Legislation Matters

  • VICTORY AT LAST!

  
  

• Community Matters

  • AAFES Delivers Healthy Return on Investment to Military Community in '07

  • Gates: Normal Korea Tours Possible

  
  

• Federal Service Matters

  • Retirement Upgrade Hits Snag

  • COLA Proposal Gets an Airing

  
  

• Laughing Matters

  • Old Dog, New Trick!

  • Baptist Cowboy

  
  

• Director's Corner

  • Osan Retiree Appreciation Day

  • Keeping in Touch

  
  

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Medical Care Matters

 

DoD Pharmacy to Electronically Publish Uniform Formulary

On Thursday [Jun 5], the TRICARE Management Activity announced that civilian providers will be able to receive the Department of Defense (DoD)'s Uniform Formulary electronically through RxHub. RxHub provides prescription information to Primary Care Managers (PCMs).

The anticipated benefits of the DoD formulary in an electronic format include: providers having more accurate information about the DoD pharmacy benefit, fewer patients presenting non-formulary prescriptions to pharmacies, and improving quality of care as well as provider and beneficiary satisfaction.

The electronic publication of the DoD formulary is the first step toward transmitting prescriptions electronically. According to DoD, the ultimate goal is to send prescriptions electronically to all points of dispensing such as MTF, mail order and retail pharmacies.

NAUS Weekly Update, Jun 6

 

Gray Area TRICARE Bill

Rep. Bob Latta (R-OH) has sponsored legislation (H.R. 6185) that would let reservists who are enrolled in TRICARE Reserve Select (TRS) to continue that coverage after they retire until they reach age 60, when they become eligible for free TRICARE coverage under current law.

On June 5, MOAA and other members of The Military Coalition participated in Rep. Latta's press conference announcing the bill's introduction.

MOAA worked very closely with Rep. Latta's staff in crafting the legislation. MOAA believes strongly that it's unfair to extend TRICARE coverage to drilling reservists, and then drop them from coverage between the time they stop drilling and the time they attain age 60. Their career of service demands some option for continuity of coverage.

Under the new bill, these "gray area" retirees would pay full-cost premiums to participate in TRICARE, contrasted with those currently drilling, who pay 28% of the premium, with the remaining 72% subsidized by the military.

How much would the gray area retirees have to pay? That's not quite clear yet. Under current TRS rules, it would be $289 a month for a single person and $975 a month for a family.

But a recent GAO report concluded that current TRICARE premiums are 45-75% too high based on actual program costs. Both the House and Senate versions of the FY2009 Defense Authorization Bill direct the Pentagon to recompute the premiums based on actual costs.

MOAA Legislative Update, Jun 6

 

TRICARE Fees Overseas

U.S. military retirees and dependents of both active duty and retiree members of the U.S. Military residing outside of the United States will soon be experiencing increased out of pocket expense of up to double or more for using TRICARE. This is happening in spite of Congress' continued refusal in past years and their refusal in May 08 to allow proposed TRICARE fee increases requested in the 2009 [National Defense Authorization Act] NDAA. All active duty military, retirees and dependents are covered by TRICARE for their health care.

TRICARE is a Department of Defense (DoD) Health Insurance Program developed and authorized by Congress. Military member's dependents, retirees and their dependents living in foreign countries that are covered under the TRICARE Standard Program will soon have a new 'country specific index' applied to all medical claims they submit to TRICARE. This new index is a product of the World Bank's survey of the average cost of goods and services in a specific country and resulted in the development of a percentage factor that reflects what amount of goods and services $1.00 would buy in the foreign currency.

Unfortunately, this survey was taken in 2005, prior to the decline of the U.S. dollar overseas and does not accurately reflect the cost of those goods and services in today's dollar. Worse yet, since this survey's results are an average of the cost of goods and services, the survey mixes private health care cost with the foreign government's health care cost (which are normally provided free or at a nominal fee, much like Medicaid).

The program is due to take effect in Aug 08 and will be phased in using a higher allowed percentage for the first year and then the World Bank's percentage starting on 1 Mar 09. The implementation of this program is being done under the DoD's rule making authority; however, it, in effect, skirts the U.S. Congress' directions which established a 25% co-pay for TRICARE Standard beneficiaries.

DoD has apparently rationalized they can do this through the use of survey data from the World Bank. Data that even the World Bank states, in it's handbook on this survey, must take into consideration the foreign exchange rate, (and presumably the inflation rate), for a specific country at the time of making use of their data. The DoD has ignored that part of the study handbook, and is going to ignore the vast difference in health care cost in rural vs. urban settings and private vs. government health care. The program is scheduled to start in the Philippines and Panama first with the intent to later make it the standard for all foreign countries where TRICARE has beneficiaries residing.

An example of how this program will affect the pocket books of the dependents and retirees in the Philippines is:

Other examples for outpatient care have shown a beneficiary cost of 60-70-80% of the total amount of the bill. And then comes the kicker. In most third world countries, such as the Philippines, the patient must pay the hospital bill and doctors/laboratory bills in full prior to discharge from the hospital or prior to receiving medical care. Some hospitals require a deposit of 110% of the estimated hospital bill prior to admission.

In the Philippines, unlike the U.S., a hospital is not required to admit a patient or treat a patient without getting paid for the medical care given. Using the above example there are very few TRICARE users who could come up with $11,200 within a day in order to get treated for a life threatening medical condition.

DoD has refused to use a prevailing rate system for the Philippines, even though this is the manner in which they determine allowable charges in the U.S., (and the U.S. rates are adjusted by zip codes and localities to account for the differences in health care cost in different parts of the U.S.).

This and the use of a new country specific index will force overseas dependents and retirees to shoulder a higher percentage of their health care cost than is required of their counterparts in the U.S. Speculation as to why this is happening is:

Government should treat equally all active and retired military members who served their country honorably. If you feel to not do so is wrong you are encouraged to contact your Senate and House representatives and tell them to stop DoD from eroding our overseas military community's benefits. Congressional contact information can be obtained from https://forms.house.gov/wyr/welcome.shtml. [Source: Various, 9 Jun 08]

RAO Baguio Bulletin Update, Jun 15

A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort. — Herm Albright

 

Court Limits Agent Orange Benefits

Some Navy veterans who served in Vietnam and now claim they are sick because of exposure to the herbicide Agent Orange during the war now bear a heavier burden of proof if they hope to earn disability compensation and health care for their conditions from the Department of Veterans Affairs (VA).

The U.S. Court of Appeals for the Federal Circuit ruled May 8 that the VA correctly defined "service in Vietnam" as actually setting foot on land or navigating the country's inland waters, rather than off the coast. The ruling overturns an earlier Court of Veterans Appeals decision that would have forced the VA to broaden its definition, and as a result open the doors to compensation and treatment to more veterans. The decision in the case, Haas v. Peake, is available online at find it at: http://www.cafc.uscourts.gov/opinions/07-7037.pdf.

Armed Forces News, Jun 27

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Pay Matters

 

IRS Statute of Limitations

Often American expatriates do not file a US tax return under several mistaken assumptions. The three main ones are:

Actually US tax laws require US citizens and resident aliens to report their worldwide income annually unless their income is below the combination of a Standard Deduction and Exemption amounts. In 2007 a Single filer's Standard Deduction was $5,350 and Exemption $3,400. So unless as a Single filer you were below this $8,750 ($5,350 + $3,400) threshold, filing an income tax return in a foreign country does not excuse you from filing stateside.

The Foreign Earned Income Exclusion (FEIE), worth $85,700 in 2007, is intended to help US filers from being taxed twice on their foreign income. But FEIE cannot be applied against investment and other forms of income. Nor can it be taken if [Internal Revenue Service] IRS challenges a nonfiler to report prior year foreign earnings and decides against allowing FEIE. So even if those foreign earnings are excluded from US taxation, they are still reportable. Staying under the radar is risky, especially as IRS is steadily increasing its reach via international tax treaties and auditors.

The worst scenario is to be discovered and face possible criminal sanctions for tax avoidance. Under IRS Statute of Limitations, taxpayers have three years to claim a tax refund. IRS has three years to audit a tax return or assess additional taxes. And ten years to collect outstanding tax liabilities. Anyone who has not filed a US tax return for some years from overseas should take the offensive approach by filing rather than being put on the defensive by an aggressive and suspicious IRS auditor. The Service asks that three years' returns be filed. [Source: The Tax Barron, Jun/Jul 08]

RAO Baguio Bulletin Update, Jun 15

(Jack Adds: Neither your military retired pay nor other benefits such as Social Security are foreign earned income and tax must be paid on these benefits. Even if you think you don't owe tax, you must file, unless your total income is below the threshold for your filing category (single, married, etc).)

If a nation expects to be ignorant and free, it expects what never was and never will be ... The People cannot be safe without information. When the press is free, and every man is able to read, all is safe. — Thomas Jefferson

 

CRSC Processing Begins — Have You Applied?

Earlier this month, DoD provided new Combat-Related Special Compensation (CRSC) guidance to the Services, implementing the law change that extended CRSC eligibility to members with less than 20 years of service who were retired for medical reasons or under the Temporary Early Retirement Authority (TERA) during the 1990s force reduction.

The services began processing claims for the new eligibles on June 8. The process is not automatic. Eligible members with combat/combat-related disabilities must apply through their Service CRSC office before they can receive any compensation.

Compensation amounts vary widely based on several key factors, including rank, years of service, DoD and VA disability ratings, and the portion of the disability that's due to combat. Based on individual circumstances, retirees may receive CRSC awards that restore part or all their longevity-based retired pay. In certain other cases, they may see no change in their pay.

Our best advice to those with combat/combat-related disabilities: apply!

The following link provides several examples of how the CRSC expansion can affect members.

MOAA Legislative Update, Jun 28

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Legislation Matters

 

VICTORY AT LAST!

Last week we said it was likely both the House and Senate would pass the defense supplemental bill by last Friday and the bill would then be on its way to the President for his signature this week. But, as is so often the case in Washington, everything takes longer than you think.

But we were only a week off. And last night, the Senate finally passed the war supplemental spending bill by a vote of 92-6. The bill is now on its way to the White House and Administration officials have already said the President will sign it.

The war funding parts of the bill provide a total of $165.4 billion to support operations in Iraq and Afghanistan: $99.5 billion for the remainder of this fiscal year and $65.9 billion for the first nine months of fiscal year 2009.

It provides billions of dollars for Midwest flood relief, rebuilding of levees destroyed by Hurricane Katrina, military construction funding, as well as funding for the State Department, the U.S. Agency for International Development and international food aid.

It bars construction of permanent U.S. bases in Iraq and requires the Iraqi government to match funds designated for Iraqi reconstruction on a dollar-for-dollar basis. And it contains a 13-week extension of unemployment benefits, as well as a delay of an administration proposal for six Medicaid regulations that would have shifted some costs of the program to the states.

Most importantly, and the reason for TREA's strong support for the bill, is the new GI Bill of Rights contained in the measure. The section of the measure is based upon Senator Jim Webb's original bill to update the 1944 GI Bill.

To briefly summarize, the new GI Bill will entitle veterans who have served since Sept. 11, 2001, to full tuition for four years at any public university in their home state, plus a housing stipend, after 36 months of active-duty service.

There is also a major upgrade for members of the Reserve components. With the new law, activated members will "earn as they serve." Benefits will accrue from 91 days (40%) up to 100% for 36 mos. aggregate service. That means that most of the 652,000 Guard and Reserve who have been activated since 9/11 are entitled to New GI Bill benefits. For the 150,000 who have multiple tours and for those in the pipeline for a second or third tour, benefits will accrue accordingly.

The other upgrade is that transferability is authorized for ALL GI Bill programs – the new GI Bill, and the active duty and reserve component MGIB programs. The caveat is that the language allows DoD to adjust the service requirements and to issue implementing regulations. That could result in a very narrow implementation scheme.

Any member of the G-R who had previously served in the active armed forces since 9/11, is also entitled to the New GI Bill including those who declined the active duty MGIB (Chap 30).

TREA Washington Update, Jun 27

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Community Matters

 

AAFES Delivers Healthy Return on Investment to Military Community in '07

Right-sized inventories, streamlined logistics and a sustained focus on accountability paid off for military Families last year as the Army & Air Force Exchange Service (AAFES) delivered more than $272 million in support to Morale, Welfare and Recreation (MWR) programs in FY 2007.

"The dividend represents an increase of approximately 17 percent over FY 2006," said AAFES' Commander Brig. Gen. Keith Thurgood. "This proves that even during tough economic times, the exchange benefit can thrive and remain a relevant quality of life enhancement for its shareholders, the authorized military shoppers who make the BX or PX their first choice."

With a mission to provide quality goods and services at competitively low prices and generate earnings to support MWR programs, the dual benefit AAFES provides military Families goes far beyond the clothes, electronics or consumables available at the exchange. Shoppers who exercise their exchange benefit at the BX/PX, online at www.aafes.com or over the phone through the Exchange Catalog actually help make the military community a better place to live and work. In fact, purchases made in the past 10 years have provided more than $2.4 billion to military MWR programs such as Youth Services, post functions and aquatic centers.

"AAFES continues to be a major non-pay benefit, of nearly $2 billion annually, for today's military because the dollars troops and their families save and spend at the exchange generate a healthy return on investment that directly improves critical quality of life services," said Thurgood.

Historically, roughly two-thirds of AAFES earnings are paid to MWR programs. In addition to funding MWR efforts, AAFES earnings are used to build new stores or renovate existing facilities without expense to the Federal government. Funds to contract these new or replacement facilities also come entirely from sales of merchandise and services.

AAFES support to the military in FY 2007 was not limited to Soldiers and Airmen. Because AAFES operates at Marine and Navy locations, AAFES was also able to return funds to Marines and Sailors. The FY 2007 projected dividend of $272.7 million was distributed as follows:

Army:	$144.8M
Army National Guard:	$20.1M
Air Force:	$91.4M
Marines:	$15.8M
Navy:	$.6M
TOTAL:	$272.7M

AAFES News Release 08-032, Jun 6

We must take back our nation from all the people who think that anything that offends them should be removed. — Unknown American

 

Gates: Normal Korea Tours Possible

Calling it a "matter of principle," Defense Secretary Robert M. Gates said that the time has come to end unaccompanied tours for the 28,000 troops stationed in Korea. But before the U.S. military contingent in Korea, largely consisting of soldiers and airmen, could move their families there, funding to pay for housing, facilities and services would have to be found, Gates said June 2. His remarks came as Gates promoted Army Gen. William "Skip" Sharp as commander of United Nations Command, Combined Forces Command, and U.S. Forces Korea. Sharp succeeds Army Gen. Burwell "B.B." Bell as the top military leader in Korea.

Armed Forces News Issue, Jun 6

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Federal Service Matters

 

Retirement Upgrade Hits Snag

[The Office of Personnel Management] OPM has issued a stop work order on a main component of the RetireEZ system that it started rolling out earlier this year that is designed to automate more retirement transactions and begin paying annuities sooner. The problem arose with the software that calculates benefits, after testing indicated potential problems. OPM has been continuing to use its former calculation process running parallel with the new system for those employees moved into RetireEZ so far, which includes OPM's own employees. GAO had raised warning flags about the calculation function in several reports issued before the new system started phasing in. The stop work order is only a temporary delay, and OPM is continuing with other aspects of RetireEZ, including moving employment records from paper to electronic files.

FEDweek Weekly Issue, Jun 4

 

COLA Proposal Gets an Airing

The Senate federal workforce subcommittee has held a hearing to examine proposals to eliminate the "non-foreign area" cost-of-living allowance program and replace it with locality pay. Under the program, about 49,000 employees in Alaska, Hawaii, Guam and the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands receive additional tax-free pay linked to living costs; an [Office of Personnel Management] OPM official said at the hearing that the program is inconsistent with locality pay for general schedule employees, which is based on local labor market conditions, not living costs.

OPM argues that even though locality pay is taxable, employees generally would benefit from such a switch because locality pay counts toward retirement benefits while the COLAs don't. The official also noted that the COLAs are capped at 25 percent above the GS base table – most of them are at or near that limit – but no cap applies under the locality system and some of the higher-paid localities are above that figure already. Separately, OPM has raised the rate for Puerto Rico to 13 percent and the rate for Hawaii County, Hawaii, to 18 percent, effective with the first full pay period starting on or after June 30.

Many Issues Would Need to Be Resolved

Any change in the non-foreign area COLA system likely would be phased in over a number of years – seven, under the OPM proposal but only three under a pending Senate bill (S-3013). One issue to be worked out is how the locality pay would be structured – employee organizations want to make sure that employees wouldn't suffer a net pay cut because of the taxability of locality pay – and how a new locality rate would be set until the Labor Department could conduct the kinds of studies in those places that are used to set locality pay in the contiguous states. Also, the bill would give affected employees a one-time choice between staying in the COLA system or going into the locality pay system, an option the administration opposes.

FEDweek Weekly Issue, Jun 11

 

Reminder Sent on Deployment Benefits

[The Office of Personnel Management] OPM has sent a memo to agencies reminding them of the various benefits available to federal employees assigned to combat zones, saying it is concerned that not all employees in such assignments are getting the full range of benefits to which they may be entitled. The memo noted that special benefits include danger pay and hardship differentials, a higher annual limit on total pay including premium pay, recruitment and retention incentives, time-off awards, travel benefits for rest and recuperation and excused absence with pay and without charge to leave.

FEDweek Weekly Issue, Jun 18

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Laughing Matters

 

Old Dog, New Trick!

An old, tired-looking dog wandered into the yard. I could tell from his collar and well-fed belly that he had a home.

He followed me into the house, down the hall, and fell asleep in a corner. An hour later, he went to the door, and I let him out.

The next day he was back, resumed his position in the hall, and slept for an hour. This continued for several days.

Curious, I pinned a note to his collar: "Every afternoon your dog comes to my house for a nap."

The next day he arrived with a different note pinned to his collar:

"He lives in a home with ten children – he's trying to catch up on his sleep. Can I come with him tomorrow?"

from Ann F. by way of Docs Daily Chuckle and "Christian Voices"

A man likes his wife to be just clever enough to comprehend his cleverness, and just stupid enough to admire it. — Israel Zangwill

 

Baptist Cowboy

A cowboy, who is visiting Wyoming from Texas, walks into a bar and orders three mugs of Bud. He sits in the back of the room, drinking a sip out of each one in turn. When he finishes them, he comes back to the bar and orders three more.

The bartender approaches and tells the cowboy, "You know, a mug goes flat after I draw it. It would taste better if you bought one at a time."

The cowboy replies, "Well, you see, I have two brothers. One is in Arizona, the other is in Colorado. When we all left our home in Texas, we promised that we'd drink this way to remember the days when we drank together. So I'm drinking one beer for each of my brothers and one for myself."

The bartender admits that this is a nice custom, and leaves it there.

The cowboy becomes a regular in the bar, and always drinks the same way. He orders three mugs and drinks them in turn.

One day, he comes in and only orders two mugs. All the regulars take notice and fall silent. When he comes back to the bar for the second round, the bartender says, "I don't want to intrude on your grief, but I wanted to offer my condolences on your loss."

The cowboy looks quite puzzled for a moment, then a light dawns in his eyes and he laughs.

"Oh, no, everybody's just fine," he explains, "It's just that my wife and I joined the Baptist Church and I had to quit drinking."

"Hasn't affected my brothers though."

from the Internet

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Director's Corner

 

Osan Retiree Appreciation Day

The Osan AB Challenger Club hosts a Retiree Appreciation Day on the second Saturday of the third month of each quarter. At these events, the Military Retiree Assistance Office (me) either provides a briefing or invites a guest speaker from the Osan military community. The presentation is followed by a great meal at no cost to the attendees.

The June 14 RAD was especially informative with the 51st Fighter Wing Commander, Col Jon Norman, as the guest speaker. There were no slides and no notes, but Col Norman spoke extemporaneously for 40 minutes about Osan from his perspective. It was extremely informative and, though much of what we'd like to see is delayed by budget limitations, Osan will continue to improve. It may not be as fast as we all would like, but improvements are coming. Patience and participation are the key.

Jack Terwiel

Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so. — Douglas Adams

 

Keeping in Touch

One of the problems I've encountered, particularly with the widows, is the frequency with which phone numbers change. Cell phones have allowed some widows to discontinue their landline telephone service. And cell phones are easy to change to take advantage of the new services that service providers and phone makers continue to add. When a phone is swapped, a new number is often part of the swap.

What the widows fail to remember is to keep me posted when they change their phone number. As a result, when a problem is brought to my attention and I try to contact the widow, I find the number is either no longer working or has already been assigned to someone else.

Although the problem is not as 'rampant' among retirees, I just want to provide a reminder that if you change your phone number (home or cell), please let me know either by phone or e-mail (or snail mail).

Jack Terwiel

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