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Volume 22 Number 1 January - February 2008 New Legislation Affects TRICARE Supplements Many TRICARE beneficiaries have received letters from their employer stating they will no longer offer TRICARE supplements as an employer sponsored medical option effective January 1, 2008. TRICARE beneficiaries should look closely at their health care options. A provision of the John Warner National Defense Authorization Act for fiscal year 2007 prohibits employers from offering their employees financial or other incentives to use TRICARE rather than the company s Group Health Plan (GHP). The legislation applies to any employer, including states and units of local government with 20 or more employees, and mirrors the same prohibition that currently applies to Medicare. Beneficiaries have earned their right to TRICARE benefits through their service and this remains unchanged. TRICARE beneficiaries should take measures to understand and look closely at all of their health care options offered by TRICARE and their current employer before deciding what is best for them and their families. Eligible beneficiaries can enroll in TRICARE on their own without taking employer incentives if desired. The employer can still offer cafeteria plans to their TRICARE eligible beneficiaries as long as the plans are offered to all of their employees, including those that are not eligible for TRICARE. The legislation does not have an impact on TRICARE Supplement plans that are not offered by the employer, but are sold by beneficiary associations or commercial insurers. A cafeteria plan is defined as a fringe-benefit plan under which employees may choose among various benefits that best fit their needs, up to a specified dollar value. The legislation was initiated after evidence showed many employers were consciously working to shift their health care costs to TRICARE by offering financial incentives urging eligible employees to use TRICARE rather than the employer s GHP. For more information about TRICARE supplements visit http://www.tricare.mil/mybenefit/home/medical/ohi/ SupplementalInsurance. For information about enrolling in TRICARE visit www.tricare.mil. by Chuck Partridge Government Relations FY2008 Defense Appropriations Act Signed by the President In the closing weeks of 2007, Congress passed and the President signed the FY2008 National Defense Appropriations Act. They finished work on the Appropriations bill before completing work on the Authorization Act, which happens from time to time, but is not the best way to do business. However the 2008 fiscal year began on 1 October 2007, so Congress was under pressure to fund the Defense Department rather than to keep passing stop-gap funding measures. Defense was the first of the 12 Appropriations bills to be enacted. The Defense bill also had funding for the other Departments of the Executive Branch pending the passage of their spending bills. Military Pay Raise Although the Administration requested only a three per cent military pay raise, Congress included appropriations needed to increase that to 3.5 %. This increase is part of a longstanding effort to bring military pay levels up to equivalent private sector civilian pay by providing military personnel an annual wage increase that is one-half of one percent more than the average annual civilian wage increase based on the Employment Cost Index (ECI). AMS President Douglas Russell, who has led AMS in its fight to improve basic pay for all military personnel, said, We thank the Congress for increasing the amount of the pay raise and look forward to working with our friends in Congress to speed up efforts to completely close the gap. TRICARE Fees The Administration had planned to continued on page 3

President s Column Douglas Russell Happy New Year! As we look forward to another year, I have to mention some news that came out near the end of 2007. An organization called The Alliance to End Homelessness published a report that said one-fourth of the homeless people in the U.S. are veterans. Yet veterans make up only 11 percent of the general adult population. According to their findings, on any given night out of 744,313 homeless people throughout the nation, 194,254 are veterans. That compares to VA figures of 250,000 homeless veterans 20 years ago. Even more disturbing is the fact that younger veterans from Iraq and Afghanistan are seeking help from shelters and food kitchens. In fact, the VA has identified 1,500 Iraq/ Afghanistan homeless veterans. Homeless veterans are, of course, always a concern. But the fact that so many from Iraq/Afghanistan are already showing up is very troubling. Contrast that with the fact that it took about ten years after the end of the Vietnam War for those veterans to start showing up in the homeless shelters. You may have already heard that Iraq/Afghanistan veterans face longer periods of sustained combat than any other veterans in U.S. history. As a result there may be a tidal wave of them with severe and long-lasting mental and emotional problems which will result in their homelessness sooner or later and it looks like it will be sooner. Let me close with a quote from an Associated Press article about homeless veterans. When the Vietnam War ended, that was part of the problem. The war was over, it was off TV, nobody wanted to hear about it, said John Keaveney, a Vietnam veteran and a founder of New Directions in Los Angeles, which provides substance abuse help, job training and shelter to veterans. I think they ll be forgotten, Keaveney said of Iraq and Afghanistan veterans. People get tired of it. It s not glitzy that these are young, honorable, patriotic Americans. They ll just be veterans, and that happens after every war. With your continued support, AMS will fight to help make sure no veteran -- homeless or otherwise -- is forgotten. And we ll keep fighting for your earned benefits as a military retiree. House Va Committee Passes Walz-Kline Bill to Modernize Guard Benefits The House of Representatives Veterans Affairs Committee has recently unanimously passed legislation authored by Congressman Tim Walz and fellow Minnesota Representative John Kline to modernize G.I. benefits for National Guard troops. H.R. 3882, the Fair Benefits for Guard and Reserve Act, will amend the Montgomery G.I. Bill by altering the requirements for receiving Chapter 30 G.I. Bill benefits. This bipartisan legislation has 57 Democratic and 57 Republican co-sponsors, including every member of the Veterans Affairs Committee. When the Montgomery G.I. Bill was written, no one could have imagined the current role that the Guard and Reserve play in combat operations, Walz said. The enhanced role the Reserve Component has played in the wars in Iraq and Afghanistan forces us to reevaluate the benefits Guard and Reserve service members receive. When members of the 1/34 th Brigade Combat Team returned from Iraq, many of them found that they were not eligible for expanded education benefits due to a technicality. This bill provides those service members, and others like them, the benefits they deserve, Walz, a former Command Sgt. Major with the 1/34 th Brigade Combat Team, said. I m pleased that my colleagues on both sides of the aisle agree that it is necessary to modernize the G.I. Bill for the benefit of our men and women in uniform. In order to qualify for Chapter 30, Active Duty educational benefits under the GI bill, soldiers must serve at least 20 months on Active Duty and must be ordered to Active Duty for 730 days or longer. H.R. 3882 amends the Montgomery G.I. Bill to ensure that soldiers who have served for 20 months receive Active-Duty level education benefits, regardless of whether or not they were ordered to duty for 730 days. In addition to authoring H.R. 3882, Congressman Walz has received personal assurances from Secretary Gates that the Army is doing everything that it can to ensure that members of the 1/34 th Brigade Combat Team (BCT) of the Army National Guard receive the benefits they deserve. The Department of Defense has dispatched teams of Army experts over the last few weeks to assist members of the 1 st BCT at Walz s request and has been tasked with resolving all cases within ten days of receiving each soldier s paperwork.

Report from the Hill continued from page 1 impose huge increases in TRICARE fees and deductibles which would have resulted in increasing health care costs to retired military personnel, their families and survivors of $800 to $1200 per year. However, military and veterans associations, including AMS, worked closely with our friends in Congress to prevent this unfair breach of promise to retirees. These efforts paid off and Congress increased the Defense Health Program by $1.9 billion to cover those costs for FY2008. However, as we have mentioned before, this issue will come up again. There is increasing pressure to impose greater fees and deductibles on retirees. The DoD Task Force on the Future of Military Health Care is calling for increased fees. So, we need to be ready to fight. Concurrent Receipt A longstanding issue AMS supports is extending concurrent receipt to all individuals medically discharged from service prior to serving for 20 years. Congress is considering extending Combat Related Special Compensation (CRSC) to retirees with at least 15 years of service and greater than 50 per cent disability or granting CRSC to all Chapter 61 retirees with service-related disabilities. Survivor Benefit Plan Issues Beginning in 2005 the National Defense Authorization Act started the process of ending the SBP/Social Security offset which reduced the SBP annuity from 55% of retired pay to as much as 35%. In April 2008 the phase-out will be completed and surviving spouses will no longer suffer the reduction in SBP at age 62. That has been a major goal of AMS and many other associations. Other SBP issues include ending the SBP/ DIC offset which has not yet been fully settled and is an injustice that must be corrected. Imposing an offset to SBP because of the service-connected death of service members is a disgrace to the nation. Insurance executives trying to sell a policy like this would be in jail. Finally, AMS has long supported the paid up provision of SBP premiums at age 70 after paying premiums for 30 years. The paid up provision is currently scheduled to take effect on 1 Oct 2008. TRICARE Incentive Prohibition A provision of the National Defense Authorization Act for 2007 prohibits employers from offering their employees financial or other incentives to use TRICARE rather than the company group health plan. The legislation applies to any employer, including states and units of local government with 20 or more employees. Unfortunately the language is so broad and ambiguous some employers are telling their retired military employees that they will no longer allow them to use their cafeteria plans to pay for TRICARE supplemental insurance or TRICARE co-pays and deductibles (cafeteria plans are fringe-benefit plans that allow employees to choose among various benefits that fit their needs and pay for them on a pre-tax basis). Cafeteria plans offer significant income-tax savings. While AMS and other associations have no problem with prohibition of improper incentives, we opposed and continue to oppose the broad, ambiguous language that is creating problems for retirees in using their cafeteria plans to pay TRICARE-related medical expenses including supplemental insurance. FY 2008 Veterans Appropriations Bill The Veterans Administration Appropriations Bill for 2008 provides $3.7 billion more than the White House asked for and $6.6 billion more than last year. Key features of the bill include additional funding to hire and train more claims processors to reduce the huge claims backlog. The bill provides for additional funding for health care as well. This is an especially critical need. The VA provides health care to some 5.8 million veterans, including more than 260,000 who served in Iraq and Afghanistan. Many of these suffer from Traumatic Brain Injury and Post Traumatic Stress disorder. There are a large number of other seriously injured veterans who will need a lifetime of care because of the nature of their wounds. In addition, the VA needs to continue to provide care for veterans of other wars. As Vietnam veterans age, there will be additional demands on the VA. These issues must be kept in front of Congress to insure they are not pushed aside by other priorities. AMS Legislative Goals for 2008 The goals listed below are not all inclusive. We will react to challenges to AMS members interests as they develop over the legislative year. AMS overriding goal is adequate funding for national security including protection of our homeland. This is the President s and Congress highest priority under the Constitution and we must all ensure that our elected officials accept this as their highest priority. Fully fund the Defense Health Program. Protect the military health care benefit including Military Treatment Facilities, The Uniformed Services University of the Health Sciences, Graduate Medical Education Programs, and the number and quality of uniformed military health care professionals. Support actions to protect the nations prescription drug supply. Fully fund the Veterans Affairs Independent Budget. Solve the claims backlog problem. Enact full Concurrent receipt. End SBP/DIC offset. Upgrade National Guard and Reserve benefits. Enact flag protection legislation. Improve the Montgomery GI Bill.

President Signs COLA and Other Veterans Measures Near the end of 2007, President Bush signed legislation which Congress had passed that establishes a program intended to reduce suicide among veterans, provides a 2.3 percent Cost-of-Living Adjustment (COLA), and honors a distinguished veteran. H.R. 327, the Joshua Omvig Veterans Suicide Prevention Act, as amended, became Public Law 110-110. It directs the Department of Veterans Affairs (VA) to develop and implement a comprehensive program to reduce the incidences of suicide among veterans. Components of the program include If you are a Veteran who has received or is receiving either Compensated Work Therapy or Incentive Therapy programs, the following is very important for you. The Department of Veterans Affairs (VA) Compensated Work Therapy (CWT), and Incentive Therapy (IT) programs are work therapy programs intended to help veterans receiving treatment at VA Hospitals to return to employment. Veterans who have participated in these programs and received payments from VA as part of their therapy may have had their All active duty branches of the Armed Services, as well as four of the six military reserve components, reported that they met their recruiting goals for FY 2007, which ended on September 30. Only the Army and Air National Guard missed their goals for the year. However, the Army has been tasked with boosting its numbers by 65,000 over the next two years. As a result, it was reported by the Associated Press late last year that the Army is looking at once again lowering its standards by making it easier for people with minor criminal records to join. Currently, about 18 percent of Army recruits need waivers for criminal behavior such as drug use, stealing, carrying weapons on school grounds, and fighting. That s a education and training for VA staff and medical personnel, health assessments of all veterans who receive VA medical care, mental counseling and treatment, and a 24-hour toll-free mental health care hotline. Commendably, VA earlier recognized the need for such a program and has already implemented actions reflective of requirements of the Act. H.R. 1284, the Veterans Compensation Cost-of-Living Adjustment Act of 2007, became Public Law 110-111. It increases the rates of compensation for veterans with serviceconnected disabilities and the rates of dependency and indemnity compensation for the survivors of certain disabled veterans by 2.3 percent. The COLA was effective December 1, 2007. H.R. 1808, became Public Law 110-112. It designates the VA hospital in Augusta, Georgia, as the Charlie Norwood Department of Veterans Affairs Medical Center. Charlie Norwood served in the Army from 1967 to 1969, and was awarded the Combat Medical Badge and two Bronze Stars. He served as a member of the U.S. House of Representatives from January 4, 1995 until his untimely death on February 13, 2007. payments reported to the Internal Revenue Service (IRS), if they received over $600 in any year. The payments from these programs may have been treated as taxable income, based on IRS regulations in place at the time. The United States Tax Court has recently determined that the payments from these VA programs are not taxable because they are tax-exempt veterans benefits. Veterans who reported CWT or IT work therapy program payments as taxable income may be eligible to file amended tax returns claiming refunds of the tax they paid on program payments. Veterans who reported these payments as taxable income are advised to speak with a tax advisor regarding this matter. Recruiting Goals Met for FY 2007 But Army Contemplates Lowering Standards Again three percent increase over 2006 and it reflects the results of standards that have already been lowered. According to the AP report, Army officers at Ft. Sill, Okla., said they already spend a great deal of time dealing with discipline problems. One officer reportedly told the Chairman of the Joint Chiefs of Staff Adm. Mike Mullen that when he was in Iraq he would spend long hours into the night dealing with what he called problem children. However, the Army s deputy chief of staff for personnel, Lt. Gen. Michael Rochelle, said the consideration of lowering the standards is necessary. Now, he said, many recruits who were arrested as juveniles for minor fights or theft are forced to get waivers if they were never convicted of the crime.

House Speaker Pelosi Meets With Veterans Groups For the third time in 2007, Speaker of the House Nancy Pelosi met with representatives from Veterans and Military Service organizations late last year. And she wasn t alone. During the meeting, which was scheduled to last 45 minutes but which actually continued for nearly an hour and one-half, the Speaker was joined by 22 other members of her caucus, including six of eight members of the House majority leadership. Pelosi and the other members continually thanked the veterans groups for all their help in passing a record increase in the VA discretionary budget for FY2008 a $6.6 billion increase. Among the items included in that record budget was an increase in the mileage reimbursement from 11 cents to 28 cents per mile. The last time the reimbursement had been increased was 1979. Members of the veterans groups expressed appreciation to the Speaker for her willingness to meet with them and for her efforts on behalf of veterans to increase the VA budget by more than $3.7 billion over the Administration s proposed budget for FY2008. Akaka Introduces Compensation For Combat Veterans Act Legislation to Improve Combat Veterans Eligibility for Compensation U.S. Senator Daniel K. Akaka (D-HI), Chairman of the Veterans Affairs Committee, has introduced legislation to remove documentation barriers that in some cases prevent combat veterans from receiving compensation for their disabilities. The Compensation for Combat Veterans Act, would provide that evidence in a veteran s record of assignment in a combat zone shall be sufficient for a veteran to prove his or her combat service, when other military documents are unavailable. Chairman Akaka said: Veterans should never be denied compensation for disabilities sustained in combat areas because the military failed to make or maintain adequate records. I urge my colleagues to support this legislation so all combat veterans can receive the compensation they are entitled to and deserve. Oversight investigations by the Committee on Veterans Affairs found that veterans are being delayed or denied compensation for combat injuries because they are unable to produce official military documentation proving their personal participation in a specific combat incident. These veterans include a Marine injured in Iraq by an IED blast, a veteran accidentally shot by a fellow servicemember in Iraq, and a Vietnam Army Infantryman who served in the Tet Offensive of 1968. VA and DoD Pilot Single Physical One Exam Used for Fitness for Duty and Disability Pay In a landmark agreement to simplify life for service members with medical problems as they leave the military and return to the civilian world, the Department of Veterans Affairs (VA) and the Department of Defense (DoD) have signed a memorandum to pilot a single physical examination to be used by both Departments. This agreement commits VA and DoD to develop a single process to assess the medical conditions of wounded, injured or ill service members, said Acting Secretary of Veterans Affairs Gordon H. Mansfield. We will make it easier for these heroes to go back to their homes, with the key questions about their eligibility for VA compensation already decided. The agreement, signed Nov. 6 by Mansfield and Dr. David S.C. Chu, Under Secretary of Defense for Personnel and Readiness, calls for a pilot program to evaluate a single physical examination that would be used by DoD to determine the medical fitness of injured personnel to remain in uniform and by VA for awarding disability compensation. The announcement continues progress on the recommendations of the President s Commission on Care for America s Returning Wounded Warriors, co-chaired by former Sen. Robert Dole and former Health and Human Services Secretary Donna Shalala. The pilot, which begins late this month, involves VA and DoD facilities in Washington, D.C. Service members from the Walter Reed Army Medical Center, the National Naval Medical Center in Bethesda, and the Air Force s Malcolm Grow Medical Center at Andrews Air Force Base will participate in the pilot. Medical evaluations will be performed by VA, although the agreement notes the physicals could actually take place in VA medical centers, military installations, VA contracted examination centers or other facilities. The memorandum says the process lays the foundation for building a network of qualified providers and resources that will meet both DoD and VA requirements and ease the transition of members from military service to veteran status. The evaluations will be based upon VA s system for disability examinations and include an examination of medical conditions identified by military physicians that call into question a service member s fitness for duty, as well as other applicable medical conditions identified by the service member together with VA.

Department of Defense Continues Efforts to Enroll Marrow Donors Every 15 minutes someone in the United States is diagnosed with a medical condition that requires treatment with bone marrow or a blood stem cell transplant. Every day more than 6,000 men, women and children around the world search the National Donor Program Registry for a lifesaving donor. Thousands of lives are lost because a match is never found. Each year more than 35,000 people in the United States are diagnosed with leukemia, lymphoma, aplastic anemia (marrow failure), and other life-threatening blood disorders. Seventy-five percent of patients in need of a marrow transplant cannot find a match within their own family, said Army Major General (MG) Elder Granger, Deputy Director, TRICARE Management Activity. The C.W. Bill Young/Department of Defense (DoD) Marrow Donor Program, named for Congressman C.W. Bill Young who initiated and supported its development, is working hard to provide hope and help to patients waiting to find a marrow donor. The C.W. Young Donor Program is only for Military donors. The C.W. Young Program works in conjunction with the National Marrow Donor Program (NMDP) which brings donors together, within the U.S. and from across the world, in a confidential and secure data search system. Humanitarian support is a part of our commitment and Uniformed Service members can help save lives by enrolling in the National Donor Program Registry, said MG Granger. In addition to the NMDP in the U.S., there are numerous organizations around the world that share this database, working together to find matches for any individual requiring a transplant. Since the creation of the NMDP in 1986, more than six million Americans, including more than 400,000 Service members, have registered as marrow donors. Hundreds of marrow donor drives are conducted on Military installations and ships each year. In addition, The C.W. Bill Young/DoD Marrow Donor Program, in cooperation with participating commands, has established walk-in registration programs for eligible personnel who wish to join the DoD Marrow Donor Program Registry. Joining the registry is almost effortless and completely painless. Participants fill out a short two-page DoD consent form and a swab is taken from inside their mouth. Potential donors receive an official card signifying they have registered as a bone marrow donor. They are added to the NMDP National Registry through the DoD Marrow Donor Program. To be eligible to join the registry through the DoD program you must be: Age 18 to 60 and in good health Active Duty Military, Coast Guard, National Guard or Reservist Immediate family member of an Active Duty Service Member A DoD civilian employee For more information on the C.W. Young Donor Program, as well as a list of walk-in locations or to establish a walk-in registration program go to www.dodmarrow.org. VA Subcommittee Considers Measures to Improve Veterans Benefits and Services The House VA Subcommittee on Disability Assistance and Memorial Affairs recently held a legislative hearing on the following measures aimed at improving benefits and services for veterans. H.R. 1137 would increase, from $1000 to $2000, the amount of special pension paid to Medal of Honor recipients. The bill would also make a surviving spouse of a recipient eligible to receive the pension if he or she had been married to the recipient for a year or more, or if the couple had a child. H.R. 3047, the Veterans Claims Processing Innovation Act of 2007, would attempt to improve the Department of Veterans Affairs (VA) benefits claims process by increasing accountability and the use of information technology. The bill would also simplify the process a surviving dependent of a veteran must undergo to acquire accrued benefits resulting from a favorable claim that was pending at the time of the veteran s death. H.R. 3249, the Veterans Burial Benefits Improvement Act of 2007, would increase the amount VA pays for funeral and burial expenses for veterans who died due to a serviceconnected disability from $2,000 to $4,100. The bill would increase the amount of plot allowance for burial in a private cemetery from $300 to $745. H.R. 3286 would reduce, from ten years to one year, the amount of time a veteran must be rated totally disabled before his or her surviving dependents can receive certain death benefits. H.R. 3415 would authorize domestic memorial markers for individuals buried in American Battle Monument Commission cemeteries. H.R. 3954, the Providing Military Honors for our Nation s Heroes Act, would authorize VA to reimburse organizations whose members serve as honor guards at a veteran s funeral. Draft legislation, the Veterans Quality of Life Study Act of 2007, would authorize a study on how quality of life benefits could be quantified as suggested by the Dole- Shalala report.

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American Military Society P.O. Box 98186 Washington, D.C. 20090-8186 Address Service Requested Non-Profit Org. US Postage PAID American Military Society President s Column... page 2 House Va Committee Passes Walz-Kline Bill to Modernize Guard Benefits......... page 2 President Signs COLA and Other Veterans Measures.... page 4 Compensated Work Therapy or Incentive Therapy Programs Important Message... page 4 Army Recruiting Goals Met for FY 2007--But...... page 4 House Speaker Pelosi Meets With Veterans Groups............................. page 5 VA and DoD Pilot Single Physical... page 5 Akaka Introduces Compensation For Combat Veterans Act...................... page 5 Department of Defense Continues Efforts to Enroll Marrow Donors............... page 6 VA Subcommittee Considers Measures to Improve Veterans Benefits and Services... page 6