Pay and Benefits Watch: More COLA, more dental care

COLA War

There's been a victory announced in the COLA war between federal employees in Alaska, Hawaii, Guam, Puerto Rico, and the Virgin Islands, and the federal government. The employees have for some time been waging a battle to get their cost-of-living allowances boosted, saying that the calculations for the COLAs are unfair to those who live in remote places.

The Office of Personnel Management announced last week that an agreement has been reached that includes a $232.5 million back pay payment for between 40-70,000 federal employees covered by the settlement.

More importantly, the lawsuit resulted in significant changes to the way the COLA program is run. OPM has been working with employee unions and economic experts for four years on resolving the disputes and is in the process of writing new regulations to implement the changes.

The practice of paying the non-foreign cost-of-living allowance began in the 1940s as an incentive to federal employees to work in high cost, often remote areas of the country. OPM uses the consumer price index (CPI), a measure of the average change over time in the prices paid by urban consumers for consumer goods and services, to calculate COLAs. The Bureau of Labor Statistics determines the CPI.

OPM will publish interim COLA rates that will be effective in October. About half of the COLA areas will see higher rates then.

DoD Dental Care

The Defense Department has published a final rule that allows dependents of retired military service members to enroll in the Tricare dental program, even if the retiree is not enrolled.

Many retirees are eligible for dental benefits from other sources, such as the Department of Veterans Affairs, or have conditions which preclude their participation in the Tricare plan. As a result, some retirees joined the program solely for the benefit of their dependents.

The House National Security Committee said that "it is not reasonable to ask these retirees to enroll in, and pay premiums for, a program which offers them no benefits only so their dependents may also enroll in the program."

As of August 10th, dependents of retired service members can enroll in the Tricare dental program if the retired member has one of these three things:

1. Dental care from Veterans Affairs
2. Employee-only dental coverage
3. A medical or dental condition which precludes coverage.

The retiree must also show that Tricare dental coverage will not be necessary in the foreseeable future.