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LEGISLATIVE NEWS THAT AFFECTS YOU Defense Bill Deal

Congress finally passed the FY 2016 National Defense Authorization Act, but MOAA worries about the future retention effects of continued pay and benefits cuts.

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n Sept. 30, Congress agreed to a controversial defense bill with a lower-than-expected pay raise and significant changes to military pay and benefits, including: Military pay: The defense bill capped

the 2016 active duty pay raise at 1.3 per- cent. This marks a third consecutive year of pay-raise caps and continues to undo a decade of work by Congress to eliminate a 13.5-percent wage gap between military and private-sector pay. Military retirement: The bill also includes major changes to military retirement for those entering service as of January 2018. The new system will cut military retire- ment by 20 percent and offer a 1-percent government contribution to Thrift Savings Plan accounts, with a match of up to 4 percent of a servicemember’s contribu- tion until 26 years of service. Current servicemembers and retirees will be grandfathered into the current retirement system. Those with less than 12 years of service as of 2018 will have the option to opt in to the new program. Congress also repealed the final section of a complicated COLA-reducing law for future military retirees. Future retirees originally were subject to a 1-percentage- point reduction in annual retirement COLA until age 62. TRICARE: At MOAA’s urging, Congress

balked at proposals to means-test annual TRICARE fees and implement new enroll- ment fees for TRICARE For Life.

They also rejected proposals to consoli- date TRICARE Prime and Standard. Under those proposals, beneficiaries would have been subject to the enrollment fees of TRI- CARE Standard without the guaranteed access of TRICARE Prime. In essence, ben- eficiaries would be paying more for less. Prescription copayments: This was one of

the most contentious issues in the defense bill. The administration’s original budget called for 10 years of TRICARE pharmacy increases. Senate lawmakers agreed and proposed increases of 25 to 125 percent. House legislators successfully fought this plan but had to concede to a one- time $2 to $4 increase in retail prescrip- tion copayments. (See chart on page 32.) Survivor benefits: The defense bill also included language to correct an inequity for military survivors. The bill authorizes Survivor Benefit Plan coverage for a new spouse in the event a former spouse pre- deceases the servicemember. Commissaries: Original budget propos- als calling for both a consolidation of the commissary and exchange systems and a dramatic cut in commissary funding were thwarted. The final law requires a DoD plan to make commissaries and exchanges self-supporting. But it also requires the plan to maintain current patron savings and satisfaction.

The defense bill fell short on many

MOAA-supported issues. The bill did not include provisions to:  end the “widow’s tax” for survivors;

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Take Action Keep up-to-date on legislation affecting the military community, read about MOAA’s legislative initiatives, and find and contact your elected of- ficials at www.moaa.org/ takeaction.