MOAA Benefits Information Update - January 2003

[thedrifter]

MOAA Benefits Information Update - January 2003

1. President Signs Defense Authorization Act
2. DFAS Sets 2002 Tax Season Mailing For Retirees, Annuitants
3. VA Reports Progress In Claims Backlog Battle
4. Veterans Health Administration Directive Reissues Eligibility
Requirements For Nursing Home Care
5. VA Announces Insurance Dividends
6. New TRICARE Mail Order Pharmacy to Open March 1, 2003
7. CHAMPVA Extended To Surviving Spouses Who Remarry After Age 55

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1. President Signs Defense Authorization Act

The FY2003 Defense Authorization Act (Public Law 107-314) was signed into
law on December 2, 2002. Among other things, the Act substantially
eliminates the disability offset to retired pay for certain retirees with at
least 20 years of active duty and (a) any disability rating that is
associated with a Purple Heart or (b) a disability rating of 60% or higher
that is due to a combat-related or operations-related disability. Eligible
retirees will have to apply for this new compensation.

Because the Defense Department needs time to develop guidelines for approval
as well as application forms and procedures, Congress made the effective
date of the new payment 180 days after the President signed the law.
President Bush did that on December 2, so the effective date of the new
special compensation will be June 1, 2003.

DoD officials have a lot of work to do to build documentation requirements,
approval procedures and guidelines, application forms and more, and say
these actions probably won't be completed before the end of April.

In the meantime, many members have called to relate their circumstances and
ask "Will I qualify?" Unfortunately, it will be four or five months before
we'll know what the final rules are or how or where to apply.

We urge disabled retirees to be patient and avoid sending inquiries to the
Defense Department until the rules are announced. The responsible Pentagon
officials are working to build the new program, and it's counterproductive
to make them spend time processing inquiries when they haven't yet had time
to figure out the answers.

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2. DFAS Sets 2002 Tax Season Mailing For Retirees, Annuitants

The 2002 1099R tax forms for all Department of Defense military retirees and
annuitants will be mailed by Jan. 15, 2003 to the home addresses on file
with the Defense Finance and Accounting Service.
That's according to DFAS officials, who also said that former spouses who
receive pay as a result of a court ordered division of community property
would also receive 1099Rs.
Reissue Requests: Retirees and annuitants, who do not receive their 1099Rs
by Jan. 31, 2003 or have questions about their 1099R forms, should call 1
(800) 321-1080 or (216) 522-5955.

When calling to request a reissue of the 2002 1099R, press 1 when prompted
and the call will be forwarded to the next available Customer Service
Representative. Callers should expect to receive the reissued 1099R
approximately seven business days after the initial request.

DFAS officials said customer service representatives are available Monday
though Friday, from 7 a.m. to 7:30 p.m. EST (except federal holidays).
Paydays, or the first business day of each month, are the busiest days.
Mondays are also characteristically busy. Beginning Jan. 11 until Feb. 15,
Saturday service will be available from 7 a.m. - 3:30 p.m. EST.

Customers may also write to the following addresses for service and are
reminded to always include the Social Security number and signature in all
correspondence.

Retirees:

Defense Finance and Accounting Service
U.S. Military Retired Pay
P.O. Box 7130
London, KY 40742-7130
Fax: 1 (800) 469-6559
Annuitants:

Defense Finance and Accounting Service
U.S. Military Annuitant Pay
P.O. Box 7131
London, KY 40742-7131
Fax: 1 (800) 982-8459

Special DFAS notes

Address changes: There are several ways customers can update addresses to
ensure delivery of 2002 1099R, Retired Account and Annuitant Account
Statement.

Log onto www.dfas.mil and click on "Contact DFAS." Scroll down the page to
the appropriate title, i.e., Retiree Pay or Annuitant Pay. For Annuitants,
simply complete the form and send. For Retirees, scroll down and click on
questions or comments regarding retired pay. Select "Military Retiree,"
then fill out the data fields. After you have completed your inquiry, click
"Submit" at the bottom of the page. Email inquiries will be answered in
five to seven business days.

Use the Employee/Member Self Service (E/MSS) at http://emss.dfas.mil

Call 1-800-321-1080.

Send a letter or fax to the address previously listed.

The amount withheld for state taxes does not automatically change when an
address update is submitted. A letter requesting to change your state taxes
is required. Include your Social Security number, printed name and
signature. The monthly amount deducted for state taxes must be in whole
dollars (no cents) and a minimum of $10.

Federal tax exemption: Federal tax exemption does not automatically carry
over into the next tax year. IRS regulations stipulate that a new W-4 must
be completed before Feb. 15 each year to maintain exempt status. To have a
W-4 processed before that cutoff date, submit a completed W-4 form after
Jan. 1, 2003 but before Feb. 10, 2003 to the address or fax number listed
above.

Marital status changes: If your marital status has changed due to marriage,
divorce, or death, your Survivor Benefit Plan election may need to be
updated. Send a copy of the marriage certificate, divorce decree, or death
certificate along with a brief letter to update your SBP election. Include
your Social Security number and signature. Submit your request to the
address or fax number listed above.

Retirees should note that changing an SBP election does not automatically
change beneficiary information for arrears of pay (AOP). The arrears of pay
are any unpaid monies due the retiree up to the date of death.

Complete a Change of Beneficiary form to update your AOP beneficiary(ies).
You may request these forms by contacting the Retired and Annuity Pay
Contact Center at the phone number listed above.

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3. VA Reports Progress In Claims Backlog Battle

After years of battling a rising backlog of applications from veterans and
survivors seeking financial benefits, the Department of Veterans Affairs
(VA) is reversing the trend.

Each month for the last nine months, VA's compensation and pension decisions
have exceeded the monthly intake of new claims requiring a decision about a
disability's severity and connection with service. Since the beginning of
this year, the steady decrease of claims in the pipeline has reduced the
backlog of ratings actions by 21 percent.

VA officials noted that VA has seen the total number of claims drop from a
peak of more than 600,000 in March to today's 463,000, which includes
343,000 claims awaiting decisions for compensation and pension. Another
97,000 cases of all types are pending on appeal.

The VA has set a goal to have no more than 250,000 disability rating claims
of all types pending. This figure reflects a normal inventory that allows
time to schedule medical exams and accumulate evidence. The goal recognizes
that veterans are allowed up to 60 days to respond to requests for any
needed information.

4. VHA Directive Reissues Eligibility Requirements For Nursing Home Care

The Veterans Health Administration (VHA) of the Department of Veterans
Affairs (VA) has reissued the eligibility requirements for nursing home
care, and clarified Nursing Home Care eligibility and the definition of 70
percent service-connected (SC) disability rating.

Public Law 106-117, The Veterans' Millennium Health Care and Benefits Act,
amended the Department of Veterans Affairs (VA) statutory authority for
providing nursing home care to eligible veterans. That law requires that:

(1) VHA provide nursing home care to any veteran in need of such care for a
SC disability.

(2) The Secretary shall ensure that the staffing and level of extended care
services provided nationally in facilities of the Department during any
fiscal year is not less than the staffing and level of such services
provided nationally in facilities of the Department during Fiscal Year 1998.

(3) VHA provides nursing home care to any veteran who is in need of such
care and who has a combined SC disability rating of 70 percent or more, is
seeking nursing home care for a SC condition, or is rated 60 percent SC and
unemployable or is rated 60 percent SC and Permanent and Total Disabled
(P&T).

4) VHA ensures that a veteran described above, who continues to need
nursing home care, is not, after placement in a Departmental nursing home,
transferred from the facility without the consent of the veteran or, if the
veteran cannot give informed consent, the veteran's designated
representative.

NOTE: Nothing in the new law authorizes VHA to displace, transfer, or
discharge a veteran who was receiving nursing home care in a Departmental
nursing home as of November 30, 1999.


This VHA implemented the provisions of Public Law 106-117 as set our below.
Veterans with combined ratings equal to or greater than 70 percent are now
covered in the mandated group for nursing home care benefits. Also included
in this group are those veterans rated 60 percent SC and unemployable or 60
percent SC and P&T Disabled.

a. VHA will provide nursing home care, either directly or through
contracts, when clinically indicated, to a veteran who needs nursing home
care for a Service Connected disability, has a combined SC disability rating
of 70 percent or more, is rated 60 percent SC and unemployable, or is rated
60 percent SC and P&T Disabled.

b. VHA may provide nursing home care based on available resources,
either direct or through contracts, when clinically indicated to all other
eligible veterans who need nursing home care.

c. Patients should be placed in Home and Community-Based Care (HCBC)
when clinically appropriate and patients receiving VA Nursing Home or
Community Nursing Home (CNH) care will be transferred to appropriate
assisted living or home and community-based care settings when nursing home
care, at any level, is no longer clinically indicated.

d. VA facilities will determine the need for nursing home care based on
a comprehensive interdisciplinary clinical assessment.

e. After admission to a VA Nursing Home Care Unit (VA NHCU), veterans
described in subparagraph 4.a. may not be transferred or discharged from a
VA Nursing Home unless:

(1) The patient no longer needs any nursing home care; or

(2) The patient, or the patient's designee, has given informed consent
to the discharge or transfer.

f. VA NHCUs will admit, as a matter of firm priority, patients who meet
the following clinical and/or programmatic criteria: post-acute patients,
patients who cannot be adequately cared for in CNH or HCBC, and those
patients who can be cared for more efficiently in VA NHCUs.

g. All VA facilities will maintain an active CNH Program.

NOTE: Nothing in this VHA Directive may be construed as authorizing or
requiring that a veteran who was receiving nursing home care in a VA Nursing
Home on November 30, 1999, be displaced, transferred, or discharged from the
VA Nursing Home Care Unit.

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5. VA Announces Insurance Dividends

The Department of Veterans Affairs (VA) announced the distribution of more
than $568 million in dividends to 1.5 million active policyholders of
veterans' life insurance.

Over the next year, veterans will receive the payments on the anniversary
date of their policies, with the specific dividend amount varying according
to age; type of insurance and length of time the policy has been in force.
Recipients will automatically receive their annual dividend through one of
the nine payment options they have selected in advance.

Dividends cover only veterans with government life insurance policies who
served between 1917 and 1956. Government insurance programs that cover
veterans of subsequent eras do not pay dividends. Also, no dividends are
paid on Servicemembers' Group Life Insurance covering current active-duty
servicemembers and reservists, or on policies converted upon retirement to
Veterans Group Life Insurance policies.

However, for some older policies still in force today, the dividends
represent a return of trust fund earnings on the premiums paid by
policyholders through the years. These funds reflect the fact that veterans
are living longer than originally predicted and are also attributable to the
higher than expected yields earned by the trust funds from investments in
U.S. government securities.

Only those with policies that have been kept in force when premiums were
required are eligible for the payout. Inaccurate stories periodically
surface suggesting that those who have not maintained insurance are eligible
for a special distribution if they contact VA, but this is false. Dividends
are automatically sent to eligible policyholders.

The largest group receiving 2003 payments will be 1.3 million veterans of
World War II with National Service Life Insurance ("V") policies. Total
payments are expected to reach $461.5 million.

Although VA also administers a special life insurance program for disabled
veterans and a program offering mortgage life insurance coverage, neither
pays dividends.

Veterans who have questions about their policy may call the VA Insurance
toll-free number: 1-800-669-8477, or may send their e-mail to:
mailto:VAinsurance@vba.va.gov

6. New TRICARE Mail Order Pharmacy to Open March 1, 2003

More than 400,000 military pharmacy mail order customers will be switched
March 1,
2003, to a new TRICARE Mail Order Pharmacy program, according to the TRICARE
Management Activity, Falls Church, VA.

Services will continue under the National Mail Order Pharmacy contract until
Feb. 28, 2003. The next day, March 1, Express Scripts Inc. will provide
services under the new TRICARE Mail Order Pharmacy program. Express Scripts
Inc. of Maryland Heights, Mo., won the $275 million, five-year contract in
September to provide mail order pharmacy services for TRICARE beneficiaries.

Beneficiaries who have refills remaining on prescriptions on March 1 would
be transferred to Express Scripts so they can continue ordering medications
on time, with a few exceptions: narcotics or other controlled substance
prescriptions and compounded prescriptions -- those that are physically
prepared by the pharmacy - cannot be transferred.

In early January, current users or the Mail Order Pharmacy should receive a
post card announcing the new services. That will be followed by a mailing,
which will include a registration form, a description of benefits and a
brochure covering the TRICARE program.

Those eligible to use the current mail order program or the retail benefit
are eligible to use the new TRICARE mail order program. New customers have
to register for the program. Information will be provided through the
TRICARE service centers, military treatment facilities pharmacy as well as
their marketing points of contact.

The usual delivery time for medication is five to seven days. The easiest
way for patients to ensure they don't run out of their medication is to have
the provider write for up to a 90-day supply with up to three refills. The
beneficiary can request a refill once 75 percent of the medication has been
used. About day 70 into their medication, you can request a refill. That
should provide a sufficient cushion.

Al medication is screened for potential drug interactions or therapeutic
overlaps that could produce an adverse drug reaction. Patients' complete
beneficiary profiles are entered into the Pharmacy Data Transition Service,
which enhances patient safety by keeping their medication records current,
on file and readily available.

The new contract saves taxpayers' dollars because it calls for purchasing
drug products at federal prices. Best federal prices are estimated to be at
least 24 percent below average commercial wholesale prices.

The TRICARE Management Activity will manage the new contract. The current,
national contract has been managed by the Defense Logistics Agency's Defense
Supply Center in
Philadelphia.

Patients can fill prescriptions three ways: by direct care at military
treatment facilities, or the retail pharmacy network or the mail order
program, Davies noted. The direct care system serves the bulk of the
beneficiary population, he said. About 2.5 million beneficiaries use the
retail pharmacy network because they don't have access to a military
facility.

Most of the 400,000 beneficiaries who use the mail order program do so for
chronic medication or maintenance medication needs. Beneficiaries who have
long-term medication needs should consider using the mail order program. It
provides up to a 90-day supply of most medications for a single co-pay,
whereas they only receive a 30-day supply for a single co- pay in the retail
network pharmacy system..

Under the TRICARE Mail Order Pharmacy system, the co-pay for up to a 90-day
supply for most medications is $9 for branded products or $3 for generics.
Exceptions include controlled substances, and active duty members pay no co-
pays.

For more information, including a complete section on the co-pay structure,
visit the TRICARE Web site at http://www.tricare.osd.mil/. Reservists can
check the site for details of their benefits under the program.

Beneficiaries can also use the Express Scripts Inc. Web site by clicking on
the DoD seal at www.express-scripts.com after the site debuts on Jan. 15,
2003.

. CHAMPVA Extended To Surviving Spouses Who Remarry After Age 55

The VA Benefits Act of 2002, passed by Congress November 11, 2002,
authorizes retention of CHAMPVA benefits for surviving spouses who remarry
after age 55. There is a 1-year open season from date of enactment of Act
for otherwise eligible spouses to apply for benefits. The effective date of
this change is 60 days after enactment of Act.

Those beneficiaries eligible for Tricare are not eligible for CHAMPVA. That
provision has not changed.

Those interested may visit the CHAMPVA web site,
http://www.va.gov/hac/champva/champva.html to determine eligibility. At
this writing, the VA had not incorporated the new provisions passed by
Congress. Further guidance is expected from the VA in the near future.

Sempers,

Roger