Military Personnel
Preliminary Observations Related to Income, Benefits, and Employer Support for Reservist During Mobilizations Gao ID: GAO-03-573T March 19, 2003Since the end of the Cold War, there has been a shift in the way reserve forces have been used. Previously, reservists were viewed primarily as an expansion force that would supplement active forces during a major war. Today, reservists not only supplement but also replace active forces in military operations worldwide. Citing the increased use of the reserves to support military operations, House Report 107-436 accompanying the Fiscal Year 2003 National Defense Authorization Act directed GAO to review compensation and benefits for reservists. In response, GAO is reviewing (1) income protection for reservists called to active duty, (2) family support programs, and (3) health care access. For this statement, GAO was asked to discuss its preliminary observations. GAO also was asked to discuss the results of its recently completed review concerning employer support for reservists.
The preliminary results of our review indicate that reservists experience widely varying degrees of income loss or gain when they are called up for a contingency operation. While income loss data for current operations Noble Eagle and Enduring Freedom were not available, data for past military operations show that 41 percent of drilling unit members reported income loss, while 30 percent reported no change and 29 percent reported an increase in income. This information is based on self-reported survey data for mobilizations or deployments of varying lengths of time. As would be expected, the data indicate that certain groups, such as medical professionals in private practice, tend to report much greater income loss than the average estimated for all reservists. Although reservists called up to support a contingency operation are generally eligible for the same family support and health care benefits as active component personnel, reservists and their families face challenges in understanding and accessing their benefits. Among the challenges, reservists typically live farther from military installations than their active duty counterparts, are not part of the day-to-day military culture, and may change benefit eligibility status many times throughout their career. Some of these challenges are unique to reservists; others are also experienced by active component members but may be magnified for reservists. Outreach to reservists and their families is likely to remain a continuing challenge for DOD in the areas of family support and health care, and we expect to look at DOD's outreach efforts in more detail as we continue our study. Outreach is also a critical component of maintaining and enhancing employers' support for reservists. Although DOD has numerous outreach efforts, we found that a sizeable number of reservists and employers were unsure about their rights and responsibilities. For example, a 1999 DOD survey found that 31 percent of employers were not aware of laws protecting reservists. Several factors have hampered DOD's outreach efforts to both employers and reservists. However, DOD is taking positive actions in this area, such as moving ahead with plans to collect employer data from all reserve personnel.
GAO-03-573T, Military Personnel: Preliminary Observations Related to Income, Benefits, and Employer Support for Reservist During Mobilizations
This is the accessible text file for GAO report number GAO-03-573T
entitled 'Military Personnel: Preliminary Observations Related to
Income, Benefits, and Employer Support for Reservist During
Mobilizations' which was released on March 19, 2003.
This text file was formatted by the U.S. General Accounting Office
(GAO) to be accessible to users with visual impairments, as part of a
longer term project to improve GAO products‘ accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
Testimony:
Before the Subcommittee on Personnel, Committee on Armed Services, U.S.
Senate:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 3 p.m. EST:
Wednesday, March 19, 2003:
Military Personnel:
Preliminary Observations Related to Income, Benefits, and Employer
Support for Reservists During Mobilizations:
Statement for the Record by Derek B. Stewart, Director, Defense
Capabilities and Management:
GAO-03-573T:
GAO Highlights:
Highlights of GAO-03-573T, a statement for the record for the
Subcommittee on Personnel, Committee on Armed Services, U.S. Senate
Why GAO Did This Study:
Since the end of the Cold War, there has been a shift in the way
reserve forces have been used. Previously, reservists were viewed
primarily as an expansion force that would supplement active forces
during a major war. Today, reservists not only supplement but also
replace active forces in military operations worldwide.
Citing the increased use of the reserves to support military
operations, House Report 107-436 accompanying the Fiscal Year 2003
National Defense Authorization Act directed GAO to review compensation
and benefits for reservists. In response, GAO is reviewing (1) income
protection for reservists called to active duty, (2) family support
programs, and (3) health care access. For this statement, GAO was
asked to discuss its preliminary observations. GAO also was asked to
discuss the results of its recently completed review concerning
employer support for reservists.
What GAO Found:
The preliminary results of our review indicate that reservists
experience widely varying degrees of income loss or gain when they
are called up for a contingency operation. While income loss data
for current operations Noble Eagle and Enduring Freedom were not
available, data for past military operations show that 41 percent of
drilling unit members reported income loss, while 30 percent reported
no change and 29 percent reported an increase in income. This
information is based on self-reported survey data for mobilizations or
deployments of varying lengths of time. As would be expected, the
data indicate that certain groups, such as medical professionals in
private practice, tend to report much greater income loss than the
average estimated for all reservists.
Although reservists called up to support a contingency operation are
generally eligible for the same family support and health care
benefits as active component personnel, reservists and their families
face challenges in understanding and accessing their benefits. Among
the challenges, reservists typically live farther from military
installations than their active duty counterparts, are not part of
the day-to-day military culture, and may change benefit eligibility
status many times throughout their career. Some of these challenges
are unique to reservists; others are also experienced by active
component members but may be magnified for reservists. Outreach to
reservists and their families is likely to remain a continuing
challenge for DOD in the areas of family support and health care,
and we expect to look at DOD‘s outreach efforts in more detail as we
continue our study.
Outreach is also a critical component of maintaining and enhancing
employers‘ support for reservists. Although DOD has numerous
outreach efforts, we found that a sizeable number of reservists and
employers were unsure about their rights and responsibilities. For
example, a 1999 DOD survey found that 31 percent of employers were
not aware of laws protecting reservists. Several factors have
hampered DOD‘s outreach efforts to both employers and reservists.
However, DOD is taking positive actions in this area, such as
moving ahead with plans to collect employer data from all reserve
personnel.
What GAO Recommends:
GAO is not making new recommendations at this time, but past reports
have contained GAO‘s views on actions that should be taken to
improve reservists‘ access to military health care benefits and to
improve the effectiveness of outreach programs and other aspects of
reservist-employer relations. DOD generally concurred with these
recommendations and has taken some actions.
www.gao.gov/cgi-bin/getrpt?GAO-03-573T.
To view the full report, including the scope and methodology, click
on the link above. For more information, contact Derek B. Stewart at
(202) 512-5140 or stewartd@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
We are pleased to have the opportunity to comment on reserve personnel
income, benefits, and employer support. My remarks focus on the more
than 870,000 ’selected“ reservists[Footnote 1] who generally drill and
train part-time with their military units (referred to in this
testimony as drilling unit members). These reservists may be
involuntarily called to federal active duty under various provisions of
law. They may also be placed voluntarily on active duty for training
and other purposes. Since the 1991 Persian Gulf War, reservists have
been mobilized or deployed to a number of contingency operations,
including operations Noble Eagle and Enduring Freedom and operations in
Kosovo, Bosnia, Southwest Asia, and Haiti. As of early March 2003,
193,270 reservists were supporting current contingency operations.
Citing the increased use of the reserves to support military
operations, House Report 107-436 accompanying the Fiscal Year 2003
National Defense Authorization Act directed us to review compensation
and benefit programs for reservists. Our review is ongoing, but today I
would like to present preliminary observations based on our review in
three areas:
(1) income protection for reservists called to active duty, (2) family
support programs, and (3) health care access.[Footnote 2] All three of
these issues are potential areas of concern to a reservist called to
active duty for a contingency operation. We plan to issue a final
report on these three issues later this year. In addition, you have
asked us to discuss the results of our recently completed review
concerning employer support for reservists, another potential area of
concern to mobilized or deployed reservists.[Footnote 3] Finally, Mr.
Chairman, while the legislation directed us to review the retirement
system for the reserves, we have not yet begun that work. As discussed
with your offices, we plan to review the reserve retirement system in
the future. While we have not conducted a detailed review of this
issue, I would like to offer some observations.
Before discussing these issues in more detail, I would like to note
that one of the Department of Defense‘s (DOD) guiding principles for
military compensation is that servicemembers--both reservists and
active component members--be treated fairly. Military compensation for
reservists is affected by the type of military duty they perform. In
peacetime--when a reservist is on active duty for training or on
military duty not related to a contingency operation--certain
thresholds are imposed at particular points in service before a
reservist is eligible to receive the same compensation as a member
serving full-time. For contingency operations, these same thresholds
generally do not apply. Reservists activated for contingency operations
such as Noble Eagle and Enduring Freedom are generally eligible to
receive the same compensation and benefits as active component
personnel. I should also note here that in a recent report comparing
the benefits offered by the military with those offered in the private
sector, we found no significant gaps in the benefits available to
military personnel.[Footnote 4]
To date, we have met with and gathered information from DOD officials
in the Office of the Assistant Secretary of Defense for Reserve
Affairs, the Office of Military Compensation, the Office of Family
Policy, the National Guard Bureau, the Army National Guard, the Air
National Guard, the Army Reserve, the Air Force Reserve, the Naval
Reserve, the Marine Corps Reserve, the TRICARE Management Activity, the
National Committee for Employer Support of the Guard and Reserve, and
other organizations. We obtained the results and DOD‘s preliminary
analysis of the 2000 Survey of Reserve Component Personnel.[Footnote 5]
We reviewed DOD proposals concerning income loss. We also reviewed
DOD‘s progress in implementing recommendations that we made in prior
reports.
Let me turn now to the specific issues.
Summary:
The preliminary results of our review indicate that reservists
experience widely varying degrees of income loss or gain when they are
called up for a contingency operation. While income loss data for
current operations Noble Eagle and Enduring Freedom were not available,
data for past military operations show that 41 percent of drilling unit
members reported income loss, while 30 percent reported no change and
29 percent reported an increase in income. This information is based on
self-reported survey data for mobilizations or deployments of varying
lengths of time. DOD‘s analysis of the data shows that, as would be
expected, certain groups, such as medical professionals in private
practice, tend to report much greater income loss than the average
estimated for all reservists.
Although reservists called up to support a contingency operation are
generally eligible for the same family support and health care benefits
as active component personnel, reservists and their families face
challenges in understanding and accessing their benefits. Among the
challenges, reservists typically live farther from military
installations than their active duty counterparts, are not part of the
day-to-day military culture, and may change benefit eligibility status
many times throughout their career. Some of these challenges are unique
to reservists; others are also experienced by active component members
but may be magnified for reservists. Outreach to reservists and their
families is likely to remain a continuing challenge for DOD in the
areas of family support and health care. We will continue to look at
DOD‘s outreach efforts as we complete our study.
Outreach is also a critical component of maintaining and enhancing
employers‘ support for reservists. Although DOD has numerous outreach
efforts in this area, we found that a sizeable number of reservists and
employers were unsure about their rights and responsibilities. For
example, a 1999 DOD survey found that 31 percent of employers were not
aware of laws protecting reservists. Our recent work has shown that
several factors, such as the lack of data on reservists‘ employers,
have hampered DOD‘s outreach efforts to both employers and reservists.
However, DOD is taking positive actions in this area, such as moving
ahead with plans to collect employer data from all reserve personnel.
Reservists have identified income loss, family burdens, and employer
support as serious concerns during prior mobilizations and deployments.
However, it is unclear how the problems reservists experience in these
areas affect their overall satisfaction with military life and,
ultimately, their decision to stay in the military or leave.
Background:
Since the end of the Cold War, there has been a shift in the way
reserve forces have been used. Previously, reservists were viewed
primarily as an expansion force that would supplement active forces
during a major war. Today, reservists not only supplement but also
replace active forces in military operations worldwide.[Footnote 6] In
fact, DOD has stated that no significant operation can be conducted
without reserve involvement. As shown in figure 1, reserve
participation in military operations spiked in fiscal
years 1991 (Desert Shield and Desert Storm) and 2002 (Noble Eagle and
Enduring Freedom).
Figure 1: Annual Number of Days Per Capita for Reserve Mobilizations
and Support to the Services and Combatant Commands (Fiscal Years 1986-
2002):
[See PDF for image]
[End of figure]
There have been wide differences in the operational tempos[Footnote 7]
of individual reservists in certain units and occupations. Prior to the
current mobilization, personnel in the fields of aviation, special
forces, security, intelligence, psychological operations, and civil
affairs were in high demand, experiencing operational tempos that were
two to seven times higher than those of the average reservist. Since
September 2001, operational tempos have increased significantly for
reservists in all of DOD‘s reserve components due to the partial
mobilization in effect to support operations Noble Eagle and Enduring
Freedom.
For each year between fiscal years 1997 and 2002, the reserves on the
whole achieved at least 99 percent of their authorized end strength. In
4 of these 6 years, they met at least 100 percent of their enlistment
goals. During this time period, enlistment rates fluctuated from
component to component. Overall attrition rates have decreased for five
of DOD‘s six reserve components.[Footnote 8] Between fiscal years 1997
and 2002, only the Army National Guard experienced a slight overall
increase in attrition. The attrition data suggest there has not been a
consistent relationship between a component‘s average attrition rate
for a given year and the attrition rate for that component‘s high
demand capabilities (which include units and occupations). Attrition
rates for high demand capabilities were higher than average in some
cases but lower for others. Aviation in the Army National Guard, for
instance, has had higher than average attrition for 4 of the
5 years it was categorized as a high demand capability.
Reservists Have Reported Widely Varying Degrees of Income Loss Or Gain:
Preliminary analysis of income changes reported by reservists who
mobilized or deployed for past military operations indicates that they
experienced widely varying degrees of income loss or gain. The source
for this analysis is DOD‘s 2000 Survey of Reserve Component Personnel,
which predates the mobilization that began in September 2001. The data
show that 41 percent of drilling unit members reported income loss
during their most recent mobilization or deployment, while 30 percent
reported no change and 29 percent reported an increase in income (see
table 1).
Table 1: Drilling Unit Members‘ Total Reported Change in Income for
Mobilizations or Deployments Prior to 2001:
Income change: Decreased $50,000 or more; Percentage: 0.9.
Income change: Decreased $25,000 to $49,999; Percentage: 1.5.
Income change: Decreased $10,000 to $24,999; Percentage: 4.1.
Income change: Decreased $5,000 to $9,999; Percentage: 6.0.
Income change: Decreased $2,500 to $4,999; Percentage: 8.9.
Income change: Decreased $1 to $2,499; Percentage: 19.5.
Income change: No change in income; Percentage: 30.
Income change: Increased $1 to $2,499; Percentage: 16.6.
Income change: Increased $2,500 to $4,999; Percentage: 6.8.
Income change: Increased $5,000 or more; Percentage: 5.7.
Source: DOD 2000 Reserve Component Survey:
[End of table]
Based on the survey data, DOD estimated that the average total income
change for all members (including losses and gains) was almost $1,700
in losses. This figure should be considered with caution because of the
estimating methodology that was used and because it is unclear what
survey respondents considered as income loss or gain in answering this
question.[Footnote 9] Further, reservists are mobilized or deployed for
varying lengths of time, which can affect their overall income loss or
gain. About
31 percent of all reservists who had at least one mobilization or
deployment had been mobilized or deployed for less than 1 month. For
the entire population, members spent an estimated 3.6 months mobilized
or deployed for their most recent mobilization.
DOD‘s preliminary analysis of the survey data show that certain groups
reported greater losses of income on average. Self-employed reservists
reported an average income loss of $6,500. Physicians/registered
nurses, on the whole, reported an average income loss of $9,000.
Physicians/registered nurses in private practice reported an average
income loss of $25,600. Income loss also varied by reserve component
and pay grade group. Average self-reported income loss ranged from $600
for members of the Air National Guard up to $3,800 for Marine Corps
Reservists. Senior officers reported an average income loss of $5,000
compared with $700 for junior enlisted members. When asked to rank
income loss among other problems they have experienced during
mobilization or deployment, about half of drilling unit members ranked
it as one of their most serious problems.[Footnote 10] DOD‘s
preliminary analysis presents little data on those groups who reported
overall income gain. Two groups who were identified as reporting a gain
were clergy and those who worked for a family business without pay.
Concerns were raised following the 1991 Gulf War that income loss would
adversely affect retention of reservists. According to a 1991 DOD
survey of reservists activated during the Gulf War, economic loss was
widespread across all pay grades and military occupations. In response
to congressional direction,[Footnote 11] DOD in 1996 established the
Ready Reserve Mobilization Income Insurance Program, an optional, self-
funded income insurance program for members of the Ready Reserve
ordered involuntarily to active duty for more than 30 days. Reservists
who elected to enroll could obtain monthly coverage ranging from $500
to $5,000 for up to 12 months within an 18-month period. Far fewer
reservists than DOD expected enrolled in the program. Many of those who
enrolled were activated for duty in Bosnia and, thus, entitled to
almost immediate benefits from the program. The program was terminated
in 1997 after going bankrupt. We reported in 1997 that private sector
insurers were not interested in underwriting a reserve income
mobilization insurance program due to concerns about actuarial
soundness and unpredictability of the frequency, duration, and size of
future call-ups.[Footnote 12] Certain coverage features would violate
many of the principles that private sector insurers usually require to
protect themselves from adverse selection. These include voluntary
coverage and full self-funding by those insured, the absence of rates
that differentiated between participants based on their likelihood of
mobilization, the ability to choose coverage that could result in full
replacement of their lost income rather than those insured bearing some
loss, and the ability to obtain immediate coverage shortly before an
insured event occurred. According to DOD officials, private sector
insurers remain unsupportive of a new reserve income insurance
mobilization program and the amount of federal underwriting required
for the program is prohibitive. The Department has no plans to
implement a new mobilization insurance program.
A 1998 study by RAND found that income loss, while widespread during
the Gulf War, did not have a measurable effect on enlisted
retention.[Footnote 13] The study was cautiously optimistic that
mobilizing the reserves under similar circumstances in the future would
not have adverse effects on recruiting and retention. However, the
effects of future mobilizations can depend on the mission, the length
of time reservists are deployed, the degree of support from employers
and family members, and other factors.
Certain federal protections, pay policies, and employer practices can
help to alleviate financial hardship during deployment. For example,
the Soldiers‘ and Sailors‘ Civil Relief Act caps debt interest rates at
6 percent annually. Income that servicemembers earn while mobilized in
certain combat zones is tax-free. For certain operations, DOD also
authorized reservists to receive both full housing allowances and per
diem for their entire period of activation. In addition, some employers
make up the difference between civilian and military pay for their
mobilized employees. This practice varies considerably among employers.
Servicemembers can also obtain emergency assistance in the form of
interest-free loans or grants from service aid societies to pay for
basic living expenses such as food or rent during activation. DOD is
exploring debt management alternatives, such as debt restructuring and
deferment of principle and interest payments, as ways to address income
loss. The Army has proposed a new special pay targeting critical health
care professionals in the reserves who are in private practice and are
deployed involuntarily beyond the established rotational schedule.
Reservists and Their Families Face Challenges in Understanding and
Accessing Family Support Services:
Reservists who have been activated for previous contingency operations
have expressed concerns about the additional burdens placed on their
families while they are gone. More than half of all reservists are
married and about half have children or other legal dependents.
According to the 2000 survey, among the most serious problems
reservists said they experienced when mobilized or deployed are the
burden placed on their spouse and problems created for their children.
The 1991 Gulf War was a milestone event that highlighted the importance
of reserve family readiness. Lessons learned showed that families of
activated reservists, like their active duty counterparts, may need
assistance preparing wills, obtaining power of attorney, establishing
emergency funds, and making child care arrangements. They may also need
information on benefits and entitlements, military support services,
and information on their reemployment rights. DOD has recognized that
family attitudes affect reserve member readiness, satisfaction with
reserve participation, and retention. Military members who are
preoccupied with family issues during deployments may not perform well
on the job, which in turn, negatively affects the mission. Research has
shown that families of reservists who use family support services and
who are provided information from the military cope better during
activations. Under a
1994 DOD policy, the military services must ’ensure National Guard and
Reserve members and their families are prepared and adequately served
by their services‘ family care systems and organizations for the
contingencies and stresses incident to military service.“:
Although activated reservists and their family members are eligible for
the same family support services as their active duty counterparts,
they may lack knowledge about or access to certain services. The 2000
DOD survey suggests that more than half of all reservists either
believe that family support services are not available to them or do
not know whether such services are available. Table 2 shows drilling
unit members‘ responses on the availability of selected programs and
services.
Table 2: Reservists‘ Views on Availability of Selected Family Support
Programs or Services:
Percentage of drilling unit members.
Services for families during separation; Percentage of drilling unit
members: Available off installation, on installation or both: 25;
Percentage of drilling unit members: Not available: 13; Percentage of
drilling unit members: Don‘t know: 62.
Crisis referral services; Percentage of drilling unit members:
Available off installation, on installation or both: 15; Percentage of
drilling unit members: Not available: 17; Percentage of drilling unit
members: Don‘t know: 68.
Financial counseling/management education; Percentage of drilling unit
members: Available off installation, on installation or both: 22;
Percentage of drilling unit members: Not available: 16; Percentage of
drilling unit members: Don‘t know: 61.
Family support centers; Percentage of drilling unit members: Available
off installation, on installation or both: 35; Percentage of drilling
unit members: Not available: 14; Percentage of drilling unit members:
Don‘t know: 51.
Source: DOD 2000 Reserve Component Survey:
Note: Rows may not add to 100 percent due to rounding.
[End of table]
According to DOD officials, operations Noble Eagle and Enduring Freedom
have highlighted the fact that not all reserve families are prepared
for potential mobilization and deployment. They told us that since many
families never thought their military members would be mobilized,
families had not become involved in their family readiness networks.
DOD has found that the degree to which reservists are aware of family
support programs and benefits varies according to component, unit
programs, command emphasis, reserve status, and the willingness of the
individual member to receive or seek out information. Results from the
2000 DOD survey show that about one-fourth of drilling unit members
said their arrangements for their dependents were not realistically
workable for deployments lasting longer than 30 days. Furthermore,
about 4 of every 10 drilling unit members thought it was unlikely or
very unlikely that they would be mobilized or deployed in the next 5
years. Again, this survey predates the events of September 11, 2001,
and the ensuing mobilization.
Among the key challenges in providing family support are the long
distances that many reservists live from installations that offer
family support services, the difficulty in persuading reservists to
share information with their families, the unwillingness of some
reservists and their families to take the responsibility to access
available information, conflicting priorities during drill weekends
that limit the time spent on family support, and a heavy reliance on
volunteers to act as liaisons between families and units. In 2000,
about 40 percent of drilling unit members lived 50 miles or farther
from their home units.
DOD has recognized the need for improved outreach and awareness. For
example, the Department has published benefit guides for reservists and
family members and has enhanced information posted on its Web sites.
DOD published a ’Guide to Reserve Family Member Benefits“ that informs
family members about military benefits and entitlements and a family
readiness ’tool kit“ to enhance communication about pre-deployment and
mobilization information among commanders, servicemembers, family
members, and family program managers. Each reserve component also
established family program representatives to provide information and
referral services, with volunteers at the unit level providing
additional assistance. The U.S. Marine Corps began offering an employee
assistance program in December 2002 to improve access to family support
services for Marine Corps servicemembers and their families who reside
far from installations. Through this program, servicemembers and their
families can obtain information and referrals on a number of family
issues, including parenting; preparing for and returning from
deployment; basic tax planning; legal issues; and stress.
Notwithstanding these efforts, we believe, based on our review to date,
that outreach to reservists and their families will likely remain a
continuing challenge for DOD.
Challenges in Accessing DOD Health Care Benefits Are Magnified for
Reservists:
Reservists who are mobilized for a contingency operation are confronted
with health care choices and circumstances that are more complex than
those faced by active component personnel. Reservists‘ decisions are
affected by a variety of factors--whether they or their spouses have
civilian health coverage, the amount of support civilian employers
would be willing to provide with health care premiums, and where they
and their dependents live. If dependents of reservists encounter
increased future difficulties in maintaining their civilian health
insurance due to problems associated with longer mobilizations and
absence from civilian employment, they may rely on DOD for their health
care benefits to a greater degree than they do today.
When activated for a contingency operation, reservists and their
dependents are eligible for health care benefits under TRICARE, DOD‘s
managed health care program. TRICARE offers beneficiaries three health
care options: Prime, Standard, and Extra. TRICARE Prime is similar to a
private HMO plan and does not require enrollment fees or co-payments.
TRICARE Standard, a fee-for-service program, and TRICARE Extra, a
preferred provider option, require co-payments and annual deductibles.
None of these three options require reservists to pay a premium.
Benefits under TRICARE are provided at more than 500 military treatment
facilities worldwide, through a network of TRICARE-authorized civilian
providers, or through non-network physicians who will accept TRICARE
reimbursement rates.
Reservists who are activated for 30 days or less are entitled to
receive medical care for injuries and illnesses incurred while on duty.
Reservists who are placed on active duty orders for 31 days or more are
automatically enrolled in TRICARE Prime and receive most care at a
military treatment facility. Family members of reservists who are
activated for 31 days or more may obtain coverage under TRICARE Prime,
Standard, or Extra.[Footnote 14] Family members who participate in
Prime obtain care at either a military treatment facility or through a
network provider. Under Standard or Extra, beneficiaries must use
either a network provider or a non-network physician who will accept
TRICARE rates.
Upon release from active duty that extended for at least 30 days,
reservists and their dependents are entitled to continue their TRICARE
benefits for 60 days or 120 days, depending on the members‘ cumulative
active duty service time. Reservists and their dependents may also
elect to purchase extended health care coverage for a period of at
least 18, but no more than 36, months under the Continued Health Care
Benefit Program.
Despite the availability of DOD health care benefits with no associated
premium, many reserve family members elect to maintain their civilian
health care insurance during mobilizations. In September 2002, we
reported that, according to DOD‘s 2000 survey, nearly 80 percent of
reservists reported having health care coverage when they were not on
active duty. Of reservists with civilian coverage, about 90 percent
maintained it during their mobilization.[Footnote 15] Reservists we
interviewed often told us that they maintained this coverage to better
ensure continuity of health benefits and care for their dependents.
Many reservists who did drop their civilian insurance and whose
dependents did use TRICARE reported difficulties moving into and out of
the system, finding a TRICARE provider, establishing eligibility,
understanding TRICARE benefits, and knowing where to go for assistance
when questions and problems arose. While reserve and active component
beneficiaries report similar difficulties using the TRICARE system,
these difficulties are magnified for reservists and their dependents.
For example, 75 percent of reservists live more than 50 miles from
military treatment facilities, compared with
5 percent of active component families. As a result, access to care at
military treatment facilities becomes more challenging for dependents
of reservists than their active component counterparts.
Unlike active component members, reservists may also transition into
and out of TRICARE several times throughout a career. These transitions
create additional challenges in ensuring continuity of care,
reestablishing eligibility in TRICARE, and familiarizing or re-
familiarizing themselves with the TRICARE system. Reservists are also
not part of the day-to-day military culture and, according to DOD
officials, generally have less incentive to become familiar with
TRICARE because it becomes important to them and their families only if
they are mobilized. Furthermore, when reservists are first mobilized,
they must accomplish many tasks in a compressed period. For example,
they must prepare for an extended absence from home, make arrangements
to be away from their civilian employment, obtain military
examinations, and ensure their families are properly registered in the
Defense Enrollment Eligibility Reporting System (DOD‘s database system
maintaining benefit eligibility status). It is not surprising that many
reservists, when placed under condensed time frames and high stress
conditions, experience difficulties when transitioning to TRICARE.
We recommended in September 2002 that DOD (1) ensure that reservists,
as part of their ongoing readiness training, receive information and
training on health care coverage available to them and their dependents
when mobilized and (2) provide TRICARE assistance during mobilizations
targeted to the needs of reservists and their dependents. DOD has added
information targeted at reservists to its TRICARE Web site and last
month, in response to our recommendation, developed a TRICARE reserve
communications plan aimed at outreach and education of reservists and
their families.
The TRICARE Web site is a robust source of information on DOD‘s health
care benefits. The Web site contains information on all TRICARE
programs, TRICARE eligibility requirements, briefing and brochure
information, location of military treatment facilities, toll free
assistance numbers, network provider locations and other general
network information, beneficiary assistance counselor information, and
enrollment information. There is also a section of the Web site devoted
specifically to reservists, with information and answers to questions
that reservists are likely to have. Results from DOD‘s 2000 survey show
that about 9 of every 10 reservists have access to the Internet.
The TRICARE reserve communications plan‘s main goals are to educate
reservists and their family members on health care and dental benefits
available to them and to engage key communicators in the active and
reserve components. The plan identifies a number of tactics for
improving how health care information is delivered to reservists and
their families. Materials are delivered through direct mailing
campaigns, fact sheets, brochures, working groups, and briefings to
leadership officials who will brief reservists and to reservists
themselves. The plan identifies target audiences and key personnel for
information delivery and receipt. The plan identifies methods of
measurement which will assist in identifying the degree information is
being requested and received. We plan to look at the TRICARE reserve
communications plan in more detail as we continue our study.
Under DOD authorities in the National Defense Authorization Acts for
2000 and 2001, DOD instituted several demonstration programs to provide
financial assistance to reservists and family members. For example, DOD
instituted the TRICARE Reserve Component Family Member Demonstration
Project to reduce TRICARE costs and assist dependents of reservists in
maintaining relationships with their current health care providers.
Participants are limited to family members of reservists mobilized for
operations Noble Eagle and Enduring Freedom. The demonstration project
eliminates the TRICARE deductible and the requirement that dependents
obtain statements saying that inpatient care is not available at a
military treatment facility before they can obtain nonemergency
treatment from a civilian hospital. In addition, DOD may pay a non-
network physician up to 15 percent more than the current TRICARE rate.
As we continue our study, we plan to review the results of the
demonstration project and its impact on improving health care for
reservists‘ family members.
DOD Actions Needed to Better Manage Relations Between Reservists and
Their Employers:
Most reservists have civilian jobs. The 2000 survey shows that 75
percent of drilling unit members worked full-time in a civilian
job.[Footnote 16] Of those with civilian jobs, 30 percent of reservists
worked for government at the federal, state, or local level; 63 percent
worked for a private sector firm; and 7 percent were self-employed or
worked without pay in their family business or farm. The 2000 survey
shows that one of the most serious problems reported by reservists in
previous mobilizations and deployments was hostility from their
supervisor. It should be noted, however, that many employers changed
company policies or added benefits for deployed reservists after
September 11, 2001. In a small nonprojectable sample of employers, we
found that more than half provided health care benefits and over 40
percent provided pay benefits that are not required by the Uniformed
Services Employment and Reemployment Rights Act of 1994.[Footnote 17]
Maintaining employers‘ continued support for their reservist employees
will be critical if DOD is to retain experienced reservists in these
times of longer and more frequent deployments. DOD has activities aimed
at maintaining and enhancing employers‘ support for reservists. The
National Committee for Employer Support of the Guard and Reserve serves
as DOD‘s focal point in managing the department‘s relations with
reservists and their civilian employers. Two specific functions of this
organization are to (1) educate reservists and employers concerning
their rights and responsibilities and (2) mediate disputes that may
arise between reservists and their employers.
Although DOD has numerous outreach efforts, we have found that a
sizeable number of reservists and employers were unsure about their
rights and responsibilities. For example, a 1999 DOD survey found that
31 percent of employers were not aware of laws protecting reservists.
In a recent report, we listed several factors that have hampered DOD‘s
outreach efforts to both employers and reservists.[Footnote 18] DOD has
lacked complete information on who reservists‘ employers are; it does
not know the full extent of problems that arise between employers and
reservists; and it has no assurance that its outreach activities are
being implemented consistently. We recommended that DOD take a number
of actions to improve the effectiveness of outreach programs and other
aspects of reservist-employer relations.
DOD concurred with most of these recommendations and has taken some
actions. Most notably, DOD is moving ahead with plans to collect
employer data from all of its reserve personnel. The data, if collected
as planned, should help DOD inform all employers of their rights and
obligations, identify employers for recognition, and implement
proactive public affairs campaigns. However, DOD has not been as
responsive to our recommendation that the services improve their
compliance with DOD‘s goal of issuing orders 30 days in advance of
deployments so that reservists can notify their employees promptly.
While our recommendation acknowledged that it will not be possible to
achieve the 30-day goal in all cases, our recommendation was directed
at mature, ongoing contingency mobilization requirements, such as the
requirements that have existed in Bosnia since 1995. We believe that
DOD needs to return to its 30-day goal following the current crisis or
it will risk losing employer support for its reserve forces.
I would like to take a moment, Mr. Chairman, to address the issue of
reservists who are students. Almost one-fourth of drilling unit members
responding to DOD‘s 2000 survey said they were currently in school.
While DOD has an active program to address problems that arise between
reservists and their civilian employers, there is no federal statute to
protect students. Student members of the reserves are not guaranteed
refunds of tuition and fees paid for the term they cannot complete, and
there is no federal statute for partial course credit or the right to
return to the college or university upon completion of active service.
Based on our recent work, we recommended that DOD add students as a
target population to the mission and responsibilities of the National
Committee for Employer Support of the Guard and Reserve, study in depth
the problems related to deployments that student reservists have
experienced, and determine what actions the National Committee for
Employer Support of the Guard and Reserve might take to help students
and their educational institutions. We feel DOD is giving this issue an
appropriate amount of attention given its resources. Employer Support
of the Guard and Reserve volunteers are directing students to available
resources and the Office of the Assistant Secretary of Defense for
Reserve Affairs has added student information and hyperlinks to its
official Web site. One available resource, for example, is the
Servicemembers Opportunity Colleges, which has volunteered to mediate
any disputes that arise between reservists and their schools.[Footnote
19] In addition, 12 states have enacted laws or policies to protect
student reservists since our report was issued last June, making a
current total of 15 states with such laws or polices.
Observations on Reserve Retirement Age:
The current reserve retirement system dates back to 1948 with the
enactment of the Army and Air Force Vitalization and Retirement
Equalization Act.[Footnote 20] The act established age 60 as the age at
which reserve retirees could start drawing their retirement pay. At the
time the act was passed, age 60 was the minimum age at which federal
civil service employees could voluntarily retire. Active component
retirees start drawing their retirement pay immediately upon
retirement.
Several proposals have been made to change the reserve retirement
eligibility age. In 1988, the 6th Quadrennial Review of Military
Compensation concluded that the retirement system should be changed to
improve retention of mid-career personnel and encourage reservists who
lack promotion potential or critical skills to voluntarily leave after
20 years of service. The study recommended a two-tier system that gives
reserve retirees the option of electing to receive a reduced annuity
immediately upon retirement or waiting until age 62 to begin receiving
retirement pay. Recent legislative proposals have called for lowering
the retirement pay eligibility age from 60 to 55, establishing a
graduated annuity, or establishing an immediate annuity similar to that
in the active duty military retirement system.
Mr. Chairman, I would like to make two observations about reforming the
reserve retirement system.
First, equity between reservists and active duty personnel is one
consideration in assessing competing retirement systems, but it is not
the only one. Other important considerations are the impact of the
retirement system on the age and experience distribution of the force,
its ability to promote flexibility in personnel management decisions
and to facilitate integration between the active and reserve
components, and the cost. Changes to the retirement system could prove
to be costly. Last year, the Congressional Budget Office estimated that
lowering the retirement pay eligibility age from age 60 to 55 would
cost $26.6 billion over 10 years.
Second, DOD currently lacks critical data needed to assess alternatives
to the existing retirement system. According to a 2001 study conducted
for the 9th Quadrennial Review of Military Compensation,[Footnote 21]
DOD should
(1) assess whether the current skill, experience, and age composition
of the reserves is desirable and, if not, what it should look like now
and in the future and (2) develop an accession and retention model to
evaluate how successful varying combinations of compensation and
personnel management reforms would be in moving the reserves toward
that preferred composition. DOD has contracted with RAND and the
Logistics Management Institute to study military retirement. RAND will
review alternative military retirement systems recommended by past
studies, develop a model of active and reserve retirement and
retention, analyze their likely effects on the retirement benefits that
individuals can expect to receive, and identify and analyze the
obstacles and issues pertaining to the successful implementation and
therefore the viability of these alternatives. The Logistics Management
Institute will assess alternative retirement systems with a focus on
portability, vesting, and equity. These studies are looking at seven
alternatives to the reserve retirement system. Preliminary results from
these studies are expected later this year. As discussed with your
offices, we plan to review the reserve retirement system in the future.
Contacts and Acknowledgments:
For future questions about this statement, please contact Derek B.
Stewart at (202) 512-5140 (e-mail address: stewartd@gao.gov) or Brenda
S. Farrell at (202) 512-3604 (e-mail address: farrellb@gao.gov).
Individuals making key contributions to this statement include
Christopher E. Ferencik, Michael Ferren, Thomas W. Gosling, Chelsa L.
Kenney, Krislin M. Nalwalk, and Timothy Wilson.
FOOTNOTES
[1] Unless specified, we use the terms ’reserves“ and ’reservists“ to
refer to the collective forces of the Air National Guard, Army National
Guard, the Army Reserve, the Naval Reserve, the Marine Corps Reserve,
and the Air Force Reserve. We did not include the Coast Guard Reserve
in our review.
[2] We plan to address compensation issues in other reviews. For
example, we have an ongoing review of special and incentive pays for
reservists who perform duty in the polar regions.
[3] U.S. General Accounting Office, Reserve Forces: DOD Actions Needed
to Better Manage Relations between Reservists and Their Employers,
GAO-02-608 (Washington, D.C.:
June 13, 2002).
[4] U.S. General Accounting Office, Military Personnel: Active Duty
Benefits Reflect Changing Demographics, but Opportunities Exist to
Improve, GAO-02-935 (Washington, D.C.: Sept. 18, 2002).
[5] The population of interest targeted by the survey consisted of all
Selected Reserve members of the reserve components below flag or
general officer rank, with at least
6 months of service when the surveys were first mailed in August 2000.
The sample consisted of 74,487 members. Eligible respondents returned
35,223 completed surveys.
[6] The average reservist trains 38 or 39 days per year. In addition to
this training, some reservists provide support for counter-drug
operations, domestic emergencies, exercises, and established and
emerging operations, including those involving either presidential
call-ups or mobilizations.
[7] For this testimony, operational tempo refers to the total days
reservists spend participating in normal drills, training, and
exercises, as well as domestic and overseas operational missions.
[8] Attrition is the total number of personnel losses from the selected
reserves divided by the average selected reserve end strength for the
year.
[9] The 2000 survey asked respondents: ’Please estimate your (and your
spouse‘s) total income change from all sources as a result of your most
recent mobilization and deployment. If you (and your spouse) have
continuing losses from a business or practice, include those in your
estimate.“
[10] The survey listed 22 possible problems and asked respondents to
choose their top three most serious problems experienced during
mobilization or deployment.
[11] See section 512, National Defense Authorization Act for Fiscal
Year 1996 (P.L. 104-106, Feb. 10, 1996).
[12] U.S. General Accounting Office, Reserve Forces: Observations on
the Ready Reserve Mobilization Income Insurance Program, GAO/
T-NSIAD-97-154 (Washington, D.C.:
May 8, 1997).
[13] RAND, The Effect of Mobilization on Retention of Enlisted
Reservists After Operation Desert Shield/Storm, MR-943-OSD (1998). The
study did not include officers.
[14] Until last week, family members of reservists generally became
eligible for Prime when the reservist was activated for 179 days or
more. Legislation passed in December
(P.L. 107-314, Sec. 702) made family members of reservists activated
for more than 30 days eligible for the Prime benefit if they reside
more than 50 miles, or an hour‘s driving time, from a military
treatment facility. Last week, the Defense Department altered TRICARE
policy such that all family members of reservists activated for more
than 30 days are eligible for the Prime benefit.
[15] U.S. General Accounting Office, Defense Health Care: Most
Reservists Have Civilian Health Coverage but More Assistance Is Needed
When TRICARE Is Used, GAO-02-829 (Washington, D.C.: Sept. 6, 2002).
[16] This figure does not include reservists who work as civilian
military technicians.
[17] Pub. L. 103-353 (Oct. 13, 1994), 38 U.S.C. secs. 4301-4333.
[18] GAO-02-608.
[19] The Servicemembers Opportunity Colleges is a consortium of
national higher education associations and more than 1,500 colleges.
The organization helps to coordinate postsecondary educational
opportunities for servicemembers through voluntary programs that are
funded by the military services.
[20] June 29, 1948, ch. 708, 62 stat. 1081.
[21] RAND, Reforming the Reserve Retirement System, PM-1278-NDRI (Dec.
2001).
