Benefactor AFSC MESSAGE FROM AFSC CEO GEOFF DEUTSCH. Legislative News for Military Families YOUR ARMED FORCES SERVICES CORPORATION NEWSLETTER

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1 2015 AFSC Benefactor YOUR ARMED FORCES SERVICES CORPORATION NEWSLETTER MESSAGE FROM AFSC CEO GEOFF DEUTSCH Happy New Year from Armed Forces Services Corporation. We wish you and your family good health and prosperity in the new year. AFSC s mission is to support Service Members, Veterans, Families and for 135 years-survivors. We provide the AFSC Benefactor to our Members as a tool to keep you informed of changes in laws and policies, as well as related information that we think you may find helpful. Our Member Services staff is here for our members, and we invite you to contact us with updates to your record, questions regarding benefits, or if you need our assistance to obtain benefits to which you are entitled. It s our honor to serve the Military/Veteran community and we appreciate the opportunity to support you and your family. Legislative News for Military Families The Fiscal Year 2015 National Defense Authorization Act (NDAA), a United States federal law that is enacted each year to specify the budget and expenditures of the United States Department of Defense, was signed by President Barack Obama on December 19, Some of the changes in this year s NDAA and other legislation that may affect you include: 1.7% cost of living adjustment (COLA) in 2015 for military retired pay, survivor benefits, social security benefits, and VA benefits. 1.0% pay raise for members of the Uniformed Services. However, active duty pay for general officers (O7 and above) will remain at the 2014 pay rate (see next paragraph). General officers under the Final Pay retirement plan who retire after December 31, 2014 will have their retired pay calculated under both the capped pay table (at the 2014 Level II rate under the Executive Schedule) and under the uncapped pay table that was in effect on December 31, 2014 and will receive the more advantageous retired pay amount. General officers who retire under the Hi-3 retirement plan will be calculated based upon the average of their highest 36 months of active duty pay, which will include uncapped active duty base pay received between October 1, 2006 and December 31, 2014, if applicable, together with capped pay, if applicable, received after December 31, Special Needs Trusts established under the Social Security Act (42 U.S.C. 1396p(d)(4)), for children who are incapable of self-support due to mental or physical incapacity, may now be designated as eligible beneficiaries to receive payments under the Survivor Benefit Plan (SBP). In a properly-drafted Special Needs Trust, assets are not considered countable for purposes of qualification for certain governmental benefits. Such benefits may include Supplemental Security Income (SSI), Medicaid, vocational rehabilitation, subsidized housing, and other benefits based upon need. A Special Needs Trust provides for supplemental and extra care over and above that which the government provides

2 TRICARE Expansion of Marine Gunnery Sergeant John David Fry Scholarship Adds Eligible Surviving Spouses Educational benefits under the Marine Gunnery Sergeant John David Fry Scholarship have been extended to the surviving spouses of military personnel who died in the line of duty after September 10, 2001(Under P.L , enacted August 7, 2014). Prior to this Act, only children of those who died in the line of duty were eligible for this benefit. The new annual rates for TRICARE Prime participants, effective October 1, 2014, are $ for individuals and $ for families. (Active duty service members and their families do not pay enrollment fees.) Co-pays for selected military pharmaceuticals may increase by $3.00 per prescription. Eligible spouses will be entitled to up to 36 months of the full, 100% level of the Post-9/11 GI Bill. This includes tuition and fee payments, a monthly housing allowance, and a books and supplies stipend. This change became effective for school years commencing on or after January 1, For more information, visit the VA website at factsheets/fry_scholarship_expansion_factsheet.pdf or call the VA at (1-888-GIBILL-1) Updating Beneficiary Designations for SGLI and VGLI If you have had a recent life event such as a change in marital status, the addition of a child, or the death of a loved one, then now is a good time to review your beneficiary designations for Servicemembers Group Life Insurance (SGLI), Veterans Group Life Insurance (VGLI) and VA Insurance policies starting with V, RS, RH or J, K or W. Make sure your life insurance benefit is paid to the the person you intend to receive it Not keeping beneficiaries up-to-date could result in your benefits unintentionally going to a ex-spouse, your deceased parent s estate, your estate, or even being held until an appropriate family member is located. It could also result in payment delays at a time when your loved one needs the money. For example, if the listed beneficiaries are children from a first marriage, children from a current marriage might contest the claim if they believe they have more recent documents showing they should be the beneficiaries. No one can be paid until it is determined who is legally entitled to the money. Even if you haven t had a recent life event, it s a good idea to review your beneficiaries at least once a year. So mark it on your calendar as an annual event. And remember, you have the legal right to name the beneficiary you want or to change your beneficiary at any time. You can access all Change of Beneficiary forms at See chart below to determine what form you will need: If you have Download A VA policy starting with V, RH, RS, J, K or W Form SGLI Coverage Form SGLV 8286 VGLI Coverage Form SGLV 8721 or log onto your VGLI Online Account at 2

3 Summary of Social Security Benefits The Social Security Administration provides retirement, disability, survivor, and medical benefits to individuals who pay Social Security taxes on their earnings. Military personnel have been contributing participants in the Social Security program since 1957 and are eligible for benefits as a result. Contributions are automatically deducted from active duty paychecks; however, you must apply to receive benefits if you become disabled or retire. The following is a basic overview of Social Security benefits: Disability Benefits: If you meet the basic eligibility requirements, benefits are payable for disability incurred as a result of a serious accident or illness before reaching Full Retirement Age (age 65 through age 67, depending upon your year of birth). If you become totally disabled, you can start drawing benefits at any age. In addition to drawing benefits on your own behalf, under some conditions dependents can also receive benefits. Medical proof must be submitted to show that you cannot perform any substantial gainful work because of a physical or mental disability which must last, or be expected to last, for at least 12 months or result in death. Retirement Benefits: In addition to your full military retired pay, you may be entitled to draw retirement benefits under Social Security after reaching age 62. However, benefits are reduced if you start drawing them before reaching your Full Retirement Age. Your military retired pay is considered to be a pension and not earned income, so it won t help to increase your SS retirement benefit. But contrary to popular belief, you can draw both your full military retired pay and your full social security retirement benefits with no offset involved. Military retired pay is not affected (reduced) when you begin drawing your Social Security retirement benefits. It is advisable to apply 2-3 months prior to the month in which you would like the retirement benefit payments to begin. The Social Security Administration can provide current estimates for all your benefit entitlements. Survivor Benefits: Survivors eligible for benefits after your death are: Your spouse when age 60 or later. Your spouse at any age if he or she is caring for your minor child/children who are entitled to Social Security benefits. Your disabled spouse who no longer has a child of yours under age 16, provided the requirements established by the Secretary of Health, Education and Welfare are met. Dependent unmarried children under age 18, and those who are 18 or over who became disabled prior to age 18. Dependent parents or a parent age 62 or over receiving more than one-half of his or her support from you at the time of your death. Your surviving divorced spouse (if he or she hasn t remarried) provided that he or she had been married to you for at least 10 years before your divorce. He or she must be at least age 62 or have a child of yours younger than age 16 in his or her care. If the surviving spouse remarries prior to age 60, the benefits paid as the survivor may cease. Children s benefits are not affected by the surviving spouse s remarriage even if their step-parents adopt them. State laws on the subject are followed by the Social Security Administration. When there is a current and a former (unmarried) spouse both caring for the children or stepchildren that are entitled to benefits, the benefits will be divided equally. Rules for changing Survivor Benefit Plan (SBP) from Former Spouse to Current Spouse On January 8, 2014, the DFAS Office of General Counsel clarified the laws regarding the change of SBP coverage from Former Spouse to Spouse upon the death of the former spouse. Situation 1: Any retiree that is married and elects Spouse coverage at retirement, then divorces that spouse and elects or is court orderd by divorce decree to continue coverage for him or her as a Former Spouse, CANNOT elect to cover his or her current spouse It does not matter whether or not the Former Spouse SBP coverage was court-ordered. Once the former spouse dies, the retiree cannot change his or her election to Spouse coverage for a subsequent spouse. The ONLY circumstance under which a retiree in Situation 1 can change his or her SBP coverage from Former Spouse to a subsequent Spouse is if the change is made while the Former Spouse is still alive. Situation 2: Any retiree that has BOTH a spouse and a former spouse at retirement, who elects Former Spouse SBP coverage pursuant to a court order, is eligible to change his or her SBP coverage to Spouse The reason is because the retiree s actual spouse was eligible to be named as a beneficiary at retirement, but the retiree was denied the opportunity to name her or him as an SBP beneficiary because of the court order to establish Former Spouse coverage. However, if the retiree made a voluntary election for Former Spouse coverage at retirement, while he or she also had a current spouse, then SBP coverage cannot be changed to Spouse For more information visit retiredmilitary/provide/sbp/change. 3

4 FAQ How do I obtain a VA Home Loan Certificate of Eligibility or a duplicate of a certificate? You can apply three ways, online, though a mortgage lender, or by mail. You can apply online. To get your Certificate of Eligibility (COE) online, please go to the ebenefits portal at This site requires username and password login credentials. If you need login credentials, please click the Register box and follow the directions on the screen. If you need any other assistance, please call the ebenefits Help Desk at Their hours are Monday-Friday, 8am to 8pm EST. Most lenders can help you apply by using the Web LGY system. This Internet-based application can establish eligibility and issue an online COE in a matter of seconds. Not all cases can be processed through Web LGY - only those for which VA has sufficient data in their records. However, Veterans are encouraged to ask their lenders about this method of obtaining a certificate. If you prefer, you can apply by mail by completing and mailing VA Form , Request for Certificate of Eligibility. Send the completed form to: VA Loan Eligibility Center Attn: COE (262) PO Box Decatur, GA Surviving Spouses must apply by mail using VA Form , Request for Determination of Loan Guaranty Eligibility - Unmarried Surviving Spouses. If your Veteran spouse died after service, VA must determine that the death was due to a service-connected disability. Please allow 2-3 months for this process unless you know that the decision on service-connected death has already been made. For more information on VA Home loans, visit Services provided to you as a Member of AFSC Family Information Record One of the most valuable benefits you will receive as an AFSC member is our unique Family Information Record (FIR) that we will send to you every year around your birth month. Your FIR will provide you with the most accurate projection available of the government benefits to which your survivors would become eligible upon your death. Hidden behind the numbers are decades of legislation that are built into our software which show how different government benefits interact with each other. To build and maintain your FIR, it is critical that you provide us your personal and service information as a foundation...all of which is kept strictly confidential. An example of the information needed is military service dates, life insurance policies, family data, etc. Contact AFSC Member Services Department at (888) or by at info@afsc.com to provide updates or if you have questions on what is missing from your Family Information Record. Digital Document Storage We can securely image your personal documents in your file. By having these imaged copies on file, AFSC Member Services Department can send them to you quickly. In addition, the documents are extremely useful to the Member Services staff in the event of a Member passing to assist in claims filing. For example, we can fax a copy of the Member s DD Form 214 to a funeral home to enable burial in a National Cemetery. Send photocopies of the following documents, if applicable: Leave and Earnings Statement (for active duty) Social Security Report of Earnings Statement Retirement Orders Civil Service Retirement Annuity Statement VA Disability Award Letter Reserve/Guard 20-year Letter Reserve/Guard Statement of Retirement Points Computation of total service, if one was provided DD214 Discharge Certificate Member #4 copy Retiree Account Statement (DFAS) In addition to the above documents, you may send us photocopies of the following records: Birth records for all family members Marriage Certificates Adoption Papers Divorce Decrees/Property Settlements Citizenship Certificates Note: Above documents will be digitally imaged, entered into your AFSC electronic file, and then destroyed. We no longer maintain paper document files. Do not send any original or one-of-a-kind documents or legal papers such as wills, powers of attorney, living wills, trusts, property titles, savings bonds, appraisals, or insurance policies. 4

5 DID YOU KNOW? Social Security pays a one-time lump sum death benefit of $255 to the surviving spouse. If there is no surviving spouse, the benefit is paid to a minor or disabled child who is eligible for survivor benefits in the month of death. If there is no surviving spouse or eligible child, the benefit will not paid. The claim must be made within two years of the date of death, and the funds cannot be paid directly to a funeral home. How to Contact AFSC AFSC-Member Services 2800 S. Shirlington Road, Suite #350 Arlington, VA Hours of Operation: 8:00 a.m. 4:30 p.m. EST Monday Friday, excluding holidays Toll Free Local Fax info@afsc.com Medicare Part B Premium Costs in 2015 The Medicare Modernization Act of 2003 made significant changes to the way in which Medicare Part B premiums are calculated. Beginning in 2007, some seniors have been required to pay higher premiums under a new means test based upon Adjusted Gross Income (AGI). AGI is your total income from all sources, minus certain adjustments, and is usually the bottom number on the front side of your 1040 tax return. The regular Part B premium for 2015 is $104.90; most people will pay this rate. Below is a chart depicting the increased cost of Part B premiums in 2015 for those with AGI over $85,000 for an individual filing single or $170,000 for a married couple filing a joint return. The IRS will provide your tax return information to Medicare for the two years preceding the year for which the higher Part B premiums are applicable. Certain life-changing events will allow modifications to the data provided by the IRS for determining a modified AGI. Website Receptionist Extension 0 Member and Survivor Services Department Jennifer A. Harlow (Manager) Ext JHarlow@AFSC.com Racquel Pearce Ext RPearce@AFSC.com Beneficiaries who file an individual tax return with income: Less than or equal to $85,000 Beneficiaries who file a joint tax return with income: Total monthly premium amount: Less than or equal to $170,000 $ Veterans Affairs Ron Pryor Ext RPryor@AFSC.com Greater than $85,000 equal to $107,000 Greater than $107,000 equal to $160,000 Greater than $170,000 and less than or equal to $214,000 Greater than $214,000 and less than or equal to $320,000 $ $ Officers President & CEO : Geoffrey J. Deutsch, MBA Executive Vice President: Keith Miller, CLU, ChFC Greater than $160,000 equal to $214,000 Greater than $320,000 and less than or equal to $428,000 $ President Emeritus : Brad Snyder, CLU Greater than $214,000 Greater than $428,000 $