Military Personnel: DOD Needs More Data to Address Financial and Health Care Issues Affecting Reservists

GAO-03-1004 Published: Sep 10, 2003. Publicly Released: Sep 10, 2003.
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Highlights

Since the 1991 Persian Gulf War, National Guard and Reserve personnel have been deployed to a number of contingency operations. Since September 2001, about 300,000 reservists have been called to active duty, and the pace of reserve operations is expected to remain high for the foreseeable future. House Report 107-436 accompanying the Fiscal Year 2003 National Defense Authorization Act (P.L. 107-314) directed GAO to review compensation programs for reservists serving on active duty. GAO evaluated information on income change reported by reservists when activated; reserve families' readiness for call-ups and their awareness and use of family support programs, focusing on personal financial management; and a legislative proposal for the Department of Defense (DOD) to offer TRICARE, the military's health care program, to reservists and their families when members are not on active duty.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
In order to provide DOD an opportunity to determine the need for and ramifications of expanding TRICARE, Congress may wish to delay a decision on the legislative proposal to offer TRICARE to reservists and their families when members are not on active duty. Furthermore, Congress may wish to direct the Secretary of Defense to assess and report on reserve health care benefits as we have recommended in this report.
Closed – Implemented
Congress made subsequent enhancements to TRICARE aimed at improving health care benefits for reserve component members. In addition, the National Defense Authorization Act for Fiscal Year 2005 directed GAO to determine the cost and feasibility of providing a stipend to members of the Ready Reserve to offset the cost of continuing their current private health insurance coverage for their dependents while they are on active duty. In response to this mandate, GAO examined the costs and potential implications of implementing a health care stipend program and issued a report (GAO-06-128R, Oct. 19, 2005).

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness to determine the need for compensation programs aimed at addressing reservists' income loss during periods of active duty by obtaining more complete information on the magnitude of income change, the causes of income change, and the effects of income change on reserve retention. At a minimum, these efforts should be designed to identify reservists who (1) fill critical wartime specialties, (2) experience high degrees of income loss when on active duty, and (3) demonstrate that income loss is a significant factor in their retention decisions.
Closed – Implemented
DOD sponsored two studies by federally funded research organizations to analyze the impact of mobilization on reservists' income. The studies, which were completed in 2006, provided more complete information on income change than was previously available to the department.
Department of Defense The Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness to assess problems reservists have experienced since the mobilizations following the events of September 11, 2001, in maintaining continuity of health care; the causes of these problems; and their effects on readiness, recruiting, and retention. As part of this assessment, DOD should evaluate the ramifications of extending TRICARE coverage to reservists not on active duty and their family members as well as paying premium costs incurred by reservists who choose to continue their civilian health care insurance coverage when activated. DOD should also evaluate the potential impact of extending such coverage on the retention of active duty personnel and on the TRICARE system.
Closed – Implemented
The National Defense Authorization Act for Fiscal Year 2005 directed GAO to determine the cost and feasibility of providing a stipend to members of the Ready Reserve to offset the cost of continuing their current private health insurance coverage for their dependents while they are on active duty. In response to this mandate, GAO examined the costs and potential implications of implementing a health care stipend program and issued a report (GAO-06-128R, Oct. 19, 2005).
Department of Defense On the basis of this information on income change, the Secretary of Defense should develop targeted compensation programs, as appropriate, to retain these reservists in the armed forces.
Closed – Implemented
Subsequent to our report, Congress mandated that DOD replace reservists' civilian income loss due to involuntary mobilization. The authority under 37 U.S.C. section 910 is a nondiscretionary entitlement that must be paid to all eligible members. This new authority was added by section 614 of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109-163, 199 Stat. 3292, January 6, 2006). In response to this mandate, DOD established its Reserve Income Replacement Program. Under this program, any eligible reservist with documented monthly income loss of at least $50 per month may receive income replacement payments. The program went into effect August 1, 2006.
Office of the Under Secretary for Personnel and Readiness In developing these plans, the military services, in conjunction with the Under Secretary of Defense for Personnel and Readiness, should assess the financial well-being of reservists and determine whether reservists' financial problems affect mission readiness.
Closed – Implemented
DOD sponsored studies by federally funded research organizations on the impact of mobilization on reservists' income. In addition, DOD included questions concerning Reserve financial issues in its Status of Forces survey.
Department of the Air Force The Secretary of Defense should direct the Secretaries of the Army, the Air Force, and the Navy and the Commandant of the Marine Corps to develop specific plans for improving reservists' and their spouses' awareness of and access to personal financial management programs.
Closed – Implemented
DOD issued an instruction in 2004 that established a uniform approach to the education and training of servicemembers on personal financial management. The instruction establishes DOD policy that servicemembers and their families shall have access to personal financial management programs and to financial planning and counseling services. The Secretaries of the Military Departments are responsible for ensuring compliance with the instruction by establishing procedures and allocating resources to foster servicemember and spouse competence in personal finance. In addition, the instruction directs the military departments to target their most aggressive education and training efforts toward junior enlisted members and families.
United States Marine Corps The Secretary of Defense should direct the Secretaries of the Army, the Air Force, and the Navy and the Commandant of the Marine Corps to develop specific plans for improving reservists' and their spouses' awareness of and access to personal financial management programs.
Closed – Implemented
DOD issued an instruction in 2004 that established a uniform approach to the education and training of servicemembers on personal financial management. The instruction establishes DOD policy that servicemembers and their families shall have access to personal financial management programs and to financial planning and counseling services. The Secretaries of the Military Departments are responsible for ensuring compliance with the instruction by establishing procedures and allocating resources to foster servicemember and spouse competence in personal finance. In addition, the instruction directs the military departments to target their most aggressive education and training efforts toward junior enlisted members and families.
Department of the Navy The Secretary of Defense should direct the Secretaries of the Army, the Air Force, and the Navy and the Commandant of the Marine Corps to develop specific plans for improving reservists' and their spouses' awareness of and access to personal financial management programs.
Closed – Implemented
DOD issued an instruction in 2004 that established a uniform approach to the education and training of servicemembers on personal financial management. The instruction establishes DOD policy that servicemembers and their families shall have access to personal financial management programs and to financial planning and counseling services. The Secretaries of the Military Departments are responsible for ensuring compliance with the instruction by establishing procedures and allocating resources to foster servicemember and spouse competence in personal finance. In addition, the instruction directs the military departments to target their most aggressive education and training efforts toward junior enlisted members and families.
Department of the Army The Secretary of Defense should direct the Secretaries of the Army, the Air Force, and the Navy and the Commandant of the Marine Corps to develop specific plans for improving reservists' and their spouses' awareness of and access to personal financial management programs.
Closed – Implemented
DOD issued an instruction in 2004 that established a uniform approach to the education and training of servicemembers on personal financial management. The instruction establishes DOD policy that servicemembers and their families shall have access to personal financial management programs and to financial planning and counseling services. The Secretaries of the Military Departments are responsible for ensuring compliance with the instruction by establishing procedures and allocating resources to foster servicemember and spouse competence in personal finance. In addition, the instruction directs the military departments to target their most aggressive education and training efforts toward junior enlisted members and families.

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