\I if ,oz -z_

81-ho

-j BRIEFING BY THE BUREAU OF RETIREMENT,

;ovERNMENT INSURANCE, AND OCCUPATIONAL HEALTH,

;torage UNITED STATES CIVIL SERVICE COMMISSION

HEARING

BEFORE THE

1%-

)MMITTEE ON RETIREMENT AND

-0 EMPLOYEE BENEFITS

OF THE

COMMITTEE ON

POST OFFICE AND CIVIL SERVICE

HOUSE OF REPRESENTATIVES

NINETY-FOURTH CONGRESS

FIRST SESSION

MARCH 3, 1975

Serial No. 94-1

Printed for the use of the

Committee on Post Office and Civil Service

U.S. GOVERNMENT PRINTING OFFICE

49-276 0 WASHINGTON : 1975
COMMITTEE ON POST OFFICE AND CIVIL SERVICE

DAVID N. HENDERSON, North Carolina, Chairman

MORRIS K. UDALL, Arizona, Vice Chairman

DOMINICK V. DANIELS, New Jersey

ROBERT N. C. NIX, Pennsylvania

JAMES M. HANLEY, New York

CHARLES H. WILSON, California

RICHARD C. WHITE, Texas

WILLIAM D. FORD, Michigan

WILLIAM (BILL) CLAY, Missouri

PATRICIA SCHROEDER, Colorado

WILLIAM LEHMAN, Florida

GLADYS N. SPELLMAN, Maryland

STEPHEN L. NEAL, North Carolina

HERBERT E. HARRIS, Virginia

WILLIAM M. BRODHEAD, Michigan

PAUL SIMON, Illinois

NORMAN Y. MINETA, California

JOHN W. JENRETTE, JR., South Carolina

STEPHEN J. SOLARZ, New York

JOHN H. MARTINY, Chief Counsel

VICTOR C. SMIROLDO, Staff Director and Counsel

THEODORE J. KAZY, Associate Staff Director

ROBERT E. LocKBART, Counsel

ROY C. MESKER, Senior Staff Assistant

EDWARD J. DE RWINSKI, Illinois

ALBERT W. JOHNSON, Pennsylvania

JOHN H. ROUSSELOT, California

ANDREW J. HINSHAW, California

JAMES M. COLLINS, Texas

GENE TAYLOR, Missouri

BENJAMIN A. GILMAN, New York

ROBIN L. BEARD, Tennessee

TRENT LOTT, Mississippi

SUBCOMMITTEE ON RETIREMENT AND EMPLOYEE BENEFITS

RICHARD C. WHITE, Texas, Chairman

DOMINICK V. DANIELS, New Jersey GENE TAYLOR, Missouri

HERBERT E. HARRIS, Virginia ROBIN L. BEARD, Tennessee

GLADYS N. SPELLMAN, Maryland

NORMAN Y. MINETA, California

JOHN W. JENRETTE, JR., South Carolina

(RONALD P. MCCLUSKEY, Assistant Counsel, Room B-345(b), Rayburn Building—Ext. 56831)

NOTE.—The chairman and ranking minority member are ex officio voting members of all subcommittees

on which they do not hold a regular assignment.

(l)
CONTENTS

Testimony of— Page

Tinsley, Thomas A., Deputy Director, Bureau of Retirement, Insurance, and Occupational Health, accompanied by Edwin Hustead__ _ 1

Communication from—

Tinsley, Thomas A., Director, Bureau of Retirement, Civil Service Commission, letter dated March 20, 1975, with enclosures to supplement the hearing record 30

(m)

BRIEFING BY THE BUREAU OF RETIREMENT, INSURANCE, AND OCCUPATIONAL HEALTH, U.S. CIVIL

SERVICE COMMISSION

MONDAY, MARCH 3, 1975

U.S. HOUSE OF REPRESENTATIVES,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

SUBCOMMITTEE ON RETIREMENT AND EMPLOYEE BENEFITS,

Washington, D.C.

The committee met at 10 a.m., in room 210, Cannon House Office

Building, Hon. Richard C. White (chairman of the subcommittee)

presiding.

Present: Representatives Richard C. White, Dominick V. Daniels,

Gladys N. Spellman, Norman Y. Mineta, and Herbert E. Harris.

OPENING STATEMENT BY CHAIRMAN RICHARD C. WHITE

Mr. WHITE. The subcommittee will come to order.

I'd like to welcome and thank Mr. Tinsley of the Civil Service

Bureau of Retirement, Insurance, and Occupational Health as well

as other members of the staff with him this morning for having agreed

to come before the subcommittee to present an indepth briefing and

discussion of all matters relating to the jurisdiction of this subcommittee which no doubt will benefit us all, especially the new members

of the subcommittee, but I have to put myself in that category as well.

I note with appreciation the fact that you were courteous enough

to visit our subcommittee on two occasions and have offered to visit

with any subcommittee member and discuss problems he or she may

be having relating to your activities and expertise. No doubt we should

be seeing a lot of you throughout the 95th Congress—the 94th Congress, and we hope the 95th, as well, and I hope this fine spirit of

cooperation may continue so we both may benefit.

The members may have many questions, especially on this 1-percent

bonus civil servants allegedly receive according to our local newspapers

and Time magazine.

So without further proceeding, I wish you would now introduce the

people with you for the record and then proceed in any way you feel

advisable.

Before you do that, however, I wish to advise you of who is present.

Of course, I am Richard White, of Texas, 16th District, and Mrs.

Spellman, of Maryland—I don't know which district 

Mrs. SPELLMAN. Five.

Mr. WHITE. And Mr. Harris of Virginia, in the metropolitan area

of Washington.

Mr. Tinsley, if you would proceed, sir.

(1)
2

STATEMENT OF THOMAS A. TINSLEY, DEPUTY DIRECTOR, BUREAU

OF RETIREMENT, INSURANCE, AND OCCUPATIONAL HEALTH,

CIVIL SERVICE COMMISSION, ACCOMPANIED BY EDWIN HUSTEAD

Mr. TINSLEY. Thank you, Mr. Chairman.

First, let me express my appreciation for the opportunity to appear

before the subcommittee this morning to brief you on the benefit

programs we administer for Federal employees and to answer questions that the committee may have concerning them.

I have no prepared statement, Mr. Chairman. I did prepare for

my use and for the use of the committee what I guess I might call a

coloring book that briefly goes through and highlights significant

information concerning the various benefit programs and perhaps

we can use that as a basis for the discussion here this morning.

I do not intend to go through and read it line for line. I think

some things in it are rather obvious to the members of the committee.

For example, the purposes of the fringe benefits programs and the

impact these benefits have, not only on Federal employees, but in

terms of costs to both the Federal Government and the employees.

In 1964 these benefit progrpms—the retirement, life insurance, and

health benefits—were costing the Government about $1.3 billion. By

1969 this cost rose to $1.8 billion; and in 1974 these had gone to $5.6

billion. From our experience and the way trends are going there is

no doubt that these benefit programs are going to continue to grow.

The continued increases, regardless of any further action by Congress

or the executive branch will be due to the present legal commitments

in the law, the long-term economic trends, increases in salaries, increases in medical care costs, as well as others, and the increasingly

older work force and the growth of the number of individuals on

retirement rolls.

If we first move into the retirement program, since this is the

largest program that we administer, it impacts on every Federal employee and their family at some point in time, if not from the very

first date they enter Government service until long after they leave.

In 1974 the Government costs for the retirement program was

$4.8 billion. In 1979, if I were to assume no further changes in the

program—that is, no further changes in benefits, no changes in salary,

no changes in the cost of living—in other words, everything static—

in 1979 the cost to the Government would be $8.4 billion.

Now I think most people would agree that everything is not going

to stay the same between now and 1979. There will be some continued inflation. There will be increases in salary. And undoubtedly,

Congress in its wisdom will enact some further liberalizations.

With some rather modest assumptions, and these are based.on the

Office of Management and Budget assumptions, those costs m 1979

to the Government would be $11.9 billion. In 1984, with static

projection, which is the one I mentioned where everything stays the

same as it is today, the Government cost would be $8.9 billion. .

Again, on a more dynamic basis, assuming some changes in salaries,

cost of living, and other factors, these costs would be $17.7 billion.

I think basically the cost of these programs is what sometimes

gives us some concern and perhaps tends to have us viewed as being

rather conservative in terms of our consideration of additional legislation, particularly when that legislation is one of liberalizing nature.
3

Now I mentioned some of the Government cost figures, but the

retirement program is financed in several ways. These financing

provisions were placed in the law in 1969. Prior to 1969 financing was

very limited, unfunded liability kept building up, and at that time it

appeared that it would not be long, possibly 10 years or 11 years, that

there would be very serious problems in terms of the retirement fund

meeting its obligation.

Congress at that time enacted a law that provided some permanent

financing mechanisms to insure the stability of the retirement system.

The financing of the system in terms of normal cost—and normal cost

insofar as we're concerned is considered to be the amount of money

that has to be placed in the fund today, for an individual entering the

system today to provide the benefits that the system provides today,

and paid over a working career which will then, upon retirement,

guarantee him these benefits. At the present time the normal cost of

the system is 13.23 percent. In other words, it's 13.23 percent of the

Government payroll.

The agencies and the employees traditionally, by law, have shared

the normal cost of the system. At the present time the agencies and

employees each contribute 7 percent of the basic pay toward the cost

of the benefits.

The 14 percent, while it would be enough for those entering the

system today to pay the benefits they are guaranteed by law today,

does not meet the full cost of the benefit payments for all employees.

This is due to the fact that unfunded liability is created through

benefit liberalization enacted by the Congress, general statutory pay

increases, other than what the normal progression of an individual

would be in the existing salary structure, the increases resulting from

the cost-of-living increases, and benefits based upon military service.

All these present some additional problems and create the need for

additional financing.

Now while the employer/employee contribution is 7 percent each

to meet the normal cost, Congress in 1969 made the decisions

mentioned earlier concerning financing and what they did by law at

that point in time was to say that the unfunded liability that existed

at the time would be paid for in this manner: The money would not

be transfered to the Treasury but the interest on that money would

begin to be paid just as if it were in the Treasury in the retirement

fund. They began by establishing that in 1971, 10 percent of the total

interest bill would be paid and increments of 10 percent would be

added to that each year until 1980 when 100 percent of the interest on

that unfunded liability would be paid into the fund.

The second major step they took was in connection with any

unfunded liability that might be created by subsequent acts of

Congress. This would involve benefit liberalizations and what they

did there was decide that this unfunded liability when it was created

would immediately be financed just as you would a home mortgage

or some other type of a mortgage. You would take the principal and

whatever the interest would be over a 30-year period and you would

pay it off in 30 annual equal installments. Those were the major

financing provisions there.

The payments for military service were covered by transfers of

funds each year from general revenues to the fund. The liabilities

created by the Consumer Price Index since the Consumer Price
4

Index provision was already in the law at that time are also only

financed by having an interest payment made on them. There's no

amortization of the cost-of-living increases.

So basically, that little chart you have on page 8 shows you exactly

what the status of the fund is at the present time. I might call attention

to an update on a figure and the interest on invested funds—these are

the funds that are paid in by the employers/employees by appropriations from Congress. They are invested by the Treasury. The Civil

Service Commission does not have the responsibility for investing the

money that's in the retirement fund. That's done by the Treasury

Department. The interest on invested funds right now is running

6.3 percent rather than the 5.7 percent mentioned there, and in all

probability it will reach about 7.5 percent this year. The fund right

now is approximately $35 billion.

In the fiscal year 1975 the agency contributions of 7 percent accounted

for $2.3 billion, and employee contributions $2.3 billion, The appropriations for the 30-year amortization payments were slightly

in excess of $1 billion and the Treasury transfers which are the

interest type payments that I spoke of, $1.5 billion. Our benefit

payout during fiscal year 1974 was $4.5 billion.

The bulk of the retirement payments go to those who are on our

regular annuity rolls, those who have left the Government for age or

upon reaching retirement eligibility. Another portion of it goes to

the individuals whose careers are shortened by virtue of disability,

and then we have the widows and children of those who died in service

and those, who on retirement, elect to provide a survivor annuity

for their spouse.

At the present time over 1.3 million persons are on the roll and

those are the individuals who have received that $5.5 billion in annuity

payments during the past year.

As I mentioned earlier, these benefit payments will continue to

grow even if nothing happens from this day forward. The number of

people on the annuity rolls will continue to grow and increase because

of the advancing age of the Federal work force, the large number of

people who entered the Federal work force during and after World

War II and, if our estimates are correct, stabilize around the year

2000.

The rising salaries which raise the 3-year average salary of the

individual on which annuities are based—and here I'm not talking

just about salary increases, the annual ones, but the fact that in

the Federal service movement of employees toward higher salary

ranges within the general schedule also affect that. Then one thing

that the chairman mentioned and which everyone is concerned with

today, the cost-of-living adjustments will repeatedly raise benefits

depending on whether or not we have the ability as a nation to bring

inflation within some kind of reasonable control.

Any new legislation that Congress may consider and pass to

further liberalize benefits will also add to the unfunded liability and

to the amount of money that the Government, and in this case it

comes from the general revenues which means the taxpayers, will

have to continue to contribute to the fund to keep it sound and

viable.

In view of the interest in the cost-of-living question,. what .we

have been experiencing as you know is several years of rapidly rising
5

inflation. The formula in the law, the cost of living formula, was

originally placed in the law I believe back in 1962. At that time it

provided for an annual increase in the cost of living for annuities.

That was subsequently changed to provide a formula that whenever

the cost of living increased by 3 percent—and this is the Consumer

Price Index I'm speaking of—and remain there for 3 months, there

would then be a cost-of-living increase based upon the rise in the

Consumer Price Index from whatever the base month was to the

highest of the 3 months. That formula remained in the law as such

until 1969.

In 1969 Congress then placed what is now called the 1-percent

bonus feature or the 1-percent kicker on top of the formula. The

intent of the Congress, as expressed both in hearings and in the reports

and in the floor debate, particularly in the Senate, indicated that

the 1-percent was placed in there for several reasons: (1) There's a

lag between the time the cost-of-living increases to 3 percent and the

time the first payment is made. That lag is normally 5 months. The

second reason given—and this was particularly true on the Senate

side and expressed both on the floor and in reports—was that the

retirees should not only keep up with a cost of living increase, with

inflation, but also should to some extent be able to maintain a standard

of living and should benefit somewhat by the productivity of the

current work force.

So despite the—I believe it was the Associated Press story that

said Congress did not know what they were doing when they placed

this in the law in 1969—I think at least some of the members were

aware that over a long period of time a 1-percent add-on would

probably produce increases higher than the normal inflationary

increases.

I don't think at that time anyone visualized this type or rate of

inflation which has been over 12 percent a year. Since 1969 annuities

have increased 55 percent. I believe the Consumer Price Index says

the cost-of-living increase has only been about 44 percent during

that same period of time. Since these are not amortized as some of the

other unfunded liabilities are, they have produced an additional

unfunded liability of $23.4 billion in that short period of time. And

again, the only method of financing them at the moment is that

interest payment.

Since July of 1973 alone, these increases in annuities have totaled

27.7 percent. We have been running almost on a 6-month cycle with

rather high cost-of-living increases. There have been four in the last

2 years.

Now to show you the impact of the cost-of-living increases on the

annuity payments themselves, in 1969 annuity payments totaled

$2.2 billion. This year they will reach $7 billion. The portion of that

$4.8 billion increase over the 6-year period attributable to the.Consumer Price Index alone, to the cost-of-living increases, is $2 billion.

In the last Congress alone there were six major laws enacted that

affected the retirement system. It appears that in each Congress,

laws to amend the retirement system, are the most popular in terms

of the fringe benefit area. Each Congress we are asked to report on

over 200 bills and I would venture to guess that probability 150 of

those bills involve the retirement system and needless to say, each

one of them involves some kind of a liberalization.

49-276 0 - 75 - 2
6

The six major retirement laws that were enacted during the last

Congress added $182.4 million annually to the cost and this was

largely the Government's cost.

That, in general, Mr. Chairman, is a rather rapid review of the

financing and the situation in connection with the retirement act.

Mr. WHITE. Mr. Tinsley, I wonder if it wouldn't be wise to, before

you proceed on life insurance, give each member about 5 minutes to

clarify any questions they may have in their own mind. I'll just go

ahead and start off myself. I don't know that I will take up a full 5

minutes.

Will you tell me, please, what is the total unfunded liability at the

present time under the retirement fund?

Mr. TINSLEY. The unfunded liability as of June 30, 1974 was $77

billion. We are estimating that as of the end of this fiscal year, June 30,

1975, it will probably be around $83 billion. However, the official

figure we use for unfunded liability at the present time is $77 billion.

Mr. WHITE. All right. Now you made the statement that you felt

that the retirement fund would be stabilized in the year 2000.

Mr. TINSLEY. The number of individuals on retirement rolls would

be stabilized.

Mr. WHITE. I see. That was individuals.

Mr. TINSLEY. I believe in 1969 when Congress enacted the major

financing legislation the goal there was to try and stabilize the fund

by 1980.

Mr. WHITE. What do you anticipate, say, in the year 2000 projected

forward would be the unfunded liability if no further laws were

passed but taking into consideration the trends in cost of living?

Mr. TINSLEY. Mr. Hustead, who's at my right, is chief actuary of

the Commission and let me see if he has a projection to the year 2000.

Ed, do you have one?

Mr. HUSTEAD. With no further changes?

Mr. WHITE. Well, presuming there would be cost of living but with

no further laws.

Mr. HUSTEAD. I see. 1984 would be $150 billion and I think that

continuing at that rate of inflation it would be probably around $200

billion by the year 2000.

Mr. WHITE. Now the statement was made in your testimony, or at

least it may have been on one of the sheets, that each agency is

charged with the retirement. I wasn't quite certain about what that

meant. Do you mean that each agency is charged back for the retirement of each of the employees who have been in its service or is this a

total?

Mr. TINSLEY. No, Mr. Chairman. During the working life time of

the individual, let us say employees of the Civil Service Commission

that are on the Civil Service Commission payroll, I contribute 7

percent of my salary and the Civil Service Commission contributes

7 percent, a matching 7 percent. That is done every pay period, every

year.

That money each pay period is paid into the retirement fund

which is in the custody of the Treasury. The Treasury invests that

money. The interest earned on those investments adds to the fund.

It goes nowhere else.
7

Mr. WHITE. Now in the light of this escalating deficit in the

program, can you please give us some idea of what you would recommend as a way to forestall or to reduce the prospect of such a horrendous deficit in the year 2000?

Mr. TINSLEY. Well, let me say this 

Mr. WHITE. In the nature of legislation you understand.

Mr. TINSLEY. Mr. Chairman, I don't think the picture is as

bleak as the $200 billion figure might make it appear. I don't think

the retirement fund is going to be in a position where we will not

be able to meet its obligations. However, I do think again if there

are no signs of inflation abating, I think Congress is going to have

to take some action to provide a better financing mechanism for

the cost-of-living increases.

Now a number of things have been proposed by some individual

Members of Congress. The administration has indicated that it

intends to submit legislation that would remove the 1-percent bonus

or kicker feature of the law. That, in and of itself, while it might

prove helpful, if you continue with an annual rate of inflation of 12

percent or greater—it's going to take something more than just

removing 1 percent.

Mr. WHITE. Do you have something in mind presently?

Mr. TINSLEY. No. I'm sorry to say, Mr. White, I do not. I wish

I did.

Mr. HUSTEAD. On that $200 billion, if the unfunded became $200

billion and inflation continued, the fund itself would be over $100

billion in that year. So both the fund and the unfunded would continue

to grow.

Mr. WHITE. There's one other question I have in mind. I don't

think it's going to come about in our lifetime, but assume that the

cost of living should go down. There's no provision in the law for

salaries to go down or retirement benefits to go down, is there?

Mr. TINSLEY. No, Mr. Chairman. Under the law, it can only

go up.

Mr. WHITE. Well, wouldn't it seem that at least on the books it

would be more equitable to have a provision that in the event that

the bottom fell out that salaries would be adjusted so we wouldn't

have a disproportionate salary or, rather retirement program, while

others were suffering?

Mr. TINSLEY. In this system where you have a cost-of-living

provision that is relatively liberal by comparison, even with other

retirement systems where such provisions exist, in my own judgment;

yes. If it's going to go up when the cost of living goes up it should

also come down when the cost of living comes down.

Mr. WHITE. Of course, that won't happen and I'm sure it's projected that it will not happen perhaps before the year 2000, but at

least on the books it probably would be fair.

Mr. Daniels is probably the most knowledgeable individual we

have in Congress on the retirement benefits, and I will call on him

at this time.

Mr. DANIELS. Mr. Tinsley, I'm sure you're aware that I was the

chairman of this subcommittee in 1968 and 1969 when these liberal

laws were passed.
S

Mr. TINSLEY. I'm sorry if I inferred that they were liberal laws.

I was speaking primarily of the financing provisions which, in my

judgment, was one of the finest pieces of legislative work by this committee in the past 15 or 20 years that I'm aware of. I think you

deserve a great deal of credit. I was about to say to Mr. White that

you probably know more about the financing of the retirement system

than I do.

Mr. DANIELS. Well, I'm not so sure. In 1969, after a 2-year study

of the retirement system, we found that it had an unfunded liability

of $65 billion and that the normal cost at that time was 13.8G. We

were advised by the actuaries who testified before this committee

that in order to put it on a sound fiscal basis it would be necessary to

increase the contributions, both agencies as well as the employees,

from 6.5 to 7 percent, which produced the present contribution of

14 percent. We took their advice and enacted that law.

Also, another factor that entered into the tremendous unfunded

liability was the fact that in prior years the Government had invested

the assets of this fund in low-paying securities, about 2 or 2.5 percent.

I was pleased to hear you say this morning that you're presently

deriving a rate of 6.3 percent, and probably at the end of the year that

may go up to 7.5 percent.

Now, in view of the fact that the present normal cost of operating

this fund is only 13.2, but contributions of both the agencies and

employees come to 14 percent; and also in view of the fact that you're

obtaining a much higher interest rate than you were receiving at that

time, why has the unfunded liability risen so high in spite of the

benefits that we have provided?

Mr. TINSLEY. Part of the unfunded liability increase, in fact,

one-third of it, has been due to that rapid inflationary spiral that we

have been in and the increase in the cost of living.

Ed, do you want to elaborate?

Mr. HUSTEAD. Yes. In 1970 we took into account that interest

was a lot higher and the board of actuaries of the civil service system

reevaluated that unfunded liability and they found that it actually

dropped to $53 billion at that time. This was the effect of taking into

account this high rate of interest.

However, it grows each year for two reasons: One is that the cost

of living increases add to the unfunded liability somewhere between

$3 and $5 billion a year since they resulted from a law prior to 1969.

The other is the interest that is not paid until 1980. In 1971 we paid 10

percent of the interest. In 1972 we paid 20 percent and so forth. That

additional interest feeds back into the unfunded and adds another

$2 or $3 billion a year. So we're increasing the unfunded liability at the

rate of perhaps $7 or $8 billion a year.

Mr. DANIELS. The Treasury is paying 10 percent more of interest

a year, isn't it, as was recommended to the committee? That doesn't

mean the financing approach was in error at that time, does it?

Mr. HUSTEAD. No. It was recognized that this would be the effect,

that the unfunded would grow merely due to that impact through

1980. That was recognized. This growth in the unfunded was recognized. What happened, I think it's grown a lot faster because of the

high rate of inflation which we couldn't have anticipated but we knew

it was going to grow.
9

Mr. DANIELS. Do you anticipate that inflation is going to continue

to grow each year at the rate of 12 percent? The administration and

the Congress are seriously working at the present time to bring that

rate of inflation down substantially.

Mr. TINSLEY. No, Mr. Daniels, I don't believe anybody is predicting that the rate of inflation will continue indefinitely at the rate

of 12 percent. Many of our assumptions are not based on 12 percent.

The Associated Press, I believe, used 12 percent when they wrote their

story. I would not want to leave the committee either in the position

of feeling the financing of the civil service retirement system is going

to create some serious problems with the system. I think the financing

of the system, despite our recent increases in unfunded liability created

by the cost of living, that it's one of the finest financed systems in the

country.

Mr. DANIELS. Mr. Chairman, I realize that my time is up.

Mr. WHITE. If you have another question or two, go ahead, because

you know more about this than any of us.

Mrs. SPELLMAN. I yield my time to you.

Mr. WHITE. Go ahead. I think we can make an exception.

Mr. DANIELS. Mr. Tinsley, the administration has announced

plans to undertake an evaluation of the present formula for determining cost-of-living increases and retirement annuities. Can you

tell me whether the Commission is currently preparing a specific

proposal relating to this matter?

Mr. TINSLEY. Yes, Mr. Daniels. We are in the process of drafting a

proposal and in effect the policy guidance we have been given by the

administration is to draft a legislative proposal that would have the

effect of removing the 1 percent.

Mr. DANIELS. How soon do you think that we will have the

administration's recommendations?

Mr. TINSLEY. I would expect—and you're well aware of the clearance process within the executive branch—it will probably be acted

on by the Commissioners within certainly no longer than the next 30

days and be on its way through the Office of Management and Budget,

and whatever clearances are necessary in this area. I might point

out that the 1 percent also involves several other retirement systems.

Mr. DANIELS. Now the OMB alleges that the current cost-ofliving formula overcompensates retirees in relation to the Consumer

Price Index. Have Federal retirees, in fact, been overcompensated

since the 1-percent additive was included in 1969?

Mr. TINSLEY. Mr. Daniels, let me state this. Over a long period of

time the 1 percent will overcompensate. However, since I knew of the

interest of the committee in this 1 percent, what I have prepared are

several charts that will show you the effect on $100 of annuity at

various rates of inflation, including the 12 percent, a 6 percent and a 3

percent. Actually, if I can accept these figures, and they are based on

data furnished me by our actuarial staff, if you were to take and

monthly compute cost-of-living increases, which is probably the most

equitable way of determining what the increase in the cost of living

would be, and you were to compare that kind of an increase in terms

of dollars over a period of time, and you were to take the dollars that,

an individual retiree would receive under our formula with the current 1-percent addon, it takes between 4 and 5 years before the

individual in terms of dollars catches up with the cost-of-living

dollars.
10

Now if you project that up to 20 years or 18 years, at the end of

that time there is going to be a difference. If the chairman wishes, I

have copies of these charts and I'll be glad to give them to you. It

might be helpful.

Mr. WHITE. I believe it would be good to distribute them.

Mr. DANIELS. I would move, Mr. Chairman, that these charts be

made part of the record.

Mr. WHITE. Without objection, it is so ordered.

[The charts follow:]

EFFECT OF 1-PERCENT KICKER ON CSR FUND FROM 1975 TO 1990 ASSUMING ANNUAL INFLATION

[Dollars in billions'

Amounts paid under 6 percent 12 percent

A. Current law $355 $647

B. Eliminating 1 percent $318 $557

C. Value of 1 percent A—B $37 $90

D. Percent difference +11.6 +16. 2

EFFECT OF 1 PERCENT KICKER OVER 20 YEARS ON A COMMENCING MONTHLY ANNUITY OF $100 ASSUMING ANNUAL

INFLATION

Annual inflation percentage

Value at end of 20 years 3 percent 6 percent 12 percent

A. Current law $34, 750 $52, 000 $119, 750

B. Eliminating 1 percent $32, 000 $44, 750 $92, 750

C. Value of 1 percent A — B $2, 750 $7, 250 $27, 000

D. Percent difference +8.6 +16.2 +29. 1

COMPARISON OF CATCHUP POINTS UNDER CURRENT LAW AS COMPARED TO MONTHLY CPI ADJUSTMENTS

ASSUMING ANNUAL INFLATION

Annual inflation percentage (in months)

Catchup points for— 3 percent 6 percent 12 percent

Monthly benefit 59 43 38

Cumulative benefit 73 52 45

Mr. DANIELS. You said "over a long period of time" with respect

to differences. Can you give us some idea of what you mean by a

long period of time?

Mr. TINSLEY. Well, if you take a 20-year period, if you take an

annual rate of inflation of 6 percent, the amounts paid—I'm sorry,

this is a 15-year period—the amount that would be paid out would

be $355 billion. This is in total. By eliminating the 1 percent, it would

be down to $318 billion over that period of time and the difference—

the overcompensation of these retirees if you're talking about that,

in terms of the 1.3 million or 1.5 million people who are on the rolls

that long would amount to $37 billion in a 15-year period.

If you were to take the individual retiree, it would be a lot less

than that, and if you look at the chart you can see for each $100 of

annuity just what happens to it over that period of time. At a 3-

percent rate of inflation the difference is relatively small. The higher

the inflation, the greater difference becomes after the period of time.
11

For example, in order to catch up, as I indicated earlier, if you had

a 3-percent rate of inflation, it takes 59 months. If you have 6 percent, you will catch up at the end of 43 months. If you have 12 percent,

you will catch up at the end of 38 months. So actually it's those

periods of time that are required before you get the actual dollars

that the cost of living would have given you if it had been done on

a monthly basis.

Mr. DANIELS. Is this 1 percent add-on unique to the civil service

retirement system?

Mr. TINSLEY. To some extent. There are very few systems that

have a 1-percent add-on. I believe the CIA retirement system has

a 1-percent add-on. However, I don't think any of the other Government systems do. Foreign Service and military do.

Mr. DANIELS. When you compare the employee/employer contribution at 14 percent to the present by estimated normal cost

of the retirement system—a difference of eight-tenths of 1 percent—

do you feel that an increase in the contribution rate would be justified

at this time?

Mr. TINSLEY. Not in terms of normal costs, no, Mr. Daniels.

If the law intends that the employer and the employee share the

normal costs, why certainly they are now paying 14 percent and

normal cost is under 14 and it certainly would not call for any type

of an increase in contribution rates.

Mr. DANIELS. Has Public Law 93-136, the act which liberalized

eligibility for annuity, cost-of-living increases, had the effect of

spreading out retirements as originally envisioned by the Commission?

Mr. TINSLEY. To some extent, Mr. Daniels. I think the thing that

entered the picture about the same time—these rapid and frequent

increases in cost-of-living payments has, to some extent, offset what

normally would be the benefit. If we were running over a longer period

of time between cost-of-living increases, I think it certainly would

have that effect. However, when you're running a cost-of-living

increase every 6 months and they are large, it is not producing the

desired effect, but I don't think that's due to any fault in the law or

the theory. I think it's due to the economy.

Mr. DANIELS. Just one final question. Is the Commission conducting

a study to determine correlation between supergrade retirements and

the current pay scale?

Mr. TINSLEY. I believe the Bureau of Executive Manpower has

begun to compile some data in this particular area and, in addition to

that, we have recently been asked by Senator Mansfield, the majority

leader in the Senate, to furnish him with a considerable amount of

data concerning retirement related to salary and as part of this we will

be gathering—and we will be glad to furnish it to this committee,

too—data on exactly the numbers, where they are, and the effect that

the salary freeze is really having on the retirement of executives,

particularly supergrades, in some firm fashion and we will be glad to

furnish that for this committee as well.

Mr. DANIELS. Mr. Tinsley, I want to thank you for your testimony

and I also want to thank the chairman for the time.

Mr. WHITE. We thank you, Mr. Daniels.

Mrs. Spellman?

0
12

Mrs. SPELLMAN. I only have a couple questions since so many of

the questions I might have raised and some I never thought of, have

been answered.

.Just something very basic: Had the civil service salaries kept up

with inflation, would the increase in liabilities have occurred?

Mr. TINSLEY. If you're speaking of the statutory salary increase,

I'm not sure just what the offsetting effect would be.

Perhaps the actuary could tell us. If I understand your question

correctly, it's if salaries had kept up with the inflation rate, the cost

of living, would the unfunded liability be about the same as it is with

the Consumer Price Index. Ed, can you answer that?

Mr. HUSTEAD. That's correct. Salaries have kept up with inflation

except the frozen level. I believe they have both increased about 40

percent over the last 4 or 5 years, inflation and salaries.

Mrs. SPELLMAN. So that isn't a factor?

Mr. HUSTEAD. No. The unfunded would have grown the way it is

anyway.

Mrs. SPELLMAN. Tell me, when you said at your 15-year point that,

1 percent begins to make some considerable difference, what percentage of retirees would draw benefits for 15 years today?

Mr. TINSLEY. I believe our retirees right now receive benefits

about 18 years on the average.

Mrs. SPELLMAN. They average 18. That's what I didn't know.

Fine. Thank you.

Mr. WHITE. Mr. Harris?

Mr. HARRIS. Thank you, Mr. Chairman.

I'm not a long-time expert of retirement programs, but I'm going

to try to learn as much about it as I can. I hope you will excuse me if

some of these questions seem very simple.

I have noticed a draft report of the Advisory Committee on Social

Security and Retirement System that has suggested that we have

universal coverage by social security, I think the point is that they

feel some Federal employees are receiving a windfall.

Would you have any reaction to this suggestion of the advisory

committee?

Mr. TINSLEY. I can give you my personal reactions to the suggestion. One, I'm normally a little bit sensitive to this type of statement

concerning Federal employees; even more sensitive in the case of

certain individuals in the executive levels of the civil service, but it

appears to me that when Federal employees receive something that the

law permits and that the law grants them, just as any other individual

in the United States receives it, it's considered a windfall. When others

receive it it's something they are entitled to.

Now, with that preface, there undoubtedly are situations under the

Social Security Act where an individual, whether he's a Federal

employee or not, can move into the social security system through

either part-time work or self-employment or something else, and again,

just as any other citizen can, and make himself eligible for a minimum

social security payment.

To that extent, I think it probably isn't the best thing in the world

for the social security system. However, far be it from me to substitute

my judgment or personal opinions for the advisory committee, but

frankly, I have a number of views and, again, they are personal as
13

to what might be done with the social security system rather than

attempting to say there's something wrong with every other system

and everybody should be thrown into the social security system as it

now exists.

I don't think I'm answering your question.

Mr. HARRIS. Not yet, but that's all right.

Mrs. SPELLMAN. You're answering some of mine.

Mr. TINSLEY. Well, social security was designed in a certain way.

The social security system has been there for a number of years. I

would have no problem if the system was somewhat different. There

should be universal coverage under the social security system, but I

would suggest that if that's the case, then the social security system

should be a little bit different than what it is now. It should provide a

base and the private pensions and other pensions provide whatever

additional income maintenance is needed.

The social security system is built to provide a greater benefit

proportionately to shorter term people or lower earning groups. At

the moment, I personally find it rather difficult to recommend to

anyone that the Federal employees be placed under the current social

security system.

Mr. HARRIS. Let me ask you a couple more routine type questions.

One of the comments I have heard most by some of the retirees is the

real need for pre- and post-retirement conferences by the Commission

or by a personnel officer so that they could be better aware of some of

the implications of the law as they actually moved into the retirement system.

Has the Commission done anything along these lines or have you

any suggestions with regard to this?

Mr. TINSLEY. Yes, we have, Mr. Harris. There's definitely a need,

particularly today, for better counseling than what occurs, I think in a

variety of ways, not just in terms of what their continuation of

benefits are going to be into retirement and what they can expect in

terms of dollars, coverage under health benefits and what happens to

their life insurance. I think there is a very definite need.

Now what has the Commission done? In the last year, and we are

currently scheduling our first training session, what we have started to

do—and this is not to say that we haven't been doing something in

the past—but what we are doing is building a capability into our

regional offices that will be passed on to our area offices and passed

on to the individuals in the agencies that we look to to do this counseling.

We have, in each agency, health benefit officers, agency retirement

officers, and life insurance representatives, and we want to give them

and equip them with some expertise, much more expertise than they

now have, so they will be available to any individual employee or

member of his family to be able to really counsel them and give them

some expert advice in these fringe benefit areas.

Now other areas of counseling, we are presently reviewing our

policy in that matter. We were recently criticized by the Comptroller

General for encouraging preretirement counseling programs. He felt

they were a waste of money. We agreed to review our policy there.

Whether we are going to reach the same conclusion the Comptroller

General did, I'm not at all certain.

49-276 0 - 75 - 3
14

Mr. HARRIS. I hope you don't.

Could I ask you this very limited question. A lot of the retirees

say it takes 3 months before they get their first check after they retire.

Is this correct? Is there anything you can do to shorten that period

or what are you doing to shorten that period?

Mr. TINSLEY. Mr. Harris, I believe what they are referring to is

it takes them 3 months before they get their first accurate regular

check. Our system is set up now so that it's a rare instance and there's

got to be something wrong if an individual does not receive an initial

check, a special payment that is an approximation of what his retirement pay will be within 10 days after we receive his retirement papers.

Now it takes a little while to get his retirement papers from the

agency payroll offices and this varies from agency to agency. There

are some agencies that will get them in relatively fast once they close

out the payroll which is usually about 2 or 3 weeks after he has separated. Other agencies, it takes them a little longer. We constantly

remind agencies to get them in on time and there should be very few

individuals that do not receive that check within 10 or 15 days or at

least some check from us after we receive the retirement papers.

Mr. HARRIS. Mr. Chairman, I note my time has expired. I wonder

if I could have permission from the committee to give the witnesses

three or four additional questions.

Mr. WHITE. Yes. As a matter of fact, after we proceed with Mr.

Mineta, we will then go back and Mr. Tinsley will cover life insurance

and health and then we'll open it up to total questions from all the

members and if we have time then certainly you can present your

questions to Mr. Tinsley and he can present them for the record

after that.

Mr. HARRIS. Thank you very much.

Mr. WHITE. Mr. Mineta, you have 5 minutes. We are on the

retirement portion at this time.

Mr. MINETA. I apologize for being late.

Mr. WHITE. That's all right.

Mr. MINETA. With regard to the retirement benefits program,

I was just wondering whether or not this counseling about which Mr.

Harris was asking is also available to survivors, and to what extent

the survivor counseling goes.

Mr. TINSLEY. At the present time the counseling of survivors is a

problem. They get very limited counseling if they seek it if they are

able to get to one of our regional offices, and the capability in our

regional offices vary. The Bureau of Retirement and Insurance has

no regional people with the exception of those in occupational health.

As a result, they rely on other members of the Commission staff who

have some knowledge in these areas so that counseling is very limited

once the individual leaves the Government service. If it's a death m

service where the survivors are involved, the personnel officers, the

retirement officers, life insurance and health benefits officers are available just as they are to employees and they normally do provide that

type of counseling. But once the individual leaves the service as an

annuitant and some years later dies, it is quite a problem for the

survivors unless they are able to come directly to us.

We have experimented with toll-free calling at various periods of

time in order to counsel them and that's been very helpful, but to do

it on a broad scale and be certain that you're going to give them
15

accurate information you almost have to sit down with them and go

through the facts.

Mr. MINETA. Thank you very much.

Mr. WHITE. Mr. Tinsley, if you would proceed and cover both

life insurance and then go on to health benefits for further questions,

then we will open it up for questioning again. Those were the two

topics remaining, were they not?

Mr. TINSLEY. Yes. At the present time the law provides that the

amount of life insurance will be a minimum of $10,000 or the salary

raised to the next thousand plus 2 thousand. You can see on page 13

of the material that in 1974 cost to the Government of the life insurance program was $133 million and here again what I have attempted to do is show you if nothing changes the 1979 cost would

move to $275 million and in 1984 would still be the same.

However, with estimated increases in salary, these costs would

increase to approximately $342 million by 1979 and $452 million by

1984. Unlike the retirement and the health benefits program—in the

life insurance program the employee contributes two-thirds of the

cost for the regular insurance and of the $10,000 additional optional

insurance that is available he has to pay the entire cost himself.

The agency payroll office contributes one-third and the other income to the fund again is interest on investments. So actually, in

1974, the total income was $529 million. Our life insurance fund

balance is $1.6 billion. A recent valuation of the system indicated that

we had to increase the premiums to 53.25 cents per thousand. That

was done effective the first of March or the first pay period beginning

after February 28. This was the first increase, I believe, since 1969 and

the premium rates moved from 41.25 cents to 53.25 cents. Actually,

in this program 97.8 percent of the money goes into benefit payments

to individuals and the reserve. Premium taxes, in the amount of 1.6

percent, are paid. These premium taxes are paid in various States.

They are required by State law. The administrative expenses, both

ours and the office of Federal employees group life insurance, which

is administratively under the control of the Metropolitan Insurance

Co. in New York, acting as the representative of the insurance

industry—the administrative charge is 1.4 percent and the service

charge, which is really what you could call a profit to the 200 and some

insurance companies who participate in underwriting the risks, is

about 0.2 percent.

As I indicated before, the full committee one day last week, in our

comparison of benefits, while we compare favorably in the health benefits area and the retirement area, there is some indication that we have

fallen a little bit behind in the life insurance area. We do intend to

submit proposals for a change in the life insurance program which will

probably do two things: (1) increase the availability of the insurance

in terms of dollars to the individual and hopefully, at the same time, will

result conceivably in either the need for a lower premium or another

very extended period of time before it would be necessary to raise the

premium rates again.

The legislative proposal actually is right now being considered by

the three Commissioners. I would expect that that, too, would be

before the Congress hopefully within the next 30 or 45 days, depending

on the Office of Management and Budget.
16

That, very briefly, covers the life insurance program. The life

insurance is a relatively noncontroversial type program and always

has been. It's one that has worked, in my judgment, very effectively;

and, again, I don't think there have been very many delays in payment

under the program and we have run into very few major problems.

The health benefits program is a program that, since its enactment

in 1959, has been considered a rather novel type program in view of

the fact that it provides a variety of plans and options that the

employee can choose from. It was very broad in terms of its coverage

in 1959. It has continued to be just that.

It compares favorably with most private plans. It has been looked

upon in many areas as somewhat of a model. There are some individuals who have even suggested it be used as a model for national

health insurance. Whether it deserves that kind of treatment or not,

I'm not sure, but at least it gives you some indication that there are

people who look upon this program as being somewhat not only unique

but a fine piece of legislation and one program that is doing a very good

job in the health area.

The problems we have encountered here, particularly in the past

few years, have been somewhat twofold: (1) Again, inflation has kept

the pressure on, increasing premiums, because most of the money

that is collected goes into the payment of benefits and since the benefits are medical, hospital-type benefits, the inflation rate of those have

been somewhat even higher than the rest of the economy and here you

can see that the cost to the Government in 1974 was $0.7 billion.

Again, the two charts for 1979 and 1984 would indicate that even without any further inflation it goes up to $1.3 and $1.5 billion and that

with relatively modest inflation, not the type of inflation as in the

past—$2 billion in 1979 and $3.7 billion by 1984.

It's financed at the moment by agency contributions and employee

contributions and the agency contributions are typically 60 percent

of the premiums. The employees contribution is 40 percent. When

Congress amended this law several years ago they increased the Government contribution from 40 to 50 percent in 1974, and 60 percent

in 1975.

We have 46 different plans in the program and the way the Government contribution is determined is to take the six largest—two

Government-wide, Aetna and the Blues; the two largest employee

organization plans, and the two largest comprehensive plans which

happen to be Kaiser plans at the moment—and take the average of

their premiums and that's used to establish the Government contribution rate.

In fiscal year 1974, Government contributions were $0.7 billion

and the employee contributions amounted to $0.8 billion, a total of

$1.5 billion in terms of income for that year.

Also, 94.2 percent of the premium goes for the payment of benefits

and a small reserve; 4.8 percent is used by the carriers and these are all

private carriers to cover the administrative expenses, including our

relatively small administrative costs; 0.6 percent goes into premium

taxes and these taxes again are taxes levied by the various States on

premiums; and the 0.4 percent service charge—here again, you could

call this, to some extent, the only money that the carrier or carriers

would have available to them for either profit or doing things that they
17

might have to do that are not permitted and that we would not pay

for under the terms of our contract.

As I indicated, these costs are going to continue to grow largely

because of the rising cost of health care. Hospital charges in the past

year have risen more than 14 percent and the doctors' more than 13

percent. The Health, Education, and Welfare people are predicting

increases much higher than that and this, again, is a very volatile area

in the economy.

We have, at least in the past 2 years, despite any time you raise

a premium you're bound to get an outcry from the consumer—

but with the increases that have taken place, we have been in a

relatively good position in terms of our premium increases. Last

year the increases both in terms of Blues and Aetna, which are the

largest carriers—the Blues have a little over 60 percent of the Federal

employees and their families and I believe Aetna has 16 percent. In

each instance, we were able to keep the premium increases below 10

percent.

That, briefly, is the picture in the health benefits program and,

again, it's a recap of what the total costs of the Government have

been for all three programs and what it looks like for the future.

Mr. WHITE. Well, now, thank you, Mr. Tinsley.

As I understand there's no deficiency whatever in the life insurance.

Mr. TINSLEY. There's no deficiency at the moment. We recently

had to increase the premium to 53.25 cents in order to avoid any type

of deficiency occuring in the future.

Mr. WHITE. Is there any health insurance deficiencies in any of the

programs?

Mr. TINSLEY. It depends on what you consider a deficiency,

Mr. Chairman. In terms of the financing of them and the availability

of money to pay the benefits, certainly there's no deficiency from that

standpoint. In terms of the overall program, I wouldn't say there

are any deficiencies in the benefit structures. While one plan may

not offer a benefit or may offer a limited benefit, another plan is

available that will offer a benefit that the employee might want,

desire, or need, and if that's the case, once a year the employee is

permitted to switch plans and he normally has a choice of various

coverages. I think there's an advantage to keeping some of these

plans with a different benefit structure to give the employee a choice,

a choice not only in terms of premium but in terms of the type of

benefit package that he feels is suited to his needs.

Mr. WHITE. Do you feel there's complete competition and bidding

opportunity on the part of all the companies in the health field and

in the life insurance field?

Mr. TINSLEY. The life insurance field is a much different field.

There's no competition in the life insurance field. The Metropolitan

Life Insurance Co. acts as a representative of the insurance

industry in insuring the risk. The risk is spread among the companies

that participate in the program. I believe it's now up to about 360

different companies in the United States. And the way it's distributed

is based upon the amount of group life insurance they had in force

during the year prior—during the year in which they participated.

So the life insurance program is not built upon competition. It was

built to let the insurance industry share the program.
18

The health insurance program, here again, you have several—if

you would call them that—competitive devices. In terms of the two

nationwide carriers—these are the ones that are available to every

Federal employee—the service benefit plan which is the Blue Cross

and Blue Shield plan, and the indemnity benefit plan which is an.

insurance industry plan but it's administered by Aetna, their competition is both in terms of benefits and in terms of premiums.

In terms of them competing with some of the other plans, for

example, the employee union organization plans are designed primarily for their own membership. Their own membership determines

really what benefits they should provide and the premium naturally

is governed by experience.

So I don't know that there's a sense of competition with other

carriers other than in terms of getting your own membership to

participate in the health plan and designing one for that type of

membership.

The third area of competition is in the delivery-type system where

in many areas of the country you have these comprehensive-type

plans. These are what are now known as health maintenance organization types and you do have the competition of that type of a delivery system with a heavy emphasis on preventive care vis-a-vis

the indemnity or the service benefit.

Mr. WHITE. Are those permitted in this program?

Mr. TINSLEY. The health maintenance organizations?

Mr. WHITE. Yes.

Mr. TINSLEY. Oh, yes; from the very beginning in 1959. In fact, in

the past few years they have increased quite a bit. We have 46 carriers

participating in the program right now and of the 46 about 32 are

health maintenance organization type plans. The most recent entrant

into the program or one of the most recent entrants into the program

was right here in Washington, D.C. That's the University Affiliated

Plans of George Washington and Georgetown. The Columbia Plan in

Maryland came into the program several years ago. Most of the Kaiser

plans are participants. We anticipate about 25 or more new applications this year.

Mr. WHITE. Mr. Tinsley, I have these questions that I will run

through quickly. I understand that the Civil Service Commission has

sent out a 30-day demand letter to Blue Cross/Blue Shield to return

some $536,000 the Civil Service Commission took exception to in its

audit. Would you briefly go into the extent of this controversy and

tell us how long the Civil Service Commission has been trying to

recoup these funds? And I understand there's also about $10 million

in total disputes still outstanding.

Mr. TINSLEY. The $536,000 that you mentioned initially involves a

dispute concerning the method that the national associations, Blue

Cross and Blue Shield, used in their accounting statements. We had

taken a number of audit exceptions. In other words, things that we felt

we should not have paid for, and when we audited the local plans we

required adjustments be made. In this particular area the adjustments

totaled $536,000. We instructed the associations to adjust their

accounting statements so that that money was moved from their

administrative costs into what's known as a special reserve. The

special reserve is our plan money but it's held by the carriers. It's a

very small amount.
19

It so happened in the year that they were making that adjustment

that their administrative expenses exceeded the 4.5-percent limitation

that we placed on them. However, they proceeded to add in their

total administrative costs even though it's above the 4.5-percent limitation. So, in effect, in that particular year, I believe for one of the

first times in the history of the program, the carrier was going to lose

money. I believe they were in a loss position of about $5 or $7 million,

somewhere in there, when they added that in and used that in the

accounting statement, and then deducted from that the $536,000.

The result was that the special reserve was not increased by the

$536,000. The 4.5-percent limitation was not reduced by that amount,

and in my judgment it became a fiction. It was a bookkeeping type

game.

The Blues lawyers took the position that it was an appropriate

way to account for it in keeping with past practices and accounting

principles and our accounting instructions. We have a little different

view. It has now reached the point as you described, Mr. Chairman,

where we will be sending a demand letter to them and whether or

not they honor that I don't know, but they will be given probably a

30-day period of time and if they do not, some kind of action will be

taken. It will either be legal action or some other appropriate type to

resolve it finally.

Mr. WHITE. Is there any procedure for arbitration set up for these

disputes?

Mr. TINSLEY. Well, there has been no procedure in the past because, here again, we were involved in a number of legal disputes

over whether or not the Federal procurement regulations applied and,

if so, how do you resolve disputes. We are in the process, and there's

no doubt in my mind or the Blues' mind that the FPRs will apply.

At the moment we plan on using the Armed Services Board of Contract

Appeals and Review to settle disputes. I am attempting as of now to

get some of these disputes that have been hanging fire for a year or

longer into that channel by trying to have them agree to have them

go to that Board for settlement.

Mr. WHITE. Thank you, Mr. Tinsley.

Mr. Daniels?

Mr. DANIELS. Thank you, Mr. Chairman.

I have three brief questions. Mr. Tinsley, as you know, when a

Federal employee retires he carries his life insurance with him into

retirement and his policy depreciates after he attains the age of 65

at the rate of 2 percent per month until the principal has been depreciated to the extent of 75 percent, so that he winds up, ultimately,

with only 25 percent of the original principal sum.

Could you tell me what costs would be involved on behalf of the

Government and employees if we would change that depreciation

factor from 2 percent to 1 percent monthly with a maximum depreciation of 50 percent of the face value?

Mr. HUSTEAD. That would add about 13 cents to the cost which is

now 5 cents. So the cost per thousand would move from 53 cents to

66 cents.

Mr. DANIELS. 13 cents per thousand?

Mr. TINSLEY. Yes. If you continue to provide the free insurance in

retirement, unless you use some kind of a tradeoff here. One of the

problems of increasing the rate has been the lower age of retirement
20

which means that people are paying for fewer number of years for

that retirement coverage and then being in retirement for a longer

period of time. Now I believe the average age retirement right now is

down to about 58, which means you're giving an individual free insurance from age 58 on.

Mr. DANIELS. I realize that.

Mr. TINSLEY. And that can be expensive.

Mr. DANIELS. I asked that question by virtue of the fact that a

recent Member of Congress who retired at the end of the 93d Congress—he was at an age over 65—and in planning for his estate he

was confronted with the question of being taxed, whether it was

State or Federal, and under the present program it would mean that

would take care of costs, so he applied for private insurance and the

premiums asked by the private insurance companies were astronomical.

So I was wondering what the increased cost would be by providing

for this.

Mr. TINSLEY. If we were to change nothing else in the program,

Mr. Hustead has given the additional cost of 130 per $1,000. I think

from your many years on this committee you are well aware that

there are different ways that you can distribute your insurance

dollars depending on where you want to place the emphasis on coverage. If you want to place it at the end of the line or give greater

emphasis than we now do at the end of the line, which means the

individual over 65, you can do that in a variety of ways.

Mr. DANIELS. Has the Commission ever given any consideration

to retirees carrying it into retirement, their life insurance, at its full

face value? Have you ever consulted the insurance industry to arrange

such a program for Federal employees?

Mr. TINSLEY. The only problem in that type of program is one of

costs. What would it be?

Mr. HUSTEAD. That would be an additional 340 per $1,000.

Mr. DANIELS. To carry the policy at its full face value?

Mr. HUSTEAD. With no reduction at all.

Mr. DANIELS. And if such a program were to be approved, how

much would it cost the retiree after retirement for such a package?

Mr. TiNSLEY. Mr. Daniels, you're considering the fact that instead

of the free coverage now we permit the retiree to, if he wishes, retain

his full coverage but he pays a portion of the cost even after retirement?

Mr. DANIELS. Let's assume he paid the full cost.

Mr. HUSTEAD. I don't know.

Mr. TINSLEY. We'll be glad to give you the figure.

Mr. DANIELS. Well, in furnishing me with an answer, will you

consider it in two parts: (1) if he paid the full costs and (2) the cost

would be defrayed by the present method of two-thirds and one-third.

Mr. TINSLEY. All right.

Mr. WHITE. When we receive that answer, then it will be made

part of the record, without objection.

[The response follows]

The cost of continuing the insurance at an unreduced amount after age 65

would be about $4 per $1,000 per month. Thus, if a retiree had $10,000 of insurance at retirement, he would have to pay $40 per month in order to keep the full

amount. If the Government were to pay one-third of the cost, the annuitant

would pay about $2.70 a month per $1,000 of insurance and the Government

would pay about $1.35.
21

Mr. DANIELS. Can you tell the subcommittee what recommendations you may be making to the Congress with respect to the coordination of the health benefits plan and the medicare program?

Mr. TINSLEY. Yes, Mr. Daniels. We did—as required by the amendment made to the Social Security Act last year extending the time for

our becoming primary to medicare this year, provided we submit a

report to Congress before March 1—send a report up last week. It was

a joint report signed by the Secretary of Health, Education, and

Welfare and the Chairman of the Commission, and what we are

proposing is to provide coverage equivalent to our high option family

coverage to all Federal employees who have parts A and B of medicare and to their families, at no cost to them as long as the premium

does not exceed the Government contribution.

And in order to do that, what we would do is eliminate for that

particular option the 75-percent limitation in the Government contribution. Actuarially, it should work out that that coverage would be

free. Whether or not it would stay free indefinitely, I'm not sure, but

if not, it would be a relatively low premium and it would provide

benefit levels for the individual of 100 percent of his medical coverage

plus that for his family.

Mr. DANIELS. Would he have to be enrolled in the high option

plan?

Mr. TINSLEY. He would be able to enroll in any option that he

chose. The high option would be available to him, but if he's an individual we're not going to force him into a family plan. We have not

finished the draft of the legislative language yet, I might say, Mr.

Daniels, and I'm a little reluctant to let myself get carried away.

Mr. DANIELS. Will this proposal that you have just mentioned result in a premium increase for enrollees who are not eligible for

medicare?

Mr. TINSLEY. Yes, because those enrollees will have to pick up part

of the savings that is going to be passed on now to only the medicare

people. This was one thing that we have attempted to point out for the

last 2 years, that if we become primary to medicare, everybody, including those with medicare, are going to pay higher premiums.

Right now under the program the medicare people, as well as the other

employees, share in the medicare subsidy, if you want to call it that.

Now if I am going to take the people with medicare and their families

and just let them benefit from the subsidy, then naturally the premiums for other employees are going to have to rise slightly.

Ed, have we estimated how much that might be?

Mr. HUSTEAD. On the average, it would be about 2 or 3 percent. In

some of the plans with higher load of medicare people it might run 5

or 10 percent.

Mr. DANIELS. Thank you.

Mr. WHITE. Thank you, Mr. Daniels.

Mrs. Spellman?

Mrs. SPELLMAN. I'm not quite sure I fully understand what you're

saying on this. As I understand it, civil service retirees are not eligible

for medicare presently.

Mr. TINSLEY. Not by virtue of their Federal service, but more and

more civil service retirees are getting themselves minimum coverage

under the Social Security Act in medicare.

49-276 0 - 75 - 4
22

Mrs:SPELLMAN. That's what I have been getting a lot of complaints

about in my mail; people saying that they think that's totally unfair.

They are concerned about their social security and they are concerned

about the viability of the program—that it's going to pot.

Now apparently Federal retirees are being singled out and told

that they're some of the people who are causing these problems.

Of course, one of the reasons that people do get social security benefits

is for health care, and you're saying that you would be able to take

care of that through the retirement program?

Mr. TINSLEY. Well, this is going to cost medicare money.

What the situation is right now, medicare always pays first, no

matter what other insurance coverage you have, whether it be our

insurance coverage or private industry insurance coverage. Medicare

pays first. But some of our Federal employees who have medicare

coverage believe that they were getting no benefit from their medicare

coverage or they were being shortchanged on their Federal employee

premium because they weren't getting the full benefit of both

programs.

. So Congress, through its Ways and Means Committee 2 years ago,

indicated that unless we came up with medicare supplements we

would become primary to medicare, which meant we would have to

pay first and medicare wouldn't pay.

Well, there's a sizeable amount of money involved here and it's

going to keep increasing because I believe right now about close .to

40 percent of Federal employees are now covered under social security

by virtue of other employment, and as this moves along a larger

number of our retirees are going to be eligible for medicare and the

amount of money is going to keep increasing. I believe right now

we're talking about $107 million a year.

Mr. HUSTEAD. Medicare subsidies, about $150 million.

Mr. TINSLEY. About $150 million. So this $150 million will be

paid by medicare. The savings resulting from that $150 million will be

passed on to our Federal people who have medicare. However, in

order to make up that money the others are going to have to pay

more than they now pay.

Mrs. SPELLMAN. I recently had an inquiry from a mayor in my

district who says when he was a Federal employee he was eligible for

physical examinations. I wasn't aware that there was that kind of

program. Is there something like that for top level people?

Mr. TINSLEY. What he probably was referring to was what is

referred to as an occupational health program. This is a program—

and it's entirely up to the agency. We give them some guidance as to

what they might do. We monitor it to some extent and keep track of

what's going on, but these are situations where an agency would have

a small health unit maybe with a part-time doctor, and in some

instances a full-time doctor, depending on the size of the installation

and the type of work that's being done there.

In connection with that program, a great deal of preventive care is

provided voluntarily. If the employee wishes it, there.are flu shots

every year; there are other types of testing. In addition to that,

where facilities are available, employees—and at one time it used to

be employees above a certain grade, but now there's no grade or age

or sex discrimination—the agency will provide physical examinations
23

at no cost to the employee. The results of the examination are made

available to his personal physician.

If you wish, I could send you our last report on what's going on

in the Federal service and it will give you a feel for how many of

these are conducted.

[See p. 30.]

Mrs. SPELLMAN. That would be helpful. His question was: Could

that sort of thing be made available to retirees?

Mr. TINSLEY. That would be pretty difficult because, as you know,

the availability of health professionals, particularly doctors today,

is mighty limited and I just don't know how we would be able to set

up the resources.

Now many of our health benefit plans—for example the HMO

types—do place an emphasis on preventive care. They are available

to him as well as any other employee.

Mrs. SPELLMAN Of course, that's the direction we would be going

in on health care, hopefully.

Just one last question. Has the Civil Service Commission ever

conducted a study to determine feasibility of a health plan operated

by the Federal Government vis-a-vis the present system of contracting with the various privately owned companies?

Mr. TINSLEY. I believe several years ago we internally reviewed the

way the program was designed, the directions it was going, and placed

a number of alternatives before the Civil Service Commissioners, one

one of which was the self-insurance "run your own show" type. It

was seriously considered, as well as most of the other items that were

placed before them, but they did not feel that they were ready to

to recommend at that time legislation that would be needed to make

this self-insured.

I might point out to you at that time the debate on directions

national health insurance should take were heating up, and I would

doubt at the moment that the Commission would make any major

change in direction decisions until we have a better feel as to what

direction national health insurance is going to take.

Mrs. SPELLMAN. Thank you very much.

Mr. WHITE. Thank you very much, Mrs. Spellman.

Mr. Harris?

Mr. HARRIS. Mr. Chairman, I have no additional questions with

regard to insurance or health insurance. I do have some on retirement still. Would it be appropriate to go ahead and ask those?

Mr. WHITE. Sure.

Mr. HARRIS. With regard to the whole tax exemption feature, I'm

told that the social security and Railroad Retirement benefits are not

taxable. I realize this goes through the Ways and Means Committee,

but I'd still like your reaction today as to whether the Commission

has a position with regard to making retirement benefits nontaxable.

I understand now that after you get back what you paid in it is taxable. Of course, that takes a relatively short time. I was wondermg

if the Commission has any position to make it more compatible with

social security and Railroad Retirement.

Mr. TINSLEY. Mr. Harris, the Commission has somewhat the same

problem this committee has with Ways and Means, because we are

constantly reminded that the Treasury Department is responsible for

the tax policy in the executive branch of the Government.
24

The Commission's position is—and we have so stated this to the

Treasury Department on a number of occasions—that we feel that

all .retirees should be treated equally under the tax laws, not just

civil service retirees but those that are out on private pensions, those

that are under social security, Railroad Retirement or whatever the

system might be. We believe there should be equitable tax rules.

I do think with that statement that there's some indication that

in our minds maybe the Federal employees or Federal retirees are

not receiving equal treatment. I am no tax expert.

Mr. HARRIS. OK. I have had a number of conversations with

people with regard to extending coverage, as I'm sure you have over

the years. One proposal which seems to me to have merit is current

Federal employees who had previous experience in State-Federal cooperative programs and connecting such period to their retirement

program.

Could you give an estimate of the numbers that might be affected

by such a change or do you have a position with regard to it?

Mr. TINSLEY. I don't have an accurate estimate as to how many

people may have been involved in these programs. There are some people that I'm aware of that do have what they claim to be firm estimates.

In our best judgment, I don't think anyone knows how many of

these people there are throughout this country today because of the

extent to which the Federal Government has engaged in these cooperative programs. In the past we have experienced situations where

there were supposed to be very few on an extension of a benefit and

then these people just come out of the woodwork.

Ed, do you know of any way we could firmly get a figure?

Mr. HUSTEAD. NO, I don't.

Mr. TINSLEY. See, these people were never Federal employees.

They worked in cooperative programs and part of the money or in

some instances all of the money came from Federal funds, but that,

didn't make them Federal employees. Many of them were State employees. Now some of these individuals were given some coverage and

some benefits under either the State retirement system or in some

instances they were in universities.

Mr. HARRIS. Some were and some weren't?

Mr. TINSLEY. Yes. They are a real mix. Whose responsibility was

it at that point in time to provide them with benefits? If the Federal

Government, with the condition and cost of the retirement system

today, is going to keep extending the benefits to individuals who may

not be Federal employees but who had service someplace else, it's

going to be a never-ending stream of extensions.

Frankly, the retirement system today, even though they say, well,

we'll be glad to pay the 7 percent or 2.5 percent or whatever it was

for that service, you'd have to be out of your mind if you wouldn't

take that kind of a deal. I'd be glad to pay an additional 7 percent for

some additional service.

Mr. HARRIS. You didn't formerly work for a Federal/State cooperative program.

Mr. TINSLEY. No, but I probably could find some service.

Mr. HARRIS. I think this is an area I understand. I preambled

my question with an understanding that it is difficult to extend coverage and benefits and what have you. It does seem to be an area
25

where it would require us looking into it with a group of employees,

many of whom were under Federal supervision for these programs

and do not have other benefits for this time. It's a point that I wanted

to give some interest in.

Now my next question:

I know we changed the law last year, I believe, to restore full

annuity to retirees whose spouses have died. We didn't change it with

regard to the question of reduction of annuities for other dependents.

I just wondered if the Commission had a position with regard to

correcting this inequity. And I don't know how many people would be

affected by this.

Mr. TINSLEY. I'm not quite sure I understand the question, Mr.

Harris. What the Congress did last year was in the survivor area

where if at the time of the retirement the individual took a reduced

annuity to provide a survivor benefit for the spouse and then the

spouse predeceased him, we now restore the full annuity during the

period of time that there is no surviving spouse. If the individual

remarries, the second spouse then becomes entitled.

Now I'm not sure what other dependents—I think I know what

you're talking about. We have a provision in the retirement law that

provides that an individual upon retirement can designate to receive

a survivor benefit, someone with an insurable interest in his continued

well being.

Mr. HARRIS. Exactly.

Mr. TINSLEY. They pay a pretty heavy price for that.

Mr. HARRIS. Indeed they do.

Mr. TINSLEY. And no, we have not given any serious consideration

as to what might be done with that particular section of the law and

it has never been that much of a problem.

Mr. WHITE. Will the gentleman yield?

Mr. HARRIS. Surely, Mr. Chairman.

Mr. WHITE. I intend to introduce a bill either today, if we can get

it there in time, or tomorrow, that will correct the problem you're

talking about.

Mr. HARRIS. I would applaud the chairman for doing that. I would

hope the Commission would look at this. It may be a limited problem

but I think it's something that should be looked at.

Mr. TINSLEY. We will be very happy to and probably will be

reporting on the bill.

Mr. HARRIS. One last question. It has to do with the hazardous pay

situation.

Under the law passed this past year, I think it's 93-350, it increases

2.5 percent the multiple for the first 20 years of service for persons

retiring after July 12, 1974, and my thinking in the case is that

probably by going back before July 12 it would include only another

9,000 employees. I just wondered what the Commission's position was

on this and can you confirm how many people would be affected?

Mr. TINSLEY. You're speaking now of making this retroactive?

Mr. HARRIS. Yes.

Mr. TINSLEY. People who retired prior to that date?

Mr. HARRIS. Putting them all in, instead of cutting it off at July 12,

1974.
26

Mr. TINSLEY. The Commission normally is opposed to any liberalization that is retroactive. In this particular situation, what we are

speaking of is a certain type of law enforcement officer. Hazard reallyisn't the major concern here because there are many hazardous occupations in the Federal service, many of them more hazardous than law

enforcement.

The increase in the formula here as well as some other changes that

were made to a considerable extent were not so much for the benefit

of law enforcement officers but for the benefit of the Government as

an employer in keeping a younger vigorous law enforcement agency

in operation.

If you begin to base retirement benefits on hazard, you can run

into some pretty hairy problems. Actually, it's my own view that if

hazard is involved it should be reflected in salary, and when you reflect

it in salary it will ultimately be reflected in the retirement benefit.

My guess is—and I have no Commission position on this—that we

would probably oppose such a proposal.

Mr. HARRIS. Let me make real sure that you understand my

question.

We have already determined for those who retire after July 12.

Now it's just a matter of degree, of whether or not the annuitants who

had retired before that time would receive equal treatment. That was

the limitation of my question.

Mr. TINSLEY. Again, traditionally, where do you draw the line once

you start going back and making retroactive liberalizations that are

taking place today? I could make the same argument for people who

retired 20 years ago who were on the 5-year average high salary which

was altogether different than the high 3 year now in the law, where

they didn't get the benefit of frequent pay raises, and this could go on

indefinitely.

In principle, I personally would normally oppose any retroactive

application of the current liberalization benefits.

Mr. HARRIS. Thank you, Mr. Chairman.

Mr. WHITE. Mr. Mineta?

Mr. MINETA. Thank you, Mr. Chairman.

Going back over to the chairman's question about cost recovery

under Blue Cross, other than the mediation board which acts, as you

indicated, after the fact; is there any way to determine some of these

cases before the fact in order to provide relief to some of these innocent

people who are getting medical treatment and then being told.that

they aren't covered under the health plan? Do you have any machinery

in place to avoid that?

Mr. TINSLEY. I don't know what will ever completely do away with

that and frankly I share your concern. I think it's brutal to have an

individual wake up some morning and find out that he thinks his

insurance covers him and he's suddenly been given an $18,000 bill,

and let's face it, the hospital doesn't forget about the bill and the

doctor doesn't forget about the bill. They get their money. It's the

individual who is left holding the bag.

We have been attempting to approach it two ways: (1) through the

use of improving the pamphlets that we furnish individuals to describe

their benefits; (2) we have increased the amount of information we

attempt to make available through agency news media in certain
27

problem areas. Hopefully, this program that we are attempting to

move forward of counseling would help in this area.

However, none of those would completely solve the problem because if most people are like me they will rarely take a look at an

insurance policy until after the event has occurred and then it's too

late to find out that you don't have what you thought you had.

I have been speaking to some carriers to see if I could get them to

work out some arrangement where in situations where long-term care

is going to be required and it's not of an emergency nature—in other

words, they don't have to be called in right away—if there could not

be some kind of a preapproval at least for a temporary period of time

until they did get some detailed medical reports in terms of what

treatment was going to be furnished and on what basis.

The second thing we have been doing has been once a carrier starts

to pay that it's assumed he's going to continue to pay until such time

as he placed the individual on notice that they are no longer going to

be responsible and gives the individual time to make whatever adjustments he needs. I have just about got them to agree to that.

As to going beyond that, I'm not at all sure what will solve this

problem today.

Mr. MINETA. In a year, how many cases do you have where there

are some very serious misunderstandings with regard to this?

Mr. TINSLEY. Where the individual is hurt? There are very few.

Mr. MINETA. I see. I would like to now shift my questions to another area; the life insurance coverage.

It has been indicated that our life insurance program is starting to

fall behind comparable life insurance programs as provided by the

private sector. I was wondering in what areas we are falling behind:

whether it's in coverage, premium-sharing costs, or other areas?

Mr. TINSLEY. Well, I think it's a little bit in both areas. In most

private companies today the amount of coverage is higher than what

we are providing and even where it isn't life insurance programs are

becoming more and more an employer-pay-all-type of situation. So

in both areas.

Mr. MINETA. Is the Commission considering some alternative plans

for any life insurance programs in terms of your own recruiting

activities or what other agencies under the Civil Service Commission

have to contend with, to make the job a little 

Mr. TINSLEY. Yes. We will be submitting legislation probably—

well, we will offer higher amounts of coverage. Given current conditions, I cannot visualize the current Administration supporting

legislation that would be Government-pay-all, but in terms of the

amount of coverage, yes, the legislative proposal will do that, and in

all probability we will probably be seeing some family coverage.

Mr. MINETA. Right now it is two-thirds/one-third?

Mr. TINSLEY. That's correct.

Mr. MINETA. Relative to the Shenandoah program, how many

beneficial associations still remain under that program, and how long

do you think it will be before it will be phased out?

Mr. TINSLEY. In the Metropolitan administered plan versus the

Shenandoah administered plan--

Mr. HUSTEAD. I believe it's going to phase out in 1990 or 1995.

Mr. MINETA. It will take that long?
28

.Mr. HUSTEAD. There are a good number of people in that that are

still in their fifties, I believe, late fifties and early sixties. They would

still be left 20 or 25 years from now. I think there are about 75,000

people who are now covered.

Mr. MINETA. Even with the plan having gone into effect in 1954,

it will still be about 1990 before the beneficial associations that

existed in 1954 are phased out?

Mr. HUSTEAD. The associations don't exist any more. I'm talking

about the number of people.

Mr. MINETA. The number of people covered?

Mr. HUSTEAD. Yes.

Mr. TINSLEY. We had, for instance, a good number at that time

which would have been age 40, say, so they would have been born in

1914, and by 1990 they would be 75. There will still be a good number

of those around.

Mr. MINETA. Thank you, Mr. Chairman.

Mr. WHITE. Thank you, Mr. Mineta.

Before I make one further statement concerning our progress in

the future here, Mr. Tinsley, I wonder if there's anything you would

like to suggest presently as to improvement in either the life insurance

program or the health insurance program or would you prefer to put

them in writing?

Mr. TINSLEY. I would prefer to put them in writing, Mr. Chairman,

and I'm sure over the course of the next few months we will be submitting a number of them.

Mr. WHITE. All right.

Mr. TINSLEY. They will be very limited at this point in time,

Mr. Chairman.

Mr. WHITE. I understand.

I would suggest to the subcommittee members that you leave the

blue book here since you have been furnished one copy for your office.

I think this would be a helpful document during the questioning

in the future as we proceed.

I intend to take up in our legislative calendar matters we have

taken up before and passed in this committee before. We will hold

some hearings but I don't intend to hold extensive hearings because

we already have a record. The committee has already acted on some

of them and in many instances the House has already acted. So those

will be among the high priorities. We will have further discussions

as we go toward the further legislative matters.

I have been thinking that we have a lot of areas of interest—

privacy, life insurance, health insurance, and retirement and so

on—and it's going to be difficult to reach all those matters at one

time unless we rely on the principal areas of interest. It may be

necessary for another member of the subcommittee to chair some

meetings of this subcommittee, since there are bound to be conflicts.

Would that be satisfactory to you all? I think we could probably

go forward faster in a broader area and still be careful as to legislation.

Fine.

Thank you very much, Mr. Tinsley, for coming. Without further 

Mrs. SPELLMAN. Just one question and he may already have

touched on it. I still have one question with regard to retirement.

Mr. WHITE. Fine.
29

Mrs. SPELLMAN. What I do want to ask is whether you have done

any study on the possibility of cooperation between States and the

Federal Government in combining the years of service in working

out some kind of arrangement.

Mr. TINSLEY. We haven't explored that to the extent of going to

the States. We have from time to time given some consideration to

maybe not full coverage for this type of service but some other type

of credit for it and payment for it. It's interesting to note the teachers

have had a problem for years on retirement coverage and they solved

their problem by having an overall teacher's individual annuity

association and within the last year another group has been formed

that would do the same thing for city, county, State or any other

government entity that would want to participate in such a system.

Mrs. SPELLMAN. I wasn't aware of that.

Mr. TINSLEY. And I believe both the National Association of

Counties and Cities and Mayors have been very much interested in

this type of arrangement which would increase the mobility and the

transferability of credit.

In addition to that, to some extent, the new Pension Reform Act

does give some individuals the opportunity to get some kind of an

annuity, not completely, but 

Mrs. SPELLMAN. Then do you think there is a possibility of the

Federal Government being involved in this kind of a program, too?

Mr. TINSLEY. I don't think at the moment that there's much of a

possibility that the Federal Government will become involved,

particularly at the State and local levels. The Federal Government is

already involved to an appreciable extent in those levels and whether

or not they want to suggest that that kind of retirement 

Mrs. SPELLMAN. I'd like to see some exploration of that and maybe

we could bring someone in from one of the States to discuss it to see

if there is a possibility. I'm not really saying that the Federal Government should pick up the full tab. I'm saying that there are moneys

that have been set aside or should have been in the States and maybe

there's a way of bringing those together so that person isn't penalized

for moving.

Thank you.

Mr. WHITE. Thank you very much, Mrs. Spellman. Thank you,

Mr. Tinsley and Mr. Hustead.

The meeting is adjourned.

[Whereupon at 12:15 p.m., the hearing was adjourned.]

[The letter, with its enclosures, which follow, was received for

inclusion in the record, subsequent to the appearance of Mr. Tinsley

before the subcommitcee:]
30

7,

STX7'..-73 CiV1L ZERVIC7E.' CONiNliaSiCN

SUREAU OF ,:,',E7!REVENT, ,NSLIRA;;C:. AND OCCUPATIONAL HZ:U.7.-i

vASHiNGTON. 4. C. 20415

MAR 2 0 1975

Honorable Glad ya N. Soellman

U. S. :use of Representatives

Washington, D. C. 20513

Dear Mrs. Spellman:

:7.1:ALY

On March 3, 1975, I briefed the Subcommittee on Retirement and Employee

Benefits on the Civil Service Retirement, Federal Employees Group Life

Insurance, and Federal Employeee Health Benefits Programs. This will

provide the information you requested at that briefing on the Government's occupational health program (referred to on page 53 of the transcript of the briefing).

At the end of fiscal year 1974, occupational health services were available to approximately 1,713,000 Federal civilian employees. I am enclosing

a copy of Chapter 792 of the Federal Personnel Manual, -Federal Employees

Occupational Health Program," and of Federal Personnel Manual Supplement 

792-1, "Occupational Health Services for Federal Civilian Employees.

These publications provide guidance to agencies for planning, operating,

and evaluating occupational health services for Federal civilian employees.

I hope this material will be useful.

Enclosures

c: Honorable Richard White

Chairman, Subcommittee on

Retirement and Employee Benefits

Sincerely ynurs,

Thomas A. Tinsley

Director
31

Subchapter 1. General Provisions

1-1. AUTHORITY

a. Section 7901 of title 5 of the United States

Code is the basic legal authority for providing

occupational health services to Federal employees (see FPM SUPPLEMENT 990-1). In

addition, Bureau of the Budget Circular A-72

establishes criteria to be followed by the heads

of executive agencies in providing programs of

health services under the basic law, and in

relating them to programs established under

the Federal Employees' Compensation Act to

provide medical and other services and to eliminate health risks.

b. Under these authorities the head of each

agency is required to review existing programs

and is authorized and encouraged to establish

an occupational health program to deal constructively with the health of the employees of

his agency in relation to their work.

1-2. POLICY

While health maintenance is primarily the

responsibility of the individual employee, the

Federal employer has an obligation to provide a

safe work environment for his employees. He

also has a valid interest in preventing loss of

work time and work efficiency resulting from his

employees' ill health. Occupational health is,

therefore, an integral part of progressive personnel management. FPM chapter 250 identifies the maintenance of an adequate employee

occupational health program as an action the

manager, together with the guidance and assistance of the personnel officer, should take in

carrying out his responsibilities for manpower

utilization. Good manpower utilization involves

effectively using, conserving, and developing

human resources to accomplish agency missions

with minimum costs, and to meet national,

social, and economic objectives.

1-3. SCOPE

a. The head of each agency will determine

the extent of occupational health services to be

provided at each work location. Occupational

health programs ultimately will provide health

services for all employees who work in groups

of 300 or more, counting employees of all

agencies who are scheduled to be on duty at

one time in the same locality. Groups of less

than 300 may be provided programs when the

employing agency determines that working

conditions involving unusual health risks warrant them.

b. An occupational health program which is

largely preventive, deals with the health of

employees in relation to their work. Definitive

diagnosis and therapy of nonoccupational injury

and illness are not responsibilities of the Federal

employer, but where the Government, the

employee, or the community stand to benefit,

certain health measures may be provided to

deal with nonoccupational illness or injury.

c. The health services that agencies are

authorized to provide to employees are limited

to those defined below. In determining whether

a particular service is necessary, the working

conditions and number of employees at each

location will be considered.

(1) Emergency diagnosis and first treatment

of injury or illness that become necessary

during working hours and that are within

the competence of the professional staff

and facilities of the health service unit,

whether or not the employee was injured

while in the performance of duty or

whether or not the illness was caused by

his employment. When the necessary

first treatment is outside the competence

of the health service staff and facilities,

the employee may be taken to a nearby
32

(2)

(3)

physician or suitable community medical

facility at his request or at the request

of someone acting on his behalf.

Preemployment examinations of persons

selected for appointment.

Any in-service examinations of employees

that the agency head determines to be

necessary (in addition to fitness-for-duty

examinations which are performed under

existing authority).

(4) Administration, at the discretion of the

responsible health service unit physician,

of treatments and medications (a) furnished by the employee and prescribed

in writing by his personal physician as

reasonably necessary to maintain the

employee at work and (b) prescribed by

a physician providing medical care in

(6)

performance-of-duty injury or illness

cases under the Federal Employees'

Compensation Act.

(5) Preventive services within the competence of the professional staff to (a)

appraise and report work environment

health hazards to agency management as

an aid in preventing and controlling

health risks, (b) provide health education

to encourage employees to maintain personal health, and (c) provide those

specific disease screening examinations

and immunizations that the agency head

determines to be necssary.

In addition to the above, employees

may be referred, upon their request, to

private physicians, dentists, and other

community health resources.
33

Subchapter 2. Agency Responsibilities

2-1. ROLE OF THE CIVIL SERVICE

COMMISSION

The Chairman of the Civil Service Commission has the overall leadership role in developing

and improving the health service programs for

Federal employees in cooperation with the

Secretary of Health, Education, and Welfare

and the Secretary of Labor. Specifically, the

Commission will:

• Aseist agencies in developing adequate

occupational health programs with services

provided at work locations in the 50

States, the District of Columbia, the

territories and posaessions, and Puerto

Rico.

• Set guidelines for cooperative provision of

health services by two or more agencies

having employees in the same or nearby

buildings.

• Report mutually to the President the

extent, costs, and results of agency occupational health programs, together with

an evaluation of these programs and

appropriate recommendations. This will

be done after

—Obtaining information from the agencies

concerning the extent, staffing, facilities,

and operating results of their programs.

—Consulting with the Public Health

Service and the Department of Labor in

their respective areas of responsibility.

2-2. ROLE OF THE DEPARTMENT OF

HEALTH, EDUCATION, AND WELFARE

The Public Health Service (Division of

Federal Employee Health) will:

• Provide consultative services on occupational medical standards and methods to

agencies contemplating establishment of

health service programs.

• Evaluate, upon request, agency health

service programs in relation to PHS

standards.

• Operate employee occupational health

programs for other Federal agencies on a

reimbursable basis when mutually agreeable.

2-3. ROLE OF THE DEPARTMENT OF

LABOR

The Department of Labor will:

• Authorize medical and other services for

employees who are injured or become ill

in the performance of duty.

• Provide advice on the appraisal and

elimination of health risks.

2-4. ROLE OF THE GENERAL SERVICES

ADMINISTRATION

The General Services Administration will:

• Provide adequate space and fixed equipment for occupational health services for

operation by the appropriate agency in

space-planning, construction, and leasing

activities under the Public Buildings Act

and Federal Property and Administrative

Services Act.

2-5. ROLE OF HEADS OF AGENCIES

The heads of agencies will:

• Review existing occupational health pro- •

grams (also, see CSC responsibility for

annual reports to the President).

• Consult with the Division of Federal

Employee Health, PHS, about medical

standards and methods before establishment of a program.

• In establishing a program, be consistent

with Department of Labor standards and

methods for providing medical services in

performance-of-duty cases and for appraising health risks as authorized under

the Federal Employees' Compensation

Act.
34

Subchapter 3. Program Implementation

3-1. RELATIONSHIP TO MANAGEMENT

a. The greater the interest that management

takes in occupational health the greater will be

the benefits it yields. Failure to place an

occupational health program at a high enough

level in the agency organizational structure so

as to insure it continued enlightened attention

and support by management could seriously

impair its efficiency, value, and yield. It is the

responsibility of management to initiate or

suggest improvements which appear to be indicated, and to maintain liaison with the Civil

Service Commission, the Public Health Service,

and the Department of Labor in the respective

areas of responsibility.

b. Of particular importance is the establishment of a good working relationship between

the professional head of occupational health

services and the head of the work force served.

Also important is the development of a meaningful reporting system to identify results and

permit assessment of program effectiveness in

terms of satisfying stated needs, reaching objectives, contributing to overall agency mission

accomplishment, costs, and efficiency in the

use of staff and resources.

3-2. MANAGEMENT RESPONSIBILITIES

a. Agency heads should issue clear policy

statements, consistent with Bureau of the

Budget Circular A-72, which show positive

support of occupational health programs. Field

establishments should also be given practical

guidance on administrative matters necessary

to establish or improve programs. As part of

its required review of programs, top management should assure itself that all other levels of

management are knowledgeable about occupational health, and should encourage special

training where possible. The agency's occupational health policy is an appropriate subject

for consultation and employee organization

views should be solicited in accordance with

FPM chapter 711.

b. Active management support of occupational health should take the form of assuring

that employees know that use of available

health services is encouraged, by making these

services convenient, accessible during normal

working hours, cost-free, and confidential. New

employees should be informed about occupational health services as part of their initial

orientation and all other employees reminded

of them from time to time. When a new service

is begun, or a special project such as immunizations is undertaken, management should show

that it stands behind the program by ample

publicity. Feedback from employees, union

representatives, and supervisors on reactions

to programs should be invited and discussed

with the personnel office and the medical staff.

Self-improvement and professional advancement of the staff of occupational health programs should be encouraged by helping medical

personnel improve their skills and knowledge

through special training and participation in

professional associations. Programs should be

adequately funded and staffed to enable them

to meet realistic goals.

3-3. MANAGEMENT UNDERSTANDING OF

OCCUPATIONAL HEALTH

Top management's understanding of the

principles, methods, and goals of occuptional

health should be advanced through two-way

communication with the occupational health

staff, familiarity with appropriate literature

in the field, taking part in and observing programs in action, and participation in management-oriented training. Subchapter 4 of this

chapter, which is an outline of occupational

health objectives and methods, is designed to

further management's working knowledge of the

discipline.
35

Subchapter 4. Basic Concepts of Occupational Health

4-1. GENERAL

a. Federal occupational health programs are

designed to promote the health fitness of Federal

employees for efficient performance of their

assigned work. These programs, therefore, exist

to serve management. The considerable benefit

for employees is a by-product, but it has been

substantial enough to influence unions to become a major force behind establishing occupational health programs in private industry.

b. Federal policy differs only slightly from

the American Medical Association's philosophy

as stated in its official publications. The

material in section 4-2 is based directly on these

publications.

4-2. MANAGEMENT BENEFITS

Among the management benefits of a good

occupational health program are:

• Reduction of absenteeism. In this area alone

a medical program which stresses prevention

can make a tremendous contribution. It is

estimated that personal health problems account for 10 times as many absences as those

caused by in-plant conditions. For this

reason, it is easy to see why the whole

health picture of the employee is becoming

a matter of increasing concern to every

prudent employer.

• Reduction of labor turnover. A safe and

pleasant working environment helps to

keep employees in their jobs. A considerable investment is made in the training

and instruction of each employee. This investment is completely lost when the employee leaves and industry must undertake

duplicate training of his replacement.

• An increase in the useful span of years of

both workers and management.

• Contribution to good employee-management

relations. It is now well-established that an

employee's productivity, the quality of his

production, and his receptivity to management are largely determined by his morale

and basic attitude.

4-3. PROGRAM OBJECTIVES

The objectives of an occupational health

program are:

• To protect employees against hazards in

their work environment.

• To facilitate placement.

• To assure adequate medical care and rehabilitation of the occupationally ill and

injured.

• To provide health education and encourage

personal health maintenance. There are

advantages in being concerned with the

whole health of the employee at least to the

extent of advising him of preventive measures for his off-the-job health as well as

on-the-job health, and by referring him to

competent internists and specialists.

• To provide extra-occupational medical

services, such as voluntary annual examinations and special preventive programs to

avoid large scale absences. Prevention of

nonoccupational illness is of primary importance since this kind of illness (e.g.,

colds and influenza) accounts for moreabsences than those of a purely occupational nature.

4-4. ACTIVITIES TO REACH OBJECTIVES

Prevention, rather than cure, characterizes

occupational health programs. Certain essential

preventive activities to attain the objectives of

section 4-3 are:

• Maintenance of a healthful work environment.

This should be accomplished by industrial

hygienists' inspections and evaluations,
36

but the occupational health physician also

should be required to visit work areas to

acquaint himself with their condition, environment, and health hazards so lie can

relate his services to job conditions. The

•Public Health Service also recommends the

use of health unit personnel to help solve

Nvork-etivironment health problems.

we Health examinat;ons, both preplacement and

periodic. In addition to facilitating placement, examinations at intervals can determine whether an employee's health is

compatible with his job assignment. Note

that some tests, such as those for cervical

cancer, glaucoma, renal disease, heart

disease, and diabetes, are effective for

younger persons and an age limit would

be inappropriate. Speaking of this, the

Commissioner of the Maryland Department of Health said before a United States

Senate committee in 1966, "Certainly there

are a number of diseases which afflict

:individuals . .,. at an earlier age than 50,

40, or 30, and I would urge that [multiphasic screening, if adopted] be applied

to all adults regardless of age. . . . I would

like to emphasize what I feel is a need for

:including all adults in some type of overall

preventive service." The Public Health

Service recommends that cost benefit yield

will be greatest in numbers of significant

:medical findings, when employees age 40

..and older are given priority for selection.

As an alternative, for sound preventive

health practice, occupational health pro-

;grams should freely incorporate voluntary

health screening programs that are available to all employees for the early detection

of chronic diseases or disorders.

• Treatment of performance-of-duty injuries

:.and illness. These services must be limited

,by occupational health facilities estabAished for the sole purpose of carrying out

,occupational health prog.rams to those

outt- ned in section 1-3 of this chapter.

Services mist be limited to emergency

-treatment and referral of injured employees

-to a hospital or physician designated by

Office of Federal Employ-ees' Compensation, Department of Labor, for needed

further treatment. Any treatment beyond

initial or emergency measures provided by

the occupational health facility must be

authorized by the physician or hospital

providing medical care under the specific

authorization of —>OFEC. Medical facilities

and physicians authorized by OFEC to

provide care to employees injured or ill in

the performance of duty are specified in

section section 5-3 of chapter S10.4-•

• Treatment of nonoccupational illness and

injury. Emergency treatment should be

provided as required to prevent loss of

life or limb or to relieve suffering until

placed under the care of the employee's

personal physician. Treatment of minor

disorders should be offered. The Public

Health Service recommends only treatment

of nonoccupational disorders which allows

completion of the workday and provides

interim care before arrangement for private

medical attention. From the point of view

of the individual employee's health needs,

referral to a private physician or dentist

is one of occupational health's most

important activities.

• Health education and counseling. Health

education and counseling enable management to derive maximum benefit from

occupational health programs because it

induces employees to be health conscious

off the job as well as on the job.

• Medical records. Accurate continuing records contribute to better understanding

of disorders when they occur. These

records should be kept confidential. The

Public Health Service's reclmm-nded policy is that (a) employee health records

should be strictly confidential and filed in

the health unit and (b) health records

should not be released except by written

permission of the employee, and then only

to a medical facility or private physician.

Any record may be obtained by an appropriate court order. See also chapter 293

on filing, use, and disposition of medical

records.
37

Subchapter Si. Federal Policy and Agency Responsibility

Si-I. FEDERAL POLICY

The following is the policy on occupational

health for Federal employees as established by

OMB Circular A-72.

"The health fitness of Federal employees

for efficient performance of their assigned work

is an important element in a progressive

personnel management system and in effective

administration of Federal programs. The head

of each department and agency, therefore, will

review existing programs and is authorized

and encouraged to establish an occupational

health program to deal constructively with the

health of the employees of his department or

agency in relation to their work."

Si-2. AGENCY RESPONSIBILITY

a. In line with the foregoing policy, assessment of its occupational health program should

be an integral part of each department and

agency's internal evaluation system as required

by the President's October 9, 1969, memorandum on personnel management. The program

elements that should receive particular

consideration are:

(1) Extent of program. Determine extent to

which the department or agency's employee

population has access to occupational health

services.

(2) Services provided. Determine whether the

services comprised by the program are consistent with the minimum standards recommended by the Public Health Service, as listed

in An Administrative Guide for Federal Occupational Health Units, PHS Publication 1325—A

(Rev.) 1969, obtainable from the Superintendent of Documents, U.S. Government

Printing Office. This determination should

include the extent that health services can be

or have been made available to employees in

remote locations.

(3) Employee utilization. Determine the

number of employees who utilize the health

services program. This should include summarizing activities in the various categories of

service rendered such as emergency treatment,

immunizations, early disease detection, medical

examinations, referral to private physician and

any other activities that represent occupational

health services.

(4) Cost. Agencies that operate health

facilities should establish methods for accumulating data on direct and indirect costs of

operating the health services programs. This

should include personnel compensation and

benefits; cost of equipment, supplies, utilities,

rent and services; and depreciation and

amortization of equipment.

Periodically, the Civil Service Commission will

request reports on the extent, staffing, facilities,

and operating results of agency programs to

be used in reporting and making recommendations to the President as required in OMB

Circular A-72.
38

Subchapter S2. Health Services Authorized and Procurement

Sources

S2-1. GENERAL

a. The services discussed in this section have

been purposely limited to those authorized by

Public Law 79-658 (5 U.S.C. 7901), as further

defined in OMB Circular A-72. The Commission and the HSA Division of Federal Employee Health take the position that a minimum

program level must be maintained by Federal

employers if the policy stated in OMB Circular

A-72 is to be realized; that minimum level

being the full range of services discussed in

paragraph 4 of Circular A-72 and in this

section.

b. An onsite health unit, under the direction

of a licensed physician with services provided

by registered professional nurses, represents

the most effective occupational health delivery

systems and the kind agencies should strive to

install. However, it is recognized that factors

such as dispersion of the work force and the

concommitant problem of employees working

in small groups or at remote locations, or both,

may make onsite facilities impractical. In such

situations alternative methods for providing

health services must be considered.

c. The following sections of this subchapter

outline health services authorized by circular

A-72. To aid officials responsible for planning

and carrying out health programs, a range of

sources from which services may be obtained

is also included. It must be emphasized that an

onsite unit presents the best opportunity for an

effective program. However, where this is not

feasible, a combination of the alternative methods

suggested should be brought together which will

afford the best possible services to the employee

population.

S2-2. EMERGENCY TREATMENT OF

ILLNESS OR INJURY ON THE JOB

a. Service. Emergency diagnosis and first

treatment of injury or illness that become

necessary during working hours regardless of

whether the injury was sustained by the employee while in the performance of duty or

whether the illness was caused by his employment.

b. Sources. Only an onsite health unit has the

capability to provide emergency service of the

kind described above. The following represent,

in the absence of an onsite facility, alternatives

for dealing with emergencies:

(1) Arrangement with nearby hospital or

medical facility for emergency service;

(2) Staff member(s) trained in first aid (particularly at remote or inaccessible worksites).

S2-3. REFERRAL TO PRIVATE PHYSICIAN

a. Service. Referral of employees to private

physicians, dentists, or other health resources

for conditions which are not job related, but

which are discovered by the professional staff

of the health unit when employees are served

during health screening programs, examinations

and other services. Referrals should be carried

out as recommended in this subchapter.

b. Source. Professional staff (doctors, nurses,

counselors, psychologists, etc.).

S2-4. HEALTH GUIDANCE AND

COUNSELING

a. Service. Individual counseling on health

matters including drug and alcohol abuse and,

for the general employee population, presenta-
39

tion and distribution of health education programs materials.

b. Sources. (1) Federal agency operated health

unit or medical facility;

(2) Health unit or medical facility operated

by private purveyor;

(3) State and local government health

departments;

(4) Voluntary organizations which have the

meapability of providing educational programs

and material include the Cancer Society, Heart

Association, TB Association, Red Cross, Diabetes Association, Society for the Prevention

of Blindness, National Council on Alcoholism,

drug information and treatment activities, and

:.,similar kinds of organizations at the community

hvel; and

(5) Federal agency alcoholism/drug abuse

coordinators and counselors.

152-5. PERIODIC TESTING FOR THE

EARLY DETECTION OF CHRONIC

DISEASE OR DISORDERS

a. Service. Periodic screening for the detection

of unknown diabetes, visual defects, glaucoma,

cancer, hearing defects, hypertension, etc. The

Division of Federal Employee Health recommends that programs be offered only on a

voluntary basis. Employees should be referred

to their private physician for final diagnosis

or treatment, or both, if the screening or testing

',programs indicate the probable presence of

disease. See Subchapter S4, Medical Standards,

for details on screening procedures.

b. Sources. (1) Federal agency-operated

..:1health unit or medical facility;

(2) Health unit or medical facility provided

by private purveyor;

(3) Contract physician;

(4) Contract or agreement with State or local

46geverrunent health facility;

(5) Voluntary health organizations such as

the American Cancer Society, Diabetes Association, and the Society for the Prevention of

Blindness.

S2-6. IMMUNIZATION PROGRAMS

_a. Service. Immunization as may be currently

- recommended by public health authorities (e.g.,

for influenza, tetanus, smallpox) and, as indicated, in connection with official travel or

special occupational health hazards (e.g.,

cholera, typhoid and typhus). See Subchapter

S4, Medical Standards, for specific recommendations. Particular attention should be directed

to the guidelines concerning smallpox and

influenza (S4-7 and S4-9).

b. Sources. (1) Federal agency operated

health unit or medical facility;

(2) Health unit or medical facility provided

by private purveyor;

(3) Contract physician; and

(4) Contract or agreement with State or local

government health facility.

S2-7. PERIODIC MEDICAL EXAMINATION

PROGRAM

a. Service. A physician-conducted examination to consist of a complete history and physical

examination and which will routinely include

tonometry for glaucoma, proctosigmoidoecopy,

pelvic examination and Papanieolaou smear,

electrocardiogram, serology, complete urinalysis

a complete blood count including a white blood

cell count, differential and hemoglobin and/or

hematocrit determination and other testa such

as cholesterol, BUN, and blood sugar, as

indicated and in accordance with Subchapter

S4, Medical Standards. Priority consideration

for voluntary examinations should be given to

employees whose work is at health risk and then

to other employees aged 40 and over. Selection

of these employees is considered the responsibility of agency management.

b. Sources. (1) Federal agency-operated

health unit or medical facility;

(2) Health unit or medical facility provided

by private purveyor;

(3) Contract physician; and

(4) Contract or agreement with State or local

government health facility.

S2-8. TREATMENTS REQUESTED BY

PRIVATE PHYSICIAN

a. Service. Administration of certain treatments (bed rest, dressing changes, etc.) and

drugs (allergens, vaccines, etc.) requested by

the employee's private physician with medica-
40

tion furnished by the employee. This service

facilitates a minimum absence from the worksite and therefore a direct advantage to management. Standards for this service are included in

subchapter S4.

b. Source. Onsite health unit.

S2-9. ASSISTANCE IN DETECTING AND

SOLVING SAFETY AND ENVIRONMENTAL SANITATION PROBLEMS

a. Service. Advisory resource in helping to

solve problems relating to hazards in the work

environment such as toxic fumes, hazardous

noise levels, and similar conditions.

b. Sources. (1) Health unit professional

personnel;

(2) Occupational hygiene and environmental

specialists may be available through local governmental jurisdictions or through local offices

of the Department of Health, Education, and

Welfare;

(3) Private consulting organizations.
41

Subchapter S3. Staffing Occupational Health Programs

S3-1. GENERAL

Health services of the scope defined in OMB

Circular A-72 and in Subchapter S2 of this issuance must be provided under the direction of a

licensed physician, and nursing services must

be provided by registered professional nurses.

S3-2. THE MEDICAL DIRECTOR

a. In December 1971, the American Medical

Association Council on Occupational Health

published a statement entitled Scope, Objectives

and Functions of Occupational Health Programs,

which included the following:

"In order to provide a satisfactory occupational health program, it is essential that a

qualified doctor of medicine be engaged to

direct the program. The needs of a specific program will determine the amount of time required of this physician. Training and experience in occupational medicine are desirable.

The medical director should have a major role

in the development, interpretation and implementation of medical policy. He should

administer the occupational health program

and be directly responsible to a designated

official at the policy making level of management. This contention is supported by the fact

that the large majority of major industrial

and commercial firms employ a medical director

to shape and direct an effective program."

b. Each major Federal department and

agency should have a medical officer at

the headquarters level whose responsibilities

include:

(1) Designing a health services program that

is responsive to the organizational and occupational needs of the agency;

(2) Managing the execution of professional

medical services to agency managers and

employees;

(3) Evaluating program effectiveness.

S3-3. HEALTH UNIT STAFFING

a. The Division of Federal Employee Health

operates a number of health units that serve

Federal agencies and recommends, based on

experience, the following minimum staffing

criteria for health units:

(1) Physicians. For every 500 employees at a

given location the services of a physician should

be available for a 2-hour visit per week. Thus,

for an employee population of 1,000, the

physician's services would be required for two

2-hour visits per week; for a population of

1,500, three per week, etc. For an employee

population of 4,000 or more, a full-time physician is recommended.

(2) Nurses. One nurse is recommended for

each 1,000 employees at a given location.

Periodically, the number of nurses should be

reappraised in terms of caseload.

(3) Reception Clerk. In those health units

serving a large employee population, provision

should be made for a receptionist/clerk to

schedule visits, receive calls, and perform other

clerical duties in order to conserve professional

medical staff resources. Division of Federal

Employee Health units provide for full-time

clerical assistance where groups of 3,000 or

more are served.
42

Subchapter S4. Medical Standards

84-1. GENERAL

The Division of Federal Employee Health's

publication, An Administrative Guide for Federal

Occupational Health Units, provides detailed

information on all facets of establishing, staffing, and operating a health unit, including

specific procedures and medical techniques that

have been validated in nFun operated units.

Some of the highlights of the medical procedures

which have direct impact on the medical quality

aspects of occupational health services are

discussed in the following sections. The Division

of Federal Employee Health recommends that

these highlights, as well as the full text of the

Administrative Guide, be considered carefully in

contracting for or otherwise obtaining medical

services.

S4-2. LABORATORY PROCEDURES AND

OTHER TESTS

a. Health maintenance examinations should

routinely include the following laboratory

procedures recommended by DFEH:

(1) Hematology—white blood cell count, differential count, hematocrit and/or hemoglobin;

(2) Standard test for syphilis;

(3) Others—such as cholesterol, BUN, blood

sugar, as indicated;

(a) Urinalysis—color appearance, albumin,

pH, sugar, specific gravity and microscopic examination;

(b) Electrocardiogram-12 lead; and

(c) Chest X-ray—optional depending on

occupational need.

84-3. VISION SCREENING AND

GLAUCOMA DETECTION

Periodic vision testing should be offered to

all employees regardless of age. Glaucoma

testing should be offered to all employees age

40 and over, and employees of any age who

have a family history of glaucoma. Also,

DFEH recommends that vision testing be done

by means of a stereoscopic vision testing apparatus; and that tonometry for detection of

glaucoma be performed only by qualified

health personnel.

S4-4. DIABETES SCREENING

The Division of Federal Employee Health

utilizes a glucose challenge test through a

special beverage; venous blood plasma is processed to test glucose levels. Employees whose

laboratory results are found to be in a critical

range are encouraged to take a more definitive

glucose tolerance test given at the health unit.

The DFEH test method is economical and meets

high standards of sensitivity, specificity, and

accuracy. Full screening procedures are included in the Administrative Guide. Individual

physicians and health units may use different

but equally reliable methods for diabetes

screening which also may be more or less expensive on a per capita basis.

84-5. CANCER SCREENING

a. Screening for the detection of breast cancer and cancer of the reproductive system is

recommended for adult female employees regardless of marital status. The screening, performed by a physician, should include:

(1) Bimanual palpation of both breasts,

questioning the employee on symptoms referrable to the mammary system and simultaneous teaching of the patient in the method

of breast self-examination; and

(2) Pelvic examination including Papaniculaou smear. All unsatisfactory slides should

be repeated as soon as possible and all suspicious findings should be referred to the private

physician.
43

S4-6. TUBERCULOSIS SCREENLNG FOR

SELECTED GROUP

The Division of Federal Employee Health

recommends use of the intracutaneous (Mantoux) test using Tuberculin PPD diluted, 5 TU

per 0.1 ml. The test should be read 43 to 72

hours after injection. The Division can provide

..guidance and specific procedures concerning

-Teactions to this test. In accordance with the

'Department of Health, Education, and Welfare's policy statement of February 18, 1972,

..DFEH does not recommend the use of the chest

.7X-ray among the general population as a screening procedure for the detection of tuberculosis,

other pulmonary disorders, and heart diseases.

The rationale supporting this policy statement

is in DHEW Publication No. (FDA) 73-8036.

S4-7. SMALLPDX VACCINATION

This vaccination is no longer recommended

for the general adult population. If employees

..are required to travel to a foreign country, the

-advice of local public health authorities or the

PHS Health Service Center for Disease Control,

Atlanta, Georgia, should be obtained.

54-8. TETANUS IMMUNIZATION

This immunization is for persons who have

never been immunized with tetanus toxoid,

Ash° cannot recall definitely or who have doubts

*bout previous immunization, or who completed

a.series of tetanus toxoid more than 10 years

4ago and no boosters since. To maintain imlnunity, a booster injection every 10 years is

currently recommended.

S4-9. INFLUENZA IMMUNIZATIONS

a. The IISPHS Center for Disease Control

annually publishes the recommendations of

the Public Health Service Advisory Committee

on Immunization Practices, which should

...serve as guidance in occupational health pro-

/grams. General practice observed by DFEH is

that annual influenza immunizations are not

_indicated for everyone but that vaccine is

-recommended to persons in groups known to

'experience high mortality from epidemic in-

/lemma.

b. The general recommendations of the

Advisory Committee on Immunization Practices as of 1972 are:

(1) Annual vaccination is recommended for

persons of all ages who have chronic debilitating

conditions: (a) Congenital and rheumatic heat-.

disease, especially with mitral stenosis, and

arteriosclerotic and hypertensive heart disease, particularly with cardiac insufficienc:.-

(b) Chronic bronchopulmonary diseases 

asthma, chronic bronchitis, cystic fibrosis. suchas 

bronchiectasis, emphysema, and advanced tuberculosis; (c) diabetes mellitus and other

chronic metabolic disorders.

(2) Although the value of routinely immunizing all older age persons is less clear, those

patients who have incipient or potentially

chronic disease, particularly affecting cardiovascular and bronchopulmonary systems should

also be considered for annual immuni7ation.

Vaccine prescribed by the Advisory Committee

on Immunization Practices should be utilized

in this program.

S4-10. TREATMENT REQUESTED BY

- PRIVATE PHYSICIAN

a. It is recommended that treatments requested by private physicians or dentists be carried

out within the following guides:

(1) That no medication shall be administered

which is likely to produce severe reactions,

which require continued medical surveillance

or laboratory procedures, or both, or which

are not adequately covered by a physician's

order;

(2) That requests must be in writing, except

in emergency situations and must contain

appropriate information and instructions including diagnosis, exact name and dosage of

medication, method of administration and site

of injection, number of injections and interval

f administration, reactions which may occur

and measures to be taken if they do. If treatment is needed, the request must specify the

type, frequency, and duration;

(3) That written requests automatically

expire within three months or in a shorter

time if specified.

For specifics concerning medications recommended for this service and restrictions and

advice for their administration see the DFER

Administrative Guide.
44

Subchapter S5. Confidentiality of Health Unit Records

S5-1. CONFIDENTIALITY OF OCCUPATIONAL HEALTH PROGRAM MEDICAL

RECORDS

Maintenance of medical records in strictest

confidence is part of the ethics of the medical

and nursing professions. All employee health

records should be maintained under the direction of the medical officer in charge of the

health unit, and all such information treated as

privileged and confidential. The confidential

nature and security requirements of these

records should be written into contracts which

deal with rendering health services to

employees.

S5-2. CONDITIONS FOR RELEASE OF

HEALTH RECORD INFORMATION

a. Information from the record may be furnished to an employee's physician, any medical

facility (including the medical facilities of OFEC

and csc), or dentist upon receipt of a signed

request from the employee authorizing the release. Reports containing health record information should be prepared for the signature of

the medical officer in charge of the health unit.

b. Accident reports and records of emergency

treatment of compensable or potentially compensable illness or injury incurred on the job

are the property of the Office of Federal Employee's Compensation and may be released only

to a representative of that office. The release

of this information must be in the form of a

transcript signed by the medical officer. Unless

the employee's signed release is presented, this

transcript should contain no information other

than that pertaining to the specific condition

under investigation and no questions should be

answered about the employee which do not

relate to this condition.

c. An employee's OFEC record may be subpoenaed by a court of competent jurisdiction.

Whenever such a subpoena is served, it is to

be accepted by the medical officer or the chief

nurse and the OFEC should be promptly contacted for advice.

d. An employee's medical record may be sent

to another Federal health unit whenever the

employee transfers to the jurisdiction of another

health unit.
45

Subchapter S6. Working With the Medical Community—

Referral and Followup

S6-1. PRIVATE PRACTICE REACTION TO

OCCUPATIONAL HEALTH PROGRAMS

a. Managers sometimes ask about the viewpoint of private medical practitioners regarding health units. The American Medical

Association has long had a Council on Occupational Health and strongly endorses occupational health programs which it calls ". . .

programs provided by management to deal

constructively with the health of employees in

relation to their work." "Good health," states

the AMA, "is good business." The Association

points out that a good occupational health

program can help business to:

(1) Reduce the cost of workmen's compensation;

(2) Reduce the cost of hospital and surgical

insurance claims;

(3) Reduce absenteeism;

(4) Reduce labor turnover;

(5) Create a good work atmosphere;

(6) Persuade the employee that management

is sincere;

(7) Convince the employee that his job is

important;

(8) Increase the useful span of years for both

worker and management.

b. While these points were written with

private industry in mind, any Federal administrator can draw from them the necessary

inferences about the value of an occupational

health program to his agency. In turn, the AMA

charges the medical profession to take leadership in improving occupational health programs

and in providing occupational health services

to all employees. It charges county medical

societies to help employers locate physicians

willing to direct and serve occupational health

programs. Thus, leadership is exerted within

the medical community to assist occupational

health programs in getting started and to work

with them once they are underway.

S6-2. REFERRAL AND FOLLOWUP

a. In line with the AMA viewpoint, referral

and followup takes on a special meaning. This

activity is one of the most important from the

point of view of the individual employee's

health needs and warrants the greatest care on

the part of the occupational health staff to see

that it is properly carried out—both with respect to the employee and his personal physician. The following guidance is offered on

referrals and followup:

(1) Referrals. For conditions that are not

job-connected, employees who require the services of a physician or dentist but who do not

know one to call should be given the name and

telephone number of the local medical society

or its service bureau. This agency will furnish

the names of physicians and dentists who practice in the locality which the employee specifies.

Where the referring physician also maintains

a private practice, the employee may request

appointment with the referring physician. However, the request must be initiated by the

employee, and the employee must be treated

at the physician's private office, not on the

agency premises.

(2) FoIlmoup. The term "followup" may be

defined as meaning an organized effort on the

part of the occupational health unit staff to

maintain contact with an employee who has a

serious or potentially serious health problem,

until assured that the employee has taken

whatever actions appear to have been indicated

to safeguard his health. It is recommended that

followup begin as soon as possible after referral

of an employee, and this function be viewed as

an important element of the daily routine.

b. Where agencies are utilizing multiphasic

health testing services or a private contractor,

and do not have health unit staff available, they

should see to it that arrangements are made

with the contractor for provision of referral and

followup services.

(
46

Subchapter S7. Employees Who Work in Groups of Less

Than Three Hundred

S7-1. GENERAL

a. Office of Management and Budget Circular

A-72 provides that Federal employee occupational health programs will ultimately provide

services for all employees who work in groups

of 300 or more, counting employees of all departments or agencies who are scheduled to

be on duty at one time in the same locality.

This apparent restriction has generated a

number of inquiries concerning conditions under

which health services may be provided to

employees in smaller groups. This issue was

raised with the Bureau of the Budget in 1967

and its interpretation briefly stated is as

follows:

(1) While every effort should be made to

provide health services, to groups of 300 or

more, the absence of a group that size cannot

in and of itself justify a denial of the health

services.

(2) If health services are determined to be

in the Government's interest and a reasonable

basis for that determiniation is recorded, they

may be provided regardless of the size of the

group involved.

b. Experience has shown that establishment

of permanent health units for employees located

in groups of 300 or less is usually uneconomical

or impractical. However, alternative methods

do exist for providing health services in these

situations. Possible approaches for developing

services for these employees is through arrangements with local hospitals, private and public

health clinics, private physicians, multiphasic

screening programs, and voluntary health

organizations. A combination of these alternative methods can be brought together to

afford health services to this employee population. See Subchapter S2, Health Services

Authorized and Procurement Sources, for

specific recommendations.
47

Subchapter S8. Automated Multiphasic Health Testing

Program

that the program be under the direction of a

licensed physician who is directly responsible

to management. One of the primary responsibilities of this medical officer will be the integration of the program into the local community's

existing health care system. The acceptance of

this program by the local medical community

is crucial to its success.

S8-1. GENERAL

a. During the past several years there has

been a significant increase in the number of

organizations and companies that offer automated multiphasic health testing services.

Such services typically include, but are not

limited to, medical history, chest X-ray,

electrocardiogram, and laboratory and other

tests. The primary purpose of these programs

is early disease detection and prevention.

Experience has shown that multiphasic screening examinations may bring to light so-called

hidden disease in a stage when they are most

treatable and at a time when the doctor can

most effectively and efficiently help the patient

maintain or regain good health. These programs

also foster an awareness of the value of early

disease detection and the advantages of a continuing physician-patient relationship.

b. Automated multiphasic health testing

programs can be of particular value to agencies

which are located in remote areas and do not

have access to an established occupational

health unit. By utilizing the AMHT services as

the basic preventive health program component,

other services can be added to develop a more

comprehensive occupational health program.

In remote areas many of these other health

services (e.g., emergency care, first aid, immunizations, counseling and health education)

can be developed through arrangements with

local hospitals, clinics, private physicians and

voluntary health organizations. However, AMHT

programs must not be construed as an alternative to an onsite comprehensive employee health

service. Worksite employee health facilities

and programs should be used to serve Federal

employees whenever possible.

c. In contracting for automated multiphasic

health testing services, agencies should require

S8-2. SAFEGUARDING PRIVACY OF

PARTICIPANTS

Many automated multiphasic health testing

programs include the use of a family history

questionnaire. The content of some questionnaires is such that safeguards must be taken to

insure that there is no overt or covert invasion

of privacy of participants. Federal agencies

that obtain these kinds of services for their

employees must provide notification to their

employees (1) that their participation is

strictly voluntary in that no official request to

participate will be made but, instead, employees

will be offered the opportunity to participate

at their own election; (2) that completion of

any questionnaire or of any particular question

is entirely optional on the part of each individual employee; and (3) that the collecting,

processing, and final disposition of medical

specimens and information will be safeguarded

to insure that only the employee and the

employee's physician are apprised of the results via professional medical channels, and

that no individual employee medical findings

resulting from such services will be made

available to agency personnel, management or

supervisory officials. These same protections

must also be afforded employees participating

in preventive or disease detection programs at

agency or contractor operated occupational

health facilities.
- 48

Subchapter S9. Obtaining Occupational Health Services

S9-I. METHODS FOR OBTAINING

SERVICES

a. Office of Management and Budget Circular

A-72 authorizes the establishment of occupational health services programs by the head of

each department and agency within the following framework:

(1) By utilizing professional staff or facilities

existing in his department or agency at locations

where adequate (e.g., federally operated hospitals or other medical facilities) ;

(2) Where an agency's staff or facilities are

not adequate, by entering into an appropriate

agreement with another Federal department or

agency at locations where that department or

agency has available adequate medical staff

or facilities, or;

(3) Where neither the agency nor another

Federal department or agency has adequate

staff or facilities available, by (a) establishing

the department's or agency's own professional

staff or facilities or (b) by entering into an

appropriate agreement with qualified private

or public sources for professional services,

including consulting services, or facilities.

S9-2. SPACE PLANNING AND DESIGN OF

FACILITIES

a. Circular A-72 imposes the following requirements with respect to space planning, construction, and leasing activities:

(1) That the Administrator of GSA, or agencies

operating under delegated authority from the

Administrator will make adequate space provision for occupational health services in accordance with GSA space standards (published in

GSA, PBS Occupancy Guide for Federal Employee Health Units).

(2) That heads of departments and agencies

excluded from provisions of the Federal Property

and Administrative Services Act will make

adequate space provision for occupational

health services (the GSA Occupancy Guide referred to above is recommended).

S9-3. CONTRACTING FOR SERVICES

a. When an agency or agencies decide to

contract for health services the following

options are available:

(1) General Services Administration will

negotiate a professional services contract for

all participating agencies. In such cases GSA

will request that the PBS Division of Federal

Employee Health advise about contract provisions and the type of services and contractor

selected; or

(2) Each agency may negotiate for services

and enter into formal agreements with contractors under the Federal Procurement Regulations; or

(3) Where several agencies will share services,

a lead agency may assume responsibility and

act as the agent for the others in negotiating for

services and entering into formal agreements

with contractors under the Federal Procurement

Regulations. See section S9-5 for sample

contract.

S9-4. COSTS

It is not possible to set a cost figure which

will apply to all employee health units or

contracts with individual physicians or organizations. There are many variables including size

of the agency, type of work done in the agency,

kinds of health services required, and other

factors. For example, in 1972, DFEH reported

a range in costs from $48 per capita for a unit

serving 410 employees to $15 for a unit serving

1,640 employees. The average per capita cost

for all DFEH health units was approximately $25.
49

S9-5. SAMPLE CONTRACT

The following prospectus jointly developed

by the General Services Administration and the

HSA Division of Federal Employee Health is

included as a convenience and guide to those

agencies contemplating contracting for occupational health services:

Prospectus for the Operations of a

Federal Employee Health Unit Located at

L Scope of Services To Be Performed

A. General. The General Services Administration, an independent agency of the United

States Government, requires the services of a

professional medical service contractor to conduct an effective Federal employee health

program for the benefit of approximately 1,000

Federal employees at the building

located at 

The major Federal occupant agencies are listed

separately (see exhibit I).

B. Facility. The General Services Administration has provided space and medical equipment on the floor in accordance with

guides and standards of the U.S. Public Health

Service to permit the operation of the medical

facility. See exhibit II for the space layout and

inventory of medical equipment items.

The Government will, as it deems advisable,

provide space heating, space lighting, ventilation, and the utilities required for the provision

of such medical services.

The Government, at its own kxpense, will

provide, install and permit the Contractor to

,Arse the equipment listed in exhibit II, and

Additional medical equipment of a similar type

when required for expansion approved by the

Government; provided, that equipment no

vicnger needed for the contract operations may

Are withdrawn by the Government. The GovArnment will replace equipment which it has

Irprovidecl, as it deems necessary. Subject to

.equate day-by-day maintenance and cleaning

of equipment by the Contractor, the Government will replace major components of, and

make major repairs to, such equipment. Ownership of medical equipment to be furnished

shall be vested in the Government.

The Government will provide the necessary

periodic cleaning of the floors, windows, and

nonmedical furnishings and fixtures necessary

to conform to applicable health and sanitary

requirements.

C. Responsibilities of the Contractor

1. Staffing. The Contractor will designate the

number of employees under his jurisdiction

that will be employed by him to staff the

program and indicate the number of such

employees who will be hired as full-time or

part-time on Contractor's payroll and those

who will be employed on a contractual basis.

2. Assignee. The Contractor will furnish the

name and title of his assignee having the

direct responsibility for the medical facility.

3. Liabilities. As a Contractor, he assumes all

legal and professional responsibilities and liabilities attendant on the professional practices

in the rendering of health services. The Contractor will submit evidence of liability insurance to the Government.

4. Medical Supplies. The Contractor will

furnish all drugs, medical supplies, pharmaceuticals, vaccines, and immunizing agents of

the quality standards recommended by the

Division of Federal Employee Health; Public

Health Service. The Contractor will further

provide such laundry supplies as may be

necessary.

5. Equipment and Facilities. The Contractor

will assume responsibility and liability for

damage to equipment and facilities provided

by the Government caused by other than

normal operating usage, and for losses attributable to torts of his employees and agents.

D. Consultation. Should the Contractor require consultation regarding medical administrative matters, he may contact the Division of

Federal Employee Health, Public Health Service, which is the medical advisor to the General Services Administration.
50

II. Specific Services To Be Performed by

Contractor

A. Required Services. The Contractor may be

required to provide the following health services that are integral to a sound Federal employee health program:

1. Preemployment Examinations. The Contractor will perform preemployment physical

examinations using the standards of the U.S.

Civil Service Commission (Form 78). In the

event special occupational requirements are

deemed necessary, they will be listed separately.

Approximately 10 percent of the participants

may receive this examination annually.

2. General Medical Examinations. The Contractor may be called upon to perform general

medical examinations such as for motor vehicle

operators to the extent of from 1 or 2 percent

of the total population served. The standards

of the sponsoring Federal agency will be strictly

adhered to.

3. Fitness-for-Duty Examinations. The Contractor may further be required to assist in the

performance of one to three fitness-for-duty

examinations per year at the request of the

participating Federal agency. A complete

physical examination is required, and may

include a psychiatric examination.

4. Vision Screening. Approximately 50 percent of the health program's participants will

receive vision screening annually. The Contractor will be guided by specifications and

standards for such programs of the Division of

Federal Employee Health, Public Health Service. The Contractor will provide glaucoma

screening for persons over 40 and all persons

having a family history of glaucoma. Approximately 25 percent of the population to be served

may receive glaucoma screening annually.

5. Immunization Programs. Approximately

half of the participants in the health services

program may voluntarily request immunizations. The Contractor will be guided by specifications for such programs of the Division of

Federal Employee Health, Public Health

Service.

.6. On-the-Job Care. This would include the

following areas:

a. First aid and immediate medical care for

work and nonwork related illness.

b. Referral of employees to private medical

practitioners for definitive medical care

for nonwork-connected disability or illness;

and, referral of employees to appropriate

Office of Federal Employee Compensation designated practitioners or facilities

for work-connected disability or injury.

c. Followup on status of ill or injured

employees.

B. Optional Services. The Contractor may be

required to furnish the following health services. Their cost will determine whether or not

they are to be performed. The Contractor

is requested to define the specific responsibilities of his professional staff relative to each

service and to price each of the following

services separately:

1. Diabetes Screening. Approximately 50

percent of the health program's participants

would annually receive diabetes screening.

The Contractor is requested to furnish advice

as to the standards and methodology he would

use in diabetes screening.

2. Cancer Screening for Women. Approximately 300 examinations may be conducted

each year for cancer of the cervix and uterus.

The Contractor is requested to submit his

proposed methodology and standards for evaluation with his proposal.

3. Employee Health Maintenance Examinations. The Contractor may be requested to

perform employee health examinations each

year to approximately 10 percent of the

participants of the health program. The

participating agencies will be charged a unit

price for each such health examination. The

Contractor is requested to submit the price

of each examination of this nature together

with his standard.

C. Administrative Services. The Contractor

may be required to provide the following

administrative medical services. Here again,

the Contractor is requested to clearly define
51

the responsibilities of his medical staff and individual costs relative to the following services:

1. Assistance in environmental and safety

control.

2. Liaison with agencies regarding occupational health problems and personnel problems

related to employee health.

3. Administration of drugs and treatments at

the request of private physicians.

4. Statistical analyses of health unit data and

reports to management.

5. Communicable disease control activities.

6. Health education and health counseling.

III. Costs

The Contractor in his proposal will furnish

minimum and maximum costs for the following

areas:

A. Required Services. Based on the assumption that only those items (IA, 1 through 6)

will be offered. The Contractor will furnish

minimum and maximum costs for the required

services.

B. Optional Services. Each cost is to be itemized separately. The Contractor will submit a

minimum and maximum cost which will cover

the combination of required (IA, 1 through

6) services and optional (LIB, 1 through 3)

services.

C. Administrative Services. Each cost is to

be itemized separately. The Contractor will

submit a minimum and maximum cost for the

administrative services (HC, 1 through 6).

D. Entire Program. The Contractor will

furnish a minimum and maximum cost for

the entire health program as explained in the

prospectus.
52

Subchapter S10. Program Advice and Assistance

S10-1. CIVIL SERVICE COMMISSION

a. Office of Management and Budget Circular A-72 charges the Chairman of the Civil

Service Commission with responsibility for assisting agencies in the development of occupational health programs. The health services

provided through these programs pertain essentially to the well-being of employees in

relation to their work assignments, and include

such activities as emergency diagnosis, first

treatment of injury or illness, and preventive

service such as disease screening exams and

immunizations.

b. Requests for assistance may be directed

to the Occupational Health Representative in

the Commission's regional offices and to the

Division of Occupational Health, Bureau of Retirement, Insurance, and Occupational Health

in the central office. In addition to providing

advisory service, Commission representatives

will coordinate the involvement of the HSA

Division of Federal Employee Health, Department of Labor and General Services

Administration.

S10-2. DEPARTMENT OF HEALTH,

EDUCATION, AND WELFARE

HSA Division of Federal Employee Health

a. Under the provisions of Public Law 79-658

(5 U.S.C. 7901) and OMB Circular A-72, the

Division of Federal Employee Health provides

the following services:

(1) Consultative services to agencies contemplating establishment of occupational health

service programs concerning occupational medical standards and methods;

(2) Evaluation, upon request, of agency

health service programs in relation to DFEH

standards;

(3) Operation of employee occupational

health programs for other Federal agencies on

a reimbursable basis where mutually agreeable.

Inquiries concerning such services may be addressed to the local Civil Service Commission

office or made directly to:

Director, Division of Federal Employee Health

Federal Health Program Service

Health Services Administration

Department of Health, Education, and Welfare

Presidential Building, Room 330

6525 Belcrest Road

Hyattsville, Md. 20782

(Phone: (301) 436-6601)

National Institute of Occupational Safety

and Health

a. This agency is primarily a research oriented

organization concerned with occupational safety

and health related problems.

b. Training services. In order to develop and

enhance industrial hygiene and safety expertise throughout the private and public

sectors, NiosH conducts several training

courses that are available on a tuition basis

(Division of Training). In additions, onjob

training specifically related to suspected health

problems, may be available subject to program

limitations and priorities (Division of Technical Services).

c. Technical services. The National Institute

of Occupational Safety and Health maintains

a free extensive Technical Information Services

program designed to respond to inquiries concerning safety and health problems associated

with the work environment.

d. Inquiries concerning any services related
53

to MOSS can be directed to the following

address:

NIOSH.

Post Office Building

Cincinnati, Ohio 45202

S10-3. THE DEPARTMENT OF LABOR

Office of Federal Employees Compensation

Office of Management and 'Budget Circular

A-72 requires that occupational health programs that provide medical services in performance-of-duty injury cases be consistent

with Department of Labor standards and

methods for providing such services, and

consistent with criteria for appraising health

risks as authorized under the Federal Employees' Compensation Act. Inquiries concerning these services should be addressed to:

Medical Director

Department of Labor

Office of Federal Employee Compensation

Washington, D.C. 20211

(Phone: (202) 382-1157)

Occupational Safety and Health

Administration

On December 29, 1970, Public Law 91-596,

the Occupational Safety and Health Act, was

approved. This act deals directly with safety in

the workplace and protection of the employee

from environmental hazards. Executive Order

11612 directs heads of Federal departments and

agencies to establish occupational safety and

health programs. The Occupational Safety and

Health Administration, Office of Federal Agency

Programs, is delegated the authority to provide

guidance to the heads of Federal departments

and agencies to assist them in developing these

programs. Inquiries concerning such services

should be addressed to:

Office of Federal Agency Programs

Occupational Safety and Health Administration

Washington, D.C. 20852

810-4. GENERAL SERVICES

ADMINISTRATION

Under OMB Circular A-72, GSA is charged

with responsibility for providing adequate

space and fixed equipment for occupational

health servicks in space planning, construction

and leasing activities under the Public Buildings

Act and the Federal Property and Administrative Services Act. Also, technical assistance is

available for contracting for services. Consultation may be arranged through the Civil Service

Commission or by direct contact with the Public

Building Service at GSA regional offices or at the

headquarters level in Washington.



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