Military Benefits Changes for 2020
2020 Military Benefit Updates Changes
Changes announced so far. Please keep checking back, as we will continue updating new changes to your military benefits for 2020.
TRICARE Drug Costs To Increase By Over 40%
Every year on January 1st, TRICARE has its regular cost increases. In 2020, we will see updates on prescription drug costs. According to an article on Military.com, we could see an increase of as much as 42%. This could be quite a change for some people.
As of January 1st, 2020, prices of all generic drugs, as well as the brand-name and non-formulary drugs that you purchase either through mail-order or at in-network, or at out-of-network pharmacies will increase. If you continue to get your prescriptions filled at on-base or on-post pharmacies, the cost will remain free and you will not see the increase.
These changes should be kept in mind if you are used to getting your prescriptions away from the on-base or on-post pharmacies.
2020 Rates for Vision and Retiree Dental Insurance
The rates for vision and retiree dental insurance will be increasing in 2020. If you are enrolled in FEDVIP, which is vision insurance for military dependents, retirees, and their families and dental insurance for retirees and their families, you will need to decide if you will change plans or stick with what you have based on the new 2020 rates.
Dental premiums will increase by 5.6% on average over current rates, with vision premiums increasing by 1.5% on average, according to TRICARE. The Federal Benefits Open Season begins on November 11th and ends December 9th. If you want to change your plan, you must do so during open season or following a FEDVIP qualifying life event. You can use the FEDVIP plan comparison tool to see what these changes mean for you and if you should choose another plan. In 2020, FEDVIP will offer 10 dental and 4 vision carriers you can choose from.
COLA will have an increase of 1.6% in 2020 which is lower than the 2019 increase of 2.8%. COLA increases are based on the increase in the CPI-W, from the 3rd quarter of 2018 through the third quarter of 2019. Increases can change year to year. The last few years have seen, 0.0% in 2016, .3% in 2017, 2.0% in 2018, and 2.8% in 2019. Military retirees, those who receive disability payments, or other benefits from the Department of Veterans Affairs, federal retirees, as well as Social Security recipients will all see the 1.6% increase in their monthly payments.
When it comes to retirement pay, it is important to keep in mind that since the increase for the year is calculated differently than active duty pay, the raises can seem a little different based on the year. Based on the 1.6% increase, in 2020 you would receive $16 for every $1,000 in government benefits you receive. If a veteran is receiving around $2,000 a month as retirement pay, they would see an increase of $32 a month.
A veteran who entered military service after July 31, 1986, has had the option of going with the “Career Status Bonus” or (CSB)/REDUX instead of the “High 3-year average” option with regards to retirement pay. This means that they would have received $30,000 during their 15th year of service and will see a reduced retirement rate until they are 62 years old. This also means that their COLA increase is reduced by 1%, which would change the amount of the increase they would see in 2020.
VA Disability payments would also increase in 2020. A veteran with a 60% rating would see about an $18 a month increase, while a veteran with a 100% rating would see a $49 a month increase. The amount they would receive depends on their rating as well as their veteran dependent status. The rate for 2020 would be 1.6% and is based on COLA rates. Rates are effective as of December 1st, 2019.
Social Security Payments
Beyond veteran payments are social security payments. According to the Social Security Administration, the average monthly Social Security benefit in June 2019 was $1,471 for the retired worker. Based on this, the average beneficiary would see an increase of $24 in 2020.
3.1% Military Pay Increase
In March of this year, the White House proposed a 3.1% pay increase for service members to take place on January 1, 2020. Both the House and Senate approved the 3.1% pay raise. For junior enlisted, this would be an increase of almost $1,000 a year and up from 2.6% in 2019, and 2.4% in 2018.
The main guideline for determining military pay raises comes from the quarterly report of the US Employment Cost Index (ECI) which is put out by the Bureau of Labor Statistics (BLS).
The fiscal 2020 NDAA passed and the 3.1% raise will take effect as of Jan 1, 2020.
RELATED: Military Pay Charts
BAH 2020 Rates
BAH is the Basic Allowance for Housing. The 2020 BAH rates have been posted and the DOD’s BAH calculator has been updated. You can use this to find out how much you will be bringing home for BAH in 2020. Remember, if your rate goes down you are grandfathered into the old rate unless you move or change rank.
BAH is based on your rank, dependent status, and geographic location. BAH is intended to cover 95% of your housing costs. This % can change each year and was 99% just a few years ago. They did not change this from last year. Your rates are based on your duty station zip code.
Your new BAH rate will go into effect on January 1st and you will see it in your January 15, 2020 paycheck.
The proposed BAH increase is 2.9% for this year and will need to be approved by Congress and the President. That being said, individual rates are based on the cost of living in your exact location. In 2018, the proposed rate was also 2.9% and 2.55% was approved. In 2018, it was .7%.
BAS 2020 Rates
BAS (Basic Allowance for Subsistence) has a proposed increase of 2.4% for 2020. This is a change from the 3.4% that is normally proposed. Rates have not changed all that much in the last few years since they are based on the cost of food.
The BAS Rates for 2020 should be:
Enlisted: $372.71 per month
Officers: $256.68 per month
BAS is meant to be used to pay for food for enlisted and officers. It is only intended to help pay for food, not to cover all the costs. The rate also does not change based on dependents because the money is not meant to cover food for family members.
The increase will take place on January 1st and you will see it on your January 15th, 2020 paychecks.
We will update as more 2020 military benefits changes are announced!
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About the author
Julie Provost is a freelance writer, blogger, and owner of Soldier's Wife, Crazy Life, a support blog for military spouses. She lives in Tennessee with her National Guard husband and three boys.