U.S. investigates insurance mix-up paying $72 million to reservists Reserve, Guard forces sent to Bosnia can get up to $5,000 a month

March 11, 1997|By Tom Bowman | Tom Bowman,SUN NATIONAL STAFF

WASHINGTON -- A congressional watchdog agency and the Pentagon's inspector general are probing an insurance program that went awry when thousands of reservists ordered to Bosnia found they could collect $5,000 per month during their deployment in addition to their military pay.

As a result of the apparent snafu, the Pentagon is scrambling to find at least $72 million to pay claims from about 3,000 reservists now in Bosnia who signed up for the hefty benefits by paying a small monthly premium.

"It is a mess. It is a disaster," said Valeria Gist of the General Accounting Office, the investigative arm of Congress, which is looking into the insurance program along with the Pentagon inspector general's office. "There's a lot of action going on at the Pentagon about what went wrong."

The Ready Reserve Mobilization Income Insurance program was designed to cushion reservists against personal financial disruption in the event they were called to active duty.

Nearly all of the 3,000 reservists who deployed to Bosnia signed up for the insurance when it was first offered last fall -- just at the time they were being called up for service in the peacekeeping force.

In some cases the soldiers signed up for the insurance after they received their orders. All reservists had a 60-day window to enroll and those who already had their orders were not precluded from participating.

$61 for $5,000

Most of those headed to Bosnia asked for the maximum coverage -- $5,000 for each month they are deployed for just a $61 monthly premium.

Besides their military pay, the troops stand to gain upward of $30,000 to $45,000 for the six to nine months they spend in Bosnia.

Gist said that the GAO, the Pentagon inspector general and another five "working groups" within the Defense Department were trying to find out what went wrong and how to salvage the insurance program.

Army Lt. Col. Terry Jones, a Pentagon spokesman, said the working groups are bringing in outside insurance experts and collecting data, trying to come up with ways to rectify the problem. Those alternatives range from changing the program to scrapping it altogether.

Expected home in December

When Congress created the insurance program last year the troops were expected home by December. But the Clinton administration extended the mission another 18 months, rotating in fresh reserve troops to serve with the active-duty personnel.

Pentagon officials assumed that all troops would be home before the program started, said Jones. Congressional staff members blame lack of communication within the Defense Department.

Along with trying to find out what went wrong and how to fix it, the Pentagon has another problem: how to pay for the claims that are now coming in. The program is prohibited from spending more money than it has in the account.

In recent weeks the Pentagon has suggested paying for the program by taking money out of the National Guard and Reserve Equipment Fund, which has an estimated $780 million budget and is loaded with spending proposals embraced by members of Congress. Lawmakers and Reserve and Guard associations quickly balked at that proposal.

"We think it makes no sense to rob Peter to pay Paul," said retired Capt. John B. Godley, legislative director of the Naval Reserve Association. "In order to bail this program out, we do not believe it should come out of the hide of the reserve components."

Military personnel can begin collecting the taxable insurance benefits 31 days after they're called up. The cost is $12.20 per month for each $1,000 of monthly coverage up to $5,000. Monthly benefits can be paid for up to 12 months in an 18-month period.

$200 for now

Insured soldiers will only get 4 percent of their monthly claims until the Pentagon can come up with the extra money, Pentagon officials said. The percentage means that a soldier expecting a $5,000 check will get $200 instead.

The insurance program began last fall as an outgrowth of the Persian Gulf war, when two-thirds of the 268,000 reservists who served cited income, business or professional practice losses after they returned home.

Now, a total of 22,500 reservists and guard members have signed up for the program, with 6,500 taking the maximum coverage. The sign-up window closed at the end of last year, and now only those just entering Guard or Reserve units can take advantage of the insurance, Jones said.

Pub Date: 3/11/97

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