Announcement comes alongside a proposal for several changes to the federal employee health insurance program.
Federal benefits payments will go exclusively electronic by 2013, the Treasury Department announced on Monday.
Treasury's decision applies to all recipients of Social Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement and Office of Personnel Management benefits. Enrollees will be able to choose between direct deposits and balances added to Treasury debit cards. All new program enrollees will receive their benefits electronically starting on March 1, 2011, and current recipients will make the transition by March 1, 2013.
Treasury said 85 percent of federal benefits recipients already are receiving electronic payments. By moving the remaining 15 percent off paper, the government will save $300 million over five years, the department estimated.
Matt Biggs, legislative director for the International Federation of Professional and Technical Engineers, praised the decision as a cost-saving and environmental measure. The debit cards program, he said, is a good alternative for beneficiaries who might not have access to conventional bank accounts. But he suggested that electronic enrollment should be a default, rather than the only option.
"There is still some justifiable concern from veterans and others that should not be ignored," Biggs said. "While this is clearly the right time to make the transition, the government should also allow beneficiaries the option to continue to receive their benefits in a paper form."
In a Federal Register notice posted on Monday, OPM also proposed a number of changes to the Federal Employees Health Benefits Program.
Open season -- the time when federal employees can change their FEHBP enrollments -- runs from the beginning of the second full work week of November to the end of the second full work week of December. OPM proposed switching it to run from Nov. 1 to Nov. 30.
"This will simplify the annual announcement of the time period for open season and allow agencies and employees to better plan for the enrollment opportunity since they will know well in advance when it will occur each year," the agency said in the notice.
In addition, OPM suggested changes to the kinds of plans health care companies can offer through FEHBP. Right now, insurers can offer two regular options and one high-deductible plan, in which enrollees pay most of their costs out of pocket in exchange for low premiums. OPM proposed allowing companies to choose between offering two plans and a high-deductible option, or three regular plans.
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