Fedweek

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The House has finally passed long-in-development bill aiming to put the Postal Service on a better financial footing, including by relieving it of an obligation to prefund costs of future health insurance for its retirees and shifting more of those costs onto the Medicare system.

While bills containing many similar provisions have stalled in Congress for many years, this version (HR-3076) has bipartisan support, containing various performance mandates for the USPS along with financial relief.

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One provision would lift the retirement pre-funding requirement imposed by the most recent major postal reform, in 2006. Postal employee unions for years have blamed that requirement for much of the agency’s financial problems, even though the USPS has not actually made the required payments to the Treasury for most of that time. However, it is carrying the defaulted payments as an obligation on its books and is on the hook for an additional $27 billion over the next 10 years.

The measure also is designed to produce savings in the share of health insurance premiums the USPS pays for its retirees. Starting in 2025, postal employees and retirees would be in a carve-out program within the FEHB, with the same plans available and on the same coverage terms but with their premiums determined separately from those of other FEHB enrollees.

That “Postal Service Health Benefits Program” would include required Medicare coverage for future postal retirees when they become eligible, typically at age 65; current postal retirees would retain the option of not enrolling in Medicare, as would current employees who are age 64 or older by the end of this year.

Currently about a quarter of postal retirees don’t enroll in Medicare, largely because they—like other federal retirees—generally are eligible to continue coverage under the FEHB program. For those with both, Medicare pays first for services both programs cover but there is no reduction in FEHB premiums for either the enrollee or for the USPS as the employer.

The bill has the support of numerous organizations including the National Active and Retired Federal Employees Association, which had opposed earlier versions on grounds of their potential for increasing premium costs for retirees.

The measure further would require continued delivery of both mail and packages six days a week, eliminating controversial language in prior versions that would have allowed for a reduction in days; and , require the USPS to post a publicly available online dashboard of performance data, updated each week; require regular reporting on its operations and financial performance.

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