Fedweek

USPS Funding, Federal Benefits are Sticking Point for a 5th Relief Bill Image: Mark Van Scyoc/Shutterstock.com

The Senate has joined the House in passing the most significant set of changes to the Postal Service since 2006, including creating a carve-out health insurance program for postal employees and retirees—although not until 2025. The bill now goes to President Biden.

HR-3076 would repeal several provisions of that earlier law, most notably the requirement for the USPS to prefund future health insurance costs for its retirees—an obligation that applies to no other federal agencies. That has been a major contributor to its financial losses of recent years; although the USPS has not been able to make the required payments in recent years, it has had to carry them as an obligation on its books and otherwise would have faced an additional $27 billion in obligations over the next 10 years.

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Also under the bill, starting in 2025, postal employees and retirees would be under a new Postal Service Health Benefits Program with the same plans available as under the FEHB—so long as a plan had at least 1,500 postal enrollees—and with the same benefits and out-of-pocket cost policies, but with the postal population forming its own pool for determining premiums.

The new “PSHBP” would include required Medicare Part B (medical services) and Part D (prescription drug) 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 launch of the new program. Retirees who previously were not enrolled in Medicare would not be subject to the late enrollment penalties that otherwise apply in that program.

The measure further would require continued delivery of both mail and packages six days a week; 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; and more.

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