A postal reform proposal being circulated in the House does not include authority the Postal Service has requested to split off from the FEHB program and create its own health insurance coverage. The new plan, crafted as the expected basis for a formal bill proposal by Rep. Darrell Issa, R-Calif., the chair of the Oversight and Government Reform Committee, differs from his plan in the prior Congress in which he would have authorized a separate health plans if postal unions had agreed to it. That idea has been controversial from the outset, since it would have unknown impacts on premiums and benefit levels not only for postal employees but also for the rest of the FEHB population. The new plan instead would require that USPS pay only the same percentage toward FEHB as other agencies by the year 2020. That presumably means existing contracts would not have to be renegotiated but that USPS would have to refuse to pay the higher rate in future contracts. For many years, postal contracts have included provisions under which USPS pays substantially more toward premiums for its active employees (although it pays the standard amount for its retirees). Issa’s plan also would require that by the same date USPS would stop paying the full cost of FEGLI basic coverage and pay only two-thirds of that cost as do other agencies. It further would require employees on long-term injury compensation to move to standard disability retirement, which typically is less generous, under certain circumstances.
