A bipartisan group of senators has offered a postal reform bill that among other things would substantially revise health insurance coverage for postal employees and retirees, who currently are under the FEHB program under largely the same terms that apply to other federal employees and retirees.

The bill is the latest in a series of proposals over the years aimed at shoring the semi-independent USPS’s finances, which have suffered for reasons including shifts to electronic delivery of messages and an obligation imposed by a 2006 law that USPS pre-fund future health insurance benefits for its retirees. The USPS has been unable to make those payments in recent years, with the obligations building up as liabilities on its ledgers.


The bill would spread out over 40 years the remaining obligation for retiree health care funding while generally requiring retirees to enroll in Medicare when eligible; currently many retirees who continue FEHB coverage do not elect to have Medicare, although others do. Medicare is the primary payer for those who have both and the change would in essence shift some of the cost to USPS of the employer share of FEHB onto the Medicare system—as well as to retirees who would not have paid Medicare premiums otherwise.

The bill also would: partially restore a rate increase that took effect but then lapsed; allow it to branch into new service areas including shipping of alcoholic beverages and partnering with state and local governments in offering services; and require that service standards not be degraded for two years while imposing certain new standards for delivery to rural areas and new requirements for publicly disclosing service results.

The bill is largely similar to one (HR-756) that advanced last year through the House Oversight and Government Reform Committee but that has since stalled. Traditionally the Senate took the lead in attempting postal reform but in more recent years the main focus has been in the House. Senate sponsors are hoping to put the bill on a fast track for voting.