OPM said it lacks authority to make exceptions from having to migrate - as many have asked, including if enrollee’s current FEHB plan is not available in the PSHB. Image: lev radin/Shutterstock.com

OPM has finalized rules for the new Postal Service Health Benefits program that is to replace the FEHB for postal employees and retirees effective in January, in the process saying it cannot grant exceptions as requested by some of those who commented on the rules after they first were proposed last spring.

The program, ordered by a 2022 law, is to generally mirror the FEHB program, and “to the greatest extent possible, OPM aligned the rules pertaining to PSHB plans with the regulations governing FEHB plans,” OPM said in a May 6 Federal Register notice. That will include setting general policies through the early-year “call letter” and then negotiating with carriers over exact coverage, premiums and out of pocket costs in advance of the benefits open season each fall for coverage in the next calendar year.

One major difference is that those who retire from the USPS after this year generally will have to enroll in Medicare Part B when they become eligible (typically at age 65) and pay the premiums in that program, as well. That requirement will not apply to those already retired before calendar year 2025, nor to current USPS who are age 64 or older by the end of this year, nor to retirees living overseas or receiving care through the VA or Indian Health Service.

Many of the comments and questions OPM received focused on the forced transition of postal employees and retirees into the new program and the Medicare enrollment requirement.

“A theme of the concerns is that many Postal annuitants plan their retirement based on the benefits packages available at the time of their employment and the PSHB Program changes those plans involuntarily,” the notice said.

OPM responded that creation of the new program and the Medicare requirement were ordered by law and that it has no discretion to change either. “OPM is required to implement these statutory provisions and is not able to modify these mandates by regulation,” it said.

Similarly, OPM said it “does not have the statutory authority to allow” for exceptions on any of a number of grounds that commenters requested, including if an enrollee’s current FEHB plan is not available in the PSHB, if the retiree is covered by the CSRS system, or if the person is retiring from the Postal Inspection Service.

The OPM recently conditionally approved 32 carriers for the PSHB—well below the 158 plan choices in the FEHB, although the carriers who account for the large majority of FEHB enrollees are included. Those whose current plan is not available in the PSHB and who do not make an enrollment change in this fall’s open season will automatically be enrolled in the lowest-cost national plan that is not a high deductible health plan and does not charge an association or membership fee.

Other points OPM made in the final rules include:

* The general requirement under FEHB to have been covered for the five years before retirement to be eligible to continue under the program in requirement also will apply to the PSHB, and time spent in the FEHB will count toward that requirement.

* The PSHB will not affect the eligibility of any Postal Service employee or annuitant to be covered as a family member under an FEHB plan. “In this circumstance, the spouse of the Postal Service annuitant would need to cover the Postal Service annuitant under their FEHB plan during Open Season 2024. The Postal Service annuitant would also need to elect not to enroll in a PSHB plan during the transitional Open Season to avoid automatic enrollment in a PSHB plan,” it said.

* In contrast to the agency-by-agency enrollment system under the FEHB, the PSHB will have a central portal for enrollment, including “robust decision support tools, and a customer support center to assist enrollees via phone, email, or online chat.”

OPM said it plans to soon issue additional rules addressing further specifics, such as reconsideration of determinations of ineligibility, scenarios in which the Medicare enrollment requirement would not apply, integration of Medicare Part D prescription drug coverage, and more.

The open season in both the FEHB and the new PSHB for calendar year 2025 will run November 11-December 9, with rates for both set to be published in September.

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