Report Outlines Transition to Postal-Only Health Insurance Program

An analysis done for Congress says that the postal reform bill (HR-3076) that the House has passed and sent to the Senate contains a number of provisions for setting up and moving postal employees and retirees into the Postal Service Health Benefits program that the measure would create effective in 2025.

According to the Congressional Research Service report, those include (in its words):

“Under the PSHB, USPS employees and retirees would be able to enroll in self-only, self-plus-one, or family coverage. If a USPS employee/retiree were enrolled in FEHB in 2024 and did not select a PSHB plan in 2025, OPM would automatically enroll the individual in a plan offered by the individual’s FEHB insurer or, if not available, in the lowest-cost, non-high deductible, nationwide PSHB plan that does not charge a membership fee.

“The PSHB would generally be structured similarly to FEHB. OPM would contract with insurers to offer plans, and the plans would need to meet specified statutory FEHB requirements. To the greatest extent practicable, the PSHB would also be required to include plans offered by each FEHB insurer that had a plan that enrolled at least 1,500 USPS employees or retirees in January 2023. (It also would include plans offered by other insurers determined appropriate by OPM.) In 2025, insurers with plans in PSHB and FEHB would be required to ensure that their PSHB and FEHB plans have equivalent benefits and cost-sharing requirements, with certain exceptions, including the drug coverage of Medicare-eligible retirees.

“PSHB premiums would be determined separately from FEHB premiums. As such, PSHB insurers would determine premiums based on the amount of health care expected to be used by USPS employees, retirees, and their dependents. The USPS contribution toward annuitant premiums would be calculated using the same statutory formula currently used under FEHB but would be based solely on PSHB plan premiums.

“The PSRA would require all Medicare-eligible USPS annuitants and their Medicare-eligible covered family members to enroll in Medicare Part B in order to maintain their USPS health coverage. Those who, as of January 1, 2025, are current annuitants and current employees aged 64 and over, those with Department of Veterans Affairs (VA) or Indian Health Service (IHS) coverage, or those residing abroad would not be subject to this requirement.

“The bill would provide for a six-month special enrollment period, starting April 2024, during which Medicare-eligible postal annuitants or family members could enroll in Part B; any late-enrollment penalties incurred by individuals enrolling during this period would be paid for by the USPS. Prescription drug coverage for all Medicare-eligible annuitants (both current and future) would be provided through a Medicare Part D Employer-Group Waiver Plan.”