Postal health plan would save USPS money, but workers could pay the price - Washington Post

The controversial plan by the U.S. Postal Service to pull its staffers from the Federal Employees Health Benefits Program (FEHBP) probably would save USPS lots of money, but the cost would bring significant uncertainties for postal workers.

That’s the finding of a report by the Government Accountability Office, which also indicated that many employees would have to pay more for care under a USPS health insurance program.

Postal Service officials have proposed withdrawing from FEHBP, which also serves federal employees generally, in order to save money. In its place, USPS would run its own health insurance plan. The proposal requires congressional approval.

USPS, which lost $15.9 billion last year, “would likely realize large financial gains from its proposed health care plan, primarily by increasing retirees’ use of Medicare,” GAO said.

Yet, “some elements of USPS’s proposal would add uncertainties that could reduce funds available for its employees’ and retirees’ future health care.”

GAO listed three points in the USPS proposal that could lead to less money being available for employee and retiree health care.

●The Postal Service plan to invest health-plan funds in something other than U.S. Treasury securities increases risk. Investments “may experience losses in a market downturn and would thus have reduced assets available for health care.”

●It “is not fiscally prudent” for USPS officials to spend health-fund money for other purposes when the fund has more money than is needed, as they have suggested. “If USPS were to consistently exercise this option to help maintain its financial solvency, it could result in an unfunded liability for retiree health benefits.”

●“Overly optimistic assumptions” about the liability USPS would face under an internally operated health insurance plan “could lead to inadequate funding for the health plan over time.”

GAO said postal employees and retirees would have similar coverage, but some might have to change doctors or lose certain protections, such as the USPS contribution to the cost of retiree health benefits, which now is set by law. Also, “some employees could have higher total costs” under a USPS plan, GAO said.

In a letter responding to GAO, Jeffrey C. Williamson, USPS’s chief human resources officer and executive vice president, said restructuring health-care benefits “is a key element” in the Postal Service’s “path to solvency and fiscal sustainability.”

But the Postal Service’s largest labor organization, the American Postal Workers Union (APWU), said it “vehemently opposes any plan that would remove postal workers from the Federal Employees Health Benefits Program. The USPS proposal is a brazen attempt to shift costs to postal employees and Medicare.

“The FEHBP is the most successful health insurance program ever run by the federal government. Removing postal employees would jeopardize the FEHBP, and would result in less coverage and higher healthcare costs for postal workers.”

Postal employees comprise about 25 percent of those covered by FEHBP, and “most nonpostal enrollees would likely not be affected by a USPS withdrawal,” GAO said.