Postal service workers wouldn’t be only ones hit by Senate bill

Joe Davidson
Columnist April 23, 2012

Even if they don’t tote mail bags, federal employees across the government would feel the weight of the Postal Service legislation being considered by the Senate.

The main purpose of the bill is to save the U.S. Postal Service from financial disaster.

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. View Archive

It’s losing $25 million a day, according to Postmaster General Patrick R. Donahoe.

“The Postal Service is at a crossroads. Our business model is broken,” he recently told Congress. “If the Postal Service were a private company, we would be engaged in Chapter 11 bankruptcy proceedings.”

Among a slew of provisions and proposed amendments are some that would affect all federal employees. Included are those that would fundamentally alter the structure of the Federal Employees Health Benefits Program (FEHBP), reduce some workers’ compensation payments and limit agency spending on conferences.

The largest component of Donahoe’s “Plan to Profitability” would have a significant impact on health insurance for federal employees no matter where they work.

The legislation would allow the Postal Service to begin plans to withdraw from FEHBP, by authorizing union negotiations over a new health plan. “The new Postal Service Health Benefits Program would only be implemented if all of the unions and the Postal Service agree,” according to a Senate summary of the legislation.

Said Donahoe: “We believe we can provide our employees and retirees with the same or better health care coverage for significantly less cost. Both our employees and retirees, and the Postal Service, would pay lower premiums.”

Not so, says Walt Francis, a health economist who is principal author of Checkbook’s Guide To Health Plans For Federal Employees. “The USPS has an employee pool that is substantially more costly than that of non-postal employees, simply because it is older . . . just to break even, the USPS will have to reduce benefits or increase premiums by about one-tenth.”

The flip side of that is health insurance costs for those left in FEHBP could decline temporarily, Francis said in an interview. Any decrease in premiums might be fleeting, however, because with fewer people in the FEHBP pool, he said premiums eventually would increase.

Withdrawal also “would massively disrupt” health coverage because hundreds of thousands of employees would have to change plans, Francis added. Many non-postal employees are in postal plans and they would have to find new insurance companies and perhaps new doctors if the USPS plan is adopted.

If USPS does withdraw from FEHBP, an amendment by Sen. John D. Rockefeller IV (D-W. Va.) would require any new plan to provide benefits comparable to the current plan, including the option to purchase dental and vision coverage.

Another provision in the legislation would reduce workers’ compensation payments to some federal workers three years after enactment, although benefits for recipients who are totally and permanently disabled or already above retirement age would not be cut.

Its sponsor, Sen. Susan Collins (R-Maine), argues that in some cases federal workers’ comp “has become a tax-free retirement plan.”

Collins, who also co-sponsored the main postal bill, said her workers’ compensation provision “would bring federal benefits more in line with compensation levels offered under most states’ laws, and encourage more employees who are able to work to return to the workforce.”

But federal employee union leaders are backing an amendment, by Sen. Daniel K. Akaka (D-Hawaii) that would increase funding for funeral expenses and facial disfigurement.

“The Akaka amendment corrects a controversial and harmful proposal in the Postal Reform bill,” said National Treasury Employees Union President Colleen M. Kelley in a letter last week to senators.

That amendment also is among the three most important ones cited by the American Postal Workers Union (APWU), which did not take a position on the overall legislation. “After the amendments have been voted on, we will evaluate the bill and decide whether we can support the final product,” APWU President Cliff Guffey said Friday.

In a fallout from the scandal about the excessive General Services Administration conference, an amendment by Sen. Tom Coburn (R-Okla.) would limit agency spending on conferences to 80 percent of the amount spent in 2010.

Sen. Joseph I. Lieberman (I-Conn.), sponsor of the main bill, said his legislation “will help make the Postal Service leaner, nimbler and more cost efficient, while still maintaining the service Americans have come to expect.”

That would not be true, however, in all cases for benefits and services federal employees now expect.

Previous columns by Joe Davidson are available at wapo.st/JoeDavidson. Follow the Federal Diary on Twitter: @JoeDavidsonWP

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