'Financial Concerns' Prompt OPM to Consider Dropping Postmasters Benefit Plan

By Stephen Barr
Thursday, December 8, 2005

The Office of Personnel Management yesterday announced that it has proposed dropping the Postmasters Benefit Plan from the federal employee health insurance program next year because of "performance and financial concerns."

OPM said enrollees may continue in the insurance plan "until a final determination is made." If a review upholds the preliminary decision to drop the plan, OPM said, government employees and retirees will be given an opportunity to transfer to other insurance plans. The OPM announcement was made in a news release.

"To wait until only four days are left in the open season to announce something of this magnitude is just beyond belief," said Steve D. LeNoir , president of the National League of Postmasters, which sponsors the plan. "The timing is just terrible."

LeNoir said OPM "felt we were not financially solvent." He said the plan had been working with OPM to address concerns "and we're surprised that they would not allow us to submit our compliance plan."

The Postmasters Benefit Plan, which has operated since 1960, has $11.7 million in a cash contingency reserve and an additional $12.8 million in a special guarantee fund, LeNoir said. "That's why we are having a difficult time understanding their concerns," he said.

LeNoir added, "All we asked for is our day in court to present our facts and give our side of the story."

The Postmasters Benefit Plan is a small carrier in the giant Federal Employees Health Benefits Program, which provides coverage for nearly 8 million Americans. The postmasters plan covers only 1,245 government workers and 6,950 government retirees, OPM said.

Near the end of each year, OPM announces premium increases in the health benefits program and sponsors an "open season" that permits federal employees and retirees to compare the costs of plans and shift enrollment if they find insurance that better suits their needs. The open season ends Monday, and it is highly unusual for OPM to announce that it might pull a plan while insurance companies are competing for enrollees.

LeNoir said the postmasters plan's financial books have been examined by an independent auditor and by the OPM inspector general. Only a few months ago, he noted, OPM and the plan successfully negotiated premiums for 2006.

Postmasters is a nationwide, fee-for-service plan that is geared to postal employees. Non-postal government employees who enroll in the plan pay a $45 fee to become associate members of the National League of Postmasters. Checkbook's Guide to Health Plans for Federal Employees does not rate the plan as one of the government's best buys from the standpoint of average annual costs.

Officials from the federal health benefits program were not available for interviews on the announcement. But the notice sent to the postmasters plan faulted the league for failure to comply with OPM directives, failure to adjudicate health claims in a timely and accurate manner and failure to ensure that the plan pays or denies claims properly.

The notice said that OPM no longer considers the league or the postmasters plan "a viable contracting entity" for the federal health benefits program.

In a statement, LeNoir told members that the plan is "financially sound" and said the League will file a protest to OPM's notice before Dec. 13 and will seek an impartial hearing.

Retirements

Karen L. Davis , a Federal Aviation Administration human resources specialist, will retire Dec. 31 after more than 32 years of federal service. At the FAA, she was instrumental in the design, development and implementation of the agency's executive compensation plan.

John E. Elkins , a supervisory attorney at Customs and Border Protection, will retire Jan. 3 after 37 years of government service. He also served in the Army and as a lieutenant colonel in the Army Reserve.

David McCandless , chief of the oversight branch for the Army's drug and alcohol substance abuse program, will retire Dec. 31 after 36 years of federal service, including 18 months of military duty during the Vietnam War.

Thomas Selle , chief of the Federal Deposit Insurance Corp. data collection and analysis section, will retire Dec. 30 after 37 years of government service. He served in the Army and spent the last 35 years with FDIC.

E-mail:barrs@washpost.com

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