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


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.

Joe Davidson writes the Federal Diary, a column about federal government and workplace issues that celebrated its 80th birthday in November 2012. Davidson previously was an assistant city editor at The Washington Post and a Washington and foreign correspondent with The Wall Street Journal, where he covered federal agencies and political campaigns. View Archive

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.

In other postal news, APWU announced that its career members will receive a $937 cost-of-living raise in September. That amounts to $36.04 per pay period.

While federal employees generally are in the third year of a freeze on their basic pay rates and do not bargain over wages, neither of these issues apply to postal workers because the Postal Service does not use tax dollars for operating expenses.

“This substantial raise is the result of the 2010-2015 Collective Bargaining Agreement, which preserved cost-of-living adjustments for our members,” APWU President Cliff Guffey said.

A blow to whistleblowers

A decision by the Merit Systems Protection Board (MSPB) is a blow to whistleblowers.

In a ruling last week, the board denied a request for a retroactive money award to a federal employee whose demotion was in retaliation for whistleblowing actions.

The whistleblower claimed compensatory damages under the Whistleblower Protection Enhancement Act of 2012. A MSPB statement said the board ruled that “compensatory damages are not available in cases pending on the effective date of the WPEA.”

Angela Canterbury, director of public policy for the Project on Government Oversight, said: “The board’s decision is regrettable. Many whistleblowers have been waiting for years for justice, and now they will be denied compensation that can make the difference between ruin and restoration. Congress intended to help federal whistleblowers who have been in limbo. Unfortunately, Congress may have to make that more clear in the law.”●

Helper needs help

FEEA, the Federal Employee Education and Assistance Fund, helps federal workers when they need money. Now, it’s the one going broke.

FEEA provides no-interest emergency loans to federal workers. The number requesting loans is up sharply this year because of the unpaid furlough days that have been imposed on the workforce. The result: FEEA is running out of money.

“So far, we have been able to help all qualified applicants who have come through the door,” FEEA Executive Director Steve Bauer said, “but that may not be the case by the end of this month if we don’t receive significant new donations.”

The amount of money loaned and the number of feds assisted since the beginning of FEEA’s fiscal year in May — a span of about three months — is already half the total for all of fiscal 2012. FEEA has loaned $350,000 to 600 workers since May 1, compared with $600,000 to 1,000 recipients in the last fiscal year. About two-thirds of the requests this year have been related to furloughs.

“There are hundreds of applications still in the pipeline, and we have already dipped into FEEA’s meager reserves in order to keep going,” Bauer said. “The combination of the financial crash and . . . years of no pay raises for feds has heavily impacted federal families and increased demand for FEEA’s emergency-loan program year after year. Widespread furloughs may, unfortunately, be the straw that breaks us.”

FEEA is seeking donations through its Web site,, or by checks made out to “FEEA” and sent to: FEEA Headquarters, 3333 S. Wadsworth Blvd., Suite 300, Lakewood, CO 80227.

Twitter: @JoeDavidsonWP

Previous columns by Joe Davidson are available at

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