What To Know About The Postal-Only Health Insurance Program

What To Know About The Postal-Only Health Insurance Program

According to a congressional analysis, the postal reform bill (HR-3076) passed by the House and sent to the Senate has several provisions for establishing and transitioning postal employees and retirees into the Postal Service Health Benefits program, which would take effect in 2025.

According to the Congressional Research Service report, “The PSHB, when passed, will allow USPS retirees and current employees to enroll in a self-only, self plus-one, or family coverage.”

The Office of Personnel Management (OPM) would automatically enroll a USPS employee or retiree who was enrolled in FEHB in 2024 but did not choose a PSHB plan in 2025. If that option were not available, OPM would choose the lowest-cost, non-high-deductible, nationwide PSHB plan that does not charge a membership fee.

It would also help post offices shore up their finances by removing the onerous and uncommon legal requirement of funding 75 years of retiree health benefits in advance. In exchange, future Postal Service retirees would be required to enroll in Medicare.

According to the Congressional Budget Office, the shift might save the postal retirement and health plans roughly $5.6 billion through 2031 and add $5.5 billion in expenditures to Medicare over that period, and likely much more in the following years.

The PSHB would be structured similarly to the FEHB. To sell plans, OPM would enter into contracts with insurers, and the plans would have to meet specific statutory FEHB standards.

To an extent, the PSHB would also be required to cover plans offered by each FEHB insurer that enrolled at least 1,500 USPS workers or retirees in January 2023. (It would also include plans offered by other insurers that OPM deems appropriate.)

Besides that, with some exceptions, insurers with PSHB and FEHB plans would have to make sure that their plans have the same benefits and cost-sharing obligations by 2025.

There would be separate premiums for PSHB and FEHB. The premiums would be based on how much health care USPS workers, retirees, and their families will need.

The USPS contribution to annuitant premiums would be based entirely on PSHB plan premiums rather than the statutory calculation used under FEHB. The PSRA would require all Medicare-eligible USPS annuitants and their Medicare-eligible insured family members to enroll in Medicare Part B to keep their USPS health coverage.

Current annuitants and current employees aged 64 and up, those with Department of Veterans Affairs (VA) or Indian Health Service (IHS) coverage, and those residing overseas would not be subject to this requirement as of January 1, 2025.

Additionally, starting in April 2024, the bill would allow Medicare-eligible postal annuitants or family members to enroll in Part B for a six-month special enrollment period. Any late-enrollment fines incurred during this period would be covered by the USPS.

A Medicare Part D Employer-Group Waiver Plan would provide prescription medication coverage to all Medicare-eligible annuitants (current and prospective).

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Bio:
Craig E. Vukich is a 35 year retirement specialist and Financial Advisor who has helped thousands of clients all over the country with their investment portfolios and retirement strategies.
In that time, Craig has also helped seniors and retirees with their Medicare options as healthcare continues to be one of the most confusing issues facing people today.
Personally, Craig lives in Beaver Falls, Pa with his beautiful wife and childhood sweetheart Barb and their lovely daughter Shalyn.
Craig is a graduate of Westminster College which is about an hour north of Pittsburgh. Craig is a recreational golfer and traveler and Pittsburgh sports fanatic.

Disclosure:
This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.