Postal Service health plan still on the radar

As federal employees gear up to consider new health insurance options, the U.S. Postal Service is pushing forward with a plan to build its own benefits program.

Postal officials have been seeking legislative changes that would allow the agency to leave the government-run Federal Employees Health Benefits Program and create its own health plan. The agency has done much of the legwork and, if allowed to proceed, could have the program up and running within a year, according to USPS Chief Human Resources Officer Anthony Vegliante.

Under the proposal, postal retirees would continue to receive health insurance benefits comparable to those offered under FEHBP at equal or lower cost, in addition to Medicare coverage. Active employees initially would be covered under a simplified plan with benefits similar in value and cost to FEHBP, though the agency eventually would shift to a private sector model. The Postal Service would establish a separate program following private sector best practices to cover all new hires.

The plan has failed to gain traction with Congress, the Obama administration and employee unions, however.

According to Vegliante, transitioning to a separate postal benefits program would help the agency cut pharmacy costs by using a systemwide drug benefits plan along with Medicare Part D. The program also would provide "menu choices," allowing participants to choose the benefits they need within a single plan -- a self-plus-one option, for example.

"It's not about taking benefits away . . . or making employees pay more," he said. "We believe we could offer more options. In FEHB there are a lot of plans but they are all very similar."

Moving to a separate plan also would resolve the Postal Service's burden to prefund its retiree health benefits account, according to Vegliante. USPS is getting some temporary relief, as the continuing resolution Congress passed on Monday extends to Nov. 18 the deadline to make the $5.5 billion annual prepayment. Postal officials have said the agency does not have enough cash and will default on the payment, originally due on Sept. 30.

The proposal for a separate health care program is fiscally responsible and resolves the prefunding burden, Vegliante said. There are enough plan providers to create competition and allow the Postal Service to leverage its size for advantages not found in FEHBP, he added.

Lawmakers continue to push a variety of postal reform bills and last week moved legislation from Rep. Darrell Issa, R-Calif., to the House Oversight and Government Reform Committee. The Senate Homeland Security and Governmental Affairs Committee could mark up legislation next month.