Sens. Tom Carper, D-Del.

Sens. Tom Carper, D-Del. Carolyn Kaster/AP

Postal Reform Bill Would Create New Health Care Plan for Agency

Updated version of legislation also would establish a new prefunding requirement for workers’ compensation payments.

Unions representing U.S. Postal Service employees offered a stark rebuke of an updated, bipartisan postal reform measure, which now includes a provision to remove USPS workers from the federal employee health care system.

Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla., the respective chairman and ranking member of the Senate Homeland Security and Governmental Affairs Committee, introduced a substitute amendment to replace the 2013 Postal Reform Act they originally put forward in August, ahead of a committee markup scheduled for Wednesday. Despite tweaking several provisions to appease postal workers, retirees and stakeholders, the lawmakers’ latest effort was greeted by stakeholders with frustration.

The Postal Service itself -- which fully endorsed the original bill -- scored a major victory in the updated version however, as the senators addressed the agency’s lone concern with the initial language. Originally, the bill would have given USPS the option to, in consultation with postal unions, create its own health care system outside the Federal Employees Health Benefits Program. It also would have given postal retirees the option to enroll in Medicare Parts A and B.

The revised language would require the Office of Personnel Management to create a Postal Service Health Benefits Program, and to administer it within FEHBP. Any company currently offering an FEHBP plan that contains more than 5,000 postal enrollees would be required to offer the same plan within the new postal-specific system. About 90 percent of all postal enrollees would be covered by this provision, while the remaining 10 percent would be exempt from making the switch.

It also would require all eligible postal retirees to receive care through Medicare, rather than through their employer-sponsored benefits. Postmaster General Patrick Donahoe has repeatedly called for these changes, saying it could save the agency $33.2 billion in the first five years of implementation and significantly reduce its liability for retiree health care. Both the Postal Service and its unions have said prefunding requirements for those costs put an unfair burden on the agency.

Carper and Coburn created a new prefunding requirement for the Postal Service, however -- one the unions opposed. The substitute amendment included a requirement that the Postal Service pay down its unfunded liability for future workers’ compensation payments, which USPS has estimated is more than $17 billion. The Postal Service would only have to make a prefunding payment in a year when it has net income exceeding $1 billion.

“No company or agency in America faces such an unreasonable burden,” the four postal unions wrote in a letter to committee members urging “no” votes on the bill.

The amendment also revised the language on the proposal to eliminate Saturday mail delivery. Under the new plan, the Postal Service could not switch to five-day mail delivery until it handles less than 140 billion pieces for four consecutive quarters.

The unions called that figure “arbitrary” and said the change would cost tens of thousands of jobs.

Finally, the bill would now make permanent the “exigent rate increase” that raised postal prices more than the rate of inflation. Mailing industry groups bashed the rate hike when it was first pitched and again when it was approved, reiterating that making the prices permanent would damage the sector significantly. Currently, the rate hike expires after two years.

Carper said he and Coburn worked closely with all affected parties to develop the best possible bill.

“Our revised measure offers a bipartisan, balanced approach and requires shared sacrifice in order to help the Postal Service survive and thrive over the long term,” Carper said in a statement to Government Executive. “I believe the legislation that Dr. Coburn and I have offered does just that and I look forward to bringing our bipartisan measure before the committee at Wednesday’s business meeting so we can continue to improve the legislation through the markup process.”

Wednesday’s markup comes after three previous efforts to vote on the bill were canceled due to a lack of support. The House Oversight and Government Reform Committee already has passed its own postal reform bill, though it did so without any Democratic support and it hasn’t yet received a vote on the House floor.

The session will give committee members an opportunity to offer their own amendments to the bill. Sen. Tammy Baldwin, D-Wis., one of the bill’s early opponents, is expected to offer an amendment that would eliminate a Carper-Coburn provision to give the Postal Service more freedom in setting its prices. Sen. Jon Tester, D-Mont., who also voiced opposition to the original bill, is planning to offer an amendment that would ease the cuts to the workers’ compensation program for all federal employees.