OPM tweaks its final rule for the postal health benefits plan

The Office of Personnel Management issued its final rule establishing the health benefits program for U.S. Postal Service employees, annuitants and beneficiaries, offering small clarifications ahead of an anticipated Jan. 1 rollout. 

The Postal Service Health Benefits program, established by the 2022 Postal Service Reform Act, will provide an estimated 1.9 million USPS employees, retirees and dependents with their own health insurance exchange in 2025 and officially move them off of the larger Federal Employees Health Benefit Program. 

The final rule, published in the Federal Register on Monday, clarifies portions of the regulation concerning enrollment in Medicare Part B, which newly eligible retirees will be required to accept as their primary coverage from the plan. 

OPM officials added language to Monday’s rule clarifying that a USPS annuitant or their family member must “promptly notify OPM or the Postal Service, in writing, if they choose not to enroll in or to disenroll from Medicare Part B,” and they removed references tasking the USPS as the entity to receive overseas residency documentation for beneficiaries trying to qualify for an exception to the Part B enrollment requirement “to provide more operational flexibility” to the postal service and OPM. 

After Jan. 1, retiring USPS annuitants, and their family members, entitled to Medicare Part A coverage must also enroll in Part B coverage as well, unless they meet one of the following exceptions: 

• Individuals who are USPS annuitants on or before Jan. 1, 2025, and who are not both entitled to Medicare Part A and enrolled in Medicare Part B on that date;
• Individuals who, on Jan. 1, 2025, are USPS employees and are 64 and over;
• USPS annuitants and family members residing outside the United States and its territories who demonstrate their residency;
• USPS annuitants and their family members already enrolled in certain Veterans Affairs Department health care benefits plans;
• USPS annuitants and family members eligible for health services provided by the Indian Health Service; and
• A family member of a USPS annuitant who is not required to enroll in Medicare Part B, based on a statutory exception, in order to be eligible for PSHB coverage.

Medicare premiums are expected to help absorb about $9 billion in program costs over the next decade due to an influx of new USPS retirees joining the program. 

OPM conditionally approved 32 carrier applications to provide insurance coverage for the exchange in March. USPS employees, annuitants and family members can begin enrolling in the PSHB exchange this fall during the 2024 Open Season, with benefits slated to begin Jan. 1.