Houses Passes Most Significant Postal Reform in 20 Years, Moves to Senate
The House approved the Postal Reform Act (H.R. 3076) with a vote of 342 to 92—a bipartisan bill that would overhaul the U.S. Postal Service (USPS) and address non postal services within federal agencies. Postmaster General Louis DeJoy estimates that the bill's key components will allow him to eliminate projected losses within the next decade as part of the agency’s 10-year business plan.
Though the bill's scope is narrower than previous attempts at postal reform, it will shift more postal retirees to Medicare and require most postal workers to enroll in insurance plans specific to the USPS. This would free the agency from health care payments for future retirees that has saddled its balance sheets since 2006.
From 2025, postal employees and retirees will be enrolled in a special program within the Federal Health Benefits Program (FEHB) like other FEHB enrollees, but with a different premium structure.
Ken Thomas, President of the National Active and Retired Federal Employees Association (NARFE) praised the provision, saying “Past versions of postal reform bills could have unintentionally led to FEHB premium increases for all nonpostal federal employees and retirees, or they would have added new conditions and costs for postal retirees’ continued receipt of health benefits. NARFE…fought persistently to make sure postal retirees and the federal community were not negatively affected as part of the effort to bring financial relief to the Postal Service.”
The special program, called the Postal Service Health Benefits Program (PSHBP), will require Medicare coverage for future postal retirees, typically when they turn 65. Current postal retirees and current employees who reach the age of 65 by the end of the year may opt out of Medicare.
At present, about a quarter of postal retirees do not enroll in Medicare, primarily because they are eligible for continuing coverage under the government's FEHB program, like other federal retirees. If both coverages are present, Medicare pays first for the services both programs cover, however FEHB premiums are not reduced for either the enrollee or USPS as an employer.
The legislation enjoys support from the White House, Amazon.com, the American Postal Workers Union, and NARFE, among others.
The Federal-Postal Coalition, comprised of 31 national organizations that collectively represent five million federal and postal workers, overwhelmingly supports the legislation. In a letter to lawmakers the Coalition noted the bill addresses several important issues that will enable the agency to focus on developing a sustainable workforce and improving performance.
“Importantly, the bill would repeal the mandate to fully prefund retiree healthcare benefits. Neither private sector companies nor federal agencies comply with such an onerous requirement. Yet the mandate has continued to place undue financial burden on the Postal Service,” stated Coalition Chair John Hatton and Vice-Chair Katie Maddocks.
Under the new legislation, the USPS would be required to report its financial standing, volume of mail, changes implemented, and investments in its network every six months to the White House, Congress, and its regulator. Furthermore, a public website would be set up to track results for new annual performance targets.
In addition to postage, the legislation covers the following non postal services on behalf of federal agencies:
Under an agreement with the State Department, the USPS will accept passport applications at post offices.
Non postal, noncommercial services, would be provided by USPS to states, local governments, and tribal governments.
Annually, USPS would report to the Postal Regulatory Commission on non postal services and related costs and revenue. Upon receiving a report, the commission would decide within 90 days whether covered non postal services met the measure, after seeking public comment. If USPS consistently fails to meet cost-coverage requirements, the commission could order USPS to restore revenue shortfalls the following year.
Senate Majority Leader Charles E. Schumer (D-NY) announced the chamber would vote on the reform bill by the end of the week.
