NARFE: Postal Reform Legislation Must Not Negatively Affect FEHB

By Jennifer Rafael – May 25, 2021
Are rising health care costs a concern for you? A newly introduced postal reform bill could increase health care premiums for federal employees and retirees enrolled in Federal Employees Health Benefits (FEHB) plans. Visit NARFE’s Legislative Action Center and ask your lawmakers to withhold support for the legislation unless changes are adopted to ensure the FEHB program is not negatively affected.

The bill, the Postal Service Reform Act of 2021 (H.R. 3076 / S. 1720), would create a new Postal Service Health Benefits (PSHB) program, starting in January 2023, that would provide separate health plans for postal employees and retirees, parallel to current FEHB plans. For example, there would be a Blue Cross Blue Shield Standard plan for Feds and a separate one for postal employees and retirees. The bill requires coverage to be “actuarially equivalent,” so that each plan covers a similar amount of expected costs.

For current postal retirees age 65 and older without Medicare, the bill provides a new opportunity to enroll in Medicare Part B without a late penalty, but does not require enrollment like previous bills. Postal retirees younger than 65 would have the option to enroll in either an FEHB or PSHB plan. But once a retiree is eligible for Medicare (age 65), enrollment in Medicare would be required upon enrollment in a PSHB plan, and that retiree cannot go back to an FEHB plan. All postal employees and retirees would be moved to the new PSHB program, except those Medicare-eligible postal retirees who do not enroll in Medicare Part B during a special enrollment period; these retirees would stay in FEHB.

Retirees without Medicare tend to cost more to insure, as older individuals use more health care, on average. As such, this exception could increase the average cost of coverage for FEHB plans, which could then lead to an increase in FEHB premiums for all participants.

It is NARFE’s position that the creation of a new program should retain all postal employees and retirees, rather than singling out and excluding retirees without Medicare, a move that could set a dangerous precedent for the future of the FEHB program. NARFE is continuing to work with lawmakers to address these concerns prior to any further movement on this bill. If these concerns are not addressed adequately, NARFE would urge opposition to this or any other bill that undermines the earned health benefits of our nation’s current and former public servants.

This week, National President Ken Thomas sent a letter to the Senate Homeland Security and Governmental Affairs Committee outlining NARFE’s views and concerns that the bill could cause FEHB premium increases for both current and retired federal employees.

Contact your lawmakers and ask that they withhold support for the legislation until a full analysis of the bill’s impact on the FEHB program is assessed.

NARFE Letter to HSGAC – May 24, 2021

Source: NARFE

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