APWU: PMG seeks to end Federal Employee Health Benefits Program for postal workers and retirees

Greg Bell
Executive Vice President

(This article will appear in the Sept/Oct. 2013 edition of The American Postal Worker.)

gregbellPostmaster General Patrick Donahoe renewed his call to remove postal employees and retirees from the Federal Employee Health Benefits Program (FEHBP) in testimony before the House Oversight and Government Reform Committee on July 17.

“Now is the time for bold and sweeping action,” the Postmaster General (PMG) told lawmakers. “We’re seeking the authority under law to control our healthcare and retirement costs,” he said.

Where have we heard this before?

Donahoe first urged lawmakers to take postal employees and retirees out of the FEHBP at a House hearing on March 27, 2012, claiming such a move would save the USPS $7 billion annually. (Now he claims savings would reach $8 billion per year.)

The APWU will vehemently oppose any plan to take postal employees or retirees out of the Federal Employee Health Benefits Program.

Despite the fact that the FEHBP is one of the best health insurance programs in the nation, the PMG seems determined to continue his quest.

We are equally determined to make sure that it doesn’t happen.

Just the Facts, Please

The USPS claims it can run a postal-only health plan more efficiently than the OPM (Office of Personnel Management) runs the FEHBP, and that a USPS-only health plan would save the Postal Service money. He also says postal employees and retirees would benefit from lower premiums and still receive the same or better health benefits.

Really? There is no factual basis for any of these assertions.

“The USPS has no professional or historical competence in insurance design or in analysis of health insurance reform models, and probably no real desire to gain these.”
– Walton Francis, FEHBP Expert

In testimony before the House Oversight Committee in March 2012, Walton Francis, the nation’s leading independent expert on the FEHBP, flatly rejected Donahoe’s claims. “Their proposal isn’t going to save money. It’s going to cost money,” he said.

The PMG’s plan also would “massively disrupt or destroy the FEHBP, the single most successful health insurance program ever operated by the United States government,” by pulling out one fourth of its enrollees, he said. “In destroying the FEHBP, the USPS would disrupt the health insurance of 8 million Americans, and breach statutory entitlement promises made to millions of federal retirees,” Francis testified.

“It hardly seems inappropriate to ask how, of all those insurance experts of both parties and both houses of Congress who have looked to the FEHBP as a model, only the USPS sees it as an albatross to be abolished,” he told lawmakers.

Francis also pointed out, “The USPS claims that FEHBP plan designs are somehow obsolete and do not match ‘best practices’ in the private sector or align ‘cost to value.’ This naturally raises the question as to how all those congressional lead­ers and experts of both parties could have been so badly fooled all these years. How is it that only the USPS has been able to detect that the FEHBP plans fail to provide health promotion and wellness benefits, and chronic condition and disease management programs? And of course the truth is that the FEHBP provides all these things and many more,” he said.

“The USPS has no professional or historical competence in insurance design or in analysis of health insur­ance reform models, and probably no real desire to gain these,” Francis pointed out.

It’s obvious that the PMG won’t let facts get in his way.

Doubts in Congress

Members of the House Committee on Oversight and Government Reform also expressed doubts about the claims made by the PMG.

Rep. Elijah Cummings (D-MD), the ranking Democrat on the panel, said at the March 2012 hearing, “I am quite skeptical that the Postal Service can or should manage its own health insur­ance system.

“I suspect that the achievable cost savings would come not from shrinking healthcare costs, but from shifting them onto employees. Postal employees would likely receive less coverage under a Postal Service plan and they would pay a greater share of their health bills. Postal annuitants would also pay more, as they would be faced with paying an increasing share of their healthcare from their fixed retirement incomes.”

Even committee Chairman Darrell Issa (R-CA), who said he would prob­ably support Donahoe’s proposal, told the postmaster general, “Let’s have no illusion. You’re just cost-shifting.” Rep. Issa is considered an ardent foe of postal workers, and has called for pay cuts, benefit reductions, limits on employees’ collective bargaining rights, and $3 billion worth of plant and post office closings.


But shifting costs on to postal employees wouldn’t be the only fallout from removing postal employees from the FEHBP.

Withdrawing postal employees from the FEHBP also would put the Postal Service another step closer to privatization.

Even though there is little support for removing postal workers and retirees from FEHBP as part of a postal reform bill, we must not fall into a false sense of security.

The APWU will vehemently oppose any plan to take postal employees or retirees out of FEHBP. Delegates to the APWU’s 2010 National Convention adopted a resolution that identified retaining the right to health benefits in the Federal Employee Health Benefits Program as a top priority.

We will continue to work with other postal and federal unions and associations, along with our friends in Congress and other allies to ensure that it never happens.


  • John Fusco

    Donahoe is a mental midget, he could not run a candy store, he has proven that. He does not care about the Postal Service or it’s employees past or present. He is a talking head!

    • pokeybird

      Will Donahoe and the higher ups be in this “postal health plan”? I think NOT!

  • U won’t let me

    If the apwu allows the usps to remove its members from fers or the fehbp they should ALL drop out of the union. Don’t sell us out like u did with the last contract !

    • Mail Clerk

      This APWU regime will sell you out if it means more money in the coffers, members be damned. The APWU’s f’d up plan will be your only option. Be sure to vote for the Members first team and it won’t happen!

  • APWU Local 124

    U won’t let me: You are dead on congrats on your firm statement

  • Le Mans

    Obama hopes that PO destroys it’s and all federal agency’s health plans, so they will all have to fall under his hideous plan. Meanwhile, Donahoe will feast on roast duck and wine, knowing he will get free health care for life.

  • Freeman

    Finally, we hear from APWU on this issue!

  • Mail Clerk

    Why do we get a response to Downahole’s proposal two years later from the APWU VP and not from the President, Cliff Goofy? and keep in mind Goofy said he will not call for his friend, PMG Downahole’s removal!

  • Ordinary Middle Class Joe

    PMG Downahole is fixated on breaking the moral compact made with employees at the time of their hire and is arguably the worst PMG in fhe recent era. The FEHB is the model health care plan and the PMG and elitist lawmakers would rather shift costs to workers and make us beholden to the vagaries of Medicare funding upon reaching 65. Thanks but no thanks. Tell you what – why doesnt the PMG and his top 6 cronies lead by example and return/reject the 100’s of thousands of dollars in deferred compensation they are getting each year while they put the screws to employees? God bless the APWU for their awareness of this 3-card monty street game and fighting for perhaps the most important issue affecting employees in this ongoing postal reform discussion. FACT – the PMG and his senior cronies have the option to stay in FEHB and not participate in new proposed postal health plan. If it is as he says better and cheaper, WHY?

    • Mail Clerk

      Yeah, but why did it take two years before they responded to Downahole’s proposal?

  • LiamSkye

    At least Donahoe had the foresight to exempt himself and the senior officers from having their health benefits taken away, so we don’t have to worry about THEM and THEIR family members being medically indigent.

  • oh really

    the facts? in the end the only health care choices for postal employees will be the Postal Service plan or the union’s plans… nalc apwu mailhandlers All will be under FEHBP. There will be no other choices. The unions will go along with it….money money…Listen to Guffey testify at the same hearing, he is already on board.

  • Texas Postman Duane

    i do not understand why this congress has not fired Donahoe. He is the most destructive force our company has ever had as a leader.