Fed unions say DonahoeCare would “destabilize the FEHBP and raise costs for federal employees, retirees, and their families”

Postmaster General Pat Donahoe’s proposal to yank postal workers (excluding himself and a few other privileged folks) out of the Federal Employee Health Benefits Program has drawn the ire of three unions that represent non- postal federal workers.

The National Treasury Employees Union, American Federation of Government Employees, and the National Active and Retired Federal Employees Association have jointly sent a letter to members of the Senate committee that oversees the USPS criticizing the Senate bill, S.1486, that would authorize Donahoe to proceed with his plan.

The unions note that the bill would

“allow the United States Postal Service (USPS) to cherry pick the largest areas of cost savings from FEHBP, which will destabilize the FEHBP and raise costs for federal employees, retirees, and their families. The Office of Personnel Management has estimated that as a result of these provisions, premium increases for employees and retirees remaining in the FEHBP would be 2 percent across the board and could be as high as 35 percent for some plans.”

Here’s the full text of the letter:

Dear Member of the Senate Homeland Security and Governmental Affairs Committee:

On behalf of the federal employees and retirees represented by the undersigned organizations, we write to express our serious concerns about the health insurance and Federal Employees’ Compensation Act (FECA) provisions of S.1486, the Postal Reform Act of 2013, which will impact all current and retired employees.

Section 104 of S.1486 will provide the Postmaster General (PMG) with extraordinary authority to withdraw active postal employees from the FEHBP – approximately 25 percent of FEHBP’s enrollment. Section 105 incentivizes Medicare eligible postal annuitants with Medicare Parts A and B to elect a newly established, voluntary Medicare wraparound plan. The FEHBP keeps costs low by spreading risks among all its participants; however, the effect of Sections 104 and 105 allow the United States Postal Service (USPS) to cherry pick the largest areas of cost savings from FEHBP, which will destabilize the FEHBP and raise costs for federal employees, retirees, and their families. The Office of Personnel Management has estimated that as a result of these provisions, premium increases for employees and retirees remaining in the FEHBP would be 2 percent across the board and could be as high as 35 percent for some plans.

Section 502 would amend the Federal Employees’ Compensation Act to reduce benefits when injured workers reach the Social Security retirement age. Currently, an employee who is injured on the job and unable to work receives FECA payments equal to 67 or 75 percent of wages at the time of injury. Under S.1486, these workers would have their insurance reduced to 50 percent of their former wages. Forcing a worker at retirement age to give up regular FECA benefits earned as a result of an on-the-job injury would cause grave economic hardship to many disabled employees. This was recently documented in a Government Accountability Office report (GAO 13-108) that showed these cuts would negatively impact lower wage workers and those injured early in their work-life.

Section 503 would eliminate the FECA family benefit that provides a modest additional 8 percent of former wages. This is not a complicated program to administer. It does not compensate for the tragic emotional burden a head of household must suffer having lost his or her ability to continue as the breadwinner for his or her children. But it does provide some modest additional payment so former family breadwinners can still provide some material support for their dependents.

In summary, the health insurance provisions of S.1486 will undermine the successful, long- standing Federal Employees Health Benefits Program (FEHBP) and increase costs for millions of federal employees, retirees and their families. These proposed changes are especially problematic given that many federal employees have already been driven to the brink by furloughs and wages that have been stagnant for years. In addition, the draconian FECA provisions are federal government wide and have no place in Postal Service reform legislation.

Sincerely,

National Treasury Employees Union
American Federation of Government Employees
National Active and Retired Federal Employees Association

  • John retired postmaster

    Sounds to me like the other federal employees besides the USPS would be taking a hit because the USPS would not be part of the FEHBP. I believe that the USPS health benefit plan could be a success. The USPS is the largest contributor to the FEHBP among federal employees and retirees. Where are the USPS unions and management organizations on this?

    • Retired Postal Worker

      I wouldn’t trust the Post Office to take care of our insurance needs. If the USPS Plan would be so good why is it The Postmaster General and his cronies would not be in it. I’m retired and I just want them to leave the insurance alone. We pay good money to be part of FEHBP. They can’t offer us anything better than we have now. and by the way, if The Post Office is pulled out of the FEHBP it will have a domino effect with all the other federal agencies in it.

    • Postman

      USPS management is incompetent and unqualified to run the Postal Service! you must be on crack retired postmaster if you think they can operate the health plan and retirement without it being a disaster.And as to the unions, only the APWU leader, who is Donahoe’s stooge said he would support this and the management organizations did what they were told and stayed silent.

  • David Miranda

    if it’s good enough for us it should be good enough for him and them also…..he needs a reality check and has reached the end of his usefulness

  • Surprise!

    I don’t believe Donahoe’s plan can work.

    Medicare is expected to go broke with in the next 10 years. Donahoe’s plan depends on dumping employees over 65 into the medicare system. If it fails so does Donahoe’s plan.

    • LiamSkye

      No – Donahoe’s plan ends when the postal employees lose their health benefits and he keeps his. The subsequent failure of Medicare does not affect the victory he will declare as soon as he takes the health plans away. He cares nothing about what happens down the road.

  • You won’t let me

    The Postal Service and govt in general has been brain washing everyone for years that the usps is not federal but is a company. Once postal employees are in the Donahoe “postal plan” when the “company” goes under all the billions already in our health and retirement accounts will disappear or be used to pay off our debts. Then they will say as when any “company goes bankrupt all your former benefits are gone! The govt keeps our money, sells off billions in equipment and real estate and the big mailers get their way.

  • Guest

    The story failed to mention how many employees they had enrolled and how much their agencies are contributing to our jointly held FEHBP insurance benefits per year because the USPS is on the hook for $11billion (yep that is a B) per year.
    Their premiums will go up if we leave? So they are admitting to using USPS employee health care as their own personal premium supplemental payment? If their premiums go up, it is only because they are not paying their fair share now, to cover their own health care. The USPS is its own entity and owes nothing to know one. We work our tails off for the american people and should be able to be reinvest our own money, into our own organization. We are not your piggy bank.

  • Jimm

    NAPS the supervisors union is against this as well as the vast majority of employees. Maybe when Congress finds out rates will rise for themselves and everyone left in FEHBP common sense will prevail. Sounds like any amount the Post Office could possibly save will be surpassed by increased rates for those left. Even Congress can understand that, maybe? : )

  • The boss

    Donahoe is nothing but a mouth piece for the Republican controlled BOG. You can bet anything he comes up with is not to benefit the poor working employee. What a total irresponsible jerk he is. A BIG NO needs to said loud and clear.