NARFE Submits Comments on PSHB Interim Final Rule

In April, the Office of Personnel Management (OPM) published its interim final rule establishing the Postal Service Health Benefits (PSHB) program. The rule outlined how PSHB will be created and provided important dates for OPM, insurance carriers and all other stakeholders assisting in the creation of PSHB before it is set to begin in January 2025. The rule largely follows the specifics set in the Postal Service Reform Act of 2022, with some discretion left to OPM to administer the program.

NARFE submitted a comment letter to OPM in response to the interim final rule highlighting areas in need of clarification, providing questions gathered from NARFE members and detailing actions that OPM can take to provide a more seamless transition to PSHB for postal workers and annuitants. The letter encouraged OPM to limit insurance plan changes to prevent disruptions to enrollee coverage and requested hardship exceptions to maintain coverage for postal employees and annuitants covered by some smaller plans, such as health maintenance organization (HMO) plans, that may decline to offer PSHB plans. The letter also requested further details on the six-month special enrollment period for Medicare Part B and requested OPM to encourage carriers to provide reimbursement accounts to cover Medicare-related costs (as some FEHB plans already do). The letter is posted on NARFE’s website and NARFE will share responses from OPM once they become available.

Based on the rule, the PSHB, like FEHB, will be operated by the Office of Personnel Management, and, to the greatest extent practicable, the program will offer a PSHB plan from each FEHB carrier that has a plan with 1,500 or more Postal Service employees or annuitants enrolled in 2023. OPM may exempt certain HMO plans from this requirement, and the PSHB will be permitted to include plans offered by other carriers as deemed appropriate by OPM.

AUGUST MONTH ACTION ALERT: SOCIAL SECURITY FAIRNESS ACT OF 2023

Visit NARFE’s Legislative Action Center at www.narfe.org to send a message to your lawmakers urging them to cosponsor the Social Security Fairness Act of 2023, H.R. 82/S. 597. This bill would repeal the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) policies that unfairly reduce Social Security benefits for federal, state and local civil servant retirees who earned a pension from their civil service career separate from benefits earned from employment covered by Social Security.

MYTH VS. REALITY

MYTH: Postal annuitants who drop Medicare Part B, or are not enrolled, will not receive health benefits via the new, parallel set of plans offered via the new Postal Service Health Benefit (PSHB) program in 2025.

REALITY: Per the Postal Service Reform Act of 2022, all postal annuitants, regardless of Medicare Part B enrollment, will receive federal retiree health benefits under the umbrella of the PSHB starting in January 2025. PSHB plans will generally provide equivalent benefits and cost sharing, per law, to the same Federal Employee Health Benefits (FEHB) program plans offered by the same carrier, but will offer different premiums based on the new postal risk pool (and cost savings accrued via partial Medicare integration). Postal employees age 64 and older as of 1/1/25 and postal annuitants will not be required to enroll in Medicare Part B if they are not already covered.

PSHB plans must include self only, self plus one, and self and family plan options. In the initial contract year, 2025, PSHB carriers must offer plans that have coverage with equivalent benefits and cost-sharing to the FEHB plans offered by that carrier, except as needed to integrate with Medicare Part D prescription drug coverage. Additionally, OPM will create a centralized enrollment system allowing PSHB enrollees to make coverage decisions through an online portal. Persons unable to access the online portal will be able to make enrollment decisions over the phone, by fax or by mail. The interim rule also outlines important dates for the implementation of the program, such as the launch of a health benefits education program beginning October 2023, the beginning of the sixmonth Medicare Part B special enrollment period in April 2024, the publishing of PSHB plan rate and benefits for 2025 in September of 2024 and the first open season, running November 11 through December 9, 2024.

Importantly, anyone who is a postal annuitant as of January 1, 2025, or a postal employee age 64 as of January 1, 2025, and not already enrolled in Medicare Part B will not be required to enroll in Part B as a condition of receiving health benefits through the PSHB program. Family members of such postal workers and annuitants are also exempt from the Part B enrollment requirement. Medicare-eligible postal annuitants and family members who are not already enrolled in Medicare Part B will have a six-month special enrollment period, beginning April 1, 2024, to enroll in Part B penalty free.

NARFE will continue to monitor the creation of PSHB and advocate for postal workers and annuitants as more information becomes available.

—BY ROSS APTER, DIRECTOR, LEGISLATIVE AND POLITICAL AFFAIRS