PMG Video To Employees discusses proposal to move away from current Health Care Plan

In his latest “State of the Business” video to employees, PMG Pat Donahoe says the proposal to move away from the current Federal Employee Health Benefits Plan (FEHBP) to a USPS-sponsored benefit is a vital element of a more sustainable business model.

“This all ties into the larger picture of what we’ve been talking about over the last several months regarding legislative change,” said Donahoe. “The whole idea and aim is to secure a strong financial future for the organization, the industry and for you as an employee.”

Donahoe acknowledged that employees are used to the FEHBP and feel comfortable in knowing they’re part of a large plan. “But that doesn’t mean it’s the best plan or the plan that offers the best flexibility for you or the Postal Service as a business,” said Donahoe. “By pulling this piece of our costs away from FEHBP, we’d be able to save about $500-700 million a year.”

The PMG said this proposal is the same business model followed by other large companies with extensive employee bases such as General Electric and IBM. “These companies leverage their size to get the lowest cost and best value for their employees,” he said. “This is the model USPS wants to follow.”

“While all of us have been taking great steps to reduce our costs, the health care cost is one we’re unable to address in its current model,” said Donahoe. “We need to change this. We need the support to own this program to maximize the benefit to you as an employee and to the Postal Service.”

The Postal Service’s proposal will require congressional approval. It will allow USPS to establish its own health benefits program.

source: USPS News LinkIn  a 2002 letter to then Postmaster General John Potter  and prior to passage of the Postal Accountability and Enhancement Act (PAEA) GAO wrote:

We also believe that our previous analysis of multiemployer characteristics did not give adequate attention to at least two additional significant areas where USPS’s plan is different from a typical multiemployer plan. First, an attempt by the USPS to terminate its participation in the Federal Employees Health Benefits Plan (FEHBP) would be subject to statutory constraints. Unlike private sector employers, USPS is statutorily prohibited from making a variation, addition, or substitution with respect to fringe benefits if it would result in a program of fringe benefits that on the whole is less favorable to its officers and employees than fringe benefits in effect on July 1, 1971. Further, as to unionized officers and employees, no changes can be made except by collective bargaining agreement. This statutory provision may not technically require USPS to provide its officers and employees with a substitute defined benefit health “plan” comparable to FEHBP. However, because of the significance of health insurance coverage to any “program of fringe benefits” and the dominance of unionized employees within USPS with whom USPS would have to obtain concurrence, it seems highly unlikely that USPS would be able to terminate participation in FEHBP without providing a comparable defined benefit health plan. Multiemployer plans are not typically subject to comparable statutory constraints. In any event, if termination were to occur, USPS would be required to continue to make contributions to OPM towards the health costs of its current retirees.

Second, like most multiple employer (single-employer) plans, USPS is required by law to make contributions towards the health costs of only its own retirees and employees and no others. In a typical multiemployer plan, an employer may have to make additional contributions in the event that other employers that participate in the plan are unable to make their required contributions.

21 thoughts on “PMG Video To Employees discusses proposal to move away from current Health Care Plan

  1. It’s still about dollars and cents. They want the dollars but none of there cra# makes sense. The worst part is there smoking good people into believing this garbage. Just keep speaking your part to educate people.(Off the clock of course). I’m sure the PMG and his rebels are doing there picketing off the clock too?

  2. Why is there thinking so short sighted, PMG is basing figures on today’s numbers when in reality, five years down the road there won’t be 1 million people in the plan. You will lose some of the retirees due to death, and you want to trim the workforce by 225,000 workforce, so what is that going to leave you with? maybe 700,000 not the 1 million. Then you consider the fact that the average age of the individual is probably in their fifties, you are not going to get all that great a deal in the private sector. And do you think Congress is going to let you leave and take your prefunded dollars with you, think again Mr Donahue

  3. Idiot!!! We have the oldest work force of any organization, public or private. Premiums would skyrocket within a few years of any insurance company taking over the healthcare of us old farts. They are not in business to lose money, so get real Donahoe. Leave our FEHB alone.

  4. Donuthole has run the p.o. into the ground, do you really think he needs to ruin thehealth plan too? He’s just trying to protect his $800,000 a year!


  6. If they can’t run the USPS correctly and profitable, why in the world would anyone trust them with running there health plan.

  7. Simple logic…when has the PMG EVER done anything” for the employees”??? Can’t trust him…won’t trust him period.

  8. How can Mr. Donahue have the any knowlegde of letting the USPS start their own health plan for employees. When the USPS management can’t even manage their way out of a paper bag in day light hours or the Lincoln Tunnel if they had too.
    Leave the health care alone and focus on what your suppose to do best. That is to deliver the mail in a timely manner. Mr. Donahue even wants to allow the USPS to handle employees retirement plans. RIGHT! I don’t think so.
    This would be the beginning of the postal service’s 21st century ENRON.
    I am in complete agreement with BDC’s assertions above.
    I wonder if the PMG and all upper USPS management would be the poster children to signup for the operated only USPS health plans and retirement pension plans.
    I doubt it!

  9. Bring back the regulators of days of old. Bring back swift justice for scoundrels and thiefs. “I will be a warrior, so that my son can be a merchant and his son a poet.” Thomas Jefferson.

    This is more of the elite in this country finding ways to take from you. Can you imagine how much more attractive the mail business is looking to the special interest that want and will eventually privatize the PO. It is time to subpoena Donahues e-mails and monetary transactions.

  10. I don’t know what you are bitching about.
    As I have to be paid to drive to a job in a Post Office that I wanted to be detailed to at a higher pay level and put up a nice abode while I am here. Then I have to use my USPS credit card for my per diem for breakfast,lunch and dinner with MY business associates, so we can figure how to fire the people who actually work the mails to save our jobs. Or rather to SAVE THE POSTAL SERVICE.

  11. What makes the PMG think he can get a better health plan for only postal employees. One would think the FEHB has better negotiating power and coverage with insurance companies as a whole than with only USPS employees as a smaller group. It just gives the postal service more opportunity to completely go defunct as some point and cancel all benefits when management runs everything to the ground as they are doing.

  12. I am retired from this shithole.I am under FEHB and pay the same % as the other federal workers and retireses with no premium conversion. Leave me the F–_K alone. I

  13. Want to save a little Mr PMG?
    Here is what you do, all those bums that get free postage service at the white house, the ones that sign packages and letters in lieu of postage, ISSA is a good one, that home wrecker, start paying your own bills for a change, pay for a hair cut you bum. And that goes for you too Mr. PMG, take off your make up that you charge against your expense account and look at the real you, an old alley dog with a worn out face. You people give me gas. Save money? Let’s start at the top. It all adds up.

  14. OK PMG and MGMT what is good for your employees must be good for you also. So if you want to change the Health Care you MUST include yourself in program. Everybody will get screwed. Note to Congress you should start doing the same when you pass new bills on ANYTHING. Also lets get your ass in Social Security also then you will leave it be……

  15. PMG Donahoe, PMg Potter. Are both the biggest losers that ever set foot on the postal service scene…neither one has ever used the greatest asset this organization has at their disposal…their employees !! The only vision they have is blurry at best…I would not allow these idiots to decide ANYTHING, no less anything as important as a health plan…..They have spent billions of dollars over the years trying to build a better mousetrap ,but haven’t figured it out yet ! I’ve been with them 40 years and they are still doing ” studies”. If they can’t figure it out by now, it’s time for them to go…you can’t fix stupid !!!!!

  16. I can save you $500-$700 million a year without touching the health plans. Of course this would involve cutting some areas of the USPS that really have no affect on our operations. For instance, cutting management overhead by about 60%-70% would be a start. But lets keep cutting the boots on the ground and see where that gets us. Maybe we can get the routes up to 12 hours a day, and see if that saves us some real money first.

  17. Mr. Donahoe is being disingenuous. If cost were his primary concern then perhaps his first argument might be that postal employees ought to pay the same premiums as everyone else in FEHB. That’s probably a winnable argument.
    What he really seeks is to disengage from the public health and retirement plans. The greatest hurdle in privatizing the Postal Service would be sorting out responsibilities for health care and retirement. This would be 1971 all over with an even more difficult process of sorting out responsibilities. Forty years after the PRA we still haven’t properly sorted the obligations.
    The PMG and the BOG continue to advance a strategic vision that simply cannot work. Taking the postal employees out of the public systems won’t save nearly as much as the PMG argues because of legacy costs. It will make it easier to move towards privatization which is a pipe dream with only bad consequences, not only for employees but for mailers and the American public.

  18. No doubt great idea for the Post Office, BAD idea for the employee. Have seen this happen just ten years ago with a family member and a Fortune 500 company. Guess what? that “flexibility” they offer is just double talk. Sure there is flexibility – they didn’t lie . . . but they Dazzle you with this while they take away that, change this . . . and the end, after 5-10 years you are paying more for less coverage.

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