USPS Dangling Incentive For APWU Members To Vote YES On Contract
From a PostalReporter reader: Name withheld upon request
from withheld
to Lucille Caldwell
date Thu, Mar 31, 2011 at 1:17 AM
subject PSE’s Health Insurance
Did you notice this unusual health insurance provision in the proposed USPS-APWU Tentative National Agreement, buried on pages 173 to 174? The Postal Service is dangling this as an incentive for APWU members to vote YES on the proposed contract.
After an initial appointment for a 360-day term and upon reappointment to another 360-day term, any eligible non-career PSE employee who wants to participate in the Federal Employees Health Benefits (FEHB) Program on a pretax basis will be required to make an election to do so in accordance with procedures to be published as soon as administratively practicable. A previous appointment as a transitional employee will count toward qualifying for participation in FEHB, in accordance with the Office of Personnel Management (OPM) regulations. The total cost of health insurance is the responsibility of the PSE employee, except as provided below.
The Postal Service will make a contribution in the amount of 75% of the total premium for any eligible PSE who selects the APWU Consumer Driven Health Plan.
Only an APWU member can belong to this FEHBP health plan. Isn’t that clever? Under this proposed contract a Postal Support Employee that doesn’t join the APWU will lose an employer-contribution of $6,817 annually on his/her family health insurance enrollment or $3030 on a self only enrollment [see APWU attachment based on 2011 rates].
OPM IG Releases Study On USPS OIG’s Proposals to Change USPS Funding of Retiree Benefits
Filed under: fehb, oig, opm, postal, postal news, press releases, usps
Press Release from the OPM Office Of Inspector General
Study of the Risks and Consequences of the USPS OIG’s Proposals to Change USPS’s Funding of Retiree Benefits: Shifting Costs from USPS Ratepayers to Taxpayers’
Washington, DC – (Feb. 28, 2011) Today, the U.S. Office of Personnel Management (OPM), Office of the Inspector General (OPM OIG), issued a study analyzing certain proposals issued by the United States Postal Service (USPS), Office of Inspector General (USPS OIG), regarding changes in the manner by which the USPS funds both its retiree annuity and health benefit obligations. The OPM OIG paper, A Study of the Risks and Consequences of the USPS OIG’s Proposals to Change USPS’s Funding of Retiree Benefits: Shifting Costs from USPS Ratepayers to Taxpayers, reviews the impact that the proposals would have upon the trust funds and the Federal benefit programs administered by OPM.
In a series of reports containing these proposals, the USPS OIG has estimated that the USPS has “overpaid” these trust funds by as much as $142 billion. The proposals generally envision changing the law governing the manner in which the USPS’s retiree benefit liabilities are determined and funded.
“We felt that the issues surrounding the USPS OIG’s proposals had not been fully explored,” said Inspector General Patrick E. McFarland. “It was important for us to examine not only the effects that the proposals would have upon the USPS, but also their impact upon the Federal retirement system as a whole. We were also concerned that there was a public perception that OPM may have inappropriately calculated the USPS’s liabilities. In fact, our analysis revealed that OPM has fully complied with the law.”
The OPM OIG study also concludes that generally the proposals would have a lasting negative effect upon the retirement programs and trust funds and have little, if any, positive impact upon the USPS’s ultimate long-term profitability. In addition, the result of these proposals would be to shift costs from USPS ratepayers to the American taxpayers.
While the USPS’s financial situation must be addressed, the OPM OIG study cautions against using the Federal retirement program as a vehicle through which to implement policy objectives unrelated to the Federal retiree benefit programs. “The resolution of the USPS’s financial situation should be fully transparent rather than providing an indirect subsidy from the Federal benefits system,” said Inspector General McFarland.
“While our findings do not support the USPS OIG’s proposals,” stated Inspector General McFarland, “we think that our work, combined with theirs, will help the Congress, the Administration, and the USPS to develop the most efficient and effective resolution of the USPS’s current problems.”
Here’s an interesting little tidbit from the report:
Under the FEHB Program, a portion of a retiree’s health care insurance premium is paid for by the Federal Government (or, in the case of USPS retirees, the USPS) through contributions to the Employees Health Benefits (EHB) Fund.The Federal or USPS retiree contributes the remaining amount of the premium to the fund.
As the USPS OIG’s reports have repeatedly pointed out, the Federal Government does not prefund it s retiree health obligations. Instead, the employer and employee contributions pay only for the costs of the program for that particular year. Consequently, the EHB Fund maintains only a small amount of reserves and thus does not have significant assets that remain in the fund from year to year.
It is unclear, however, what the effect would be upon USPS employees’ or retirees’ rights if the USPS ceased making its required payments into the EHB Fund because the fund does not contain sufficient reserves that could be used to “replace” the USPS’s contributions. Consequently, the fund’s assets would be exhausted very quickly.
In such a scenario, the insurance companies would still be legally entitled to the full amount of the premium negotiated under the contract. The OPM would have to take some sort of action because without the USPS’s contributions, the fund simply would not have enough money to pay every FEHB Program participant’s premium.
Absent an emergency appropriation from Congress, it is possible that the OPM would have to exercise its regulatory authority to disenroll USPS employees and retirees as a class in order to continue providing health care coverage to all other FEHB Program participants.
USPS’s Financial Outlook
While various parties have worked diligently to develop business and operational initiatives geared towards improving the USPS’s business model and financial condition, we have yet see a report that contain s viable projections that it will improve its financial situation.
OPM OIG Study of USPS OIG Proposals Feb 28 2011
Deficit Commission’s Final Recommendations Includes USPS And Changes To FEHBP, Retirement
The National Commission on Fiscal Responsibility and Reform released its final recommendations today. The Commission recommends changes to the Federal Health and Benefits Program, Military and Civil Service Retirement and giving the Postal Service more flexibility to manage its operations. On another note, the Commission claims that USPS received a $4 Billion bailout which is incorrect.
RECOMMENDATION 4.10: GIVE POST OFFICE GREATER MANAGEMENT AUTONOMY
The Postal Service has run multi-billion dollar losses since 2007, and in 2010 maintained an operating deficit of $8.5 billion, even after receiving a $4 billion bailout from Congress the previous year. With the dramatic expansion of electronic mail, the volume of traditional air-mailed items will continue to fall, only worsening these enormous budget shortfalls and requiring even more federal funding in the future. To put the Postal Service on a path toward long-term solvency, the Commission recommends reversing restrictions that prevent the Postal Service from taking steps to survive – such as shifting to five-day delivery and gradually closing down post offices no longer able to sustain a positive cash-flow.
RECOMMENDATION 4.1: REVIEW AND REFORM FEDERAL WORKFORCE RETIREMENT PROGRAMS.
Create a federal workforce entitlement task force to re-evaluate civil service and military health and retirement programs and recommend savings of $70 billion over ten years.
Military and civilian pensions are both out of line with pension benefits available to the average worker in the private sector, and in some cases, out of line with each other across different categories of federal employment. The Commission recommends a federal workforce entitlement review to analyze civil service and military retirement programs in order to 1) Make program rules more consistent across similar programs, and 2) Bring both systems more in line with standard practices from the private sector. The review will have a ten-year savings target of $70 billion; recommendations of the task force would receive fast track consideration in Congress. Examples of program design reforms that the task force should consider include:
Use the highest five years of earnings to calculate civil service pension benefits for new retirees (CSRS and FERS), rather than the highest three years prescribed under current law, to bring the benefit calculation in line with the private sector standard.
(Saves $500 million in 2015, $5 billion through 2020)
Defer Cost of Living Adjustment (COLA) for retirees in the current system until age 62, including for civilian and military retirees who retire well before a conventional retirement age. In place of annual increases, provide a one-time catch-up adjustment at age 62 to increase the benefit to the amount that would have been payable had full COLAs been in effect.
(Saves $5 billion in 2015, $17 billion through 2020)
Adjust the ratio of employer/employee contributions to federal employee pension plans to equalize contributions.(Saves $4 billion in 2015, $51 billion through 2020)
Mandatory Savings: Cut agriculture subsidies and modernize military and civil service retirement systems, while reforming student loan programs and putting the Pension Benefit Guarantee Corporation on a sustainable path.
Pilot premium support through FEHB Program.
(Saves $2 billion in 2015, $18 billion through 2020)
The Commission recommends transforming the Federal Employees Health Benefits (FEHB) program into a defined contribution premium support plan that offers federal employees a fixed subsidy that grows by no more than GDP plus 1 percent each year. For federal retirees, this subsidy could be used to pay a portion of the Medicare premium. In addition to saving money, this has the added benefit of providing real-world experience with premium support.
Open Season For Health Benefits Starts Monday, Nov. 8
It’s Open Season — the time of year when employees can sign up for benefit programs, change enrollments, or cancel their participation.
Open Season for three benefits programs — Federal Employees Health Benefits (FEHB), Flexible Spending Accounts (FSA), and the Federal Employees Dental and Vision Insurance Program (FEDVIP) — begins Monday, Nov. 8.
FEHB and FEDVIP plans have changed significantly. For example, the 2010 Affordable Care Act changed FEHB eligibility requirements allowing children up to age 26 as eligible dependents for Self and Family coverage (Link, 8/17). Employees are asked to note that even if they keep the same FEHB plans and coverage automatically continues, their premiums may change. It’s also recommended that employees check their insurance coverage for details that could save them money. For example, if you’re enrolled in a family plan but no one else is covered by that plan, changing to the “Self Only” option will reduce your premiums.
Employees with FEHB plans that no longer will be offered must select a new plan or their health insurance coverage will end. Affected employees will receive a letter from the plan and from the Postal Service. Employees whose plan’s service area is changing also will be notified.
FSA — which can save money on taxes for eligible out-of-pocket health care and dependent care expenses — also has changed. The Health Care FSA has added restrictions on coverage for over-the-counter drugs and medicines. Also, children who are not dependents on your taxes may now be covered under your Health Care FSA until Dec. 31 of the year before they turn age 27. Employees who want an FSA for 2011 need to re-enroll — FSA coverage does not continue from year to year. FSA brochures with more details now are being mailed to all employees.
You can make FEHB and FSA selections on PostalEASE. For FEDVIP elections, go to www.benefeds.com.
Open Season for the Annual Leave Exchange (ALE) begins Monday, Nov. 15. Employees eligible to make an ALE election will receive a letter.
FEHB, FSA and FEDVIP booklets will be arriving in the mail. Look for the information and save it when it arrives. Additional Open Season information is in today’s edition of the Postal Bulletin. You also can go to the “My HR” section on LiteBlue for more details.
You will need your employee identification number (EIN) and USPS personal identification number (PIN) to enter PostalEASE or LiteBlue. Forget your PIN? Click here to read “Got Your Number?” in yesterday’s Link for help.
source: USPS News Link
Federal Employees 2011 Open Season for Health Benefits, Dental, Vision Insurance and FSA
From the Office Of Personnel Management
• The U.S. Office of Personnel Management (OPM) has announced that this year’s open season for health benefits, dental and vision insurance, and Flexible Spending Accounts will run from November 8 through December 13, 2010. This open season will give federal employees and retirees the opportunity to change their health-care coverage and employees who are not enrolled, but are eligible to participate, the opportunity to elect coverage.
• Each year, OPM enters into annual negotiations with each FEHB carrier, historically enabling the program to hold premium increases below industry averages and secure good benefits value for enrollees and their families.
• Premiums for the 2011 FEHB Program will rise by an average 7.2 percent for the enrollee share of premiums. This increase is below last year’s premium increase of 8.8 percent and lower than rate hikes predicted for large, employer-sponsored health programs by benefit consultants such as Aon, Milliman, and Price Waterhouse Coopers, which are estimating 2011 premium increases between 8.9 percent and 10.5 percent.
• In January 2011, there will be 207 health plan options in the FEHB Program.
• The Affordable Care Act extends important new benefits to FEHB enrollees and strengthens the program. Preventive care and screenings will be available with no out-of-pocket costs and enrollees will have the right to add their young adult children under the age of 26 to their family health plan. According to an OPM analysis, and consistent with independent reports, these new consumer protections account for a 1.7 percent increase in premiums.
• Additionally, all FEHB plans are fully compliant with the insurance reforms required by the Affordable Care Act and, in the case of preventive care, FEHB plans have extended benefits ahead of when they were required to do so by the Act.
• Enrollees with self-only coverage will pay, on average, $5.53 more each pay period and enrollees with family coverage will pay $11.45 more per pay period. FEHB enrollees pay, on average, 30 percent of the total cost of the plan’s premium while the government pays 70 percent.
• Enrollees in the Blue Cross Blue Shield Standard Option, the most popular FEHB plan choice, will see their share of the premium increase by 6.9 percent for self-only coverage and 7.6 percent for self and family coverage.
• All FEHB plans will offer tobacco cessation benefits in compliance with the U.S. Public Health Services’ 2008 clinical guidance on tobacco cessation. This includes full coverage (no enrollee co-payments) for seven FDA-approved medications, four counseling sessions per quit attempt, and two quit attempts per year.
• Five FEHB plans have increased benefits for hearing devices and/or other assistive devices and twelve FEHB plans currently provide coverage for hearing aids and/or assistive technology devices.
• Sixteen FEHB plans will offer testing for up to four transplant donors for bone marrow and stem cell transplants.
• Two health plans, GEHA and Mail Handlers, will pilot coordination of benefits with Medicare, whereby the FEHB plan will contribute toward the cost of the enrollee’s Medicare Part B premium in return for the enrollee accepting the same cost sharing (e.g. copayment/coinsurance) as non-Medicare enrollees. Medicare enrollees may voluntarily participate in these pilot programs. Currently, these plans waive some cost sharing for enrollees with Medicare coverage.
Non-Dependent Children Can Join FEHBP Next Year
Non-dependent children can join FEHBP as of January 1st, 2011. The child doesn’t have to be your own. It can be your gay partner’s or someone else’s. If it is your own child, the child can be married and have their own employer-sponsored insurance. Almost any child living with a federal employee can be added. See the attachments from OPM. Some employees and retirees may overlook this important benefit change this Open Season.
OPM’s definition of “Foster Child” and “Step Child” is at
http://www.opm.gov/insure/health/reference/handbook/fehb28.asp#FosterChildren.
Changes for Federal Benefits Programs under the Affordable Care Act
http://www.opm.gov/retire/pubs/bals/2010/10-201.pdf
Attachment: Health Reform Changes for Federal Benefits Programs Effective January 1, 2011
http://www.opm.gov/retire/pubs/bals/2010/10-201attachment.pdf
Pharmacy Owner Pleads Guilty To Submitting Phony Postal Employee Prescriptions
Press Release from the United States Attorney District of New Jersey:
June 3
TRENTON, N.J. — The owner and operator of Sicomac Pharmacy in Wyckoff, New Jersey, pleaded guilty today to defrauding the Federal Employees Health Benefits program by billing for prescriptions never requested by United States Postal Service customers of the pharmacy, United States Attorney Paul J. Fishman announced.
Francisco Marcos, 34, of Wyckoff , pleaded guilty before United States District Judge Anne E. Thompson to an Information charging him with health care fraud. Judge Thompson set bail at $50,000 and permitted Marcos’ release pending sentencing, which is scheduled for September 22, 2010.
According to documents filed in this case and statements made during Marcos’ guilty plea proceeding:
From 2005 through 2008, Marcos owned and operated Sicomac Pharmacy, a retail pharmacy. Among the customers of Sicomac Pharmacy were employees of the United States Postal Service and their families, whose prescriptions were covered by the Federal Employees Health Benefits program. Between 2005 and 2008, on at least 400 occasions, Marcos submitted claims for prescriptions for these customers, when the customers had not requested the prescriptions and never received them.
Marcos received over $28,000 from the Federal Employees Health Benefits program for the phony prescriptions.
At sentencing, Marcos faces a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the pecuniary gain or victim loss from the offense. As part of his plea agreement, Marcos agreed to enter into a restitution order requiring him to repay $28,500 to the Federal Employees Health Benefits program.
In determining an actual sentence, Judge Thompson will consult the advisory United States Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant’s criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining the sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.
U.S. Attorney Fishman credited Special Agents with the United States Postal Service, Office of Inspector General, under the direction of Special Agent in Charge Jane Hughes in Trenton, New Jersey; Special Agents with the Federal Bureau of Investigation, under the direction of Special Agent in Charge Michael B. Ward, in Newark, New Jersey; Special Agents with the United States Office of Personnel Management, Office of Inspector General, under the direction of Special Agent in Charge Drew Grimm in Washington, D.C.; and Special Agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Thomas F. ODonnell, Special Agent in Charge for the region covering New Jersey.
The case is being prosecuted by Assistant United States Attorney Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
OPM Proposes Changing FEHBP Open Season To Month of November
From the Federal Register
We are also proposing to change the annual FEHB Program Open Season from the Monday of the second full workweek in November through the Monday of the second full workweek in December, to November 1st through November 30th of each year. We are also adding a new opportunity for eligible employees to enroll in the FEHB Program or to change enrollment from self only to self and family under the Children’s Health Insurance Program Reauthorization Act of 2009. Finally, we are proposing to allow FEHB plans to offer three options, without the requirement that one of the options be a high deductible health plan.
Change in Dates of Open Season
The current regulations provide for the FEHB Program Open Season to be held from the Monday of the second full workweek in November through the Monday of the second full workweek in December of each year. We are revising the regulations to change these dates to the month of November. Therefore, beginning in 2010, the Open Season dates will be November 1st through November 30th of each year. This will simplify the annual announcement of the time period for Open Season and allow agencies and employees to better plan for the enrollment opportunity since they will know well in advance when it will occur each year.
New Enrollment Opportunities
Public Law 111-3, the Children’s Health Insurance Program (CHIP) Reauthorization Act of 2009 (the Act), enacted on February 4, 2009, allows States to subsidize health insurance premium payments for certain low-income children who have access to qualified employer-sponsored health insurance coverage. FEHB-eligible enrollees who meet the criteria for child health assistance are eligible to receive State premium subsidy assistance payments to help them pay for their FEHB plan premiums. Current FEHB Program regulations already allow an eligible enrollee who loses coverage under the FEHB Program or another group health plan, including loss of eligibility or assistance under Medicaid or CHIP, to enroll or change enrollment from self only to self and family within the period beginning 31 days before and ending 60 days after the date of loss of coverage. The Act provides new opportunities for eligible employees to enroll in the FEHB Program or to change enrollment from self only to self and family when the employee or an eligible family member becomes eligible for premium assistance under CHIP. Employees must request the change in enrollment within 60 days after the date the employee or eligible family member is determined to be eligible for assistance. Employees may make these enrollment changes regardless of whether they are covered under premium conversion (pay premiums with pre-tax dollars).
DATES: OPM must receive comments on or before June 18, 2010.