Thursday, August 11, 2011

Postal Service asks to pull out of the FEHBP

The Federal Times and the Washington Post are reporting that the Postal Service is asking Congress to permit it to layoff over one hundred thousand employees and pull its employees and retirees out of the FEHB Program and the federal employees retirement programs -- in violation of its collective bargaining agreements with the Postal unions. According to the Federal Times,
The Postal Service said the Federal Employees Health Benefits Program doesn't meet its needs, and said it will ask Congress for permission to pull its 600,000 active employees and 480,000 retirees out of the program. The Postal Service would set up its own health plan instead, which it said would be simpler, more cost effective, and more in line with the private sector.
The Postal Service forms about 27% of the FEHB Program's  total enrollment. Pulling the Postal Service out of the FEHBP likely would create two relatively weaker health benefits programs in the FEHBlog's view. This proposal is a big bowl of wrong.

FEHB plans will unveil their 2012 benefit designs and premium rates later next month. AIS Health reports on employee health plan benefit design trends for 2012 -- in particular the growing interest in narrower provider networks and higher employee cost sharing.  These trends, however, are not rapidly adopted in competitive models like the FEHB Program where employees select their coverage.  In the program that the Postal Service evidently is contemplating for its employees, the employer can adopt aggressive approaches like these because there is no employee choice (other than declining coverage).

Reuters reports that there continues to be a substantial 24% spread between Medco's stock price and the value of the Express Scripts acquisition deal "as contract concerns for Medco and the shaky stock market compound worries that the deal will fail to pass antitrust muster."

The Government Accountability Office recently issued a report on the Federal Long Term Care Insurance Program. The report considers why more carriers are not attracted to bidding for the business.

1 comment:

Anonymous said...

If USPS pools all employees and retirees, it could be better for all. States and Municipalities get lower premiums and better coverage (AFSCME) by large pools with few choice. The current 207 FEHB plans with high/low choices and high-deductible plans is high cost for employee and govt (taxpayers). The only reason for 207 plans is like military contracts-to give a piece of the federal dollar to as many congressional districts as possible.