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Politics : Liberalism: Do You Agree We've Had Enough of It?
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To: TideGlider who wrote (160512)10/10/2013 12:30:36 PM
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USPS wants to overhaul health, retiree benefits

By Paula Aven Gladych

September 26, 2013 • Reprints



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U.S. Postal Service letter carrier, Jamesa Euler, delivers mail, in Atlanta. (AP Photo/David Goldman, File)

The Government Accountabilty Office released a report Thursday endorsing the U.S. Postal Service's idea to withdraw its retirees and current employees from the Federal Employee Health Benefit Program and start its own health plan.

The GAO said the Post Office would save a great deal of money in doing this and eliminate its unfunded retiree health benefit liability.

The Postal Service has been plagued by financial problems over the past few years as more communication goes digital and first-class mail volumes fall. But the two areas that have contributed the most to the financial crisis within the USPS are retiree and health benefits — both of which have drowned it in unfunded liabilities. Under a 2006 congressional mandate, the Postal Service is required to make billions of dollars in advance payments to cover expected health care costs for future retirees.

The GAO found that the USPS’s proposal to start its own health plan would help. “These gains would significantly reduce its health benefits expenses and eliminate its unfunded retiree health benefit liability — with increased use of Medicare by retirees comprising most of the projected liability reduction,” the GAO said.

Currently, 77 percent of Postal retirees draw on some form of Medicare for their health coverage, according to the GAO. Moving the remaining 23 percent out of FEHBP entirely and into a separate plan integrated with Medicare would help reduce the amount USPS spends on health care from 20 cents of every revenue dollar to 8 cents — or about $8 billion annually through 2016, compared to current expenses.

That said, Medicare spending would increase under the proposal.

A proposal that has been raised in the past would have the Federal Employees Retirement System return any surplus it has to the USPS. The GAO, however, said that option wouldn’t work because estimates of retirement benefits liabilities contain a significant degree of uncertainty and can change over time. Returning these surpluses would eventually lead to unfunded liabilities in the future, the report said.



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