Federal Times Blogs
Lest anyone forget, Postmaster General Pat Donahoe remains keenly interested in creating a stand-alone health insurance plan for about 1.1 million U.S. Postal Service employees and retirees.
The latest reminder came at last week’s Senate hearing on the USPS’s financial crisis. Although lawmakers’ attention was predictably focused on the agency’s decision to end Saturday mail delivery, Donahoe also stressed the urgency of pulling out of the Federal Employees Health Benefits Program.
“An astonishing 20 cents of every revenue dollar the Postal Service takes in must go toward health care costs,” Donahoe said in prepared testimony. “By moving away from the federal system, nearly all of our employees and retirees would reap the benefits of getting equivalent or better healthcare coverage and paying less for it.”
Creation of a new health plan was a major stumbling block in contract talks with the National Association of Letter Carriers; although labor and management couldn’t reach a deal, a joint task force will keep discussing the issue, according to an arbitration panel’s recent decision.
But the Postal Service hasn’t furnished many details about what it has in mind. And employees may understandably be skeptical of any promises to provide comparable (or better) benefits at lower cost. Fortunately, the USPS inspector general took a look at the subject last year that fleshes out some specifics.
The inspector general’s report, whose conclusions drew a vigorous dissent from Postal Service management, can be read here. It’s of course possible that the USPS human resources team has since made changes to their plan; if so, however, those changes haven’t been made public.
In the meantime, here are a few takeaways from the IG’s review. By the Postal Service’s reckoning, creation of a stand-alone plan would save $52 billion. (The original total was $62.1 billion, but the agency then dropped the idea of freezing its contributions for retiree health insurance, according to the report.) Although the IG doesn’t say over what period of time those savings would occur, the key is requiring employees and retirees to move to Medicare, the taxpayer-funded medical benefits program for people aged 65 and older.
That step alone would save some $37 billion; for older employees and retirees, the Postal Service’s health plan (whatever it turns out to be) would become the back-up insurer to Medicare. The Postal Service would also be freed of much, if not all, of the obligation to set aside billions of dollars now for future retiree care.
But from the employee/retiree perspective, there’s one immediate concern. By law, anyone eligible for Medicare Part B (which covers things like doctors’ visits and lab tests) is supposed to sign up after turning 65 or else face a 10 percent, per year, enrollment penalty.
According to the IG, there were about 88,000 USPS retirees over 65 who hadn’t signed up. Those folks would thus face late-enrollment penalties totaling $53 million per year, or an average of $625 per person. The Postal Service needs to settle that issue, the inspector general said, either by ensuring that the penalties will be waived or by deciding who’s going to foot the bill.
USPS workers and retirees could also pay more under another proposed change that would require anyone retiring after the end of this year to pay a standard deductible before the Postal Service picks up any cost not covered by Medicare. But the Postal Service would also expand coverage options from the two currently offered by the FEHBP to four. In some instances, employees could pay less than they do now. (Check out p. 11 of the IG report for a side-by-side comparison.)
The overall goal here is simple. The Postal Service, like any other money-losing enterprise, is trying to tamp down costs wherever it can. And postal workers generally pay less for their health benefits than other federal employees.
But because congressional approval is required, the Postal Service’s plans need political traction that so far appears to be lacking. At a September 2011 congressional hearing, for example, Office of Personnel Management Director John Berry was notably unenthusiastic about letting the Postal Service leave the FEHBP. A fuller analysis of the potential effects was needed, Berry said, adding that he thought postal employees were “well-served” by the status quo.
In last year’s report, the inspector general recommended that USPS officials lay out to affected employees and retirees, as well as the government, “all potential cost increases, cost savings and cost shifts that would result from a transition to a Postal Service-proposed alternative health care plan.”
In their strongly worded response attached to the report, postal executives both disputed key findings and objected to what they called its “negative tone.” The Postal Service, for example, has proposed relief from the Medicare late enrollment penalties, they wrote. A draft of the report, they added, “totally ignores the fact that total costs will decrease substantially and that out-of-pocket costs for most employees and retirees will decrease.”
The Postal Service has yet, however, to make the kind of detailed disclosure urged by the IG. Until it does, a tough sales job lies ahead.
The House Rules Committee will meet Wednesday afternoon to consider a bill that would extend the pay freeze through the rest of 2013.
HR 273 — sponsored by Rep. Ron DeSantis, R-Fla., Rep. Darrell Issa, R-Calif., and 27 other Republican lawmakers — would cancel the 0.5 percent pay raise now scheduled to go into effect at the end of March.
And one proposed amendment to the bill — introduced by Rep. Doug Collins, R-Geo. — would go even further, and freeze pay until the end of 2014. That would mean a four-year pay scale freeze for federal employees.
Federal employee groups denounced the bill.
“A vote in favor of HR 273 is a vote to continue the freeze on pay for those who guard our borders, ensure that food supplies and medicines are safe, and provide services to your constituents every day,” National Treasury Employees Union National President Colleen Kelley said in a letter to House members Tuesday. “America’s workforce lives with constant threats of government shutdowns and furloughs and [agencies have] fewer and fewer resources as a result of budget cuts. Despite what supporters of this proposal may say about respecting the work of federal employees, blocking a modest pay raise of 0.5 percent for dedicated public servants who are working under a 27-month pay freeze sends quite the opposite message — that neither they nor their work are viewed as important to our nation.”
Joseph Beaudoin, national president of the National Active and Retired Federal Employees Association, called the bill “nothing more than another direct attack on hardworking public servants.”
Tags: pay freeze
If sequestration goes into effect next month, many Defense Department employees are likely to be furloughed one day per week for the rest of the fiscal year — in effect, a 20 percent pay cut.
Deputy Defense Secretary Ash Carter and other political appointees can’t be furloughed. But according to the Washington Times, Carter told lawmakers today that he is going to give back one-fifth of his salary if Defense civilian employees are furloughed. The Times called it “a show of solidarity.”
Federal employees are, of course, not happy about the prospect of mass furloughs, and many observers fear it could deal a devastating blow to morale. While Carter returning some of his pay won’t do anything to lessen the pressure on furloughed feds’ checkbooks, it may keep some of their anger from turning against their bosses.
Five Democratic representatives on Tuesday reintroduced a bill that would guarantee at least four weeks of paid leave for federal employees who become new parents, whether through the birth or adoption of a child.
HR 517 — sponsored by Reps. Carolyn Maloney, D-N.Y., Gerry Connolly, D-Va., George Miller, D-Calif., and Raul Grijalva, D-Ariz., and Del. Eleanor Holmes Norton, D-D.C. — would grant all feds who become parents four weeks of paid parental leave, apart from their stored sick or annual leave. They would then be able to use up to eight additional weeks of sick or annual leave to be at home with their new children.
This leave would be in lieu of, and not in addition to, the 12 weeks of unpaid leave guaranteed by the Family and Medical Leave Act. It would be available to both fathers and mothers.
The National Treasury Employees Union issued a statement Thursday strongly supporting the bill, and said some federal employees do not have 12 weeks of leave stored to care for their newborn or newly-adopted children. Said NTEU National President Colleen Kelley:
This paid parental leave act will make a significant difference in the lives of both parent and child. It is time for the federal government, as the largest employer in this country, to step up and make parental leave benefits a reality — not a mirage that few can afford to use. While the FMLA has been a terrific first step in helping employees balance family and work needs, no federal employee with a new child should be forced to choose between a paycheck and caring for the newest member of the family.
Maloney last introduced her paid parental leave bill in February 2011, but it died in committee. The House passed a previous version in 2009, but it died in the Senate.
There are also at least two petitions on the White House’s petition site urging the government to require paid maternity leave, although they are not specific to the federal government.
Tags: parental leave
The House of Representatives voted today to extend the current pay freeze — which has already lasted two years — through the rest of 2013.
The American Federation of Government Employees denounced the bill, proposed by Rep. Michael Fitzpatrick, R-Penn., as a “cheap political ploy.” Rep. Steny Hoyer, D-Md., also blasted the bill and said it has no chance of passing the Senate.
But Fitzpatrick said approving a raise at a time when the government is teetering on the edge of the “fiscal cliff” is inappropriate.
“At a time when American families are tightening their belts and businesses are reducing salaries to make ends meet, I believe that the federal government must lead by example,” Fitzpatrick said.
The current Congress ends on Thursday, at which point any legislation still pending will be scrapped, and must be reintroduced in the 113th Congress. It is likely that Republicans will try again to freeze federal pay later this year, before the current freeze expires March 27.
President Obama on Friday issued a memo officially freezing federal pay scales for the first three months of 2013.
Obama’s freeze — which extends a pay scale freeze that has already stretched for two years — is no surprise. In August, he proposed freezing pay until Congress passes an actual budget and stops funding the government through a series of continuing resolutions, or CRs. One month later, Congress passed a six-month CR that freezes pay and partially funds the government until March 27.
The pay freeze memo came a few hours after President Obama granted feds a day off on Christmas Eve. Which once again shows, you win some, you lose some.
A coalition of 20 federal unions is encouraging its members to pressure lawmakers Tuesday against cutting their jobs, pay and benefits as part of a deal to avert the fiscal cliff.
The Federal Workers Alliance — which includes unions such as the National Federation of Federal Employees, International Federation of Technical and Professional Engineers and Professional Aviation and Safety Specialists — wants its members to visit lawmakers in person, call their offices, e-mail them and spread the word via social media that when it comes to federal employee cuts, “Enough is enough.”
“Federal workers have already seen $103 billion in cuts to their pay and benefits, but many in Congress still don’t get the message,” said NFFE National President Bill Dougan, who is also the chairman of the union coalition. “We’re encouraging our members to contact their elected officials in any way they can and tell them, ‘The bank is closed.’”
Reports surfaced over the weekend that House Speaker John Boehner had proposed limiting federal retirees’ pension cost of living adjustments by adopting a new measure of inflation called the chained Consumer Price Index.
Multiple news organizations are reporting that House Speaker John Boehner included the so-called chained Consumer Price Index in his latest proposal to President Obama seeking to avert the fiscal cliff.
This would put a big dent in the deficit — perhaps raising more than $290 billion over a decade — but it would hit federal and military retirees right in their pensions. Economists say the chained CPI is a more accurate method of determining inflation that is usually 0.25 to 0.30 percentage points lower than the current method. Adopting it for pensions, Social Security benefits and other indexed portions of the government’s budget would, over time, dramatically lower cost-of-living adjustments. The change would mean only a few hundred dollars at first for federal retirees. But its effect would compound over time, until eventually federal retirees would likely earn tens of thousands of dollars less than they would under the current system.
As Federal Times reported last week, several federal employee groups had been fearing momentum was building on Capitol Hill to adopt the chained CPI. They oppose such a change, and say federal employees have already contributed $103 billion to deficit reduction over the next decade.
It’s no secret that printing on dead trees is a dying art — hello, declining newspaper industry! — but today’s Federal Register contained another reminder at how much the industry has changed. Blue-collar federal printers and lithographers in the Washington area have officially lost their special wage scale.
The Office of Personnel Management says the number of Washington-area printers and lithographers has plummeted in recent years — from 235 in 2004 to 24 this summer, spread across 10 agencies — and it no longer makes sense to offer them different wage rates. (Also, none of those 24 remaining printers or lithographers even benefit from the special wage scale anymore, further making it moot.) OPM said it expects the number of wage-scale printing and lithographic employees in the Washington area to continue to decline until there are none left. The wage scales being discontinued are the XS supervisory schedule printing employee, the XP nonsupervisory special schedule printing employee, and the XL leader special schedule printing employee.
It’s another sign of how the federal government has dramatically scaled back its once-massive printing operations over the last decade. As PDFs and iPads replaced paper Federal Register notices and reports, agencies such as the Government Printing Office have slashed their staffs and shifted much of their resources towards digital publishing.
Have you signed up for your health, dental and vision insurance for next year? If not, better act fast — today is the final day of the Federal Employees Health Benefits Program’s open season. The open season — your only window of opportunity to choose your health coverage — began Nov. 12 and ends Dec. 10.
So speak now or forever hold your … health care coverage that may not meet your needs in 2013.