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Postal Service Health Benefits (PSHB) Program

The Postal Service Reform Act of 2022 (PSRA, Pub. L. 117-108) requires OPM to establish and administer the PSHB Program, a new health benefits program for approximately 1.9 million United States Postal Service (USPS) employees, annuitants, and their eligible family members that will replace their Federal Employees Health Benefits (FEHB) Program coverage. The PSRA mandates that the PSHB Program begin coverage starting in January 2025.

Though situated within the broader FEHB Program, the PSHB Program is a separate health insurance benefit, with separate carrier contracts, plan options, and enrollment prerequisites. Critically different from FEHB, the PSHB Program requires stronger coordination with Medicare and verifying the Medicare enrollment eligible of PSHB Program enrollees. For example, if a postal annuitant who is required to be enrolled in Medicare Part B is not enrolled or disenrolls, they are no longer eligible to be enrolled in the PSHB Program. To meet this requirement, OPM must routinely accept and integrate Medicare eligibility information for enrollees and confirm PSHB Program eligibility (including exceptions to the Medicare Part B requirement) with a number of stakeholder agencies, including exchanging data with the Social Security Administration (SSA), Department of Veterans Affairs (VA), Department of Labor Office of Workers Compensation (DOL), OPM Retirement Services (RS), and, of course, USPS. This integration is unique among employer-based health insurance programs.

OPM remains committed to collaborating with these partner agencies to develop and manage a PSHB Program that is the most advanced health insurance exchange available in the U.S. healthcare marketplace and delivers better customer experience and significantly improved oversight. When successfully implemented, the PSHB Program will see:

  • robust participation by health plans offering innovative, affordable, high-quality benefits;
  • accurate and efficient enrollment and payment processing that generates savings by removing ineligible persons and addressing other enrollment discrepancies; and,
  • superior enrollee satisfaction with the health benefits selection process and their chosen health plan.

The PSRA appropriated $70.5 million in no-year funds to OPM for start-up costs associated with the PSHB Program implementation. Using a minimum viable product (MVP) strategy and agile delivery, the start-up costs include development and deployment of new systems which centralize enrollment and eligibility determination, significantly improve tools enabling enrollee plan selection decision-making, and automate numerous processes (previously entirely manual and paper-driven) with the carriers, and integrate current systems with the new ones including those supporting Retirement Services and those processing financial obligations. In addition to technology, the implementation funding addressed program management and oversight requirements, along with FTEs that support both the implementation and administration of a new benefits program. Further, funding addressed requirements development of financial system configurations needed for the Employees Health Benefits Fund and Postal Service Retiree Health Benefits Fund to separately account for the new PSHB Program within the Employees Health Benefits Fund. OPM has sought additional appropriations for FY 2024 to support the continuation of the development of the PSHB Program and the launch of the initial plan year. Specific activities included: hiring dedicated personnel; funding outreach and communications, ongoing project management support, cyber security expenses, licenses, and the Open Season contract supporting annuitants; and, covering maintenance agreement costs for relevant OPM systems.

This FY 2025 budget continues the appropriation increase from 2024, and requests to include the resources to operate the PSHB Program within OPM’s limitation on Trust Fund Transfers instead of our Salaries and Expenses appropriation. The budget also includes a legislative proposal to finance the continued operation of eligibility determination and enrollment systems critical to the PSHB Program in FY 2026 and beyond via mandatory authority within dollar limits defined in the proposal. The surety of mandatory authority provides for system refinements and potential expansion to the entire FEHB Program.

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