Postal Service Reform Act; Establishment of the Postal Service Health Benefits Program rule (2024)

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The Postal Service Reform Act; Establishment of the Postal Service Health Benefits Program rule is a significant rule issued by the Office of Personnel Management (OPM) effective July 5, 2024, that established the Postal Service Health Benefits Program for employees, their beneficiaries, and annuitants. OPM issued this rule pursuant to its authority under the Postal Service Reform Act of 2022.[1]

HIGHLIGHTS
  • Name: Postal Service Reform Act; Establishment of the Postal Service Health Benefits Program
  • Code of Federal Regulations: 5 CFR 890, 48 CFR 1602, and 48 CFR 1609
  • Action: Final rule
  • Type of significant rule: Economically significant rule

    • Timeline

    The following timeline details key rulemaking activity:

    Background

    The Postal Service Reform Act of 2022 required the Office of Personnel Management (OPM) to implement health benefits for Postal Service employees and their beneficiaries under the Postal Service Health Benefits Program, according to the text of the act.[1]

    OPM issued an interim final rule in April 2023 with request for comment to implement the program. OPM issued the Postal Service Reform Act; Establishment of the Postal Service Health Benefits Program final rule to codify the interim final rule with minimal changes.[1]

    Summary of the rule

    The following is a summary of the rule from the rule's entry in the Federal Register:[1]

    “ This rule finalizes an interim final rule that established the Postal Service Health Benefits (PSHB) Program for Postal Service employees, Postal Service annuitants, and their eligible family members, pursuant to the Postal Service Reform Act of 2022. This Program will include health benefits plans available to United States Postal Service (Postal Service) employees, Postal Service annuitants, and their eligible family members starting January 1, 2025. For these individuals, eligibility for enrollment or coverage in FEHB plans based on Postal Service employment will end on December 31, 2024, and they will be able to enroll in or be covered only by PSHB plans after that time. Open Season for enrollee selection of PSHB plans will occur from November 11 through December 9, 2024. OPM will publish the negotiated PSHB plan rates and benefits for the 2025 plan year in September 2024. This rule adopts the provisions of the interim final rule with minor clarifications on the Office of Personnel Management's (OPM) implementation of the PSHB Program.[2] ”

    Summary of provisions

    The following is a summary of the provisions from the rule's entry in the Federal Register:[1]

    “

    The PSHB Program includes health benefits plans available to Postal Service employees, Postal Service annuitants, and their eligible family members starting January 1, 2025. For these individuals, eligibility for enrollment or coverage in FEHB plans based on Postal Service employment will end after December 31, 2024, and they will be able to enroll in or be covered only by PSHB plans starting January 1, 2025. Subject to limited exceptions, Postal Service annuitants who retire and become entitled to Medicare Part A after January 1, 2025, and their family members who are entitled to Medicare Part A will be required to enroll in Medicare Part B as a condition of eligibility to enroll in the PSHB Program.

    The exceptions to the Medicare Part B enrollment requirement for PSHB enrollment described at § 890.1604 are:

    • Individuals who are Postal Service annuitants on or before January 1, 2025, and who are not both entitled to Medicare Part A and enrolled in Medicare Part B on January 1, 2025;
    • Individuals who, on January 1, 2025, are Postal Service employees and are aged 64 and over;
    • Postal Service annuitants and family members residing outside the United States and its territories who demonstrate their residency;

    Postal Service annuitants and their family members enrolled in certain Department of Veterans Affairs (VA) health care benefits. This exemption is derived from 5 U.S.C. 8903c(e)(3)(A)(iv)(II), which refers to individuals 'enrolled in health care benefits provided by the VA under subchapter II of chapter 17 of title 38, United States Code.' Subchapter II of chapter 17 of title 38, U.S.C. governs who is eligible for various VA health care benefits, including eligibility for VA hospital care and medical services. There is a limited class of veterans who are not required to enroll in the system of patient enrollment referred to in 38 U.S.C. 1705(a) in order to receive VA benefits described in subchapter II of chapter 17 of title 38, United States Code. As such, this regulation is drafted to include all veterans described in 38 U.S.C. 1710, including those who are not required to enroll in the VA's system of patient enrollment referred to in 38 U.S.C. 1705(a);

    • Postal Service annuitants and family members eligible for health services provided by the Indian Health Service; and
    • A family member of a Postal Service annuitant who is not required to enroll in Medicare Part B, based on a statutory exception, in order to be eligible for PSHB coverage.

    OPM will contract with carriers to offer two categories of health benefits plans through the broad umbrella of the FEHB Program, established under 5 U.S.C. 8901 et seq. OPM's authority to contract for FEHB plans and OPM's authority to contract for PSHB plans are in separate parts of the FEHB statute. First, pursuant to 5 U.S.C. 8902, OPM may contract with carriers to offer FEHB plans. Second, pursuant to 5 U.S.C. 8903c, OPM may now contract with carriers to offer PSHB plans through the PSHB Program within the FEHB Program. The broad umbrella of the FEHB Program comprises both FEHB plans and PSHB plans. OPM started the process of approving carrier participation in the PSHB Program when the interim final rule became effective on June 5, 2023.[2]

    		”

    Significant impact

    See also: Significant regulatory action

    Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.

    Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]


    The text of the Postal Service Reform Act; Establishment of the Postal Service Health Benefits Program rule states that OMB deemed this rule a section 3(f)(1) rule according to E.O. 12866 as amended by E.O 14094:

    “ The Office of Management and Budget has determined that this rule is a 'significant regulatory action' under section 3(f)(1) of Executive Order 12866, as amended by Executive Order 14094.[2] ”

    Text of the rule

    The full text of the rule is available below:[1]

    See also

    External links

    Footnotes

    1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 Federal Register, "Postal Service Reform Act; Establishment of the Postal Service Health Benefits Program," May 23, 2024
    2. ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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