PMG on USPS-Sponsored Health Benefits

In his latest “State of the Business” video to employees, PMG Pat Donahoe says the proposal to move away from the current Federal Employee Health Benefits Plan (FEHBP) to a USPS-sponsored benefit is a vital element of a more sustainable business model.

Donahoe says his all ties into the larger picture of what has been talked about over the last several months regarding legislative change, making changes in the Postal Service’s retail, delivery and processing networks, and growing the business to get it on the path to profitability. The whole idea and aim, he says, is to secure a strong financial future for the organization, the industry and employees.

Donahoe acknowledged that employees are used to the FEHBP and having comfort in knowing they’re part of a large plan. But that doesn’t mean it’s the best plan or the plan that offers the best flexibility for you or the Postal Service as a business he says. “By pulling this piece of costs away from the FEHBP, we’d be able to save about $500-700 million a year.”

The PMG said this proposal is the same business model followed by other large companies like General Electric and IBM with big employee bases. Those companies leverage their size to get the lowest cost and best value for their employees. Donahoe says this is the model USPS wants to follow.

He says although everyone has been taking great steps to reduce the organization’s costs, the health care cost is one USPS is unable to address in its current model. The business model needs to be changed to maximize the benefit to employees and to the Postal Service he says.

The Postal Service’s proposal will require congressional approval. It will allow USPS to establish its own health benefits program.