Postal Service Health Benefits Program

Though situated within the broader FEHB Program, the PSHBP is a separate health benefit, with separate carriers, plans, and enrollment prerequisites. Critically different from FEHB, the PSHBP requires verifying the Medicare enrollment of PSHBP 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 PSHBP. To meet this requirement, OPM must routinely accept and integrate Medicare eligibility enrollment information and confirm PSHBP eligibility with a number of stakeholder agencies, 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 focused, committed, and excited about collaborating with these partner agencies to develop and manage a PSHBP that is the most advanced health insurance exchange available in the U.S. healthcare marketplace and which delivers better customer experience and significantly improved oversight. If successfully implemented, the PSHBP will see robust participation by health plans offering innovative, affordable, high-quality benefits, accurate and efficient enrollment and payment processing that generates savings by reducing premium payments for ineligible persons and 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 development of the PSHBP. OPM is utilizing this funding to aggressively pursue a host of implementation activities – from development of a minimally viable product (MVP) covering basic requirements for carrier contracts, eligibility determination, enrollment, and decision support to onboarding personnel needed for project and program management support to minimum updates to existing systems (including OPM’s financial management and retirement systems) to issuing regulations by April 2023 that were developed in collaboration with SSA, Centers for Medicare and Medicaid Services (CMS), Indian Health Service (IHS), Department of Veteran Affairs (VA), and USPS. OPM will also develop the financial configurations 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.

FY 2024, however, includes start-up and ongoing implementation costs: OPM and partnering agencies will be completing the work begun in FY 2023 while also preparing to implement the initial Open Season, which includes approving PSHBP plans, negotiating rates and benefits, and communicating with enrollees. During FY 2024, OPM will have expended the start-up funds provided in the PSRA and will need support from Congress through appropriations for ongoing implementation costs.

As such, in addition to existing funding, this FY 2024 budget request includes an additional $37.7 million to meet needs vital to the successful implementation of the program. This includes $28 million to support on-going operations and maintenance costs of implementation activities begun in FY 2023 and continuing in FY 2024 that were not otherwise provided for. Specific activities funded include personnel costs, outreach and communication, project management support, cyber security, licenses, Open Season contract supporting annuitants, and maintenance agreements for relevant OPM systems.

This $37.7 million FY 2024 budget request also includes $9.5 million to meet a surge in demand for customer support. Fully 100% of Postal employees and annuitants – all 1.7 million individuals – must change their health enrollment from an FEHB plan to a PSHB plan by January 2025. By contrast, a normal health benefits Open Season typically results in just 5-6% of enrollees making a change in enrollment – and that within a system they already have experience operating within. Change is often difficult, and we expect many Postal employees and annuitants will need extra advice and assistance to understand their choices and actions that must be taken. OPM anticipates a significant spike in demand for customer-facing services this first year and building the capability needed to deliver a good customer experience at scale, and at the outset, is essential to the effective implementation of the PSHBP. It also aligns with existing Administration priorities and the President’s Management Agenda’s focus on delivering an excellent customer experience.

If funded, OPM plans to meet this surge by standing up a full-service Customer Support Center (CSC) able to address the full suite of customer issues and seamlessly integrated with and complementing an online PSHB enrollment system. Example activities that the CSC will perform include effectuating enrollment changes made by telephone or mail, verifying documentation proving eligibility of family members and enrollees, answering Postal enrollee questions concerning the PSHBP, and reconciling enrollment and premium discrepancies. It will also include a call center to offer year-round, multi-lingual customer service staff to answer inquiries and provide enrollment assistance by phone, email, and live chat in the U.S. and internationally. OPM will deploy the CSC through a procurement, as this offers OPM the ability to appropriately scale staffing up or down during the initial Open Season as well in subsequent Open Season and non-Open Season periods, ensuring an excellent customer experience at all points while not paying for services that are not required. This PSHB system and customer support functionality will also assist OPM in addressing the accuracy of family member eligibility, an issue the GAO reported could cost the FEHB program (of which Postal employees and annuitants are currently enrolled) as much as $1B per year in improper payments.

In all upcoming activities, OPM will take an iterative and agile approach to the implementation of the PSHBP. As we continuously mature the PSHBP toward its January 2025 launch, we will mitigate risk by continuing to learn more about the requirements and interdependencies, especially with the partner agencies and industry, communicate our assumptions and plans, incorporate feedback from stakeholders, and update our information and cost estimates accordingly.

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