The Postal Service Reform Act was signed into law on April 6, 2022.
The bill had bipartisan support, passing in the House with a vote of 342-92 and in the Senate with a vote of 79-19. The National Association of Letter Carriers, another key representative of postal employees, has also praised the bill.
How Postal Service Reform Act Gained Support of NARFE
An earlier version of the bill was causing concern among federal employee advocates. The later version modified some of the provisions necessary to gain support. In a press release issued on February 4, NARFE wrote:
The Postal Service provides essential communication and transportation infrastructure for our national economy. Yet it has faced more than a decade of financial challenges, including from the overly burdensome mandate to prefund future postal retiree health benefits, a requirement NARFE has long called to repeal.
Rather than protecting health benefits, the requirement has threatened them by undermining the financial stability of the Postal Service, leading to cost-reduction measures targeting those benefits, as well as limiting innovation and improvements, resulting in a steady decline in service standards and erosion of public trust.
Change in USPS Prefunding of Retirees’ Health Benefits
One major change that was of concern to agency advocates was a requirement of the USPS to pre-fund retiree health benefits for Postal Service (USPS) employees. That requirement has now been eliminated.
But, as some in Congress have noted and as highlighted by Florida Senator Rick Scott: “This bill doesn’t reduce costs — it just shifts them from one unfunded government program to another unfunded government program.”
That change makes the agency happy and also makes agency advocates feel better but it does not solve the issue of funding for retirement. That will still have to be paid by the federal government.
Senator Scott was also concerned about the impact of the bill on the government’s Medicare program which is already under financial stress.
Other Changes in Postal Service Reform Act
Other changes for the Postal Service in the new law include:
- It would require USPS employees to enroll in Medicare when they turn 65. Currently, about one-fourth of agency employees do not enroll in Medicare. This change would purportedly save about $22.6 billion over 10 years.
- The bill requires the Office of Personnel Management (OPM) to establish the Postal Service Health Benefits Program within the Federal Employees Health Benefits Program under which OPM may contract with carriers to offer health benefits plans for USPS employees and retirees.
- The bill would make delivery of mail six days a week a permanent service provided by the agency.
The exceptions to this requirement are for “weeks that include a Federal holiday, in emergency situations, such as natural disasters, or in geographic areas where the Postal Service has established a policy of delivering mail fewer than six days a week as of the date of enactment of the Postal Service Reform Act of 2022.“
- The Postal Service would be authorized to work with State governments, local governments, or tribal governments to provide services such as licenses for fishing, hunting, and drivers’ licenses and to provide “property or nonpostal services to the public on behalf of such agencies for non-commercial purposes…” with some restrictions.
An item of concern to many was the efficiency of the long-suffering federal agency. One item addressing this issue in the bill requires the Postal Service to develop and maintain a publicly available dashboard for tracking service performance and to report on its operations and financial condition.
Additionally, the Postal Regulatory Commission must annually submit to the USPS a budget of its expenses. It would also be required to conduct a study to identify the causes and effects of postal inefficiencies relating to items such as large envelopes.