The Postal Service to Its Employees: Lots of Tricks But Few Treats

By Richard Thayer

Not too long ago postal employees all across the country were treated to a video-taped message by their illustrious leader, Postmaster General Patrick Donahoe.

Apparently the goal of his stirring presentation was to convince them why his plan for taking over their health benefits program would be far superior to the one they are currently enjoying.

According to Donahoe, “The whole idea and aim is to secure a strong financial future for the organization, the industry and for you as an employee.”

Although I wasn’t there for the video, I have been told he said this with a straight face.

While acknowledging that postal employees are generally satisfied with the Federal Employees’ Health Benefit Plan (FEHBP), Donahoe said, “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. By pulling this piece of our costs away from FEHBP, we’ll be able to save about $500-700 million a year.”

Mr. Donahoe and postal brass in Washington would like for us to believe that this will actually benefit its retired and active employees, not hurt us.

But before they can help us and make us more secure, they need to strip away those pesky collective bargaining rights. It seems the union contracts are a barrier to our having better health care. For example…

In a 2002 letter to then Postmaster General John Potter, the Government Accounting Office (GAO), in apparent response to the USPS providing its own health care plan to its employees, said: “An attempt by the USPS to terminate its participation in the Federal Employees Health Benefits Plan would be subject to statutory restraints. Unlike private sector employers, USPS is statutorily prohibited from making a variation, addition, or substitution with respect to fringe benefits if it would result in a program of fringe benefits that on the whole is less favorable to its officers and employees than fringe benefits in effect on July 1, 1971. Further, as to unionized officers and employees, no changes can be made except by collective bargaining agreement (Emphasis added).

In its white paper document issued earlier this year, “Workforce Optimization,” the Postal Service admits that breaking labor agreements and stripping employees of their bargaining rights is an “extraordinary request,” but in the same breath justifies its actions with, “However, exceptional circumstances require exceptional remedies.”

In other words, the end justifies the means. And, “We’re all out of ideas on how to make this work so this is our Hail Mary.”

If our currently dysfunctional Congress were to agree to the Postal Service’s request, it would result in 480,000 pensioners and 600,000 active employees being removed from the FEHBP and being placed in a new, improved, Postal Service administered program.

Says Donahoe: “If we take over our own plan, cover 1 million people, employees and retirees, the experts tell us you can cut your costs by somewhere between 8 to 10 percent.”

Donahoe did not expound on who these “experts” were. Perhaps they are Sean Hannity and Bill O’Reilly over at Fox News, the Heritage Foundation, Karl Rove or the Koch brothers. We don’t know; he didn’t say.

On the other hand, Walt Francis, is a bona-fide expert whose credentials include his being a health economist and primary author of Checkbook’s annual “Guide to Health Plans for Federal Employees,” says Donahoe’s pontifications about his plan being superior to the FEHBP is “nonsense.” Francis notes that a health plan administered by the powers-that-be in Washington would be “less competent and less efficient than OPM, by far, in trying to run their own insurance program.” He adds: “Anything they propose to do, if it will help them financially, will necessarily involve reducing benefits, reducing their share of premiums or playing some financial game like stripping reserves.”

Ron Ashkenas, managing partner of Schaffer Consulting, agrees with those observations. He says, “If you were an investor wouldn’t you want to look at the track record of the management team asking for money? The Postal Service has been notoriously slow in developing alternative business models, has allowed competitors to capture lucrative parts of its market, and has generally relied on pricing increases and service cuts to survive.”

Very perceptive.

All of the postal unions have weighed in on Donahoe’s master plan for the Postal Service, but my favorite quote comes from the president of the APWU, Cliff Guffey, who said of it: “I am at a loss for adjectives sufficient to the task of describing these actions by the postal service. Several that come close are outrageous, illegal and despicable.”

Resources for further reading:
“Would a USPS Health-Care Plan Really Work?”
“Postal Unions, Postal Service Collide Over Layoff Scheme, Health Care Cuts.”
“Government Health Care: Like the Postal Service?”
“Postal Service Proposes Cutting 120,000 Jobs, Pulling Out of Health-Care Plan.”
“Postal Service Health-Plan Move Criticized.”
“PMG Video To Employees Discusses Proposal to Move Away From Current Health Care Plan.”

Photo: Nocturnica


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