July 28, 2023 • 24 mins
NALC President Brian L. Renfroe welcomes you back to the podcast, provides an update on collective bargaining, discusses Medicare integration, and more. Have questions you'd like answered on the podcast? Email social@nalc.org.
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Episode Transcript
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(00:06):
Welcome to the "You Are The Current
Resident" podcast, the official podcast ofthe National Association of Letter
Carriers, a union that represents 280,000active and retired city letter carriers
employed by the UnitedStates Postal Service.
My name is Brian Renfroe andI'm the president of NALC.
Today I'm alone for this episode, but inthe future, we plan to have a consistent
(00:27):
co-host and also some guests, and we'lltalk a little more about that at the end.
First, I want to welcome youall back to the podcast.
This is something we started back in 2019,and as we all know, the Pandemic hit in
2020 in March, and it transformed into aCOVID-related podcast.
If those of you that were letter carriersback around that time will remember a lot
(00:49):
of the uncertainty that was there from dayto day, and we used the podcast at that
time as a platform to getout information to you.
And we're happy now, even though it's been
a few years to be back and intend onproducing this podcast on a regular basis
to keep everyone informedof what's going on.
Before I get into the meat of what we want
to discuss today, I first want to remindyou that our monthly magazine, the Postal
(01:12):
Record, we have audio versions of allthe articles and officers columns there.
You can find those by going to any podcastprovider and just search for NALC Postal
Record, and that'll makeit easier for you to find.
And going forward, we plan to startputting those audio versions in the feed
where you found this podcast so you'll beable to access everything that comes
(01:33):
officially from NALC at thenational level in one podcast feed.
To start with though, Iwant to talk a little news.
What's at top-of-mind for me, and I'm sure
our members that are listening,are collective bargaining.
That's a process that we began officiallyback in February, and it continues as
we're here in the middletowards the end of July.
Just an update on the timeframe of what's going on.
(01:55):
Our contract expired in May.
By law, there is a 60-day mediation periodthat follows that negotiation period.
That period ended on July the 19th.
We use that period to continuenegotiations, and I can tell you from our
perspective and share with you that fromour counterparts, the Postal Service,
(02:15):
their negotiators, from their perspective,we both feel like we still have very good
prospects for reachinga tentative agreement.
So we've continued to negotiate.
We will continue to negotiate even as we
begin to move into thenext step of the process.
The next step of the process, in the eventwe are not able to reach an agreement,
would be an interestarbitration proceeding.
(02:37):
And the first step there is for us to
select a neutral arbitrator that wouldchair a three-person panel that would set
the terms of our next collectivebargaining agreement.
That three-person panel is made up of an
arbitrator appointed by the union, anarbitrator appointed by the Postal Service
and then a neutral arbitratorthat we will jointly select.
So we have not gotten to the pointof selecting an arbitrator yet.
(03:01):
If we still do not have an agreement here
in the reasonably near future, that'llbe the step that we move towards.
So once we select that arbitrator, we
would then begin scheduling thehearings that would take place.
Our preparation, speaking just internalfor the union for interest arbitration is
something that's been ongoing formonths and months and months.
We're in a very good position in the event
(03:22):
we end up having to go that directionto set the terms of our agreement.
We feel really good about thepreparation that's been done.
However, even as we go through thatprocess, as long as the prospects remain
where we believe we have a good chance toreach a tentative agreement, we will
remain at the bargaining table as long asit takes to eventually achieve an
agreement that we believe rewards lettercarriers for our contribution for the
(03:46):
Postal Service and is worthy of sendingout to our members for ratification.
For future updates, just keep an eye on
the website, certainly in your PostalRecord, the NALC bulletin that you see in
your stations and definitely inthe future on this podcast feed.
So today the main topic I want to cover is
something that we get a number ofquestions about and it has to do with the
(04:08):
landmark Postal Reform Act that was signedinto law by President Biden last spring.
And there's one specific section of that
law that makes some significant changesthat are beneficial not just to the Postal
Service but also to us, and that ischanges that integrate Medicare at a
higher percentage for postalretirees in their health care.
(04:30):
But before we get into the specifics on
that, I just want to quickly recap thisbill and the three main things that it
accomplished that are really beneficiallong term to the Postal Service and
therefore to the union and to lettercarriers that work for the Postal Service.
Those three main changes are as follows.
Number one, this legislation made six daydelivery a permanent part of the law.
(04:52):
So until this bill passed since 1983 on ayearly basis, we have had to fight to
maintain that six daymandate for mail delivery.
That is no longer the case.
That is now a permanent part of the law.
Number two is this repealed a 2006 mandate
for the Postal Service to prefund healthbenefits for retirees decades in advance.
(05:15):
This is a result of a 2006 bill called the
Postal Accountability and Enhancement Actwhere the Postal Service was required to
pay anywhere in the neighborhood of fiveto $6 billion a year for health benefits
for, in some cases, people that are noteven born yet many decades in advance.
This is a mandate that no other governmentagency, no other private company has.
(05:39):
And as we look back over the last, now12-13 years, it's still responsible for
the vast majority of money thatthe Postal Service has lost.
So that mandate is now goneas a result of this bill.
And the third thing it did is what Imentioned earlier is that it integrated
Medicare with postal retirees and theirhealth care at a much higher percentage.
(06:00):
And we'll get into the specifics of that
and most importantly, what that will meanfor every active and retired postal
employee as we move into 2024 and wehave this legislation implemented.
First, we will want to educate you here,
but this will not be the lasttime you hear about this.
You will read about it.
(06:21):
You will get things inthe mail from the union.
You'll hear stuff from the Postal Service.
We will do everything in ourpower to educate our members.
But I think it's important that we beginwith a basic understanding of what's going
to take place, how that will affecteveryone in the action, maybe most
importantly that will be required of everyactive postal employee here in the future.
(06:43):
So to understand Medicare integration,
let's first be sure that we allunderstand what Medicare is.
So Medicare is a system that the
government provides, thatprovides healthcare.
Every employee, including all the lettercarriers listening to this podcast, with
every paycheck you've ever gotten, you'vecontributed money into the Medicare system
(07:04):
and it's available foryou when you retire.
And for the purposes of the conversationwe're going to have today, we're going to
talk about three differentparts of Medicare.
The first is Medicare Part A.
Medicare Part A covers hospitalizations.
There is no premium for Medicare Part A
once you become eligible, and thatis when you are age 65 and retired.
(07:28):
Both of those things have to be true.
More about that in a minute.
The second is Medicare Part B.
This covers medical expenses,doctor visits and things like that.
There is currently a monthly premium.
I think that premium is in the
neighborhood of a littleover $170 a month currently.
And the third piece that we'll talk about
in the end is Medicare Part D, whichdeals with prescription drugs.
(07:52):
So the first question is what is thepercentage of folks that utilize Medicare?
And 80% of people do whatI'm about to explain.
80% of postal retirees, when they retire
and they're age 65, they choose toenroll in Medicare Part A and Part B.
The result there is they pay their premium
(08:14):
for their health insurance plan and thefederal program, hopefully the NALC plan
because it's the best one, andthey also pay for Medicare Part B.
That $170 or so a month.
The result is they then have noout-of-pocket medical expenses.
Medicare becomes your primary payer.
They pay their benefits, whatever is left,your health insurance plan picks up and
(08:37):
you have no out-of-pocket expenses foryour medical care or hospitalization.
And 80% of postal retireesalready do that, but 20% do not.
And remember, 100% of us have paidinto this system our entire career.
So what this legislation accomplishesis how to increase that percentage.
(08:58):
Because if you increase that percentage,
you are shifting cost from the federalhealth insurance programs into the
Medicare system that once again, wealready paid into, which will result in a
positive impact on the premiums that arepaid both by the Postal Service and by the
retired, in our case,retired letter carrier.
So when you're retired, your premium foryour health insurance, 72% of it's paid by
(09:22):
the Postal Service, 28% of it ispaid by you, the postal retiree.
So a positive impact on those premiumsbenefits the Postal Service financially,
long term, as well as us, andthe premiums that we pay.
How are we going toincrease that percentage?
This is what the law does, and this isgoing to require action of some folks.
So it's important that wegain that understanding.
(09:43):
And for the purpose of this conversation,you will fall into one of two groups.
So I want to be sure that if you'relistening, you understand what group
you're in because that's a very importantpiece of what you'll be required to do,
how you're impacted oryou're not impacted.
If you're in what we'll call group one, f
or the purpose of this conversation, youare someone that on January 1, 2025,
(10:09):
you are either retired, regardless of yourage, or you are still active working for
the Postal Service andyou are age 64 or older.
Again, on January 1, 2025, if you are
either retired, no matter your age, or youare active, still working for the Postal
(10:31):
Service, but you are age 64 or older,you will fall into group number one.
Group number two is those that are active,still working for the Postal Service, and
on January 1, 2025, theyare under the age of 64.
So if on January 1, 2025, you are active,
(10:53):
working for the Postal Service and you areunder the age of 64, you fall into group
two, which also is everyonethat is not in group one.
First, let's start with groupone and what the impact is.
If you're in group one, there isno mandate that you do anything.
So you do not have to enroll in anythingyou've not currently chose to enroll in,
(11:16):
but you will have an opportunity for someof you that will allow you to enroll.
So the Medicare system is set up so that
when you become eligible and that's whenyou are both age 65 and retired, you have
a period of time where you can enrollin Medicare Parts A and Part B.
If you choose not to enroll, then with
(11:37):
every year that passes, there is a 10%penalty on your premium that you pay.
So let me just give an example that'llillustrate this and hopefully illustrate
the opportunity that'll be therefor a certain group of people.
Let's say you retire when you're 64.
You turn 65.
You're now eligible forMedicare Parts A and Part B.
(11:58):
Maybe you're someone that's pretty healthy
and you don't incur alot of medical costs.
So you choose not to enroll and not pay
that roughly $170 a monthpremium for Medicare Part B.
Now let's fast forward ten years.
You're now 75 years old.
You begin to have more healthissues, need to see more doctors.
(12:19):
You incur more medical expenses, and you
at that point probably wish you hadenrolled in Medicare parts A and part B.
But due to there being that 10% penaltyevery year, it becomes unaffordable for
you because in that case, 10%a year for ten years is 100%.
So your premium would be double what it
otherwise would be, and that's a sizablepercentage of that 20% of folks that do
(12:43):
not or have not chosen to enrollin Medicare parts A and part B.
What this legislation will do is in thespring of 2024, there will be a special
open season for those folks that areretired and they are 65 or older, and they
have not enrolled inMedicare part A and part B.
(13:04):
They will be given anopportunity to enroll.
They will also be able to not just enroll,
but enroll and not haveto pay that 10% penalty.
The Postal Service will pay thatpenalty for the rest of your life.
And the reason for that is it's cheaper
for the Postal Service to pay that penaltyand then get the benefits of having the
(13:26):
higher percentage of folks in Medicareparts A and part B because of the impact
it has on premiums, asI mentioned earlier.
So there'll be more information aboutspecific dates as we get closer.
But if you're someone that is in thatgroup where you are over 65, you're
retired, you've not enrolled in Medicare,you will have an opportunity during a
(13:47):
special open season next spring in 2024where you can enroll, pay your 170 or so
dollar a month premium, and thePostal Service will pay that penalty.
That'll be a one-time opportunity.
If you're in that circumstance, then I
encourage you to do your research and beprepared when that time comes and we'll be
(14:08):
sure again and get a lotof information out to you.
Now let's move to group two and whatthe bill requires of group two.
So if you were in group two, which onceagain is people that on January 1, 2025,
you are still active working for thePostal Service and you're under age 64,
when you retire and you are age 65, bothof those things have to be true, you will
(14:33):
be required to get Medicare part Band part A (but why wouldn't you?
It has no premium) to maintain your
coverage in theFederal Employee Health Benefits Program.
Going forward, everyone that when they
reach age 65, if you're in group two andyou're retired, there will be a
requirement for you to enroll in Medicareparts a and part b to maintain your
(14:56):
federal health insurancecoverage in retirement.
However, there are twoexceptions to that rule.
Exception number one is if you live in alocation where there are no Medicare
providers, you will notbe required to enroll.
So for example, if you live in anothercountry where there's no Medicare
providers, there will be a process whereyou can be exempted from that requirement.
(15:17):
It's just a simple concept of it doesn't
make sense to make people payfor something they can't use.
The other exception are people that get
their health insurancefrom another source.
Most commonly what we will see,
particularly with letter carriers, arethese are people that receive healthcare
with something connectedto military service.
(15:37):
So there'll be a lot ofinteraction there with the VA.
And then there are certainly those that
through their significant otherhave health insurance provided.
So those are the two exceptions.
If you live somewhere with no Medicare
provider or if you get your healthinsurance from another source, you will
not be required to enroll in Medicare partB in order to maintain your coverage.
(15:59):
So let's talk about themechanics of how this will work.
And the way this will result in thesavings is that for plan year 2025, that's
the year that will start at the beginningof January, that open season that happens
in the fall of 2024, you would beenrolling or switching plans, whatever the
case may be, for the coveragethat you'll have in 2025.
(16:22):
The plans that are in the Federal Employee
Health Benefits Program, including theNALC high option plan,
each of those plans will create identicalplans that will be in a new Postal Service
health benefits program that will fallunder the umbrella of the
(16:43):
Federal Employee Health Benefits Program,but it'll be a subset within that program.
The plans will be the same in terms of thebenefits, but by separating them, what we
have is a set of plans wherepostal folks only are enrolled.
These are people that will be requiredto enroll in Medicare part b.
So Medicare compared to the rest of the
(17:05):
federal government, the federal employeesthat are enrolled in the other plans,
Medicare will take on a higher percentageof the cost, which should result in
positive impacts on premiums there, whichas I said in the beginning here benefits
not just the Postal Service, but alsobenefits us in terms of controlling the
cost of those premiums as we go forward,since we share the cost with them.
(17:28):
And then once that's done and that'll be
done to be effective in 2025, duringnormal open season in the fall of 2024,
every active and required postal employeewill be required to switch from a plan in
theFederal Employee Health Benefits Program
to one of the plans in the newPostal Service health benefit program.
(17:51):
That is a subset underthat federal umbrella.
For example, if you have the NALChigh option plan (which if you don't, I
highly recommend you do; it's the bestcoverage for the best cost among all the
federal plans) you would simply then,during that open season, you would just
switch to the NALC high optionplan in the postal subset.
(18:13):
The benefits will be the same as the one
for the federal employees,at least initially.
We could potentially down the road seesome improvements in benefits because
we're paying premiums that are lower andgetting more value and that type thing.
But initially the plans will be identical
and then in 2024 you'llbe required to swap over.
So a natural question is out of thehundreds of thousands, if not over a
(18:36):
million, postal employees that are bothactive and retired, I suspect there will
be someone that will not switch over toa plan next fall during open season.
That is one of the issues that is ongoingand we're having conversations frequently
with the Postal Service, with the folksfrom the Office of Personnel Management
that will administer this to ensure thatif someone doesn't make the switch, that
(18:59):
they will be enrolled inthe appropriate plan.
So you can look for moreinformation to come on that.
The end result of all of this is that for
the Postal Service long term it results intens of billions of dollars in savings in
retiree health cost which is afinancial benefit to the service.
It's a benefit to the job security of
(19:21):
letter carriers and other postal employeesand it's definitely a benefit in the long
term to the financial stability of thePostal Service which directly relates to
the service that we provideto all of our customers.
And that's about half thesavings in this bill.
The other half is something that you willnot be required to do anything but still
involves Medicare and that is theinclusion of the Postal Service through
(19:45):
Medicare Part D in something calledan employer group waiver plan.
And I won't go too in depth about this
because again, it's not something thatrequires any action by any of our members
but basically it includes the PostalService and the related health plans in a
program that was designed to allowinsurance companies that integrate
(20:08):
Medicare to negotiate betterprescription drug prices.
We will be in a position, the Postal
Service has been exempted from thissince sometime in the mid 2000s.
This will be an opportunity to bettercontrol the price of prescription drugs
and that'll also result insavings in some premiums.
So once again, this is not the lasttime you will hear about this.
(20:29):
We will do mailings that will be specific
to the circumstances ofa lot of our members.
We'll have this through allof our in the magazine.
We'll have this on our website as we getcloser to next year, you'll hear it
through, I would expect we do, anotherpodcast on it when we get closer.
So you'll kind of have to be livingunder a rock not to know about this.
(20:50):
The education is important.
And we just thought that as I travel
around the country and see our members atdifferent types of training and
conventions and those kinds of things,this is something I always cover to give
the leadership and our branches and ourstate associations the knowledge they need
to answer some of the initialquestions that come up from members.
If you come up with any questions about
(21:11):
this in just a minute, I'm going to tellyou about our plans for future segments
and part of that will be aquestion and answer opportunity.
So you'll have the opportunity to ask any
questions that you want and we'lldo our best to answer them here.
Speaking of future episodes, just to letyou in a little bit on what we plan to do,
I mentioned earlier thatwe'll have some other voices.
(21:33):
You won't just hear me all the time.
We'll have guest co-host and likely some
of our officers and staff here in thebuilding and even some guests, maybe from
outside the NALC and the largerlabor movement or who knows?
But we'll try to mix up a variety ofcontent and the voices that you hear to
keep it fresh and entertainingfor you in the near future.
(21:55):
We'll cover some really importanttopics that are happening right now.
Two of those, particularly this summer,
are heat safety, which has been somethingthat we've dealt with for a number of
years, but increasingly dangerous hazardfor us out there on the street, and then
what we're working on here toprevent crime that's taken place.
(22:17):
We've seen a pretty dramatic increase in
the number of attacks on letter carriersand robberies and violent crime.
And unfortunately, due to both of these,
we've had members that have lost theirlives and heartbreaking, it's just
appalling every time it happens and it's aproblem where we've got to take advantage
of every avenue and opportunitywe have to address it.
(22:38):
So in future episodes, in the very nearfuture, we'll get to some of those issues.
And then of course, there's a variety ofcontractual issues related to our
collective borrowing agreement and thework that you as letter carriers do every
day that seems to be prettyconstantly changing.
And there's a ton of those issues outthere that over time we'll get into.
(23:00):
Thanks so much for listening.
We're happy to be back with the YouAre the Current Resident podcast.
Again, this is the official podcast of theNational Association of Letter Carriers.
If you would please subscribeso you don't miss an episode.
And we would appreciate it if you sharewith your NALC brothers and sisters and
the letter carriers thatyou work with every day.
(23:21):
We do intend to have a question and answer
segment where I'll be happy to answersome questions from NALC members.
So if you have questions about what we
talked about today or really anythingelse, feel free to email us.
You can email us at social@nalc.org.
That is social@nalc.org. You can followNALC on our official social media accounts
(23:45):
on Facebook, Twitter, Instagramand we are new to threads.
You can find links to all of those inthe episode description of this podcast.
And if you'd like, youcan follow me on Twitter.
I am at Brianrenrenfro 19.
So once again, if you have questions tosubmit or any other kind of feedback,
please email us at social@nalc.org.Thanks again for listening.
(24:10):
We will talk to you sooner.
Welcome to the "You Are The Current
Resident" podcast, the official podcast ofthe National Association of Letter
Carriers, a union that represents 280,000active and retired city letter carriers
employed by the UnitedStates Postal Service.
My name is Brian Renfroe andI'm the president of NALC.
Today I'm alone for this episode, but inthe future, we plan to have a consistent
(00:27):
co-host and also some guests, and we'lltalk a little more about that at the end.
First, I want to welcome youall back to the podcast.
This is something we started back in 2019,and as we all know, the Pandemic hit in
2020 in March, and it transformed into aCOVID-related podcast.
If those of you that were letter carriersback around that time will remember a lot
(00:49):
of the uncertainty that was there from dayto day, and we used the podcast at that
time as a platform to getout information to you.
And we're happy now, even though it's been
a few years to be back and intend onproducing this podcast on a regular basis
to keep everyone informedof what's going on.
Before I get into the meat of what we want
to discuss today, I first want to remindyou that our monthly magazine, the Postal
(01:12):
Record, we have audio versions of allthe articles and officers columns there.
You can find those by going to any podcastprovider and just search for NALC Postal
Record, and that'll makeit easier for you to find.
And going forward, we plan to startputting those audio versions in the feed
where you found this podcast so you'll beable to access everything that comes
(01:33):
officially from NALC at thenational level in one podcast feed.
To start with though, Iwant to talk a little news.
What's at top-of-mind for me, and I'm sure
our members that are listening,are collective bargaining.
That's a process that we began officiallyback in February, and it continues as
we're here in the middletowards the end of July.
Just an update on the timeframe of what's going on.
(01:55):
Our contract expired in May.
By law, there is a 60-day mediation periodthat follows that negotiation period.
That period ended on July the 19th.
We use that period to continuenegotiations, and I can tell you from our
perspective and share with you that fromour counterparts, the Postal Service,
(02:15):
their negotiators, from their perspective,we both feel like we still have very good
prospects for reachinga tentative agreement.
So we've continued to negotiate.
We will continue to negotiate even as we
begin to move into thenext step of the process.
The next step of the process, in the eventwe are not able to reach an agreement,
would be an interestarbitration proceeding.
(02:37):
And the first step there is for us to
select a neutral arbitrator that wouldchair a three-person panel that would set
the terms of our next collectivebargaining agreement.
That three-person panel is made up of an
arbitrator appointed by the union, anarbitrator appointed by the Postal Service
and then a neutral arbitratorthat we will jointly select.
So we have not gotten to the pointof selecting an arbitrator yet.
(03:01):
If we still do not have an agreement here
in the reasonably near future, that'llbe the step that we move towards.
So once we select that arbitrator, we
would then begin scheduling thehearings that would take place.
Our preparation, speaking just internalfor the union for interest arbitration is
something that's been ongoing formonths and months and months.
We're in a very good position in the event
(03:22):
we end up having to go that directionto set the terms of our agreement.
We feel really good about thepreparation that's been done.
However, even as we go through thatprocess, as long as the prospects remain
where we believe we have a good chance toreach a tentative agreement, we will
remain at the bargaining table as long asit takes to eventually achieve an
agreement that we believe rewards lettercarriers for our contribution for the
(03:46):
Postal Service and is worthy of sendingout to our members for ratification.
For future updates, just keep an eye on
the website, certainly in your PostalRecord, the NALC bulletin that you see in
your stations and definitely inthe future on this podcast feed.
So today the main topic I want to cover is
something that we get a number ofquestions about and it has to do with the
(04:08):
landmark Postal Reform Act that was signedinto law by President Biden last spring.
And there's one specific section of that
law that makes some significant changesthat are beneficial not just to the Postal
Service but also to us, and that ischanges that integrate Medicare at a
higher percentage for postalretirees in their health care.
(04:30):
But before we get into the specifics on
that, I just want to quickly recap thisbill and the three main things that it
accomplished that are really beneficiallong term to the Postal Service and
therefore to the union and to lettercarriers that work for the Postal Service.
Those three main changes are as follows.
Number one, this legislation made six daydelivery a permanent part of the law.
(04:52):
So until this bill passed since 1983 on ayearly basis, we have had to fight to
maintain that six daymandate for mail delivery.
That is no longer the case.
That is now a permanent part of the law.
Number two is this repealed a 2006 mandate
for the Postal Service to prefund healthbenefits for retirees decades in advance.
(05:15):
This is a result of a 2006 bill called the
Postal Accountability and Enhancement Actwhere the Postal Service was required to
pay anywhere in the neighborhood of fiveto $6 billion a year for health benefits
for, in some cases, people that are noteven born yet many decades in advance.
This is a mandate that no other governmentagency, no other private company has.
(05:39):
And as we look back over the last, now12-13 years, it's still responsible for
the vast majority of money thatthe Postal Service has lost.
So that mandate is now goneas a result of this bill.
And the third thing it did is what Imentioned earlier is that it integrated
Medicare with postal retirees and theirhealth care at a much higher percentage.
(06:00):
And we'll get into the specifics of that
and most importantly, what that will meanfor every active and retired postal
employee as we move into 2024 and wehave this legislation implemented.
First, we will want to educate you here,
but this will not be the lasttime you hear about this.
You will read about it.
(06:21):
You will get things inthe mail from the union.
You'll hear stuff from the Postal Service.
We will do everything in ourpower to educate our members.
But I think it's important that we beginwith a basic understanding of what's going
to take place, how that will affecteveryone in the action, maybe most
importantly that will be required of everyactive postal employee here in the future.
(06:43):
So to understand Medicare integration,
let's first be sure that we allunderstand what Medicare is.
So Medicare is a system that the
government provides, thatprovides healthcare.
Every employee, including all the lettercarriers listening to this podcast, with
every paycheck you've ever gotten, you'vecontributed money into the Medicare system
(07:04):
and it's available foryou when you retire.
And for the purposes of the conversationwe're going to have today, we're going to
talk about three differentparts of Medicare.
The first is Medicare Part A.
Medicare Part A covers hospitalizations.
There is no premium for Medicare Part A
once you become eligible, and thatis when you are age 65 and retired.
(07:28):
Both of those things have to be true.
More about that in a minute.
The second is Medicare Part B.
This covers medical expenses,doctor visits and things like that.
There is currently a monthly premium.
I think that premium is in the
neighborhood of a littleover $170 a month currently.
And the third piece that we'll talk about
in the end is Medicare Part D, whichdeals with prescription drugs.
(07:52):
So the first question is what is thepercentage of folks that utilize Medicare?
And 80% of people do whatI'm about to explain.
80% of postal retirees, when they retire
and they're age 65, they choose toenroll in Medicare Part A and Part B.
The result there is they pay their premium
(08:14):
for their health insurance plan and thefederal program, hopefully the NALC plan
because it's the best one, andthey also pay for Medicare Part B.
That $170 or so a month.
The result is they then have noout-of-pocket medical expenses.
Medicare becomes your primary payer.
They pay their benefits, whatever is left,your health insurance plan picks up and
(08:37):
you have no out-of-pocket expenses foryour medical care or hospitalization.
And 80% of postal retireesalready do that, but 20% do not.
And remember, 100% of us have paidinto this system our entire career.
So what this legislation accomplishesis how to increase that percentage.
(08:58):
Because if you increase that percentage,
you are shifting cost from the federalhealth insurance programs into the
Medicare system that once again, wealready paid into, which will result in a
positive impact on the premiums that arepaid both by the Postal Service and by the
retired, in our case,retired letter carrier.
So when you're retired, your premium foryour health insurance, 72% of it's paid by
(09:22):
the Postal Service, 28% of it ispaid by you, the postal retiree.
So a positive impact on those premiumsbenefits the Postal Service financially,
long term, as well as us, andthe premiums that we pay.
How are we going toincrease that percentage?
This is what the law does, and this isgoing to require action of some folks.
So it's important that wegain that understanding.
(09:43):
And for the purpose of this conversation,you will fall into one of two groups.
So I want to be sure that if you'relistening, you understand what group
you're in because that's a very importantpiece of what you'll be required to do,
how you're impacted oryou're not impacted.
If you're in what we'll call group one, f
or the purpose of this conversation, youare someone that on January 1, 2025,
(10:09):
you are either retired, regardless of yourage, or you are still active working for
the Postal Service andyou are age 64 or older.
Again, on January 1, 2025, if you are
either retired, no matter your age, or youare active, still working for the Postal
(10:31):
Service, but you are age 64 or older,you will fall into group number one.
Group number two is those that are active,still working for the Postal Service, and
on January 1, 2025, theyare under the age of 64.
So if on January 1, 2025, you are active,
(10:53):
working for the Postal Service and you areunder the age of 64, you fall into group
two, which also is everyonethat is not in group one.
First, let's start with groupone and what the impact is.
If you're in group one, there isno mandate that you do anything.
So you do not have to enroll in anythingyou've not currently chose to enroll in,
(11:16):
but you will have an opportunity for someof you that will allow you to enroll.
So the Medicare system is set up so that
when you become eligible and that's whenyou are both age 65 and retired, you have
a period of time where you can enrollin Medicare Parts A and Part B.
If you choose not to enroll, then with
(11:37):
every year that passes, there is a 10%penalty on your premium that you pay.
So let me just give an example that'llillustrate this and hopefully illustrate
the opportunity that'll be therefor a certain group of people.
Let's say you retire when you're 64.
You turn 65.
You're now eligible forMedicare Parts A and Part B.
(11:58):
Maybe you're someone that's pretty healthy
and you don't incur alot of medical costs.
So you choose not to enroll and not pay
that roughly $170 a monthpremium for Medicare Part B.
Now let's fast forward ten years.
You're now 75 years old.
You begin to have more healthissues, need to see more doctors.
(12:19):
You incur more medical expenses, and you
at that point probably wish you hadenrolled in Medicare parts A and part B.
But due to there being that 10% penaltyevery year, it becomes unaffordable for
you because in that case, 10%a year for ten years is 100%.
So your premium would be double what it
otherwise would be, and that's a sizablepercentage of that 20% of folks that do
(12:43):
not or have not chosen to enrollin Medicare parts A and part B.
What this legislation will do is in thespring of 2024, there will be a special
open season for those folks that areretired and they are 65 or older, and they
have not enrolled inMedicare part A and part B.
(13:04):
They will be given anopportunity to enroll.
They will also be able to not just enroll,
but enroll and not haveto pay that 10% penalty.
The Postal Service will pay thatpenalty for the rest of your life.
And the reason for that is it's cheaper
for the Postal Service to pay that penaltyand then get the benefits of having the
(13:26):
higher percentage of folks in Medicareparts A and part B because of the impact
it has on premiums, asI mentioned earlier.
So there'll be more information aboutspecific dates as we get closer.
But if you're someone that is in thatgroup where you are over 65, you're
retired, you've not enrolled in Medicare,you will have an opportunity during a
(13:47):
special open season next spring in 2024where you can enroll, pay your 170 or so
dollar a month premium, and thePostal Service will pay that penalty.
That'll be a one-time opportunity.
If you're in that circumstance, then I
encourage you to do your research and beprepared when that time comes and we'll be
(14:08):
sure again and get a lotof information out to you.
Now let's move to group two and whatthe bill requires of group two.
So if you were in group two, which onceagain is people that on January 1, 2025,
you are still active working for thePostal Service and you're under age 64,
when you retire and you are age 65, bothof those things have to be true, you will
(14:33):
be required to get Medicare part Band part A (but why wouldn't you?
It has no premium) to maintain your
coverage in theFederal Employee Health Benefits Program.
Going forward, everyone that when they
reach age 65, if you're in group two andyou're retired, there will be a
requirement for you to enroll in Medicareparts a and part b to maintain your
(14:56):
federal health insurancecoverage in retirement.
However, there are twoexceptions to that rule.
Exception number one is if you live in alocation where there are no Medicare
providers, you will notbe required to enroll.
So for example, if you live in anothercountry where there's no Medicare
providers, there will be a process whereyou can be exempted from that requirement.
(15:17):
It's just a simple concept of it doesn't
make sense to make people payfor something they can't use.
The other exception are people that get
their health insurancefrom another source.
Most commonly what we will see,
particularly with letter carriers, arethese are people that receive healthcare
with something connectedto military service.
(15:37):
So there'll be a lot ofinteraction there with the VA.
And then there are certainly those that
through their significant otherhave health insurance provided.
So those are the two exceptions.
If you live somewhere with no Medicare
provider or if you get your healthinsurance from another source, you will
not be required to enroll in Medicare partB in order to maintain your coverage.
(15:59):
So let's talk about themechanics of how this will work.
And the way this will result in thesavings is that for plan year 2025, that's
the year that will start at the beginningof January, that open season that happens
in the fall of 2024, you would beenrolling or switching plans, whatever the
case may be, for the coveragethat you'll have in 2025.
(16:22):
The plans that are in the Federal Employee
Health Benefits Program, including theNALC high option plan,
each of those plans will create identicalplans that will be in a new Postal Service
health benefits program that will fallunder the umbrella of the
(16:43):
Federal Employee Health Benefits Program,but it'll be a subset within that program.
The plans will be the same in terms of thebenefits, but by separating them, what we
have is a set of plans wherepostal folks only are enrolled.
These are people that will be requiredto enroll in Medicare part b.
So Medicare compared to the rest of the
(17:05):
federal government, the federal employeesthat are enrolled in the other plans,
Medicare will take on a higher percentageof the cost, which should result in
positive impacts on premiums there, whichas I said in the beginning here benefits
not just the Postal Service, but alsobenefits us in terms of controlling the
cost of those premiums as we go forward,since we share the cost with them.
(17:28):
And then once that's done and that'll be
done to be effective in 2025, duringnormal open season in the fall of 2024,
every active and required postal employeewill be required to switch from a plan in
theFederal Employee Health Benefits Program
to one of the plans in the newPostal Service health benefit program.
(17:51):
That is a subset underthat federal umbrella.
For example, if you have the NALChigh option plan (which if you don't, I
highly recommend you do; it's the bestcoverage for the best cost among all the
federal plans) you would simply then,during that open season, you would just
switch to the NALC high optionplan in the postal subset.
(18:13):
The benefits will be the same as the one
for the federal employees,at least initially.
We could potentially down the road seesome improvements in benefits because
we're paying premiums that are lower andgetting more value and that type thing.
But initially the plans will be identical
and then in 2024 you'llbe required to swap over.
So a natural question is out of thehundreds of thousands, if not over a
(18:36):
million, postal employees that are bothactive and retired, I suspect there will
be someone that will not switch over toa plan next fall during open season.
That is one of the issues that is ongoingand we're having conversations frequently
with the Postal Service, with the folksfrom the Office of Personnel Management
that will administer this to ensure thatif someone doesn't make the switch, that
(18:59):
they will be enrolled inthe appropriate plan.
So you can look for moreinformation to come on that.
The end result of all of this is that for
the Postal Service long term it results intens of billions of dollars in savings in
retiree health cost which is afinancial benefit to the service.
It's a benefit to the job security of
(19:21):
letter carriers and other postal employeesand it's definitely a benefit in the long
term to the financial stability of thePostal Service which directly relates to
the service that we provideto all of our customers.
And that's about half thesavings in this bill.
The other half is something that you willnot be required to do anything but still
involves Medicare and that is theinclusion of the Postal Service through
(19:45):
Medicare Part D in something calledan employer group waiver plan.
And I won't go too in depth about this
because again, it's not something thatrequires any action by any of our members
but basically it includes the PostalService and the related health plans in a
program that was designed to allowinsurance companies that integrate
(20:08):
Medicare to negotiate betterprescription drug prices.
We will be in a position, the Postal
Service has been exempted from thissince sometime in the mid 2000s.
This will be an opportunity to bettercontrol the price of prescription drugs
and that'll also result insavings in some premiums.
So once again, this is not the lasttime you will hear about this.
(20:29):
We will do mailings that will be specific
to the circumstances ofa lot of our members.
We'll have this through allof our in the magazine.
We'll have this on our website as we getcloser to next year, you'll hear it
through, I would expect we do, anotherpodcast on it when we get closer.
So you'll kind of have to be livingunder a rock not to know about this.
(20:50):
The education is important.
And we just thought that as I travel
around the country and see our members atdifferent types of training and
conventions and those kinds of things,this is something I always cover to give
the leadership and our branches and ourstate associations the knowledge they need
to answer some of the initialquestions that come up from members.
If you come up with any questions about
(21:11):
this in just a minute, I'm going to tellyou about our plans for future segments
and part of that will be aquestion and answer opportunity.
So you'll have the opportunity to ask any
questions that you want and we'lldo our best to answer them here.
Speaking of future episodes, just to letyou in a little bit on what we plan to do,
I mentioned earlier thatwe'll have some other voices.
(21:33):
You won't just hear me all the time.
We'll have guest co-host and likely some
of our officers and staff here in thebuilding and even some guests, maybe from
outside the NALC and the largerlabor movement or who knows?
But we'll try to mix up a variety ofcontent and the voices that you hear to
keep it fresh and entertainingfor you in the near future.
(21:55):
We'll cover some really importanttopics that are happening right now.
Two of those, particularly this summer,
are heat safety, which has been somethingthat we've dealt with for a number of
years, but increasingly dangerous hazardfor us out there on the street, and then
what we're working on here toprevent crime that's taken place.
(22:17):
We've seen a pretty dramatic increase in
the number of attacks on letter carriersand robberies and violent crime.
And unfortunately, due to both of these,
we've had members that have lost theirlives and heartbreaking, it's just
appalling every time it happens and it's aproblem where we've got to take advantage
of every avenue and opportunitywe have to address it.
(22:38):
So in future episodes, in the very nearfuture, we'll get to some of those issues.
And then of course, there's a variety ofcontractual issues related to our
collective borrowing agreement and thework that you as letter carriers do every
day that seems to be prettyconstantly changing.
And there's a ton of those issues outthere that over time we'll get into.
(23:00):
Thanks so much for listening.
We're happy to be back with the YouAre the Current Resident podcast.
Again, this is the official podcast of theNational Association of Letter Carriers.
If you would please subscribeso you don't miss an episode.
And we would appreciate it if you sharewith your NALC brothers and sisters and
the letter carriers thatyou work with every day.
(23:21):
We do intend to have a question and answer
segment where I'll be happy to answersome questions from NALC members.
So if you have questions about what we
talked about today or really anythingelse, feel free to email us.
You can email us at social@nalc.org.
That is social@nalc.org. You can followNALC on our official social media accounts
(23:45):
on Facebook, Twitter, Instagramand we are new to threads.
You can find links to all of those inthe episode description of this podcast.
And if you'd like, youcan follow me on Twitter.
I am at Brianrenrenfro 19.
So once again, if you have questions tosubmit or any other kind of feedback,
please email us at social@nalc.org.Thanks again for listening.
(24:10):
We will talk to you sooner.
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