Welcome back + a discussion on Medicare integration

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Welcome to the "You Are The Current

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Resident" podcast, the official podcast of
the National Association of Letter

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Carriers, a union that represents 280,000
active and retired city letter carriers

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employed by the United
States Postal Service.

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My name is Brian Renfroe and
I'm the president of NALC.

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Today I'm alone for this episode, but in
the future, we plan to have a consistent

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co-host and also some guests, and we'll
talk a little more about that at the end.

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First, I want to welcome you
all back to the podcast.

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This is something we started back in 2019,
and as we all know, the Pandemic hit in

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2020 in March, and it transformed into a
COVID-related podcast.

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If those of you that were letter carriers
back around that time will remember a lot

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of the uncertainty that was there from day
to day, and we used the podcast at that

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time as a platform to get
out information to you.

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And we're happy now, even though it's been

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a few years to be back and intend on
producing this podcast on a regular basis

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to keep everyone informed
of what's going on.

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Before I get into the meat of what we want

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to discuss today, I first want to remind
you that our monthly magazine, the Postal

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Record, we have audio versions of all
the articles and officers columns there.

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You can find those by going to any podcast
provider and just search for NALC Postal

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Record, and that'll make
it easier for you to find.

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And going forward, we plan to start
putting those audio versions in the feed

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where you found this podcast so you'll be
able to access everything that comes

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officially from NALC at the
national level in one podcast feed.

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To start with though, I
want to talk a little news.

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What's at top-of-mind for me, and I'm sure

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our members that are listening,
are collective bargaining.

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That's a process that we began officially
back in February, and it continues as

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we're here in the middle
towards the end of July.

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Just an update on the time
frame of what's going on.

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Our contract expired in May.

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By law, there is a 60-day mediation period
that follows that negotiation period.

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That period ended on July the 19th.

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We use that period to continue
negotiations, and I can tell you from our

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perspective and share with you that from
our counterparts, the Postal Service,

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their negotiators, from their perspective,
we both feel like we still have very good

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prospects for reaching
a tentative agreement.

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So we've continued to negotiate.

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We will continue to negotiate even as we

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begin to move into the
next step of the process.

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The next step of the process, in the event
we are not able to reach an agreement,

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would be an interest
arbitration proceeding.

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And the first step there is for us to

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select a neutral arbitrator that would
chair a three-person panel that would set

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the terms of our next collective
bargaining agreement.

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That three-person panel is made up of an

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arbitrator appointed by the union, an
arbitrator appointed by the Postal Service

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and then a neutral arbitrator
that we will jointly select.

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So we have not gotten to the point
of selecting an arbitrator yet.

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If we still do not have an agreement here

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in the reasonably near future, that'll
be the step that we move towards.

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So once we select that arbitrator, we

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would then begin scheduling the
hearings that would take place.

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Our preparation, speaking just internal
for the union for interest arbitration is

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something that's been ongoing for
months and months and months.

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We're in a very good position in the event

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we end up having to go that direction
to set the terms of our agreement.

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We feel really good about the
preparation that's been done.

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However, even as we go through that
process, as long as the prospects remain

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where we believe we have a good chance to
reach a tentative agreement, we will

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remain at the bargaining table as long as
it takes to eventually achieve an

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agreement that we believe rewards letter
carriers for our contribution for the

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Postal Service and is worthy of sending
out to our members for ratification.

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For future updates, just keep an eye on

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the website, certainly in your Postal
Record, the NALC bulletin that you see in

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your stations and definitely in
the future on this podcast feed.

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So today the main topic I want to cover is

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something that we get a number of
questions about and it has to do with the

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landmark Postal Reform Act that was signed
into law by President Biden last spring.

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And there's one specific section of that

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law that makes some significant changes
that are beneficial not just to the Postal

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Service but also to us, and that is
changes that integrate Medicare at a

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higher percentage for postal
retirees in their health care.

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But before we get into the specifics on

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that, I just want to quickly recap this
bill and the three main things that it

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accomplished that are really beneficial
long term to the Postal Service and

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therefore to the union and to letter
carriers that work for the Postal Service.

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Those three main changes are as follows.

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Number one, this legislation made six day
delivery a permanent part of the law.

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So until this bill passed since 1983 on a
yearly basis, we have had to fight to

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maintain that six day
mandate for mail delivery.

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That is no longer the case.

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That is now a permanent part of the law.

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Number two is this repealed a 2006 mandate

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for the Postal Service to prefund health
benefits for retirees decades in advance.

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This is a result of a 2006 bill called the

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Postal Accountability and Enhancement Act
where the Postal Service was required to

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pay anywhere in the neighborhood of five
to $6 billion a year for health benefits

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for, in some cases, people that are not
even born yet many decades in advance.

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This is a mandate that no other government
agency, no other private company has.

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And as we look back over the last, now
12-13 years, it's still responsible for

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the vast majority of money that
the Postal Service has lost.

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So that mandate is now gone
as a result of this bill.

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And the third thing it did is what I
mentioned earlier is that it integrated

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Medicare with postal retirees and their
health care at a much higher percentage.

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And we'll get into the specifics of that

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and most importantly, what that will mean
for every active and retired postal

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employee as we move into 2024 and we
have this legislation implemented.

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First, we will want to educate you here,

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but this will not be the last
time you hear about this.

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You will read about it.

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You will get things in
the mail from the union.

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You'll hear stuff from the Postal Service.

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We will do everything in our
power to educate our members.

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But I think it's important that we begin
with a basic understanding of what's going

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to take place, how that will affect
everyone in the action, maybe most

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importantly that will be required of every
active postal employee here in the future.

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So to understand Medicare integration,

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let's first be sure that we all
understand what Medicare is.

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So Medicare is a system that the

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government provides, that
provides healthcare.

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Every employee, including all the letter
carriers listening to this podcast, with

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every paycheck you've ever gotten, you've
contributed money into the Medicare system

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and it's available for
you when you retire.

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And for the purposes of the conversation
we're going to have today, we're going to

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talk about three different
parts of Medicare.

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The first is Medicare Part A.

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Medicare Part A covers hospitalizations.

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There is no premium for Medicare Part A

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once you become eligible, and that
is when you are age 65 and retired.

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Both of those things have to be true.

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More about that in a minute.

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The second is Medicare Part B.

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This covers medical expenses,
doctor visits and things like that.

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There is currently a monthly premium.

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I think that premium is in the

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neighborhood of a little
over $170 a month currently.

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And the third piece that we'll talk about

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in the end is Medicare Part D, which
deals with prescription drugs.

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So the first question is what is the
percentage of folks that utilize Medicare?

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And 80% of people do what
I'm about to explain.

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80% of postal retirees, when they retire

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and they're age 65, they choose to
enroll in Medicare Part A and Part B.

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The result there is they pay their premium

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for their health insurance plan and the
federal program, hopefully the NALC plan

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because it's the best one, and
they also pay for Medicare Part B.

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That $170 or so a month.

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The result is they then have no
out-of-pocket medical expenses.

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Medicare becomes your primary payer.

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They pay their benefits, whatever is left,
your health insurance plan picks up and

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you have no out-of-pocket expenses for
your medical care or hospitalization.

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And 80% of postal retirees
already do that, but 20% do not.

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And remember, 100% of us have paid
into this system our entire career.

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So what this legislation accomplishes
is how to increase that percentage.

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Because if you increase that percentage,

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you are shifting cost from the federal
health insurance programs into the

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Medicare system that once again, we
already paid into, which will result in a

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positive impact on the premiums that are
paid both by the Postal Service and by the

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retired, in our case,
retired letter carrier.

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So when you're retired, your premium for
your health insurance, 72% of it's paid by

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the Postal Service, 28% of it is
paid by you, the postal retiree.

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So a positive impact on those premiums
benefits the Postal Service financially,

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long term, as well as us, and
the premiums that we pay.

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How are we going to
increase that percentage?

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This is what the law does, and this is
going to require action of some folks.

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So it's important that we
gain that understanding.

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And for the purpose of this conversation,
you will fall into one of two groups.

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So I want to be sure that if you're
listening, you understand what group

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you're in because that's a very important
piece of what you'll be required to do,

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how you're impacted or
you're not impacted.

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If you're in what we'll call group one, f

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or the purpose of this conversation, you
are someone that on January 1, 2025,

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you are either retired, regardless of your
age, or you are still active working for

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the Postal Service and
you are age 64 or older.

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Again, on January 1, 2025, if you are

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either retired, no matter your age, or you
are active, still working for the Postal

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Service, but you are age 64 or older,
you will fall into group number one.

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Group number two is those that are active,
still working for the Postal Service, and

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on January 1, 2025, they
are under the age of 64.

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So if on January 1, 2025, you are active,

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working for the Postal Service and you are
under the age of 64, you fall into group

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two, which also is everyone
that is not in group one.

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First, let's start with group
one and what the impact is.

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If you're in group one, there is
no mandate that you do anything.

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So you do not have to enroll in anything
you've not currently chose to enroll in,

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but you will have an opportunity for some
of you that will allow you to enroll.

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So the Medicare system is set up so that

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when you become eligible and that's when
you are both age 65 and retired, you have

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a period of time where you can enroll
in Medicare Parts A and Part B.

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If you choose not to enroll, then with

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every year that passes, there is a 10%
penalty on your premium that you pay.

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So let me just give an example that'll
illustrate this and hopefully illustrate

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the opportunity that'll be there
for a certain group of people.

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Let's say you retire when you're 64.

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You turn 65.

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You're now eligible for
Medicare Parts A and Part B.

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Maybe you're someone that's pretty healthy

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and you don't incur a
lot of medical costs.

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So you choose not to enroll and not pay

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that roughly $170 a month
premium for Medicare Part B.

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Now let's fast forward ten years.

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You're now 75 years old.

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You begin to have more health
issues, need to see more doctors.

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You incur more medical expenses, and you

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at that point probably wish you had
enrolled in Medicare parts A and part B.

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But due to there being that 10% penalty
every year, it becomes unaffordable for

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you because in that case, 10%
a year for ten years is 100%.

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So your premium would be double what it

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otherwise would be, and that's a sizable
percentage of that 20% of folks that do

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not or have not chosen to enroll
in Medicare parts A and part B.

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What this legislation will do is in the
spring of 2024, there will be a special

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open season for those folks that are
retired and they are 65 or older, and they

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have not enrolled in
Medicare part A and part B.

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They will be given an
opportunity to enroll.

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They will also be able to not just enroll,

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but enroll and not have
to pay that 10% penalty.

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The Postal Service will pay that
penalty for the rest of your life.

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And the reason for that is it's cheaper

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for the Postal Service to pay that penalty
and then get the benefits of having the

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higher percentage of folks in Medicare
parts A and part B because of the impact

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it has on premiums, as
I mentioned earlier.

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So there'll be more information about
specific dates as we get closer.

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But if you're someone that is in that
group where you are over 65, you're

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retired, you've not enrolled in Medicare,
you will have an opportunity during a

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special open season next spring in 2024
where you can enroll, pay your 170 or so

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dollar a month premium, and the
Postal Service will pay that penalty.

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That'll be a one-time opportunity.

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If you're in that circumstance, then I

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encourage you to do your research and be
prepared when that time comes and we'll be

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sure again and get a lot
of information out to you.

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Now let's move to group two and what
the bill requires of group two.

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So if you were in group two, which once
again is people that on January 1, 2025,

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you are still active working for the
Postal Service and you're under age 64,

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when you retire and you are age 65, both
of those things have to be true, you will

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be required to get Medicare part B
and part A (but why wouldn't you?

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It has no premium) to maintain your

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coverage in the
Federal Employee Health Benefits Program.

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Going forward, everyone that when they

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reach age 65, if you're in group two and
you're retired, there will be a

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requirement for you to enroll in Medicare
parts a and part b to maintain your

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federal health insurance
coverage in retirement.

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However, there are two
exceptions to that rule.

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Exception number one is if you live in a
location where there are no Medicare

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providers, you will not
be required to enroll.

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So for example, if you live in another
country where there's no Medicare

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providers, there will be a process where
you can be exempted from that requirement.

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It's just a simple concept of it doesn't

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make sense to make people pay
for something they can't use.

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The other exception are people that get

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their health insurance
from another source.

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Most commonly what we will see,

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particularly with letter carriers, are
these are people that receive healthcare

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00:15:34,930 --> 00:15:37,580
with something connected
to military service.

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So there'll be a lot of
interaction there with the VA.

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And then there are certainly those that

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through their significant other
have health insurance provided.

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So those are the two exceptions.

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If you live somewhere with no Medicare

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provider or if you get your health
insurance from another source, you will

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not be required to enroll in Medicare part
B in order to maintain your coverage.

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So let's talk about the
mechanics of how this will work.

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And the way this will result in the
savings is that for plan year 2025, that's

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the year that will start at the beginning
of January, that open season that happens

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00:16:12,690 --> 00:16:17,620
in the fall of 2024, you would be
enrolling or switching plans, whatever the

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00:16:17,650 --> 00:16:22,020
case may be, for the coverage
that you'll have in 2025.

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The plans that are in the Federal Employee

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Health Benefits Program, including the
NALC high option plan,

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00:16:30,370 --> 00:16:36,780
each of those plans will create identical
plans that will be in a new Postal Service

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health benefits program that will fall
under the umbrella of the

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Federal Employee Health Benefits Program,
but it'll be a subset within that program.

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The plans will be the same in terms of the
benefits, but by separating them, what we

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have is a set of plans where
postal folks only are enrolled.

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These are people that will be required
to enroll in Medicare part b.

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00:17:02,850 --> 00:17:05,280
So Medicare compared to the rest of the

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federal government, the federal employees
that are enrolled in the other plans,

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00:17:08,650 --> 00:17:13,500
Medicare will take on a higher percentage
of the cost, which should result in

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positive impacts on premiums there, which
as I said in the beginning here benefits

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not just the Postal Service, but also
benefits us in terms of controlling the

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cost of those premiums as we go forward,
since we share the cost with them.

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And then once that's done and that'll be

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done to be effective in 2025, during
normal open season in the fall of 2024,

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00:17:37,970 --> 00:17:44,640
every active and required postal employee
will be required to switch from a plan in

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the
Federal Employee Health Benefits Program

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to one of the plans in the new
Postal Service health benefit program.

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That is a subset under
that federal umbrella.

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For example, if you have the NALC
high option plan (which if you don't, I

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highly recommend you do; it's the best
coverage for the best cost among all the

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federal plans) you would simply then,
during that open season, you would just

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switch to the NALC high option
plan in the postal subset.

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The benefits will be the same as the one

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00:18:16,120 --> 00:18:18,530
for the federal employees,
at least initially.

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We could potentially down the road see
some improvements in benefits because

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we're paying premiums that are lower and
getting more value and that type thing.

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But initially the plans will be identical

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and then in 2024 you'll
be required to swap over.

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So a natural question is out of the
hundreds of thousands, if not over a

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00:18:36,510 --> 00:18:40,880
million, postal employees that are both
active and retired, I suspect there will

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00:18:40,910 --> 00:18:45,500
be someone that will not switch over to
a plan next fall during open season.

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00:18:45,530 --> 00:18:49,900
That is one of the issues that is ongoing
and we're having conversations frequently

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with the Postal Service, with the folks
from the Office of Personnel Management

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00:18:54,010 --> 00:18:59,530
that will administer this to ensure that
if someone doesn't make the switch, that

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they will be enrolled in
the appropriate plan.

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So you can look for more
information to come on that.

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The end result of all of this is that for

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00:19:08,590 --> 00:19:14,090
the Postal Service long term it results in
tens of billions of dollars in savings in

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00:19:14,120 --> 00:19:18,860
retiree health cost which is a
financial benefit to the service.

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00:19:18,890 --> 00:19:21,090
It's a benefit to the job security of

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letter carriers and other postal employees
and it's definitely a benefit in the long

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00:19:25,320 --> 00:19:29,600
term to the financial stability of the
Postal Service which directly relates to

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the service that we provide
to all of our customers.

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00:19:32,930 --> 00:19:35,420
And that's about half the
savings in this bill.

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00:19:35,450 --> 00:19:40,500
The other half is something that you will
not be required to do anything but still

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00:19:40,530 --> 00:19:45,570
involves Medicare and that is the
inclusion of the Postal Service through

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00:19:45,600 --> 00:19:50,570
Medicare Part D in something called
an employer group waiver plan.

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00:19:50,600 --> 00:19:53,660
And I won't go too in depth about this

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because again, it's not something that
requires any action by any of our members

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00:19:58,530 --> 00:20:04,220
but basically it includes the Postal
Service and the related health plans in a

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00:20:04,250 --> 00:20:08,010
program that was designed to allow
insurance companies that integrate

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00:20:08,040 --> 00:20:11,570
Medicare to negotiate better
prescription drug prices.

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00:20:11,600 --> 00:20:13,220
We will be in a position, the Postal

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00:20:13,250 --> 00:20:17,900
Service has been exempted from this
since sometime in the mid 2000s.

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00:20:17,930 --> 00:20:21,980
This will be an opportunity to better
control the price of prescription drugs

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00:20:22,010 --> 00:20:26,180
and that'll also result in
savings in some premiums.

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00:20:26,200 --> 00:20:29,050
So once again, this is not the last
time you will hear about this.

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00:20:29,080 --> 00:20:32,140
We will do mailings that will be specific

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00:20:32,170 --> 00:20:35,620
to the circumstances of
a lot of our members.

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00:20:35,640 --> 00:20:38,090
We'll have this through all
of our in the magazine.

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00:20:38,120 --> 00:20:42,760
We'll have this on our website as we get
closer to next year, you'll hear it

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00:20:42,790 --> 00:20:46,860
through, I would expect we do, another
podcast on it when we get closer.

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00:20:46,880 --> 00:20:50,420
So you'll kind of have to be living
under a rock not to know about this.

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00:20:50,440 --> 00:20:51,770
The education is important.

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00:20:51,800 --> 00:20:53,660
And we just thought that as I travel

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00:20:53,690 --> 00:20:57,700
around the country and see our members at
different types of training and

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00:20:57,720 --> 00:21:01,460
conventions and those kinds of things,
this is something I always cover to give

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00:21:01,480 --> 00:21:05,460
the leadership and our branches and our
state associations the knowledge they need

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00:21:05,490 --> 00:21:09,420
to answer some of the initial
questions that come up from members.

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00:21:09,450 --> 00:21:11,500
If you come up with any questions about

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00:21:11,530 --> 00:21:16,140
this in just a minute, I'm going to tell
you about our plans for future segments

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00:21:16,170 --> 00:21:19,420
and part of that will be a
question and answer opportunity.

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00:21:19,450 --> 00:21:22,220
So you'll have the opportunity to ask any

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00:21:22,240 --> 00:21:25,010
questions that you want and we'll
do our best to answer them here.

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00:21:25,040 --> 00:21:30,090
Speaking of future episodes, just to let
you in a little bit on what we plan to do,

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00:21:30,120 --> 00:21:33,420
I mentioned earlier that
we'll have some other voices.

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00:21:33,450 --> 00:21:36,290
You won't just hear me all the time.

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00:21:36,320 --> 00:21:39,480
We'll have guest co-host and likely some

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00:21:39,510 --> 00:21:43,620
of our officers and staff here in the
building and even some guests, maybe from

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00:21:43,650 --> 00:21:47,080
outside the NALC and the larger
labor movement or who knows?

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00:21:47,110 --> 00:21:52,140
But we'll try to mix up a variety of
content and the voices that you hear to

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00:21:52,170 --> 00:21:55,220
keep it fresh and entertaining
for you in the near future.

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00:21:55,250 --> 00:21:58,980
We'll cover some really important
topics that are happening right now.

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Two of those, particularly this summer,

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00:22:01,810 --> 00:22:06,810
are heat safety, which has been something
that we've dealt with for a number of

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00:22:06,840 --> 00:22:12,740
years, but increasingly dangerous hazard
for us out there on the street, and then

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00:22:12,770 --> 00:22:17,020
what we're working on here to
prevent crime that's taken place.

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00:22:17,050 --> 00:22:19,240
We've seen a pretty dramatic increase in

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00:22:19,270 --> 00:22:23,980
the number of attacks on letter carriers
and robberies and violent crime.

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00:22:24,010 --> 00:22:26,180
And unfortunately, due to both of these,

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00:22:26,210 --> 00:22:30,810
we've had members that have lost their
lives and heartbreaking, it's just

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00:22:30,840 --> 00:22:35,700
appalling every time it happens and it's a
problem where we've got to take advantage

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00:22:35,730 --> 00:22:38,810
of every avenue and opportunity
we have to address it.

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So in future episodes, in the very near
future, we'll get to some of those issues.

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00:22:43,890 --> 00:22:48,400
And then of course, there's a variety of
contractual issues related to our

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00:22:48,400 --> 00:22:52,290
collective borrowing agreement and the
work that you as letter carriers do every

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00:22:52,320 --> 00:22:55,220
day that seems to be pretty
constantly changing.

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00:22:55,250 --> 00:22:59,980
And there's a ton of those issues out
there that over time we'll get into.

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00:23:00,010 --> 00:23:01,500
Thanks so much for listening.

357
00:23:01,530 --> 00:23:05,420
We're happy to be back with the You
Are the Current Resident podcast.

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00:23:05,450 --> 00:23:10,500
Again, this is the official podcast of the
National Association of Letter Carriers.

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00:23:10,530 --> 00:23:13,570
If you would please subscribe
so you don't miss an episode.

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00:23:13,600 --> 00:23:19,420
And we would appreciate it if you share
with your NALC brothers and sisters and

361
00:23:19,440 --> 00:23:21,780
the letter carriers that
you work with every day.

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00:23:21,810 --> 00:23:24,260
We do intend to have a question and answer

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00:23:24,290 --> 00:23:28,330
segment where I'll be happy to answer
some questions from NALC members.

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00:23:28,360 --> 00:23:30,570
So if you have questions about what we

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00:23:30,600 --> 00:23:34,290
talked about today or really anything
else, feel free to email us.

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00:23:34,320 --> 00:23:38,290
You can email us at social@nalc.org.

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00:23:38,320 --> 00:23:45,660
That is social@nalc.org. You can follow
NALC on our official social media accounts

368
00:23:45,690 --> 00:23:50,620
on Facebook, Twitter, Instagram
and we are new to threads.

369
00:23:50,650 --> 00:23:54,500
You can find links to all of those in
the episode description of this podcast.

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00:23:54,530 --> 00:23:57,500
And if you'd like, you
can follow me on Twitter.

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00:23:57,530 --> 00:24:00,660
I am at Brianrenrenfro 19.

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00:24:00,680 --> 00:24:04,380
So once again, if you have questions to
submit or any other kind of feedback,

373
00:24:04,410 --> 00:24:09,980
please email us at social@nalc.org.
Thanks again for listening.

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00:24:10,010 --> 00:24:18,000
We will talk to you sooner.