Mail insurance operation faces potential breakdown due to staffing deficiencies at OPM
The Postal Service Health Benefits (PSHB) program, which provides healthcare coverage to approximately 2 million Postal employees, annuitants, and their family members, is at risk of operational failure due to staffing vacancies and insufficient funding at the Office of Personnel Management (OPM).
Key contributing factors include the impact of a hiring freeze, the deferred resignation program, a lack of contingency planning and funding, and operational risks.
The hiring freeze, implemented under the Trump administration, prevented OPM from filling essential vacancies in the IT workforce that supports the PSHB data platform. As a result, ahead of the April 2025 system handover, OPM had only 7 of the 11 necessary employees. The freeze also led to the rescinding of job offers, worsening staff shortages.
Additionally, employees who were expected to support the program are leaving due to OPM’s workforce downsizing initiatives, further depleting critical staffing. The deferred resignation program has seen four employees resign from the PSHB enrollment platform, and two IT specialists temporarily assigned to help manage the platform also left the agency.
OPM does not have the appropriated funds or a contingency plan to maintain PSHB operations if funding lapses. A failure in the data platform would disrupt key functions such as processing enrollment changes, qualifying life events, and open season enrollment, crippling PSHB functionality.
Without skilled personnel, the data platform risks ceasing operations, which would cause failure in systems interfacing with employers and insurance carriers, undermining enrollment tracking, rate negotiation, contract execution, and provider network data sharing.
The Office of Personnel Management (OPM) is facing budget issues with the PSHB program, as it was unable to maintain the extra funding in its budget for managing the PSHB program under the full-year continuing resolution for fiscal 2025.
These staffing losses have affected virtually all of the agency's components, including OPM's healthcare and insurance office, which runs both the PSHB and FEHB programs. Currently, OPM has only three employees out of the 11 total positions needed to manage the PSHB program's central enrollment platform.
In response, the OPM inspector general is urging the agency to take immediate action to address the staffing gaps in the PSHB program. The OPM spokesperson stated that OPM is committed to the ongoing success of the PSHB program and to the delivery of world-class benefits to federal and USPS employees and annuitants and their family members.
However, the staffing challenges aren't limited to only the PSHB program, as recent OPM vacancies have also led to an indefinite suspension of fraud risk assessments in the FEHB program.
Republicans are proposing a budget of roughly $422 million for OPM for the upcoming budget cycle, which would put the agency about $26 million below currently enacted spending levels. The OPM is on track to lose over 1,000 employees, about one-third of its total workforce, by the end of the year.
[1] OIG Report: Postal Service Health Benefits (PSHB) Program at Risk of Operational Failure (link) [2] OPM Faces Staffing and Funding Issues Threatening Postal Health Benefits Program (link) [3] OPM Loses 80 Employees, Puts Postal Health Benefits at Risk (link)
- The federal workforce, specifically in the Office of Personnel Management (OPM), is facing a reimagined workforce structure due to staffing vacancies, budget cuts, and the resignation of critical employees, which threatens the operational success of programs such as the Postal Service Health Benefits (PSHB).
- The ongoing staff shortages and budget issues within the OPM have had a significant impact, extending beyond the PSHB program to other programs like the Federal Employees Health Benefits (FEHB), as recent vacancies have led to an indefinite suspension of fraud risk assessments, similar to the sports term 'indefinite suspension', implying a prolonged absence or disruption.
