The Postal Service Reform Act of 2022 (PSRA) contains several provisions designed to affect the Postal Service’s finances and operations. One of the most significant changes in the law has to do with the Postal Service’s requirement to fund its retirees’ health benefits costs out of its revenues.
The PSRA removed the requirement for USPS to fully prefund this obligation by making multi-billion dollar advance payments into a dedicated fund each year to cover premium payments for retirees that might be decades in the future. The Postal Service though is still ultimately responsible for covering the cost of these premium payments when they are due. In general, individual federal agencies are not responsible for prefunding or paying for these costs.
