I 
115TH CONGRESS 
1ST SESSION 
H. R. 756 
To restore the financial solvency and improve the governance of the United 
States Postal Service in order to ensure the efficient and affordable 
nationwide delivery of mail, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 31, 2017 
Mr. CHAFFETZ (for himself, Mr. CUMMINGS, Mr. MEADOWS, Mr. LYNCH, Mr. 
CONNOLLY, and Mr. ROSS) introduced the following bill; which was re-
ferred to the Committee on Oversight and Government Reform, and in 
addition to the Committees on Energy and Commerce, and Ways and 
Means, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To restore the financial solvency and improve the governance 
of the United States Postal Service in order to ensure 
the efficient and affordable nationwide delivery of mail, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Postal Service Reform Act of 2017’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
TITLE I—POSTAL SERVICE BENEFITS REFORM 
Sec. 101. Postal Service Health Benefits Program. 
Sec. 102. Postal Service retiree health care benefit funding reform. 
Sec. 103. Postal Service pension funding reform. 
Sec. 104. Medicare part B premium transition for newly enrolling Postal Serv-
ice annuitants and family members. 
TITLE II—POSTAL SERVICE OPERATIONS REFORM 
Sec. 201. Governance reform. 
Sec. 202. Transition to more efficient and secure mail delivery. 
Sec. 203. Modernizing postal rates. 
Sec. 204. Nonpostal services. 
Sec. 205. Efficient and flexible universal postal service. 
Sec. 206. Fair stamp-evidencing competition. 
Sec. 207. Market-dominant rates. 
Sec. 208. Completion of initial rate regulation review. 
Sec. 209. Review of Postal Service cost attribution guidelines. 
Sec. 210. Aviation security for parcels. 
Sec. 211. ZIP codes. 
TITLE III—POSTAL SERVICE PERSONNEL 
Sec. 301. Postal Service Chief Innovation Officer. 
Sec. 302. Inspector General of the Postal Community. 
Sec. 303. Right of appeal to Merit Systems Protection Board. 
TITLE IV—POSTAL CONTRACTING REFORM 
Sec. 401. Contracting provisions. 
Sec. 402. Technical amendment to definition. 
SEC. 2. DEFINITIONS. 
In this Act— 
(1) the term ‘‘Postal Service’’ means the United 
States Postal Service; and 
(2) the term ‘‘postal retail facility’’ means a 
post office, post office branch, post office classified 
station, or other facility which is operated by the 
Postal Service, and the primary function of which is 
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to provide retail postal services, but does not include 
a contractor-operated facility offering postal services. 
TITLE I—POSTAL SERVICE 
BENEFITS REFORM 
SEC. 101. POSTAL SERVICE HEALTH BENEFITS PROGRAM. 
(a) ESTABLISHMENT.— 
(1) IN GENERAL.—Chapter 89 of title 5, United 
States Code, is amended by inserting after section 
8903b the following: 
‘‘SEC. 8903c. POSTAL SERVICE HEALTH BENEFITS PRO-
GRAM. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘covered Medicare individual’ 
means an individual who is entitled to benefits under 
part A of title XVIII of the Social Security Act (42 
U.S.C. 1395c et seq.), but excluding an individual 
who is eligible to enroll under such part under sec-
tion 1818 or 1818A of the Social Security Act (42 
U.S.C. 1395i–2, 1395i–2a); 
‘‘(2) the term ‘initial contract year’ means the 
contract year beginning in January of 2019; 
‘‘(3) the term ‘initial participating carrier’ 
means a carrier that enters into a contract with the 
Office to participate in the Postal Service Health 
Benefits Program during the initial contract year; 
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‘‘(4) the term ‘Office’ means the Office of Per-
sonnel Management; 
‘‘(5) the term ‘Postal Service’ means the United 
States Postal Service; 
‘‘(6) the term ‘Postal Service annuitant’ means 
an annuitant enrolled in a health benefits plan under 
this chapter whose Government contribution is paid 
pursuant to the requirements of section 8906(g)(2); 
‘‘(7) the term ‘Postal Service employee’ means 
an employee of the Postal Service enrolled in a 
health benefits plan under this chapter whose Gov-
ernment contribution is paid by the Postal Service; 
‘‘(8) the term ‘Postal Service Medicare covered 
annuitant’ means an individual who— 
‘‘(A) is a Postal Service annuitant; and 
‘‘(B) is a covered Medicare individual; 
‘‘(9) the term ‘Program’ means the Postal Serv-
ice Health Benefits Program established under sub-
section (c) within the Federal Employees Health 
Benefit Program; and 
‘‘(10) the term ‘Program plan’ means a health 
benefits plan offered under the Program. 
‘‘(b) APPLICATION.—The requirements under this 
section shall— 
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‘‘(1) apply to the initial contract year and each 
contract year thereafter; and 
‘‘(2) supersede any other provision of this chap-
ter inconsistent with such requirements, as deter-
mined by the Office. 
‘‘(c) ESTABLISHMENT
OF
THE POSTAL SERVICE 
HEALTH BENEFITS PROGRAM.— 
‘‘(1) IN GENERAL.—The Office shall establish 
the Postal Service Health Benefits Program under 
which the Office contracts with carriers to offer 
health benefits plans as described under this section. 
Except as otherwise provided under this section, any 
such contract shall be consistent with the require-
ments of this chapter for contracts under section 
8902 with carriers to offer health benefits plans 
other than under this section. The Program shall— 
‘‘(A) to the greatest extent practicable, in-
clude plans offered by— 
‘‘(i) each carrier for which the total 
enrollment in the plans provided under this 
chapter includes, in the contract year be-
ginning in January 2018, 1,500 or more 
enrollees who are Postal Service employees 
or Postal Service annuitants; and 
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‘‘(ii) any other carrier determined ap-
propriate by the Office; 
‘‘(B) be available for participation by all 
Postal Service employees and Postal Service an-
nuitants, in accordance with subsection (d); 
‘‘(C) provide for enrollment in a plan as an 
individual, for self plus one, or for self and fam-
ily; and 
‘‘(D) not be available for participation by 
an individual who is not a Postal Service em-
ployee or Postal Service annuitant (except as a 
family member of such an employee or annu-
itant or as provided under paragraph (5)). 
‘‘(2) SEPARATE POSTAL SERVICE RISK POOL.— 
The Office shall ensure that each Program plan in-
cludes rates that reasonably and equitably reflect the 
cost of benefits provided to a risk pool consisting 
solely of Postal Service employees and Postal Service 
annuitants (and covered family members of such em-
ployees and annuitants), taking into specific account 
the reduction in benefits cost for the Program plan 
due to the Medicare enrollment requirements under 
subsection (e) and any savings or subsidies resulting 
from subsection (f)(1). 
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such contract year becomes available 
as a Program plan; or 
‘‘(ii) resides in a geographic area for 
which there is not a Program plan in 
which the Postal Service annuitant may 
enroll. 
‘‘(B) CHANGED ENROLLMENT.—If a Post-
al Service annuitant changes enrollment to a 
health benefits plan under this chapter provided 
by a different carrier than the health benefits 
plan in which such annuitant is enrolled during 
the previous contract year, the Postal Service 
annuitant may only enroll in a Program plan. 
‘‘(3) EMPLOYEES.—A Postal Service employee 
who is enrolled in a health benefits plan under this 
chapter for the contract year immediately preceding 
the initial contract year that is not a health benefits 
plan offered by an initial participating carrier shall 
not be subject to the requirements of this section, 
except that— 
‘‘(A) if the Postal Service employee 
changes enrollment to a different health bene-
fits plan under this chapter during the open 
season for the initial contract year, or after the 
start of the initial contract year, the Postal 
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Service employee may only enroll in a Program 
plan; 
‘‘(B) if the health benefits plan in which 
such employee is enrolled for such contract year 
becomes available as a Program plan, the Post-
al Service employee may only enroll in a Pro-
gram plan; 
‘‘(C) upon becoming a Postal Service an-
nuitant, if the Postal Service employee elects to 
continue coverage under this chapter, the Post-
al Service employee shall enroll in a Program 
plan during the open season that is— 
‘‘(i) being held when the Postal Serv-
ice employee becomes a Postal Service an-
nuitant; or 
‘‘(ii) if the date on which the Postal 
Service employee becomes a Postal Service 
annuitant falls outside of an open season, 
the first open season following that date; 
and 
‘‘(D) subparagraphs (A), (B), and (C) 
shall not apply to an employee who resides in 
a geographic area for which there is not a Pro-
gram plan in which the employee may enroll. 
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‘‘(e) REQUIREMENT
OF MEDICARE ENROLLMENT 
FOR ANNUITANTS AND THEIR FAMILY MEMBERS.— 
‘‘(1) POSTAL SERVICE MEDICARE COVERED AN-
NUITANTS.—A Postal Service Medicare covered an-
nuitant subject to the requirements of this section 
may not obtain coverage under this chapter unless 
the annuitant is enrolled in part B of title XVIII of 
the Social Security Act (42 U.S.C. 1395j et seq.). 
‘‘(2) MEDICARE COVERED FAMILY MEMBERS.— 
If a family member of a Postal Service annuitant 
who is subject to the requirements of this section is 
a covered Medicare individual, the family member 
may not be covered under the Program as a family 
member of the Postal Service annuitant unless the 
family member is enrolled in part B of title XVIII 
of the Social Security Act (42 U.S.C. 1395j et seq.). 
‘‘(3) PROCESS FOR COORDINATED ELECTION OF 
ENROLLMENT UNDER MEDICARE PART B.—The Of-
fice shall establish a process under which— 
‘‘(A) Postal Service annuitants and family 
members who are subject to the requirements of 
paragraph (1) or (2)— 
‘‘(i) are informed, at the time of en-
rollment under this chapter, of such re-
quirement; 
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‘‘(ii) receive requests for any addi-
tional information necessary for enrollment 
in writing; and 
‘‘(iii) as a consequence of such enroll-
ment are deemed, for such continuous pe-
riod as such annuitant or family member 
involved otherwise maintains eligibility for 
enrollment under Medicare part B, to have 
elected to be enrolled under Medicare part 
B (under section 1837(m)(1) of the Social 
Security Act) in connection with the enroll-
ment in a Program plan under this chap-
ter; and 
‘‘(B) the Office provides the Secretary of 
Health and Human Services and the Commis-
sioner of Social Security in a timely manner 
with such information respecting such annu-
itants and family members and such election as 
may be required to effect their enrollment and 
coverage under Medicare part B and this sec-
tion in a timely manner. 
‘‘(f) MEDICARE COORDINATION.— 
‘‘(1) IN
GENERAL.—The Office shall require 
each Program plan to provide benefits for covered 
Medicare individuals pursuant to the standard co-
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ordination of benefits method used under this chap-
ter, rather than the exclusion method or the carve- 
out method. 
‘‘(2) MEDICARE PART D PRESCRIPTION DRUG 
BENEFITS.—The Office shall require each Program 
plan to provide prescription drug benefits for Postal 
Service annuitants and family members who are eli-
gible individuals (as defined in section 1860D– 
1(a)(3)(A) of the Social Security Act) through an 
employer group waiver plan offered under subsection 
(b) of section 1860D–22 of the Social Security Act. 
The Federal Government, through the Office, shall 
be deemed the sponsor of such plan. 
‘‘(g) POSTAL SERVICE CONTRIBUTION.— 
‘‘(1) IN GENERAL.—Subject to subsection (i), 
for purposes of applying section 8906(b) to the 
Postal Service, the weighted average shall be cal-
culated in accordance with paragraphs (2) and (3). 
‘‘(2) WEIGHTED AVERAGE CALCULATION.—Not 
later than October 1 of each year (beginning with 
2018), the Office shall determine the weighted aver-
age of the rates established pursuant to subsection 
(c)(2) for Program plans that will be in effect dur-
ing the following contract year with respect to— 
‘‘(A) enrollments for self only; 
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‘‘(B) enrollments for self plus one; and 
‘‘(C) enrollments for self and family. 
‘‘(3) WEIGHTING
IN
COMPUTING
RATES
FOR 
INITIAL
CONTRACT
YEAR.—In determining such 
weighted average of the rates for the initial contract 
year, the Office shall take into account (for purposes 
of section 8906(a)(2)) the enrollment of Postal Serv-
ice employees and annuitants in the health benefits 
plans offered by the initial participating carriers as 
of March 31, 2018. 
‘‘(h) RESERVES.— 
‘‘(1) SEPARATE RESERVES.— 
‘‘(A) IN GENERAL.—The Office shall en-
sure that each Program plan maintains sepa-
rate reserves (including a separate contingency 
reserve) with respect to the enrollees in the 
Program plan in accordance with section 8909. 
‘‘(B) REFERENCES.—For purposes of the 
Program, each reference to ‘the Government’ in 
section 8909 shall be deemed to be a reference 
to the Postal Service. 
‘‘(C) AMOUNTS TO BE CREDITED.—The re-
serves (including the separate contingency re-
serve) maintained by each Program plan shall 
be credited with a proportionate amount of the 
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funds in the reserves for health benefits plans 
offered by the carrier. 
‘‘(2) DISCONTINUATION OF PROGRAM PLAN.— 
In applying section 8909(e) relating to a Program 
plan that is discontinued, the Office shall credit the 
separate Postal Service contingency reserve main-
tained under paragraph (1) for that plan only to the 
separate Postal Service contingency reserves of the 
Program plans continuing under this chapter. 
‘‘(i) NO EFFECT ON EXISTING LAW.—Nothing in 
this section shall be construed as affecting section 1005(f) 
of title 39 regarding variations, additions, or substitutions 
to the provisions of this chapter. 
‘‘(j) MEDICARE EDUCATION PROGRAM.—Not later 
than 180 days after the date of enactment of this section, 
the Postal Service shall establish a Medicare Education 
Program. Under the Program, the Postal Service shall— 
‘‘(1) notify annuitants and employees of the 
Postal Service about the Postal Service Health Ben-
efits Program established under subsection (c)(1); 
‘‘(2) provide information regarding the Postal 
Service Health Benefits Program to such annuitants 
and employees, including a description of the health 
care options available under such Program, the re-
quirement that retirees be enrolled in Medicare 
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under subsection (e)(1), and the operation of the 
premium transition fund to be created under section 
104 of the Postal Service Reform Act of 2017; and 
‘‘(3) respond and provide answers to any in-
quiry from such employees and annuitants about the 
Postal Service Health Benefits Program or Medicare 
enrollment.’’. 
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENTS.— 
(A) Section 8903(1) of title 5, United 
States Code, is amended by striking ‘‘two levels 
of benefits’’ and inserting ‘‘2 levels of benefits 
for enrollees under this chapter generally and 2 
levels of benefits for enrollees under the Postal 
Service Health Benefits Program established 
under section 8903c’’. 
(B) The table of sections for chapter 89 of 
title 5, United States Code, is amended by in-
serting after the item relating to section 8903b 
the following: 
‘‘8903c. Postal Service Health Benefits Program.’’. 
(b) COORDINATION WITH MEDICARE.— 
(1) MEDICARE ENROLLMENT AND COVERAGE.— 
Section 1837 of the Social Security Act (42 U.S.C. 
1395p) is amended by adding at the end the fol-
lowing new subsection: 
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‘‘(m)(1) In the case of an individual who— 
‘‘(A) is— 
‘‘(i) a Postal Service Medicare covered an-
nuitant; or 
‘‘(ii) an individual who is a family member 
of such an annuitant and is a covered Medicare 
individual; 
‘‘(B) enrolls in a Program plan under section 
8903c of title 5, United States Code; and 
‘‘(C) is not enrolled under this part, 
the individual is deemed, in accordance with section 
8903c(e)(3) of such title, to have elected to be enrolled 
under this part. 
‘‘(2) In the case of an individual who is deemed to 
be enrolled under paragraph (1), the coverage period 
under this part shall begin on the date that the individual 
first has coverage under the Program plan pursuant to 
the enrollment described in paragraph (1)(B). 
‘‘(3) The definitions in section 8903c(a) of title 5, 
United States Code, shall apply for purposes of this sub-
section.’’. 
(2) WAIVER OF INCREASE OF PREMIUM.—Sec-
tion 1839(b) of the Social Security Act (42 U.S.C. 
1395r(b)) is amended by inserting after ‘‘section 
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1837’’ the following: ‘‘or pursuant to subsection (m) 
of such section’’. 
(3) CONFORMING COORDINATION OF BENEFIT 
RULES.—Section 1862(b) of the Social Security Act 
(42 U.S.C. 1395y(b)) is amended by adding at the 
end the following: 
‘‘(10) COORDINATION
OF
BENEFITS
WITH 
POSTAL SERVICE HEALTH BENEFITS PLANS.—The 
previous provisions of this subsection are superseded 
to the extent the Secretary determines, in consulta-
tion with the Office of Personnel Management, them 
to be inconsistent with section 8903c(f) of title 5, 
United States Code.’’. 
SEC. 102. POSTAL SERVICE RETIREE HEALTH CARE BEN-
EFIT FUNDING REFORM. 
(a) CONTRIBUTIONS.—Section 8906(g) of title 5, 
United States Code, is amended— 
(1) by striking ‘‘(2)(A) The Government’’ and 
inserting ‘‘(2)(A)(i) The Government’’; and 
(2) in paragraph (2)— 
(A) in subparagraph (A)— 
(i) in clause (i), as added by para-
graph (1), by striking ‘‘shall through Sep-
tember 30, 2016, be paid’’ and all that fol-
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lows and inserting the following: ‘‘shall be 
paid as provided in clause (ii).’’; and 
(ii) by adding at the end the fol-
lowing: 
‘‘(ii) With respect to the Government contributions 
required to be paid under clause (i)— 
‘‘(I) the portion of the contributions that is 
equal to the amount of the net claims costs under 
the enrollment of the individuals described in clause 
(i) shall be paid from the Postal Service Retiree 
Health Benefits Fund up to the amount contained 
in the Fund; and 
‘‘(II) any remaining amount shall be paid by 
the United States Postal Service.’’; and 
(B) by adding at the end the following: 
‘‘(C) For purposes of this paragraph, the amount of 
the net claims costs under the enrollment of an individual 
described in subparagraph (A)(i) shall be the amount, as 
determined by the Office over any particular period of 
time, equal to the difference between— 
‘‘(i) the sum of— 
‘‘(I) the costs incurred by a carrier in pro-
viding health services to, paying for health serv-
ices provided to, or reimbursing expenses for 
health services provided to, the individual and 
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any other person covered under the enrollment 
of the individual; and 
‘‘(II) an amount of indirect expenses rea-
sonably allocable to the provision, payment, or 
reimbursement described in subclause (I), as 
determined by the Office; and 
‘‘(ii) the amount withheld from the annuity of 
the individual or otherwise paid by the individual 
under this section.’’. 
(b) POSTAL SERVICE RETIREE HEALTH BENEFITS 
FUND.—Section 8909a of title 5, United States Code, is 
amended— 
(1) in subsection (d)— 
(A) in paragraph (1), by striking ‘‘required 
under section 8906(g)(2)(A)’’ and inserting the 
following: ‘‘required to be paid from the Postal 
Service Retiree Health Benefits Fund under 
section 8906(g)(2)(A)(ii)(I)’’; 
(B) by striking paragraph (2) and insert-
ing the following: 
‘‘(2)(A) Not later than June 30, 2018, the Office 
shall compute, and by June 30 of each succeeding year, 
the Office shall recompute, a schedule including a series 
of annual installments which provide for the liquidation 
of the amount described under subparagraph (B) (regard-
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