Key Takeaways

• The transition to the Postal Service Health Benefits (PSHB) Program in 2025 introduces important changes, but not all benefits are impacted.

• Your core retirement, dental, vision, and life insurance benefits continue without interruption or mandatory changes.

The Health Benefit Shift in 2025: What It Means for You

In 2025, the U.S. Postal Service transitions from the Federal Employees Health Benefits (FEHB) Program to the new Postal Service Health Benefits (PSHB) Program. This shift affects health insurance coverage for eligible USPS employees, annuitants, and their families. The new program is overseen by the Office of Personnel Management (OPM) and is designed specifically for postal workers and retirees.

But while the change is significant, not everything about your benefits package is affected. Many programs and entitlements remain the same, ensuring continuity and support in key areas of your life.

Your Retirement Benefits Stay the Same

Your retirement plan through the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS) does not change as a result of the PSHB transition.

• Pension calculations remain based on your high-3 average salary and years of creditable service.

• FERS Special Retirement Supplement (if applicable) continues as long as you meet eligibility requirements.

• CSRS retirees still receive their annuity as usual, unaffected by the PSHB rollout.

No additional enrollment actions are required for your pension benefits.

Thrift Savings Plan (TSP) Continues Without Disruption

The TSP, your retirement savings vehicle, operates independently of your health insurance. Whether you’re an employee contributing actively or a retiree managing your account, the PSHB shift has no impact on:

• Contribution limits or matching formulas.

• Fund selections or withdrawal rules.

• TSP website access and account management.

For 2025, the TSP contribution limit is $23,500, with catch-up contributions allowed based on your age.

Life Insurance Benefits Remain Intact

Your life insurance coverage through the Federal Employees’ Group Life Insurance (FEGLI) Program does not change with the introduction of PSHB.

• Coverage options remain the same.

• Premiums continue to adjust based on age and coverage type.

• You can still make changes to your FEGLI coverage during qualifying life events or open enrollment periods if applicable.

You do not need to re-enroll or take any action regarding FEGLI because of the health plan transition.

Your Dental and Vision Coverage Through FEDVIP Isn’t Affected

The Federal Employees Dental and Vision Insurance Program (FEDVIP) continues to serve postal employees and annuitants in 2025, just as it has in previous years.

• You can enroll, cancel, or make changes during the Federal Benefits Open Season.

• Coverage and provider networks remain as-is under the chosen FEDVIP plan.

• No automatic changes occur to your dental or vision benefits as a result of PSHB.

Keep in mind, though, that FEDVIP is entirely separate from your medical coverage, so it requires separate enrollment.

Flexible Spending Accounts (FSAs) Still Follow the Same Rules

If you’re an active USPS employee who participates in the Federal Flexible Spending Account Program (FSAFEDS), nothing changes in 2025 with the new PSHB system.

• Contribution limits for 2025 are $3,300 for healthcare FSAs.

• Carryover rules remain in place, allowing you to carry up to $660 in unused funds.

• The same rules apply for dependent care FSAs.

These accounts are administered separately and are unaffected by the type of health insurance you hold.

Federal Long Term Care Insurance Remains Suspended

The Federal Long Term Care Insurance Program (FLTCIP) remains in a suspension phase as of 2025. New applications are not being accepted, and the PSHB transition does not change this status.

• Current enrollees maintain their coverage.

• Premium payments continue as usual.

• No impact from PSHB enrollment or Medicare coordination.

If changes to FLTCIP occur in the future, they will be communicated separately by the program administrators.

Access to Retirement and Benefit Portals Is Unchanged

As a USPS employee or retiree, you continue using familiar systems to access your benefits:

• Employees use LiteBlue to manage health benefits and payroll information.

• Annuitants use KeepingPosted.org for retirement and benefit updates.

The launch of the PSHB does not require a new system or platform. You will still receive notifications and instructions through the usual portals.

Medicare Part A Is Still Automatic for Most

Medicare Part A (hospital insurance) continues to work the same way in 2025. If you’re eligible, you’re automatically enrolled at age 65 if you already receive Social Security benefits.

• Part A has no premium if you or your spouse worked 40 quarters or more.

• It covers inpatient hospital care, skilled nursing facility care, and some home health services.

• You are still encouraged to enroll even if you’re staying on a PSHB plan.

This portion of your healthcare coverage does not depend on PSHB participation.

Medicare Part B Has New Coordination Rules—but It’s Not a Total Shift

While Medicare Part B is now required to maintain PSHB coverage for certain annuitants and family members, not everyone is subject to this mandate.

You Are Exempt from the Requirement If:

• You retired on or before January 1, 2025.

• You were aged 64 or older as of January 1, 2025.

• You live overseas.

• You receive care through VA or Indian Health Services.

In these cases, your PSHB plan continues even if you don’t enroll in Part B.

What Stays the Same:

• Part B enrollment is handled through Social Security, not OPM.

• Standard premiums and income-based adjustments still apply.

• You still have access to the same Medicare claims process and coverage rules.

Prescription Drug Coverage Through PSHB Works Like FEHB

Under PSHB, prescription drug benefits are integrated for Medicare-eligible enrollees through an Employer Group Waiver Plan (EGWP), similar to the setup many FEHB plans previously used.

• You get access to a broader pharmacy network.

• You benefit from the new $2,000 annual out-of-pocket cap for Part D.

• Monthly insulin costs are capped at $35.

If you’re eligible for Medicare and stay in a PSHB plan, you’ll automatically receive this Part D coverage unless you opt out.

Travel, Relocation, and Living Abroad Do Not Disrupt Most Coverage

Your eligibility for PSHB, Medicare, and many federal benefits remains intact even if you:

• Move out of state.

• Temporarily relocate.

• Live abroad long-term (with some restrictions for Medicare Part B).

While local provider access may vary, your enrollment status does not automatically change based on your location.

Some Benefits May Still Change Based on Your Actions

Though many benefits remain steady, it’s important to remember that:

• Missing the PSHB Open Season can result in automatic enrollment in a comparable plan.

• Opting out of Medicare Part B (when required) may cause a loss of drug coverage under PSHB.

• Qualifying life events like marriage, divorce, or death of a spouse can impact coverage eligibility.

These changes are not caused by the PSHB program itself but rather by your choices or life circumstances.

What to Expect Going Forward

You can expect continued communication from OPM, USPS, and plan carriers throughout the year. Resources will be updated regularly to reflect any changes to eligibility, benefits, and plan options.

Stay informed by checking:

• Your plan brochures

• LiteBlue (for employees)

• KeepingPosted.org (for annuitants)

• OPM’s official PSHB resources

Make Confident Decisions About What Matters Most

Even as the PSHB transition brings new rules for health insurance, most of your core benefits—including retirement, dental and vision, life insurance, and more—remain untouched. Take the time to review your options and understand what’s changing and what isn’t.

For help reviewing your benefits and understanding how these changes affect your personal situation, get in touch with a licensed agent listed on this website for professional advice.