Key Takeaways

• The Postal Service Health Benefits (PSHB) program officially replaces FEHB coverage for USPS employees and retirees in 2025, marking the end of a decades-long reliance on the Federal Employees Health Benefits system.

• Although PSHB offers some structural similarities to FEHB, there are key changes in premiums, Medicare coordination, eligibility rules, and prescription drug coverage that you need to understand.

Understanding the Shift: PSHB Replaces FEHB in 2025

If you’ve been under the Federal Employees Health Benefits (FEHB) program for years, you’re likely familiar with how your health plan worked, what your premium shared cost was, and how to coordinate it with Medicare if you were retired. But beginning in 2025, FEHB no longer applies to USPS workers and annuitants. Instead, you’re now part of the Postal Service Health Benefits (PSHB) program.

This change isn’t just a matter of branding. It comes with updated cost-sharing structures, Medicare integration mandates, and altered plan options, all shaped specifically for the USPS workforce. While many of the foundational rules remain the same, the experience under PSHB may feel different.

What’s Staying the Same From FEHB to PSHB

Before diving into the differences, it helps to know what hasn’t changed:

• Federal Oversight: PSHB is still administered by the U.S. Office of Personnel Management (OPM).

• Annual Enrollment Period: Open Season continues from November through December each year.

• Eligibility Groups: Current USPS employees, annuitants, and eligible family members remain eligible under PSHB.

• Premium Contributions: The employer continues to cover approximately 72% of the total premium on average.

• Plan Types: You can still choose between HMO, PPO, HDHP, and Consumer-Driven plans.

While the framework seems familiar, the underlying rules have shifted in a few major ways.

Medicare Enrollment Is Now Tied to PSHB Eligibility

One of the most significant differences in 2025 is how Medicare Part B enrollment now affects your PSHB eligibility.

Who Must Enroll in Medicare Part B

If you’re a Medicare-eligible annuitant (or covered family member) as of 2025, you must enroll in Medicare Part B to maintain full PSHB coverage, unless you fall under one of the exceptions:

• You retired on or before January 1, 2025.

• You are employed and age 64 or older as of January 1, 2025.

• You reside abroad.

• You receive health coverage through the Indian Health Service or VA.

If you meet the criteria, you’re exempt. Everyone else who is Medicare-eligible must be enrolled in Part B to avoid losing access to key PSHB benefits.

Why This Change Matters

In FEHB, enrolling in Part B was optional. Under PSHB, your decision directly affects your benefits. Enrolling in Part B now allows your PSHB plan to coordinate benefits more effectively, often reducing your out-of-pocket costs.

Prescription Drug Coverage Has a New Structure

In 2025, Medicare-eligible enrollees in PSHB plans automatically receive integrated Medicare Part D coverage through an Employer Group Waiver Plan (EGWP). This structure enhances pharmacy benefits significantly.

Key Pharmacy Benefits Now Include:

• A $2,000 annual cap on out-of-pocket drug costs under Medicare Part D rules.

• $35 monthly cap on insulin, as required by Medicare.

• Broader pharmacy network access through the enhanced plan design.

Under FEHB, drug coverage was typically bundled with your medical plan but not aligned with Medicare drug policy. PSHB, by contrast, brings in tighter coordination that could reduce your total prescription costs once you meet eligibility.

Contribution Costs: What You Pay Is Shifting

You may already be noticing changes in your biweekly or monthly premium contributions in 2025.

Premiums by Enrollment Type (Biweekly Average):

• Self Only: Over $110 for annuitants.

• Self Plus One: Exceeding $240.

• Self and Family: Above $260.

These contributions have increased compared to previous FEHB averages, where many enrollees paid less in 2024. Government contributions remain roughly the same percentage, but the total cost of plans has increased.

In addition to premiums, deductibles have also increased, particularly for high-deductible or out-of-network services:

• In-network deductibles: $350 to $500 for low-deductible plans.

• High-deductible plans: $1,500 to $2,000.

• Out-of-network deductibles: $1,000 or more in some cases.

If you aren’t reviewing your plan closely, these costs could surprise you.

Out-of-Pocket Limits and Cost Sharing

The PSHB program still has an annual maximum out-of-pocket (MOOP) limit, but the thresholds have increased in 2025:

• Self Only: $7,500 in-network.

• Self Plus One or Family: $15,000 in-network.

These limits protect you from catastrophic costs, but many plans also impose higher copayments and coinsurance rates than what you were used to under FEHB:

• Primary care visits: $20 to $40.

• Specialist visits: $30 to $60.

• Urgent care: $50 to $75.

• Emergency room: $100 to $150.

These are general figures and vary by plan, but you may find yourself paying more per visit than you did under FEHB.

PSHB Eligibility and Enrollment Rules Are Stricter

FEHB gave you more flexibility to remain covered as a family unit, even after life events. In PSHB, eligibility enforcement is more rigid.

You Need to Confirm the Following:

• Family members must meet strict eligibility criteria defined by OPM.

• Failure to enroll during Open Season or a qualifying event means you cannot make changes until the next period.

• If you decline Part B (when required), you lose access to the PSHB medical and pharmacy benefits until enrolled again.

In short, there’s less room for leniency now. The PSHB structure requires closer attention to deadlines and compliance.

What’s the Impact on Retirees?

For annuitants, PSHB’s biggest impact revolves around Medicare coordination and premium costs. If you retired before January 1, 2025, you retain some flexibility and are exempt from the Medicare Part B mandate. However, you can still choose to enroll and potentially reduce your cost-sharing.

If you retired after January 1, 2025, or are approaching retirement now, PSHB will require you to:

• Enroll in Medicare Part B to keep PSHB.

• Manage new drug coverage through the Medicare-integrated model.

• Pay attention to potential cost increases each Open Season.

You’ll also want to review how your annuities interact with increased premiums, particularly if you’re on a fixed income.

How the PSHB Enrollment Process Works

Enrollment into the PSHB system happened automatically for most FEHB enrollees in 2024. If you were already in FEHB, you were transitioned to a corresponding PSHB plan on January 1, 2025, unless you made changes during Open Season.

If you did not actively select a plan, you were auto-enrolled in the closest matching option.

Enrollment and Account Management Platforms:

• USPS Employees: Use the LiteBlue portal.

• Annuitants: Use KeepingPosted.org for updates and account access.

You are also encouraged to review your Annual Notice of Change (ANOC) every fall to stay informed of any updates.

Support for PSHB Transition and Ongoing Help

This transition wasn’t small. To help with the changeover from FEHB to PSHB, the following supports were made available:

• PSHB Navigator Help Line: 1-833-712-7742

• OPM PSHB Website: Official plan brochures, comparison tools, and FAQs.

Additionally, plan comparison tools and outreach efforts occurred throughout 2024 and continue through 2025 for those still navigating the transition.

Why You Need to Stay Involved Every Year

Now that you’re part of PSHB, staying on top of changes is more important than ever. With higher deductibles, stricter Medicare rules, and integrated drug coverage, the consequences of overlooking your plan details can be costly.

You should:

• Review your plan options during each Open Season.

• Monitor Medicare eligibility for yourself and family members.

• Consider total costs (not just premiums) before enrolling.

• Track eligibility and enrollment deadlines to avoid gaps.

Staying Informed Can Help You Save and Stay Protected

The switch to PSHB isn’t a downgrade, but it is a different system. By understanding the changes and actively managing your coverage, you can still find quality, affordable care. But it requires more attention to detail than what you may have grown used to under FEHB.

If you’re unsure about your options, Medicare requirements, or plan costs, get in touch with a licensed agent listed on this website who can walk you through your choices and help you avoid surprises.