Key Takeaways

• While PSHB and FEHB plans may look nearly identical on the surface, they function differently in key areas like Medicare integration, enrollment procedures, and cost-sharing.

• Assuming PSHB is simply a renamed FEHB could leave you underprepared for major changes that impact your out-of-pocket costs and long-term healthcare strategy.

Similar Labels, But Not the Same System

At first glance, it might seem that the Postal Service Health Benefits (PSHB) program is just a rebranding of the Federal Employees Health Benefits (FEHB) program. After all, many of the same carriers appear to offer coverage, and the government continues to pay a large portion of the premium. But while both systems share structural similarities, their underlying policies, funding arrangements, and coordination with Medicare Part B reveal critical distinctions.

If you are a USPS employee or annuitant in 2025, you are now fully under the PSHB system. This shift changes the way you engage with your health coverage, especially if you’re approaching retirement or already Medicare-eligible.

1. Medicare Part B Enrollment Is No Longer Optional for Most

Under FEHB, enrolling in Medicare Part B when you became eligible was encouraged but voluntary. With PSHB in 2025, Medicare-eligible annuitants and their eligible family members must enroll in Part B to maintain full PSHB medical coverage.

Key exceptions include:

• Retirees who left USPS on or before January 1, 2025.

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

• Residents living overseas.

• Individuals receiving VA or Indian Health Services care.

If you don’t qualify for one of these exceptions, failing to enroll in Medicare Part B could result in losing your PSHB medical coverage, leaving you with limited options for care.

2. Prescription Drug Coverage Takes a New Path

FEHB drug coverage was embedded in each plan and varied widely. Under PSHB, if you’re Medicare-eligible and enrolled in Part B, your drug coverage is automatically integrated through a Medicare Part D Employer Group Waiver Plan (EGWP).

This change matters for three reasons:

• There’s now a $2,000 annual out-of-pocket cap for prescription drugs.

• Many plans offer a $35 monthly cap on insulin.

• You benefit from lower costs and broader pharmacy access due to Part D’s regulatory protections.

However, if you opt out of the Medicare drug integration, you forfeit your drug coverage through PSHB. And re-enrollment opportunities are limited. This is a sharp departure from the FEHB model, where you could add or drop coverage each Open Season.

3. Open Season and Enrollment Behave Differently

FEHB Open Season enrollment ran on a system-wide OPM platform. Under PSHB, enrollment processes differ depending on your status:

• Current USPS employees use the LiteBlue portal.

• USPS annuitants must use KeepingPosted.org.

In 2024, during the transition, many annuitants were automatically enrolled in a PSHB plan matching their prior FEHB coverage. But beginning in 2025 and beyond, you must proactively review and select plans during Open Season each November–December if you want to make changes.

Failure to act can result in staying with a plan that may no longer suit your needs, especially if plan benefits or cost-sharing shift.

4. Premium Contributions Work on a Different Scale

One of the more noticeable differences is how premiums are structured.

In FEHB, the government paid approximately 70–75% of your total premium. PSHB continues a similar model, but with some recalibrated calculations. For 2025:

• USPS employee monthly premiums (weighted average) are $860.93 for Self Only, $1,860.93 for Self Plus One, and $2,025.08 for Self and Family.

• The employer contribution averages around 72%.

Annuitant contributions differ and are based on their enrollment type and whether Medicare is integrated.

This shift means you might be paying more or less than you did under FEHB, depending on your plan choice, employment status, and family size. What looked like a similar premium on the surface may now come with different out-of-pocket obligations.

5. Deductibles and Cost-Sharing See More Variability

While both FEHB and PSHB plans offer a range of low- and high-deductible options, PSHB plans in 2025 tend to emphasize cost-sharing adjustments based on Medicare enrollment.

For example:

• In-network deductibles may range from $350 to $500 for low-deductible plans, and $1,500 to $2,000 for high-deductible ones.

• Out-of-network deductibles may reach $3,000.

• Coinsurance varies: 10%–30% for in-network services, and 40%–50% for out-of-network.

• Copayments generally fall between $20–$60 for regular visits, and $100–$150 for emergency care.

These figures are shaped by whether you’re Medicare-enrolled. If you are, some plans reduce or even eliminate your deductibles and coinsurance, which was less commonly the case under FEHB.

6. Medicare Coordination Brings Cost Relief—but Only if You Enroll

In 2025, PSHB plans are deeply integrated with Medicare. This allows plans to offer:

• Waived or reduced deductibles

• Lower copayments

• Expanded drug coverage via Part D EGWP

But you only benefit if you’re enrolled in Medicare Parts A and B. Without it, your PSHB plan functions more like a standalone commercial plan—and you absorb more of the cost. This is a major shift from FEHB, where having or skipping Medicare had minimal impact on cost-sharing.

Failing to integrate Medicare with your PSHB plan may mean:

• Higher deductibles

• No access to cost-sharing reductions

• No out-of-pocket caps on drugs

7. PSHB Doesn’t Affect FEDVIP, FEGLI, or FLTCIP

One area of continuity is that the transition to PSHB does not impact your other federal benefits:

• FEDVIP (dental and vision) remains separate and available.

• FEGLI (life insurance) policies stay intact.

• FLTCIP (long-term care) coverage, if already enrolled, continues unaffected.

That said, the PSHB program requires separate action, so do not assume everything rolls over automatically just because your other benefits did.

8. PSHB Coverage Is Lifetime—But Only If You Maintain Eligibility

Like FEHB, PSHB coverage continues for life if you:

• Retire with immediate annuity eligibility

• Were enrolled continuously for the 5 years prior to retirement

• Continue paying your share of the premium

However, if you lose eligibility (e.g., by refusing required Medicare enrollment), your PSHB medical coverage may be terminated. Restoring coverage later could be very difficult or impossible. The margin for error is narrower than it was under FEHB.

9. The Pharmacy Network Is Broader, But More Regulated

Because Medicare Part D standards now apply to many PSHB plans through EGWP integration, the pharmacy network:

• Must meet federal access standards

• Offers national coverage, including retail and mail-order options

• Often expands beyond what was available under FEHB drug plans

This is a net gain for many enrollees, particularly those in rural or underserved areas. But it comes with stricter rules for opting out, as discussed earlier.

10. There Are Fewer Plans in 2025—But More Tailored Options

Compared to FEHB’s hundreds of plan choices, PSHB offers a more curated list in 2025. While this may feel like a reduction, it serves a purpose:

• Every plan must meet new Medicare integration standards

• Plans are reviewed for alignment with USPS needs

If you’re Medicare-eligible, the smaller list may actually offer better alignment with your healthcare needs. But if you relied on niche FEHB plans in the past, you might need to reevaluate your selections carefully.

Where Similarity Ends and Strategy Begins

The transition to PSHB means you can’t afford to treat your health coverage like it’s business as usual. While many elements of the FEHB experience remain—like government contributions, Open Season, and broad plan options—critical policies now require deeper planning.

• Medicare coordination isn’t optional.

• Drug coverage rules have changed.

• Enrollment portals and deadlines differ.

If you’re not paying attention to these details, you could miss opportunities to lower your healthcare costs—or worse, lose coverage altogether.

For a smart strategy, speak to a licensed agent listed on this website. They can walk you through your options, confirm whether you’re exempt from Medicare requirements, and help match you with a plan that reflects your real healthcare needs in 2025 and beyond.