Key Takeaways

• The PSHB transition has already begun, and waiting any longer could mean missing critical deadlines or making ill-informed choices.

• If you are a USPS employee, retiree, or eligible family member, your health coverage decisions in 2025 could shape your financial and medical security for years.

The Transition Isn’t Optional—It’s Happening Right Now

If you are still treating the Postal Service Health Benefits (PSHB) transition as something to deal with later, it’s time for a reality check. The Federal Employees Health Benefits (FEHB) program is no longer the default for postal employees and annuitants. As of January 1, 2025, the PSHB program is officially live, and enrollment, plan selection, and Medicare coordination are no longer optional considerations. They are required.

This change affects all USPS employees, retirees, and family members who previously relied on FEHB. And with the shift comes new rules, costs, coverage options, and responsibilities.

Let’s walk through what you need to know and act on immediately.

Who Is Affected by the PSHB Transition?

The PSHB transition applies to:

• All active Postal Service employees

• All Postal Service annuitants (retirees)

• Eligible family members under postal plans

• Survivors of deceased postal employees or annuitants

If you’re in any of these groups and enrolled in a FEHB plan, you are no longer covered under that plan after December 31, 2024. Your coverage in 2025 must be through a PSHB plan, unless you are covered through a non-postal family member’s FEHB plan.

2025 Is a Critical Year: What’s Already in Motion

You’re not just choosing a plan—you’re adapting to an entirely new benefits system. Here’s what has already happened or is currently active in 2025:

• The PSHB program launched on January 1, 2025.

• Medicare Part B enrollment requirements went into effect for many postal retirees and their covered family members.

• Automatic enrollment notifications were sent out before Open Season to anyone previously enrolled in a FEHB plan, placing them into a similar PSHB option unless they made an active choice.

• Open Season ran from November to December 2024. Anyone who didn’t act was automatically transitioned, which might not align with their current needs or budget.

If you’re just now catching up, it’s not too late to understand what’s at stake and how to manage it moving forward.

What’s New Under PSHB—And Why It Matters

You might assume PSHB is just FEHB with a different label. But that’s not the case.

Here are some of the most significant differences and why you need to pay attention:

Plan Structures

PSHB plans may look similar in name or type to their FEHB predecessors, but benefits, cost-sharing structures, and provider networks can be different. You must review the full plan brochure to understand:

• Copayment amounts

• Coinsurance rates

• Deductibles

• Coverage limits and exclusions

• Out-of-pocket maximums

Government Contribution

The government still contributes approximately 70% of premium costs, just as it did under FEHB. However, premium totals may have changed, and your share could differ depending on the plan type (Self Only, Self Plus One, or Self and Family).

Medicare Part B Integration

For annuitants and eligible family members who are Medicare-eligible:

• Enrollment in Medicare Part B is now required to keep PSHB coverage active, unless you meet an exemption.

• If you retired on or before January 1, 2025, you are not subject to this requirement.

• Some plans offer reimbursement incentives for Part B premiums and lower cost-sharing when enrolled in both PSHB and Medicare.

Prescription Drug Coverage

PSHB includes integrated Medicare Part D drug coverage for those enrolled in Medicare. You benefit from:

• A $2,000 annual out-of-pocket cap on drug costs

• Lower prescription copays

• Broader pharmacy network access

If you opt out of this drug coverage, you risk losing PSHB prescription benefits entirely.

Mistakes You Can’t Afford to Make

Now that PSHB is active, these common mistakes could cost you financially or result in a coverage gap:

1. Ignoring Medicare Part B Requirements

If you’re Medicare-eligible and don’t enroll in Part B when required, you could lose access to your PSHB plan. This includes:

• Retirees who turned 65 before 2025 but delayed Part B

• Family members who are Medicare-eligible

2. Assuming Automatic Enrollment Is Good Enough

While automatic enrollment was provided as a fallback, it may not match your current health needs or budget. It’s your responsibility to review and switch during future Open Seasons or during a qualifying life event.

3. Overlooking Cost Changes

Even if you stayed in a plan with the same name, the cost-sharing, coverage limits, and networks may have changed. Not reviewing these could mean:

• Higher out-of-pocket spending

• Less access to your preferred providers

• Reduced benefits in key service areas

What You Can Do Now if You Missed Open Season

If you didn’t make changes during the November-December 2024 Open Season, you’ve likely been auto-enrolled into a default PSHB plan. But not all is lost.

Here’s what you can do:

• Check your current plan details through your online account (KeepingPosted.org for annuitants, LiteBlue for employees).

• Monitor your plan performance throughout the year. If your needs aren’t being met, document your concerns for the next Open Season.

• Wait for the next Open Season in late 2025, typically running from early November to early December.

• If you experience a Qualifying Life Event (QLE), such as marriage, divorce, or a move, you may be eligible to make a change sooner.

Understanding Your Costs in 2025

Your total costs under PSHB will include:

• Monthly premiums: Your share depends on the plan and coverage type.

• Deductibles: These vary by plan and typically range from a few hundred dollars to several thousand, especially for high-deductible plans.

• Copayments and coinsurance: Ranges widely between providers and services. For example:

  • Primary care visits may cost $20-$40

  • Specialist visits may range from $30-$60

  • Emergency room visits may be $100 or more

• Prescription drugs: The $2,000 cap on drug costs helps manage expenses for high-need users, especially those on multiple medications.

Review your plan brochure to assess how these costs align with your expected medical use in 2025.

Medicare Coordination Can Save You More Than You Think

If you’re a Medicare-eligible annuitant, PSHB’s integration with Medicare Part B and Part D could save you hundreds or even thousands in out-of-pocket costs:

• Lower cost-sharing (copays and coinsurance) when Medicare is primary

• Waived or reduced deductibles in many PSHB plans

• Access to Part B premium reimbursements in some plan options

However, to access these savings, you must:

• Be enrolled in Medicare Part A and Part B

• Not opt out of the Medicare Part D drug coverage offered by your PSHB plan

Skipping this step may result in higher costs and less coverage.

Resources That Actually Help

Instead of relying on outdated assumptions or second-hand opinions, use official tools and resources:

• KeepingPosted.org – for annuitants to manage benefits and access plan materials

• LiteBlue – for employees to enroll or make changes

• OPM Plan Comparison Tools – to analyze PSHB plans based on cost, provider network, and benefit structures

• Plan brochures – the most detailed source of what each PSHB plan covers and how much it may cost you

Also, make sure you understand what constitutes a Qualifying Life Event (QLE) so you can make changes if needed outside of Open Season.

Don’t Let Inaction Undermine Your Health Security

Every decision you make under PSHB in 2025 has a ripple effect. Whether you’re working or retired, your choices directly impact:

• Your financial security

• Your access to care

• Your ability to manage future health events

If you haven’t looked at your plan materials, reviewed your Medicare status, or evaluated how your needs align with your current PSHB plan, now is the time.

Make Your PSHB Strategy Work for You

The PSHB transition isn’t just a formality. It’s a new framework that demands informed action. Waiting until the next Open Season or until a medical issue arises is a costly risk.

Take control of your benefits:

• Review your current plan’s cost structure and coverage

• Confirm your Medicare enrollment status and understand how it integrates with PSHB

• Set a reminder for the 2025 Open Season so you can make changes proactively

• Get in touch with a licensed agent listed on this website to walk through your options in detail