Key Takeaways

• Switching from FEHB to PSHB is not always automatic; if you’re not paying attention, you could be enrolled in a plan that doesn’t align with your healthcare needs or retirement timeline.

• Being proactive during the PSHB Open Season from November to December could either protect your current benefits or save you from unexpected out-of-pocket costs in 2025 and beyond.

Understanding the Shift to PSHB in 2025

The Postal Service Health Benefits (PSHB) Program officially replaces the Federal Employees Health Benefits (FEHB) Program for Postal Service employees and retirees starting January 1, 2025. But what many don’t realize is that this transition isn’t entirely hands-off. While most current enrollees will be auto-enrolled in a corresponding PSHB plan, there are exceptions—and consequences—if you don’t take the time to verify your status and coverage.

What the Automatic Enrollment Covers—and What It Doesn’t

Who Gets Auto-Enrolled

If you are already enrolled in an FEHB plan through USPS and meet the eligibility requirements, you will be automatically transferred into a PSHB plan that most closely matches your existing coverage. This process is intended to simplify the transition.

Who Needs to Take Action

However, automatic enrollment does not apply if:

• You’re covered under a family member’s FEHB plan who is not a Postal employee or annuitant.

• You plan to change enrollment types (e.g., from Self Plus One to Self Only).

• You are Medicare-eligible and do not meet the Part B enrollment requirements that PSHB now enforces.

In these cases, you must actively select a PSHB plan during the Open Season or risk losing your coverage or being placed in an unfavorable plan.

New Medicare Part B Requirement—and Its Ripple Effects

One of the biggest changes under PSHB is the requirement for Medicare-eligible annuitants and their eligible family members to enroll in Medicare Part B in order to maintain PSHB coverage. There are a few limited exceptions, including retirees who:

• Retired on or before January 1, 2025, and are not already enrolled in Part B.

• Are age 64 or older as of January 1, 2025.

• Live outside the United States.

• Receive care through the Indian Health Service or Department of Veterans Affairs.

Failing to enroll in Part B, if required, means you may not be eligible for your PSHB plan. Instead, you could lose your drug coverage and face re-enrollment restrictions.

Impact of Inaction During Open Season

The 2025 PSHB Open Season runs from November to December. If you assume your current coverage will carry over without confirming your enrollment status, you may face:

• A plan mismatch, with different deductibles, networks, and cost-sharing rules.

• Higher out-of-pocket costs due to missed opportunities to enroll in Medicare Part B.

• Ineligibility for certain PSHB cost-saving features that depend on Medicare integration.

This is not the time to be passive. Reviewing your PSHB options and making an intentional selection can directly affect both your finances and your access to care.

The Medicare Prescription Drug Integration Factor

Starting in 2025, PSHB plans will integrate prescription drug coverage through Medicare Part D Employer Group Waiver Plans (EGWPs). This shift brings several implications:

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

• Reduced copayments and better formulary access for Medicare enrollees.

• Mandatory drug plan participation unless you opt out, which will result in losing PSHB drug benefits.

If you are already enrolled in Medicare Part A and B, you will automatically receive this enhanced drug coverage. But if you haven’t enrolled in Part B—and are required to—you won’t be eligible for the PSHB drug benefit.

Financial Considerations: Premiums, Deductibles, and Cost-Sharing

PSHB plans share structural similarities with FEHB plans but also come with cost variations. For example:

• In-network deductibles for PSHB plans generally range between $350 and $2,000.

• Coinsurance can vary widely from 10% to 50%, depending on whether you stay in-network or go out-of-network.

• Copayments are often tiered and may rise for urgent care, specialists, or emergency services.

Your total health care costs in retirement may differ significantly depending on whether you coordinate your PSHB plan with Medicare Part B.

Why Choosing the Right Enrollment Type Matters

Enrollment types under PSHB—Self Only, Self Plus One, and Self and Family—require careful consideration. If you don’t adjust your enrollment type before the end of Open Season, your 2025 coverage may:

• Include family members who are no longer eligible, such as adult children.

• Exclude eligible dependents you intended to cover.

• Cost more than necessary if you’re covering fewer people.

You must use the appropriate platform—LiteBlue for employees or KeepingPosted.org for annuitants—to make changes during Open Season.

What Happens if You Miss the Deadline?

If you miss the November–December Open Season and didn’t qualify for automatic enrollment, your only other chance to enroll in or change PSHB coverage will be through a Qualifying Life Event (QLE). These include:

• Marriage or divorce

• Birth or adoption of a child

• Loss of other health coverage

Outside of a QLE, your plan selection (or lack thereof) will stand for the rest of the plan year, which could lead to substantial financial and coverage consequences.

Steps You Should Take Now

To make sure the switch from FEHB to PSHB works in your favor, follow these steps:

• Confirm your eligibility: Check if you qualify for automatic enrollment or need to act.

• Evaluate your Medicare status: Determine if you or your covered family members need to enroll in Part B.

• Compare plans: Review cost-sharing structures, provider networks, and benefits in available PSHB options.

• Adjust your enrollment type: Make changes as necessary to ensure the right people are covered.

• Log into your enrollment portal: Use LiteBlue (for employees) or KeepingPosted.org (for annuitants) to update your elections.

Mistakes to Avoid When Switching to PSHB

Making assumptions or overlooking key details can result in real losses. Avoid the following:

• Assuming FEHB coverage automatically rolls into PSHB for every situation.

• Ignoring the Medicare Part B requirement and its exceptions.

• Overlooking out-of-pocket costs and deductible resets that differ from FEHB.

• Missing the Open Season window and being stuck in a mismatched plan.

These are correctable—but only if you catch them before it’s too late.

Getting PSHB Right Could Make Retirement Smoother

The switch to PSHB in 2025 marks a significant turning point for your health coverage. Whether you’re actively working or retired, how you respond to this shift determines how protected—and prepared—you’ll be for years ahead. Don’t wait until problems arise. Take the time now to assess your status, review your plan options, and ensure your Medicare alignment is complete.

If you’re unsure about what steps apply to your situation, speak to a licensed agent listed on this website. They can walk you through the process and help you avoid costly mistakes.