Key Takeaways

• PSHB is not a replica of FEHB. While the Postal Service Health Benefits Program carries over several core features, it introduces critical changes that affect your costs, eligibility, and coordination with Medicare.

• Understanding the structural and administrative shifts in PSHB is essential, especially if you’re a retiree. The plan now mandates specific Medicare integration, has distinct cost-sharing formats, and comes with new enrollment rules.

Why the Transition Matters More Than You Think

If you’ve been part of the Federal Employees Health Benefits (FEHB) program for years, you might expect the Postal Service Health Benefits (PSHB) program to operate identically. That’s an assumption many postal workers and retirees have made—but PSHB isn’t just a name change. It’s a substantial shift in how your health coverage works moving forward.

The transition officially began on January 1, 2025, replacing FEHB for Postal Service employees, annuitants, and eligible family members. But what hasn’t been spelled out clearly is how this change affects your premiums, your coordination with Medicare, and your enrollment responsibilities.

Let’s explore the key differences that deserve your attention.

1. Medicare Part B Requirements Are No Longer Optional for Most

Under FEHB, you could choose whether or not to enroll in Medicare Part B when you became eligible. With PSHB, that choice has shifted for many postal retirees.

• If you retired on or after January 1, 2025, and you are Medicare-eligible, you are required to enroll in Medicare Part B to maintain PSHB coverage.

• If you retired before January 1, 2025, you are generally exempt from this rule—though you can still choose to enroll for added cost-sharing benefits.

• Current employees aged 64 or older as of January 1, 2025, are also exempt if they retire in the future.

This change is aimed at reducing costs for the Postal Service and integrating PSHB more directly with Medicare, but it does mean you’ll be facing dual premiums if you fall into the mandatory enrollment group.

2. Prescription Drug Coverage Is Now Tied to Medicare Part D

FEHB plans typically included prescription drug benefits within the health plan. Under PSHB, your prescription benefits shift if you are Medicare-eligible:

• You will be automatically enrolled in a Medicare Part D EGWP (Employer Group Waiver Plan) offered through your PSHB plan.

• If you opt out of this Part D coverage, you will lose drug coverage under PSHB and will not have another chance to enroll in the Part D portion later unless a qualifying life event occurs.

This makes it crucial to understand how the drug benefits work, especially because the 2025 Part D structure includes a new $2,000 out-of-pocket cap—a feature that can save significant money if you require high-cost medications.

3. FEHB and PSHB Differ in Cost-Sharing Structures

At first glance, it may seem like premiums under PSHB are similar to FEHB. But dig deeper, and you’ll see some changes:

• Deductibles under PSHB plans can be higher, especially in high-deductible plans.

• Copayments and coinsurance amounts vary widely depending on whether you are enrolled in Medicare.

• Out-of-pocket maximums under PSHB have been updated, with Self Only plans capped at $7,500 and Self Plus One or Self and Family plans capped at $15,000 for in-network services.

One key difference is that some PSHB plans waive or reduce these costs if you’re enrolled in both Medicare Part A and B.

4. Enrollment Process Is Now Managed Separately

Under FEHB, employees and retirees used the same portal to manage their health benefits. With PSHB, the processes diverge:

• Active USPS employees use LiteBlue for plan selection and changes.

• Retirees and annuitants manage their PSHB enrollment through KeepingPosted.org.

If you miss your window for enrolling during Open Season (held annually from November to December), you may be locked into your current plan unless a Qualifying Life Event (QLE) occurs.

5. FEHB Flexibility No Longer Applies in Some Areas

One of the benefits of FEHB was its broad flexibility—especially for employees switching between federal agencies. PSHB, however, is exclusively for USPS:

• If you move from the Postal Service to another federal agency, you will need to enroll in a FEHB plan again, and PSHB coverage ends.

• You cannot keep your PSHB plan if you’re no longer eligible under USPS employment or retirement status.

This makes it vital to plan ahead if you’re considering a role change within the federal workforce.

6. Government Contributions Remain—But Don’t Cover Everything

As with FEHB, the federal government continues to pay roughly 70% of total premiums under PSHB. However:

• Your share of the premium depends on your plan choice and enrollment tier (Self Only, Self Plus One, or Self and Family).

• Unlike in FEHB, some PSHB plans reduce out-of-pocket costs for retirees with Medicare, which may offset the added Medicare Part B premium.

So while the contribution model is similar, the net cost to you may be higher or lower depending on how your plan coordinates with Medicare.

7. PSHB Introduces Strict Rules for Prescription Drug Opt-Outs

Another important change concerns your drug coverage if you’re Medicare-eligible:

• PSHB automatically enrolls you into the Part D EGWP plan.

• If you opt out, you cannot re-enroll mid-year unless you qualify for a Special Enrollment Period.

• If you opt out, you also lose all drug coverage through PSHB.

This policy was not present in FEHB, and it highlights the one-time nature of some PSHB choices.

8. Special Enrollment Periods Were Time-Sensitive

To accommodate this massive transition, a Special Enrollment Period (SEP) was offered from April to September 2024. This SEP allowed retirees who had previously declined Medicare Part B to enroll without a late penalty.

If you didn’t act during this period and are now required to enroll in Part B, you may face a lifetime late enrollment penalty unless you’re exempt under PSHB rules.

9. Not All Benefits Carried Over Automatically

Unlike a typical renewal under FEHB, the transition to PSHB required active enrollment during the 2024 Open Season.

• If you did not actively choose a PSHB plan, you were automatically enrolled in a corresponding plan, but it may not be an ideal fit for your needs.

• You still have the opportunity to change plans during future Open Seasons, but only within the PSHB system.

10. FEHB Isn’t Entirely Gone—for Some

While PSHB has replaced FEHB for USPS employees and retirees, some individuals may still interact with FEHB:

• Family members of USPS retirees who work in other federal positions may be covered under FEHB.

• Dual federal households can sometimes keep FEHB through the non-USPS spouse.

Still, for the vast majority of postal retirees, PSHB is now your permanent system.

Make Sure You’re Covered the Right Way

The switch to PSHB in 2025 brought a number of changes—some obvious, others hidden in administrative fine print. If you’re a retiree, the stakes are high: missteps could cost you money or leave you without coverage.

Here’s what you should do next:

• Review your plan’s 2025 brochure for specific coverage details, especially if you’re Medicare-eligible.

• Check your enrollment status on KeepingPosted.org or LiteBlue depending on your status.

• Coordinate with Medicare to ensure you’re meeting PSHB eligibility and avoiding penalties.

• Contact a licensed insurance agent listed on this website to review your current plan and confirm it’s still the right fit.