Key Takeaways

• Not every USPS employee or retiree is automatically eligible for the Postal Service Health Benefits (PSHB) program in 2025—eligibility depends on employment status, retirement date, and Medicare enrollment.

• If you’re nearing retirement, understanding your PSHB eligibility now can help you avoid disruptions to your health coverage later.

What Is the PSHB Program and Why It Matters

The Postal Service Health Benefits (PSHB) Program officially replaces the Federal Employees Health Benefits (FEHB) Program for USPS employees and retirees starting January 1, 2025. This new program is specifically designed for Postal Service members and is managed by the U.S. Office of Personnel Management (OPM).

If you’re a current USPS employee or annuitant, this change directly impacts your health coverage. But here’s the kicker—not everyone will automatically qualify in the same way. There are certain rules, deadlines, and exceptions you really need to understand.

Who’s Automatically Eligible?

You’re automatically eligible for PSHB if you fall into any of these categories:

• You’re a career USPS employee actively working in 2025

• You’re a USPS annuitant (retiree) who was enrolled in FEHB as of December 31, 2024

• You’re a family member of an eligible USPS employee or retiree covered under a Self Plus One or Self and Family enrollment

In most of these cases, if you’re already enrolled in an FEHB plan, you will be auto-enrolled in a corresponding PSHB plan, unless you actively choose a different option during Open Season.

Medicare and PSHB: A Mandatory Pairing for Some

Starting in 2025, certain USPS retirees and family members must be enrolled in Medicare Part B to maintain PSHB eligibility:

• If you’re a USPS annuitant entitled to Medicare Part A and retired on or after January 1, 2025, you’re required to enroll in Medicare Part B

• If you’re a family member of a USPS annuitant and also entitled to Medicare Part A, you must enroll in Part B to keep PSHB coverage

Who’s Exempt from the Part B Rule?

You’re exempt from the Medicare Part B requirement if:

• You retired on or before December 31, 2024, and were already entitled to Medicare Part A

• You’re not entitled to Medicare Part A (even if you’re over 65)

• You’re covered as a family member under someone else’s FEHB plan, not PSHB

Understanding these conditions is key—if you’re required to enroll in Medicare Part B and you don’t, you risk losing your PSHB coverage.

Timing Matters: Open Season and Enrollment Windows

The PSHB Open Season happens every year from November to December. During this period, you can:

• Enroll in a PSHB plan if you’re newly eligible

• Change your current plan selection

• Add or remove eligible family members

If you’re eligible for automatic enrollment but want to explore better-suited options, this is your chance.

Missed Open Season? Here’s When You Can Still Enroll

If you miss Open Season, you’ll only be able to enroll or make changes during a Qualifying Life Event (QLE) such as:

• Retirement

• Marriage or divorce

• Birth or adoption of a child

• Gaining or losing other health coverage

Make sure you’re not caught off guard. Mark your calendar and plan ahead.

Retiring Soon? Here’s What You Need to Check

If you’re planning to retire in 2025 or later, your choices in the months leading up to retirement can affect your PSHB eligibility.

Checklist Before You Retire:

• Were you enrolled in FEHB at least 5 years before retirement?

• Will you be entitled to Medicare Part A when you retire?

• Have you set up your Medicare Part B enrollment if required?

• Do you know what PSHB plan you’ll be auto-enrolled in, and do you want to change it?

Failing to prepare on any of these fronts can lead to gaps in your health coverage or higher costs.

What About Family Members and Survivors?

PSHB coverage extends to eligible family members, but with some limitations and responsibilities.

Covered Family Members Include:

• Spouses

• Children under 26

• Disabled adult children dependent on you before age 26

If you’re the retiree and you pass away, your eligible family members can continue PSHB coverage only if you’ve elected a survivor annuity for them.

It’s important to make this election during the retirement process. Without it, your dependents could lose access to health benefits.

Making the Medicare Decision Easier

Enrolling in Medicare Part B can feel like another monthly expense, but if you’re required to have it for PSHB, you don’t really have a choice.

Here’s what to consider:

• Monthly premiums: These are based on your income and can rise if you delay enrollment

• Coordination of benefits: Having both Medicare and PSHB can reduce your out-of-pocket costs

• Penalty avoidance: Delaying Part B without other creditable coverage can trigger a lifetime late enrollment penalty

If you’re unsure whether you need Part B, check your retirement date and entitlement status. When in doubt, ask a licensed agent.

Common Missteps That Can Mess With Your Coverage

Let’s be real: It’s easy to assume you’re all set when you’re not. Here are some mistakes to avoid:

• Assuming auto-enrollment means optimal coverage: The plan you’re rolled into might not be the best fit for your needs

• Missing the Medicare Part B deadline: If you’re required to enroll and don’t, your PSHB coverage could be terminated

• Failing to include eligible dependents during Open Season or QLEs

• Not reviewing plan changes each year—benefits and costs can shift, so what worked last year may not work now

Staying informed and proactive saves you stress—and potentially money.

How PSHB and FEHB Are Different

While both programs are managed by OPM and offer comprehensive health benefits, PSHB is tailored specifically for Postal Service employees and retirees.

Here’s how they differ:

• Eligibility requirements: PSHB has stricter Medicare Part B enrollment rules

• Enrollment process: USPS employees and retirees are auto-enrolled, but non-postal federal workers must actively choose FEHB options

• Plan offerings: While there’s some overlap, PSHB plans are limited to Postal Service enrollees only

If you’re married to a non-postal federal employee, you can still stay on their FEHB plan, but once you enroll in PSHB, you can’t switch back.

You’ve Got Options—But You Need to Be Strategic

The PSHB transition doesn’t mean fewer choices; it means smarter choices. Here’s how to take control of your health benefits:

• Compare your plan options every Open Season

• Consider how Medicare and PSHB work together to minimize costs

• Factor in your family’s needs—especially if they depend on your coverage

A little planning goes a long way. Start early, review everything, and don’t hesitate to ask questions.

Your Retirement Health Coverage Can Be One Less Thing to Worry About

If you’re still feeling unsure about your PSHB eligibility or how Medicare ties into all of this, you’re not alone. But confusion doesn’t have to turn into regret. The sooner you clarify your status and understand your options, the better off you—and your family—will be.

Need help making sense of it all? Reach out to a licensed agent listed on this website for expert guidance tailored to your situation.