Key Takeaways

• The Postal Service Health Benefits (PSHB) Program officially replaced FEHB for USPS workers and retirees starting January 1, 2025.

• Failing to understand the new plan structure, enrollment rules, and Medicare coordination could lead to gaps in coverage and higher costs.

Understanding the Shift to PSHB in 2025

As of January 1, 2025, the Postal Service Health Benefits (PSHB) Program is the official health insurance program for all USPS employees, retirees, and eligible family members. This marks a significant shift from the Federal Employees Health Benefits (FEHB) Program that covered postal workers for decades. You are now part of a standalone health benefits program designed exclusively for the Postal Service workforce.

The transition is part of a legislative change mandated by the Postal Service Reform Act of 2022. Its purpose is to reduce long-term liabilities and enhance Medicare integration for eligible enrollees. If you’re still relying on old rules or unaware of the PSHB structure, this is the time to get up to speed.

Who the Change Affects

The PSHB Program affects nearly all USPS employees and annuitants, with a few exceptions:

• If you’re a current USPS employee or annuitant, you are now enrolled in a PSHB plan unless you opted out or missed enrollment.

• If you are an annuitant who retired on or before January 1, 2025, you are exempt from the mandatory Medicare Part B enrollment requirement.

• If you are a USPS employee who was 64 or older as of January 1, 2025, you are also exempt from this requirement.

However, all other Medicare-eligible individuals must enroll in Medicare Part B to maintain their PSHB coverage once they turn 65.

Major Differences Between FEHB and PSHB

Although both are managed by the Office of Personnel Management (OPM), PSHB differs from FEHB in structure and requirements:

• Mandatory Medicare Integration: Most Medicare-eligible annuitants and family members must be enrolled in Part B.

• Dedicated Plan Options: PSHB offers a separate menu of plans created specifically for USPS members, distinct from traditional FEHB options.

• Prescription Drug Coverage Alignment: For Medicare-eligible members, prescription drugs are provided through a Medicare Part D Employer Group Waiver Plan (EGWP), offering enhanced coverage and a $2,000 out-of-pocket cap.

Enrollment Periods You Need to Know

You had several critical enrollment periods during the transition:

• Special Enrollment Period (SEP): April 1 to September 30, 2024 — For those needing to enroll in Medicare Part B without penalty.

• Open Season: November to December 2024 — For selecting your PSHB plan. Changes made here took effect January 1, 2025.

If you missed these windows and didn’t qualify for an exception, you may have limited options until the next Open Season or unless a Qualifying Life Event (QLE) occurs.

Where to Manage Your Enrollment

• Current USPS Employees: Use the LiteBlue portal to review, update, or change your PSHB elections.

• USPS Annuitants: Use KeepingPosted.org or contact the Retirement Information Center to manage your benefits.

These platforms are now the standard tools for plan selection and updates. Familiarizing yourself with them will help avoid delays or errors in coverage.

Medicare Part B Requirement Explained

One of the most important shifts under PSHB is the stronger coordination with Medicare Part B. Starting in 2025:

• You must be enrolled in both Medicare Part A and Part B to keep your PSHB coverage active if you become eligible and do not meet one of the listed exemptions.

• Enrolling in Medicare Part B can reduce your overall out-of-pocket costs, since many PSHB plans waive deductibles and lower copays for those with Medicare.

• If you do not enroll in Part B and do not qualify for an exemption, you may lose PSHB coverage altogether.

What You Get with PSHB Prescription Drug Coverage

Prescription drug coverage under PSHB is tailored for Medicare coordination:

• Integrated with Medicare Part D EGWP for those eligible.

• $2,000 annual out-of-pocket cap on covered prescription drugs.

• $35 monthly insulin cap continues under the Inflation Reduction Act provisions.

• Access to an expanded national pharmacy network.

If you are Medicare-eligible and choose to opt out of the EGWP, you risk losing prescription drug coverage entirely. Re-enrollment may not be guaranteed unless you qualify for a future Special Enrollment Period.

What Stays the Same Under PSHB

Even with the shift, many aspects of your coverage remain familiar:

• Government Contributions: The Postal Service still covers approximately 70% of the total premium cost.

• FEDVIP Eligibility: You remain eligible for separate vision and dental coverage through the Federal Employees Dental and Vision Insurance Program (FEDVIP).

• FEGLI, FLTCIP, and FSAFEDS Access: These benefits are not impacted by the move to PSHB.

Key Costs to Watch in 2025

While plan costs vary, here are typical cost structures you should be aware of under PSHB plans:

• In-Network Deductibles: Range from $350 to $500 for low-deductible plans; $1,500 to $2,000 for high-deductible plans.

• Out-of-Pocket Maximums: Around $7,500 for Self Only; $15,000 for Self Plus One or Self & Family.

• Copayments: $20-$40 for primary care, $30-$60 for specialists, $100-$150 for emergency room visits.

If you’re enrolled in Medicare Part B, these costs may be significantly reduced depending on your plan’s structure.

Planning for Upcoming Open Season

Even if you’re satisfied with your current plan, you should review your options during every Open Season. This happens every November to December, and it’s your chance to:

• Evaluate plan changes in premiums, copays, or provider networks

• Compare how your plan coordinates with Medicare (if eligible)

• Choose a plan that better meets your changing health needs or financial situation

Failing to review your coverage could mean higher costs or missed benefits.

Your Next Steps in 2025

To stay on top of your health benefits, here’s what you should do now:

• Verify Medicare Enrollment: If you’re turning 65 soon or are already eligible, make sure you’re enrolled in both Part A and Part B unless exempt.

• Log in to LiteBlue or KeepingPosted.org: Confirm your current plan and coverage level.

• Mark Open Season on your calendar: Even if you’re not planning to make changes, reviewing plan brochures and updates annually is wise.

• Watch for your ANOC letter: The Annual Notice of Change will outline any updates to your PSHB plan for the next year.

Stay Informed, Stay Covered

2025 is the year PSHB officially became your health benefits standard, and falling behind on the changes can lead to confusion, penalties, or loss of coverage. The more proactive you are in understanding and managing your benefits, the better protected you’ll be.

If you have questions about your current coverage, Medicare enrollment, or future PSHB choices, speak with a licensed agent listed on this website for professional advice tailored to your needs.