Key Takeaways

• PSHB has replaced FEHB for USPS workers and retirees in 2025, but the differences go deeper than just a name change. The way plans are structured, the Medicare integration rules, and out-of-pocket costs can vary significantly.

• Comparing FEHB and PSHB without fully examining copayments, deductibles, coinsurance, and Medicare requirements could result in higher out-of-pocket spending and missed benefits.

The Shift from FEHB to PSHB in 2025

If you’re a USPS worker or retiree, 2025 marks a pivotal transition: you are now covered under the Postal Service Health Benefits (PSHB) Program instead of the Federal Employees Health Benefits (FEHB) Program. While this change has been in the works since the Postal Service Reform Act passed in 2022, its real impact is unfolding now.

At first glance, the two programs seem similar. Both offer nationwide coverage, government contribution toward premiums, and eligibility for family members. But the fine print tells a different story—especially when it comes to costs, Medicare coordination, and your future financial risk.

Who Is Covered by PSHB in 2025

In 2025, PSHB covers:

• All USPS employees.

• USPS annuitants (retirees and survivors) previously enrolled in FEHB.

• Family members, including spouses and eligible dependents.

If you were retired and covered under FEHB as of January 1, 2025, your enrollment has transitioned into a PSHB plan. The same applies if you were covered under a family member’s USPS FEHB plan.

What’s Different About PSHB?

The government contribution remains about 70% of the total premium cost, just like under FEHB. However, the similarities stop there. PSHB introduces a set of new rules and coverage structures that you can’t afford to overlook.

1. Mandatory Medicare Part B Enrollment for Many

If you’re a Medicare-eligible annuitant or family member, PSHB requires you to enroll in Medicare Part B in most cases.

There are some exceptions:

• If you retired on or before January 1, 2025.

• If you turned 64 before January 1, 2025.

• If you live overseas or receive coverage through the VA or Indian Health Services.

Failing to enroll in Medicare Part B when required could result in termination of your PSHB coverage.

2. Drug Coverage Is Now Tied to Medicare Part D

In 2025, Medicare-eligible enrollees under PSHB receive prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). This program:

• Caps annual out-of-pocket drug costs at $2,000.

• Offers access to a wider network of pharmacies.

• Includes a $35 cap on monthly insulin costs.

If you opt out of this drug benefit, your PSHB plan will not offer an alternative.

3. Deductibles and Copayments Can Be Significantly Different

Deductibles in PSHB plans vary widely. In-network deductibles can range from $350 to $2,000, depending on whether you’re in a standard or high-deductible plan.

Common copayments include:

• $20 to $40 for primary care visits.

• $30 to $60 for specialist visits.

• $100 to $150 for emergency room visits.

Out-of-pocket maximums also differ, with many plans capping in-network costs at $7,500 for Self Only coverage and $15,000 for Self Plus One or Self and Family.

4. Medicare Coordination Can Mean Lower Costs—If Done Right

PSHB plans often offer reduced deductibles, lower coinsurance, and premium reimbursements if you are enrolled in Medicare Part B. But not all plans provide the same level of benefit coordination.

If you’re not enrolled in Medicare, you may end up paying higher deductibles and missing out on premium credits. That makes reviewing your plan’s Medicare coordination rules essential.

You Might Still Be Comparing Plans Like It’s 2024

Many retirees assume PSHB will operate just like FEHB did last year. That assumption can be costly.

• If you ignore Medicare enrollment rules, your plan may cancel your coverage or deny key benefits.

• If you overlook differences in copays and deductibles, your out-of-pocket expenses could balloon without warning.

• If you assume all plans offer equal pharmacy benefits, you might miss out on new savings under the Medicare-integrated drug coverage.

Key Differences You Should Be Reviewing

Before you make a decision during Open Season or a Qualifying Life Event, review these areas carefully:

Medicare Integration

• Are you required to enroll in Medicare Part B?

• Does the plan offer premium reimbursements for Medicare enrollees?

• Will Medicare reduce your deductible or cost-sharing?

Prescription Drug Coverage

• Are you enrolled in the Medicare Part D EGWP automatically?

• What happens if you opt out?

• Does the plan coordinate with Medicare Part D to lower your costs?

Cost-Sharing Structure

• What is the plan’s deductible?

• What are the copays for common services like PCP, specialists, urgent care, and ER visits?

• What is the annual out-of-pocket limit?

Government Contribution and Premium Share

• Has your share of the premium changed since your FEHB plan?

• Are you paying more for similar benefits?

• Do you understand the total cost with and without Medicare?

Enrollment and Change Opportunities

If you’re already enrolled in a PSHB plan as of January 1, 2025, you can still make changes during:

• Open Season (November to December): Adjust your plan choice.

• Qualifying Life Events (QLEs): Change coverage due to marriage, divorce, death, or changes in Medicare eligibility.

You can also change your Medicare Part B enrollment status if you’re newly eligible and meet the criteria for a Special Enrollment Period.

What You Should Be Doing Now

Understanding PSHB in 2025 requires more than just reading a summary brochure. Here’s what you can do right now to protect your finances:

• Check your Medicare Part B enrollment status. If you’re required to enroll and haven’t, act immediately.

• Review your current PSHB plan. Don’t assume it’s the same as your FEHB plan.

• Compare plan deductibles and coinsurance. Especially if you expect regular doctor visits or medication needs.

• Look for Medicare incentives. Some plans reimburse part of your Part B premium or reduce your cost-sharing if you’re enrolled.

• Plan for out-of-pocket expenses. Calculate what you’ll really pay after premiums, copays, and deductibles.

Making Sense of the Big Picture

PSHB has introduced more complexity but also more opportunities—if you know where to look. With Medicare integration, new cost caps, and drug benefit changes, the value of your plan now hinges on the details.

Comparing FEHB to PSHB only at the surface level will leave you with an incomplete picture. For 2025, the stakes are higher, and the rules are different. This isn’t the time for a quick comparison.

Get Help Before You Decide

Choosing the right PSHB plan isn’t just about picking a name you recognize. It’s about understanding how Medicare fits in, how your out-of-pocket limits compare, and how each cost—big or small—adds up over the year.

If you’re unsure about your Medicare eligibility, PSHB coordination benefits, or want help reviewing your current plan, get in touch with a licensed agent listed on this website. Personalized help could be the difference between saving money or watching costs pile up in 2025.