Key Takeaways

• The contribution column on your PSHB premium sheet doesn’t reflect the total cost of your plan—it only shows your portion after the government subsidy.

• Understanding how contributions are calculated and what influences their fluctuations can help you budget more accurately and avoid surprises.

What the Contribution Column Really Represents

When you look at your PSHB premium sheet, you’ll see a column labeled “Employee/Annuitant Share” or simply “Your Contribution.” It might seem like this is the total cost of your health coverage, but that’s only part of the picture. The number you see there is the amount you pay after the government covers its share, which is roughly 70% for most employees and annuitants.

This column can be misleading if you don’t also look at the total premium. You’re not just responsible for what appears in the contribution column—you’re choosing a plan that comes with an overall cost, and your contribution rises or falls depending on:

• The plan’s overall premium

• Your enrollment type (Self Only, Self Plus One, or Self and Family)

• Whether or not you’re a retiree

• Integration with Medicare Part B, if applicable

Why PSHB Premiums Look Different in 2025

2025 marks the first full year of the Postal Service Health Benefits (PSHB) Program, a separate system from the previous FEHB plans. That transition introduced several new pricing structures, and the way contributions appear on your sheet may differ significantly from what you were used to.

• Biweekly Contributions Are the Norm: Your premium contributions are usually listed as biweekly amounts. This aligns with the USPS pay schedule, but if you’re budgeting monthly, multiply by 2.17 to get a more accurate monthly estimate.

• Annuitant vs. Active Employee Contributions: Annuitants often pay more than active employees because the government contribution is calculated slightly differently. For example, if you’re retired and not enrolled in Medicare Part B, you may see higher premiums compared to those who are.

• Medicare Enrollment Matters: If you’re enrolled in Medicare Part B, your PSHB plan may reduce your deductible or copayments, and in some cases, offer premium reimbursement. This affects your out-of-pocket exposure, even if it doesn’t directly change the number in the contribution column.

Government Contribution Isn’t a Flat Amount

The government’s share is based on a formula, not a fixed dollar amount. For 2025, the government pays 72% of the weighted average premium of all plans, not 72% of your plan specifically. That means:

• If you choose a plan that’s more expensive than the weighted average, your contribution will be higher than someone who picks a less expensive plan.

• If your plan is below the average, you’ll likely pay less, but still a significant portion.

So even though your portion is subsidized, the full plan cost—and your decision—greatly influence how much you owe.

How Plan Type Affects Contribution

The enrollment type you select significantly affects your contribution. Here’s how it breaks down:

• Self Only: This has the lowest contribution, but it covers just you. Ideal if you don’t have dependents or family members who need coverage.

• Self Plus One: Costs more than Self Only but is often close in price to Self and Family. Depending on the plan, you might not see much savings here.

• Self and Family: This provides coverage for multiple dependents, but some plans treat it similarly to Self Plus One in pricing, so it’s important to compare.

The contribution differences across these types may look subtle on the sheet, but over a year, they add up significantly.

Medicare Coordination Can Change the Game

If you’re 65 or older and enrolled in Medicare Part B, your PSHB plan may coordinate benefits in a way that lowers your actual medical costs. However, that coordination may not be visible in the contribution column.

Here’s how:

• You Still Pay the Contribution Listed: Whether you have Medicare or not, you’ll still pay the premium contribution shown for your selected plan.

• But You May Get Added Value: Some plans offer reduced deductibles, waived copays, or reimbursement of Part B premiums, depending on your coordination level.

So while your biweekly premium might stay the same, your effective cost of care could be much lower with Medicare integration.

Contribution Changes Between 2024 and 2025

With the shift from FEHB to PSHB in 2025, many enrollees noticed changes in their contributions. This shift wasn’t just about new plan names—it also came with adjusted pricing due to:

• Revised government contributions

• Differences in plan networks and coverage structures

• Introduction of integrated prescription drug plans through Medicare Part D for Medicare enrollees

If you compared your 2024 FEHB contribution with your 2025 PSHB one and saw an increase, it doesn’t necessarily mean your benefits declined—but it could mean your plan is more expensive or the government contribution changed in proportion.

Cost Isn’t Just the Premium Contribution

One of the biggest misconceptions is equating your total cost with what’s in the contribution column. That figure only tells you what you’re paying out of each paycheck or monthly pension.

What it doesn’t show:

• Deductibles you might have to meet before your insurance kicks in

• Copayments and coinsurance for doctor visits, emergency care, or hospital stays

• Out-of-pocket maximums that cap your spending but can still be several thousand dollars annually

If you choose a plan with a low contribution but high out-of-pocket costs, you could end up spending more over time. That’s why contribution alone isn’t a reliable measure of affordability.

Budgeting Tips Based on Your Contribution

If you want to use the contribution column as a budgeting tool, here’s how to approach it smartly:

• Convert to Monthly Numbers: Multiply your biweekly contribution by 2.17 for a monthly figure.

• Account for Out-of-Pocket Exposure: Review the plan brochure to see deductibles, copays, and annual caps.

• Factor in Medicare Benefits: If you’re enrolled in Medicare, calculate whether your total cost (including Part B premium) makes sense based on what your PSHB plan offers.

• Watch for Annual Increases: PSHB plans, like FEHB before them, adjust premiums every year. Budget for a possible increase each January.

Understanding Your Contribution During Open Season

The annual Open Season (November to December) is your opportunity to evaluate whether the contribution you’re making still matches your health needs and financial goals. During this time:

• Review the new premium sheets carefully. Look for changes in both the total premium and your share.

• Check for plan updates. Benefits may have changed even if the name stayed the same.

• Use OPM resources. Official materials from the Office of Personnel Management can help compare options side by side.

This is the one time each year you can make adjustments without a qualifying life event. Don’t let a familiar number in the contribution column lull you into skipping a review.

What to Do If Your Contribution Jumps Unexpectedly

If you notice that your contribution has increased more than expected:

• Verify if your plan tier changed. Accidentally enrolling in Self and Family instead of Self Plus One can lead to higher premiums.

• Compare similar plans. If your plan increased substantially, see if a comparable option has lower contributions.

• Check for Medicare changes. If you recently turned 65, integration with Medicare may now apply.

You have options—but only if you look beyond the surface and compare the full range of choices.

Your Premium Share Deserves More Than a Glance

That small number in the contribution column is just the tip of the iceberg. It’s tempting to assume that if the amount hasn’t changed much, everything’s fine. But in 2025, with the new PSHB structure in place, those numbers deserve more scrutiny than ever before.

Take time to compare plans side by side, understand what’s really included, and estimate your total annual cost—including premiums, deductibles, copays, and coinsurance. That’s how you make a decision that fits your needs today—and protects your wallet tomorrow.

If you have questions about your PSHB contribution, or need help understanding how it fits into your broader health coverage and retirement strategy, speak with a licensed agent listed on this website.