Key Takeaways

• Starting in 2025, all USPS employees and retirees must transition from the Federal Employees Health Benefits (FEHB) program to the new Postal Service Health Benefits (PSHB) Program.

• This change affects how your health insurance works, how it integrates with Medicare, and what actions you need to take during the Open Season or when you become Medicare-eligible.

Major Shift from FEHB to PSHB in 2025

As of January 1, 2025, your health benefits as a United States Postal Service (USPS) employee or retiree are no longer covered under the traditional Federal Employees Health Benefits (FEHB) Program. Instead, a new system called the Postal Service Health Benefits (PSHB) Program is now in effect. This change impacts every USPS worker and retiree, including their eligible family members.

The PSHB Program is designed exclusively for USPS employees, annuitants, and their covered dependents. It still operates under the broader framework managed by the U.S. Office of Personnel Management (OPM), but it is a separate risk pool from the standard FEHB Program. This transition has significant implications for your coverage options, Medicare requirements, and enrollment procedures.

Who Is Affected?

You are affected by the PSHB change if you fall into one of these categories:

• You are an active USPS employee.

• You are a USPS retiree or annuitant.

• You are a family member covered under a USPS employee or retiree’s health plan.

If you are a federal employee outside of USPS or a family member of one, your FEHB coverage remains unchanged.

What Stays the Same?

Some aspects of your coverage continue as before:

• The plans are still administered by OPM.

• You can still choose from a range of plans during the annual Open Season.

• You will receive government contributions toward your premiums, generally covering about 70% of the total cost.

However, the PSHB Program has new rules—especially if you’re Medicare-eligible or approaching age 65.

Medicare Part B Enrollment Now Matters More

One of the biggest changes for Medicare-eligible USPS retirees and family members is the mandatory enrollment in Medicare Part B in order to maintain full PSHB coverage. This requirement did not exist under the FEHB Program.

Who Must Enroll in Medicare Part B?

If you are a USPS annuitant or family member who is entitled to Medicare Part A, you must also enroll in Medicare Part B to stay fully covered under the PSHB Program, unless you qualify for an exemption. Those exemptions include:

• You retired on or before January 1, 2025, and you are not already enrolled in Medicare Part B.

• You are a USPS employee who was age 64 or older as of January 1, 2025.

• You live outside the United States or in a U.S. territory.

• You receive care through the Department of Veterans Affairs or Indian Health Service.

If you are newly becoming eligible for Medicare, your PSHB plan will notify you and provide instructions. If you fail to enroll in Part B without a valid exemption, you risk losing significant portions of your health coverage.

Coordination Between PSHB and Medicare

When you are enrolled in both PSHB and Medicare, the programs work together to reduce your out-of-pocket costs.

Benefits of Dual Enrollment

• Many PSHB plans waive deductibles and lower coinsurance when Medicare is the primary payer.

• Some plans offer reimbursement for part of your Medicare Part B premium.

• Prescription drug benefits are integrated into a Medicare Part D plan administered by your PSHB insurer.

This coordination can lead to significant cost savings—provided you are enrolled in both Medicare Part A and Part B as required.

How Prescription Drug Coverage Works Now

Starting in 2025, your PSHB prescription drug coverage is automatically integrated with Medicare Part D through an Employer Group Waiver Plan (EGWP). This change brings several important updates:

• You pay no separate premium for the drug plan—it is included in your PSHB coverage.

• There is a $2,000 annual out-of-pocket cap on prescription drug costs.

• Certain medications, including insulin, are capped at $35 per month.

If you opt out of the Part D drug plan, you will lose drug coverage entirely under PSHB. Re-enrollment is not guaranteed, so you must take this decision seriously.

Key Enrollment Periods and Deadlines

The transition to PSHB requires timely action during specific enrollment windows. Here’s what to watch for:

Annual Open Season (November–December)

• Review your PSHB options.

• Make changes to your plan if desired.

• Changes take effect on January 1 of the following year.

Medicare Part B Special Enrollment Period (April 1 – September 30, 2024)

• If you were already entitled to Medicare Part A but not enrolled in Part B, this was your one-time chance to enroll without a penalty.

• This period has now ended unless a new qualifying life event occurs.

Ongoing Life Events

• Retirement

• Marriage or divorce

• Gaining or losing other health coverage

Life events allow you to make changes to your PSHB enrollment outside Open Season.

What Happens If You Do Nothing?

If you are currently enrolled in FEHB as a USPS employee or retiree and take no action, you will be automatically transitioned into a corresponding PSHB plan in 2025. However, this default option may not be the best fit for your needs.

You are strongly encouraged to:

• Review plan brochures carefully.

• Compare benefits, provider networks, and costs.

• Check how each plan coordinates with Medicare.

Failure to review your options could lead to higher out-of-pocket costs or coverage gaps.

Dental, Vision, and Other Federal Benefits Remain Unchanged

Your eligibility for other federal programs is not affected by the transition to PSHB:

• FEDVIP (Federal Employees Dental and Vision Insurance Program) continues to be available to USPS employees and retirees.

• FEGLI (Federal Employees’ Group Life Insurance) and FLTCIP (Federal Long Term Care Insurance Program) are also unaffected.

• FSAFEDS (Flexible Spending Accounts) remains available for active USPS employees, though not retirees.

It’s important to understand that PSHB only changes your health coverage. All other federal benefits follow existing rules.

How to Compare PSHB Plans Effectively

You should evaluate your options thoroughly each year, especially during Open Season. Consider the following when comparing plans:

• Monthly premiums (your share after government contribution)

• Annual deductibles and cost-sharing structures

• Out-of-pocket maximums for in-network and out-of-network care

• Provider network size and availability

• Drug formulary (especially if you take ongoing medications)

• Medicare coordination policies

OPM and PSHB carriers provide detailed brochures and comparison tools to help you make informed decisions.

Where to Get Help

You’re not alone in navigating this transition. Several resources are available to assist you:

• KeepingPosted.org – For USPS retirees

• LiteBlue – For current USPS employees

• PSHB Navigator Help Line – Phone support for questions

• Licensed agents – For professional guidance tailored to your situation

Don’t hesitate to reach out if you need clarification or help comparing plans.

Preparing for the Road Ahead

The switch to PSHB is the biggest shift in USPS health coverage in decades. With the right information and timely action, you can ensure that you and your family continue to receive the care you need without surprises. Take the time now to understand how the PSHB Program works and what it means for your Medicare coordination, drug coverage, and plan selection.

Get help from a licensed agent listed on this website to make the best decision for your health and financial future.