Key Takeaways

• The PSHB program in 2025 introduces changes that differ significantly from the traditional FEHB model, particularly in cost-sharing, Medicare integration, and eligibility rules.

• Assuming PSHB works just like FEHB could lead to missed benefits, unexpected costs, and loss of essential coverage, especially if you or a family member is Medicare-eligible.

Your Familiar Benefits Aren’t Transferring Over As-Is

If you’re accustomed to the Federal Employees Health Benefits (FEHB) Program and assume your transition into the Postal Service Health Benefits (PSHB) Program in 2025 is seamless—think again. While PSHB may seem like a simple extension of FEHB, the reality is far more complex. This new program brings with it different expectations, requirements, and structural rules that can impact both your finances and your healthcare experience.

PSHB Is No Longer Optional—It’s Mandatory

Beginning January 1, 2025, all Postal Service employees and annuitants must be enrolled in a PSHB plan to maintain coverage. You can no longer stay on an FEHB plan unless you’re covered as a family member on a non-postal enrollee’s plan. This is not a choice—it’s a structural change directed by federal law.

Key differences:

• PSHB enrollment replaces FEHB for all USPS employees and retirees.

• Open Season runs from November to December each year, but you must act during this period to make changes.

• If you do not actively select a PSHB plan, you will be automatically enrolled in a comparable one based on your current FEHB plan.

Medicare Enrollment Is Now Tied to PSHB Eligibility

This is one of the most critical shifts. If you or your covered family members are eligible for Medicare Part B and do not enroll, you may not be eligible to remain in a PSHB plan unless you meet specific exceptions.

Who must enroll in Medicare Part B?

• Annuitants (retirees) and their family members who are Medicare-eligible

• You must enroll to keep your PSHB benefits unless you:

  • Retired on or before January 1, 2025

  • Were an active USPS employee aged 64 or older as of January 1, 2025

  • Live outside the United States

  • Receive coverage through VA or Indian Health Services

Failing to enroll in Medicare Part B could result in loss of drug coverage and more limited PSHB benefits. The PSHB program includes an integrated Part D prescription drug plan (EGWP), which requires Medicare Part B enrollment to remain active.

Cost-Sharing Structures Have Changed

Under PSHB, out-of-pocket costs such as deductibles, copayments, and coinsurance may be higher or structured differently than what you’re used to with FEHB.

Cost examples for 2025 (general ranges):

• Deductibles: Can range from $350 to $2,000 depending on the plan and coverage tier (Self Only, Self Plus One, Self and Family).

• Out-of-pocket maximums: Up to $7,500 for Self Only and $15,000 for family coverage in-network. Out-of-network limits are typically higher.

• Coinsurance: In-network ranges from 10%-30%; out-of-network can reach 40%-50%.

• Copayments: Generally fall between $20 and $150 depending on the service type (primary care, specialist, ER, urgent care).

You cannot assume that your PSHB plan will have the same cost protections you had under FEHB. The actual costs will vary based on your selected plan and how you use services.

Premiums Are Now Calculated Differently

While the federal government still pays approximately 70% of the total premium cost, the premium-sharing formulas under PSHB have been recalculated. As a result, many annuitants are paying more out of pocket than they did under FEHB.

2025 Premium Contributions (Monthly Annuitant Share):

• Self Only: Approximately $241

• Self Plus One: Approximately $521

• Self and Family: Approximately $567

These are averages. Your actual premium depends on your specific plan selection and region.

Prescription Drug Coverage Has a New Framework

PSHB automatically integrates a Medicare Part D EGWP plan for Medicare-eligible enrollees. This brings several new rules and cost protections, including:

• A $2,000 annual cap on out-of-pocket drug costs

• A $35 monthly cap on insulin for covered medications

• Broader pharmacy network access

• Monthly payment plan option for high-cost drugs (Medicare Prescription Payment Plan)

However, if you opt out of the Medicare Part D drug plan tied to PSHB, you may lose drug coverage altogether. This is not something that happened under FEHB.

Automatic Enrollment Isn’t Always in Your Best Interest

If you do nothing during Open Season, you’ll be auto-enrolled in a PSHB plan that mirrors your 2024 FEHB coverage. But this does not mean it’s the best option for your current health or budget needs.

Why you should actively compare plans:

• Cost-sharing can vary widely between plans

• Medicare coordination benefits differ

• Coverage networks may change

• Some plans offer added benefits for those enrolled in Medicare Part B

The plan you were in last year might not be your best choice today. Use the Open Season window to evaluate what aligns with your current circumstances.

Dependent Eligibility Rules Are Still the Same—For Now

The eligibility rules for spouses, children, and other dependents remain consistent with FEHB, but you should not assume those policies will never evolve under PSHB.

Dependents must meet standard criteria:

• Children under 26

• Spouses and qualifying stepchildren

• Children over 26 only if disabled before that age

However, make sure to double-check these rules annually as future legislative or administrative changes could occur.

FEDVIP and Other Federal Benefits Remain Unchanged

It’s important to note that the PSHB transition does not affect other benefits such as:

• Federal Employees Dental and Vision Insurance Program (FEDVIP)

• Federal Employees Group Life Insurance (FEGLI)

• Flexible Spending Accounts (FSAFEDS)

• Federal Long-Term Care Insurance Program (FLTCIP) – although enrollment remains suspended for new applicants

These are managed separately from PSHB and follow different rules. But you should still review them annually, especially FEDVIP, to ensure you’re covering all your family’s healthcare needs.

Annual Re-Evaluation Is More Important Than Ever

The PSHB program is new and evolving. Plan offerings, costs, benefits, and Medicare integration rules may continue to change in the coming years. That makes it critical for you to:

• Review your plan options every Open Season

• Monitor your eligibility for Medicare and PSHB

• Assess whether your current plan still meets your needs

• Update dependent information and address changes with your plan

Failing to review your plan regularly could result in missed opportunities or even loss of benefits.

Understanding PSHB Now Protects You Later

This isn’t just a paper transition—it’s a meaningful restructuring of how Postal Service health benefits work in 2025 and beyond. While it may feel similar to FEHB on the surface, you now face new expectations, especially regarding:

• Mandatory Medicare Part B enrollment for many retirees

• Higher or restructured out-of-pocket costs

• Prescription drug plan integration

• Changing plan coverage tiers and contributions

If you assume things are the same as they were last year, you may end up undercovered—or paying much more than necessary.

Prepare for What PSHB Really Means

You owe it to yourself—and your family—to actively engage with your PSHB options. This year’s Open Season isn’t routine; it’s essential. You need to understand what’s changed and how it affects your coverage, costs, and peace of mind.

If you’re unsure what steps to take, speak with a licensed agent listed on this website for expert guidance tailored to your situation.