Key Takeaways

• Your monthly PSHB premium is only part of the picture. The federal government contributes roughly 72% of the total premium cost, but you’re still responsible for the rest—plus out-of-pocket expenses.

• Not all services are fully covered by your PSHB plan. Deductibles, copayments, coinsurance, and non-covered services can still result in significant costs depending on your usage and Medicare status.

Understanding Your PSHB Deductions

If you’re a USPS employee or annuitant, you’re already enrolled or transitioning to a Postal Service Health Benefits (PSHB) plan. Each pay period, a portion of your income is deducted to fund your coverage. But how much of that goes toward actual medical care? What portion is administrative? And what do your deductions not cover at all?

This guide breaks down your monthly PSHB contributions so you know what you’re really paying for in 2025—and what you may still need to budget for separately.

How PSHB Premiums Are Structured

Premiums in the PSHB program are split between the enrollee and the federal government. On average:

• The government pays around 72% of the total premium.

• You are responsible for the remaining 28%.

Your share is automatically deducted from your USPS paycheck (if you’re an employee) or your annuity payment (if you’re a retiree). The amount depends on your coverage type:

• Self Only

• Self Plus One

• Self and Family

Each option carries a different premium, with Self and Family plans being the most expensive. In 2025, monthly costs continue to rise compared to 2024, so it’s more important than ever to understand what your premium is actually buying you.

What Your Premium Does Cover

1. Medical and Hospital Benefits

Your premium grants access to a network of in-network providers and services, including:

• Preventive care

• Primary and specialty physician visits

• Inpatient and outpatient hospital services

• Emergency and urgent care

If you use an in-network provider, you pay lower coinsurance and copays. Out-of-network care typically comes with higher cost-sharing or no coverage at all.

2. Prescription Drug Coverage

If you are Medicare-eligible, your PSHB plan integrates with Medicare Part D through an Employer Group Waiver Plan (EGWP). This provides:

• A $2,000 out-of-pocket cap on prescriptions for 2025

• Expanded pharmacy networks

• A $35 insulin monthly cap

For those not yet on Medicare, standard drug coverage still applies with tiered pricing and formularies, but costs can be higher without Medicare integration.

3. Mental Health and Substance Use Services

Mental health parity rules ensure that behavioral health is treated equally. Your premium typically includes:

• Therapy visits

• Psychiatric services

• Inpatient and outpatient substance use disorder treatment

4. Telehealth and Virtual Care

Many PSHB plans support telehealth at reduced copays or coinsurance, offering:

• 24/7 access to physicians

• Mental health counseling

• Prescription refills and follow-ups

This benefit has grown since 2020 and remains a standard feature in 2025.

5. Maternity and Family Planning

Most PSHB plans include maternity care, including prenatal, delivery, and postnatal services. Family planning services such as contraception and sterilization are also covered under preventive care guidelines.

6. Some Wellness and Preventive Benefits

Wellness programs, biometric screenings, and flu shots are often covered with no cost-sharing. The goal is to incentivize early detection and reduce long-term costs.

What Your Premium Does Not Cover

1. Deductibles

Most PSHB plans have an annual deductible before certain benefits kick in. For in-network care, this can range from:

• $350 to $500 for low-deductible plans

• $1,500 to $2,000 for high-deductible options

Out-of-network deductibles are higher and apply separately.

2. Copayments

Even after paying your monthly premium, you will still owe fixed copayments for services like:

• $20 to $40 for primary care

• $30 to $60 for specialists

• $100 to $150 for emergency room visits

These payments are immediate, out-of-pocket costs each time you access care.

3. Coinsurance

For more expensive treatments, such as surgeries or hospitalization, you will be responsible for coinsurance, which typically ranges from:

• 10% to 30% in-network

• 40% to 50% out-of-network

Medicare-eligible enrollees may pay less if their plan coordinates well with Medicare Part B.

4. Non-Covered Services

Certain services aren’t covered at all, regardless of your premium payments. These may include:

• Cosmetic procedures

• Experimental treatments

• Overseas medical care (unless it’s an emergency)

• Adult dental and vision (unless enrolled in separate FEDVIP coverage)

These require separate planning and potentially supplemental coverage.

5. Long-Term Care

Neither PSHB nor Medicare covers custodial care or long-term care services in a nursing facility. For that, you would need:

• A standalone long-term care insurance policy

• Personal savings

The Federal Long Term Care Insurance Program (FLTCIP) remains closed to new enrollees as of 2025.

What Happens When Medicare Enters the Picture

If you are age 65 or older and eligible for Medicare, your PSHB coverage changes significantly:

• Medicare Part A (hospital insurance) is usually premium-free and becomes primary.

• Medicare Part B requires a monthly premium but becomes your primary insurance for outpatient services.

• PSHB becomes secondary and may waive or reduce your cost-sharing.

In 2025, most Medicare-eligible annuitants must enroll in Part B to maintain PSHB coverage. Exceptions exist for:

• Those who retired on or before January 1, 2025

• Those aged 64 or older as of January 1, 2025

• Residents outside the U.S.

If you opt out of Medicare Part B when required, your PSHB coverage could be significantly limited.

What About Your Employer Contribution?

While you pay your share of the PSHB premium, your employer—in this case, the federal government via the USPS—covers a substantial portion:

• Around 72% of total premium cost

• This is one of the highest employer contributions among public and private sectors

However, this contribution only goes toward the plan premium. You are still responsible for all cost-sharing elements such as:

• Deductibles

• Copays

• Coinsurance

Even with this large contribution, your final healthcare costs can vary widely depending on how often and how extensively you use care.

The Role of enrollment Types in Cost

The type of enrollment you select plays a large role in both your premium and your out-of-pocket costs:

• Self Only: Least expensive, suitable if you’re the only one needing coverage.

• Self Plus One: Higher premiums, may or may not be cheaper than Self and Family depending on your plan.

• Self and Family: Most expensive, covers all eligible family members.

Review your family’s health needs annually during Open Season (typically November through December) to ensure you’re not overpaying or underinsuring.

Where to Pay Extra Attention

Even if your premium seems manageable, there are areas where costs can creep up quickly:

• Specialty medications: May require prior authorization and come with high coinsurance.

• Out-of-network care: Often results in much higher costs.

• Emergency care while traveling: Especially outside the U.S., this may not be fully covered.

• High usage of services: Frequent office visits, procedures, or chronic condition management can accumulate copays and coinsurance quickly.

Tracking Your Benefits in 2025

To get the most out of your PSHB premiums:

• Use your plan’s online portal or mobile app to track claims and benefits.

• Review your Explanation of Benefits (EOB) statements regularly.

• Stay in-network when possible.

• Schedule preventive visits early in the year to use benefits without triggering cost-sharing.

• Read the Annual Notice of Change (ANOC) and Plan Brochures during Open Season.

How to Manage Costs Beyond Premiums

Paying your premium is just the beginning. To avoid surprise bills:

• Understand your deductible and when it resets (typically every January).

• Know which services are subject to copays vs. coinsurance.

• Coordinate with Medicare properly if you’re eligible.

• Consider supplemental dental or vision insurance through FEDVIP if needed.

• Avoid non-covered services unless you are prepared to pay out of pocket.

Health Savings Accounts (HSAs) are not compatible with Medicare, but if you are in a High Deductible Health Plan and not yet Medicare-enrolled, an HSA can help offset your future costs.

What This Means for You in 2025

The PSHB program offers strong employer contributions and comprehensive coverage, but your deductions only cover part of the healthcare picture. Premiums do not eliminate the need for smart budgeting and active plan management. With rising healthcare costs in 2025 and increasing plan complexity, it’s more important than ever to know where your money is going—and where it isn’t.

To make sure you’re choosing the right coverage and preparing for future expenses, get in touch with a licensed agent listed on this website. They can help review your PSHB plan, coordinate with Medicare if applicable, and identify cost-saving opportunities tailored to your situation.