Key Takeaways

• The Postal Service Health Benefits (PSHB) Program in 2025 is no longer interchangeable with the Federal Employees Health Benefits (FEHB) Program. Assuming they function the same could result in coverage gaps, missed deadlines, and unnecessary out-of-pocket expenses.

• Key differences in enrollment rules, Medicare integration, drug coverage, and eligibility could leave you financially vulnerable if you rely on outdated FEHB assumptions.

PSHB and FEHB Are Not Interchangeable

In 2025, the PSHB Program is officially live, replacing FEHB for all Postal Service employees, annuitants, and eligible family members. While it might appear that not much has changed on the surface, the internal structure, expectations, and requirements of PSHB are notably different. If you’re approaching this transition assuming that PSHB will operate exactly like FEHB, you’re putting yourself at risk—especially when it comes to Medicare coordination, prescription drug coverage, and eligibility criteria.

PSHB Requires Its Own Enrollment Decisions

The PSHB Program has its own Open Season, separate from FEHB. While the timing is familiar—November to December each year—you cannot assume that your existing FEHB choices will automatically continue. If you’re a Postal Service annuitant or employee, you must actively enroll in a PSHB plan to retain health coverage in 2025. This requirement applies unless you qualify for one of the limited exceptions.

If you missed the 2024 Open Season, your opportunity to enroll in PSHB is now restricted to specific life events or next year’s Open Season. Unlike FEHB, where legacy enrollments could sometimes be carried over with fewer changes, PSHB enforces a clear enrollment boundary.

Key point: Relying on FEHB timelines or procedures can mean missing your opportunity to enroll in PSHB.

Eligibility Is No Longer the Same

Under FEHB, Postal Service employees and annuitants were part of a shared system with other federal employees. But as of January 1, 2025, eligibility under PSHB has diverged. Only USPS employees and annuitants, and their qualified dependents, are eligible for PSHB.

However, if you are covered under a federal family member’s FEHB plan, you may continue that coverage. But this does not mean you can switch between FEHB and PSHB at will. You must qualify under specific guidelines to do so.

The rules around surviving family members, disabled children, and split families also come with unique interpretations under PSHB. If you assume FEHB’s broader eligibility rules still apply, you might accidentally disqualify yourself or a dependent.

Medicare Enrollment Is Now a Major Factor

One of the biggest shifts is the way PSHB handles Medicare integration. If you are Medicare-eligible and enrolled in PSHB, you may be required to enroll in Medicare Part B in order to keep your PSHB coverage. This is not optional for most annuitants retiring after January 1, 2025.

Those who retired on or before January 1, 2025, or who were 64 or older as of that date, may be exempt. But everyone else must coordinate with Medicare—or risk losing access to full PSHB benefits, especially prescription drug coverage.

This is a stark departure from FEHB, which allowed annuitants more flexibility when deciding whether to enroll in Medicare Part B.

Important clarification: Opting out of Medicare Part B under PSHB may reduce your benefits, increase your out-of-pocket costs, or even terminate your prescription drug coverage through PSHB.

Prescription Drug Coverage Is No Longer Automatic

Another critical distinction between PSHB and FEHB is how prescription drug coverage works. In PSHB, if you are Medicare-eligible, your drug coverage is integrated with a Medicare Part D Employer Group Waiver Plan (EGWP). If you decline to participate in this EGWP, you risk forfeiting drug coverage under your PSHB plan entirely.

FEHB, in contrast, traditionally provided prescription coverage as part of the plan—regardless of Medicare enrollment. In 2025, that safety net is gone for PSHB participants.

This shift affects:

• Your ability to afford high-cost medications

• Your access to pharmacy networks

• Your exposure to the new $2,000 out-of-pocket cap under Medicare Part D

Failing to understand this could leave you scrambling to pay for essential medications once your current refill cycle ends.

Cost Structures Might Look Similar—But Aren’t

At first glance, PSHB premiums and cost-sharing may seem familiar. But the internal formulas have changed. While the federal government still pays roughly 70% of the premium, employee contributions are recalculated within the PSHB framework.

Some key cost distinctions under PSHB:

• Copayments: Often range from $20 to $150 depending on the type of visit or care.

• Coinsurance: May vary widely, from 10% to 50%, depending on whether services are in-network or out-of-network.

• Deductibles: High-deductible options under PSHB have shifted thresholds, and some low-deductible plans now require more upfront spending.

• Out-of-pocket maximums: For 2025, in-network limits reach $7,500 for Self Only and $15,000 for Self Plus One or Self and Family.

If you assumed your old FEHB plan would carry over its costs and protections unchanged, you might be facing unexpected bills—especially early in the year.

Your FEHB Plan Name May Still Exist—But the Plan Has Changed

Even if your 2024 FEHB plan name appears on the PSHB plan list for 2025, that doesn’t mean the benefits are identical. Plan names can stay the same while networks, cost-sharing, drug formularies, and Medicare coordination features shift behind the scenes.

You must read the new PSHB brochures carefully. Review:

• What providers are in-network

• How much cost-sharing applies

• Whether deductibles have changed

• What supplemental benefits are included or excluded

Some plans may also offer Medicare Part B premium reimbursements or other coordination incentives—but these are new features under PSHB and not standard across all plans.

Changes to Out-of-Network Coverage Could Affect Your Access

Under PSHB, out-of-network care often comes with significantly higher coinsurance—sometimes up to 50%. FEHB plans often offered more generous out-of-network terms, especially for urgent care and follow-up services.

If you regularly see specialists or use providers outside your immediate network, assuming FEHB-style reimbursement levels could set you up for major financial exposure.

Make sure you:

• Check whether your current doctors are in-network under PSHB

• Recalculate expected coinsurance for specialty care

• Understand how emergency services are treated when out-of-area

FEHB Coordination Rules No Longer Apply

In FEHB, many retirees coordinated their benefits with Medicare in a flexible way—sometimes even skipping Medicare Part B and relying solely on FEHB coverage. That’s no longer an option for many under PSHB.

Also, PSHB changes how benefits coordinate with:

• Tricare for those with military service backgrounds

• VA benefits

• Indian Health Service or other tribal programs

You must review coordination rules annually, especially if your family relies on multiple benefit sources.

Open Season Deadlines and Notifications Are Separate

Don’t assume you’ll receive the same level of notification or reminders you got under FEHB. PSHB uses USPS-specific portals—such as LiteBlue for employees and KeepingPosted.org for annuitants.

If you’re not checking these sources, you could miss critical deadlines, updates, or required actions. In 2025, plan changes, premium adjustments, and benefit updates may not be widely communicated beyond these portals.

What All These Differences Mean for You

It’s clear now: treating PSHB like a simple rebranding of FEHB is not only inaccurate—it’s risky. Every assumption you carry over from the FEHB era should be double-checked against current PSHB documentation.

Here’s how to protect yourself:

• Carefully read your PSHB plan brochure each year

• Stay current on Medicare Part B requirements

• Monitor announcements via USPS and OPM communication channels

• Don’t skip Open Season—it’s your annual chance to correct any wrong assumptions

If you’re uncertain, reach out to a licensed agent listed on this website to walk you through the specifics and avoid costly oversights.

Rethink What You Knew About Federal Health Benefits

In 2025, the PSHB Program marks a turning point for Postal Service health benefits. While it may mirror FEHB in structure, the fine print holds critical distinctions that could reshape your access to care and financial stability. Don’t risk your health or your wallet by relying on outdated comparisons.

Reach out to a licensed agent listed on this website to ensure your PSHB choices align with your current eligibility, financial goals, and healthcare needs.