Key Takeaways

• Automatic enrollment in the PSHB program only applies to certain groups, and misunderstanding these details could result in a lapse in your health coverage.

• Not everyone who was enrolled in FEHB is guaranteed an effortless transition into PSHB; key eligibility factors and actions may still be required on your part.

The PSHB Transition: Not as Seamless as It Sounds

If you’re counting on automatic enrollment in the Postal Service Health Benefits (PSHB) program to handle everything for you, it’s time for a reality check. While the U.S. Office of Personnel Management (OPM) has taken steps to simplify the 2025 transition from the Federal Employees Health Benefits (FEHB) program to the PSHB program for Postal Service employees and retirees, not every enrollee will be carried over without action.

The transition began officially on January 1, 2025. But the actual enrollment process—especially the so-called ‘automatic’ enrollment—depends on several eligibility criteria, age, Medicare status, and whether you are an active employee, annuitant, or covered family member.

Who Is Automatically Enrolled—And Who Isn’t

OPM has stated that certain eligible individuals will be auto-enrolled in a corresponding PSHB plan. This includes:

• Current employees who are enrolled in FEHB as of December 31, 2024.

• Annuitants receiving retirement benefits and enrolled in FEHB as of the end of 2024.

• Eligible family members of Postal employees and annuitants enrolled in a qualifying FEHB plan at the time.

However, automatic enrollment does not apply if:

• You were not enrolled in FEHB as of December 31, 2024.

• You are a family member covered under a non-postal federal employee’s FEHB plan.

• You were receiving Temporary Continuation of Coverage (TCC).

• You have suspended FEHB to enroll in TRICARE, CHAMPVA, or other coverage.

Medicare-Eligible Postal Annuitants Face Extra Steps

One of the most commonly misunderstood elements of the PSHB transition involves Medicare coordination. As of 2025, if you are a Medicare-eligible Postal Service annuitant, you are generally required to be enrolled in Medicare Part B to keep your full PSHB coverage.

Here’s the breakdown:

• If you retired on or before January 1, 2025, you are not required to enroll in Medicare Part B to keep your PSHB coverage.

• If you retired after January 1, 2025, and are Medicare-eligible, you must enroll in Medicare Part B or risk losing significant portions of your PSHB benefits.

• Family members who are Medicare-eligible may also be required to enroll, depending on their relation and retirement status.

Automatic enrollment won’t override these Medicare requirements. In fact, if you skip Medicare Part B enrollment when required, you could find your drug and health coverage under PSHB limited—or worse, void.

Notification Isn’t the Same as Confirmation

Even if you’re listed for automatic enrollment, you still need to pay attention to the communications sent during the Open Season period, which ran from November to December 2024. Every eligible employee and annuitant should have received a mailing from OPM confirming either their automatic enrollment status or the need for action.

However, these notifications sometimes:

• Are delayed in the mail

• Go to old or incorrect addresses

• Are ignored or misunderstood

If you didn’t actively confirm your plan details, it’s possible you were defaulted into a plan you wouldn’t have chosen yourself. This is particularly relevant if your current FEHB plan doesn’t have an identical match in the PSHB program.

You Might Be Auto-Enrolled in the Wrong Tier

Another wrinkle in the PSHB rollout: coverage tiers. While many expect their tier to remain unchanged (Self Only, Self Plus One, or Self and Family), the automatic transition does not always guarantee the correct mapping.

For example:

• A family composition change in late 2024 may not have been reflected in the auto-enrollment process.

• A discrepancy in Medicare eligibility within a family unit could lead to misaligned cost-sharing or incorrect drug coverage under the Medicare Part D Employer Group Waiver Plan (EGWP).

To avoid premium or coverage mismatches, reviewing your enrollment tier and family details during the designated Open Season was critical. If you skipped this, now is the time to audit your current PSHB plan.

TCC and Suspended Coverage: You’re Not on the List

Temporary Continuation of Coverage (TCC) enrollees were not part of the automatic enrollment process. If you were enrolled in FEHB through TCC at the end of 2024, you needed to actively elect a PSHB plan during Open Season. Otherwise, your coverage lapsed as of January 1, 2025.

Similarly, if you had suspended your FEHB coverage to use other coverage like TRICARE, you were not automatically reenrolled. You needed to affirmatively rejoin the PSHB system during Open Season if you wished to have coverage in 2025.

Opting Out of PSHB Prescription Drug Coverage Has Consequences

Every Medicare-eligible enrollee in PSHB is automatically enrolled in a Medicare Part D EGWP unless they opt out. But here’s the catch: opting out of this coverage also means losing your entire prescription drug coverage under PSHB.

And here’s where it gets more complicated:

• If you opt out but don’t have another creditable Part D plan, you could face a late enrollment penalty later.

• Re-enrollment in PSHB drug coverage is not guaranteed if you change your mind mid-year.

Automatic enrollment doesn’t save you here—it could set you up for costly gaps if you misunderstand the drug coverage requirements.

What If You’re Still Covered Under a Federal Spouse’s FEHB Plan?

In some households, one spouse is a Postal Service annuitant and the other is a federal employee. In these situations, you may still be enrolled in FEHB through your spouse’s employment, which means you are not automatically enrolled in PSHB.

To maintain postal-specific benefits, you must enroll in a PSHB plan directly. Failing to do so could mean your benefits are handled under the general FEHB system rather than the postal-specific PSHB system, impacting:

• Cost-sharing

• Access to certain Medicare coordination benefits

• Drug plan integration

Again, automatic enrollment won’t catch this exception—you need to.

PSHB Plan Options Differ From FEHB

Even if your transition was automatic, it’s important to realize that PSHB plan structures differ from FEHB:

• Different cost tiers for deductibles and coinsurance

• Changes in copayment structures for urgent care, emergency room visits, or specialists

• Altered provider networks in some regions

If you didn’t review your 2025 plan brochure, you may now be enrolled in a plan with:

• Higher or lower premiums than you expected

• Different out-of-pocket limits (as high as $7,500 for Self Only or $15,000 for family coverage)

• A different pharmacy network or specialty care policy

The “automatic” enrollment didn’t automatically keep your preferences or expectations in place. It only moved you to what OPM considered the closest equivalent.

Automatic Doesn’t Mean Unchangeable—But There’s a Time Limit

If you discover now in 2025 that your auto-enrollment put you in the wrong plan or tier, you have limited recourse:

• Outside of Open Season, you can only change plans if you experience a Qualifying Life Event (QLE), such as marriage, divorce, birth, or loss of other coverage.

• Otherwise, you must wait until the next Open Season, which typically runs from mid-November to mid-December each year.

Until then, you’re bound to the plan you were enrolled in—automatically or not.

Watch for Updates From OPM and USPS

Because PSHB is still new in 2025, guidance is ongoing. Both OPM and USPS continue to issue clarifications, especially around:

• Medicare Part B integration

• EGWP drug plan policies

• Family tier reclassification

Keep a close eye on official correspondence. Automatic enrollment may have saved you time—but staying enrolled and properly covered will require active attention going forward.

Understand Your Enrollment Before It’s Too Late

The term “automatic enrollment” can give a false sense of security. While it applies to many, it doesn’t apply to all. And even if you were auto-enrolled, that doesn’t mean your plan is right for your household, your Medicare status, or your budget.

Make sure you review:

• Your current PSHB plan details

• Whether all family members are properly covered

• Medicare enrollment status (especially for those who turned 65 recently)

• Prescription drug coverage status under EGWP

For guidance tailored to your unique situation, get in touch with a licensed agent listed on this website. They can help you avoid missteps and ensure that your PSHB plan meets your healthcare needs in 2025 and beyond.