Key Takeaways

• Choosing the wrong Postal Service Health Benefits (PSHB) option in 2025 can leave you without essential coverage, particularly for prescription drugs, specialist visits, or Medicare integration.

• Understanding plan structures, coordination with Medicare Part B, and your personal eligibility status are all critical factors that determine whether your PSHB plan provides the protection you need.

The Choices May Look Similar—But the Consequences Are Not

With the full transition from the Federal Employees Health Benefits (FEHB) program to the Postal Service Health Benefits (PSHB) program now active in 2025, the choices you make during Open Season matter more than ever. While many PSHB plans appear similar on the surface, the underlying details can affect your access to care, your monthly costs, and even your drug coverage.

This is not the year to default to a plan without carefully reviewing what you might miss.

What Changed With PSHB in 2025

Since January 1, 2025, all Postal Service employees, retirees, and eligible family members must be enrolled in a PSHB plan instead of an FEHB plan. If you’re a Postal Service annuitant or a covered family member, you’re now subject to:

• New plan networks that may not include the same providers as your previous FEHB plan.

• Revised prescription drug benefits that are integrated with Medicare Part D through an Employer Group Waiver Plan (EGWP).

• Mandatory Medicare Part B enrollment for many Medicare-eligible annuitants and family members to maintain PSHB eligibility.

Missing any of these details during enrollment could mean losing access to key benefits.

Medicare Part B Integration Isn’t Optional for Everyone

Many retirees mistakenly believe they can opt out of Medicare Part B without penalty. Under PSHB, this is no longer the case for many enrollees. If you or a covered family member became Medicare-eligible after January 1, 2025, you must enroll in Medicare Part B to maintain PSHB coverage.

Exceptions apply only to:

• Retirees who began retirement on or before January 1, 2025 and are not currently enrolled in Part B.

• Employees who were age 64 or older as of January 1, 2025.

• Those living abroad, receiving VA benefits, or under Indian Health Services.

Choosing a PSHB plan without understanding these Medicare requirements can result in:

• Loss of PSHB coverage

• Unexpected out-of-pocket costs

• Ineligibility for certain plan reimbursements

You May Assume Drug Coverage Is Included—But It Might Not Be Enough

Each PSHB plan integrates drug coverage differently. If you rely on prescription drugs, you need to be aware of how:

• Formularies (covered drug lists) vary widely between plans

• Pharmacy networks may exclude your usual pharmacy

• Cost-sharing for brand-name vs. generic drugs is structured

• Coverage phases under Part D apply, including the $2,000 out-of-pocket cap in 2025

Choosing a plan with a limited formulary or higher out-of-pocket costs could leave you without coverage for critical medications. You could also find yourself restricted to mail-order pharmacies or forced to switch pharmacies mid-year.

Out-of-Network Costs Could Drain Your Retirement Budget

All PSHB plans include provider networks. If you don’t check whether your preferred doctors and specialists are in-network before enrolling, you could face:

• Coinsurance of up to 50% for out-of-network care

• Deductibles exceeding $3,000 for family out-of-network services

• Limits on covered services unless pre-authorized

Even basic services like diagnostic imaging or specialist consultations can become unaffordable if your provider is not in the PSHB plan’s network.

Misunderstanding the Tier You’re Enrolling In Could Cost You

PSHB premiums are based on your enrollment tier:

• Self Only

• Self Plus One

• Self and Family

Selecting the wrong tier may either:

• Leave a spouse or dependent without coverage, or

• Force you to pay significantly more than necessary for coverage you don’t need

If you’re newly retired or have had changes in your family size, reviewing the tier options is essential. Changing tiers outside Open Season requires a Qualifying Life Event (QLE).

The Premium Isn’t the Only Cost That Matters

A lower premium may seem like the best choice, but be sure to factor in:

• In-network vs. out-of-network deductibles

• Annual out-of-pocket maximums ($7,500 for Self Only; $15,000 for family coverage in-network in 2025)

• Copayments for urgent care, emergency services, or hospitalization

• Whether the plan reduces costs if you have Medicare Part B

A low-premium plan with high out-of-pocket expenses can cost you more by year’s end than a higher-premium plan with generous cost-sharing.

Some Plans Offer Perks That Only Work With Medicare

Several PSHB plans advertise perks like:

• Reimbursements for Part B premiums

• Waived deductibles if you have Medicare

• Lower copays for dual coverage enrollees

But here’s the catch: You only receive these if you are enrolled in Medicare Part B.

If you select such a plan but skip enrolling in Medicare Part B, those advertised perks vanish—but you’ll still pay the same premium.

You Can’t Change Plans Mid-Year Without a Qualifying Life Event

Unlike some private insurance options, PSHB plans follow strict federal timelines. Once you select a plan during the Open Season (November to December), you cannot switch plans until the next year unless you experience a:

• Marriage, divorce, or death

• Birth or adoption

• Loss or gain of other coverage

• Move to a new area requiring different plan options

Choosing the wrong plan could lock you into insufficient coverage for up to 12 months.

Medicare Advantage Plans May Interfere With PSHB

Some retirees consider enrolling in Medicare Advantage (Part C) plans alongside PSHB coverage. While this may work under certain conditions, it can create:

• Coverage conflicts that delay care

• Duplicate services that aren’t reimbursed

• Loss of EGWP drug coverage if not coordinated properly

Most PSHB plans do not recommend combining with Medicare Advantage. Make sure you understand your plan’s rules before attempting to enroll in both.

Annual Notices Can Signal Major Plan Changes

Every year, PSHB plans issue Annual Notices of Change (ANOCs). These documents outline key updates such as:

• Premium changes

• Network adjustments

• Drug formulary changes

• Copay or coinsurance increases

Failing to read your ANOC could result in automatic re-enrollment into a plan that no longer meets your needs.

Use the Tools Available Before Enrolling

Before making your 2025 PSHB decision, take advantage of:

• Plan comparison tools on the official OPM site

• Summary of Benefits brochures for each plan

• Medicare coordination charts that show how benefits work together

• Help lines and customer service representatives who can clarify your options

Don’t rely on assumptions or past experiences—2025 is a different landscape with new rules and integration requirements.

Making the Right Decision Starts With Awareness

You have until the end of the Open Season to choose the PSHB plan that fits your medical needs, budget, and Medicare status. Waiting until the last minute or failing to research the fine print can result in higher costs, limited access to care, or even loss of coverage.

Your Plan Should Work for You, Not Against You

Understanding the mechanics of PSHB in 2025 is more important than ever. The wrong decision can lead to limited access, higher expenses, or coverage gaps that could have been avoided. Whether you’re currently working, recently retired, or supporting a covered family member, now is the time to evaluate how your choice lines up with your healthcare needs and financial situation.

If you’re unsure how to proceed, speak with a licensed agent listed on this website. They can walk you through your options and help you choose a plan that doesn’t leave you exposed.