Key Takeaways

• The transition from FEHB to PSHB in 2025 is mandatory for eligible Postal Service employees, retirees, and family members, and it could impact your overall healthcare budget in multiple ways.

• Understanding premium structures, cost-sharing changes, and Medicare integration requirements is crucial to prevent unexpected financial strain.

Why the Move to PSHB Matters for Your Finances

If you’re still enrolled in the Federal Employees Health Benefits (FEHB) Program, the shift to the Postal Service Health Benefits (PSHB) Program in 2025 is not optional. It’s happening for all Postal Service employees, annuitants, and eligible family members. While the move is designed to create a tailored healthcare experience for postal workers and retirees, it also brings notable changes that could directly affect your wallet.

Learning how these changes unfold is the first step in safeguarding your budget.

Premium Contributions: What Changes and What Stays the Same

You will continue to see government contributions covering about 70% of your plan premiums, a structure familiar from FEHB. However, PSHB plans come with their own set of premium rates, which may not match what you were paying under FEHB.

Key premium-related points:

• Premium amounts under PSHB are recalculated for postal-only populations.

• While government contributions remain significant, some members may experience increases in their share of the premium.

• Monthly premium rates for Self Only, Self Plus One, and Self and Family coverage types are now based strictly on PSHB plan terms, not FEHB averages.

For retirees and annuitants, monthly premiums must still be paid to maintain coverage, just like before. However, differences in plan structures mean your budget might need to stretch a bit further.

Deductibles and Cost Sharing: Prepare for New Numbers

Moving to PSHB may reset your expectations for deductibles, coinsurance, and copayments. Although many plan designs resemble traditional FEHB plans, each PSHB option sets its own deductible levels and cost-sharing percentages.

Important changes to watch for:

• In-network deductibles typically range from $350 to $500 for low-deductible options.

• High-deductible health plans under PSHB can require annual deductibles between $1,500 and $2,000.

• Copayments for primary care visits, specialists, urgent care, and emergency services might shift slightly upward.

• Coinsurance for major services can now range between 10% and 30% in-network and even higher out-of-network.

If you are used to a specific out-of-pocket maximum under your FEHB plan, double-check your PSHB plan’s figures. In-network annual out-of-pocket maximums for 2025 generally hover around $7,500 for Self Only and $15,000 for family coverage—an important number to budget for.

Medicare Part B Enrollment: A New Requirement for Some

A major difference under PSHB is the integration with Medicare Part B for Medicare-eligible annuitants and family members. If you turned 65 before January 1, 2025, and retired before that date, you’re exempt from the new Medicare Part B enrollment requirement. However, if you became Medicare-eligible after January 1, 2025, you must enroll in Part B to keep your PSHB coverage active.

Impact on your budget:

• The standard Medicare Part B premium for 2025 is $185 per month.

• Higher-income enrollees pay more under the Income-Related Monthly Adjustment Amount (IRMAA).

• Some PSHB plans offer partial reimbursement for Part B premiums, but reimbursement is not universal.

Failing to enroll in Part B if required could lead to the loss of your PSHB plan coverage, leaving you reliant solely on Medicare—a major financial and health planning risk.

Prescription Drug Coverage: Better Caps, Different Costs

Another shift under PSHB involves prescription drug coverage for Medicare-eligible members. PSHB integrates Part D prescription coverage through an Employer Group Waiver Plan (EGWP).

Here’s how it affects you:

• There is now a $2,000 annual out-of-pocket cap for prescription drug costs.

• Plans offer a $35 maximum copayment for insulin.

• Pharmacy networks may differ, potentially affecting where you fill prescriptions and what you pay.

Previously, under FEHB, prescription costs varied widely without a consistent national cap. This new structure could bring significant savings for those with high drug needs but could also present surprises for others depending on medication lists and formularies.

Out-of-Network Costs: A Hidden Risk

If you prefer seeing providers outside of your plan’s network, pay close attention to out-of-network cost structures under PSHB. Many plans increase coinsurance to 40%-50% for non-network services, and out-of-network deductibles are often much higher, sometimes reaching $3,000.

Given these figures, a single out-of-network hospital visit could lead to thousands of dollars in bills if you’re not adequately prepared.

Transition Periods: 2025 Timelines You Should Know

Understanding the 2025 transition timeline is crucial to avoid gaps in coverage or unexpected costs.

• April 2024 to September 2024: Special Enrollment Period for Medicare Part B (for eligible annuitants and family members).

• November to December 2024: Open Season to select a PSHB plan.

• January 1, 2025: PSHB plans become active.

Failure to select a PSHB plan during Open Season could result in automatic enrollment in a comparable plan—but ‘comparable’ doesn’t necessarily mean ‘identical,’ so active plan selection is advised.

Additional Costs That Could Creep Up

Even if you plan carefully, a few budget items might still catch you off guard:

• Higher specialist copays: Certain plans have raised specialist visit copays.

• Non-covered services: Some plans redefine what’s considered a “covered” service, leaving gaps.

• Prior authorization changes: Delays in prior authorization approvals could shift timing and costs of care.

• Telehealth costs: Some PSHB plans offer reduced-cost telehealth, but others charge the same as in-person visits.

Taking the time to carefully read your plan’s summary of benefits and coverage is vital.

How to Safeguard Your Budget Moving Forward

You can take a few simple steps now to protect your financial stability during and after the transition:

• Review PSHB plan brochures carefully during Open Season.

• Confirm Medicare enrollment status if you’re Medicare-eligible.

• Estimate annual healthcare expenses based on deductibles, copays, and out-of-pocket maximums.

• Use in-network providers whenever possible to avoid hefty out-of-network charges.

• Double-check prescription drug coverage for your medications under the new EGWP structure.

Planning proactively in 2025 can prevent reactive financial headaches later.

Where You Might Feel the Biggest Differences

While many aspects of FEHB and PSHB plans are similar, the most noticeable budget impacts are likely to show up in:

• Your monthly premium deductions

• Out-of-pocket costs for doctor visits and prescriptions

• Costs if you use out-of-network providers

• Potential penalties if Medicare Part B enrollment is missed

Recognizing where your money could be most at risk helps you prioritize which plan features to scrutinize during Open Season.

Staying Financially Ready for the PSHB Era

The move from FEHB to PSHB in 2025 represents more than just an administrative change—it’s a real shift in how your healthcare costs are structured. While government contributions remain strong and new prescription drug protections help many, changes in premiums, deductibles, Medicare requirements, and network rules mean the transition could touch nearly every aspect of your budget.

If you’re unsure about how the switch will impact you personally, it’s wise to get in touch with a licensed insurance agent listed on this website. They can walk you through your PSHB plan options, Medicare considerations, and budget impacts, helping you make an informed choice that protects your health and finances for the future.