Key Takeaways

• Auto-enrollment into the Postal Service Health Benefits (PSHB) Program does not guarantee that you are getting the best coverage for your current needs or future plans.

• Reviewing your options and understanding what auto-enrollment includes can help you avoid higher out-of-pocket costs or unexpected coverage gaps in 2025 and beyond.

Why Auto-Enrollment Happens

In 2025, the United States Postal Service (USPS) officially transitions from the Federal Employees Health Benefits (FEHB) Program to the Postal Service Health Benefits (PSHB) Program. As part of this change, eligible USPS employees and retirees are automatically enrolled in a comparable PSHB plan if no action is taken during the Open Season. This default transition is intended to ensure continuity of coverage without requiring every individual to manually re-enroll.

However, while the intent is to protect you from losing health insurance, the process doesn’t guarantee that the plan you’re assigned actually matches your current health needs or preferences. That’s where a closer look becomes essential.

What Auto-Enrollment Actually Covers

The PSHB Program is designed specifically for postal workers and retirees. It offers plans that may resemble your previous FEHB coverage, but there are notable differences. Auto-enrollment places you into a PSHB plan that is “comparable” to your prior FEHB plan, but that doesn’t mean the two are identical.

Key areas that may vary include:

• Network coverage: Providers or hospitals you used under FEHB might not be covered under the new PSHB plan.

• Prescription drug benefits: In 2025, Medicare-eligible annuitants are automatically enrolled in a Part D EGWP (Employer Group Waiver Plan), which changes how your prescriptions are covered.

• Cost-sharing rules: Deductibles, copayments, and coinsurance may differ even if the plan looks the same in name.

• Out-of-pocket maximums: These can be higher or lower than you had under FEHB, especially for in-network versus out-of-network services.

If You’re Still Working at USPS

If you’re still an active USPS employee in 2025, auto-enrollment ensures you remain covered, but you still need to compare plans during Open Season.

Why? Because your health situation or location may have changed. Or, your new PSHB plan might not include a preferred provider network or may carry a different deductible. Don’t assume everything remains the same.

Additionally, while premiums are subsidized by the government, your share of the premium could increase if your auto-enrolled plan includes features you don’t use or need.

If You’re a Retiree

Retirees are at particular risk of overlooking important details. If you are Medicare-eligible, PSHB plans now integrate with Medicare Part B. That means your coordination of benefits and your out-of-pocket expenses can change substantially depending on whether you are enrolled in Medicare Part B or not.

In 2025:

• Some PSHB plans waive deductibles and offer lower copayments if you’re enrolled in Medicare Part B.

• If you are not enrolled in Medicare Part B and do not qualify for an exemption, you could lose PSHB coverage.

• You may also be automatically enrolled in Medicare Part D drug coverage via the plan’s EGWP. Opting out of that may lead to a loss of drug coverage entirely.

These interactions with Medicare are not always clearly explained in auto-enrollment notices, so reviewing your plan’s fine print is essential.

The Importance of Open Season

Open Season for PSHB generally runs from November to December. During this period, you can:

• Review all available PSHB plan options.

• Compare benefits, cost structures, provider networks, and Medicare coordination details.

• Switch to a plan that better suits your needs or maintain your auto-enrolled coverage if it meets your expectations.

Don’t skip this opportunity. Even if you plan to stay in the same coverage type, small plan changes can lead to unexpected costs.

Common Mistakes You Can Avoid

Assuming your preferred doctors are still in-network

Not all providers who were in your FEHB plan are necessarily in the PSHB equivalent. Use the plan’s directory or call customer service to verify.

Not understanding Medicare integration

Medicare Part B coordination can significantly reduce your out-of-pocket costs under PSHB, but only if you’re enrolled. Confirm your eligibility and understand whether an exception applies to you.

Ignoring the Part D EGWP enrollment

Retirees automatically enrolled in a PSHB plan with Medicare drug coverage are also enrolled in an EGWP. If you opt out of this and don’t have other creditable drug coverage, your PSHB plan might drop your drug benefits.

Assuming auto-enrollment equals the best deal

Auto-enrolled plans are not personalized. They are based on general comparability and may not reflect your prescription needs, travel habits, or new health conditions.

Questions You Should Ask Yourself

Before sticking with the default plan, ask:

• Is my primary doctor still covered?

• Are my medications on the plan’s formulary?

• Have my health needs changed since last year?

• Do I need coverage while traveling?

• Am I enrolled in Medicare Part B, and does my plan coordinate well with it?

• Is there a plan with lower total out-of-pocket costs for the benefits I actually use?

What If You Miss Open Season?

If you don’t take any action during Open Season, you will be auto-enrolled in the corresponding PSHB plan. While this ensures continuity, you lose the ability to tailor your coverage until the next Open Season or unless you experience a Qualifying Life Event (QLE).

Common QLEs include:

• Marriage or divorce

• Birth or adoption of a child

• Loss of other coverage

• Moving outside your plan’s service area

Even with a QLE, it may take time to process the change. Planning ahead is always better.

Exemptions from Medicare Part B Requirement

Not everyone is required to enroll in Medicare Part B to stay in PSHB. As of 2025, you are exempt if:

• You retired on or before January 1, 2025, and are not enrolled in Part B.

• You were at least age 64 on January 1, 2025.

• You live abroad.

• You qualify for care through the Department of Veterans Affairs or Indian Health Service.

If none of these apply, enrollment in Medicare Part B is mandatory to maintain full PSHB benefits.

How PSHB Prescription Drug Coverage Works in 2025

All Medicare-eligible annuitants are automatically enrolled in an EGWP through their PSHB plan. This gives you access to:

• A $2,000 annual cap on out-of-pocket prescription drug costs

• Coverage of insulin at a capped price

• Access to a broader network of retail and mail-order pharmacies

However, if you opt out of the EGWP and don’t have other drug coverage, you lose prescription benefits under PSHB. That means it’s crucial to verify that this automatic enrollment works in your favor.

Double-Check Your Plan Details Before It’s Too Late

Even though auto-enrollment prevents you from losing coverage, it should not be considered a final solution. You need to ensure that your plan fits your:

• Current medical needs

• Preferred providers

• Prescription requirements

• Medicare enrollment status

• Budget expectations

What works well for one person may be costly or ineffective for another. Each plan has unique cost-sharing features and service coverage that can shift from year to year.

Getting the Right Support

Understanding your plan options can be complex, especially when Medicare and prescription benefits are involved. During Open Season, or before any major coverage decisions, consider contacting a licensed agent for one-on-one help. They can walk you through the details, clarify your eligibility, and help you avoid surprises.

Make an Informed Choice That Works for You

Default auto-enrollment into a PSHB plan might seem like a safety net, but it isn’t tailored to you. Taking the time to double-check your coverage, compare plan options, and understand Medicare integration can save you from costly mistakes.

Make use of Open Season and any available tools or expert support. If you’re uncertain about how your benefits align with your health and financial goals, get in touch with a licensed agent listed on this website for professional advice tailored to your needs.