Key Takeaways

• The Postal Service Health Benefits (PSHB) Program officially replaces FEHB for USPS employees and retirees starting January 1, 2025.

• Medicare-eligible annuitants may need to enroll in Medicare Part B to maintain full PSHB coverage, depending on retirement status and other criteria.

What the PSHB Program Is and Why It Matters

The Postal Service Health Benefits (PSHB) Program is a new federal health insurance program created exclusively for United States Postal Service (USPS) employees, annuitants, and their eligible family members. It takes effect on January 1, 2025, and replaces existing Federal Employees Health Benefits (FEHB) coverage for this group. This change is mandated under the Postal Service Reform Act of 2022 and represents a significant shift in how your health coverage is structured going forward.

If you’re a current USPS employee or a retired postal worker, this change will impact how you enroll in health benefits, whether you need Medicare Part B, and what kind of coverage options are available to you and your dependents.

Who Must Enroll in the PSHB Program

You must enroll in a PSHB plan if you are:

• A current USPS employee,

• A USPS retiree or annuitant,

• An eligible family member (spouse or dependent child) of a USPS employee or retiree.

The switch from FEHB to PSHB is not optional for those in the USPS system. If you fall into one of these categories, your participation in PSHB is mandatory beginning in 2025.

Timeline for Enrollment

The initial PSHB Open Season occurred from November 11 through December 9, 2024. During this period, you were able to:

• Choose a new PSHB plan,

• Confirm automatic enrollment into a comparable plan,

• Make changes to dependents covered under your plan.

If you did not make any changes during Open Season, you were automatically enrolled in a PSHB plan similar to your prior FEHB plan. Coverage under the PSHB officially begins January 1, 2025.

How Medicare Enrollment Ties Into PSHB

A major component of the PSHB transition is the new requirement for Medicare Part B enrollment for certain annuitants and their covered family members.

Who Must Enroll in Medicare Part B

You are required to enroll in Medicare Part B if:

• You are a USPS annuitant or family member who is entitled to Medicare Part A,

• You turn 65 before or after January 1, 2025,

• You are not exempt from the Part B requirement.

Who Is Exempt from the Part B Requirement

You are exempt from mandatory Medicare Part B enrollment if:

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

• You were an active USPS employee aged 64 or older as of January 1, 2025,

• You live abroad full-time,

• You qualify for healthcare through Veterans Affairs (VA) or Indian Health Services (IHS).

Why This Requirement Matters

Without Medicare Part B enrollment, you may lose access to certain PSHB benefits, particularly drug coverage under the Medicare Part D integration. The prescription drug component is managed through an Employer Group Waiver Plan (EGWP), which offers lower out-of-pocket drug costs, broader pharmacy access, and coverage enhancements such as a $35 insulin cap.

Prescription Drug Coverage Under PSHB

Your PSHB plan includes integrated prescription drug coverage. For those who are Medicare-eligible and enrolled in Part B, your drug coverage is coordinated through a Medicare Part D Employer Group Waiver Plan (EGWP).

Features of the EGWP Drug Plan

• $2,000 annual out-of-pocket maximum on prescription drugs,

• Coverage for a wide variety of brand-name and generic medications,

• Access to an expanded pharmacy network,

• Monthly payment option to help manage high drug costs throughout the year,

• Lower copayments when coordinated with Medicare.

If you opt out of the Medicare Part D integration, you will lose drug coverage through PSHB, and re-enrollment will be restricted unless you experience a qualifying life event.

Costs You Can Expect Under PSHB

While exact costs vary by plan, the PSHB system follows a cost-sharing structure similar to FEHB but with a few notable changes:

• Premiums: The government continues to pay about 70% of your total premium, with you covering the remainder. Premiums are categorized by Self Only, Self Plus One, and Self and Family.

• Deductibles: In-network deductibles generally range from $350 to $2,000, depending on whether you’re enrolled in a low or high deductible plan.

• Out-of-Pocket Maximums: These vary, but many plans cap in-network out-of-pocket costs at $7,500 for Self Only and $15,000 for family coverage.

• Copayments: Typically $20-$40 for primary care, $30-$60 for specialists, and up to $150 for emergency services.

• Coinsurance: Commonly ranges from 10%-30% in-network and higher out-of-network.

Be sure to check your specific plan brochure for exact cost-sharing details.

How to Enroll or Make Changes

If you’re an active USPS employee, you manage your health benefits enrollment through the LiteBlue platform. If you’re an annuitant, use KeepingPosted.org or call the PSHB Navigator Help Line for support.

Outside of Open Season

Once Open Season ends, you can only make changes to your PSHB plan during a Qualifying Life Event (QLE), such as:

• Marriage or divorce,

• Birth or adoption of a child,

• Death of a family member,

• Loss of other insurance coverage.

Changes made during a QLE generally must be completed within 60 days of the event.

What Happens If You Do Nothing

If you were eligible and took no action during the 2024 Open Season, you were automatically enrolled in a PSHB plan that closely mirrors your previous FEHB coverage. This ensures continued coverage but may not be the most cost-effective or appropriate choice for your current situation. It’s essential to actively review your options each year.

FEDVIP, FSAs, and Other Federal Benefits

The PSHB Program only replaces FEHB coverage. Other benefit programs like:

• Federal Employees Dental and Vision Insurance Program (FEDVIP),

• Flexible Spending Accounts (FSAFEDS),

• Federal Long Term Care Insurance Program (FLTCIP),

• Federal Employees’ Group Life Insurance (FEGLI),

remain unchanged. You do not lose access to these benefits because of the switch to PSHB.

Planning Ahead for 2026 and Beyond

While the most immediate impact occurs in 2025, it’s important to plan for:

• Annual Open Seasons each November–December,

• Medicare Part B enrollment if you’re turning 65 in the next year,

• Monitoring your plan’s drug formulary and cost structure,

• Reviewing coverage changes through your Annual Notice of Change (ANOC).

You should also verify that your dependents remain eligible, particularly children aging out of coverage or spouses who become Medicare-eligible.

Next Steps for USPS Employees and Retirees

Here are a few practical steps you can take now:

• Review your current plan details and how they align with your medical needs,

• Check if you or your dependents are required to enroll in Medicare Part B,

• Set calendar reminders for future Open Seasons,

• Evaluate whether your coverage is cost-effective for your family situation,

• Reach out to a licensed agent if you have questions about eligibility or plan selection.

Prepare Now to Stay Covered and Informed

The PSHB Program brings big changes to your healthcare coverage, but with the right preparation, you can make confident choices that work for your health and financial well-being. Understanding who needs Medicare, how drug coverage is changing, and what actions to take during enrollment periods will help you avoid gaps in coverage and unnecessary costs.

For personal guidance about your situation, contact a licensed agent listed on this website to walk you through your options.