Key Takeaways

• In 2025, the cost-sharing structure under the Postal Service Health Benefits (PSHB) Program differs significantly between employees and retirees, with the government covering approximately 70% of total premium costs.

• PSHB enrollees must factor in additional elements like Medicare coordination, deductibles, and out-of-pocket maximums, which affect their total annual healthcare spending beyond monthly premiums.

Understanding the PSHB Program in 2025

As of January 1, 2025, the Postal Service Health Benefits (PSHB) Program has officially replaced FEHB coverage for USPS employees, annuitants, and their eligible family members. This shift was mandated by the Postal Service Reform Act of 2022. Now, if you’re an active USPS worker or a retiree, you are part of a health benefits program designed specifically for the postal workforce. But what hasn’t changed is the cost-sharing model: you still split premiums with the government—just not equally.

Let’s walk through how the costs break down between you and the government in 2025, depending on whether you’re working or retired.

Who Pays What: Employees vs. Retirees

The PSHB cost-sharing model is designed to be consistent with previous federal benefit structures, but there are a few nuances.

For Current Employees

• The federal government continues to contribute around 70% of your plan premium, with you paying the remaining 30%.

• These percentages apply whether you’re enrolled in Self Only, Self Plus One, or Self and Family coverage.

• Premiums are deducted directly from your biweekly paycheck, which spreads the cost across the year.

For Retirees and Annuitants

• The same 70/30 split generally applies.

• However, retirees pay premiums on a monthly basis, not biweekly, and the deduction comes from your annuity.

• If you’re enrolled in Medicare Part B, your total cost burden may be lower due to cost-sharing reductions and premium reimbursements offered by certain PSHB plans.

2025 Premium Contributions: General Overview

While premium amounts vary by plan and coverage type, the following are general monthly contribution ranges for 2025 based on the 70/30 cost-sharing split:

• Self Only: Total premium ranges from $120 to $200, with the employee/retiree contributing around $36 to $60.

• Self Plus One: Total premium ranges from $250 to $400, with contributions around $75 to $120.

• Self and Family: Total premium ranges from $350 to $550, with contributions around $105 to $165.

These amounts represent estimates and will vary depending on the plan you select. Always refer to your plan brochure for exact premium amounts.

Government Contribution: How It’s Calculated

The government contribution in PSHB is tied to the weighted average premium of all available plans. This means:

• If your chosen plan costs more than the average, your contribution will be higher.

• If you choose a plan with costs below the average, your out-of-pocket contribution will be less.

The maximum government contribution is capped at 75% of any plan’s total premium. That means you will always be responsible for at least 25% of the cost, even for lower-priced plans.

Medicare and the PSHB Split: Why It Matters

If you’re a retiree who is eligible for Medicare, particularly Part B, the cost dynamics of PSHB coverage shift considerably. Here’s how:

• Mandatory Enrollment: Certain retirees and family members must be enrolled in Medicare Part B to maintain PSHB coverage.

• Lower Cost-Sharing: Many PSHB plans offer reduced deductibles, lower copays, and even reimbursements for Part B premiums when you combine PSHB with Medicare.

• Part D Integration: Your prescription drug coverage is automatically provided through a Medicare Part D Employer Group Waiver Plan (EGWP), which features a $2,000 out-of-pocket cap in 2025.

So while you pay the standard Part B premium—which is $185 in 2025—you may find that your overall annual healthcare expenses go down due to these integration benefits.

Deductibles and Out-of-Pocket Maximums in 2025

Your premium isn’t the only cost you need to think about. Deductibles, coinsurance, and out-of-pocket maximums can also have a big impact on what you spend each year.

In-Network Deductibles

• Low-Deductible Plans: $350 to $500 for Self Only; up to $1,000 for Self Plus One/Family

• High-Deductible Plans: $1,500 to $2,000 for Self Only; up to $4,000 for family coverage

Out-of-Pocket Maximums (In-Network)

• Self Only: Capped at $7,500

• Self Plus One/Family: Capped at $15,000

Note: These caps apply only to in-network covered services. Out-of-network limits may be much higher.

Copayments and Coinsurance

• Primary Care Visits: $20–$40

• Specialist Visits: $30–$60

• Urgent Care: $50–$75

• Emergency Room: $100–$150

Understanding these additional costs is crucial for planning your annual health expenses beyond just the premium split.

Automatic Enrollment and Plan Selection

For current FEHB enrollees, automatic enrollment into a corresponding PSHB plan occurred at the start of 2025. However, you were allowed to switch plans during Open Season in November–December 2024.

If you didn’t make any changes, you were automatically moved to the PSHB version of your existing FEHB plan. That said, reviewing plan brochures and checking how costs split between you and the government is always worth your time.

What to Expect in the Future

Though the 70/30 premium split remains in place in 2025, legislative proposals in the coming years could affect this ratio. There have been discussions about switching to a flat-rate voucher model, which could increase your share of the premium, particularly if you choose a more expensive plan.

It’s wise to stay updated through official channels, especially during Open Season, and assess how any proposed changes could affect your costs.

Key Considerations for Planning

• Medicare Enrollment Timing: Make sure to enroll in Medicare Part B when required to avoid penalties and maintain PSHB eligibility.

• Plan Comparison Tools: Use OPM resources and official brochures to compare total costs, including premiums, cost-sharing, and Medicare integration.

• Keep an Eye on Annual Notices: Plan benefits and premium contributions can change from year to year. Always review your plan’s Annual Notice of Change.

Making the Cost Work for You

To manage your costs effectively under the PSHB program:

• Consider enrolling in Medicare Part B if you’re eligible, especially if your plan offers Part B premium reimbursement.

• Choose a plan that balances monthly premiums with reasonable deductibles and out-of-pocket limits.

• Stay in-network whenever possible to take advantage of lower copays and coinsurance.

• Budget for yearly out-of-pocket maximums, especially if you or a family member requires ongoing or specialized care.

Understanding Your 2025 PSHB Cost Split

Breaking down how your PSHB costs are divided between you and the government can help you make smarter choices throughout the year. Whether you’re an employee or retiree, keeping track of premium contributions, Medicare coordination, and other healthcare costs can make a big difference in your annual budget.

If you have questions about which PSHB plan works best for your situation or need help analyzing costs, consider reaching out to a licensed agent listed on this website for personalized support.