Key Takeaways

• As of 2025, the Postal Service Health Benefits (PSHB) Program replaces the Federal Employees Health Benefits (FEHB) Program for USPS employees, annuitants, and eligible family members.

• Understanding how PSHB works with Medicare, enrollment periods, and benefit changes will help you avoid coverage gaps and unexpected costs.

What You Need to Know About the Shift

The transition from FEHB to PSHB isn’t just a simple plan change. It marks a structural shift in how healthcare benefits are provided to those connected with the United States Postal Service. If you’re a USPS employee or annuitant, this change affects your health coverage starting January 1, 2025. Knowing the key dates, rules, and differences between FEHB and PSHB helps ensure you’re fully prepared.

Why the Change Happened

Congress required the USPS to move to a separate health benefits program through the Postal Service Reform Act of 2022. The goal was to stabilize long-term USPS finances and improve sustainability by creating a health benefits pool exclusively for postal workers and retirees. FEHB had served its purpose for decades, but it didn’t account for the unique structure and size of the USPS workforce.

Who’s Affected in 2025

If you fall into any of these categories, you are directly impacted:

• Active USPS employees

• USPS retirees (annuitants)

• Eligible family members enrolled under your plan

All of you must enroll in a PSHB plan during the 2024 Open Season (which ran from November to December) for coverage starting January 1, 2025.

How PSHB Plans Compare to FEHB

PSHB plans are modeled after FEHB but with some critical differences:

• Exclusivity: Only USPS employees, annuitants, and their eligible family members can enroll.

• Medicare Integration: PSHB plans are required to integrate more seamlessly with Medicare Part B.

• Prescription Drug Coverage: Medicare-eligible annuitants automatically receive Part D prescription coverage via an Employer Group Waiver Plan (EGWP).

• Premium Contributions: The government still pays about 70% of the premiums, similar to FEHB.

Overall, you’re likely to see similar coverage options, but your eligibility, enrollment requirements, and how Medicare works with your plan will change significantly.

Medicare Part B Requirements Under PSHB

If you’re a USPS annuitant or a family member who is eligible for Medicare Part A and Part B as of January 1, 2025, and not already enrolled in Part B, you’re now required to enroll in it to keep your PSHB coverage.

Who’s Required to Enroll in Medicare Part B?

• Medicare-eligible annuitants and family members who are not currently enrolled in Part B

Who’s Exempt?

• Annuitants who retired on or before January 1, 2025

• USPS employees who are 64 or older as of January 1, 2025

• Residents living abroad with no access to Medicare

• Those receiving healthcare from Indian Health Services or the Department of Veterans Affairs

Why This Matters

Failure to enroll in Medicare Part B, when required, will result in losing your drug coverage through PSHB. You may not be able to re-enroll later unless you qualify for a special exception.

Understanding PSHB Prescription Drug Coverage

For Medicare-eligible annuitants, prescription drug benefits are now delivered through an EGWP. Here’s what that means for you:

• You are automatically enrolled if you meet the criteria.

• Your plan includes the standard Medicare Part D protections, including a $2,000 annual out-of-pocket cap in 2025.

• You get access to a broad pharmacy network, which includes major chains and mail-order services.

• Low-cost insulin and critical medications are typically covered.

If you choose to opt out of this integrated drug coverage, you forfeit PSHB prescription benefits and may have very limited re-enrollment opportunities.

Premiums, Deductibles, and Cost Sharing

Your share of the premium under PSHB remains similar to what you paid under FEHB, with the government continuing to cover about 70% of the cost.

What You Can Expect:

• Monthly Premiums: You still pay your portion, deducted from your annuity or paycheck.

• Deductibles: In-network deductibles for low-deductible PSHB plans typically range from $350 to $500, and much higher for high-deductible options.

• Out-of-Pocket Maximums: For in-network services, you can expect to pay up to $7,500 (Self Only) or $15,000 (Self Plus One or Self and Family) in 2025.

• Copayments and Coinsurance: These vary by plan, but PSHB plans often include $20 to $40 for primary care visits and $50 to $150 for emergency care.

Enrollment and Plan Selection Process

If You’re an Active USPS Employee:

You select your PSHB plan through LiteBlue during Open Season. If you didn’t make a change, you were automatically enrolled in a corresponding PSHB plan that matched your previous FEHB coverage.

If You’re a Retiree or Annuitant:

You made your elections on the OPM portal at KeepingPosted.org. If no action was taken, OPM automatically enrolled you in a PSHB plan aligned with your existing coverage.

You can change plans annually during Open Season unless you have a Qualifying Life Event (QLE).

When to Consider Making a Change

Even if you were auto-enrolled, it’s wise to review your PSHB plan options each year. Here’s why:

• Your health needs may change.

• Plan networks or benefits may be updated.

• New plan options could be available.

What Doesn’t Change With PSHB

Some aspects of your federal benefits remain the same:

• FEDVIP: You can still enroll in dental and vision through the Federal Employees Dental and Vision Insurance Program.

• FEGLI: Your life insurance benefits under the Federal Employees’ Group Life Insurance Program remain unaffected.

• FLTCIP: The Federal Long Term Care Insurance Program continues for those already enrolled, although new enrollments remain suspended.

• FSAFEDS: Flexible spending accounts for active employees are still available.

Important Deadlines and Timing

• January 1, 2025: PSHB plans go into effect.

• Annually (November–December): Open Season to review or change your PSHB plan.

• Initial Enrollment or Special Enrollment Periods: These apply to Medicare Part B if you missed prior deadlines.

Common Questions You May Have

What happens if I don’t enroll in Medicare Part B when required?

You could lose your drug coverage through PSHB and may not be able to get it back later unless you qualify for a limited exception.

Can I keep my same doctor?

That depends on your plan’s provider network. It’s important to check if your preferred doctors participate in your new PSHB plan.

Will my costs go up?

That varies by plan. While premium contribution rates are similar, your deductible and out-of-pocket limits may be higher or lower, depending on the plan you choose.

What if I retired before 2025?

If you retired on or before January 1, 2025, you are exempt from the Medicare Part B enrollment requirement. You still need to choose a PSHB plan, but you won’t lose your coverage if you’re not enrolled in Part B.

Why PSHB Is Built for the Future

The FEHB program served USPS well for decades, but it wasn’t tailored to your specific needs. PSHB introduces stronger coordination with Medicare, postal-specific cost structures, and long-term program stability. It’s a big shift, but it’s designed to better serve you in the years to come.

Take Charge of Your 2025 Coverage

This transition doesn’t have to be stressful. Get familiar with how PSHB works, what Medicare Part B means for your eligibility, and the deadlines you must follow. If you have questions or are unsure about your options, speak with a licensed agent listed on this website to receive guidance tailored to your situation.